AGREEMENT AND PLAN OF MERGER Dated as of February 16, 2010 BY AND AMONG FOSTER THOMAS COMPANY AND PORTEC RAIL PRODUCTS, INC.
Execution Copy
Exhibit 2.1
Dated
as of February 16, 2010
BY
AND AMONG
X.
X. XXXXXX COMPANY,
XXXXXX
XXXXXX COMPANY
AND
PORTEC
RAIL PRODUCTS, INC.
Execution Copy
TABLE
OF CONTENTS
Page
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ARTICLE
1 THE OFFER
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2
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1.1
Conduct of the Offer.
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2
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1.2
Company Actions.
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5
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1.3
Directors.
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6
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1.4
Top-Up Option.
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7
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ARTICLE
2 MERGER TRANSACTION
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8
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2.1
Merger of Acquisition Co. into the Company.
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8
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2.2
Effect of Merger.
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9
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2.3
Closing; Effective Time.
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9
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2.4
Articles of Incorporation and Bylaws; Directors and
Officers.
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9
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2.5
Conversion of Shares.
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10
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2.6
Surrender of Certificates; Stock Transfer Books.
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11
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2.7
The Company’s Shareholders’ Meeting.
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12
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2.8
Dissenters’ Rights.
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13
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2.9
Further Action.
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13
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ARTICLE
3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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13
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3.1
Organization.
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14
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3.2
Capitalization.
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15
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3.3
Subsidiaries.
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16
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3.4
Authorization; Binding Agreement
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16
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3.5
Governmental Approvals.
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17
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3.6
Non-Contravention
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17
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3.7
Compliance with Law.
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17
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3.8
SEC Filings; Adequate Controls
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18
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3.9
Assets.
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19
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3.10
Absence of Certain Changes or Events; No Undisclosed
Liabilities
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20
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3.11
Permits.
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20
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3.12
Legal Proceedings
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21
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3.13
Intellectual Property.
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21
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3.14
Contracts.
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22
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3.15
Employee-Benefit Plans
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23
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3.16
Customers and Suppliers
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24
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3.17
Taxes.
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24
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3.18
Insurance.
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25
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3.19
Questionable Payments.
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26
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3.20
Related Party and Affiliate Transactions.
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26
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3.21
Vote Required.
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26
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3.22
Fairness Opinion
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26
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3.23
Financial Advisory Fees
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27
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ii
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3.24
Disclosure Documents.
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27
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3.25
Real Property.
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27
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3.26
Environmental Matters
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29
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3.27
Labor Matters.
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30
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3.28
Disclaimer of Other Representations and Warranties.
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31
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ARTICLE
4 REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION
CO.
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31
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4.1
Due Organization.
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31
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4.2
Authority; Binding Nature of Agreement.
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31
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4.3
Non-Contravention; Consents.
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32
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4.4
Disclosure Documents.
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32
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4.5
Sufficient Funds.
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33
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ARTICLE
5 CERTAIN COVENANTS OF THE COMPANY
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33
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5.1
Access and Investigation
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33
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5.2
Operation of the Business.
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34
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5.3
No Solicitation.
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36
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ARTICLE
6 COVENANTS OF THE PARTIES
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38
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6.1
Shareholder Approval; Proxy Statement.
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38
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6.2
Regulatory Approvals.
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39
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6.3
Employee Benefits.
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39
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6.4
Indemnification of Officers and Directors.
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40
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6.5
Additional Agreements.
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42
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6.6
Press Releases.
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42
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6.7
Resignation of Officers and Directors.
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42
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6.8
General Cooperation.
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43
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ARTICLE
7 CONDITIONS PRECEDENT TO THE MERGER
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43
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7.1
Shareholder Approval.
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43
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7.2
No Restraints.
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43
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7.3
Consummation of Offer.
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43
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ARTICLE
8 TERMINATION
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43
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8.1
Termination.
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43
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8.2
Effect of Termination.
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46
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8.3
Expenses; Termination Fees.
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46
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ARTICLE
9 GENERAL PROVISIONS
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48
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9.1
Amendment.
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48
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9.2
Waiver and Consents.
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48
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9.3
Knowledge Convention.
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48
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9.4
No Survival of Representations and Warranties.
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48
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9.5
Entire Agreement.
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49
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9.6
Counterparts and Delivery.
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49
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9.7
Third-Party Beneficiaries
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49
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9.8
Governing Law; Jurisdiction and Venue
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49
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9.9
Specific Performance
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49
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9.10
Headings
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50
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9.11
Assignability
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50
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9.12
Notices
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50
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9.13
Cooperation
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51
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9.14
Severability
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51
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9.15
Construction
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52
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ATTACHMENTS
Annex I – Conditions of the
Offer
INDEX OF DEFINED
TERMS
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Defined Term
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Location in Agreement
|
|
Acceptance
Time
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Section
6.3
|
|
Acquired
Companies
|
Section
3.1(b)
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|
Acquisition
Co.
|
Preamble
|
|
Agreement
|
Preamble
|
|
Alternative
Transaction Proposal
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Section
5.3(a)
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Benefit
Plan
|
Section
3.15
|
|
Business
Day
|
Section
1.4(a)
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|
Cash
Amount
|
Section
2.5(b)
|
|
Certificates
|
Section
2.6(b)
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Closing
|
Section
2.3
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|
Closing
Date
|
Section
2.3
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|
Code
|
Section
3.2(b)
|
|
Company
|
Preamble
|
|
Company
Benefit Plan
|
Section
3.15
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|
Company
Board Recommendation
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Section
1.2(a)
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|
Company
Common Stock
|
Introduction
|
|
Company
Disclosure Letter
|
Article
3 (preamble)
|
|
Company
Intellectual Property
|
Section
3.13(a)
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|
Company
Material Adverse Effect
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Section
3.1(a)
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Company
Material Contract
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Section
3.14
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|
Company
Options
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Section
3.2(b)
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Company
Permits
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Section
3.11
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Company
SEC Documents
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Section
3.8(a)
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Company
Shareholder Meeting
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Section
6.1(a)
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Company
Superior Proposal
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Section
5.3(d)
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Company's
Form 10-K
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Section
3.10
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Company's
Stock Option Plan
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Section
3.2(b)
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Confidentiality,
Non-disclosure and Exclusive Negotiation Agreement
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Section
8.2
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Consent
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Section
3.5
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Continuing
Directors
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Section
1.3(c)
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Contracts
|
Section
3.14
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Dissenting
Shares
|
Section
2.8
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Drop
Dead Date
|
Section
8.1(c)
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Effective
Time
|
Section
2.3
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Enforceability
Exceptions
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Section
3.4
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Entity
|
Section
1.1(c)(iii)
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Environmental
Laws
|
Section
3.27(c)
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Environmental
Liabilities
|
Section
3.27(c)
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ERISA
|
Section
3.15
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|
Exchange
Act
|
Section
1.1(a)
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Fully
Diluted Number of Company Shares
|
Section
1.1(d)
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Governmental
Body
|
Section
1.1(c)(ii)
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Hazardous
Materials
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Section
3.27(c)
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HSR
Act
|
Section
3.5
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Indemnified
Persons
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Section
6.4(a)
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|
Lastest
Balance Sheet
|
Section
3.8(b)
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Law
|
Section
1.1(c)(i)
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Leased
Real Property
|
Section
3.26(b)
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Leases
|
Section
3.26(b)
|
|
Licensed
Intellectual Property
|
Section
3.13(d)
|
|
Merger
|
Introduction
|
|
Merger
Consideration
|
Section
2.5(a)(iii)
|
|
Minimum
Condition
|
Section
1.1(b)(i)
|
|
Nasdaq
|
Section
3.5
|
|
Offer
|
Introduction
|
|
Offer
Closing Date
|
Section
7.3
|
|
Offer
Documents
|
Section
1.1(e)
|
|
Owned
Real Property
|
Section
3.26(a)
|
|
Parent
|
Preamble
|
|
Paying
Agent
|
Section
2.6(a)
|
|
Permitted
Encumbrances
|
Section
3.9
|
|
Per-Share
Amount
|
Introduction
|
|
Person
|
Section
1.1(c)(iv)
|
|
Pre-Closing
Period
|
Section
5.1
|
|
Proceedings
|
Section
3.12(a)
|
|
Promissory
Note
|
Section
1.4(d)
|
|
Proxy
Statement
|
Section
3.25
|
|
Registered
Intellectual Property
|
Section
3.13(c)
|
|
Representatives
|
Section
5.3(b)
|
|
Required
Company Shareholder Vote
|
Section
3.22
|
|
Schedule
14D-9
|
Section
1.2(b)
|
|
SEC
|
Section
1.1(d)
|
|
Securities
Act
|
Section
3.8(a)
|
|
Short
Form Merger
|
Section
6.1(c)
|
|
SOX
|
Section
3.7
|
|
Special
Shareholders Meeting
|
Section
2.7
|
|
Subsidiary
|
Section
3.1(b)
|
|
Surviving
Corporation
|
Introduction
|
|
Takeover
Laws
|
Section
1.2(a)
|
|
Tax
|
Section
3.17(a)
|
|
Tax
Return
|
Section
3.17(a)
|
|
Tender
and Voting Agreement
|
Introduction
|
|
Termination
Fee
|
Section
8.3(e)
|
|
Top-Up
Option
|
Section
1.4(a)
|
|
Top-Up
Shares
|
Section
1.4(a)
|
|
US
GAAP
|
Section
3.8(b)
|
|
WVBCA
|
Section
1.2(a)
|
This Agreement and Plan of
Merger (the “Agreement”) is made
and entered into on this 16th day of February, 2010, by and among Portec Rail
Products, Inc., a West Virginia corporation (the “Company”), X. X.
Xxxxxx Company, a Pennsylvania corporation (“Parent”), and Xxxxxx
Xxxxxx Company, a West Virginia corporation and wholly owned subsidiary of
Parent (“Acquisition
Co.”).
INTRODUCTION
A. The
respective boards of directors of Parent, Acquisition Co. and the Company have
each determined that it is advisable and in the best interests of their
respective shareholders for Parent to acquire the Company; and for such purpose
have each approved a merger (the “Merger”) of
Acquisition Co. with and into the Company, with the Company as the surviving
corporation (the “Surviving Corporation”), upon the terms and conditions set
forth herein.
B. In
furtherance of the Merger, it has been agreed that Acquisition Co. will make a
cash tender offer (the “Offer”) to acquire
all of the Company’s outstanding shares of common stock, $1.00 par value per
share (the “Company
Common Stock”) for $11.71 per share (such amount or any greater
amount per share paid pursuant to the Offer, subject to Section 1.1(f), is
hereinafter referred to as the “Per-Share Amount”),
without interest, upon the terms and conditions set forth herein.
C. By
resolutions duly adopted, the Company’s board of directors has, in light of and
subject to the terms and conditions hereof: (i) determined that
this Agreement and the transactions contemplated hereby, specifically including
the Offer and the Merger, are fair to and in the best interests of the Company
and its shareholders; and (ii) resolved to recommend that the Company’s
shareholders accept the Offer and tender their shares pursuant thereto, and
adopt this Agreement.
D. By
resolution duly adopted, Parent has approved this Agreement and in its capacity
as the sole stockholder of Acquisition Co., adopted this Agreement.
E. Immediately
prior to the execution of this Agreement and as a condition and inducement to
the Parent’s and Acquisition Co’s willingness to enter into this Agreement,
Parent is simultaneously entering into a shareholder tender agreement
substantially in the form set forth in Exhibit A (the “Tender and Voting
Agreement”) with certain of the Company’s directors and executive
officers (and certain related persons and entities) owning shares of Company
Common Stock and/or rights to acquire Company Common Stock, pursuant to which
(i) such shareholders are, among other things, agreeing to tender, and not
withdraw, all of such shareholders’ shares of Company Common Stock in the Offer
upon the terms and conditions specified therein, and (ii) certain of such
shareholders are agreeing to certain restrictive covenants.
AGREEMENT
Now, Therefore, in
consideration of the foregoing premises hereby made a part of this Agreement,
the mutual covenants and agreements contained herein, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound subject to the
satisfaction of the conditions set forth herein, hereby agree as
follows:
ARTICLE
1
THE
OFFER
1.1 Conduct of the
Offer.
(a) Provided
that none of the events or circumstances set forth in Annex I attached hereto
shall have occurred or exist, as promptly as practicable (and in any event not
later than ten business days after the date hereof, provided that the Company
has within a reasonable time prior thereto furnished Parent with the information
about the Company required to be included in the Offer Documents, as defined in
paragraph (e) below), Acquisition Co. shall commence, within the meaning of Rule
14d-2 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), the
Offer.
(b) Subject
to the terms and conditions of the Offer and this Agreement, Acquisition Co.
shall accept for payment all shares of Company Common Stock validly tendered and
not withdrawn pursuant to the Offer as soon as it is permitted to do so under
applicable Law (as defined in paragraph (c) below) and shall pay for such shares
in cash promptly thereafter (and in any event in compliance with Rule 14e-1(c)
under the Exchange Act). Acquisition Co.’s obligation to accept for
payment and to pay for any shares of Company Common Stock tendered pursuant to
the Offer shall be subject to:
(i) the
condition that there shall be a number of shares of Company Common Stock validly
tendered pursuant to the Offer and not withdrawn, together with shares of
Company Common Stock owned by Parent and its subsidiaries (excluding any Top-Up
Shares, as defined in Section 1.4 below), that,
immediately prior to the acceptance for payment of shares of Company Common
Stock pursuant to the Offer, represents at least sixty five percent (65%) of the
Fully Diluted Number of Company Shares (as defined in paragraph (d) below) (the
“Minimum
Condition”); and
(ii) the other
conditions set forth in Annex I.
Acquisition
Co. expressly reserves the right in its sole discretion to increase the initial
Per-Share Amount (in compliance with Rule 14d-10), to waive (in whole or in
part) any of the conditions of the Offer set forth in Annex I, or to make any
other changes in the terms and conditions of the Offer; provided, however, that
without the Company’s prior written consent: (1) the Minimum
Condition may not be amended or waived; (2) no change may be made that
alters the form of consideration to be paid, reduces the Per-Share Amount,
changes the number of shares of Company Common Stock sought in the Offer, or
imposes conditions to the Offer in addition to the Minimum Condition and the
conditions set forth in Annex I; (3) except as provided in Section 1.1(d),
no change may be made that extends the expiration date of the Offer beyond its
initial expiration date, (4) except as provided in this Agreement, no
change may be made that amends any other terms of the Offer in a manner adverse
to the holders of Company Common Stock and (5) Acquisition Co. shall not accept
tendered Company Shares unless the conditions set forth in (a) and (b) in Annex
I shall have been satisfied.
(c) For all
purposes of this Agreement, the capitalized terms set forth below shall have the
following meanings:
(i) “Law” shall mean any
federal, state, local or foreign law, statute, ordinance, regulation,
guidelines, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any
Governmental Body (or under the authority of the Nasdaq Stock
Market).
(ii) “Governmental Body”
shall mean any (a) nation, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature,
(b) federal, state, local or foreign government, or (c) governmental
authority.
(iii) “Entity” shall mean
any corporation, general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity.
(iv) “Person” shall mean an
individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
(d) The Offer
shall initially expire 20 business days following the date of the commencement
thereof. Notwithstanding anything to the contrary contained herein
but subject to the parties’ respective termination rights under Section
8.1: (i) if, at any then-scheduled expiration date of the Offer,
any of the conditions to the Offer have not been satisfied or waived,
Acquisition Co., without the consent of the Company or any other Person, shall
be entitled to extend the Offer for such amount of time as is reasonably
necessary to cause such conditions to the Offer to be satisfied;
(ii) Acquisition Co. may, without the consent of the Company or any other
Person (A) extend the Offer (one or more times) for any period required or
permitted by any rule, regulation, interpretation or position of the United
States Securities and Exchange Commission (the “SEC”) applicable to
the Offer and (B) if the sum of (1) the number of shares of Company Common
Stock that shall have been validly tendered and not withdrawn pursuant to the
Offer (other than shares tendered by guaranteed delivery where actual delivery
has not occurred) as of the then-scheduled expiration date of the Offer plus (2)
the number of shares of Company Common Stock owned by the Parent and it
subsidiaries as of such date (excluding any Top-Up Shares), is at
least 65% of the Fully Diluted Number of Company Shares but equals less than 90%
of the number of shares of Company Common Stock outstanding as of such date,
extend the Offer (one or more times) for an aggregate additional period of not
more than 20 Business Days; (iii) Acquisition Co. may, without the consent
of the Company or any other Person, elect to provide for a subsequent offering
period (and one or more extensions thereof) pursuant to and in accordance with
the terms of Regulation 14D under the Exchange Act; and (iv) if, at any
then-scheduled expiration date of the Offer, any of the conditions to the Offer
have not been satisfied or waived, Acquisition Co. shall, if the Company so
requests in writing, extend the Offer for ten business days; provided, however, that
Acquisition Co. shall not be required to extend the expiration date more than
one time pursuant to this clause (iv).
For
purposes of this Agreement, “Fully Diluted Number of
Company Shares” shall mean the sum of the (x) aggregate number of
shares of Company Common Stock outstanding immediately prior to the acceptance
of shares of Company Common Stock pursuant to the Offer, plus (y) the
aggregate number of shares of Company Common Stock issuable upon the exercise of
any option, warrant, other right to acquire capital stock of the Company or
other security exercisable for or convertible into shares of Company Common
Stock or other capital stock of the Company, any of which is outstanding
immediately prior to the acceptance of shares of Company Common Stock pursuant
to the Offer (but excluding any Top-Up Shares).
(e) On the
date of commencement of the Offer, Parent and Acquisition Co. shall
(i) file with the SEC a Tender Offer Statement on Schedule TO with respect
to the Offer which will contain or incorporate by reference the offer to
purchase shares of Company Common Stock pursuant to the Offer and form of the
related letter of transmittal and (ii) cause the offer to purchase and
related documents to be disseminated to holders of shares of Company Common
Stock in accordance with applicable federal securities laws. Parent
and Acquisition Co. agree that they shall use their reasonable best efforts to
cause the Schedule TO and all exhibits, amendments or supplements thereto
(collectively, the “Offer Documents”) to
comply in all material respects with the Exchange Act, the rules and regulations
thereunder and other applicable Law. Each of Parent and Acquisition
Co. agrees (and the Company agrees to cooperate with Parent and Acquisition Co.)
to use its reasonable best efforts to respond promptly to any comments of the
SEC or its staff with respect to the Offer Documents or the Offer, to correct
promptly any information provided by it for use in the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect, and to take all steps necessary to cause the Offer Documents
as supplemented or amended to correct such information to be filed with the SEC
and to be disseminated to holders of shares of Company Common Stock, in each
case as and to the extent required by applicable federal securities
laws. The Company shall promptly furnish to Parent and Acquisition
Co. all information concerning the Company and the Company’s shareholders that
may be required or reasonably requested in connection with any action
contemplated by this Section 1.1(e). The Company and its counsel
shall be given reasonable opportunity to review and comment on the Offer
Documents (including any amendment thereto) prior to the filing thereof with the
SEC. Parent and Acquisition Co. agree to provide the Company and its
counsel with any comments Parent, Acquisition Co. or their counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after
receipt of such comments.
(f) If,
between the date of this Agreement and the date on which any particular share of
Company Common Stock is accepted for payment pursuant to the Offer, the
outstanding shares of Company Common Stock are changed into a different number
or class of shares by reason of any stock split, division, subdivision or
combination of shares, stock dividend, consolidation of shares,
reclassification, recapitalization or other similar transaction, then the
Per-Share Amount shall be appropriately adjusted to reflect such change or
transaction. For avoidance of doubt, it is understood that the
Company shall not have the right to take any such action with respect to the
Company Common Stock without the prior written consent of Parent. The
provisions of this Section 1.1(f) do not apply to the exercise of options
granted prior to the date hereof.
1.2 Company
Actions.
(a) The
Company hereby approves and consents to the Offer and represents that its board
of directors, at a meeting duly called and held or pursuant to unanimous written
action, has: (i) determined that this Agreement and the
transactions contemplated hereby, specifically including the Offer and the
Merger, are fair to and in the best interests of the Company and its
shareholders; (ii) approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, in accordance with the
requirements of the West Virginia Business Corporation Act (“WVBCA”), (iii)
approved the Tender and Voting Agreement and the transactions contemplated
thereby (iv) resolved to recommend that shareholders of the Company accept
the Offer and tender their shares of Company Common Stock and the Rights
pursuant to the Offer and adopt and approve this Agreement and the Merger (the
“Company Board
Recommendation”) and (v) irrevocably resolved to elect, to the extent of
the Company’s board of directors’ power and authority and to the extent
permitted by law, not to be subject to any other “moratorium”, “control share
acquisition”, “business combination”, “fair price” or other form of
anti-takeover laws and regulations (collectively, “Takeover Laws”) of
any jurisdiction that may purport to be applicable to this Agreement or the
Tender and Voting Agreement or the transactions contemplated hereby and
thereby. Finally, the Company represents that its board of directors
and/or compensation committee thereof has adopted any necessary resolutions to
provide for the treatment of Company Options (as defined in Section 3.2(b)
below) as set forth in Section 2.5(b) of this Agreement. Subject to
Section 5.3, the Company hereby consents to the inclusion of the Company Board
Recommendation in the Offer Documents.
(b) As
promptly as practicable on the day that the Offer is commenced, the Company
shall file with the SEC and (following or contemporaneously with the
dissemination of the Offer Documents and related documents) disseminate to
holders of shares of Company Common Stock, in each case as and to the extent
required by applicable federal securities laws, a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Offer (together with any
amendments or supplements thereto, the “Schedule 14D-9”) that
shall reflect, subject to Section 5.3, the Company Board Recommendation. The
Company agrees that it shall cause the Schedule 14D-9 to comply in all material
respects with the Exchange Act and the rules and regulations thereunder and
other applicable Law. Each of Parent, Acquisition Co. and the Company
agrees to promptly correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as supplemented or amended
to correct such information to be filed with the SEC and to be disseminated to
holders of shares of Company Common Stock, in each case as and to the extent
required by applicable federal securities laws. Parent and its
counsel shall be given reasonable opportunity to review and comment on the
Schedule 14D-9 (including any amendment thereto) prior to the filing thereof
with the SEC. The Company agrees to provide Parent and its counsel
with any comments the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after receipt of such
comments.
(c) The
Company will, or will cause its transfer agent to, promptly furnish Parent and
Acquisition Co. with a list of its shareholders, mailing labels and any
available listing or computer file containing the names and addresses of all
record holders of shares of Company Common Stock and lists of securities
positions of shares of Company Common Stock held in stock depositories, in each
case as of the most recent practicable date, and will provide to Parent such
additional information (including updated lists of shareholders, mailing labels
and lists of securities positions) and such other assistance as Parent or
Acquisition Co. may reasonably request in connection with the Offer and the
Merger. Parent and Acquisition Co. and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger and,
if this Agreement shall be terminated, will, upon request, deliver to the
Company or destroy (as requested), and will use their reasonable best efforts to
cause their agents to deliver to the Company or destroy (as requested), all
copies and any extracts or summaries from such information then in their
possession or control.
1.3 Directors.
(a) Effective
upon the fulfillment of the Minimum Condition and upon the acceptance for
payment of the shares of Company Common Stock pursuant to the Offer and the
delivery of funds to the depositary for the Offer to pay for such shares, Parent
shall be entitled to designate the number of directors, rounded up to the next
whole number, on the Company’s board of directors that equals the product of (i)
the total number of directors on the Company’s board of directors (giving effect
to the election of any additional directors pursuant to this Section) and (ii) a
fraction whose numerator is the aggregate number of shares of Company Common
Stock then beneficially owned by Parent and Acquisition Co. (including shares of
Company Common Stock accepted for payment pursuant to the Offer), and whose
denominator is the total number of shares of Company Common Stock then
outstanding (provided that, in no event shall Parent’s director designees
constitute less than a majority of the entire board of directors of the
Company), and the Company shall take all commercially reasonable actions
necessary to cause Parent’s designees to be elected or appointed to the
Company’s board of directors, including increasing the number of directors, and
seeking and accepting resignations of incumbent directors. At such
time, to the extent requested by Parent, and subject to the applicable
requirements of Nasdaq (including Stock Market Rule 5605(c)), the Company will
also use its reasonable best efforts (i) to cause individuals designated by
Parent to constitute the number of members, rounded up to the next whole number,
on each committee of the Company’s board of directors, that represents the same
percentage as the individuals designated by Parent represent on the board of
directors of the Company and (ii) to cause individuals designated by Parent to
constitute the same percentage of the members of the board of
directors of each Subsidiary (as defined in Section 3.1 below) and each committee thereof.
(b) The
Company’s obligations to appoint Parent’s designees to the Company’s board of
directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly take all actions, and shall
include in the Schedule 14D-9 such information with respect to the Company and
persons designated by Parent pursuant to Section 1.3(a), as Section 14(f) and Rule 14f-1 of the Exchange
Act require in order to fulfill its obligations under this Section, so long as
Parent shall have furnished to the Company on a timely basis the information
with respect to Parent and its nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1 of the Exchange Act. The
provisions of this Section 1.3 are in addition to and
shall not limit any rights which Acquisition Co., Parent or any of their
affiliates may have as a holder or beneficial owner of shares of Company Common
Stock as a matter of applicable Law with respect to the election of directors or
otherwise.
(c) Following
the election or appointment of Parent’s designees pursuant to Section 1.3(a) and until the Effective
Time, the approval of a majority of the Individuals who were directors of the
Company on the date hereof ("Continuing
Directors"), or a single Continuing Director if there be only one such
Continuing Director, shall be required to authorize (and such authorization
shall constitute the authorization of the Company’s board of directors and no
other action on the part of the Company, including any action by any other
director of the Company, shall be required to authorize) any termination of this
Agreement by the Company, any amendment of this Agreement requiring action by
the Company’s board of directors, any extension of time for performance of any
obligation or action hereunder by Parent or Acquisition Co. requiring the
consent of the Company, any waiver of compliance by the Company of any of the
agreements or conditions contained herein for the benefit of the Company or its
shareholders, any required or permitted consent or action by the board of
directors of the Company hereunder and any other action of the Company
hereunder, which in the case of any of the foregoing adversely affects in any
material respect the holders of shares of Company Common Stock (other than
Parent or Acquisition Co.).
1.4 Top-Up
Option.
(a) The
Company hereby grants to Parent and Acquisition Co. an irrevocable option which
may be assigned by Parent to another wholly owned subsidiary of Parent (the
“Top-Up
Option”), exercisable once upon the terms and subject to the conditions
set forth herein, to purchase at the Per-Share Amount an aggregate number of
shares of Company Common Stock (the “Top-Up Shares”) equal
to the lowest number of shares of Company Common Stock that, when added to the
number of shares Company Common Stock owned by Parent and its subsidiaries at
the time of such exercise, shall constitute one (1) share more than ninety
percent (90%) of the Fully Diluted Number of Company Shares (after giving effect
to the issuance of the Top-Up Shares); provided, however, that in no
event shall the Top-Up Option be exercisable for a number of Shares in excess of
the number of the authorized but unissued shares of Company Common Stock as of
immediately prior to the issuance of the Top-Up Shares; provided, further, that the
Parent and Acquisition Co. shall not exercise the Top-UP Option for a number of
shares which exceeds the maximum number of shares that may be issued pursuant to
WVBCA § 31D-6-621 without shareholder approval; provided, further, that the
Top-Up Option shall terminate upon the earlier of: (x) the fifth
(5th) Business Day (as such term is defined in Rule 14d-1(g)(3) of the
Exchange Act, "Business Day") after
the later of (1) the expiration date of the Offer and (2) the
expiration of any “subsequent offering period”; and (y) the termination of
this Agreement in accordance with its terms.
(b) The
obligation of the Company to deliver Top-Up Shares upon the exercise of the
Top-Up Option is subject to the conditions that (i) no provision of any
applicable Law (other than the applicable listing and corporate governance rules
and regulations of the Nasdaq Stock Market), and no judgment, injunction, order
or decree shall prohibit the exercise of the Top-Up Option or the delivery of
the Top-Up Shares in respect of such exercise and (ii) Acquisition Co. has
accepted for payment all shares of Company Common Stock validly tendered in the
Offer and not properly withdrawn and delivered the funds for payment for such
shares to the depositary for the Offer.
(c) In the
event Parent or Acquisition Co. wishes to exercise the Top-Up Option, Parent or
Acquisition Co. shall deliver to the Company a notice setting forth:
(i) the number of shares of Company Common Stock that Parent or Acquisition
Co. intends to purchase pursuant to the Top-Up Option; (ii) the manner in
which Parent or Acquisition Co. intends to pay the applicable exercise price;
and (iii) the place and time at which the closing of the purchase of such
shares of Company Common Stock by Parent or Acquisition Co. is to take place.
The Company shall, as soon as practicable following receipt of such notice,
notify Acquisition Co. of the number of shares of Company Common Stock then
outstanding, the number of shares of Company Common Stock then outstanding on a
fully-diluted basis and the number of Top-Up Shares. At the closing of the
purchase of such shares of Company Common Stock, Parent or Acquisition Co. shall
cause to be delivered to the Company the consideration required to be delivered
in exchange for such shares, and the Company shall cause to be issued to Parent
or Acquisition Co. (as the case may be) a certificate representing such shares
or, at Parent's or Acquisition Co.'s request or otherwise if the Company does
not then have certificated shares, the applicable number of book-entry shares.
The parties shall cooperate to issue the Top-Up Shares pursuant to an exemption
from registration under the Securities Act of 1933. Parent and Acquisition Co.
represent and warrant that the Top-Up Option, and the Top-Up Shares to be
acquired upon exercise of the Top-Up Option, if any, are being and shall be
acquired by Parent or Acquisition Co. for the purpose of investment and not with
a view to, or for resale in connection with, any distribution thereof (within
the meaning of the Securities Act of 1933).
(d) Parent or
Acquisition Co. may pay the Company the aggregate price required to be paid for
the Top-Up Shares either (i) entirely in cash or cash equivalents or
(ii) at Parent's or Acquisition Co.'s election, by
(x) paying in cash an amount equal to not less than the aggregate par value
of the Top-Up Shares and (y) executing and delivering to the Company a
promissory note having a principal amount equal to the aggregate price required
to be paid for the purchase of the Top-Up Shares but less the amount to be paid
in cash pursuant to the preceding clause (x) (a “Promissory Note”).
Any such Promissory Note shall be full recourse against Parent and Acquisition
Co. and (i) shall bear interest at a market rate of interest per annum,
payable in arrears at the end of one (1) year, (ii) shall mature on
the first (1st) anniversary of the date of execution and delivery of such
Promissory Note and (iii) may be prepaid, in whole or in part, without
premium or penalty.
ARTICLE
2
MERGER
TRANSACTION
2.1 Merger of Acquisition Co.
into the Company.
Upon the
terms and subject to the conditions set forth in this Agreement and in
accordance with the WVBCA, at the Effective Time, Acquisition Co. shall be
merged with and into the Company, the separate existence of Acquisition Co.
shall cease and the Company will continue as the surviving corporation in the
Merger.
2.2 Effect of
Merger.
The
Merger shall have the effects set forth in this Agreement and in the applicable
provisions of the WVBCA. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all property of the
Company and Acquisition Co. shall vest in the Surviving Corporation, and all
debts, liabilities, obligations and duties of the Company and Acquisition Co.
shall become debts, liabilities, obligations and duties of the Surviving
Corporation.
2.3 Closing; Effective
Time.
Unless
this Agreement shall have been terminated and the transactions contemplated
hereby shall have been abandoned pursuant to ARTICLE 8, the consummation of the
Merger (the “Closing”) shall take
place by mutual release of Closing documents followed by overnight delivery of
originals, on a date to be designated by Parent (the “Closing Date”), which
shall be no later than the fifth Business Day after the satisfaction or waiver
of the last to be satisfied or waived of the conditions set forth in ARTICLE 7
(other than delivery of items to be delivered at the Closing and other than
those conditions that by their nature are to be satisfied at the Closing, it
being understood that the occurrence of the Closing shall remain subject to the
delivery of such items and the satisfaction or waiver of such conditions at the
Closing), unless another date, time or place is agreed to in writing by the
parties hereto. Subject to the provisions of this Agreement, articles of merger
satisfying the applicable requirements of the WVBCA shall be duly executed by
the Company and Acquisition Co. and, concurrently with or as soon as practicable
following the Closing, filed with the office of the West Virginia Secretary of
State. The Merger shall become effective upon the date and time of
the filing of such articles of merger with the West Virginia Secretary of State,
or at such later time as is specified therein (the “Effective
Time”).
2.4 Articles of Incorporation
and Bylaws; Directors and Officers.
Unless
otherwise determined by Parent prior to the Effective Time:
(a) the
articles of incorporation of the Surviving Corporation shall be amended and
restated as of the Effective Time to conform to the articles of incorporation of
Acquisition Co. as in effect immediately prior to the Effective Time until
thereafter changed or amended in accordance with the provisions thereof and
applicable Law;
(b) the
bylaws of the Surviving Corporation shall be amended and restated as of the
Effective Time to conform to the bylaws of Acquisition Co. as in effect
immediately prior to the Effective Time until thereafter changed or amended in
accordance with the provisions thereof and applicable Law;
(c) the
directors of the Surviving Corporation immediately after the Effective Time
shall be the respective individuals who are directors of Acquisition Co.
immediately prior to the Effective Time until the earlier of their resignation
or removal or until their respective successors are duly elected and qualified,
as the case may be; and
(d) the
officers of the Surviving Corporation immediately after the Effective Time shall
be the respective individuals who are officers of Acquisition Co. immediately
prior to the Effective Time until the earliest of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be.
2.5 Conversion of
Shares.
(a) At the
Effective Time, by virtue of the Merger and without any further action on the
part of Parent, Acquisition Co., the Company or any shareholder of the
Company:
(i) all
shares of Company Common Stock then held by the Company or any wholly owned
Subsidiary shall be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor;
(ii) all
shares of Company Common Stock, if any, then held by Parent, Acquisition Co. or
any other wholly owned subsidiary of Parent shall be canceled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor;
(iii) except as
provided in clauses (i) and (ii) above and subject to Sections 2.5(c) and 2.8, each share of Company Common Stock then
outstanding shall be converted into the right to receive the Per Share Amount
(the “Merger
Consideration”), without interest; and
(iv) all of
the shares of the common stock, $1.00 par value per share, of Acquisition Co.
then outstanding shall be converted into one share of Surviving Corporation
Common Stock.
(b) All
Company Options (as defined in Section 3.2(b) below) shall terminate as of
the Effective Time, whether or not vested or exercisable and without regard to
any agreements qualifying the right to retain or exercise any such Company
Options. At the Effective Time, subject to the terms and conditions
set forth below in this Section 2.5(b), each holder of a Company Option
whether or not vested or exercisable will be entitled to receive from the
Company, and shall receive, in settlement of each Company Option a “Cash
Amount.” The “Cash Amount” shall be
equal to the net amount of (A) the product of the excess, if any, of the
Merger Consideration over the exercise price per share of such Company Option at
the Effective Time, multiplied by (ii) the number of shares subject to such
Company Option, less (B) any applicable withholdings for Tax (as defined in
Section 3.17 below). If the exercise price per share of any Company
Option equals or exceeds the Merger Consideration, the Cash Amount therefor
shall be zero. Except as may be otherwise agreed to by Parent and the
Company, the Company's Stock Option Plan (as defined in Section 3.2 below) shall
terminate as of the Effective Time and the provisions in any other plan, program
or arrangement providing for the issuance or grant of any other interest in
respect of the capital stock of Company or any Subsidiary shall be deleted,
terminated and of no further force or effect as of the Effective
Time. Notwithstanding the foregoing, (i) payment of the Cash
Amount is subject to written acknowledgement, in a form acceptable to the
Surviving Corporation, that no further payment is due to such holder on account
of any Company Option and all of such holder's rights under such Company Options
have terminated and (ii) with respect to any Person subject to Section
16(a) of the Exchange Act, any Cash Amount to be paid to such Person in
accordance with this Section 2.5(b) shall be paid as soon as practicable after
the payment can be made without liability on such Person’s part under Section
16(b) of the Exchange Act.
(c) If,
between the date of this Agreement and the Effective Time, the outstanding
shares of Company Common Stock are changed into a different number or class of
shares by reason of any stock split, division or subdivision of shares, stock
dividend, reverse stock split, consolidation of shares, reclassification,
recapitalization or other similar transaction, then the Merger Consideration
shall be appropriately adjusted to reflect such change or
transaction. For avoidance of doubt, it is understood that the
Company shall not have the right to take any such action with respect to the
Company Common Stock without the prior written consent of Parent. The
provisions of this Section 2.5(c) do not apply to the exercise of options
granted prior to the date hereof.
2.6 Surrender of Certificates;
Stock Transfer Books.
(a) Prior to
the Effective Time, Parent shall designate a bank or trust company reasonably
acceptable to the Company to act as agent (the “Paying Agent”) for
the holders of shares of Company Common Stock to receive the funds to which
holders of such shares shall become entitled pursuant to Section
2.5. Such funds shall be invested by the Paying Agent as directed by
the Parent or the Surviving Corporation. Earnings from such
investments shall be the sole and exclusive property of Parent and the Surviving
Corporation, and no part of such earnings shall accrue to the benefit of holders
of shares of Company Common Stock.
(b) As soon
as reasonably practicable after the Effective Time, the Surviving Corporation
shall cause to be mailed to each Person who was, at the Effective Time, a holder
of record of shares of Company Common Stock entitled to receive the Merger
Consideration pursuant to Section 2.5, a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
certificates evidencing such shares (the “Certificates”) shall
pass, only upon proper delivery of the Certificates to the Paying Agent) and
instructions for use in effecting the surrender of the Certificates pursuant
thereto. Upon surrender to the Paying Agent of a Certificate, together with such
letter of transmittal duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each share of Company Common
Stock formerly evidenced by such Certificate, and such Certificate shall
thereupon be canceled. No interest shall accrue or be paid on the
Merger Consideration payable upon the surrender of any Certificate for the
benefit of the holder of such Certificate. If the payment of the
Merger Consideration is to be made to a Person other than the Person in whose
name the surrendered Certificate formerly evidencing shares of Company Common
Stock is registered on the Company’s stock transfer books, it shall be a
condition of payment that the Certificate so surrendered be endorsed properly or
otherwise be in proper form for transfer and that the Person requesting such
payment shall have paid all transfer and other similar Taxes required by reason
of the payment of the Merger Consideration to a Person other than the registered
holder of the Certificate surrendered, or shall have established to the
satisfaction of Acquisition Co. that such Taxes are not
applicable. Except as set forth in Section 2.8, until surrendered as
contemplated by this Section 2.6(b), each Certificate shall be deemed, from and
after the Effective Time, to represent only the right to receive the Merger
Consideration for each share of Company Common Stock formerly evidenced by such
Certificate. If any Certificate shall have been lost, stolen or
destroyed, Parent may, in its discretion and as a condition precedent to the
payment of the Merger Consideration for each share of Company Common Stock
formerly evidenced by such Certificate, require the owner of such lost, stolen
or destroyed Certificate to provide an appropriate affidavit and to deliver a
bond (in such sum as Parent may reasonably direct) as indemnity against any
claim that may be made against the Paying Agent, Parent or the Surviving
Corporation with respect to such Certificate.
(c) At any
time following the six-month anniversary of the Effective Time, the Surviving
Corporation shall be entitled to require the Paying Agent to deliver to it any
funds not then disbursed to holders of shares of Company Common Stock (including
without limitation all interest and other income received by the Paying Agent in
respect of all such funds), and, thereafter, such holders shall be entitled to
look to the Surviving Corporation (subject to abandoned property, escheat and
other similar laws) only as general creditors thereof with respect to any Merger
Consideration that may be payable upon due surrender of the Certificates held by
them. Notwithstanding the foregoing, none of the Surviving
Corporation, Parent or the Paying Agent nor any other party to this Agreement
shall be liable to any holder of a share of Company Common Stock for any Merger
Consideration delivered in respect of such share to a public official pursuant
to any abandoned property, escheat or other similar law. If any
Certificates shall not have been surrendered prior to five years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration in respect of such Certificate would otherwise escheat to or
become the property of any Governmental Body), any amounts payable in respect of
such Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any Person previously entitled thereto.
(d) At the
close of business on the day of the Effective Time, the Company’s stock transfer
books shall be closed and thereafter there shall be no further registration of
transfers of shares of the Company’s capital stock. From and after
the Effective Time, the holders of shares of Company Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares except as otherwise provided herein or by applicable
Law.
(e) Each of
the Surviving Corporation, Parent and Acquisition Co. shall be entitled to
deduct and withhold (or cause the Paying Agent to deduct and withhold) from the
consideration otherwise payable in the Merger to any holder of shares of Company
Common Stock such amounts as it is required to deduct and withhold with respect
to Taxes. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Company Common Stock in respect of which such
deduction and withholding was made.
2.7 The Company’s Shareholders’
Meeting.
Unless
the Merger is consummated in accordance with Section 31D-11-1105 of the WVBCA as
contemplated by Section 6.1(c) below, the Company,
acting through its board of directors, shall duly call a special meeting of its
shareholders (the “Special Shareholders
Meeting”) to be held in accordance with the WVBCA at the earliest
practicable date, upon due notice thereof to its shareholders, to consider and
vote upon, among other matters, the adoption and approval of this Agreement and
the Merger. The Company’s board of directors will recommend the
approval of the Merger and will use its best efforts, consistent with its
fiduciary duties, to solicit the requisite vote of the Company’s shareholders to
approve this Agreement and the Merger pursuant to proxy solicitation
materials.
2.8 Dissenters’
Rights.
Holders
of Company Common Stock may dissent from the Merger and exercise their appraisal
rights pursuant to and subject to the provisions of Sections 31D-13-1301 et seq.
of the WVBCA. Each outstanding share of Company Common Stock, the
holder of which has demanded and perfected such holder’s right to dissent from
the Merger and to be paid the fair value of such shares in accordance with
Sections 31D-13-1301 et seq. of the WVBCA and, as of the Effective Time, has not
effectively withdrawn or lost such dissenters’ rights (“Dissenting Shares”),
shall not be converted into or represent a right to receive the Merger
Consideration pursuant to Section 2.5, but the holder thereof shall be entitled
only to such rights as are granted by the WVBCA; provided, however, that if
any holder of Company Common Stock demands dissenters’ rights with respect to
such shares under the WVBCA and subsequently effectively withdraws or loses
(through failure to perfect or otherwise) its dissenters’ rights, then as of the
Effective Time or the occurrence of such event, whichever later occurs, such
holder’s Company Common Stock will automatically be converted into and represent
only the right to receive the Merger Consideration as provided in Section 2.5,
without interest thereon, upon surrender of the certificate(s) formerly
representing such shares. After the Effective Time, Parent shall
cause the Company to make all payments to holders of Dissenting Shares with
respect to such demands in accordance with the WVBCA. The Company
shall give Parent: (i) prompt written notice of any notice of
intent to demand fair value for any shares of Company Common Stock, withdrawals
of such notices, and any other instruments served pursuant to the WVBCA and
received by the Company; and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for fair value for shares
of Company Common Stock under the WVBCA. The Company shall not,
except with prior written consent of Parent, voluntarily make any payment with
respect to any demands for fair value for shares of Company Common Stock or
offer to settle or settle any such demands.
2.9 Further
Action.
If, at
any time after the Effective Time, any further action is determined by Parent to
be reasonably necessary or desirable to carry out the purposes of this Agreement
or to vest the Surviving Corporation with full right, title and possession of
and to all rights and property of Acquisition Co. and the Company, the officers
and directors of the Surviving Corporation and Parent shall be fully authorized
(in the name of Acquisition Co., in the name of the Company and otherwise) to
take such action.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as
set forth in the disclosure schedules attached hereto, hereinafter referred to
as the “Company
Disclosure Letter” (it being acknowledged that disclosure in the Company
Disclosure Letter with respect to any particular Section of the Agreement shall
be deemed disclosure with respect to another Section of the Agreement to the
extent that it is reasonably clear on the face of such Schedule that such item
applies to such other schedule or incorporated by reference to a specific
section of the Company SEC Documents (as defined in Section 3.8 below) filed on
or after January 1, 2009 but prior to the date of this Agreement), the Company
represents and warrants to Parent and Acquisition Co. that all of the statements
contained in this ARTICLE 3 are true and complete as of the date of this
Agreement, and will be true and complete as of the expiration date of the Offer
as though made at such time and as of the Effective Time as though made at the
Effective Time (except as to any representation or warranty that speaks as of a
specific date, which shall be true as of such date).
3.1 Organization.
(a) The
Company and each Subsidiary is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The
Company and each Subsidiary is duly qualified or licensed and in good standing
to do business in each jurisdiction in which the character of the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing would not be reasonably
likely to have a Company Material Adverse Effect. For purposes of
this Agreement, a “Company Material Adverse
Effect” shall mean any change, result, effect, event, occurrence or state
of facts (or any development that has had or is reasonably likely to have any
change or effect) that is or would reasonably be expected to be materially
adverse to the business, financial condition, assets, liabilities or results of
operations of the Company and the Subsidiaries, taken as a whole, or which is or
would reasonably be expected to be materially adverse to the ability of such
Persons to consummate the transactions contemplated hereby; provided, however, that none
of the following shall be deemed in itself, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Company Material Adverse
Effect: (i) any effect resulting from or arising in connection
with this Agreement or the transactions contemplated hereby or the execution or
announcement hereof, (ii) changes in general economic conditions (including
general financial, credit or capital market conditions including changes in
interest rates) in the United States, United Kingdom or Canada,
(iii) changes in generally accepted accounting principles, (iv) any
change in the price at which the shares of Company Common Stock are publicly
traded, (v) any matter relating to the Company's former properties in Troy, New
York (including any litigation or government action related to the Company's
former properties in Troy, New York), (vi) changes that are the result of
factors generally affecting the industries or markets in which the Company or
the Subsidiaries operate (other than those changes that have had a
disproportionate adverse effect relative to other industry participants on the
Company and its Subsidiaries taken as a whole), (vii) acts of war (whether or
not declared), the commencement, continuation or escalation of a war, acts of
armed hostility, sabotage or terrorism or other international or national
calamity or any material worsening of conditions threatened or existing as of
the date of this Agreement (other than those that have had a disproportionate
adverse effect relative to other industry participants on the Company and its
Subsidiaries taken as a whole), (viii) any material disaster, or other force
majeure event (other than those that have had a disproportionate adverse effect
relative to other industry participants on the Company and its Subsidiaries
taken as a whole) or (ix) any divestiture by the Company pursuant to Section 6.2 of this Agreement.
(b) The
Company has heretofore made available to Parent accurate and complete copies of
the articles of incorporation and bylaws, as currently in effect, of the Company
and the Subsidiaries. For purposes of this Agreement, “Subsidiary” shall
mean a Subsidiary of the Company and an Entity shall be considered a Subsidiary
of the Company if the Company directly or indirectly owns, beneficially or of
record, an amount of voting securities of other interests in such Entity that is
sufficient to enable the Company to elect at least a majority of the members of
such Entity’s board of directors or other governing body, or at least 50% of the
outstanding equity or financial interests of such Entity. Neither the
Company nor any of the Subsidiaries (collectively, the “Acquired Companies”)
owns an equity interest in any Entity other than a Subsidiary and none of the
Acquired Companies have agreed or is obligated to make, or is bound by any
contract or other obligation under which it may become obligated to make, any
future equity or similar investment in or capital contribution to any other
Person.
3.2 Capitalization.
(a) As of the
date hereof, the Company’s authorized capital stock consists of 50,000,000
shares of Company Common Stock. As of the date hereof, 9,602,029 shares
of Company Common Stock were issued and outstanding. No other capital
stock of the Company is authorized or issued. All issued and
outstanding shares of Company Common Stock are duly authorized, validly issued,
fully paid and non-assessable. None of the Acquired Companies is
under any obligation, or is bound by any contract or other obligation pursuant
to which it may become obligated, to repurchase, redeem or otherwise acquire any
outstanding shares of Company Common Stock.
(b) As of the
date hereof 139,000 shares of Company Common Stock are subject to
issuance pursuant to the exercise of outstanding options, whether vested or
unvested ("Company
Options") under the Company's 2006 Stock Option Plan (the “Company’s Stock Option
Plan”). All such Company Options are exercisable only for
Company Common Stock. Schedule 3.2(b) of the Company Disclosure
Letter sets forth the following information with respect to each of the Company
Options outstanding as of the date of this Agreement: (1) the
particular plan pursuant to which such Company Option was granted and whether
such Company Option is an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”); (2) the
name of the optionee; (3) the number of shares of Company Common Stock
subject to such Company Option; (4) the exercise price of such Company
Option; (5) the date on which such Company Option was granted; (6) the
applicable vesting schedules, and the extent to which such Company Option is
vested and exercisable as of the date set forth in the Company Disclosure
Letter; and (7) the date on which such Company Option
expires. The Company has no plans or arrangements pursuant to which
stock options or other stock-based equity may be issued other than the Company's
Stock Option Plan. The Company has delivered to Parent and
Acquisition Co. accurate and complete copies of all stock plans pursuant to
which Company has granted currently outstanding stock options or other
stock-based compensation or, could have granted stock options or other
stock-based compensation since December 31, 2008, or currently can grant stock
options or other stock-based compensation, and the forms of all stock option
agreements evidencing such options or other stock-based
compensation. Assuming that the Company complies with its obligations
under Section 2.5(b), the Company will not incur any liability as a result of
the cancellation of the Company Options as described in Section 2.5 and all
rights of the holders of such Company Options will terminate as of the Effective
Time.
(c) Except
for the Company Options and the Top-Up Option, there is
no: (i) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable) to acquire any shares of the capital
stock or other securities of Company (or any Subsidiary); (ii) outstanding
security, instrument or obligation that is or may become convertible into or
exchangeable for any shares of the capital stock or other securities of Company
(or any Subsidiary); or (iii) stockholder rights plan (or similar plan
commonly referred to as a “poison pill”) or contract under which Company (or any
Subsidiary) is or may become obligated to sell or otherwise issue any shares of
its capital stock or any other securities.
(d) Since
December 31, 2008, the Company has not repurchased, redeemed or otherwise
acquired any shares of Company Common Stock.
3.3 Subsidiaries.
Each
Subsidiary is listed in Schedule 3.3 of the Company Disclosure
Letter. Each Subsidiary is wholly owned by the Company except as
otherwise indicated in Schedule 3.3 of the Company Disclosure
Letter. All of the capital stock and other interests of the
Subsidiaries so held are owned by the Company free and clear of any claim, lien,
encumbrance, security interest or agreement with respect thereto. All
of the outstanding shares of capital stock in each of the Subsidiaries held by
the Company are duly authorized, validly issued, fully paid and non-assessable
and were issued free of preemptive rights and in compliance with applicable
Laws. No equity securities or other interests of any of the
Subsidiaries are or may become required to be issued or purchased by reason of
any options, warrants, rights to subscribe to, puts, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any capital stock of any Subsidiary, and there are
no contracts, commitments, understandings or arrangements by which any
Subsidiary is bound to issue additional shares of its capital stock, or options,
warrants or rights to purchase or acquire any additional shares of its capital
stock or securities convertible into or exchangeable for such
shares.
3.4 Authorization; Binding
Agreement.
The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including but not limited
to the Offer and the Merger, have been duly and validly authorized by the
Company’s board of directors and no other corporate proceedings on the part of
the Company or any Subsidiary are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions contemplated hereby
(other than the adoption of this Agreement by the shareholders of the Company in
accordance with the WVBCA as set forth in Section 3.21 hereof). This Agreement has been duly
and validly executed and delivered by the Company and constitutes the legal,
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors’ rights generally and by principles
of equity regarding the availability of remedies (the “Enforceability
Exceptions”).
3.5 Governmental
Approvals.
No
consent, approval, waiver or authorization of, notice to or declaration or
filing with (“Consent”), any
Governmental Body on the part of the Company or any of the Subsidiaries is
required in connection with the execution or delivery by the Company of this
Agreement or the consummation by the Company of the transactions contemplated
hereby other than: (a) the filing of the articles of merger with
the West Virginia Secretary of State in accordance with the WVBCA;
(b) filings with the SEC, state securities laws administrators and the
Nasdaq Stock Market (“Nasdaq”);
(c) filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder (the “HSR Act”),
(d) such filings as may be required in any jurisdiction where the Company
or any of the Subsidiaries is qualified or authorized to do business in order to
continue to do business therein, and (e) those Consents that, if they were
not obtained or made, would not be a Company Material Adverse
Effect.
3.6 Non-Contravention.
Other
than as set forth in Schedule 3.6 of the Company Disclosure Letter, the
execution and delivery of this Agreement and the Tender and Voting Agreement,
the consummation of the transactions contemplated hereby and thereby and
compliance by the Company with any of the provisions hereof and thereof in
accordance with their terms will not: (a) conflict with or
result in any breach of any provision of the articles of incorporation or bylaws
or other governing instruments of the Company or any of the Subsidiaries;
(b) require any Consent under or result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any Company Material Contract (as
defined in Section 3.14 below); (c) result in the creation or imposition of
any lien or encumbrance of any kind upon any of the assets of the Company or any
Subsidiary; or (d) subject to obtaining the Consents from Governmental
Bodies referred to in Section 3.5, contravene any applicable provision of any
Law to which the Company or any Subsidiary or its or any of their respective
assets or properties are subject, except, in the case of clauses (b), (c) and
(d) above, for any deviations from the foregoing which would not be reasonably
likely to have a Company Material Adverse Effect.
3.7 Compliance with
Law.
The
operations of each of the Acquired Companies, the conduct of the business of
each of the Acquired Companies, as and where such business has been or presently
is conducted, and the ownership, possession and use of the assets of each of the
Acquired Companies have complied and currently do comply with all applicable
Laws, including without limitation, the Xxxxxxxx-Xxxxx Act of 2002 (“SOX”), except where
failure to so comply would not be reasonably likely to have a Company Material
Adverse Effect. From December 31, 2006 through the date of this
Agreement, none of the Acquired Companies have received any written notice, nor
to the knowledge of the Company, any oral notice from any Governmental Body
regarding any actual or possible material violation of, or failure to comply in
any material respect with, any Law.
3.8 SEC Filings; Adequate
Controls.
(a) The
Company has made available to Parent and Acquisition Co. accurate and complete
copies of all registration statements, definitive proxy statements and other
statements, reports, schedules, forms and other documents (and all amendments or
supplements thereto) filed by Company with the SEC since January 1, 2007 (the
“Company SEC
Documents”). All statements, reports, schedules, forms and
other documents required to have been filed by Company with the SEC since
January 1, 2007 have been so filed and in a timely manner. Other than
as disclosed on Section 3.8 of the Company Disclosure Letter, as of the time it
was filed with the SEC (or, if amended, supplemented or superseded by a filing
prior to the date of this Agreement, then on the date of such
filing): (i) each of the Company SEC Documents complied in all
material respects with the applicable requirements of the Securities Act of
1933, as amended (the “Securities Act”), the
Exchange Act, and SOX (as the case may be); and (ii) none of the Company
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The
consolidated financial statements (including any related notes) contained in the
Company SEC Documents: (i) when filed, complied as to form in
all material respects with the published rules and regulations of the SEC
applicable thereto; (ii) when filed, were prepared in accordance with
generally accepted accounting principles in the United States (“US GAAP”), except, in
the case of unaudited statements, as permitted by SEC regulations applicable to
Form 10-Q, and except that the unaudited financial statements may not contain
footnotes and are subject to normal and recurring year-end adjustments; and
(iii) when filed fairly presented in all material respects the consolidated
financial position of the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company for the periods
covered thereby. The unaudited consolidated balance sheet of the
Company and its Subsidiaries as of September 30, 2009 included in the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 is
sometimes referred to as the “Latest Balance
Sheet.”
(c) Neither
the Company nor any of its Subsidiaries is a party to, or has any commitment to
become a party to, any joint venture, off-balance sheet partnership or any
similar contract or arrangement including any contract or arrangement relating
to any transaction or relationship between or among the Company and any of its
Subsidiaries, on the one hand, and any unconsolidated affiliate (including any
structured finance, special purpose or limited purpose entity or Person), on the
other hand or any “off-balance sheet arrangements” (as defined in Item 303(a) of
Regulation S-K promulgated by the SEC), where the result, purpose or intended
effect of such contract or arrangement is to avoid disclosure of any material
transaction involving, or material liabilities of, the Company or any of its
Subsidiaries in the Company’s or such Subsidiary’s published financial
statements or other Company SEC Documents.
(d) Prior to
the Offer Closing Date (as defined in Section 7.3 below), the Company has and
will have in place the “disclosure controls and procedures” (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act) required in order for the Company’s
Chief Executive Officer and Chief Financial Officer to engage in the review and
evaluation process mandated by the Exchange Act, and has delivered copies of any
such written procedures to Parent. The Company’s “disclosure controls
and procedures” are reasonably designed to ensure that all
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC, and that all such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required
disclosure.
(e) The
Company maintains a system of accounting controls (including “internal control
over financial reporting” as defined in Rule 13a-15(f) promulgated under
the Exchange Act) sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with US GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences. Since December 31, 2008, the Company has not
received any written or oral notice from its registered independent public
accounting firm of a “reportable condition,” “significant deficiency” or
“material weakness” in the Company’s system of accounting controls as those
terms are defined under generally accepted auditing standards in the United
States.
3.9 Assets.
Other
than as set forth in Section 3.9 of the Company Disclosure Letter, except for
Company Intellectual Property (title for which is described in Section 3.13),
the Acquired Companies have good and marketable title to all of their respective
assets reflected on the Latest Balance Sheet (other than assets disposed of in
the ordinary course of business since the date of the Latest Balance Sheet) and
have the right to transfer all rights, title and interest in such assets, free
and clear of any liens or encumbrances other than (i) encumbrances set
forth in the Latest Balance Sheet or (ii) Permitted Encumbrances (as
defined below). Except for Company Intellectual Property, each of the
Acquired Companies has all material assets necessary to operate, or which are
material to the operation of, its respective business as currently conducted.
For purposes of this Agreement, “Permitted
Encumbrances” shall mean encumbrances (i) for Taxes, governmental
charges, assessments or levies, provided that such Taxes, governmental charges,
assessments or levies are not yet due or are being contested in good faith by
appropriate proceedings, and in any case, for which the Company has made an
appropriate reserve on the Latest Balance Sheet; (ii) deposits,
encumbrances or pledges to secure payments of workmen’s compensation, public
liability, unemployment and other similar insurance; (iii) mechanics’,
workmen’s, materialmen’s, repairmen’s, warehousemen’s, vendors’, landlords’ or
carriers’ encumbrances, or other similar encumbrances arising in the ordinary
course of business consistent with past practices and securing sums which are
not past due or are being contested in good faith by appropriate proceedings,
and in any case, for which the Company has made an appropriate reserve on the
Latest Balance Sheet; and (iv) encumbrances that would not have a Company
Material Adverse Effect.
3.10 Absence of Certain Changes
or Events; No Undisclosed Liabilities.
Other
than as set forth in Schedule 3.10 of the Company Disclosure Letter, from
December 31, 2008 and on or prior to the
date of this Agreement, there has not been any: (a) event that
has had or would reasonably be expected to have a Company Material Adverse
Effect; (b) declaration, payment or setting aside for payment of any
dividend (other than quarterly cash dividends at the rate of $0.06 per share) or
other distribution or any redemption or other acquisition of any shares of
capital stock or securities of the Company by the Company or any split,
combination or reclassification of any of the capital stock of the Company;
(c) damage (other than ordinary wear and tear) or loss to any material
asset or property of the Company, whether or not covered by insurance which is
reasonably likely to result in a Company Material Adverse Effect;
(d) change by the Company in accounting principles or practices other than
changes made as a result of changes in the requirements of GAAP or the rules and
regulations of the SEC; (e) other than pursuant to the grant of Company
Options or the exercise of Company Options and the grant of the Top-Up Option,
sale, issuance or grant of any capital stock or other equity security of the
Company or any Subsidiary, or sale, issuance or grant of any instrument
convertible into or exchangeable for any such capital stock or other security;
(f) Subsidiary formed or acquired or investment made in or guarantee
granted in favor of any Entity not a Subsidiary; (g) amendment to the
articles of incorporation or organization, bylaws or other organizational
documents of the Company or any Subsidiary; (h) other than to the extent
described in the Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 2008 (the “Company's
Form 10-K”) or in any Current Report on Form 8-K filed by the
Company after the filing of the Company's Form 10-K and prior to the date hereof
(x) increase in compensation payable to any executive officer, director or
consultant or (y) granting to any executive officer, director or consultant
any employment, severance or termination agreement or any increase in severance
or termination pay or benefits; or (i) any delivery of a notice of default
under or non-renewal of any Company Material Contract (as defined in
Section 3.14 below), except for (x) such defaults that were subsequently
cured, (y) such defaults which are not reasonably expected to result in a
Company Material Adverse Effect and (z) any non-renewal of any Company Material
Contract which was subsequently replaced or the loss of which would not result
in a Company Material Adverse Effect. Except for those liabilities
that are fully reflected or reserved against on the balance sheet of the Company
included in the Company's Form 10-K and for liabilities incurred in the ordinary
course of business consistent with past practice, since December 31, 2008,
neither the Company nor any Subsidiary has incurred any liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due
or to become due) that, either individually or in the aggregate, has had or
would be reasonably likely to have, a Company Material Adverse
Effect.
3.11 Permits.
Other
than as set forth in Schedule 3.11 of the Company
Disclosure Letter, the Company and Subsidiaries have all permits, certificates,
licenses, approvals and other authorizations required in connection with the
operation of their respective businesses (collectively, the “Company Permits”)
except those Company Permits the absence of which would not be reasonably likely
to have a Company Material Adverse Effect. To the knowledge of the
Company, neither the Company nor any of the Subsidiaries is in material
violation of any Company Permit. No proceedings are pending or, to
the knowledge of the Company, threatened, to revoke or limit any Company Permit,
except, in each case, those the absence or violation of which would not be
reasonably likely to have a Company Material Adverse Effect.
3.12 Legal
Proceedings.
(a) Schedule
3.12 of the Company Disclosure Letter sets forth all Proceedings (as defined
herein). Other than the proceedings set forth in Schedule 3.12 of the
Company Disclosure Letter, there is no suit, action or proceeding (collectively,
“Proceedings”)
pending or, to the knowledge of the Company, threatened against the Company or
any of the Subsidiaries which, individually or in the aggregate, would be
reasonably likely to have a Company Material Adverse Effect; nor is there any
judgment, decree, injunction, rule or order of any Governmental Body outstanding
against the Company or any Subsidiaries which, individually or in the aggregate,
would be reasonably likely to have a Company Material Adverse
Effect.
(b) In
connection with the manufacture, sale, refurbishment, resale, marketing or
distribution of the products and/or marketing, sale and provision of the
services of the Company and the Subsidiaries, neither the Company nor any
Subsidiary has (i) received any written claim or request, or to the
knowledge of the Company any oral claim or request, for compensation for alleged
personal injuries, (ii) paid any settlement or other monies to a claimant
to have a Proceeding or claim resolved, and/or (iii) been notified that a
user of any products intends to make a claim or commence litigation, except for
any of the foregoing which are not, individually or in the aggregate, reasonably
likely to have a Company Material Adverse Effect.
3.13 Intellectual
Property.
(a) The
Company or the Subsidiaries own, and/or are licensed or otherwise possess rights
to use all: (i) trademarks and service marks (registered or
unregistered), trade dress, trade names and other names and slogans embodying
business goodwill or indications of origin, all applications or registrations in
any jurisdiction pertaining to the foregoing and all goodwill associated
therewith; (ii) inventions, technology, computer programs and software
(including password unprotected interpretive code or source code, object code,
development documentation, programming tools, drawings, specifications and
data), and all applications and patents disclosed on Schedule 3.13(c) of the
Company Disclosure Letter pertaining to the foregoing, including re-issues,
continuations, divisions, continuations-in-part, renewals or extensions;
(iii) trade secrets, including confidential and other non-public
information (iv) writings, designs, software programs, mask works or other
works, applications or registrations in any jurisdiction for the foregoing and
all moral rights related thereto; (v) databases and all database rights;
(vi) internet websites, domain names and applications and registrations
pertaining thereto; and (vii) other intellectual property rights (“Company Intellectual
Property”) that are used in the respective businesses of the Company and
the Subsidiaries as currently conducted, except for any such failures to own, be
licensed or possess that would not be reasonably likely to have a Company
Material Adverse Effect.
(b) To the
knowledge of the Company, and other than as disclosed on Schedule 3.13(b) of the
Company Disclosure Letter, there are no infringements of any Company
Intellectual Property by any third party that are reasonably likely to have a
Company Material Adverse Effect, and the conduct of the businesses as currently
conducted or as currently planned to be conducted does not infringe any
proprietary right of a third party.
(c) Schedule
3.13(c) of the Company Disclosure Letter sets forth
a complete list of all patents, trademarks, registrations and pending
registration applications pertaining to the Company Intellectual Property owned
by the Company and the Subsidiaries (collectively, the “Registered Intellectual
Property”). All such Registered Intellectual Property is owned
by the Company and/or the Subsidiaries, free and clear of liens or encumbrances
of any nature.
(d) Schedule
3.13(d) of the Company Disclosure Letter sets forth
a complete list of all licenses, sublicenses and other agreements in which the
Company or any of the Subsidiaries have granted rights to any Person to make,
use, sell, distribute or service any products or services which utilize or
incorporate the Company Intellectual Property and a separate list of all
material licenses, sublicenses and other agreements in which the Company or any
of the Subsidiaries has received rights from any person to use the Company
Intellectual Property (the “Licensed Intellectual
Property”). The Company will not, as a result of the execution
and delivery of this Agreement or the Tender and Voting Agreement, or the
performance of its obligations under this Agreement or the Tender and Voting
Agreement, be in breach of any license, sublicense or other agreement relating
to the Licensed Intellectual Property.
(e) The
Company and the Subsidiaries own or have the right to use all computer software
currently used in and material to the businesses, except for any failures to own
or rights of use that would not be reasonably likely to have a Company Material
Adverse Effect.
3.14 Contracts.
Other
than as set forth in Schedule 3.14 of the Company Disclosure Letter, neither the
Company nor any Subsidiary nor, to the knowledge of the Company, any
counterparty to any Company Material Contract, is in violation or breach of or
default under any such Company Material Contract where such violation or breach
would be reasonably likely to have a Company Material Adverse
Effect. “Company Material Contract” shall mean any and all of the
following bonds, mortgages, indentures, contracts, subcontracts, leases,
subleases, licenses, instruments, insurance policies, agreements or binding
understandings (“Contracts”): (i) any
consulting or other Contract (excluding employment or severance contracts) with
a current or former employee, officer or director of the Company or any
Subsidiary, as applicable, which requires payment of amounts by the Company or
any Subsidiary, as applicable, after the date hereof in excess of $50,000; (ii)
any collective bargaining Contract with any labor union; (iii) any Contract for
capital expenditures or the acquisition or construction of fixed assets which
requires aggregate future payments in excess of $200,000; (iv) any Contract
containing covenants of the Company or any Subsidiary (A) to indemnify or
hold harmless another Person, unless such indemnification or hold harmless
obligation to such Person, or group of Persons, as the case may be, is less than
$200,000 or (B) not to (or otherwise restricting or limiting the ability of
the Company or any of the Subsidiaries to) solicit or hire any individual or
compete in any line of business or geographic area, and each of such Contracts
described in this Section 3.14(iv)(B) are listed in Schedule 3.14 of
the Company Disclosure Letter; (v) any Contract requiring aggregate future
payments or expenditures in excess of $50,000 and relating to cleanup,
abatement, remediation or similar actions in connection with environmental
liabilities; (vi) any license, royalty Contract or other Contract with
respect to Company Intellectual Property that grants to a third party any rights
to such intellectual property; (vii) any Contract pursuant to which the
Company or any Subsidiary has entered into a partnership or joint venture with
any other Person (other than the Company or any Subsidiary); (viii) any
indenture, mortgage, loan or credit Contract under which the Company or any
Subsidiary has outstanding indebtedness or any outstanding note, bond, indenture
or other evidence of indebtedness for borrowed money or otherwise, or guaranteed
indebtedness for money borrowed by others in excess of $50,000; (ix) any
Contract under which the Company or any Subsidiary is (A) a lessee or
sublessee of real property, (B) a lessee of, or holds or uses, any
machinery, equipment, vehicle or other tangible personal property owned by a
third person or entity, (C) a lessor or sublessor of real property, or
(D) a lessor of any tangible personal property owned by the Company or any
Subsidiary, in any case referred to in clauses (B) or (D) only those Contracts
which require annual payments in excess of $200,000; (x) any Contract under
which the Company or any Subsidiary is a purchaser or supplier of goods and
services which, pursuant to the terms thereof, requires payments by the Company
or any Subsidiary in excess of $200,000 per annum; (xi) any material
Contract between the Company and any Subsidiary; (xii) any Contract which
requires payments by or to the Company or any Subsidiary in excess of $200,000
per annum containing “change of control” or similar provisions; and
(xiii) any Contract relating to the acquisition or disposition of any
business or any assets (whether by merger, sale of stock or assets or otherwise
other than in the ordinary course of business), and (xiv) any other Contract the
termination or breach of which, or the failure to obtain consent in respect of,
is reasonably likely to have a Company Material Adverse Effect.
3.15 Employee-Benefit
Plans.
Schedule
3.15 of the Company Disclosure Letter contains a complete and accurate list of
all Benefit Plans (as defined below) maintained or contributed to by the Company
or any Subsidiary (each a “Company Benefit
Plan”). A “Benefit Plan” shall include: (i) an
employee-benefit plan as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended, together with all regulations
thereunder (“ERISA”); and
(ii) whether or not described in the preceding clause, any pension,
profit-sharing, stock-bonus, deferred or supplemental compensation, retirement,
stock-purchase or stock-option plan, “cafeteria plan” (as defined in Code
Section 125), change-in-control agreement, severance-pay plan and any other
compensation, welfare, fringe-benefit or retirement plan, program, policy or
arrangement providing for benefits for or the welfare of any or all of the
current or former employees, directors or agents of the Company, the
Subsidiaries or any of their respective beneficiaries or dependents; provided, however, that
“Benefit Plans” shall not include any multiemployer plan, as defined in Section
3(37) of ERISA, nor any periodic wage or salary, bonus or other incentive
compensation arrangement providing non-deferred compensation for the current
services of employees. Except as disclosed on Schedule 3.15 of the
Company Disclosure Letter, neither the Company nor any Subsidiary contributes
to, or has any outstanding liability with respect to, any multiemployer
plan. Except as otherwise provided on Schedule 3.15 of the Company
Disclosure Letter, neither the Company nor any of the Subsidiaries maintains or
contributes to any defined benefit pension plan subject to ERISA Title IV, or
has any outstanding liability with respect to any such plan. Each
Company Benefit Plan has been maintained in compliance with its terms and all
applicable Law, except where the failure to do so would not be reasonably likely
to result in a Company Material Adverse Effect. There is no pending
or, to the Company’s knowledge, threatened Proceeding or claim against, or with
respect to, any Company Benefit Plan (other than routine claims for benefits)
that would be reasonably likely to result in a Company Material Adverse
Effect.
3.16 Customers and
Suppliers.
Since
December 31, 2008, there has been no termination, cancellation or material
curtailment of the business relationship of the Company or any Subsidiary with
any customer or supplier or group of affiliated customers or suppliers which,
individually or in the aggregate, would result in a Company Material Adverse
Effect nor has the Company received any written notice of intent to so
terminate, cancel or materially curtail which would have such a Company Material
Adverse Effect.
3.17 Taxes.
Other
than as set forth on Schedule 3.17 of the Company
Disclosure Letter:
(a) The
Company and each Subsidiary has filed, or caused to be filed all Tax Returns (as
defined below) required to be filed by it, and to the knowledge of the Company
such Tax Returns are true, correct and complete in all material
respects. The Company and each Subsidiary has paid, collected or
withheld, or caused to be paid, collected or withheld, all amounts of Taxes (as
defined below) required to be paid, collected or withheld, other than any such
Taxes that are being contested in good faith or for which adequate reserves have
been established in the financial statements contained in the Company SEC
Documents. There are no claims or assessments pending against the
Company or any of the Subsidiaries for any alleged deficiency in any Tax, and
the Company has not been notified in writing of any proposed Tax claims or
assessments against the Company or any Subsidiary (other than claims or
assessments that, in each case, are being contested in good faith, are
immaterial in amount or for which adequate reserves have been established in the
Company Financial Statements). Neither the Company nor any Subsidiary
has waived or extended any applicable statute of limitations to assess any
Taxes. There are no outstanding requests by the Company or any
Subsidiary for any extension of time within which to file any Tax Return or
within which to pay any Taxes shown to be due on any return, except that
consistent with past practice the Company intends to request an extension with
respect to the filing of federal, provincial and state income tax
returns for the current year. To the Company’s knowledge, there are
no liens for Taxes on the assets of the Company or any Subsidiary, except for
any statutory liens for current Taxes not yet due and payable. For
purposes of this Agreement, the term “Tax” shall mean any
federal, state, local, foreign or provincial income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or added minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty imposed by any Governmental Body. The term “Tax Return” shall
mean a report, return or other information (including any attached schedules or
any amendments to such report, return or other information) required to be
supplied to or filed with a Governmental Body with respect to any Tax, including
an information return, claim for refund, amended return or declaration or
estimated Tax.
(b) The
Company has properly accrued and reflected on the Latest Balance Sheet, and has
thereafter properly accrued all liabilities for Taxes, all such accruals being
in the aggregate sufficient for payment of all such Taxes.
(c) The
Company will timely and properly file or cause to be filed all Tax Returns which
it is or will be required to file on or before the Closing Date, all such Tax
Returns to be true, correct and complete in all material respects, and will pay
or cause to be paid in full when due all Taxes, if any, which become due and
payable pursuant to such Tax Returns or assessments received by it on or before
the Closing Date, except for any such assessments that, in each case, are being
contested in good faith, are immaterial in amount or for which adequate reserves
will have been properly accrued as provided in paragraph (b) above.
(d) Neither
the Company nor any of the Subsidiaries has ever been a member of an affiliated
group of corporations (within the meaning of Section 1504 of the Code) other
than an affiliated group of which the Company is the common
parent. Neither the Company nor any Subsidiary (i) is a party
to, is bound by or has any Obligation under any Tax-sharing agreement or similar
agreement or arrangement other than one that is solely between the Company and
one or more Subsidiaries or (ii) has any liability for Taxes of any party
(other than the Company or any Subsidiary) under Treasury Regulation Section
1.1502-6 or any similar provision of state, local or foreign law, as a
transferee or successor, by contract or otherwise.
(e) No audits
or other administrative Proceedings or court Proceedings are pending or, to the
Company’s knowledge, threatened with regard to any Taxes or Tax Return of the
Company, any Subsidiary or any affiliated, consolidated, combined or unitary
group of Entities of which the Company or any Subsidiary is a member and, to the
knowledge of the Company, no material issues have been raised by any Tax
authority in connection with any Tax or Tax Return that have not been
conclusively resolved.
(f) The
Company and each Subsidiary has disclosed on its respective income Tax Returns
all positions taken therein that could give rise to a substantial understatement
of federal income Tax within the meaning of Section 6662 of the
Code.
(g) Neither
the Company nor any Subsidiary has made nor is obligated to make a payment that
would not be deductible by reason of Section 280G of the Code.
(h) To the
Company’s knowledge, no claim has ever been made by a taxing authority in a
jurisdiction, where either the Company or any Subsidiary does not file Tax
Returns, that it is or may be subject to taxation in that jurisdiction, except
for any such claim that has been conclusively resolved.
3.18 Insurance.
Schedule
3.18 of the Company Disclosure Letter sets forth a true and complete list of all
insurance policies carried by, or covering the Company or any of the
Subsidiaries with respect to their businesses, assets and properties and with
respect to which records are maintained at the Company’s principal executive
offices, together with, in respect of each such policy, the amount of coverage
and the deductible. The Company and the Subsidiaries maintain
insurance policies against all material risk, including without limitation
business-interruption insurance, and in such amounts as are usually insured
against by similarly situated companies in the same or similar
businesses. Each insurance policy set forth on Schedule 3.18 of the
Company Disclosure Letter is in full force and effect and all premiums due
thereon have been paid in full.
3.19 Questionable
Payments.
To the
Company’s knowledge, no current or former director, officer or employee of the
Company or any Subsidiary or representative or agent authorized to act on behalf
of the Company or any Subsidiary (when any such person is acting in such
capacity or otherwise on behalf of any of the Company or any Subsidiary or any
of their predecessors), (a) has used or is using any corporate funds for
any illegal contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (b) has used or is using any corporate
funds for any direct or indirect unlawful payments to any foreign or domestic
government officials or employees; (c) has violated or is violating any
provision of the Foreign Corrupt Practices Act of 1977; (d) has established
or maintained, or is maintaining, any unlawful or unrecorded fund of corporate
monies or other properties; (e) has made at any time, any false or
fictitious entries on the books and records of the Company or any Subsidiary; or
(f) has made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment of any nature using corporate funds or otherwise on
behalf of any of the Acquired Companies; or (g) during the past three years has
made any material favor or gift that is not deductible for federal income-tax
purposes using corporate funds or otherwise on behalf of the Company or any
Subsidiary.
3.20 Related Party and Affiliate
Transactions.
Other
than as set forth in Schedule 3.20 of the Company
Disclosure Letter, there does not exist any transaction of the type described in
item 404(a) of Regulation S-K promulgated by the SEC other than transactions
described in the Company's Proxy Statement dated April 29, 2009.
3.21 Vote
Required.
Unless
the Merger is consummated pursuant to Section 31D-11-1105 of the WVBCA as
contemplated by Section 6.1(c) below, the
affirmative vote of the holders of a majority of the shares of Company Common
Stock outstanding on the record date for the Company Shareholder Meeting (as
defined in Section 6.1 below), and entitled to vote (the “Required Company Shareholder
Vote”), is the only vote of the holders of any class or series of the
Company’s capital stock necessary to adopt this Agreement, approve the Merger or
consummate any of the other transactions contemplated hereby. There
are no bonds, debenture notes or other indebtedness of the Company or its
subsidiaries the holders of which have the right to vote on any matters on which
the holders of the Company’s capital stock may vote.
3.22 Fairness
Opinion.
The
Company has received the opinion of Chaffe & Associates, Inc., dated the
date of this Agreement, to the effect that, as of such date, the Per-Share
Amount is fair, from a financial point of view, to the Company’s shareholders, a
signed copy of which opinion will be made available to Parent promptly after the
date hereof. The Company has been authorized by Chaffe &
Associates, Inc. to include such opinion in the Schedule TO,
Schedule 14D-9 and the Proxy Statement (as defined in Section 3.24 below).
3.23 Financial Advisory
Fees.
Other
than as set forth in Section 3.23 of the Company
Disclosure Letter, no broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the Offer, the
Merger, or any of the other transactions contemplated by this Agreement or the
Tender and Voting Agreement based upon arrangements made by or on behalf of the
Company.
3.24 Disclosure
Documents.
Subject
to Parent’s and Acquisition Co.’s fulfillment of their respective obligations
with respect thereto, the Schedule 14D-9 and any proxy statement to be sent to
the Company’s shareholders in connection with the Company Shareholder Meeting
(the “Proxy
Statement”) will contain (or will be amended in a timely manner so as to
contain) all information which is required to be included therein in accordance
with the Exchange Act and the rules and regulations thereunder and any other
applicable Law and will conform in all material respects with the requirements
of the Exchange Act and any other applicable Law, and neither the Schedule 14D-9
nor the Proxy Statement will, at the respective times they are filed with the
SEC or published, sent or given to Company’s shareholders, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading; provided, however, that no
representation or warranty is hereby made by the Company with respect to any
information supplied by Parent or Acquisition Co. in writing for inclusion in,
or with respect to Parent or Acquisition Co. information derived from Parent’s
public SEC filings which is included or incorporated by reference in, the
Schedule 14D-9 or the Proxy Statement. None of the information
supplied or to be supplied in writing by Company for inclusion or incorporation
by reference in, or which may be deemed to be incorporated by reference in, any
of the Offer Documents will, at the respective times the Offer Documents are
filed with the SEC or published, sent or given to Company’s shareholders,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not
misleading.
3.25 Real
Property.
(a) Other
than as set forth in Section 3.25 of the Company
Disclosure Letter, with respect to each parcel of real property owned by the
Company or any of the Subsidiaries which is material to the operations of the
Company and any of its Subsidiaries (collectively, the “Owned Real
Property”): (i) the Company or any of the Subsidiaries, as the case
may be, has good and marketable indefeasible fee simple title, free and clear of
all liens, charges, mortgages, security interests and encumbrances, except
(A) Permitted Encumbrances; (B) easements for the erection and
maintenance of public utilities exclusively serving the properties; or
(C) other easements and encumbrances affecting the properties so long as
same do not render title to the Owned Real Property unmarketable or uninsurable;
(ii) neither the Company nor any of the Subsidiaries, as the case may be,
has leased or otherwise granted to any Person the right to use or occupy such
Owned Real Property or any portion thereof; (iii) there are no outstanding
options, rights of first offer, rights of reverter or rights of first refusal to
purchase such Owned Real Property or any portion thereof or interest therein;
and (iv) neither the Company nor any of the Subsidiaries is a party to any
agreement or option to purchase any real property or interest
therein.
(b) With
respect to each premise leased by the Company or any of the Subsidiaries
(collectively, the “Leased Real
Property”), the Company or any of the Subsidiaries, as the case may be,
has delivered or made available to Parent and Acquisition Co. a true and
complete copy of all leases, subleases, licenses or other agreement including
all amendments, extensions, renewals or guaranties thereof (“Leases”) for such
Leased Real Property. With respect to each of the
aforementioned Leases: (i) with respect to the Company and its
Subsidiaries and, to the knowledge of the Company, with respect to the other
party thereto, such Lease is legal, valid, binding, enforceable and in full
force and effect; (ii) the transactions contemplated by this Agreement or
the Tender and Voting Agreement do not require the consent of any other party to
such Lease, will not result in a breach of or default under such Lease, or
otherwise cause such Lease to cease to be legal, valid, binding, enforceable and
in full force and effect on identical terms following the Closing;
(iii) there are no material disputes with respect to such Lease;
(iv) neither the Company nor any of the Subsidiaries, as the case may be,
nor, to the knowledge of the Company or any of the Subsidiaries, as the case may
be, any other party to the Lease is in breach or default under such Lease, and
to the knowledge of the Company no event has occurred or failed to occur or
circumstance exists which, with the delivery of notice, the passage of time or
both, would constitute such a breach or default, or permit the termination,
modification or acceleration of rent under such Lease; (v) to the knowledge
of the Company no security deposit or portion thereof deposited with respect to
such Lease has been applied in respect of a breach or default under such Lease
which has not been redeposited in full; (vi) neither the Company nor any of
the Subsidiaries, as the case may be, owes, nor will it owe in the future, any
brokerage commissions or finder’s fees with respect to such Lease;
(vii) the other party to such Lease is not an affiliate of, and otherwise
does not have any economic interest in, the Company or any of the Subsidiaries;
(viii) neither the Company nor any of the Subsidiaries, as the case may be,
has subleased, licensed or otherwise granted any Person the right to use or
occupy such Leased Real Property or any portion thereof; (ix) neither the
Company nor any of the Subsidiaries, as the case may be, has collaterally
assigned or granted any other security interest in such Lease or any interest
therein; and (x) there are no Liens on the estate or interest created by
such Lease, other than, in the case of (i) through (x) above, for any such case
where there is no current or reasonably likely material interference with the
operations conducted at the Leased Real Property as presently conducted (or as
would be conducted at full capacity).
(c) The
Company’s and each Subsidiary’s current use of the Leased Real Property is in
material compliance with applicable Law and any applicable restrictions of
record, and neither the Company nor any Subsidiary has received any notice of a
material violation of any such Law or restriction with respect to the Leased
Real Property that has not been cured.
(d) Neither
the Company nor any of the Subsidiaries, as the case may be, has received any
written notice, or the knowledge of the Company oral notice, from any insurance
company of any material defects or inadequacies in the Owned Real Property or
Leased Real Property or any part thereof, which would materially and adversely
affect the insurability of the same or of any termination or threatened (in
writing) termination of any policy of insurance.
3.26 Environmental
Matters.
(a) (i) Other
than as set forth in Section 3.26 of the Company
Disclosure Letter, and to the knowledge of the Company and the Subsidiaries, the
operations of the Company and the Subsidiaries are and have been, in material
compliance with all applicable Environmental Laws, including possession and
compliance with the terms of all Permits required by Environmental Laws, (ii) to
the knowledge of the Company and the Subsidiaries, there are no facts or
circumstances that would materially increase the cost of maintaining such
compliance in the future, (iii) there are no pending, or to the knowledge of the
Company, threatened suits, actions, investigations or Proceedings under or
pursuant to Environmental Laws by the Environmental Protection Agency or any
other Governmental Body or any other Person against the Company or any of the
Subsidiaries or involving any real property currently or, to the knowledge of
the Company, formerly owned, operated or leased or other sites at which
Hazardous Materials were disposed of by the Company or any of the Subsidiaries,
(iv) to the knowledge of the Company all real property owned or operated by the
Company or any of the Subsidiaries is free of contamination from Hazardous
Materials that is reasonably likely to create material liability for clean-up or
remediation under Environmental Laws and (v) and, to the Company's knowledge no
facts, circumstances or conditions relating to, associated with or attributable
to any real property currently or, formerly owned, operated or leased by the
Company or any of the Subsidiaries or the Company’s or any Subsidiary’s
operations thereon has resulted in or is reasonably likely to result in material
Environmental Liabilities; provided, however, that the Company and the
Subsidiaries do not make any of the foregoing representations and warranties
with respect to the Company's former properties in Troy, New York (including any
litigation or government action related to the former properties in Troy, New
York).
(b) The
Company and the Subsidiaries have provided to Parent any written allegations of
any Environmental Liabilities and all material environmental reports,
assessments and data produced in the last five years and in the possession or
control of the Company or the Subsidiaries including without limitation on the
foregoing with respect to the Company's former properties in Troy, New York
(including any litigation or other government action related to the former
properties in Troy, New York).
(c) “Environmental Laws”
shall mean any and all applicable federal, state, foreign, interstate, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
injunctions, decrees, requirements of any Governmental Body, any and all common
law requirements, rules and bases of liability regulating, relating to, or
imposing liability or standards of conduct concerning (i) pollution, (ii) any
materials or wastes defined, listed, classified or regulated as hazardous or
toxic, or as a pollutant or contaminant including petroleum, petroleum products,
friable asbestos, urea formaldehyde, radioactive materials and polychlorinated
biphenyls including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Clean Water
Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401
et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C., Section 136 et
seq., the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., and the
Endangered Species Act (16 U.S.C. Section 1531 et seq.) as such laws have been
amended or supplemented and the regulations promulgated pursuant thereto, and
all analogous state or local statutes. “Environmental
Liabilities” with respect to any Person shall mean any and all
liabilities of such Person or any of its subsidiaries (including any entity
which is, in whole or in part, a predecessor of such Person or any of such
subsidiaries), which (i) arise under or are based upon Environmental Laws
and (ii) relate to actions occurring on or prior to the Closing Date or
conditions existing on the Closing Date. “Hazardous Materials”
shall mean any materials or wastes, defined, listed, classified or regulated as
hazardous, toxic, a pollutant, or a contaminant regulated under any
Environmental Laws including, but not limited to, petroleum, petroleum products,
friable asbestos, urea formaldehyde, radioactive materials and polychlorinated
biphenyls.
3.27 Labor
Matters.
(a) As of the
date hereof, (i) no work stoppage, slowdown, lockout, labor strike,
arbitration or other labor dispute against the Company or any of the
Subsidiaries is pending or, to the knowledge of the Company, threatened,
(ii) no unfair labor practice charges, material grievances or complaints
are pending or, to the knowledge of the Company, threatened against the Company
or any of the Subsidiaries, (iii) neither the Company nor any of
the Subsidiaries is delinquent in any material respect in payments to any of its
employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed for it or amounts required to be
reimbursed to such employees, (iv) neither the Company nor any of the
Subsidiaries is liable for any payment to any trust or other fund or to any
Governmental Body with respect to unemployment compensation benefits, social
security or other benefits or obligations for employees (other than routine
payments to be made in the ordinary course of business consistent with past
practice), (v) no employee of the Company or any of the Subsidiaries, at the
executive officer level or above, has given notice to the Company or any of the
Subsidiaries that any such employee intends to terminate his or her employment
with the Company or any of the Subsidiaries, (vi) to the knowledge of the
Company, no employee of the Company or any of the Subsidiaries is in any respect
in violation of any term of any (A) employment contract where such failure would
be reasonably likely to have a Company Material Adverse Effect, (B)
nondisclosure agreement, (C) common law nondisclosure obligations, (D)
non-competition agreement, or (E) any restrictive covenant to a former employer
relating to the right of any such employee to be employed by the Company or any
of the Subsidiaries because of the nature of the business conducted or presently
proposed to be conducted by the Company or any of the Subsidiaries or to the use
of trade secrets or proprietary information of others, (vii) neither the Company
nor any of the Subsidiaries is a party to, or otherwise bound by, any consent
decree with any Governmental Body relating to employees or employment practices;
(viii) the Company and each of the Subsidiaries are in material compliance
with all applicable Law respecting labor and employment, including terms and
conditions of employment, workers’ compensation, occupational safety and health
requirements, immigration, plant closings and layoffs, wages and hours,
employment discrimination, disability rights or benefits, equal opportunity,
affirmative action, employee benefits, severance payments, labor relations,
employee leave issues and unemployment insurance and related matters; and
(ix) there are no complaints, charges or claims against the Company or any
of the Subsidiaries pending with or, to the knowledge of the Company, threatened
by any Governmental Entity or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment of any employees by the Company
and or any of the Subsidiaries.
(b) The
execution of this Agreement and the Tender and Voting Agreement, and
the consummation of the transactions contemplated hereby and thereby will not
result in a material breach or other violation of any collective bargaining
agreement or any other employment contract to which the Company or any of the
Subsidiaries is a party.
(c) Except as
set forth in Schedule 3.27 of the Company
Disclosure Letter, as of the date hereof, (i) neither the Company nor any
of the Subsidiaries is a party to, or otherwise bound by, any collective
bargaining agreement or any other agreement with a labor union, labor
organization or works council, nor are any such agreements presently being
negotiated; (ii) none of the employees of the Company or any of the
Subsidiaries is represented by any labor union, labor organization or works
council in their capacities as employees of the Company or any of the
Subsidiaries; (iii) no labor union, labor organization or works council or
group of employees of the Company or any of the Subsidiaries has made a pending
demand for recognition or certification to the Company or any of the
Subsidiaries, and there are no representation or certification proceedings or
petitions seeking a representation proceeding presently pending or, to the
knowledge of the Company, threatened in writing to be brought or filed with the
National Labor Relations Board or any other labor relations tribunal or
authority; or (iv) to the knowledge of the Company, no labor union, labor
organization or works council is seeking to organize any employees of the
Company or any of the Subsidiaries.
3.28 Disclaimer of Other
Representations and Warranties.
The
Company does not make, and has not made, any representations or warranties in
connection with the Offer or the Merger other than those expressly set forth
herein. It is understood that any data, any financial information or any
memoranda, offering materials or presentations previously submitted to Parent
are not and shall not be deemed to be or to include representations or
warranties of the Company. Except as expressly set forth herein, no
Person has been authorized by the Company to make any representation or warranty
relating to the Company or any Subsidiary thereof or their respective
businesses, or otherwise in connection with the Offer or the Merger and, if
made, such representation or warranty may not be relied upon as having been
authorized by the Company.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF PARENT AND ACQUISITION CO.
Parent
and Acquisition Co. jointly and severally represent and warrant to the Company
as follows:
4.1 Due
Organization.
Parent is
a corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania. Acquisition Co. is a
corporation duly organized, validly existing and in good standing under the laws
of the State of West Virginia.
4.2 Authority; Binding Nature of
Agreement.
Parent
and Acquisition Co. have the corporate right, power and authority to perform
their obligations under this Agreement; and the execution, delivery and
performance by Parent and Acquisition Co. of this Agreement have been duly
authorized by all necessary action on the part of Parent and Acquisition Co. and
their respective boards of directors. This Agreement constitutes the
legal, valid and binding obligation of Parent and Acquisition Co., enforceable
against them in accordance with its terms. No vote of the holders of
Parent’s securities is required to adopt this Agreement, approve the Merger or
permit the consummation of any of the other transactions contemplated by this
Agreement and the Tender and Voting Agreement.
4.3 Non-Contravention;
Consents.
Neither
the execution and delivery of this Agreement, by Parent and
Acquisition Co. nor the consummation by Parent and Acquisition Co. of the Offer
or the Merger will (a) conflict with or result in any breach of any
provision of the certificate or articles of incorporation or bylaws of Parent or
Acquisition Co., (b) result in a default by Parent or Acquisition Co. under
any contract to which Parent or Acquisition Co. is a party, except for any
default that will not prevent or delay the ability of Parent and Acquisition Co.
to consummate the Offer or the Merger, or (c) result in a violation by
Parent or Acquisition Co. of any order, writ, injunction, judgment or decree to
which Parent or Acquisition Co. is subject as of this date, except for any
violation that will not prevent or delay the ability of Parent and Acquisition
Co. to consummate the Offer or the Merger. Except as may be required
by the Securities Act, the Exchange Act, state securities or “blue sky” laws,
the WVBCA, any antitrust law or regulation (including the HSR Act) and the rules
of Nasdaq, Parent and Acquisition Co. are not and will not be required to make
any filing with or give any notice to, or to obtain any Consent from, any Person
in connection with the execution, delivery or performance of this Agreement or
the consummation of the Offer or the Merger.
4.4 Disclosure
Documents.
The Offer
Documents will contain at the time they are mailed to the shareholders of the
Company (or will be amended in a timely manner so as to contain) all information
which is required to be included therein in accordance with the Exchange Act and
the rules and regulations thereunder and any other applicable Law and will
conform in all material respects with the requirements of the Exchange Act and
any other applicable Law. At the time the Offer Documents are mailed
to the shareholders of the Company or at any time between the time the Offer
Documents are mailed to the shareholders of the Company and the acceptance of
shares of Company Common Stock pursuant to the Offer, the Offer Documents will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading; provided,
however, that no representation or warranty is hereby made by the Parent
or Acquisition Co. with respect to any information supplied by the
Company in writing for inclusion in, or with respect to the Company
or information derived from the Company’s public SEC filings which is included
or incorporated by reference in, the Offer Documents. None of the
information supplied or to be supplied in writing by or on behalf of Parent for
inclusion in the Proxy Statement will, at the time the Proxy Statement is mailed
to the shareholders of the Company or at the time of the Company Shareholder
Meeting (or any adjournment or postponement thereof), if required, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not
misleading.
4.5 Sufficient
Funds.
Acquisition
Co. has or Parent shall cause Acquisition Co. to have sufficient liquid cash
funds available to permit Acquisition Co. to satisfy the obligation to pay for
shares of Company Common Stock in the Offer, to pay the Merger Consideration in
the Merger and to pay the exercise price of any portion of the Top-up Option to
be paid in cash. Excluding any award pursuant to the exercise of dissenters
rights, the Per Share Amount payable upon closing of the Offer and the Merger
shall be the same amount .
ARTICLE
5
CERTAIN
COVENANTS OF THE COMPANY
5.1 Access and
Investigation.
During
the period from the date hereof through the Closing of the Merger (the “Pre-Closing Period”),
the Company shall, and shall cause the respective Representatives of the Company
and Subsidiaries to: (a) provide Parent and Parent’s
Representatives with reasonable access to the Acquired Companies’
Representatives, personnel and assets and to all existing books, records, Tax
Returns, work papers and other documents and information relating to the
Acquired Companies; (b) provide Parent and Parent’s Representatives with
such copies of the existing books, records, Tax Returns, work papers and other
documents and information relating to the Acquired Companies, and with such
additional financial, operating and other data and information regarding the
Acquired Companies and their financial condition, as Parent may reasonably
request; and (c) fully cooperate with Parent in its reasonable
investigation of the businesses of the Acquired Companies. Without
limiting the generality of the foregoing, during the Pre-Closing Period, the
Company shall furnish promptly to Parent (i) a copy of each report,
schedule, registration statement and other document filed by the Company during
the Pre-Closing Period with the SEC, and (ii) all other information
concerning its business, properties and personnel as Parent may reasonably
request. In addition, the Company shall during the Pre-Closing Period
give prompt written notice to Parent, and the Parent shall during the
Pre-Closing Period give prompt written notice to the Company, if it becomes
aware of (A) any representation or warranty made by it contained in this
Agreement becoming untrue or inaccurate in any material respect, (B) the
failure by it to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement, (C) the occurrence of an event or circumstance that could be
reasonably expected to make the timely satisfaction of any of the conditions set
forth in Annex I impossible or unlikely or that has had or would reasonably be
expected to have a Company Material Adverse Effect, and (D) the
commencement of any litigation or Proceeding against the Company, Parent or
Acquisition Co. Nothing in this Section 5.1 shall require the Company
to provide Parent or Acquisition Co. with any information relating to an
Alternative Transaction Proposal.
5.2 Operation of the
Business.
5.2.1. Unless Parent shall otherwise
consent in writing and except as expressly contemplated by this Agreement or in
the schedules to the Company Disclosure Letter (the inclusion of any such item
constituting a consent to such matter by Parent and Acquisition Co.), during the
Pre-Closing Period the Company shall conduct, and it shall cause the
Subsidiaries to conduct, its or their businesses in the ordinary course and
consistent with past practice, and the Company shall, and it shall cause each of
the Subsidiaries to, use its reasonable best efforts to preserve intact its
business organization, to keep available the services of its officers and
employees and to maintain satisfactory relationships with all Persons with whom
it does business. Without limiting the generality of the foregoing,
neither the Company nor any of the Subsidiaries will:
(a) amend or
propose to amend its articles of incorporation or bylaws (or comparable
governing instruments);
(b) authorize
for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant,
sell, pledge or dispose of any shares of, or any options, warrants, commitments,
subscriptions or rights of any kind to acquire or sell any shares of, the
capital stock or other securities of the Company or any Subsidiary, including
but not limited to any securities convertible into or exchangeable for shares of
stock of any class of the Company or any such Subsidiaries, except for the
issuance of Company Common Stock pursuant to the exercise of stock options
outstanding on the date of this Agreement in accordance with their present
terms;
(c) amend or
waive any of its rights under any provision of any of the Company Stock Option
Plans (provided that, notwithstanding anything in this Agreement to the
contrary, the Company may accelerate vesting under any or all of the Company
Options), any provision of any agreement evidencing any outstanding stock option
or any restricted stock purchase agreement, or otherwise modify any of the terms
of any outstanding option, warrant or other security or any related contract, in
each case with respect to the capital stock of the Company and
Subsidiaries;
(d) split,
combine or reclassify any shares of its capital stock or declare, pay or set
aside any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock, other than (i)
dividends or distributions to the Company or a Subsidiary and (ii) the
declaration and payment by the Company of quarterly cash dividends in the amount
of $0.06 per share in accordance with past practice, or directly or indirectly
redeem, purchase or otherwise acquire or offer to acquire any shares of its
capital stock or other securities;
(e) adopt or
enter into a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other material reorganization
or any agreement relating to an Alternative Transaction Proposal;
(f) permit
any material insurance policy naming it as a beneficiary or a loss payable payee
to be cancelled or terminated without notice to Parent;
(g) enter
into any agreement, understanding or commitment that restrains, limits or
impedes, in any material respect, the ability of any Acquired Company to compete
with or conduct any business or line of business;
(h) take any
action that could be reasonably expected to result in any of the conditions to
the Offer set forth in Annex I not being satisfied; or
(i) take any
action that could reasonably be expected to require the Company to become
obligated to pay any severance due to a change-in-control or similar provision
in any Contract other than as a result of the consummation of the transactions
contemplated by this Agreement.
5.2.2.
Unless Parent shall otherwise consent in writing (which consent shall not be
unreasonably withheld) and except as expressly contemplated by this Agreement or
in the schedules to the Company Disclosure Letter (the inclusion of any such
item constituting a consent to such matter by Parent and Acquisition Co.),
during the Pre-Closing Period the Company shall conduct, and it shall cause the
Subsidiaries to conduct, its or their businesses in the ordinary course and
consistent with past practice, and the Company shall, and it shall cause each of
the Subsidiaries to, use its reasonable best efforts to preserve intact its
business organization, to keep available the services of its officers and
employees and to maintain satisfactory relationships with all Persons with whom
it does business. Without limiting the generality of the foregoing,
neither the Company nor any of the Subsidiaries will unless the Parent shall
consent in writing (which consent shall not be unreasonably
withheld):
(a) make or rescind any material Tax
election or settle or compromise any material Tax liability of the Company or of
any Acquired Company;
(b) plan, announce, implement or effect
any reduction in force, lay-off, early retirement program, severance program or
other program or effort concerning the termination of employment of employees of
the Company or the Subsidiaries generally;
(c) create, incur or assume any
indebtedness for borrowed money except for (1)(i) borrowings in the ordinary
course of business under existing revolving credit facilities and lines of
credit and (ii) refinancing of existing obligations on terms that are no less
favorable to the Company or the Subsidiaries than the existing terms (other than
interest rates may vary); (2) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, indirectly, contingently or
otherwise) for the obligations of any Person (other than a Subsidiary);
(3) make any capital expenditures (other than as necessary to conduct the
business of the Company and Subsidiaries consistent with past practice) or make
any loans, advances or capital contributions to, or investments in, any other
Person (other than to a Subsidiary and customary travel, relocation or business
advances to employees); (4) acquire the stock or assets of, or merge or
consolidate with, any other Person; (5) voluntarily incur any material liability
or obligation (absolute, accrued, contingent or otherwise); or (6) sell,
transfer, mortgage, pledge or otherwise dispose of, or encumber, or agree to
sell, transfer, mortgage, pledge or otherwise dispose of or encumber, any assets
or properties, real, personal or mixed material to the Company and the
Subsidiaries taken as a whole other than to secure debt permitted under clauses
(i) and (ii) of subsection (1) of this paragraph (c) and other than the sale of
assets in the ordinary course of business consistent with past
practice;
(d) increase
in any manner the compensation of any of its officers or employees or enter
into, establish, amend or terminate any employment, consulting, retention,
change-in-control, collective-bargaining, bonus or other incentive compensation,
profit-sharing, health or other welfare, stock-option or other equity, pension,
retirement, vacation, severance, deferred compensation or other compensation or
benefit plan, policy, agreement, trust, fund or arrangement with, for or in
respect of, any shareholder, officer, director, other employee, agent,
consultant or affiliate other than (i) as required pursuant to the terms of
agreements or plans in effect on the date of this Agreement, or (ii) increases
in the salaries or wages of present employees (other than executives, officers
and directors) in the ordinary course of business and consistent with past
practice (for the avoidance of doubt, bonuses may be paid for calendar year 2009
performance consistent with past practice), except that the Company may make the
payments set forth at Section 5.2 of the Company
Disclosure Letter;
(e)(1) commence
or settle any material Proceeding, or (2) pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction of claims, liabilities or obligations either (A) to the extent
reflected or reserved against in the Latest Balance Sheet; or (B) incurred in
the ordinary course of business since the date of the Latest Balance
Sheet;
5.2.3. The Company shall, and the Company shall cause
each Subsidiary to, use its reasonable best efforts to comply in all respects
with all Laws applicable to it or any of its properties, assets or business and
maintain in full force and effect all the Permits necessary for, or otherwise
material to, such business.
5.3 No
Solicitation.
(a) “Alternative Transaction
Proposal” means (i) any tender or exchange offer for the Company's Common
Stock, (ii) any inquiry, proposal or indication of interest (whether binding or
non-binding) to the Company or its directors or executive officers relating to
any proposed tender or exchange offer, proposal for a merger, consolidation or
other business combination involving the Company or any subsidiary of the
Company or (iii) any inquiry, proposal or indication of interest (whether
binding or non-binding) to the Company or its directors or executive officers to
acquire in any manner beneficial ownership (as defined under Section 13(d) of
the Exchange Act and the rules and regulations thereunder) of ten percent (10%)
or more of the outstanding voting securities of the Company or ten percent (10%)
or more of the aggregate fair market value of the consolidated assets
of Company and its Subsidiaries, other than the transactions
contemplated by this Agreement or the Tender and Voting Agreement.
(b) The
Company shall not, nor shall it permit any Subsidiary to, nor shall it authorize
or permit any of its or any Subsidiary's officers, directors, employees,
representatives, investment bankers, financial advisers, accountants and agents
(collectively, “Representatives”),
directly or indirectly, to: (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action to, or
which is designed or reasonably likely to, facilitate, induce or encourage any
inquiries with respect to, or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Alternative Transaction Proposal;
(ii) participate in any discussion or negotiations regarding or facilitate
any effort or attempt to make any Alternative Transaction Proposal (except to
the extent necessary to disclose the Company’s obligations under this Section
5.3); (iii) approve, endorse or recommend any Alternative Transaction
Proposal, except to the extent permitted pursuant to paragraph (d) below; or
(iv) enter into any letter of intent or similar document or any contract,
agreement or commitment (whether binding or not) contemplating or otherwise
relating to any possible or proposed Alternative Transaction
Proposal.
(c) As
promptly as reasonably practicable (and in any event within 24 hours) after
receipt of any Alternative Transaction Proposal or any request for nonpublic
information or any inquiry relating in any way to any Alternative Transaction
Proposal, the Company shall provide Parent with oral and written notice of the
material terms and conditions of such Alternative Transaction Proposal, request
or inquiry, a copy of any term sheet or proposed definitive agreement regarding
such Alternative Transaction Proposal and any revisions thereto, and the
identity of the Person or group of Persons making any such Alternative
Transaction Proposal, request or inquiry. In addition, the Company
shall keep Parent informed, as promptly as reasonably practicable, in all
material respects of the status and details (including amendments or proposed
amendments) of any such Alternative Transaction Proposal, request or
inquiry.
(d) Notwithstanding
the covenants in Section 5.3(b) above, if the Company is not in breach of its
covenants contained in Section 5.3(b) above (it being understood that a breach by a
Subsidiary or Representative shall be deemed to be a breach by the Company for
purposes of this paragraph (d)), prior to the Offer Closing Date (as
defined in Section 7.3 below), in response to
an unsolicited bona
fide Alternative Transaction Proposal that the Company’s board of
directors determines in good faith (after receipt of advice from its outside
legal counsel and in consultation with its financial advisor) constitutes or
would reasonably be expected to lead to a Company Superior Proposal, the
Company’s board of directors may, to the extent that it determines in good faith
(after receipt of advice from its outside legal counsel) that such action is
required in order to comply with its fiduciary duties under applicable Law, take
the following actions to the extent reasonably necessary to satisfy such
fiduciary duties (but only after giving Parent not less than 24 hours
written notice of the intention to take such action and the identity of the
Person or group of Persons making such Alternative Transaction
Proposal): (i) furnish information with respect to the Company
to any Person pursuant to a customary confidentiality agreement (as determined
by the Company after consultation with its outside legal counsel) but in no
event less restrictive than the confidentiality provisions contained in the
Confidentiality, Non-disclosure and Exclusive Negotiation Agreement (as
hereafter defined) and provided that any information provided to such Person is
contemporaneously provided to Parent; and/or (ii) participate in
negotiations regarding such Alternative Transaction Proposal. For
purposes of this Agreement, a “Company Superior
Proposal” means any bona fide unsolicited written
Alternative Transaction Proposal made by a third party to acquire, directly or
indirectly, for consideration consisting of cash and/or securities (with any
financing necessary to consummate such Alternative Transaction Proposal to have
been committed by a financial institution), all of the Company’s capital stock
then outstanding or all of the assets of the Company, on terms which the
Company’s board of directors determines in its good faith judgment (based on the
advice of its advisors) to be more favorable from a financial point of view to
the Company’s shareholders than the Offer and the Merger, as the same may be
proposed to be amended (taking into account all factors relating to such
proposed transaction deemed relevant by the Company’s board of directors,
including without limitation the amount and form of consideration, the timing of
payment, the risk of consummation of the transaction, the financing thereof and
all other conditions thereto).
(e) Neither
the Company’s board of directors nor any committee thereof shall
(i) withhold, withdraw, amend or modify, or propose to withhold, withdraw,
amend or modify, the approval and Company Board Recommendation,
(ii) approve or recommend, or propose to approve or recommend, any
Alternative Transaction or (iii) cause the Company or any Subsidiary to
enter into any letter of intent, agreement in principle, acquisition agreement
or other agreement with respect to an Alternative Transaction unless the
Company’s board of directors shall have previously terminated this Agreement
pursuant to Sections 8.1(c), 8.1(e), 8.1(g) or 8.1(h).
(f) Nothing
contained in this Section 5.3 shall prohibit the Company from taking and
disclosing to its shareholders a position contemplated by Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act or from making any other disclosure
to the Company’s shareholders if, in the good faith judgment of the Company’s
board of directors, after receipt of advice from its outside legal counsel,
failure so to disclose would create a reasonable possibility of a breach of its
fiduciary duties to the Company’s shareholders under applicable Law; provided, however, neither
the Company nor its board of directors nor any committee thereof shall, except
as permitted by Section 5.3(e), withdraw or modify, or propose publicly to
withdraw or modify, the Company Board Recommendation or approve or recommend, or
propose publicly to approve or recommend, an Alternative Transaction
Proposal.
ARTICLE
6
COVENANTS
OF THE PARTIES
6.1 Shareholder Approval; Proxy
Statement.
(a) If the
adoption of this Agreement by the Company’s shareholders is required by
applicable Law, the Company shall, as promptly as practicable following the
Offer Closing Date (as defined in Section 7.3
below), take all action necessary under all applicable Law to call, give notice
of and hold a meeting of the holders of Company Common Stock to vote on the
adoption of this Agreement (the “Company Shareholder
Meeting”).
(b) If the
adoption of this Agreement by the Company’s shareholders is required by Law, the
Company shall, as soon as practicable following the Offer Closing Date, prepare
and file with the SEC the Proxy Statement and shall use its reasonable best
efforts to respond to any comments of the SEC or its staff and to cause the
Proxy Statement to be mailed to the Company’s shareholders, as promptly as
practicable.
(c) Notwithstanding
anything to the contrary contained in this Agreement, if Acquisition Co. and
Parent shall own of record by virtue of the Offer, the Top-Up Option or
otherwise at least 90% of the outstanding shares of Company Common Stock (such
that the conditions of Section 31D-11-1105 of the WVBCA are satisfied), the
parties shall take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after the expiration date of the Offer
(as such expiration date may have been extended in accordance with the terms of
this Agreement) without the Company Shareholder Meeting (a “Short Form
Merger”).
(d) Parent
agrees to cause all shares of Company Common Stock, if any, owned by Parent or
any subsidiary of Parent to be voted in favor of the adoption of the Agreement
at the Company Shareholder Meeting.
6.2 Regulatory
Approvals.
Each
party shall use its reasonable best efforts to file, as soon as practicable
after the date of this Agreement, all notices, reports and other documents
required to be filed by such party with any Governmental Body with respect to
the Offer, the Merger and the other transactions contemplated by this Agreement
and the Tender and Voting Agreement, and to submit promptly any additional
information requested by any such Governmental Body. Without limiting
the generality of the foregoing, the Company and Parent shall, promptly after
the date hereof, prepare and file any notifications required under any
applicable antitrust Laws in connection with the Offer, the Merger or the other
transactions contemplated by this Agreement and the Tender and Voting
Agreement. The Company and Parent shall respond as promptly as
practicable to any inquiries or requests received from any antitrust authority
or other Governmental Body in connection with antitrust or related
matters. Each of the Company and Parent shall (a) give the other
party prompt notice of the commencement or threat of commencement of any
Proceeding by or before any Governmental Body with respect to the Offer, the
Merger or any of the other transactions contemplated by this Agreement,
(b) keep the other party informed as to the status of any such Proceeding
or threat, and (c) promptly inform the other party of any communication to
or from any Governmental Body regarding the Offer, the Merger or any of the
other transactions contemplated by this Agreement and the Tender and Voting
Agreement. Except as may be prohibited by any Governmental Body or by
any Law, (x) each party will consult and cooperate with the other, and will
consider in good faith the views of the other, in connection with any analysis,
appearance, presentation, memorandum, brief, Proceeding under or relating to any
foreign, federal or state antitrust or fair trade Law, and (y) in
connection with any such Proceeding, each party will permit authorized
Representatives of the other to be present at each meeting or conference
relating to any such Proceeding and to have access to and be consulted in
connection with any document, opinion or proposal made or submitted to any
Governmental Body in connection with any such Proceeding. At the
request of Parent, the Company shall agree to divest, sell, dispose of, hold
separate or otherwise take or commit to take any action that limits its freedom
of action with respect to its or the Subsidiaries’ ability to operate or retain
any of the businesses, product lines or assets of the Company or any Subsidiary,
provided, however, that
any such action is conditioned upon the consummation of the Offer and
satisfaction of all conditions to the consummation of the Offer.
6.3 Employee
Benefits.
Parent
further agrees that to the extent Parent terminates or freezes a Company Benefit
Plan of the Acquired Companies, (i) that the employees of the Acquired Companies
who continue employment with Parent or its subsidiaries shall be enrolled in
comparable plans of Parent to the extent that Parent then offers comparable
plans to its employees who are employed at similar geographic locations, and
(ii) that for purposes of determining eligibility, vesting and benefits under
any such Parent plans, Parent will recognize service with the Acquired
Companies. For the avoidance of doubt, the participation of any
employees of the Acquired Companies in any equity based compensation plans of
Parent will be expressly determined by Parent in its sole
discretion. Nothing in this Agreement shall require Parent to retain
any Acquired Companies employees for any period of time after the Closing Date
and, subject to requirements of applicable law, Parent reserves the right, at
any time after the Closing Date, to terminate such employment and to amend,
modify or terminate any term and condition of employment including, without
limitation, any employee benefit plan, program, policy, practice or arrangement
or the compensation or working conditions of Acquired Company
employees. Prior to the Acceptance Time, the Company (acting through
the compensation committee of the Company Board of Directors if such committee
is comprised of independent directors as provided in Rule 14d-10(d)(2) or, if
such compensation committee in not comprised of such independent directors, by a
special committee as provided in Rule 14d-10(d)(2)) shall take all such steps as
may be required to cause each agreement, arrangement or understanding entered
into by the Company or any of its Subsidiaries with respect to any payments that
are to be made to any of its officers, directors or employees which are
described in Section 2.5(b) and Section 5.2 of the Company Disclosure Letter to be approved as
an “employment compensation, severance or other employee benefit arrangement”
within the meaning of Rule 14d-10(d)(1) under the Exchange Act and to satisfy
the requirements of the non-exclusive safe harbor set forth in
Rule 14d-10(d) under the Exchange Act. For purposes hereof,
“Acceptance Time” shall mean the time at which Acquisition Co. accepts for
payment shares of Company Common Stock tendered and not properly withdrawn
pursuant to the Offer.
6.4 Indemnification of Officers
and Directors.
(a) For a
period of six years after the Effective Time, Parent shall cause the Surviving
Corporation's Bylaws to continue to contain the following quoted indemnification
provisions which are contained in the Company's Bylaws and further agrees that
for a period of six years after the Effective Time these
indemnification provisions shall apply to each person who was an officer,
director or employee of the Company or its Subsidiaries at any time before the
date hereof or who becomes before the Effective Time, an officer, director, or
employee or shareholder of the Company (the "Indemnified Persons"):
"1. To the
extent permitted by applicable law, the corporation shall indemnify any person
(other than a shareholder of the corporation) who was or is a party or
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (including,
without limitation, an action or proceeding by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorney fees), judgments, fines, taxes and penalties and interest
thereon, and amounts paid in settlement actually and reasonably incurred by him
in connection with such action or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful.
2. To
the extent permitted by applicable law the corporation shall indemnify any
shareholder of the corporation who was or is a party or threatened to be made a
party to any threatened, pending or completed action or proceedings, whether
civil, criminal, administrative, or investigative (including, without
limitation, an action or proceeding by or in the right of the corporation) by
reason of the fact that he is or was a shareholder, director, officer, employee
or agent of the corporation, or is, or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorney fees), judgments, fines, taxes and penalties and interest
thereon, and amounts paid in settlement actually and reasonably incurred by him
in connection with such action or proceeding, except in relation to matters as
to which he shall have been finally adjudged to be liable by reason of having
been guilty of gross negligence or wilful misconduct. In the event of any other
judgment against any such shareholder or in the event of a settlement,
indemnification shall be made only if the corporation shall be advised, in case
none of the persons involved shall have been a director of the corporation, by
the board of directors, and otherwise by independent counsel to be appointed by
the board of directors, that in its or his opinion such shareholder was not
guilty of gross negligence or wilful misconduct, and, in the event of a
settlement, that such settlement was, or if still to be made, is, in the best
interests of the corporation. If a determination is to be made by the board of
directors, it may rely, as to all questions of law, on the advice of the
independent counsel.
3. The
foregoing rights of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such shareholder, director, officer,
employee or agent and shall be in addition to and not exclusive of, any other
rights to which such shareholder, director, officer, employee or agent may be
entitled."
(b) Parent
hereby absolutely, unconditionally and irrevocably guarantees and becomes surety
for the full and punctual performance by the Surviving Corporation of the
Surviving Corporation's obligations to indemnify the Indemnified Persons under
the foregoing subsection (a) of this Section 6.4 as and when such performance shall become
due. This is a guarantee of payment and performance and not merely of
collectibility, and a separate action or actions may be brought by the
Indemnified Persons against Parent regardless of whether action is brought
against the Surviving Corporation.
(c) Parent
shall maintain, or shall cause the Surviving Corporation to maintain, in effect
for three years following the Effective Time, the current directors’ and
officers’ liability insurance policies covering the officers and directors of
the Company (provided that Parent may substitute therefor policies of at least
the same coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring at or prior to the Effective
Time. In connection with the foregoing, the Company agrees in order
for Parent to fulfill its agreement to provide directors’ and officers’
liability insurance policies for three years to provide such insurer or
substitute insurer with such reasonable and customary representations as such
insurer may request with respect to the reporting of any prior
claims.
(d) In the
event that either Parent or any of its successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person, then, and in each
such case, proper provision shall be made so that the successors and assigns of
Parent shall assume the obligation to cause the Surviving Corporations Bylaws to
continue to contain the indemnification provisions in accordance with Section 6.4(a) and (b)and to provide directors and officers liability
insurance in accordance with Section 6.4(c).
(e) The
provisions of this Section 6.4 shall be enforceable by the Indemnified
Persons against Parent and shall be binding on all respective
successors and assigns of Parent.
6.5 Additional
Agreements.
Each of
Parent and the Company shall use its reasonable best efforts to take, or cause
to be taken, all actions necessary to consummate the Offer and the Merger and
make effective the other transactions contemplated by this Agreement and the
Tender and Voting Agreement. Without limiting the generality of the
foregoing, each party to this Agreement (a) shall make all filings and give
all notices required to be made and given by such party in connection with the
Offer and the Merger and the other transactions contemplated by this Agreement
and the Tender and Voting Agreement, (b) shall use its reasonable efforts
to obtain each Consent (if any) required to be obtained (pursuant to any
applicable Law or contract, or otherwise) by such party in connection with the
Offer and the Merger and each of the other transactions contemplated by this
Agreement and the Tender and Voting Agreement, and (c) shall use its
reasonable best efforts to lift any restraint, injunction or other legal bar to
the Offer, the Merger or any of the other transactions contemplated by this
Agreement and the Tender and Voting Agreement. Each party shall
promptly deliver to the other parties a copy of each such filing made, each such
notice given and each such Consent obtained by such party during the Pre-Closing
Period. Nothing contained in this Section or in this Agreement shall
obligate the Parent or Acquisition Co. to agree to hold separate or to dispose
of any assets or businesses of the Parent and its subsidiaries or of the Company
and its Subsidiaries.
6.6 Press
Releases.
Parent
and the Company shall consult with each other before issuing any press release
or otherwise making any public statement with respect to the Offer, the Merger
or any of the other transactions contemplated by this Agreement and the Tender
and Voting Agreement. Without limiting the generality of the
foregoing, the Company shall not, and shall not permit any Subsidiary or any
Representative of any of the Acquired Companies to, make any disclosure to
employees of any of the Acquired Companies, to the public or otherwise regarding
the Offer, the Merger or any of the other transactions contemplated by this
Agreement and the Tender and Voting Agreement, unless (a) Parent shall have
been given the opportunity to review and comment upon such disclosure and shall
have approved such disclosure or (b) such disclosure is required by
applicable Law.
6.7 Resignation of Officers and
Directors.
The
Company shall use its reasonable best efforts to obtain and deliver to Parent on
or immediately following the acceptance of shares of Company Common Stock
pursuant to the Offer the resignation of sufficient directors of each of the
Acquired Companies in order that Parent shall have proportionate representation
on the boards of directors as provided in Section 1.3.
6.8 General
Cooperation.
During
the Pre-Closing Period, the Acquired Companies will use their reasonable best
efforts to operate their businesses in such a manner as to achieve a smooth
transition consistent with the respective business interests of the Acquired
Companies and Parent. In this regard, the Acquired Companies and
Parent agree that they will enter into good-faith discussions concerning the
businesses of the Acquired Companies, including but not limited to personnel
policies and procedures, and other operational matters.
ARTICLE
7
CONDITIONS
PRECEDENT TO THE MERGER
The
obligations of the parties to effect the Merger are subject to the satisfaction,
at or prior to the Closing, of each of the following conditions:
7.1 Shareholder
Approval.
If
required by applicable Law, this Agreement shall have been duly adopted by the
Required Company Shareholder Vote.
7.2 No
Restraints.
No
temporary restraining order, preliminary or permanent injunction or other order
preventing the consummation of the Merger shall have been issued by any court of
competent jurisdiction and remain in effect, and there shall not be any Law
enacted or deemed applicable to the Merger that makes consummation of the Merger
illegal; provided,
however, that in the case of a restraining order, injunction or other
order, each of the parties shall have used their reasonable best efforts to
prevent the entry of any such restraining order, injunction or other order and
to appeal as promptly as possible any restraining order, injunction or other
order that may be entered.
7.3 Consummation of
Offer.
Acquisition
Co. shall have accepted for payment and paid for shares of Company Common Stock
pursuant to the Offer and delivered funds to the depositary to pay for such
shares (the first date on which the foregoing occurs is referred to as the
“Offer Closing
Date”).
ARTICLE
8
TERMINATION
8.1 Termination.
This
Agreement may be terminated prior to the Offer Closing Date or the Effective
Time, as set forth below, by action taken or authorized by the board of
directors of the party or parties effecting such termination, whether before or
after the Required Company Shareholder Vote, for any reason provided
below:
(a) by mutual
written consent of Parent and the Company;
(b) prior to
the Effective Time, by either Parent or the Company if a court of competent
jurisdiction or other Governmental Body shall have issued a final and
non-appealable order, decree or ruling, or shall have taken any other action,
having the effect of permanently restraining, enjoining or otherwise prohibiting
the acceptance of shares of Company Common Stock pursuant to the Offer or the
Merger or making consummation of the Offer or the Merger illegal; provided, however, that in
the case of a restraining order, injunction or other order, each of the parties
shall have used its reasonable best efforts to prevent the entry of any such
restraining order, injunction or other order and to appeal as promptly as
possible any restraining order, injunction or other order that may be
entered;
(c) prior to
the Offer Closing Date, by either Parent or the Company if the acceptance for
payment of shares of Company Common Stock equal to or in excess of the Minimum
Condition pursuant to the Offer shall not have occurred by the earlier of
(i) the expiration of the Offer in accordance with its terms as a result of
a failure of any of the conditions of the Offer, or (ii) the close of
business on June 15, 2010 (the “Drop Dead Date”);
provided, however, that a party shall not be permitted to terminate this
Agreement pursuant to this Section 8.1(c) if the failure of the acceptance for
payment of shares of Company Common Stock pursuant to the Offer by the close of
business on the Drop Dead Date was caused by the intentional failure on the part
of such party to perform its obligations under this Agreement;
(d) prior to
the Offer Closing Date, by Parent if (i) the Company shall not have performed
and complied, in all material respects, with each covenant or agreement
contained in this Agreement and required to be performed or complied with by it,
or (ii) if any of the representations and warranties of the Company set forth in
this Agreement (which for purposes of this Section 8.1(d) shall be read as
though none of them contained any qualifiers such as “Material Adverse Effect,”
“in all material respects” or other materiality qualifiers) shall not have been
true and correct as of the date of this Agreement and as of the then scheduled
expiration date of the Offer (as it may be extended in accordance with the terms
hereof) with the same force and effect as though made as of such date of
termination pursuant to this clause (or as of the date when made in the case of
any representation and warranty which specifically relates to an earlier date),
except where the failure of such representations and warranties to be true and
correct, individually or in the aggregate, would not be a Company Material
Adverse Effect; provided, however, if such failure to perform or comply or
inaccuracy of representations and warranties is curable by the Company, then
Parent may not terminate the Agreement under this Section 8.1(d) with respect to
a particular failure to perform or comply or inaccuracy of representations and
warranties prior to or during the ten-Business Day period commencing upon
delivery by Parent of written notice to the Company of such failure to perform
or comply or inaccuracy of representations and warranties, so long as the
Company continues to exercise its reasonable best efforts to cure such failure
to perform or comply or inaccuracy of representations and warranties during such
ten-Business Day period;
(e) prior to
the Offer Closing Date, by the Company if: (i) any of Parent’s
representations and warranties contained in this Agreement shall fail to be true
and correct as of the date of this Agreement, or as of a date subsequent to the
date of this Agreement (as if made on such subsequent date) (except to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall not be true and correct
as of such earlier date), except where such failure does not have a material
adverse effect on the ability of Parent or Acquisition Co. to consummate the
Offer or the Merger; or (ii) Parent shall not have complied with, in all
material respects, Parent’s covenants contained in this Agreement, except where
such noncompliance does not have a material adverse effect on the ability of
Parent or Acquisition Co. to consummate the Offer or the Merger; provided,
however, if such inaccuracy or breach is curable by Parent, then the Company may
not terminate this Agreement under this Section 8.1(e) with respect to a
particular inaccuracy or breach prior to or during the ten-business-day period
commencing upon delivery by the Company of written notice to Parent of such
inaccuracy or breach, so long as Parent continues to exercise its reasonable
best efforts to cure such inaccuracy or breach within such ten-business-day
period; or
(f) prior to
the Offer Closing Date, by Parent if the Company’s board of directors has
authorized the Company to enter into a binding written agreement regarding an
Alternative Transaction Proposal (it being understood that this Section 8.1(f)
does not grant to the Company any right to take such action) or if the Company's
board of directors withdraws or modifies in a manner adverse to Parent the
Company Board Recommendation or fails to reconfirm its recommendation within 15
business days after a written request to do so, or approves or recommends any
Alternative Transaction Proposal in respect of the Company; or
(g) prior to
the Offer Closing Date, by the Company if (i) the Company’s board of
directors determines that an Alternative Transaction Proposal constitutes a
Company Superior Proposal, (ii) the Company’s board of directors authorizes
the Company to enter into a binding written agreement regarding such Alternative
Transaction Proposal (provided that the Company complies with provisions of this
Agreement including Section 5.3), (iii) the Company provides information to
Parent regarding such Alternative Transaction Proposal as reasonably requested
by Parent, (iv) the Company notifies Parent in writing that the Company's board
of directors has determined that such Alternative Transaction Proposal
constitutes a Company Superior Proposal and intends to authorize the Company to
enter into a binding written agreement with respect thereto (v) within five
business days of receipt of such written notification by Parent, Parent does not
make an offer that the Company’s board of directors determines, in good faith
after consultation with its outside legal counsel and independent financial
adviser, to be at least as favorable to the Company’s shareholders as the
Company Superior Proposal) (it being understood that the Company shall not enter
into any binding agreement during such five-business-day period), and (vi) the
Company pays the Termination Fee at or prior to the termination of this
Agreement; provided,
however, that in the event that the determination by the Company’s board
of directors that such Alternative Transaction Proposal constitutes a Company
Superior Proposal is made less than five business days prior to the
scheduled expiration date of the Offer, Parent shall have the right, in its sole
discretion, to either (A) reduce the five-day period described above or
(B) extend the Offer, in either case so that such five-day period will end
one day prior to the expiration date of the Offer (and the Company hereby
consents to any such action by Parent including any such extension of the
expiration date of the Offer); or
(h) by the
Company if Parent or Acquisition Co. shall have (i) failed to commence the
Offer within ten business days of the date hereof (assuming that the Company has
timely complied with its obligations to cooperate with Parent and Acquisition
Co. in connection with the Offer), or (ii) failed to pay pursuant to the Offer
and in breach of this Agreement for shares of Company Common Stock validly
tendered and accepted for payment in the Offer by Acquisition Co.
8.2 Effect of
Termination.
If this
Agreement is terminated as provided in Section 8.1, it shall be of no further
force or effect; provided, however, that (i) Section 8.2, Section 8.3 and
Article 9 (and the Confidentiality, Non-disclosure and Exclusive
Negotiation Agreement, as defined below) shall survive the termination of this
Agreement, and shall remain in full force and effect, (ii) the termination
of this Agreement and the Tender and Voting Agreement shall not
relieve any party from any liability for fraud or from any liability for any
intentional or willful breach of any representation, warranty, covenant,
obligation or other provision contained in this Agreement, and (iii) no
termination of this Agreement shall in any way affect any of the parties’ rights
or obligations with respect to any shares of Company Common Stock accepted for
payment and paid for pursuant to the Offer prior to such
termination. For purposes hereof, “Confidentiality, Non-disclosure
and Exclusive Negotiation Agreement” shall mean that certain Confidentiality,
Non-disclosure and Exclusive Negotiation Agreement dated as of December 10,
2009, as amended, by and between Parent and the Company.
8.3 Expenses; Termination
Fees.
(a) Except as
set forth in this Section 8.3, all fees and expenses incurred in connection with
this Agreement and the transactions contemplated by this Agreement shall be paid
by the party incurring such expenses, whether or not the Offer or the Merger is
consummated; provided,
however, that Parent and the Company shall share equally all fees for the
filing of any notice or other document under any applicable antitrust law or
regulation, including the filing with the United States Department of Justice
and Federal Trade Commission pursuant to the HSR Act.
(b) If this
Agreement is terminated (i) by Parent or Acquisition Co. pursuant to
Section 8.1(f), or (ii) by the Company
pursuant to Section 8.1(g); then the Company shall pay to Parent substantially
concurrently with such termination, in the case of a termination by the Company,
or within two (2) Business Days thereafter in the case of a termination by
Parent, the Termination Fee.
(c) In the
event that this Agreement is terminated pursuant to Section 8.1(d) by reason of a breach by the Company of any
representation, warranty or covenant of the Company contained in this Agreement
that the Company shall have failed to cure in accordance with the notice and
cure provisions of Section 8.1(d), the Company shall
promptly reimburse Parent for its and Acquisition's reasonable out-of-pocket
fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby. In the event that (i) this Agreement is
terminated pursuant to Section 8.1(d) by reason of a breach by the Company of
any representation, warranty or covenant of the Company contained in this
Agreement that the Company shall have failed to cure in accordance with the
notice and cure provisions of Section 8.1(d),
(ii) prior to such termination an Alternative Transaction Proposal shall
have been publicly disclosed or otherwise communicated to the Company or the
Company's board of directors and not withdrawn, and (iii) within six
(6) months after such termination, the Company consummates a transaction
contemplated by any Alternative Transaction Proposal, then the Company shall pay
to Parent the Termination Fee (less any amount previously paid pursuant to this
Section 8.3(c)) on the
date no later than two (2) Business Days after the consummation of a
transaction that constitutes an Alternative Transaction Proposal; provided,
however that in no event shall a transaction engaged in by the Company during
such six month period obligate the Company to pay the Termination Fee if (x) the
Company's shareholders constitute at least sixty percent (60%) of the equity
holders of the surviving entity in such transaction and (y) such transaction was
not the Alternative Transaction Proposal publicly disclosed or otherwise
communicated to the Board of Directors prior to the termination of this
Agreement. For purposes of the immediately preceding sentence, the
term “Alternative
Transaction Proposal” shall have the meaning assigned to such term in
Section 5.3 except that the references to “ten
percent (10%)” therein shall be deemed to be references to “a
majority.”
(d) In the
event that this Agreement is terminated pursuant to Section 8.1(e) by reason of a breach by Parent or Acquisition
Co. of any representation, warranty or covenant of Parent or Acquisition Co.
contained in this Agreement that Parent or Acquisition shall have failed to cure
in accordance with the notice and cure provisions of Section 8.1(e), Parent shall promptly reimburse Company for
Company's reasonable out-of-pocket fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby.
(e) In the
event this Agreement is terminated pursuant to Section 8.1(h)(ii) a fee in
immediately available United States Dollars in the amount of three million three
hundred and seventythree thousand dollars ($3,373,000.00) shall be paid by the
Parent to the Company within two (2) Business Days of termination.
(f) For
purposes of this Agreement, “Termination Fee”
shall mean a fee in immediately available United States Dollars equal to three
million three hundred and seventythree thousand dollars
($3,373,000.00).
(g) Company
acknowledges and agrees that the agreements contained in this Section 8.3 are an integral part of the transactions
contemplated by this Agreement, that the Termination Fee is not a penalty but
rather liquidated damages in a reasonable amount that will compensate Parent and
Acquisition Co. in the circumstances where such fee is payable to Parent, and
that, without these agreements, Parent would not have entered into this
Agreement. Accordingly, if the Company fails to pay when due any
amount payable under this Section 8.3, then:
(i) the Company shall reimburse Parent for all costs and expenses
(including fees and disbursements of counsel) incurred in connection with the
collection of such overdue amount and the enforcement by Parent of its rights
under this Section 8.3; and (ii) the
Company shall pay to Parent interest on such overdue amount (for the period
commencing as of the date such overdue amount was originally required to be paid
and ending on the date such overdue amount is actually paid to Parent in full)
at a rate per annum equal to 300 basis points over the “prime rate” (as
announced by PNC Bank, N.A. or any successor thereto) in effect on the date such
overdue amount was originally required to be paid.
(h) If the
Parent fails to pay when due the fee set forth at Section 8.3(e) then (i) Parent
shall reimburse Company for all costs and expenses (including fees and
disbursements of counsel) incurred in connection with the collection of such
overdue amount and the enforcement by Company of its rights under this Section
8.3 and (ii) the Parent shall pay to Company
interest on such overdue amount, computed in the same manner as in Section 8.3(g)(ii).
ARTICLE
9
GENERAL
PROVISIONS
9.1 Amendment.
Subject
to Section 1.3(c), this Agreement may be amended with the approval of the
respective boards of directors of the Company and Parent at any
time. This Agreement may not be amended except by an instrument in
writing signed on behalf of all of the parties hereto.
9.2 Waiver and
Consents.
No
failure on the part of any party to exercise any power, right, privilege or
remedy under this Agreement, and no delay on the part of any party in exercising
any power, right, privilege or remedy under this Agreement, shall operate as a
waiver of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any other
or further exercise thereof or of any other power, right, privilege or
remedy. Subject to Section 1.3(c), no party shall be deemed to have
waived any claim arising out of this Agreement, or any power, right, privilege
or remedy under this Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written instrument duly executed
and delivered on behalf of such party; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section.
9.3 Knowledge
Convention.
Whenever
any statement herein or in any schedule, exhibit, certificate or other document
delivered to any party pursuant to this Agreement is made “to the knowledge” of
a party hereto or words of similar intent, such statement shall be deemed to be
made to the actual knowledge of the persons identified on Schedule 9.3 of the
Company Disclosure Letter after a reasonable investigation of the subject matter
thereof.
9.4 No Survival of
Representations and Warranties.
None of
the representations and warranties contained in this Agreement or in any
certificate delivered pursuant to this Agreement shall survive the Merger; provided, however, that this
Section 9.4 shall not limit any covenant or agreement of the parties hereto
which by its terms provides for performance after the Effective Time or after
termination of this Agreement.
9.5 Entire
Agreement.
This
Agreement (together with its attachments, exhibits, annexes and schedules) and
the other agreements referred to herein constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
or between any of the parties with respect to the subject matter hereof and
thereof; provided,
however, that the confidentiality provisions of the Confidentiality and
Non-disclosure Agreement shall not be superseded and shall remain in full force
and effect.
9.6 Counterparts and
Delivery.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same
instrument. Signatures delivered by means of facsimile or other
electronic transmission shall be valid and binding to the same extent as the
delivery of original signatures.
9.7 Third-Party
Beneficiaries.
No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies under any provision of this Agreement
except for (a) Indemnified Persons pursuant to, as provided by and in accordance
with Section 6.4, and (b) holders of Company Options pursuant to, as provided by
and in accordance with Section 2.5(b).
9.8 Governing Law; Jurisdiction
and Venue.
This
Agreement shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Pennsylvania, regardless of any conflicts-of-law
principles. In any action between or among any of the parties arising
out of or relating to this Agreement or any of the transactions contemplated by
this Agreement: (a) each of the parties irrevocably and
unconditionally consents and submits to the exclusive jurisdiction and venue of
the state and federal courts located in the Western District of the Commonwealth
of Pennsylvania and irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action brought in such court has
been brought in an inconvenient forum; (b) if any such action is commenced
in a state court, then, subject to applicable Law, no party shall object to the
removal of such action to any federal court located in the Western District of
the Commonwealth of Pennsylvania; (c) each of the parties irrevocably
waives the right to trial by jury; and (d) each of the parties irrevocably
consents to service of process by first-class certified mail, return receipt
requested, postage prepaid, to the address at which such party is to receive
notice in accordance with Section 9.12.
9.9 Specific
Performance.
The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties
agree that each party shall be entitled to an injunction or restraining order to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States located in the Western
District of the Commonwealth of Pennsylvania, this being in addition to any
other right or remedy to which such party may be entitled under this Agreement,
at law or in equity.
9.10 Headings.
The
section, paragraph and other headings contained in this Agreement are inserted
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.11 Assignability.
This
Agreement shall be binding upon, and shall be enforceable by and inure solely to
the benefit of, the parties hereto and their respective successors and assigns;
provided, however, that
neither this Agreement nor any of the Company’s rights hereunder may be assigned
by the Company without the prior written consent of Parent, and any attempted
assignment of this Agreement or any of such rights by the Company without such
consent shall be void and of no effect; provided, further, that
Parent may assign this Agreement to any direct or indirect subsidiary of Parent
without the prior written consent of the Company, but any such assignment shall
not relieve Parent of any of its obligations hereunder. Any
assignment prohibited under this Section 9.11 shall be null and
void.
9.12 Notices.
All
notices, demands, consents, requests, instructions and other communications to
be given or delivered or permitted under or by reason of the provisions of this
Agreement, or in connection with the transactions contemplated hereby and
thereby shall be in writing and shall be deemed to be delivered and received by
the intended recipient as follows: (a) if personally delivered,
on the business day after it is sent (as evidenced by the receipt of the
personal delivery service); (b) if mailed by certified or registered mail
with return receipt requested, four business days after the aforesaid mailing;
(c) if delivered by overnight courier (with all charges having been
prepaid), on the second business day after it is sent (as evidenced by the
receipt of the overnight courier service of recognized standing); or (d) if
delivered by facsimile transmission, on the business day of such delivery if
confirmed within 48 hours thereafter by a signed original sent in one of the
manners set forth in (a) through (c) above. If any notice, demand,
consent, request, instruction or other communication cannot be delivered because
of a changed address of which no notice was given (in accordance with this
Section 9.12), or the refusal to accept same, the notice shall be deemed
received on the business day the notice is sent (as evidenced by a sworn
affidavit of the sender). All such notices, demands, consents,
requests, instructions and other communications will be sent to the following
addresses or facsimile numbers as applicable:
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If to
Company:
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Portec
Rail Products, Inc.
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000
Xxx Xxxxxxxx Xxxx
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Xxxxxxxxxx,
XX 00000
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Attention: Xxxxxxxx
Xxxxxxxx, Chairmand of the Board
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Fax: 000-000-0000
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With a copy
to:
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Xxxx
Xxxxxx Xxxxxxxx & Xxxxxx, P.C.
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0000
Xxxxxxxxx Xxx., X.X.
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Xxxxx
000
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Xxxxxxxxxx,
X.X. 00000
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Attention:
Xxxx Xxxxxx, Esq.
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Fax: (000)
000-0000
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If
to Parent or
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Acquisition
Co.:
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X.
X. Xxxxxx Company
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000
Xxxxxxx Xxxxx
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Xxxxxxxxxx,
XX 00000
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Attention: Xxxxx
X. Xxxxx,
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Vice
President and General Counsel
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fax: 000-000-0000
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With a copy
to:
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Xxxxxxxx
Xxxxxxxxx & Xxxxxx PC
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One
Oxford Centre
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000
Xxxxx Xxxxxx, 00xx Xxxxx
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Xxxxxxxxxx,
Xxxxxxxxxxxx 00000
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Attention: Xxxxx
X. Xxxxx, Esq.
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Fax: (000) 000-0000
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9.13 Cooperation.
Each
party to this Agreement agrees to reasonably cooperate with the other parties
and to execute and deliver such further documents, certificates, agreements and
instruments and to take such other actions as may be reasonably requested by the
other parties to evidence or reflect the transactions contemplated by this
Agreement.
9.14 Severability.
Any term
or provision of this Agreement that is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof is
invalid, void or unenforceable, the parties agree that the court making such
determination shall have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, void or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
9.15 Construction.
The
parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement. Except as
otherwise indicated, all references in this Agreement to “Sections,” “Exhibits”
and “Annexes” are intended to refer to Sections of this Agreement and Exhibits
or Annexes to this Agreement. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms.
[Remainder
of page intentionally left blank]
In Witness Whereof, the
parties have caused this Agreement and Plan of Merger to be executed as of the
date first above written.
COMPANY:
PORTEC
RAIL PRODUCTS, INC.
By: /s/ Xxxxxxxx X.
Xxxxxxxx
Its:
Chairman
PARENT:
X.
X. XXXXXX COMPANY
By: /s/ Xxxx X.
Xxxxxxxxxxx
Its:
President and Chief
Executive Officer
ACQUISITION
CO.:
XXXXXX
XXXXXX COMPANY
By: /s/ Xxxx X.
Xxxxxxxxxxx
Its:
President and Chief
Executive Officer
ANNEX
I
CONDITIONS
OF THE OFFER
Capitalized
terms used but not defined herein shall have the meanings set forth in the
Agreement and Plan of Merger (the “Agreement”) of which
this Annex I is a part. Notwithstanding any other provision of the
Offer, Acquisition Co. shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
under the Exchange Act (relating to Acquisition Co.’s obligation to pay for or
return tendered shares of Company Common Stock promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to any applicable rules and regulations of the SEC, the payment for,
any tendered shares of Company Common Stock, and may amend the Offer consistent
with the terms of the Agreement or terminate the Offer and not accept for
payment any tendered shares of Company Common Stock, if (i) the Minimum
Condition shall not have been satisfied at the time of expiration of the Offer
(as the same may be extended pursuant to the Agreement), or (ii) on any
scheduled expiration date any of the following events or circumstances shall
occur or exist:
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(a)
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the
waiting period (or any extension thereof) applicable to the Offer or the
Merger under the HSR Act shall not have expired or been
terminated;
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(b)
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any
waiting period applicable to the Offer or the Merger under any applicable
foreign antitrust or competition-related legal requirements shall not have
expired or been terminated, and any consent required under any applicable
foreign antitrust or competition-related legal requirement in connection
with the Offer or the Merger shall not have been obtained or not be in
full force and effect;
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(c)
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any
event that has had or would reasonably be expected to result in a Company
Material Adverse Effect;
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(d)
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(i)
any general suspension of trading in, or limitation on prices for,
securities on the New York Stock Exchange or Nasdaq Global Select Market,
(ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any limitation by
federal or state authorities on the extension of credit by lending
institutions, or a disruption of or material adverse change in either the
syndication market for credit facilities or the financial, banking or
capital markets that have a disproportionate adverse effect on the Company
and its Subsidiaries taken as a whole relative to other industry
participants, or (iii) a commencement of war or armed hostilities (other
than a continuation of such wars, conflicts or actions in which the United
States armed forces were engaged as of the date of the Agreement) directly
involving the United States or any other jurisdiction in which the Company
or any of the Company's Subsidiaries has material assets or operations,
provided that such action results in a Company Material Adverse Effect or
materially or adversely affects or delays the consummation of the
Offer;
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(e)
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any
of the representations and warranties of the Company set forth in the
Agreement (without giving effect to any materiality or similar
qualification contained therein) shall not be true and correct, as of the
date of this Agreement or as of a date subsequent to the date of this
Agreement as if made on such subsequent date, except to the extent the
failure of any such representations and warranties to be true and correct
(without giving effect to any materiality or similar qualification
contained therein), taken together in their entirety, would not reasonably
be expected to have a Company Material Adverse Effect; provided, however, that
any such breach capable of being cured has not in fact been cured prior to
the initial expiration date of the Offer (or such later date upon which
the Offer shall expire in accordance with Section
1.1(d));
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(f)
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the
Company shall not have performed and complied, in all material respects,
with each covenant or agreement contained in the Agreement and required to
be performed or complied with by it and such failure would reasonably be
expected to have a Company Material Adverse Effect and such failure is
incapable of being cured or has not been cured during the grace period
described in the proviso below; provided, however, if
such breach is curable by the Company, then Parent may not terminate the
Agreement under Section 8.1(d) of the Agreement with respect to a
particular breach prior to or during the ten-business-day period
commencing upon delivery by Parent of written notice to the Company of
such breach, so long as the Company continues to exercise commercially
reasonable efforts to cure such breach during such ten-business-day
period;
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(g)
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any
temporary restraining order, preliminary or permanent injunction or other
order preventing the consummation of the Offer or the Merger or any of the
other transactions contemplated by the Agreement shall be pending or shall
have been issued by any court of competent jurisdiction and remain in
effect, or there shall be any Law enacted or deemed applicable by a
Governmental Body to the Offer or the Merger or any of the other
transactions contemplated by the Agreement that makes consummation of the
Offer, the Merger or any of the other transactions contemplated by the
Agreement illegal;
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(h)
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any
antitrust regulator or body having decided to take, institute, implement
or threaten any action proceeding, suit, investigation, enquiry or
reference, or having required any action to be taken or otherwise having
done anything or having enacted, made or proposed any statute, regulation,
decision, order or change to published practice or there would
be outstanding any statute, regulation, decision or order which
would or might:
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1.
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impose
any limitation on, or result in a delay in, the ability of Parent or
Acquisition Co. directly or indirectly to acquire or hold or to exercise
effectively all or any rights of ownership in respect of shares or other
securities (or the equivalent) in the Company or its Subsidiaries or on
the ability of Parent directly or indirectly to hold or exercise
effectively any rights of ownership in respect of shares or other
securities (or the equivalent) in, or to exercise management control over,
the Company or any of its Subsidiaries,
or
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2.
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require
Parent, Company or Acquisition Co. to divest any of their
respective assets or businesses in connection with the Offer
and the Merger or any of the transactions contemplated by the
Agreement;
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(i)
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the
failure of the Company to obtain any necessary consent to the transactions
contemplated by this Agreement required by the Contracts with the
Company's vendors identified in writing by the Parent to the Company on or
prior to the date of this Agreement;
or
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(j)
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the
Agreement shall have been terminated in accordance with its
terms.
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The
foregoing conditions are for the sole benefit of Parent and Acquisition Co. and
(except for the Minimum Condition) may be waived by Parent and Acquisition Co.,
in whole or in part at any time and from time to time, in the sole discretion of
Parent and Acquisition Co. The failure by Parent or Acquisition Co. at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
