AGREEMENT AND PLAN OF MERGER Dated as of May 20, 2007, Among OLIN CORPORATION, PRINCETON MERGER CORP. And PIONEER COMPANIES, INC.
Exhibit
2.1
EXECUTION
VERSION
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Dated
as of May 20, 2007,
Among
XXXX
CORPORATION,
PRINCETON
MERGER CORP.
And
PIONEER
COMPANIES, INC.
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Page
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The
Merger
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The
Merger
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1
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Closing
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1
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Effective
Time
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2
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Effects
of the Merger
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2
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Certificate
of Incorporation and Bylaws
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2
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Directors
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2
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Officers
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2
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Effect
of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates
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Effect
on Capital Stock
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3
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Exchange
of Certificates
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4
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Representations
and Warranties
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Representations
and Warranties of the Company
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6
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Representations
and Warranties of Parent and Sub
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29
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Covenants
Relating to Conduct of Business; No Solicitation
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Conduct
of Business
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30
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No
Solicitation
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36
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Additional
Agreements
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Preparation
of the Proxy Statement; Stockholders’ Meeting
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38
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Access
to Information; Confidentiality
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39
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Commercially
Reasonable Efforts
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40
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Company
Stock Options; Company Restricted Shares
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41
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Indemnification;
Advancement of Expenses; Exculpation and Insurance
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42
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Fees
and Expenses
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43
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Page
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Public
Announcements
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44
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Stockholder
Litigation
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44
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Employee
Matters
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45
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Cooperation
with Respect to Financing
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46
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Cooperation
with Respect to Governmental Entities
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46
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Convertible
Notes
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46
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Severance
Matters
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47
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Conditions
Precedent
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Conditions
to Each Party’s Obligation to Effect the Merger
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48
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Conditions
to Obligations of Parent and Sub
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49
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Conditions
to Obligation of the Company
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50
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Frustration
of Closing Conditions
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50
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Termination,
Amendment and Waiver
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Termination
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51
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Effect
of Termination
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52
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Amendment
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52
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Extension;
Waiver
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52
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Procedure
for Termination or Amendment
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53
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General
Provisions
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Nonsurvival
of Representations and Warranties
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53
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Notices
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53
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Definitions
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54
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Interpretation
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56
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Consents
and Approvals
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56
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Counterparts
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56
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Entire
Agreement; No Third-Party Beneficiaries
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56
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GOVERNING
LAW
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57
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Assignment
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57
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Specific
Enforcement; Consent to Jurisdiction
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57
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Waiver
of Jury Trial
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58
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Severability
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58
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| Annex I |
Index
of Defined Terms
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Restated
Certificate of Incorporation of the Surviving Corporation
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AGREEMENT
AND PLAN OF MERGER (this “Agreement”) dated as of May 20, 2007, among XXXX
CORPORATION, a Virginia corporation (“Parent”), PRINCETON MERGER CORP., a
Delaware corporation and a wholly owned Subsidiary of Parent (“Sub”), and
PIONEER COMPANIES, INC., a Delaware corporation (the “Company”).
WHEREAS
the Board of Directors of each of the Company and Sub has approved and declared
advisable, and the Board of Directors of Parent has approved, this Agreement
and
the merger of Sub with and into the Company (the “Merger”), upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued
and
outstanding share of common stock, par value $0.01 per share, of the Company
(“Company Common Stock”), other than (i) shares of Company Common Stock
directly owned by Parent, Sub or the Company and (ii) the Appraisal Shares,
will be converted into the right to receive $35.00 in cash; and
WHEREAS
Parent, Sub and the Company desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
NOW,
THEREFORE, in consideration of the representations, warranties, covenants
and
agreements contained in this Agreement, and subject to the conditions set
forth
herein, the parties hereto agree as follows:
The
Merger
SECTION
1.01. The Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and in accordance
with
the General Corporation Law of the State of Delaware (the “DGCL”), Sub shall be
merged with and into the Company at the Effective Time. Following the
Effective Time, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation in the Merger (the
“Surviving Corporation”) and shall succeed to and assume all the rights and
obligations of Sub in accordance with the DGCL.
SECTION
1.02. Closing. The closing of the Merger
(the “Closing”) will take place at 10:00 a.m. on a date to be specified by
the parties, which shall be no later than the second business day after
satisfaction or (to the extent permitted by law) waiver of the conditions
set
forth in Article VI (other than those conditions that by their terms are to
be satisfied at the Closing, but subject to the satisfaction or (to the extent
permitted by law) waiver of those conditions), at the offices of Cravath,
Swaine & Xxxxx LLP, Worldwide Plaza, 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, unless another time, date or place is agreed to
in writing by Parent and the Company; provided, however, that if
all the conditions set forth in Article VI shall no longer be satisfied or
(to the extent permitted by law) waived on such second business day, then
the
Closing shall take place on the first business day on which all such conditions
shall have been satisfied or (to the extent permitted by law)
waived. The date on which the Closing occurs is referred to in this
Agreement as the “Closing Date”.
SECTION
1.03. Effective Time. Subject to the
provisions of this Agreement, as soon as practicable on the Closing Date,
the
parties shall file with the Secretary of State of the State of Delaware a
certificate of merger (the “Certificate of Merger”) executed and acknowledged by
the parties in accordance with the relevant provisions of the DGCL and, as
soon
as practicable on or after the Closing Date, shall make all other filings
or
recordings required under the DGCL. The Merger shall become effective
upon the filing of the Certificate of Merger with the Secretary of State
of the
State of Delaware, or at such later time as Parent and the Company shall
agree
and shall specify in the Certificate of Merger (the time the Merger becomes
effective being the “Effective Time”).
SECTION
1.04. Effects of the Merger. The Merger
shall have the effects set forth in Section 259 of the DGCL.
SECTION
1.05. Certificate of Incorporation and
Bylaws. (a) The Fourth Amended and Restated
Certificate of Incorporation of the Company (the “Company Certificate”)
shall be amended at the Effective Time as set forth in Exhibit A and, as so
amended, such Company Certificate shall be the Amended and Restated Certificate
of Incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
(b) The
Bylaws of Sub, as in effect immediately prior to the Effective Time, shall
be
the Bylaws of the Surviving Corporation until thereafter changed or amended
as
provided therein or by applicable law.
SECTION
1.06. Directors. The directors of Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may
be.
SECTION
1.07. Officers. The officers of Sub
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may
be.
Effect
of
the Merger on the Capital Stock of the
Constituent
Corporations; Exchange of Certificates
SECTION
2.01. Effect on Capital Stock. At the
Effective Time, by virtue of the Merger and without any action on the part
of
the holder of any shares of Company Common Stock or any shares of capital
stock
of Parent or Sub:
(a) Capital
Stock of Sub. Each issued and outstanding share of capital stock
of Sub shall be converted into and become one validly issued, fully paid
and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
(b) Cancellation
of Treasury Stock and Parent-Owned Stock. Each share of Company
Common Stock that is directly owned by the Company, Parent or Sub immediately
prior to the Effective Time shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion
of Company Common Stock. Each share of Company Common Stock
(including Company Restricted Shares) issued and outstanding immediately
prior
to the Effective Time (other than shares to be canceled in accordance with
Section 2.01(b) and the Appraisal Shares) shall be converted into the right
to receive $35.00 in cash, without interest (the “Merger
Consideration”). At the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be canceled
and shall cease to exist, and each holder of a certificate which immediately
prior to the Effective Time represented any such shares of Company Common
Stock
(each, a “Certificate”) shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration. As provided in
Section 2.02(h), the right of any holder of a Certificate to receive the
Merger Consideration shall be subject to and reduced by the amount of any
withholding that is required under applicable tax law.
(d) Appraisal
Rights. Notwithstanding anything in this Agreement to the
contrary, shares (the “Appraisal Shares”) of Company Common Stock issued and
outstanding immediately prior to the Effective Time that are held by any
holder
who is entitled to demand and properly demands appraisal of such Appraisal
Shares pursuant to, and who complies in all respects with, the provisions
of
Section 262 of the DGCL (“Section 262”) shall not be converted into
the right to receive the Merger Consideration as provided in
Section 2.01(c), but instead such holder shall be entitled to payment of
the fair value of such Appraisal Shares in accordance with the provisions
of
Section 262. At the Effective Time, all Appraisal Shares shall
no longer be outstanding, shall automatically be canceled and shall cease
to
exist, and each holder of Appraisal Shares shall cease to have any rights
with
respect thereto, except the right to receive the fair value of such Appraisal
Shares in accordance with the provisions of
Section 262. Notwithstanding the foregoing, if any such holder
shall fail to perfect or otherwise shall waive, withdraw or lose the right
to
appraisal under Section 262, or a court of competent jurisdiction shall
determine that such holder is not entitled to the relief provided by
Section 262, then the right of such holder to be paid the fair value of
such holder’s Appraisal Shares under Section 262 shall cease and such
Appraisal Shares shall be deemed to have been converted as of the Effective
Time
into, and to have become, the right to receive the Merger Consideration as
provided in Section 2.01(c). The Company shall serve prompt
notice to Parent of any demands received by the Company for appraisal of
any
shares of Company Common Stock, and Parent shall have the right to participate
in and direct all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, without
the prior written consent of Parent, voluntarily make any payment with respect
to, or settle or offer to settle, any such demands, or agree to do any of
the
foregoing.
SECTION
2.02. Exchange of
Certificates. (a) Paying
Agent. Prior to the Effective Time, Parent shall appoint American
Stock Transfer & Trust Company or another comparable bank or trust company
reasonably acceptable to the Company to act as paying agent (the “Paying Agent”)
for the payment of the Merger Consideration. At the earlier of the
Closing and the Effective Time, Parent shall deposit, or cause the Surviving
Corporation to deposit, with the Paying Agent, for the benefit of the holders
of
Certificates, cash in an amount sufficient to pay the aggregate Merger
Consideration required to be paid pursuant to Section 2.01(c) (such cash
being hereinafter referred to as the “Exchange Fund”).
(b) Exchange
Procedures. As soon as reasonably practicable after the Effective
Time, Parent shall cause the Paying Agent to mail to each holder of record
of a
Certificate (i) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall
pass, only upon proper delivery of the Certificates to the Paying Agent and
which shall be in customary form and have such other provisions as Parent
may
reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger
Consideration. Each holder of record of a Certificate shall, upon
surrender to the Paying Agent of such Certificate, together with such letter
of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, be entitled to receive in exchange therefor
the
amount of cash which the number of shares of Company Common Stock previously
represented by such Certificate shall have been converted into the right
to
receive pursuant to Section 2.01(c), and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership
of Company Common Stock which is not registered in the transfer records of
the
Company, payment of the Merger Consideration may be made to a person other
than
the person in whose name the Certificate so surrendered is registered if
such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or
other
taxes required by reason of the payment of the Merger Consideration to a
person
other than the registered holder of such Certificate or establish to the
reasonable satisfaction of Parent that such taxes have been paid or are not
applicable. Until surrendered as contemplated by this
Section 2.02(b), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender
the
Merger Consideration which the holder thereof has the right to receive in
respect of such Certificate pursuant to this Article II. No
interest shall be paid or will accrue on any cash payable to holders of
Certificates pursuant to the provisions of this Article II.
(c) No
Further Ownership Rights in Company Common Stock. All cash paid
upon the surrender of Certificates in accordance with the terms of this
Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock formerly represented
by
such Certificates. At the close of business on the day on which the
Effective Time occurs, the stock transfer books of the Company shall be closed,
and there shall be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Company Common Stock
that
were outstanding immediately prior to the Effective Time. If, after
the Effective Time, any Certificate is presented to the Surviving Corporation
for transfer, it shall be canceled against delivery of cash to the holder
thereof as provided in this Article II.
(d) Termination
of the Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of the Certificates for nine months
after
the Effective Time shall be delivered to Parent, upon demand, and any holders
of
the Certificates who have not theretofore complied with this Article II
shall thereafter look only to Parent for, and Parent shall remain liable
for,
payment of their claim for the Merger Consideration.
(e) No
Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect
of any
cash from the Exchange Fund properly delivered to a public official pursuant
to
any applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to three years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration would otherwise escheat to or become the property of any
Governmental Entity), any such Merger Consideration shall, to the extent
permitted by applicable law, become the property of Parent, free and clear
of
all claims or interest of any person previously entitled thereto.
(f) Investment
of Exchange Fund. The Paying Agent shall invest the cash in the
Exchange Fund in a money market fund registered under the Investment Company
Act
of 1940, the principal of which is invested solely in obligations issued
or
guaranteed by the United States government and repurchase agreements in respect
of such obligations. Any interest and other income resulting from
such investments shall be paid to Parent. If for any reason
(including losses) the cash in the Exchange Fund shall be insufficient to
fully
satisfy all of the payment obligations to be made in cash by the Exchange
Agent
hereunder (but subject to Sections 2.02(d) and 2.02(e)), Parent shall promptly
deposit cash into the Exchange Fund in an amount which is equal to the
deficiency in the amount of cash required to fully satisfy such cash payment
obligations.
(g) Lost
Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by Parent,
the
posting by such person of a bond in such reasonable amount as Parent may
direct
as indemnity against any claim that may be made against it with respect to
such
Certificate, the Paying Agent shall deliver in exchange for such lost, stolen
or
destroyed Certificate the applicable Merger Consideration with respect
thereto.
(h) Withholding
Rights. Parent, the Surviving Corporation or the Paying Agent
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company Common
Stock such amounts as Parent, the Surviving Corporation or the Paying Agent
is
required to deduct and withhold with respect to the making of such payment
under
the Internal Revenue Code of 1986, as amended (the “Code”), or any provision of
state, local or foreign tax law. To the extent that amounts are so
withheld and paid over to the appropriate taxing authority by Parent, the
Surviving Corporation or the Paying Agent, 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 by Parent, the Surviving Corporation or the Paying
Agent.
Representations
and Warranties
SECTION
3.01. Representations and Warranties of the
Company. Except as set forth in the disclosure schedule (with
specific reference to the particular Section or subsection of this Agreement
to
which the information set forth in such disclosure schedule relates;
provided, however, that any information set forth in one section
of the Company Disclosure Schedule shall be deemed to apply to each other
Section or subsection thereof or hereof to which its relevance is readily
apparent on its face) delivered by the Company to Parent prior to the execution
of this Agreement (the “Company Disclosure Schedule”), the Company represents
and warrants to Parent and Sub as follows:
(a) Organization,
Standing and Corporate Power. Each of the Company and its
Subsidiaries has been duly organized, and is validly existing and, where
such
concept is applicable, in good standing under the laws of the jurisdiction
of
its incorporation or formation, as the case may be, and has all requisite
power
and authority and possesses all governmental licenses, permits, authorizations
and approvals necessary to enable it to use its corporate or other name and
to
own, lease or otherwise hold and operate its properties and other assets
and to
carry on its business as presently conducted and as currently proposed to
be
conducted, except where the failure to have such governmental licenses, permits,
authorizations or approvals individually or in the aggregate has not had
and
would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its Subsidiaries is duly qualified or
licensed to do business and, where such concept is applicable, is in good
standing in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification
or
licensing necessary, other than in such jurisdictions where the failure to
be so
qualified or licensed individually or in the aggregate has not had and would
not
reasonably be expected to have a Material Adverse Effect. The Company
has made available to Parent, prior to the execution of this Agreement, complete
and accurate copies of the Company Certificate and its Amended and Restated
Bylaws (the “Company Bylaws”), and the comparable organizational documents of
each of its Subsidiaries, in each case as amended to the date
hereof. The Company has made available to Parent complete and
accurate copies of the minutes (or, in the case of minutes that have not
yet
been finalized, drafts thereof) of all meetings of the stockholders of the
Company and each of its Subsidiaries, the Boards of Directors of the Company
and
each of its Subsidiaries and the committees of each of such Boards of Directors,
in each case held since January 1, 2004 and prior to the date
hereof.
(b) Subsidiaries. Section 3.01(b)
of the Company Disclosure Schedule lists, as of the date hereof, each of
the
Subsidiaries of the Company and, for each such Subsidiary, the jurisdiction
of
incorporation or formation and, each jurisdiction in which such Subsidiary
is
qualified or licensed to do business. All the issued and outstanding
shares of Capital Stock of each such Subsidiary have been validly issued
and are
fully paid and nonassessable and are owned directly or indirectly by the
Company
free and clear of all pledges, liens, charges, encumbrances or security
interests of any kind or nature whatsoever (collectively, “Liens”), and free of
any restriction on the right to vote, sell or otherwise dispose of such Capital
Stock. Except for the Capital Stock of its Subsidiaries, the Company
does not own, directly or indirectly, any Capital Stock of any corporation,
partnership, joint venture, association, limited liability company, trust,
unincorporated organization or other entity.
(c) Capital
Structure. (i) The authorized Capital Stock of the
Company consists of 50,000,000 shares of Company Common Stock and
10,000,000 shares of preferred stock, par value $0.01 per
share (“Company Preferred Stock”). At the close of business on
May 18, 2007, (A) 11,840,934 shares of Company Common Stock were
issued and outstanding (including 37,755 Company Restricted Shares),
(B) no shares of Company Common Stock were held by the Company in its
treasury, (C) 1,257,955 shares of Company Common Stock were reserved
and available for issuance pursuant to the Company 2006 Stock Incentive Plan
and
the Company 2001 Employee Stock Option Plan (collectively, the “Company Stock
Plans”), of which 178,039 shares of Company Common Stock were subject to
outstanding Company Stock Options, (D) no shares of Company Preferred Stock
were issued or outstanding or were held by the Company as treasury shares
and
(E) up to 3,398,664 shares of Company Common Stock were reserved for issuance
and issuable upon conversion of the Company’s 2.75% Convertible Senior
Subordinated Notes due 2027 (the “Convertible Notes”). Except as set
forth above in this Section 3.01(c)(i), at the close of business on May 18,
2007, no shares of Capital Stock of the Company were issued, reserved for
issuance or outstanding. There are no outstanding shares of Company
Common Stock or Company Preferred Stock subject to vesting or restrictions
on
transfer, stock appreciation rights, “phantom” stock rights, performance units,
rights to receive shares of Company Common Stock on a deferred basis or other
rights (other than Company Stock Options, the Company Restricted Shares and
the
Convertible Notes) that are linked to the value of Company Common Stock
(collectively, “Company Stock-Based Awards”).
(ii) Section 3.01(c)(ii)
of the Company Disclosure Schedule sets forth a complete and accurate list,
as
of May 18, 2007, of (A) all outstanding options to purchase shares of
Company Common Stock (collectively, “Company Stock Options”) under the Company
Stock Plans or otherwise, the number of shares of Company Common Stock subject
thereto, the grant dates, expiration dates, exercise or base prices (if
applicable) and vesting schedules thereof and the names of the holders thereof
and (B) all shares of Company Common Stock that were outstanding but were
subject to vesting or other forfeiture restrictions or were subject to a
right
of repurchase by the Company at a fixed purchase price (shares so subject,
the
“Company Restricted Shares”) under the Company Stock Plans or otherwise, the
grant and issuance dates, expiration dates, vesting schedules and repurchase
price (if any) thereof and the names of the holders thereof. All
(1) Company Restricted Shares and (2) Company Stock Options are
evidenced by stock option agreements, restricted stock purchase agreements
or
other award agreements, in each case in the forms set forth in
Section 3.01(c)(ii) of the Company Disclosure Schedule, and no stock option
agreement, restricted stock purchase agreement or other award agreement contains
terms that are inconsistent with or in addition to such forms. Each
grant of a Company Stock Option was duly authorized no later than the date
on
which the grant of such Company Stock Option was by its terms to be effective
(the “Grant Date”) by all necessary corporate action, including, as applicable,
approval by the Board of Directors of the Company (or a duly constituted
and
authorized committee thereof) and any required stockholder approval by the
necessary number of votes or written consents, and the award agreement governing
such grant (if any) was duly executed and delivered by each party thereto,
each
such grant was made in accordance with the terms of the applicable compensation
plan or arrangement of the Company, the Exchange Act and all other applicable
laws and regulatory rules or requirements, including the rules of the Nasdaq
Global Market, the per share exercise price of each Company Stock Option
was
equal to the fair market value of a share of Company Common Stock on the
applicable Grant Date and each such grant was properly accounted for in
accordance with GAAP in the financial statements (including the related notes)
of the Company and disclosed in the Company SEC Documents in accordance with
the
Exchange Act and all other applicable laws. The Company has not
knowingly granted, and there is no and has been no Company policy or practice
to
grant, Company Stock Options prior to, or otherwise coordinate the grant
of
Company Stock Options with, the release or other public announcement of material
information regarding the Company or its Subsidiaries or their financial
results
or prospects. Each Company Stock Option intended to qualify as an
“incentive stock option” under Section 422 of the Code so
qualifies. Each Company Stock Option and each Company Restricted
Share may, by its terms, be treated at the Effective Time as set forth in
Section 5.04(a)(i) or 5.04(a)(ii), as applicable. All
outstanding shares of Capital Stock of the Company are, and all shares which
may
be issued pursuant to the Company Stock Options and the Convertible Notes
will
be, when issued in accordance with the terms thereof, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights.
(iii) Except
for the Convertible Notes, there are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into,
or
exchangeable for, securities having the right to vote) on any matters on
which
stockholders of the Company may vote. Except as set forth above in
this Section 3.01(c), (A) there are not issued, reserved for issuance
or outstanding (1) any shares of Capital Stock of the Company, (2) any
securities of the Company or any of its Subsidiaries convertible into or
exchangeable or exercisable for Capital Stock of the Company or any Subsidiary
of the Company or (3) any warrants, calls, options or other rights to
acquire from the Company or any of its Subsidiaries, and no obligation of
the
Company or any of its Subsidiaries to issue, any Capital Stock or securities
convertible into or exchangeable or exercisable for Capital Stock of the
Company
or any Subsidiary of the Company and (B) there are not any outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem
or
otherwise acquire any such securities or to issue, deliver or sell, or cause
to
be issued, delivered or sold, any such securities. Neither the Company nor
any of its Subsidiaries is a party to any voting agreement with respect to
the
voting of any such securities.
(d) Authority;
Noncontravention. The Company has all requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement, subject, in the case of the
consummation of the Merger, to the receipt of the Stockholder
Approval. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on
the
part of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby, subject, in the case of the consummation
of
the Merger, to the obtaining of the Stockholder Approval. This
Agreement has been duly executed and delivered by the Company and, assuming
the
due authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights
of
creditors generally and the availability of equitable remedies. The
Board of Directors of the Company, at a meeting duly called and held at which
all directors of the Company were present, duly adopted resolutions
(i) approving and declaring advisable this Agreement, the Merger and the
other transactions contemplated by this Agreement, (ii) declaring that it
is in the best interests of the stockholders of the Company that the Company
enter into this Agreement and consummate the Merger and the other transactions
contemplated by this Agreement on the terms and subject to the conditions
set
forth in this Agreement, (iii) directing that the adoption of this
Agreement be submitted as promptly as practicable to a vote at a meeting
of the
stockholders of the Company and (iv) recommending that the stockholders of
the Company adopt this Agreement, which resolutions, as of the date of this
Agreement, have not been subsequently rescinded, modified or withdrawn in
any
way. The execution and delivery of this Agreement do not, and the
consummation of the Merger and the other transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation or breach of, or default (with
or
without notice or lapse of time, or both) under, or give rise to a right
of, or
result in, termination, cancellation or acceleration of any obligation or
to the
loss of a benefit under, or result in the creation of any Lien in or upon
any of
the properties or other assets of the Company or any of its Subsidiaries
under,
(x) the Company Certificate or the Company Bylaws or the comparable
organizational documents of any Subsidiary of the Company, (y) any loan or
credit agreement, bond, debenture, note, mortgage, indenture, lease, supply
agreement, license agreement, distribution agreement or other contract,
agreement, obligation, commitment, arrangement, understanding, instrument,
permit, franchise or license, whether oral or written (each, including all
amendments thereto, a “Contract”), to which the Company or any of its
Subsidiaries is a party or any of their respective properties or other assets
is
subject or (z) subject to (i) the Stockholder Approval and
(ii) the governmental filings and the other matters referred to in the
following sentence, any (A) statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or their respective
properties or other assets or (B) order, writ, injunction, decree, judgment
or stipulation, in each case applicable to the Company or any of its
Subsidiaries or their respective properties or other assets, other than,
in the
case of clauses (y) and (z), any such conflicts, violations, breaches,
defaults, rights, losses or Liens that individually or in the aggregate have
not
had and would not reasonably be expected to have a Material Adverse
Effect. No consent, approval, order or authorization of, action by or
in respect of, or registration, declaration or filing with, any Federal,
state,
local or foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any non-governmental
self-regulatory agency, commission or authority (each, a “Governmental Entity”)
is required by or with respect to the Company or any of its Subsidiaries
in
connection with the execution and delivery of this Agreement by the Company
or
the consummation of the Merger or the other transactions contemplated by
this
Agreement, except for (1) the filing of a premerger notification and report
form by the Company under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of
1976, as amended (including the rules and regulations promulgated thereunder,
the “HSR Act”), and the receipt, termination or expiration, as applicable, of
approvals or waiting periods required under the HSR Act or any other applicable
competition, merger control, antitrust or similar law or regulation, (2)
the
filing of the Canadian Filings, if applicable, (3) the filing with the
Securities and Exchange Commission (the “SEC”) of (A) a proxy statement
relating to the adoption by the stockholders of the Company of this Agreement
(as amended or supplemented from time to time, the “Proxy Statement”) and
(B) such reports under the Securities Exchange Act of 1934, as amended
(including the rules and regulations promulgated thereunder, the “Exchange
Act”), as may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (4) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company or any
of its
Subsidiaries is qualified to do business, (5) any filings required under
the rules and regulations of the Nasdaq Global Market and (6) such other
consents, approvals, orders, authorizations, actions, registrations,
declarations and filings the failure of which to be obtained or made
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect.
(e) Company
SEC Documents. (i) The Company has filed all reports,
schedules, forms, statements and other documents (including exhibits and
other
information incorporated therein) with the SEC required to be filed by the
Company since January 1, 2004 (such documents, together with any documents
filed during such period by the Company with the SEC on a voluntary basis
on
Current Reports on Form 8-K, the “Company SEC Documents”). As of
their respective filing dates, the Company SEC Documents complied in all
material respects, to the extent in effect at the time of filing, with the
requirements of the Securities Act of 1933, as amended (including the rules
and
regulations promulgated thereunder, the “Securities Act”), the Exchange Act, and
the Xxxxxxxx-Xxxxx Act of 2002 (including the rules and regulations promulgated
thereunder, “SOX”) applicable to such Company SEC Documents, and 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 light of the circumstances under
which
they were made, not misleading. Except to the extent that information
contained in any Company SEC Document has been revised, amended, supplemented
or
superseded by a later-filed Company SEC Document, none of the Company SEC
Documents contains any untrue statement of a material fact or omits 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 were made,
not misleading which individually or in the aggregate would require an
amendment, supplement or corrective filing to any such Company SEC
Document. Each of the financial statements (including the related
notes) of the Company included in the Company SEC Documents complied at the
time
it was filed as to form in all material respects with the applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto in effect at the time of filing, has been prepared in accordance
with
generally accepted accounting principles in the United States (“GAAP”) (except,
in the case of unaudited statements, as permitted by the rules and regulations
of the SEC) applied on a consistent basis during the periods involved (except
as
may be indicated in the notes thereto) and fairly presented in all material
respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal year-end audit adjustments). Except
as disclosed in the Company SEC Documents filed by the Company and publicly
available prior to the date of this Agreement (the “Filed Company SEC
Documents”), neither the Company nor any of its Subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) which individually or in the aggregate have had or would reasonably
be expected to have a Material Adverse Effect. None of the
Subsidiaries of the Company are, or have at any time since January 1, 2002,
been
subject to the reporting requirements of Sections 13(a) and 15(d) of
the Exchange Act.
(ii) Each
of the principal executive officer of the Company and the principal financial
officer of the Company (or each former principal executive officer of the
Company and each former principal financial officer of the Company, as
applicable) has made all applicable certifications required by Rule 13a-14
or 15d-14 under the Exchange Act and Sections 302 and 906 of SOX
with respect to the Company SEC Documents, and the statements contained in
such
certifications are true and accurate. For purposes of this Agreement,
“principal executive officer” and “principal financial officer” shall have the
meanings given to such terms in SOX. Neither the Company nor any of
its Subsidiaries has outstanding, or has arranged any outstanding, “extensions
of credit” to directors or executive officers within the meaning of
Section 402 of SOX.
(iii) The
Company maintains a system of “internal control over financial reporting” (as
defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient
to
provide reasonable assurance (A) regarding the reliability of the Company’s
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, (B) that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
GAAP,
(C) that receipts and expenditures of the Company are being made only in
accordance with the authorization of management and directors of the Company
and
(D) regarding prevention or timely detection of the unauthorized acquisition,
use or disposition of the Company’s assets that could have a material effect on
the Company’s financial statements.
(iv) The
“disclosure controls and procedures” (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) of the Company are designed to ensure that
all
information (both financial and non-financial) 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 required
to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure and to
enable the chief executive officer and chief financial officer of the Company
to
make the certifications required under the Exchange Act with respect to such
reports.
(v) 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 (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 under the Exchange Act)), where the
result, purpose or intended effect of such Contract 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.
(vi) Since
January 1, 2004, the Company has not received any oral or written
notification of any “material weakness” in the Company’s internal controls over
financial reporting. There is no outstanding “significant deficiency”
or “material weakness” which the Company’s independent accountants certify has
not been appropriately and adequately remedied by the Company. For
purposes of this Agreement, the terms “significant deficiency” and “material
weakness” shall have the meanings assigned to them in Release 2004-001 of
the Public Company Accounting Oversight Board, as in effect on the date
hereof.
(f) Information
Supplied. None of the information supplied or to be supplied by
or on behalf of the Company specifically for inclusion or incorporation by
reference in the Proxy Statement will, at the date it is first mailed to
the
stockholders of the Company and at the time of the Stockholders’ Meeting,
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, except that no representation or warranty is made by the Company
with respect to statements made or incorporated by reference therein based
on
information supplied by or on behalf of Parent or Sub in writing specifically
for inclusion or incorporation by reference in the Proxy
Statement. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act.
(g) Absence
of Certain Changes or Events. Except for liabilities incurred in
connection with this Agreement or as expressly permitted pursuant to
Section 4.01(a)(i) through (xiv), since the date of the most recent
financial statements included in the Filed Company SEC Documents, the Company
and its Subsidiaries have conducted their respective businesses only in the
ordinary course consistent with past practice, and there has not been any
Material Adverse Change, and from such date until the date hereof there has
not
been (i) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any Capital
Stock of the Company or any of its Subsidiaries, except for dividends and
distributions by a direct or indirect wholly owned Subsidiary of the Company
to
its parent, (ii) any purchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any Capital Stock of the Company or
any of
its Subsidiaries or any options, warrants, calls or rights to acquire such
Capital Stock, (iii) any split, combination or reclassification of any
Capital Stock of the Company or any of its Subsidiaries or any issuance or
the
authorization of any issuance of any other securities in respect of, in lieu
of
or in substitution for their Capital Stock, (iv) (A) any granting by
the Company or any of its Subsidiaries to any current or former director,
officer, employee or consultant of the Company or any of its Subsidiaries
(each
a “Participant”) of any increase in compensation, bonus or fringe or other
benefits or any granting of any type of compensation or benefits to any
Participant not previously receiving or entitled to receive such type of
compensation or benefit, except (1), in the case of employees who are
neither directors nor officers, for normal increases in cash compensation
in the
ordinary course of business consistent with past practice or (2) as was
required under any Company Benefit Agreement or Company Benefit Plan in effect
as of the date of the most recent financial statements included in the Filed
Company SEC Documents, (B) any granting by the Company or any of its
Subsidiaries to any Participant of (1) any change of control, severance,
termination, retention or any similar compensation or benefits or any increases
therein or any payment thereof or (2) any right to receive any change of
control, severance, termination, retention or any similar compensation or
benefits or any increases therein, (C) any entry by the Company or any of
its Subsidiaries into, or any amendment or termination of (1) any
employment, deferred compensation, consulting, severance, change of control,
termination, retention, indemnification, employee benefit, loan, stock
repurchase or similar agreement between the Company or any of its Subsidiaries,
on the one hand, and any Participant, on the other hand, or (2) any
agreement between the Company or any of its Subsidiaries, on the one hand,
and
any Participant, on the other hand, the benefits of which are contingent,
or the
terms of which are materially altered, upon the occurrence of a transaction
involving the Company of a nature contemplated by this Agreement (all such
agreements under this clause (C), collectively, “Company
Benefit Agreements”), (D) any
payment of any benefit under, or the grant of any award under, or any amendment
to, or termination of, any bonus, incentive, performance or other compensation
plan or arrangement, Company Benefit Agreement or Company Benefit Plan
(including in respect of Company Stock Options, Company Restricted Shares,
Company Stock-Based Awards, “phantom” stock, stock appreciation rights,
restricted stock, “phantom” stock rights, restricted stock units, deferred stock
units, performance stock units or other stock-based or stock-related awards
or
the removal or modification of any restrictions in any Company Benefit Agreement
or Company Benefit Plan or awards made thereunder) except as required to
comply
with applicable law or any Company Benefit Agreement or Company Benefit Plan
in
effect as of the date of the most recent financial statements included in
the
Filed Company SEC Documents, (E) the taking of any action to fund or in any
other way secure the payment of compensation or benefits under any Company
Benefit Plan or Company Benefit Agreement or (F) the taking of any action
to
accelerate the vesting or payment of any compensation or benefits under any
Company Benefit Plan or Company Benefit Agreement, (v) any damage,
destruction or loss to any asset of the Company or any of its Subsidiaries,
whether or not covered by insurance, that individually or in the aggregate
has
had or would reasonably be expected to have a Material Adverse Effect,
(vi) any change in accounting methods, principles or practices by the
Company materially affecting its assets, liabilities or businesses, except
insofar as may have been required by a change in GAAP or (vii) any material
tax election, any change in material method of accounting for tax purposes
or
any settlement or compromise of any material income tax
liability.
(h) Litigation. There
is no suit, action or proceeding pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any of their
respective assets that individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against, or, to the Knowledge of the Company,
investigation by any Governmental Entity involving, the Company or any of
its
Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect.
(i) Contracts. (i) Except
for (A) Contracts filed in unredacted form as exhibits to the Filed Company
SEC
Documents and (B) Contracts that the Company made available for review by
representatives of Parent and which were considered “Restricted Evaluation
Material” (as that term is defined in the Confidentiality Agreement, as
supplemented by the letter agreement dated as of February 16, 2007) (the
Contracts referred to in this clause (B), the “Restricted
Contracts”), Section 3.01(i)(i) of the Company Disclosure Schedule
sets forth a true and complete list as of the date of this Agreement, and
the
Company has made available to Parent prior to the date of this Agreement
true,
complete and correct copies (including all amendments and modifications thereto)
of:
(A)
all
Contracts that are of a nature required to be filed as an exhibit to a report
or
filing under the Securities Act or the Exchange Act and the rules and
regulations promulgated thereunder;
(B)
all
Contracts of the Company or any of its Subsidiaries made in the ordinary
course
of business involving annual payments by or to the Company or any of its
Subsidiaries, of more than $5,000,000;
(C)
all
Contracts to which the Company or any of its Subsidiaries is a party, or
that
purports to be binding upon the Company, any of its Subsidiaries or any of
its
Affiliates, that contain a covenant restricting the ability of the Company
or
any of its Subsidiaries (or which, following the consummation of the Merger,
could restrict the ability of Parent or any of its Subsidiaries, including
the
Company and its Subsidiaries) to compete in any business or with any person
in
any geographic area;
(D)
all
material Contracts of the Company or any of its Subsidiaries made outside
the
ordinary course of business;
(E)
all
Contracts of the Company or any of its Subsidiaries with any Affiliate of
the
Company (other than any of its Subsidiaries);
(F)
all
joint venture, partnership or other similar agreements to which the Company
or
any of its Subsidiaries is a party (including all amendments and modifications
thereto); and
(G)
all
loan agreements, credit agreements, notes, debentures, bonds, mortgages,
indentures and other Contracts (collectively, “debt obligations”) pursuant to
which any indebtedness of the Company or any of its Subsidiaries is outstanding
or may be incurred and all guarantees of or by the Company or any of its
Subsidiaries of debt obligations of any other person (other than the Company
or
any of its Subsidiaries), including the respective aggregate principal amounts
outstanding as of the date of this Agreement.
(ii) None
of the Company, any of its Subsidiaries or, to the Knowledge of the Company,
any
other party thereto is in violation of or in default under (nor does there
exist
any condition which upon the passage of time or the giving of notice or both
would cause such a violation of or default under) any Contract to which it
is a
party or by which it or any of its properties or other assets is bound, except
for violations or defaults that individually or in the aggregate have not
had
and would not reasonably be expected to have a Material Adverse
Effect.
(iii) The
Restricted Contracts represent at least 80% of the aggregate volume purchased
or
sold, as the case may be, by the Company and its Subsidiaries of each product
or
service they purchased or sold.
(j) Compliance
with Laws; Environmental Matters. (i) Except with
respect to Environmental Laws, the Employee Retirement Income Security Act
of
1974, as amended (“ERISA”), and taxes, which are the subjects of
Sections 3.01(j)(ii), 3.01(l) and 3.01(n), respectively, each of the
Company and its Subsidiaries is in compliance with all statutes, laws,
ordinances, rules, regulations, judgments, orders and decrees of any
Governmental Entity applicable to it, its properties or other assets or its
business or operations (collectively, “Legal Provisions”), except for failures
to be in compliance that individually or in the aggregate have not had and
would
not reasonably be expected to have a Material Adverse Effect. Each of
the Company and its Subsidiaries has in effect all approvals, authorizations,
certificates, filings, franchises, licenses, notices and permits of or with
all
Governmental Entities (collectively, “Permits”), necessary for it to own, lease
or operate its properties and other assets and to carry on its business and
operations as presently conducted and as currently proposed to be conducted,
except where the failure to have such Permits individually or in the aggregate
has not had and would not reasonably be expected to have a Material Adverse
Effect. There has occurred no default under, or violation of, any
such Permit, except for any such default or violation that individually or
in
the aggregate has not had and would not reasonably be expected to have a
Material Adverse Effect. The consummation of the Merger, in and of
itself, would not cause the revocation or cancellation of any such Permit
that
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect. No action, demand, requirement or investigation by
any Governmental Entity and no suit, action or proceeding by any other person,
in each case with respect to the Company or any of its Subsidiaries or any
of
their respective properties or other assets under any Legal Provision, is
pending or, to the Knowledge of the Company, threatened, except for actions,
demands, requirements, investigations, suits or proceedings that individually
or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect.
(ii) Except
for any matters that, individually or in the aggregate, would not reasonably
be
expected to have a Material Adverse Effect: the Company
and each of its Subsidiaries is, and have been, in compliance with all
Environmental Laws, and neither the Company nor any of its Subsidiaries has
received any (1) written communication that alleges that the Company or any
of
its Subsidiaries is in violation of, or has any liability under, any
Environmental Law, (2) written request for information pursuant to any
Environmental Law, or (3) notice regarding any requirement proposed for adoption
or implementation under any Environmental Law which would be applicable to
the
operations of the Company or any of its Subsidiaries and would result in
capital
expenditures;
(B)
(1) the Company and each of its Subsidiaries have obtained and are in
compliance with all permits, licenses and other governmental authorizations
that
are required by Environmental Law for their respective operations as currently
conducted (“Environmental Permits”), (2) all such Environmental Permits are
valid and in good standing, (3) neither the Company nor any of its
Subsidiaries has received any written notice of any actual or potential change
in the status or terms and conditions of any Environmental Permit, and (4)
the
transactions contemplated by this Agreement will not result in the modification
or revocation of any Environmental Permit;
(C)
there
are no Environmental Claims pending or, to the Knowledge of the Company,
threatened, against the Company or any of its Subsidiaries;
(D)
to
the Knowledge of the Company, there have been no Releases of any Hazardous
Material that would reasonably be expected to form the basis of any
Environmental Claim against the Company or any of its Subsidiaries or against
any person whose liabilities for such Environmental Claims the Company or
any of
its Subsidiaries has or may have retained or assumed either contractually
or by
operation of law; and
(E)
(1)
neither the Company nor any of its Subsidiaries has retained or assumed either
contractually or by operation of law any liabilities or obligations that
would
reasonably be expected to form the basis of any Environmental Claim against
the
Company or any of its Subsidiaries, and (2) there are no Environmental
Claims against any person whose liabilities for such Environmental Claims
the
Company or any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law.
(k) Absence
of Changes in Company Benefit Plans; Labor Relations. Except as
disclosed in the Filed Company SEC Documents or as expressly permitted pursuant
to Section 4.01(a)(i) through (xiv), since the date of the most recent financial
statements included in the Filed Company SEC Documents, there has not been
any
adoption, amendment or termination by the Company or any of its Subsidiaries
of
any collective bargaining agreement or any employment, bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership,
stock
purchase, stock appreciation, restricted stock, stock option, “phantom” stock,
other equity or equity-based compensation performance, retirement, thrift,
savings, stock bonus, paid time off, perquisite, fringe benefit, vacation,
change of control, severance, retention, termination, disability, death benefit,
hospitalization, medical, welfare benefit or other plan, program, policy,
arrangement, agreement or understanding (whether or not legally binding)
sponsored, maintained, contributed to or required to be sponsored, maintained
or
contributed to by the Company or any of its Subsidiaries or any other person
or
entity that, together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code (each, a “Commonly Controlled
Entity”), in each case providing benefits to any Participant, but not including
any Company Benefit Agreement (collectively, the “Company Benefit Plans”), or
any change in any actuarial or other assumption used to calculate funding
obligations with respect to any Company Pension Plans, or any change in the
manner in which contributions to any Company Pension Plans are made or the
basis
on which such contributions are determined, other than amendments or other
changes as required to ensure that such Company Pension Plan is not then
out of
compliance with applicable law, or reasonably determined by the Company to
be
necessary or appropriate to preserve the qualified status of a Company Pension
Plan under Section 401(a) of the Code. Except as disclosed in
the Filed Company SEC Documents, there exist no currently binding Company
Benefit Agreements. There are no collective bargaining or other labor
union agreements to which the Company or any of its Subsidiaries is a party
or
by which the Company or any of its Subsidiaries is bound. No
employees of the Company or any of its Subsidiaries are, or since
January 1, 2003 have been, represented by any union with respect to their
employment by the Company or such Subsidiary. There is not pending
and since January 1, 2003 until the date hereof there has not been any
material labor dispute, union organization attempt or work stoppage, slowdown
or
lockout due to labor disagreements. There is no, and since January 1,
2003 until the date hereof, there has not been, any unfair labor practice
charge, complaint or other proceeding pending and, to the Knowledge of the
Company, no such charge, complaint or other proceeding is threatened, against
the Company or any of its Subsidiaries before the National Labor Relations
Board
or any other Governmental Entity. Each of the Company and its
Subsidiaries is, and since January 1, 2003, has been, in compliance in all
material respects with all applicable laws relating to employment and employment
practices, occupational safety and health standards, terms and conditions
of
employment and wages and hours, and is not, and since January 1, 2003, has
not,
engaged in any unfair labor practice. There are no material
complaints, controversies, lawsuits or other proceedings pending or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries brought by or on behalf of any applicant for employment, any
Participant or any class of the foregoing, relating to any such law, or alleging
breach of any express or implied contract of employment or of any other wrongful
or tortious conduct in connection with the employment
relationship. There are no pending or, to the Knowledge of the
Company, threatened, investigations, audits, complaints, or proceedings against
the Company or any of its Subsidiaries by or before any Governmental Entity,
whether domestic or foreign, respecting or involving any applicant for
employment, any Participant or any class of the foregoing.
(l) Employee
Benefit Matters. (i) Section 3.01(l)(i) of the
Company Disclosure Schedule contains a complete and accurate list of each
Company Benefit Plan that is an “employee pension benefit plan” (as defined in
Section 3(2) of ERISA) (sometimes referred to herein as a “Company Pension
Plan”), each Company Benefit Plan that is an “employee welfare benefit plan” (as
defined in Section 3(1) of ERISA) and all other Company Benefit Plans and
Company Benefit Agreements in effect on the date of this
Agreement. The Company has provided to Parent complete and accurate
copies of (A) each Company Benefit Plan and Company Benefit Agreement (or,
in the case of any unwritten Company Benefit Plans or Company Benefit
Agreements, written descriptions thereof), (B) the two most recent annual
reports on Form 5500 (including any accompanying schedules and attachments)
required to be filed with the Internal Revenue Service (the “IRS”) and the two
most recent annual information returns filed with any Governmental Entity
with
respect to each Company Benefit Plan (if any such report was required under
applicable law), (C) the most recent summary plan description and summary
of material modifications (including any applicable notices under
Section 204(h) of ERISA) for each Company Benefit Plan for which a summary
plan description or summary of material modifications, as applicable, is
required under applicable law, (D) the two most recent actuarial valuations
for each Company Benefit Plan (if any) and (E) each trust agreement and
insurance or group annuity contract relating to any Company Benefit
Plan. Each Company Benefit Plan has been administered in all material
respects in accordance with its terms. Each Company Benefit Plan has
been administered in compliance in all material respects with the applicable
provisions of ERISA, the Code and all other applicable laws, including laws
of
foreign jurisdictions, and the terms of all collective bargaining
agreements.
(ii) All
Company Pension Plans intended to be tax-qualified have received favorable
determination letters from the IRS with respect to all tax law changes with
respect to which the IRS is currently willing to provide a determination
letter,
to the effect that such Company Pension Plans are qualified and exempt from
Federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code, no such determination letter has been revoked (nor, to the Knowledge
of
the Company, has revocation been threatened) and no event has occurred since
the
date of the most recent determination letter or application therefor relating
to
any such Company Pension Plan that would reasonably be expected to adversely
affect the qualification of such Company Pension Plan or materially increase
the
costs relating thereto or require security under Section 307 of
ERISA. All Company Pension Plans required to have been approved by or
registered with any foreign Governmental Entity have been so approved or
registered, no such approval or registration has been revoked (nor, to the
Knowledge of the Company, has revocation been threatened) and no event has
occurred since the date of the most recent approval or application therefor
relating to any such Company Pension Plan that would reasonably be expected
to
materially affect any such approval or registration relating thereto or
materially increase the costs relating thereto. The Company has
delivered to Parent a complete and accurate copy of the most recent
determination letter received prior to the date hereof with respect to each
Company Pension Plan, as well as a complete and accurate copy of each pending
application for a determination letter, if any. The Company has also
provided to Parent a complete and accurate list of all amendments to any
Company
Pension Plan as to which a favorable determination letter has not yet been
received.
(iii) Section
3.01(l)(iii) of the Company Disclosure Schedule contains a list of (A) each
Company Benefit Plan subject to Title IV of ERISA that the Company, any Commonly
Controlled Entity or any predecessor thereof sponsors, maintains or contributes
to, or has in the past sponsored, maintained or contributed to (each, a “Title
IV Plan”), and (B) each other Company Benefit Plan that is a defined benefit
pension plan. All contributions, premiums and benefit payments under
or in connection with the Company Benefit Plans that are required to have
been
made in accordance with the terms of such Company Benefit Plan and all
applicable laws have been timely made. No “accumulated funding
deficiency”, as defined in Section 412(a) of the Code, has been incurred with
respect to any Title IV Plan, whether or not waived. No event
described in Sections 4062 or 4063 of ERISA, has occurred in connection with
any
Company Benefit Plan. No Title IV Plan, other than any Title IV Plan
that is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA
(a “Multiemployer Plan”), had, as of the last annual valuation date for such
Title IV Plan, any “unfunded benefit liabilities” (as such term is defined in
Section 4001(a)(18) of ERISA) based on actuarial assumptions that have been
delivered to Parent, and there has been no material adverse change in the
financial condition of any Title IV Plan since its last such annual valuation
date. Neither the Company nor any Commonly Controlled Entity has (1)
engaged in, or is a successor or parent corporation to an entity that has
engaged in, a transaction described in Section 4069 or 4212(c) of ERISA or
(2)
incurred, or reasonably expects to incur prior to the Closing Date, any
liability under Title IV or Section 302 of ERISA, other than liability for
premiums due to the Pension Benefit Guaranty Corporation (which premiums
have
been paid when due).
(iv) Neither
the Company nor any Commonly Controlled Entity has announced an intention
to
withdraw, but has not yet completed withdrawal, from a Multiemployer Plan,
and
no action has been taken, and no circumstance exists, that has resulted or
would, with the passage of time, reasonably be expected to result in any
liability under Title IV of ERISA by the Company or any Commonly Controlled
Entity for any withdrawal from a Multiemployer Plan. Section
3.01(l)(iv) of the Company Disclosure Schedule contains a list of Multiemployer
Plans that the Company or any Commonly Controlled Entity or any predecessor
thereof contributes to, or has in the past contributed to, and lists for
each
Multiemployer Plan the Company’s reasonable, good faith estimate of the maximum
amount of withdrawal liability that would be incurred if the Company and
each
Commonly Controlled Entity were to make a complete withdrawal from such plan
as
of the Closing Date, and the amount of “unfunded vested benefits” (within the
meaning of Section 4211 of ERISA) as of the end of the most recently completed
plan year and as of the date of this Agreement.
(v) All
reports, returns and similar documents with respect to all Company Benefit
Plans
required to be filed with any Governmental Entity or distributed to any Company
Benefit Plan participant have been duly and timely filed or
distributed. None of the Company or any of its Subsidiaries has
received notice of, and to the Knowledge of the Company, there are no
investigations by any Governmental Entity with respect to, termination
proceedings or other claims (except claims for benefits payable in the normal
operation of the Company Benefit Plans), suits or proceedings against or
involving any Company Benefit Plan or asserting any rights or claims to benefits
under any Company Benefit Plan that would reasonably be expected to give
rise to
any material liability, and, to the Knowledge of the Company, there are not
any
facts that could give rise to any material liability in the event of any
such
investigation, claim, suit or proceeding.
(vi) There
are no understandings, agreements or undertakings, written or oral, with
any
person (other than pursuant to the express terms of the applicable Company
Benefit Plan or Company Benefit Agreement) that are (pursuant to any such
understandings, agreements or undertakings) reasonably expected to result
in any
liabilities if such Company Benefit Plan or Company Benefit Agreement were
amended or terminated on or at any time after the Effective Time or that
would
prevent any unilateral action by the Company (or, after the Effective Time,
Parent) to effect such amendment or termination. No Company Benefit
Plan or related trust has been terminated during the last five years, nor
has
there been any “reportable event” (as that term is defined in Section 4043 of
ERISA) for which the 30-day reporting requirement has not been waived with
respect to any Company Benefit Plan during the last five years, and no notice
of
a reportable event will be required to be filed in connection with the
transactions contemplated by this Agreement. No “wind-up” (as that
term is defined in Section 1(1) of the Pension Benefits Act (New
Brunswick or similar applicable law) or other legislation under which a Company
Benefit Plan has been registered) in whole or in part of any Company Benefit
Plan has been previously ordered nor has any event occurred which would cause
any Governmental Entity to order a wind-up, in whole or in part, of any Company
Benefit Plan offered to Canadian employees of the Company.
(vii) With
respect to each Company Benefit Plan, (A) there has not occurred any prohibited
transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code or similar applicable law) in which the Company,
any of its Subsidiaries or any of their respective officers, directors or
employees, or, to the Knowledge of the Company, any trustee, administrator
or
other fiduciary of such Company Benefit Plan, or any agent of the foregoing,
has
engaged that would reasonably be expected to subject the Company, any of
its
Subsidiaries or any of their respective officers, directors or employees,
or, to
the Knowledge of the Company, any trustee, administrator or other fiduciary
of
any trust created under any Company Benefit Plan, to the tax or penalty on
prohibited transactions imposed by Section 4975 of the Code or the
sanctions imposed under Title I of ERISA or any other applicable law and
(B) neither the Company nor any of its Subsidiaries nor, to the Knowledge
of the Company, any trustee, administrator or other fiduciary of any Company
Benefit Plan nor any agent of any of the foregoing, has engaged in any
transaction or acted in a manner, or failed to act in a manner, that would
reasonably be expected to subject the Company or any of its Subsidiaries
or, to
the Knowledge of the Company, any trustee, administrator or other fiduciary,
to
any liability for breach of fiduciary duty under ERISA or any other applicable
law.
(viii) Section 3.01(l)(viii)
of the Company Disclosure Schedule discloses whether each Company Benefit
Plan
and each Company Benefit Agreement that is an employee welfare benefit plan
is
(A) unfunded or self-insured, (B) funded through a “welfare benefit
fund”, as such term is defined in Section 419(e) of the Code, or other
funding mechanism, or (C) insured. Each such employee welfare
benefit plan may be amended or terminated (including with respect to benefits
provided to retirees and other former employees) without material liability
to
the Company or any of its Subsidiaries at any time after the Effective
Time. Each of the Company and its Subsidiaries complies in all
material respects with the applicable requirements of Section 4980B(f) of
the Code, Sections 601-609 of ERISA or any similar state or local law with
respect to each Company Benefit Plan that is a group health plan, as such
term
is defined in Section 5000(b)(1) of the Code or such state or local
law. No Company Benefit Plan or Company Benefit Agreement that is an
employee welfare benefit plan provides benefits after termination of employment,
except where the cost thereof is borne entirely by the former employee (or
his
or her eligible dependents or beneficiaries) or as required by Section 4980B(f)
of the Code.
(ix) None
of the execution and delivery of this Agreement, the obtaining of the
Stockholder Approval or the consummation of the Merger or any other transaction
expressly contemplated by this Agreement (including as a result of any
termination of employment on or following the Effective Time) will
(A) entitle any Participant to severance, termination, retention, change in
control or similar compensation or benefits, (B) accelerate the time of
payment or vesting, or trigger any payment or funding (through a grantor
trust
or otherwise) of, compensation or benefits under, increase the amount payable
or
trigger any other material obligation pursuant to, or increase the cost of,
any
Company Benefit Plan or Company Benefit Agreement or otherwise or
(C) result in any breach or violation of, or a default under, any Company
Benefit Plan or Company Benefit Agreement. The total amount of all
payments and the fair market value of all non-cash benefits (other than Company
Stock Options and Company Restricted Shares) that may become payable or provided
to any Participant under the Company Benefit Plans and Company Benefit
Agreements (assuming for such purpose that such individual’s employment were
terminated immediately following the Effective Time as if the Effective Time
were the date hereof) will not exceed the aggregate amount set forth in
Section 3.01(l)(ix) of the Company Disclosure Schedule.
(x) Neither
the Company nor any of its Subsidiaries has any material liability or
obligations, including under or on account of a Company Benefit Plan, arising
out of the hiring of persons to provide services to the Company or any of
its
Subsidiaries and incorrectly classifying such persons as consultants or
independent contractors and not as employees of the Company or any of its
Subsidiaries.
(xi) No
deduction by the Company or any of its Subsidiaries in respect of any
“applicable employee remuneration” (within the meaning of Section 162(m) of
the Code) has been disallowed or is subject to disallowance by reason of
Section 162(m) of the Code, and no Participant has received or is
reasonably expected to receive any payment or benefit from the Company or
any of
its Subsidiaries that would be nondeductible pursuant to Section 162(m) of
the Code.
(xii) Each
Company Benefit Plan and each Company Benefit Agreement that is a “nonqualified
deferred compensation plan” within the meaning of Section 409A(d)(1) of the Code
(a “Nonqualified Deferred Compensation Plan”) subject to Section 409A of the
Code has been operated in compliance with Section 409A of the Code since
January
1, 2005, based upon a good faith, reasonable interpretation of (A) Section
409A
of the Code and (B) the rules, regulations and other guidance promulgated
thereunder (clauses (A) and (B), together, the “409A
Authorities”). No Company Benefit Plan or Company Benefit Agreement
that would be a Nonqualified Deferred Compensation Plan subject to Section
409A
of the Code but for the effective date provisions that are applicable to
Section
409A of the Code, as set forth in Section 885(d) of the American Jobs Creation
Act of 2004, as amended (the “AJCA”), has been “materially modified” within the
meaning of Section 885(d)(2)(B) of the AJCA after October 3, 2004, based
upon a
good faith reasonable interpretation of the AJCA and the 409A
Authorities. No Participant is entitled to any gross-up, make-whole
or other additional payment from the Company or any of its Subsidiaries in
respect of any tax (including Federal, state, local or foreign income, excise
or
other taxes (including taxes imposed under Section 409A of the Code)) or
interest or penalty related thereto.
(m) No
Excess Parachute Payments. Other than payments or benefits that
may be made to the persons listed in Section 3.01(m) of the Company
Disclosure Schedule (“Primary Company Executives”), no amount or other
entitlement or economic benefit that could be received (whether in cash or
property or the vesting of property) as a result of the execution and delivery
of this Agreement, the obtaining of the Stockholder Approval, the consummation
of the Merger or any other transaction contemplated by this Agreement (alone
or
in combination with any other event, including as a result of termination
of
employment on or following the Effective Time) (such actions, collectively,
“Merger Actions”) by or for the benefit of any director, officer, employee or
consultant of the Company or any of its Affiliates who is a “disqualified
individual” (as such term is defined in Treasury Regulation
Section 1.280G-1) under any Company Benefit Plan, Company Benefit Agreement
or otherwise would be characterized as an “excess parachute payment” (as such
term is defined in Section 280G(b)(1) of the Code), and no disqualified
individual is entitled to receive any additional payment from the Company,
any
of its Subsidiaries, Parent, the Surviving Corporation or any other person
in
the event that the excise tax required by Section 4999(a) of the Code is
imposed on such disqualified individual (a “Parachute Gross Up
Payment”). Section 3.01(m) of the Company Disclosure Schedule
sets forth, calculated as of the date of this Agreement, (i) the “base
amount” (as such term is defined in Section 280G(b)(3) of the Code) for
each Primary Company Executive and each other disqualified individual (defined
as set forth above) who holds any Company Stock Options or Company Restricted
Shares that will vest in connection with any Merger Action and (ii) the
Company’s reasonable, good faith estimate of the maximum amount that could be
received (whether in cash or property or the vesting of property, and including
the amount of any tax gross-up) by each Primary Company Executive as a result
of
any Merger Action.
(n) Taxes. (i) Each
of the Company and its Subsidiaries has (A) duly filed with the appropriate
taxing authorities all material tax returns required to be filed by it for
all
periods ending on or prior to the Effective Time, and (B) duly paid in full
or
made adequate provision in accordance with GAAP for the payment of all material
taxes due, whether or not shown as due in such tax returns.
(ii) (A)
No federal, state, local or foreign audits, examinations, investigations
or
other administrative proceedings (collectively “Audits”) or court proceedings
are presently pending or, to the Knowledge of the Company, threatened with
regard to any taxes owed or claimed to be owed by or on behalf of the Company
or
any of its Subsidiaries, and (B) amounts finally agreed upon or determined,
as
the case may be, to be owed from any Audit or court proceedings relating
to
taxes of the Company or any of its Subsidiaries have been paid.
(iii) None
of the Company or any of its Subsidiaries will be required to include in
a
taxable period ending after the Effective Time taxable income attributable
to
income that accrued (for purposes of the financial statements of the Company
included in the Filed Company SEC Documents) in a prior taxable period (or
portion of a taxable period) but was not recognized for tax purposes in any
prior taxable period (or portion of a taxable period) as a result of
(A) the installment method of accounting, (B) the completed contract
method of accounting, (C) the long-term contract method of accounting,
(D) the cash method of accounting or Section 481 of the Code or
(E) any comparable provisions of state or local tax law, domestic or
foreign, or for any other reason, other than any amounts that are specifically
reflected in a reserve for taxes on the financial statements of the Company
included in the Filed Company SEC Documents.
(iv) Within
the two-year period ending on the Closing Date, none of the Company or any
of
its Subsidiaries has constituted either a “distributing corporation” or a
“controlled corporation” as such terms are defined in Section 355 of the
Code in a distribution of stock qualifying or intended to qualify for tax-free
treatment (in whole or in part) under Section 355(a) or 361 of
the Code.
(v) Neither
the Company nor any of its Subsidiaries has ever entered into any “reportable
transaction”, as defined in Treasury Regulation Section 1.6011-4(b),
required to be reported in a disclosure statement pursuant to Treasury
Regulation Section 1.6011-4(a).
(vi) No
taxing authority has asserted any material liens for taxes with respect to
any
assets or properties of the Company or its Subsidiaries, except for statutory
liens for taxes not yet due and payable.
(vii) As
used in this Agreement (A) ”tax” or “taxes” shall include (whether disputed
or not) all (x) Federal, state, local and foreign income, property, sales,
use, excise, withholding, payroll, employment, social security, capital gain,
alternative minimum, transfer and other taxes and similar governmental charges,
including any interest, penalties and additions with respect thereto,
(y) liability for the payment of any amounts of the type described in
clause (x) as a result of being a member of an affiliated, consolidated,
combined, unitary or aggregate group or as a transferee or successor and
(z) liability for the payment of any amounts as a result of being party to
any tax sharing agreement or as a result of any express or implied obligation
to
indemnify any other person with respect to the payment of any amounts of
the
type described in clause (x) or (y); (B) ”taxing authority” means any
Federal, state, local or foreign government, any subdivision, agency, commission
or authority thereof, or any quasi-governmental body exercising tax regulatory
authority; and (C) ”tax return” or “tax returns” means all returns,
declarations of estimated tax payments, reports, estimates, information returns
and statements, including any related or supporting information with respect
to
any of the foregoing, filed or to be filed with any taxing authority in
connection with the determination, assessment, collection or administration
of
any taxes.
(o) Title
to Properties. (i) Each of the Company and its
Subsidiaries has good and marketable title to or valid leasehold or sublease
interests or other comparable contract rights in or relating to all of its
real
properties and other tangible assets necessary for the conduct of its business
as presently conducted and as currently proposed by its management to be
conducted, except for defects in title, easements, restrictive covenants
and
similar encumbrances that individually or in the aggregate have not materially
interfered with, and would not reasonably be expected to materially interfere
with, its ability to conduct its business as presently conducted and as
currently proposed to be conducted. All such properties and other
assets, other than properties and other assets in which the Company or any
of
its Subsidiaries has a leasehold or sublease interest or other comparable
contract right, are free and clear of all Liens, except for Liens that
individually or in the aggregate have not materially interfered with, and
would
not reasonably be expected to materially interfere with, the ability of the
Company or any of its Subsidiaries to conduct their respective businesses
as
presently conducted and as currently proposed to be conducted.
(ii) Each
of the Company and its Subsidiaries has complied with the terms of all leases
or
subleases to which it is a party and under which it is in occupancy, and
all
such leases are in full force and effect, except for such failure to comply
or
be in full force and effect that individually or in the aggregate has not
had
and would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its Subsidiaries is in possession of
the properties or assets purported to be leased under all its material
leases. Neither the Company nor any of its Subsidiaries has received
any written notice of any event or occurrence that has resulted or would
result
(with or without the giving of notice, the lapse of time or both) in a default
with respect to any material lease or sublease to which it is a
party.
(iii) Section 3.01(o)(iii)
of the Company Disclosure Schedule sets forth a complete and accurate list
of
all material real property owned by the Company and its
Subsidiaries.
(iv) Section 3.01(o)(iv)
of the Company Disclosure Schedule sets forth a complete and accurate list
of
all material real property leased by the Companies and its
Subsidiaries.
(p) Intellectual
Property. (i) Each of the Company and its Subsidiaries
owns, or is validly licensed to use, in each case free and clear of any Liens,
all material Intellectual Property used or necessary to carry on its business
as
now being conducted and as currently proposed to be conducted.
(ii) To
the Knowledge of the Company, none of the Company or any of its Subsidiaries
has
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property or other proprietary information of any other person,
except for any such infringement, misappropriation or other conflict that
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. None of the Company or
any of its Subsidiaries has received any written charge, complaint, claim,
demand or notice alleging any such infringement, misappropriation or other
conflict (including any claim that the Company or any of its Subsidiaries
must
license or refrain from using any Intellectual Property or other proprietary
information of any other person), or is party to or the subject of any pending
or, to the Knowledge of the Company, threatened, suit, claim, action,
investigation or proceeding before or by any Governmental Entity or third
party
with respect to any such infringement, misappropriation or other conflict,
that
has not been settled or otherwise fully resolved, except for any such
infringement, misappropriation or other conflict that individually or in
the
aggregate has not had and would not reasonably be expected to have a Material
Adverse Effect. To the Knowledge of the Company, no person or persons
are infringing or have misappropriated or otherwise come into conflict with
the
rights of the Company or any of its Subsidiaries with respect to any
Intellectual Property in a manner which, individually or in the aggregate,
has
had or would reasonably be expected to have a Material Adverse
Effect.
(iii) No
claims are pending or, to the Knowledge of the Company, threatened with regard
to the ownership or use by the Company or any of its Subsidiaries of any
of
their respective Intellectual Property which individually or in the aggregate
have had or would reasonably be expected to have a Material Adverse
Effect.
(q) Voting
Requirements. The affirmative vote of holders of a majority of
the outstanding shares of Company Common Stock at the Stockholders’ Meeting or
any adjournment or postponement thereof to adopt this Agreement (the
“Stockholder Approval”) is the only vote of the holders of any class or series
of Capital Stock of the Company necessary to adopt this Agreement and approve
the transactions contemplated hereby.
(r) State
Takeover Statutes. No state takeover statute (including
Section 203 of the DGCL) or similar statute or regulation applies to this
Agreement, the Merger or the other transactions contemplated by this
Agreement.
(s) Brokers
and Other Advisors. No broker, investment banker, financial
advisor or other person (other than CIBC World Markets Corp.), the fees and
expenses of which will be paid by the Company, is entitled to any broker’s,
finder’s, financial advisor’s or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company has made available
to Parent complete and accurate copies of all Contracts under which any such
fees or expenses are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees are
payable.
(t) Opinion
of Financial Advisor. The Board of Directors of the Company has
received the opinion of CIBC World Markets Corp. to the effect that, as of
the
date of such opinion, the Merger Consideration is fair, from a financial
point
of view, to the holders of shares of Company Common Stock. A signed
copy of the written opinion of CIBC World Markets Corp. promptly will be
delivered to Parent solely to confirm the delivery of such opinion.
(u) Insurance. Section 3.01(u)
of the Company Disclosure Schedule contains a complete and accurate list
of all
policies of fire, liability, workers’ compensation, title and other forms of
insurance owned, held by or applicable to the Company (or its assets or
business) as of the date hereof, and the Company has heretofore made available
to Parent a complete and accurate copy of all such policies, including all
occurrence-based policies applicable to the Company (or its assets or
business) for all periods prior to the Closing Date. All such
policies (or substitute policies with substantially similar terms and
underwritten by insurance carriers with substantially similar or higher ratings)
are in full force and effect, all premiums with respect thereto covering
all
periods up to and including the Closing Date have been paid, and no notice
of
cancellation or termination has been received with respect to any such policy
except for such policies, premiums, cancellations or terminations that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. Such policies are
sufficient, in the reasonable opinion of the Company, for compliance by the
Company with (i) all requirements of applicable laws and (ii) all
Contracts to which the Company is a party, and each of the Company and its
Subsidiaries has complied in all material respects with the provisions of
each
such policy under which it is an insured party. The Company has not
been refused any insurance with respect to its assets or operations by any
insurance carrier to which it has applied for any such insurance or with
which
it has carried insurance, during the last five years. There are no
pending or, to the Knowledge of the Company, threatened material claims under
any insurance policy.
(v) Relationships
with Customers and Suppliers. As of the date of this Agreement,
since December 31, 2005 no customer or supplier of the Company or any of
the Subsidiaries of the Company that is material to the Company and its
Subsidiaries, taken as a whole, has canceled or otherwise terminated, or
provided notice of its intent, or to the Knowledge of the Company threatened,
to
terminate its relationship with the Company or the applicable Subsidiary,
or,
since December 31, 2005 until the date of this Agreement, decreased or
limited in any material respect its purchases from or sales to the Company
or
any of the Subsidiaries of the Company, or provided notice that such reductions
or limitations will occur.
SECTION
3.02. Representations and Warranties of Parent and
Sub. Parent and Sub represent and warrant to the Company as
follows:
(a) Organization,
Standing and Corporate Power. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the
laws
of the jurisdiction in which it is incorporated and has all requisite corporate
power and authority to carry on its business as now being
conducted. Each of Parent and Sub is duly qualified or licensed to do
business and is in good standing in each material jurisdiction in which the
nature of its business or the ownership, leasing or operation of its properties
makes such qualification or licensing necessary.
(b) Authority;
Noncontravention. Each of Parent and Sub has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by
all
necessary corporate action on the part of Parent and Sub and no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This
Agreement and the transactions contemplated hereby do not require approval
of
the holders of any shares of Capital Stock of Parent. This Agreement
has been duly executed and delivered by each of Parent and Sub and, assuming
the
due authorization, execution and delivery by the Company, constitutes a legal,
valid and binding obligation of Parent and Sub, as applicable, enforceable
against Parent and Sub, as applicable, in accordance with its terms, subject
to
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
the
rights of creditors generally and the availability of equitable
remedies. The execution and delivery of this Agreement do not, and
the consummation of the Merger and the other transactions contemplated by
this
Agreement and compliance by Parent and Sub with the provisions of this Agreement
will not, conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of, or result in, termination, cancellation or acceleration
of
any obligation or to the loss of a benefit under, or result in the creation
of
any Lien in or upon any of the properties or other assets of Parent or Sub
under
(x) the Restated Articles of Incorporation or Bylaws of Parent or the
Certificate of Incorporation or Bylaws of Sub, (y) any Contract to which
Parent or Sub is a party or any of their respective properties or other assets
is subject, in any way that would prevent, materially impede or materially
delay
the consummation by Parent of the Merger (including the payments required
to be made pursuant to Article II) or the other transactions contemplated
hereby or (z) subject to the governmental filings and other matters
referred to in the following sentence, any (A) statute, law, ordinance,
rule or regulation applicable to Parent or Sub or their respective properties
or
other assets or (B) order, writ, injunction, decree, judgment or
stipulation, in each case applicable to Parent or Sub or their respective
properties or other assets, and in each case, in any way that would prevent,
materially impede or materially delay the consummation by Parent of the Merger
(including the payments required to be made pursuant to Article II) or the
other transactions contemplated hereby. No material consent,
approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Governmental Entity is required
by
or with respect to Parent or Sub in connection with the execution and delivery
of this Agreement by Parent and Sub or the consummation by Parent and Sub
of the
Merger or the other transactions contemplated by this Agreement, except for
(1) the filing of a premerger notification and report form by Parent under
the HSR Act and the receipt, termination or expiration, as applicable, of
approvals or waiting periods required under the HSR Act or any other applicable
competition, merger control, antitrust or similar law or regulation, (2)
the
filing of the Canadian Filings, if applicable and (3) the filing of the
Certificate of Merger with the Secretary of State of the State
of Delaware.
(c) Information
Supplied. None of the information supplied or to be supplied by
or on behalf of Parent or Sub specifically for inclusion or incorporation
by
reference in the Proxy Statement will, at the date it is first mailed to
the
stockholders of the Company and at the time of the Stockholders’ Meeting,
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.
(d) Interim
Operations of Sub. Sub was formed solely for the purpose of
engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
(e) Capital
Resources. As of the Closing, Parent will have sufficient cash to
pay the aggregate Merger Consideration. As of the date of this
Agreement, the sum of (i) the amount of Parent’s cash on hand and (ii) the
amount of cash that Parent may borrow under outstanding lending commitments
equals or exceeds the aggregate Merger Consideration.
Covenants
Relating to Conduct of Business; No Solicitation
SECTION
4.01. Conduct of
Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the
Effective Time, except as set forth in Section 4.01(a) of the Company
Disclosure Schedule or as consented to in writing in advance by Parent or
as
otherwise permitted pursuant to Section 4.01(a)(i) through (xiv) of
this Agreement, the Company shall, and shall cause each of its Subsidiaries
to,
carry on its business (including making maintenance expenditures) in the
ordinary course consistent with past practice and in compliance in all material
respects with all applicable laws, rules, regulations and treaties and, to
the
extent consistent therewith, use all commercially reasonable efforts to preserve
intact its current business organizations, keep available the services of
its
current officers, employees and consultants and preserve its relationships
with
customers, suppliers and others having business dealings with it with the
intention that its goodwill and ongoing business shall be unimpaired at the
Effective Time. In addition to and without limiting the generality of
the foregoing, during the period from the date of this Agreement to the
Effective Time, except as otherwise set forth in Section 4.01(a) of the
Company Disclosure Schedule or as otherwise expressly permitted by or required
pursuant to this Agreement, the Company shall not, and shall not permit any
of
its Subsidiaries to, without Parent’s prior written consent:
(i) (x) declare,
set aside or pay any dividends on, or make any other distributions (whether
in
cash, stock, property or otherwise) in respect of, any of its Capital Stock,
except for dividends and distributions (including liquidating distributions)
by
a direct or indirect wholly owned Subsidiary of the Company to its parent,
(y) split, combine or reclassify any of its Capital Stock, or issue or
authorize the issuance of any other securities in respect of, in lieu of
or in
substitution for its Capital Stock or (z) purchase, redeem or otherwise
acquire any shares of Capital Stock or any other rights, warrants, calls
or
options to acquire any such Capital Stock, except for purchases, redemptions
or
other acquisitions of (A) Capital Stock or other securities of the Company
in
connection with the forfeiture of any Company Stock Options or Company
Restricted Shares outstanding on the date hereof and (B) the Convertible
Notes;
(ii) issue,
deliver, sell, grant, pledge or otherwise encumber or subject to any Lien
any of
its Capital Stock or any securities convertible into, or exchangeable for,
or
any rights, warrants, calls or options to acquire, any such Capital Stock
or
convertible or exchangeable securities, or any “phantom” stock, “phantom” stock
rights, stock appreciation rights, stock-based performance units or other
equity
or equity-based interests that are linked to the value of Company Common
Stock,
including pursuant to Contracts as in effect on the date hereof (other than
(A)
the issuance of shares of Company Common Stock upon the exercise of Company
Stock Options outstanding on the date hereof in accordance with their terms
on
the date hereof and (B) the issuance of shares of Company Common Stock upon
conversion of the Convertible Notes);
(iii) amend
the Company Certificate or the Company Bylaws or other comparable charter
or
organizational documents of any of the Company’s Subsidiaries except as may be
required by the SEC or the Nasdaq Global Market;
(iv) directly
or indirectly acquire (x) by merging or consolidating with, or by
purchasing assets of, or by any other manner, any person or division, business
or equity interest of any person or (y) other than capital expenditures
permitted by clause (vii) below or deferred taxes, (A) any non-current asset
or
assets that, individually, has a purchase price in excess of $75,000 or,
in the
aggregate, have a purchase price in excess of $500,000 and (B) current assets
acquired outside the ordinary course of business or in a manner inconsistent
with past practice;
(v) directly
or indirectly (x) sell, lease, license, mortgage, sell and leaseback
or otherwise encumber or subject to any Lien or otherwise dispose of any
of its
properties or other assets or any interests therein (including securitizations),
other than sales of inventory and obsolete equipment in the ordinary course
of
business consistent with past practice or sales of unimproved land which
is not
used or contemplated to be used in the Company’s or any of the Company’s
subsidiaries’ operations or (y) enter into, modify or amend any lease of
property, except for modifications or amendments that are not adverse in
any
material respect to the Company or any of its Subsidiaries;
(vi) (x) incur
any indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt securities or calls, options, warrants
or
other rights to acquire any debt securities of the Company or any of its
Subsidiaries, guarantee any debt securities of another person, enter into
any
“keep well” or other Contract to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of
any
of the foregoing, other than (A) short-term borrowings incurred in the ordinary
course of business consistent with past practice not to exceed $1,000,000
at any
time outstanding, (B) letters of credit issued to support payment obligations
in
respect of equipment for the St. Xxxxxxx expansion project with an aggregate
face value not to exceed $50,000,000 at any time outstanding and (C) letters
of
credit issued in the ordinary course of business consistent with past practice
to support payment obligations under sales contracts with an aggregate face
value not to exceed $10,000,000 at any time outstanding, (y) make any
loans, advances or capital contributions to, or investments in, any other
person
(other than extensions of trade credit in the ordinary course of business
consistent with past practice or loans, advances or capital contributions
to, or
investments in, the Company or any wholly owned Subsidiary) or (z) repay,
redeem, repurchase or otherwise retire, or otherwise make any payment in
respect
of, any indebtedness for borrowed money or any debt securities, or any rights,
warrants, calls or options to acquire any debt securities, other than as
required by their terms as in effect on the date of this Agreement;
(vii) make
any capital expenditure, other than (A) normal recurring capital expenditures
which, in the aggregate, are not in excess of $18,000,000 for 2007 and (B)
capital expenditures for the St. Xxxxxxx expansion project in accordance
with
Section 4.01(a)(vii) of the Company Disclosure Schedule; provided that,
notwithstanding and in addition to the foregoing, the Company may purchase
chlorine rail cars so long as the aggregate number of chlorine rail cars
owned
and leased by the Company (after giving effect to any such purchase) does
not
exceed the number of chlorine rail cars owned and leased by the Company as
of
the date of this Agreement;
(viii) (v) except
as required by law or any judgment, pay, discharge, satisfy or settle any
material claims (including claims of stockholders), liabilities, obligations
(whether absolute, accrued, contingent or otherwise), or litigation (whether
or
not commenced prior to the date hereof), other than the payment, discharge,
satisfaction or settlement, in the ordinary course of business consistent
with
past practice or in accordance with its terms as in effect on the date hereof,
of any liability reflected or reserved against in the most recent financial
statements (or the related notes) of the Company included in the Filed Company
SEC Documents (for amounts not in excess of the amount reflected on, or reserved
against in, such financial statements) or incurred since the date of such
financial statements in the ordinary course of business consistent with past
practice, (x) cancel any indebtedness, other than upon conversion of the
Convertible Notes in accordance with their terms as in effect as of the date
of
this Agreement, (y) waive, transfer, grant or release any claims or right
of material value or (z) waive any benefits of, or agree to modify in any
respect, or terminate or fail to enforce, or consent to any material matter
with
respect to which consent is required under any confidentiality, standstill
or
similar Contract to which the Company or any of its Subsidiaries is a party
or
of which the Company or any of its Subsidiaries is a beneficiary;
(ix) enter
into, modify, amend or terminate any material Contract outside the ordinary
course of business or waive, release or assign any material rights or claims
thereunder outside the ordinary course of business or in a manner inconsistent
with past practice;
(x) enter
into, modify, amend or terminate any Contract, which if so entered into,
modified, amended or terminated would reasonably be expected to (A) impair
in any material respect the ability of the Company to perform its obligations
under this Agreement or (B) prevent or materially delay the consummation of
the transactions contemplated by the Agreement;
(xi) enter
into any Contract to the extent consummation of the transactions contemplated
by
this Agreement or compliance by the Company with the provisions of this
Agreement would reasonably be expected to conflict with, or result in a
violation or breach of, or default (with or without notice or lapse of time,
or
both) under, or give rise to a right of, or result in, termination, cancellation
or acceleration of any obligation or to the loss of a benefit under, or result
in the creation of any Lien in or upon any of the properties or other assets
of
the Company or any of its Subsidiaries under, or require Parent to license
or
transfer any of its Intellectual Property or other material assets under,
or
give rise to any increased, additional, accelerated, or guaranteed right
or
entitlements of any third party under, or result in any material alteration
of,
any provision of such Contract;
(xii) except
as otherwise contemplated by this Agreement or as required to ensure that
any
Company Benefit Plan or Company Benefit Agreement is not then out of compliance
with applicable law or to comply with any Contract or Company Benefit Plan
or
Company Benefit Agreement entered into prior to the date hereof (to the extent
complete and accurate copies of which have been heretofore made available
to
Parent), (A) adopt, enter into, terminate or amend (I) any collective
bargaining agreement or Company Benefit Plan or (II) any Company Benefit
Agreement or other agreement, plan or policy involving the Company or any
of its
Subsidiaries and one or more Participants, (B) increase in any manner the
compensation, bonus or fringe or other benefits of, or grant or pay any type
of
compensation or benefits to, any Participant not previously receiving or
entitled to receive such type of compensation or benefits other than, in
the
case of employees who are neither directors nor officers, normal increases
in
cash compensation in the ordinary course of business consistent with past
practice, (C) pay any benefit or amount not required under any Company
Benefit Plan or Company Benefit Agreement or any other benefit plan or
arrangement of the Company or any of its Subsidiaries as in effect on the
date
of this Agreement, (D) grant or pay to any Participant (1) any
severance, termination, change in control, retention or similar compensation
or
benefits or increase in any manner such compensation or benefits or (2) any
right to receive any such compensation or benefits, (E) pay any benefits
under or grant any awards under or enter into, amend or terminate, any bonus,
incentive, performance or other compensation plan or arrangement, Company
Benefit Agreement or Company Benefit Plan (including the grant of Company
Stock
Options, “phantom” stock, stock appreciation rights, “phantom” stock rights,
stock-based or stock-related awards, performance units or restricted stock
or
the removal of existing restrictions in any Company Benefit Agreements, Company
Benefit Plans or agreements or awards made thereunder), (F) amend or modify
any Company Stock Option or Company Restricted Share, (G) take any action
to fund or in any other way secure the payment of compensation or benefits
under
any employee plan, agreement, contract or arrangement or Company Benefit
Plan or
Company Benefit Agreement, (H) take any action to accelerate the vesting or
payment of any compensation or benefit under any Company Benefit Plan or
Company
Benefit Agreement or (I) change any actuarial or other assumption used to
calculate funding obligations with respect to any Company Pension Plan or
change
the manner in which contributions to any Company Pension Plan are made or
the
basis on which such contributions are determined;
(xiii) change
its fiscal year and, except as required by GAAP, revalue any material assets
of
the Company or any of its Subsidiaries or make any change in accounting methods,
principles or practices; or
(xiv) authorize
any of, or commit, resolve, propose or agree to take any of, the foregoing
actions.
(b) Other
Actions. The Company, Parent and Sub shall not, and shall not
permit any of their respective Subsidiaries to, take any action that would,
or
that would reasonably be expected to, result in any of the conditions to
the
Merger set forth in Article VI not being satisfied.
(c) Advice
of Changes; Filings. The Company and Parent shall promptly advise
the other party orally and in writing of (i) any representation or warranty
made by it (and, in the case of Parent, made by Sub) contained in this Agreement
that is qualified as to materiality becoming untrue or inaccurate in any
respect
or any such representation or warranty that is not so qualified becoming
untrue
or inaccurate in any material respect or (ii) the failure of it (and, in
the case of Parent, of Sub) to comply with or satisfy in any material respect
any covenant, condition or agreement to be complied with or satisfied by
it
(and, in the case of Parent, of Sub) under this Agreement; provided,
however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties (or remedies with respect
thereto) or the conditions to the obligations of the parties under this
Agreement. The Company and Parent shall, to the extent permitted by
law, promptly provide the other with copies of all filings made by such party
with any Governmental Entity in connection with this Agreement and the
transactions contemplated hereby, other than the portions of such filings
that
include confidential information not directly related to the transactions
contemplated by this Agreement.
(d) Certain
Tax Matters. (i) During the period from the date of
this Agreement to the Effective Time, the Company shall, and shall cause
each of
its Subsidiaries to, (A) not make any material tax election or settle or
compromise any material tax liability, other than with Parent’s consent or other
than in the ordinary course of business; and (B) cause all existing tax
sharing agreements, tax indemnity obligations and similar agreements,
arrangements or practices with respect to taxes to which the Company or any
of
its Subsidiaries is or may be a party or by which the Company or any of its
Subsidiaries is or may otherwise be bound to be terminated as of the Closing
Date so that after such date neither the Company nor any of its Subsidiaries
shall have any further rights or liabilities thereunder.
(ii) The
Company shall deliver to Parent at or prior to the Closing a certificate,
in
form and substance satisfactory to Parent, duly executed and acknowledged,
certifying that the payment of the Merger Consideration and any payments
made in
respect of the Appraisal Shares pursuant to the terms of this Agreement are
exempt from withholding pursuant to the Foreign Investment in Real Property
Tax
Act.
(iii) To
the extent Section 6043A of the Code applies to the transactions contemplated
by
this Agreement, the parties shall cooperate with each other and provide each
other with all information as is reasonably necessary for the parties to
satisfy
the reporting obligations under Section 6043A of the Code.
SECTION
4.02. No
Solicitation. (a) The Company shall not, nor shall it
authorize or permit any of its Subsidiaries or any of their respective
directors, officers or employees or any investment banker, financial advisor,
attorney, accountant or other advisor, agent or representative (collectively,
“Representatives”) retained by it or any of its Affiliates to, directly or
indirectly through another person, (i) solicit, initiate or knowingly
encourage, or take any other action designed to, or which would reasonably
be
expected to, facilitate, any Takeover Proposal or (ii) enter into, continue
or otherwise participate in any discussions or negotiations regarding, or
furnish to any person any information, or otherwise cooperate in any way
with,
any Takeover Proposal. Without limiting the foregoing, it is agreed
that any violation of the restrictions set forth in the preceding sentence
by
any Representative of the Company or any of its Subsidiaries shall be a breach
of this Section 4.02(a) by the Company. The Company shall, and
shall cause its Subsidiaries to, immediately cease and cause to be terminated
all existing discussions or negotiations with any person conducted heretofore
with respect to any Takeover Proposal and request the prompt return or
destruction of all confidential information previously
furnished. Notwithstanding the foregoing, at any time prior to
obtaining the Stockholder Approval, in response to a bona fide written Takeover
Proposal that the Board of Directors of the Company determines in good faith
(after consultation with outside counsel and a financial advisor of nationally
recognized reputation) constitutes or would reasonably be expected to lead
to a
Superior Proposal by such party, and which Takeover Proposal was not solicited
after the date hereof and was made after the date hereof and did not otherwise
result from a breach of this Section 4.02(a), the Company may, if its Board
of Directors determines in good faith (after consultation with outside counsel)
that it is required to do so in order to comply with its fiduciary duties
to the
stockholders of the Company under applicable law, and subject to compliance
with
Section 4.02(c), (x) furnish information with respect to the Company
and its Subsidiaries to the person making such Takeover Proposal (and its
Representatives) pursuant to a customary confidentiality agreement (which
need
not restrict such person from making an unsolicited Takeover Proposal) not
less
restrictive of such person than the confidentiality provisions of the
Confidentiality Agreement; provided that all such information has previously
been provided to Parent or is provided to Parent prior to or substantially
concurrent with the time it is provided to such person, and (y) participate
in discussions or negotiations with the person making such Takeover Proposal
(and its Representatives) regarding such Takeover Proposal.
The
term
“Takeover Proposal” means any inquiry, proposal or offer from any person
relating to, or that would reasonably be expected to lead to, any direct
or
indirect acquisition or purchase, in one transaction or a series of
transactions, of assets or businesses that constitute 15% or more of the
revenues, net income or the assets of the Company and its Subsidiaries, taken
as
a whole, or 15% or more of any class of equity securities of the Company
or any
of its Subsidiaries, any tender offer or exchange offer that if consummated
would result in any person beneficially owning 15% or more of any class of
equity securities of the Company or any of its Subsidiaries, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution,
joint venture, binding share exchange or similar transaction involving the
Company or any of its Subsidiaries pursuant to which any person or the
stockholders of any person would own 15% or more of any class of equity
securities of the Company or any of its Subsidiaries or of any resulting
parent
company of the Company, other than the transactions contemplated by this
Agreement.
The
term
“Superior Proposal” means any bona fide offer made by a third party that if
consummated would result in such person (or its stockholders) owning, directly
or indirectly, all or substantially all of the shares of Company Common Stock
then outstanding (or of the surviving entity in a merger or the direct or
indirect parent of the surviving entity in a merger) or all or substantially
all
the assets of the Company, which the Board of Directors of the Company
determines in good faith (after consultation with outside counsel and a
financial advisor of nationally recognized reputation) to be (i) more
favorable to the stockholders of the Company from a financial point of view
than
the Merger (taking into account all the terms and conditions of such proposal
and this Agreement (including any changes to the terms of this Agreement
proposed by Parent in response to such offer or otherwise)) and
(ii) reasonably capable of being completed, taking into account all
financial, legal, regulatory and other aspects of such proposal.
(b) Except
as set forth below, neither the Board of Directors of the Company nor any
committee thereof shall (i) (A) withdraw (or modify in a manner adverse to
Parent), or publicly propose to withdraw (or modify in a manner adverse to
Parent), the approval, recommendation or declaration of advisability by such
Board of Directors or any such committee thereof of this Agreement, the Merger
or the other transactions contemplated by this Agreement or (B) recommend,
adopt or approve, or propose publicly to recommend, adopt or approve, any
Takeover Proposal (any action described in this clause (i) being referred
to as a “Company Adverse Recommendation Change”) or (ii) approve or
recommend, or publicly propose to approve or recommend, or allow the Company
or
any of its Affiliates to execute or enter into, any letter of intent, memorandum
of understanding, agreement in principle, merger agreement, acquisition
agreement, option agreement, joint venture agreement, partnership agreement
or
other similar agreement constituting or related to, or that is intended to
or
would reasonably be expected to lead to, any Takeover Proposal (other than
a
confidentiality agreement referred to in Section 4.02(a)) (an “Acquisition
Agreement”). Notwithstanding the foregoing, at any time prior to
obtaining the Stockholder Approval, the Board of Directors of the Company
may make a Company Adverse Recommendation Change if the Board of Directors
of the Company determines in good faith (after consultation with outside
counsel
and a financial advisor of nationally recognized reputation) that it is required
to do so in order to comply with its fiduciary duties to the stockholders
of the
Company under applicable law; provided,
however, that no Company Adverse Recommendation Change may be made until
after the fourth business day following Parent’s receipt of written notice (a
“Notice of Adverse Recommendation”) from the Company advising Parent that the
Board of Directors of the Company intends to take such action and specifying
the
reasons therefor, including the terms and conditions of any Superior Proposal
that is the basis of the proposed action by the Board of Directors (it being
understood and agreed that any amendment to the financial terms or any other
material term of such Superior Proposal shall require a new Notice of Adverse
Recommendation and a new four business day period). In determining
whether to make a Company Adverse Recommendation Change, the Board of Directors
of the Company shall take into account any changes to the terms of this
Agreement proposed by Parent in response to a Notice of Adverse Recommendation
or otherwise.
(c) In
addition to the obligations of the Company set forth in paragraphs (a) and
(b) of this Section 4.02, the Company shall promptly advise Parent
orally and in writing of any Takeover Proposal, the material terms and
conditions of any such Takeover Proposal and the identity of the person making
any such Takeover Proposal. The Company shall (i) keep Parent
fully informed of the status and details (including any change to the terms
thereof) of any such Takeover Proposal and any discussions and negotiations
concerning the material terms and conditions thereof and (ii) provide to
Parent as soon as practicable after receipt or delivery thereof with copies
of
all correspondence and other written material relating to any such Takeover
Proposal exchanged between the Company or any of its Subsidiaries (or their
Representatives), on the one hand, and the person making such Takeover Proposal
(or its Representatives), on the other hand.
(d) Nothing
contained in this Agreement shall prohibit the Company from (x) taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a) and
14d-9 promulgated under the Exchange Act or (y) making any disclosure to
the stockholders of the Company if, in the good faith judgment of the Board
of
Directors of the Company (after consultation with outside counsel) failure
to so
disclose is reasonably likely to be inconsistent with its obligations under
applicable law, including the Board of Directors’ duty of candor to the
stockholders of the Company; provided, however, that in no event
shall the Company or its Board of Directors or any committee thereof take,
or
agree or resolve to take, any action prohibited by
Section 4.02(b).
Additional
Agreements
SECTION
5.01. Preparation of the Proxy Statement; Stockholders’
Meeting. (a) As promptly as practicable following the
date of this Agreement, the Company and Parent shall prepare and the Company
shall file with the SEC the Proxy Statement and the Company shall use
commercially reasonable efforts to respond as promptly as practicable to
any
comments of the SEC with respect thereto and to cause the Proxy Statement
to be
mailed to the stockholders of the Company as promptly as practicable following
the date of this Agreement. The Company shall promptly notify Parent
upon the receipt of any comments from the SEC or the staff of the SEC or
any
request from the SEC or the staff of the SEC for amendments or supplements
to
the Proxy Statement and shall provide Parent with copies of all correspondence
between the Company and its Representatives, on the one hand, and the SEC
and
the staff of the SEC, on the other hand. Notwithstanding the
foregoing, prior to filing or mailing the Proxy Statement (or any amendment
or
supplement thereto) or responding to any comments of the SEC or the staff
of the
SEC with respect thereto, the Company (i) shall provide Parent an
opportunity to review and comment on such document or response and
(ii) shall include in such document or response all comments reasonably
proposed by Parent; provided that Parent shall use commercially reasonable
efforts to provide or cause to be provided its comments to the Company as
promptly as reasonably practicable after such document or response is
transmitted to Parent for its review.
(b) The
Company shall, as soon as practicable following the date of this Agreement,
establish a record date for, duly call, give notice of, convene and hold
a
meeting of its stockholders (the “Stockholders’ Meeting”) solely for the purpose
of obtaining the Stockholder Approval. Subject to
Section 4.02(b) and 4.02(d), the Company shall, through its Board of
Directors, recommend to its stockholders adoption of this Agreement and shall
include such recommendation in the Proxy Statement. Without limiting
the generality of the foregoing, the Company’s obligations pursuant to the first
sentence of this Section 5.01(b) shall not be affected by (i) the
commencement, public proposal, public disclosure or communication to the
Company
of any Takeover Proposal or (ii) the withdrawal or modification by the
Board of Directors of the Company or any committee thereof of such Board
of
Directors’ or such committee’s approval or recommendation of this Agreement, the
Merger or the other transactions contemplated by this Agreement; provided
that
no breach of this Section 5.01(b) shall be deemed to have occurred if the
Company adjourns or postpones the Stockholders’ Meeting for a reasonable period
of time, each such period of time not to exceed 10 business days, if (x) at
the time of such adjournment or postponement Parent shall have received a
Notice
of Adverse Recommendation and the Stockholders’ Meeting is scheduled to occur
within four business days of the time of delivery of such Notice of Adverse
Recommendation to Parent or (y) at the time the Board of Directors
announces a Company Adverse Recommendation Change, the Stockholders’ Meeting is
then scheduled to occur no later than 10 business days from the date of
such Company Adverse Recommendation Change; provided further that the Company
may not adjourn or postpone the Stockholders’ Meeting pursuant to the preceding
proviso more than two times or for more than 15 business days in the
aggregate.
SECTION
5.02. Access to Information;
Confidentiality. Insofar as permitted by applicable law and the
terms of the Confidentiality Agreement, the Company shall afford to Parent,
and
to Parent’s officers, employees, accountants, counsel, financial advisors and
other Representatives, reasonable access (including for the purpose of
coordinating integration activities and transition planning with the employees
of the Company and its Subsidiaries) during normal business hours and upon
reasonable prior notice to the Company during the period prior to the Effective
Time or the termination of this Agreement to all its and its Subsidiaries’
properties, books, Contracts, personnel and records and, during such period,
the
Company shall furnish promptly to Parent (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws,
(b) a copy of each correspondence or written communication with any United
States Federal or state Governmental Entity and (c) all other information
concerning its and its Subsidiaries’ business, properties and personnel as
Parent may reasonably request. Except for disclosures expressly
permitted by the terms of the Confidentiality Agreement dated August 25,
2006, as amended from time to time, between Parent and the Company (as it
may be
amended from time to time, the “Confidentiality Agreement”), Parent shall hold,
and shall cause its officers, employees, accountants, counsel, financial
advisors and other Representatives to hold, all information received from
the
Company, directly or indirectly, in confidence and otherwise in accordance
with
the Confidentiality Agreement. No investigation pursuant to this
Section 5.02 or information provided or received by any party hereto
pursuant to this Agreement will affect any of the representations or warranties
of the parties hereto contained in this Agreement or the conditions hereunder
to
the obligations of the parties hereto.
SECTION
5.03. Commercially Reasonable
Efforts. Upon the terms and subject to the conditions set forth
in this Agreement, each of the parties agrees to use its commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to
be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including using commercially reasonable efforts
to accomplish the following: (i) the taking of all acts
necessary to cause the conditions to Closing to be satisfied as promptly
as
practicable, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making
of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental
Entity
and (iii) the obtaining of all necessary consents, approvals or waivers
from third parties; provided that none of the Company, Parent or Sub shall
be
required to make any payment to any such third parties or concede anything
of
value to obtain such consents. In connection with and without
limiting the foregoing, the Company and Parent shall, as promptly as practicable
after the date of this Agreement, duly file with the U.S. Federal Trade
Commission and the Antitrust Division of the Department of Justice the
notification and report form (the “HSR Filing”) required under the HSR Act and
with the applicable Canadian Governmental Entities the filings (the “Canadian
Filings”) required under the Competition Act (Canada) and the Investment Canada
Act (Canada) (collectively, the “Canadian Competition Laws”), in each case with
respect to the transactions contemplated by this Agreement. The HSR
Filing and the Canadian Filings shall be in substantial compliance with the
requirements of the HSR Act and the Canadian Competition Laws, as
applicable. Each party shall cooperate with the other party to the
extent necessary to assist the other party in the preparation of its HSR
Filing
and the Canadian Filings, to request early termination of the waiting period
required by the HSR Act and, if requested, to promptly amend or furnish
additional information thereunder. The Company and Parent shall
furnish to each other’s counsel such necessary information and reasonable
assistance as the other party may reasonably request in connection with its
preparation of any filing or submission that is necessary in connection with
the
HSR Filing and the Canadian Filings and with any inquiry or communication
with
or from any Governmental Entity in connection therewith. The Company
and its Board of Directors shall (1) take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to this Agreement, the Merger or any of the other transactions
contemplated by this Agreement and (2) if any state takeover statute or
similar statute becomes applicable to this Agreement, the Merger or any of
the
other transactions contemplated by this Agreement, take all action necessary
to
ensure that the Merger and the other transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated by
this
Agreement and otherwise to minimize the effect of such statute or regulation
on
this Agreement, the Merger and the other transactions contemplated by this
Agreement. Nothing in this Agreement shall be deemed to require
Parent, the Company or any Subsidiary to agree to, or proffer to, divest
or hold
separate any assets or any portion of any business of Parent, the Company
or any
of their respective Subsidiaries and neither the Company nor any of its
Subsidiaries shall, without Parent’s written consent, agree to, or proffer to,
divest or hold separate any assets or any portion of its business;
provided that, notwithstanding the foregoing, at Parent’s request, the
Company or any Subsidiary shall agree to, or proffer to, divest or hold separate
any assets or any portion of its business so long as such divestiture or
holding
separate shall occur no earlier than, and be conditioned upon the occurrence
of,
the consummation of the Merger.
SECTION
5.04. Company Stock Options; Company Restricted
Shares. (a) As soon as practicable following the date
of this Agreement, the Board of Directors of the Company (or, if
appropriate, any committee thereof administering the Company Stock Plans)
shall
adopt such resolutions or take such other actions as may be required to effect
the following:
(i) adjust
the terms of all outstanding Company Stock Options, whether vested or unvested,
as necessary to provide that the Company Stock Options will become fully
exercisable and may be exercised before the Effective Time at such applicable
time or times as specified in the Company Stock Plans, and, at the Effective
Time, each Company Stock Option outstanding immediately prior to the Effective
Time shall be canceled and the holder thereof shall then become entitled
to
receive, in full satisfaction of the rights of such holder with respect thereto,
as soon as practicable following the Effective Time, a single lump sum cash
payment equal to the product of (A) the number of shares of Company Common
Stock
for which such Company Stock Option shall not theretofore have been exercised
and (B) the excess, if any, of the Merger Consideration over the exercise
price
per share of such Company Stock Option;
(ii) adjust
the terms of all outstanding Company Restricted Shares as necessary to provide
that each Company Restricted Share outstanding immediately prior to the
Effective Time will vest in full and be converted into the right to receive
the
Merger Consideration pursuant to Section 2.01(c);
(iii) make
such changes to the Company Stock Plans or any other Company Benefit Plan
or
Company Benefit Agreement as the Company and Parent may agree are appropriate
to
clarify that if the Closing occurs during the 2007 fiscal year prior to December
15, 2007, or during the 2008 fiscal year prior to December 15, 2008, the
Company’s non-employee directors immediately prior to the Effective Time will
each be paid, on the Closing Date, an amount in cash equal to (A) $60,000
multiplied by (B) a fraction, (I) the numerator of which is the number of
months
that have fully elapsed in the year in which the Closing occurs through the
Closing Date plus one and (II) the denominator of which is 12;
and
(iv) make
such other changes to the Company Stock Plans as the Company and Parent may
agree are appropriate to give effect to the Merger.
(b) All
amounts payable pursuant to Section 5.04(a) shall be subject to any
required withholding of taxes and shall be paid without interest as soon
as
practicable following the Effective Time.
(c) The
Company shall ensure that following the Effective Time, no holder of a Company
Stock Option, Company Restricted Share or Company Stock-Based Award (or former
holder of a Company Stock Option, Company Restricted Share or Company
Stock-Based Award) or any current or former participant in any Company Stock
Plan, Company Benefit Plan or Company Benefit Agreement shall have any right
thereunder to acquire any Capital Stock of the Company, the Surviving
Corporation or their Subsidiaries or any other equity interest therein
(including “phantom” stock or stock appreciation rights).
(d) Prior
to the Effective Time, the Company shall take all actions necessary in order
to
cause any dispositions of shares of Company Common Stock (including derivative
securities with respect to shares of Company Common Stock) resulting from
the
transactions contemplated by this Agreement by each individual who is subject
to
the reporting requirements of Section 16(a) of the Exchange Act with respect
to
the Company to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
SECTION
5.05. Indemnification; Advancement of Expenses;
Exculpation and Insurance. (a) Parent shall cause the
Surviving Corporation to assume the obligations with respect to all rights
to
indemnification, advancement of expenses and exculpation from liabilities
for
acts or omissions occurring at or prior to the Effective Time now existing
in
favor of the current or former directors or officers of the Company as provided
in the Company Certificate, the Company Bylaws or any indemnification Contract
between such directors or officers and the Company (in each case, as in effect
on the date hereof), without further action, as of the Effective Time and
such
obligations shall survive the Merger and shall continue in full force and
effect
in accordance with their terms.
(b) In
the event that the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of such consolidation or merger
or
(ii) transfers or conveys all or substantially all of its properties and
other assets to any person, then, and in each such case, Parent shall cause
proper provision to be made so that the successors and assigns of the Surviving
Corporation shall expressly assume the obligations set forth in this
Section 5.05.
(c) Parent
shall obtain, at the Effective Time, prepaid (or “tail”) directors’ and
officers’ liability insurance in respect of acts or omissions occurring at or
prior to the Effective Time covering each person currently covered by the
Company’s directors’ and officers’ liability insurance policy (a complete and
accurate copy of which has been heretofore delivered to Parent) for six years
from the Effective Time, on terms with respect to such coverage and amounts
no
less favorable than those of such policy in effect on the date of this
Agreement; provided, however, that in satisfying its obligation
under this Section 5.05(c), Parent shall not be obligated to pay more than
$1,000,000 in the aggregate to obtain such coverage. It is understood
and agreed that in the event such coverage cannot be obtained for $1,000,000
or
less in the aggregate, Parent shall be obligated to obtain a policy providing
such coverage as may be obtained for such $1,000,000 aggregate
amount.
(d) The
provisions of this Section 5.05 (i) are intended to be for the benefit
of, and will be enforceable by, each indemnified party, his or her heirs
and his
or her representatives and (ii) are in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by contract or otherwise.
SECTION
5.06. Fees and
Expenses. (a) Except as provided in
paragraph (b) of this Section 5.06, all fees and expenses
incurred in connection with this Agreement, the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated.
(b) In
the event that:
(i) this
Agreement is terminated by Parent pursuant to Section 7.01(c)(iii) or
7.01(e); or
(ii) this
Agreement is terminated by the Company pursuant to Section 7.01(d)(ii);
or
(iii) (A) prior
to the obtaining of the Stockholder Approval, a Takeover Proposal shall have
been made to the Company or shall have been made directly to the stockholders
of
the Company generally or shall have otherwise become publicly known or any
person shall have publicly announced an intention (whether or not conditional)
to make a Takeover Proposal, (B) thereafter this Agreement is terminated by
either Parent or the Company pursuant to Section 7.01(b)(i) (but only if a
vote to obtain the Stockholder Approval or the Stockholders’ Meeting has not
been held) or Section 7.01(b)(iii) and (C) within 12 months after such
termination, the Company enters into a definitive Contract to consummate,
or
consummates, the transactions contemplated by any Takeover
Proposal,
then
the
Company shall pay Parent a fee equal to $15,634,552 (the “Parent Termination
Fee”) by wire transfer of same-day funds on (x) in the case of a payment
required by clause (i) or (ii) above, the date of termination of this
Agreement and (y) in the case of a payment required by clause (iii)
above, the date of the first to occur of the events referred to in
clause (iii)(C).
(c) The
Company and Parent acknowledge and agree that the agreements contained in
Section 5.06(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not enter
into
this Agreement. Accordingly, if the Company fails promptly to pay the
amount due pursuant to Section 5.06(b), and, in order to obtain such
payment, Parent commences a suit that results in a judgment against the Company
for the Parent Termination Fee, the Company shall pay to Parent its costs
and
expenses (including attorneys’ fees and expenses) in connection with such suit,
together with interest on the amount of the Parent Termination Fee from the
date
such payment was required to be made until the date of payment at a rate
equal
to 2% plus the prime rate of Citibank, N.A. in effect on the date such payment
was required to be made (the “Default Rate”).
SECTION
5.07. Public Announcements. Except with
respect to any Company Adverse Recommendation Change made in accordance with
the
terms of this Agreement, Parent and the Company shall consult with each other
before issuing, and give each other the opportunity to review and comment
upon,
any press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Merger, and shall not issue
any
such press release or make any such public statement prior to such consultation,
except as such party may reasonably conclude may be required by applicable
law,
court process or by obligations pursuant to any listing agreement with any
national securities exchange or national securities quotation
system. The parties agree that all formal Company employee
communication programs or announcements with respect to the transactions
contemplated by this Agreement shall be in the forms mutually agreed to by
the
parties (such agreement not to be unreasonably withheld or
delayed). The parties agree that the initial press release to be
issued with respect to the transactions contemplated by this Agreement shall
be
in the form heretofore agreed to by the parties.
SECTION
5.08. Stockholder Litigation. The
Company shall give Parent the opportunity to participate in the defense or
settlement of any stockholder litigation against the Company and/or its
directors relating to the transactions contemplated by this Agreement, and
no
such settlement shall be agreed to without Parent’s prior written
consent.
SECTION
5.09. Employee
Matters. (a) Except as otherwise provided in any
applicable collective bargaining agreement, from the Effective Time through
the
first anniversary of the Effective Time, the employees of the Company employed
primarily in the United States who remain in the employment of the Surviving
Corporation and its Subsidiaries (the “Continuing Employees”) shall receive
employee benefits that are substantially comparable in the aggregate to the
employee benefits provided to such Continuing Employees immediately prior
to the
Effective Time; provided that neither Parent nor the Surviving
Corporation nor any of their Subsidiaries shall have any obligation to issue,
or
adopt any plans or arrangements providing for the issuance of, shares of
Capital
Stock, warrants, options, stock appreciation rights or other rights in respect
of any shares of Capital Stock of any entity or any securities convertible
or
exchangeable into such Capital Stock pursuant to any such plans or arrangements;
providedfurther that no plans or arrangements of the Company or
any of its Subsidiaries providing for such issuance shall be taken into account
in determining whether employee benefits are substantially comparable in
the
aggregate. Any change in benefits that is adopted prior to the
Effective Time but becomes effective on or after the Effective Time and any
other change in benefits (including changes in vendors, co-payments, deductibles
and life-time maximums) that would have been made by the Company or its
Subsidiaries in the ordinary course of business during calendar year 2007
(or
2008, if the Closing occurs after December 31, 2007) to reflect market
conditions of the provision of those benefits shall be deemed to have been
in
effect immediately prior to the Effective Time for purposes of this
Section 5.09(a).
(b) Parent
shall cause the Surviving Corporation to recognize the service of each
Continuing Employee as if such service had been performed with Parent (i)
for
purposes of eligibility to participate and vesting (but not benefit accrual)
under Parent’s defined contribution plan, (ii) for purposes of eligibility
for vacation under Parent’s vacation program, (iii) for purposes of
eligibility and participation under any health or welfare plan maintained
by
Parent (other than any post-employment health or post-employment welfare
plan)
and (iv) unless covered under another arrangement with or of the Company,
for benefit accrual purposes under Parent’s severance plan (in the case of each
of clauses (i), (ii), (iii) and (iv), solely to the extent that Parent
makes such plan or program available to employees of the Surviving Corporation,
and except as would result in any duplication of benefits for the same period
of
service), but not for purposes of any other employee benefit plan of
Parent.
(c) Except
to the extent set forth in paragraph (m) of Section 4.01(a) of the Disclosure
Schedule, nothing contained herein shall be construed as requiring, and the
Company shall take no action that would have the effect of requiring, Parent
or
the Surviving Corporation to establish, maintain or continue any specific
plans
or to continue the employment of any specific person. Furthermore,
except to the extent set forth in paragraph (m) of Section 4.01(a) of the
Disclosure Schedule, no provision of this Agreement shall be construed as
prohibiting or limiting the ability of Parent or the Surviving Company to
amend,
modify or terminate any plans, programs, policies, arrangements, agreements
or
understandings of Parent, the Company or the Surviving
Company. Without limiting the scope of Section 8.07, nothing in this
Section 5.09 shall confer any rights or remedies of any kind or description
upon
any Continuing Employee or any other person other than Parent, the Company
and
their respective successors and assigns.
(d) With
respect to any welfare plan maintained by Parent in which Continuing Employees
are eligible to participate after the Effective Time, Parent shall, and shall
cause the Surviving Corporation to, (i) use reasonable efforts to waive all
limitations as to preexisting conditions and exclusions with respect to
participation and coverage requirements applicable to such employees to the
extent such conditions and exclusions were satisfied or did not apply to
such
employees under the welfare plans of the Company and its Subsidiaries prior
to
the Effective Time and (ii) provide each Continuing Employee with credit
for any co-payments and deductibles paid prior to the Effective Time in
satisfying any analogous deductible or out-of-pocket requirements incurred
in
the same year as the Effective Time to the extent applicable under any such
plan.
(e) With
respect to the employees of the Company who are employed primarily outside
the
United States, following the Effective Time, Parent and its Subsidiaries
will
provide such employees with employee benefits in accordance with applicable
law.
(f) As
soon as reasonably practicable after the date of this Agreement, the Company
shall amend the Company Benefit Plans listed in paragraph (m) of Section
4.01(a)
of the Disclosure Schedule or take such other actions as necessary to reflect
the terms set forth in such paragraph.
SECTION
5.10. Cooperation with Respect to
Financing. The Company shall provide, and shall cause its
Subsidiaries and its and their officers and employees to provide, on a
reasonably timely basis all reasonable cooperation in connection with the
arrangement of any financing to be consummated by Parent in connection with
the
transactions contemplated by this Agreement.
SECTION
5.11. Cooperation with Respect to Governmental
Entities. The parties shall, through their counsel, keep each
other informed with respect to communications with, to and from Governmental
Entities regarding the transactions contemplated hereunder and shall through
their counsel afford each other a reasonable opportunity to participate in
all
communications and meetings with Governmental Entities and to have input
into
all filings and submissions to Governmental Entities regarding the transactions
contemplated hereunder.
SECTION
5.12. Convertible Notes. Each of the
Company, Parent and Sub shall take each action required to be taken by such
party pursuant to the Indenture dated as of March 26, 2007, between the Company
and Xxxxx Fargo Bank, National Association in connection with the
Merger. The Company shall comply with the terms of the instruments
relating to the Convertible Notes as in effect as of the date of this
Agreement.
SECTION
5.13. Severance
Matters. (a) Parent and Sub covenant and agree that,
except as otherwise set forth in Schedule 5.13(a) of the Disclosure Schedule,
on
or before the date which is 60 days after the date of this Agreement, with
respect to each person listed on Schedule 5.13(a) of the Disclosure Schedule
(the “Officer and Other Employee List”), Parent will provide to the Company a
date on which it expects to terminate such person’s employment with the Company
(the termination date for such person being referred to herein as such person’s
“Officer and Other Employee Termination Date”) with each Officer and Other
Employee Termination Date to be (a) no later than the date which is six months
after the Closing Date (it being understood that such Officer and Employee
Termination Date may be expressed in the number of months (not to exceed
six
months) after the Closing Date for which such employee’s services will be
required) and (b) determined by Parent in good faith based on Parent’s
reasonable expectation as to the amount of time for which Parent will require
such person’s services after the Closing in connection with the transition to
Parent’s ownership of the Company. In addition, except as set forth
in Schedule 5.13(a) of the Disclosure Schedule, Parent will cause the Company
to
pay to each person on the Officer and Other Employee List the severance pay
entitled to him or her from the Company on the earlier of the Officer and
Other
Employee Termination Date for such person or such person’s earlier termination
of employment with the Company; provided that, as a condition to
receiving any such severance pay, each such person may be required by Parent
to
continue his or her service with the Company up to such person’s Officer and
Other Employee Termination Date (unless such person is earlier terminated
by the
Company or Parent (other than for cause)) and to also sign a waiver and release
of claims against the Company, Parent and their affiliates for any claims
incurred prior to such person’s termination. For the avoidance of
doubt, except as set forth in Schedule 5.13(a) of the Disclosure Schedule,
each
employee who is included in the Officer and Other Employee List shall be
entitled to receive a severance payment on or prior to such person’s Officer and
Other Employee Termination Date so long as the employee agrees to continue
and
does continue his or her service with the Company up to such Officer and
Other
Employee Termination Date (unless earlier terminated by the Company or Parent
(other than for cause)) and signs a waiver and release of claims in a form
reasonably acceptable to Parent.
(b) Parent
and Sub covenant and agree that on or before the date which is 30 days after
the
date of this Agreement, with respect to each person listed on Schedule
5.13(b) of the Disclosure Schedule (the “Accounting and IT List”), Parent will provide to the Company (i) a list of those persons on the Accounting and IT List which Parent reasonably and in good faith expects the Company or Parent will continue to employ following six months after the Closing Date and who will be offered permanent employment with the Company or Parent (all other persons on the Accounting and IT List, the “Accounting and IT Terminated Employees”) and (ii) the date on which it expects to terminate each Accounting and IT Terminated Employee’s employment with the Company (the termination date for such Accounting and IT Terminated Employee being referred to herein as such Accounting and IT Terminated Employee’s “Accounting and IT Termination Date”) with each such termination date to be (a) no later than the date which is six months after the Closing Date (it being understood that each Accounting and IT Termination Date may be expressed in the number of months (not to exceed six months) after the Closing Date for which such employee’s services will be required) and (b) determined by Parent in good faith based on Parent’s reasonable expectation as to the amount of time for which Parent will require such Accounting and IT Terminated Employee’s services after the Closing in connection with the transition to Parent’s ownership of the Company. In addition, Parent will cause the Company to pay to each Accounting and IT Terminated Employee the severance pay entitled to him or her from the Company on the earlier of the Accounting and IT Termination Date for such person or such person’s earlier termination of employment with the Company; provided that, as a condition to receiving any such severance pay, each such person may be required by Parent to continue his or her service with the Company up to such person’s Accounting and IT Termination Date (unless such person is earlier terminated by the Company or Parent (other than for cause)) and to also sign a waiver and release of claims against the Company, Parent and their affiliates for any claims incurred prior to such person’s termination. For those employees on the Accounting and IT List who are not Accounting and IT Terminated Employees, the Company may inform such employees that Parent has indicated to the Company that Parent desires to retain their services on a permanent basis after the Closing. For the avoidance of doubt, each employee who is included in the Accounting and IT List and who is designated as an Accounting and IT Terminated Employee shall be entitled to receive a severance payment so long as the employee agrees to continue and does continue his or her service with the Company up to such person’s Accounting and IT Termination Date (unless earlier terminated by the Company or Parent (other than for cause)) and signs a waiver and release of claims in a form reasonably acceptable to Parent.
5.13(b) of the Disclosure Schedule (the “Accounting and IT List”), Parent will provide to the Company (i) a list of those persons on the Accounting and IT List which Parent reasonably and in good faith expects the Company or Parent will continue to employ following six months after the Closing Date and who will be offered permanent employment with the Company or Parent (all other persons on the Accounting and IT List, the “Accounting and IT Terminated Employees”) and (ii) the date on which it expects to terminate each Accounting and IT Terminated Employee’s employment with the Company (the termination date for such Accounting and IT Terminated Employee being referred to herein as such Accounting and IT Terminated Employee’s “Accounting and IT Termination Date”) with each such termination date to be (a) no later than the date which is six months after the Closing Date (it being understood that each Accounting and IT Termination Date may be expressed in the number of months (not to exceed six months) after the Closing Date for which such employee’s services will be required) and (b) determined by Parent in good faith based on Parent’s reasonable expectation as to the amount of time for which Parent will require such Accounting and IT Terminated Employee’s services after the Closing in connection with the transition to Parent’s ownership of the Company. In addition, Parent will cause the Company to pay to each Accounting and IT Terminated Employee the severance pay entitled to him or her from the Company on the earlier of the Accounting and IT Termination Date for such person or such person’s earlier termination of employment with the Company; provided that, as a condition to receiving any such severance pay, each such person may be required by Parent to continue his or her service with the Company up to such person’s Accounting and IT Termination Date (unless such person is earlier terminated by the Company or Parent (other than for cause)) and to also sign a waiver and release of claims against the Company, Parent and their affiliates for any claims incurred prior to such person’s termination. For those employees on the Accounting and IT List who are not Accounting and IT Terminated Employees, the Company may inform such employees that Parent has indicated to the Company that Parent desires to retain their services on a permanent basis after the Closing. For the avoidance of doubt, each employee who is included in the Accounting and IT List and who is designated as an Accounting and IT Terminated Employee shall be entitled to receive a severance payment so long as the employee agrees to continue and does continue his or her service with the Company up to such person’s Accounting and IT Termination Date (unless earlier terminated by the Company or Parent (other than for cause)) and signs a waiver and release of claims in a form reasonably acceptable to Parent.
(c) For
purposes of this Section 5.13, “cause” shall be determined by the Company or
Parent in good faith and shall mean termination from employment due to
unacceptable performance, misconduct, dishonesty or any other violation of
the
policies of the Company or law.
Conditions
Precedent
SECTION
6.01. Conditions to Each Party’s Obligation to Effect
the Merger. The respective obligation of each party to effect the
Merger is subject to the satisfaction or (to the extent permitted by law)
waiver
on or prior to the Closing Date of the following conditions:
(a) Stockholder
Approval. The Stockholder Approval shall have been
obtained.
(b) Antitrust. The
waiting period (and any extension thereof) applicable to the Merger under
the HSR Act shall have been terminated or shall have expired, and all applicable
approvals and waiting periods under the antitrust laws of Canada (if applicable)
shall have been obtained, expired or been terminated, as
applicable.
(c) No
Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other judgment or order issued by
any
court of competent jurisdiction or other statute, law, rule, legal restraint
or
prohibition (collectively, “Restraints”) shall be in effect preventing the
consummation of the Merger; provided, however, that prior to
asserting the lack of satisfaction of this condition the asserting party
shall,
subject to Section 5.03, have used its commercially reasonable efforts in a
manner consistent with its obligations under this Agreement to prevent the
entry
of any such injunction or other judgment or order and to appeal as promptly
as
possible any such judgment that may be entered.
SECTION
6.02. Conditions to Obligations of Parent and
Sub. The obligations of Parent and Sub to effect the Merger are
further subject to the satisfaction or (to the extent permitted by law) waiver
by Parent on or prior to the Closing Date of the following
conditions:
(a) Representations
and Warranties. The (i) representations and warranties of
the Company set forth in Section 3.01(c), Section 3.01(d),
Section 3.01(g)(iv), Section 3.01(q), Section 3.01(r) and
Section 3.01(s) qualified as to “materiality” or “Material Adverse Effect”
shall be true and correct, and to the extent those representations and
warranties are not so qualified as to “materiality” or “Material Adverse Effect”
shall be true and correct in all material respects, in each case as of the
date
of this Agreement and as of the Closing Date with the same effect as though
made
on the Closing Date (except to the extent such representations and warranties
expressly relate to an earlier date, in which case as of such earlier date)
and
(ii) representations and warranties of the Company set forth in this
Agreement (other than those listed in the preceding clause (i)) shall be
true and correct as of the date of this Agreement and as of the Closing Date
with the same effect as though made on the Closing Date (except to the extent
such representations and warranties expressly relate to an earlier date,
in
which case as of such earlier date), except to the extent that the facts
or
matters as to which such representations and warranties are not so true and
correct as of such dates (without giving effect to any qualifications and
limitations as to “materiality” or “Material Adverse Effect” set forth therein),
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect. Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such
effect.
(b) Performance
of Obligations of the Company. The Company shall have performed
in all material respects all obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and Parent shall have received
a
certificate signed on behalf of the Company by the chief executive officer
and
the chief financial officer of the Company to such effect.
(c) No
Litigation. There shall not be pending or threatened any suit,
action or proceeding by any Governmental Entity (i) challenging the
acquisition by Parent or Sub of any shares of Company Common Stock, seeking
to
restrain or prohibit the consummation of the Merger or any other transaction
contemplated by this Agreement, or seeking to place limitations on the ownership
of shares of Company Common Stock (or shares of common stock of the Surviving
Corporation) by Parent, Sub or any other Affiliate of Parent or seeking to
obtain from the Company, Parent, Sub or any other Affiliate of Parent any
damages that are material in relation to the Company, (ii) seeking to
prohibit or materially limit the ownership or operation by the Company, Parent
or any of their respective Subsidiaries of any portion of any business or
of any
assets of the Company, Parent or any of their respective Subsidiaries, or
to
compel the Company, Parent or any of their respective Subsidiaries to divest
or
hold separate any portion of any business or of any assets of the Company,
Parent or any of their respective Subsidiaries, in each case, as a result
of the
Merger, (iii) seeking to prohibit Parent or any of its Affiliates from
effectively controlling in any material respect the business or operations
of
the Company or any of its Subsidiaries or (iv) otherwise having, or being
reasonably expected to have, a Material Adverse Effect.
(d) Restraints. No
Restraint sought by a Governmental Entity that would reasonably be expected
to
result, directly or indirectly, in any of the effects referred to in
clauses (i) through (iv) of paragraph (c) of this Section 6.02
shall be in effect.
SECTION
6.03. Conditions to Obligation of the
Company. The obligation of the Company to effect the Merger is
further subject to the satisfaction or (to the extent permitted by law) waiver
by the Company on or prior to the Closing Date of the following
conditions:
(a) Representations
and Warranties. The representations and warranties of Parent and
Sub contained in this Agreement that are qualified as to materiality shall
be
true and correct, and the representations and warranties of Parent and Sub
contained in this Agreement that are not so qualified shall be true and correct
in all material respects in each case as of the date of this Agreement and
as of
the Closing Date with the same effect as though made on the Closing Date
(except
to the extent such representations and warranties expressly relate to an
earlier
date, in which case as of such earlier date). The Company shall have
received a certificate signed on behalf of Parent by the chief executive
officer
and chief financial officer of Parent to such effect.
(b) Performance
of Obligations of Parent and Sub. Parent and Sub shall have
performed in all material respects all obligations required to be performed
by
them under this Agreement at or prior to the Closing Date, and the Company
shall
have received a certificate signed on behalf of Parent by the chief executive
officer and chief financial officer of Parent to such effect.
SECTION
6.04. Frustration of Closing
Conditions. None of the Company, Parent or Sub may rely on the
failure of any condition set forth in Section 6.01, 6.02 or 6.03, as the
case may be, to be satisfied if such failure was caused by such party’s failure
to act in good faith or to use its commercially reasonable efforts to consummate
the Merger and the other transactions contemplated by this Agreement, as
required by and subject to Section 5.03.
Termination,
Amendment and Waiver
SECTION
7.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
receipt of the Stockholder Approval:
(a) by
mutual written consent of Parent, Sub and the Company;
(b) by
either Parent or the Company:
(i) if
the Merger shall not have been consummated on or before February 20, 2008;
provided, however, that the right to terminate this Agreement
under this Section 7.01(b)(i) shall not be available to any party whose
breach of a representation or warranty in this Agreement or whose action
or
failure to act has been a principal cause of or resulted in the failure of
the
Merger to be consummated on or before such date;
(ii) if
any Restraint which prevents the consummation of the Merger shall be in effect
and shall have become final and nonappealable; or
(iii) if
the Stockholder Approval shall not have been obtained at the Stockholders’
Meeting duly convened therefor or at any adjournment or postponement
thereof;
(c) by
Parent:
(i) if
the Company shall have breached or failed to perform any of its representations,
warranties, covenants or agreements set forth in this Agreement, which breach
or
failure to perform (A) would give rise to the failure of a condition set
forth in Section 6.02(a) or 6.02(b) and (B) is incapable of being
cured, or is not cured, by the Company within 90 calendar days following
receipt of written notice of such breach or failure to perform from
Parent;
(ii) if
any Restraint having the effects referred to in clauses (i) through (iv)
of
Section 6.02(c) shall be in effect and shall have become final and
nonappealable; or
(iii) if
the Company gives Parent the notification contemplated by
Section 7.05(b);
(d) by
the Company:
(i) if
Parent shall have breached or failed to perform any of its representations,
warranties, covenants or agreements set forth in this Agreement, which breach
or
failure to perform (A) would give rise to the failure of a condition set
forth in Section 6.03(a) or 6.03(b) and (B) is incapable of being
cured, or is not cured, by Parent within 90 calendar days following receipt
of written notice of such breach or failure to perform from the Company;
or
(ii) in
accordance with the provisions of Section 7.05(b); provided that
Stockholder Approval has not then been obtained and the Company has complied
with all provisions of Section 7.05(b), including the notice provisions
therein; or
(e) by
Parent, in the event that prior to the obtaining of the Stockholder
Approval:
(i) a
Company Adverse Recommendation Change shall have occurred; or
(ii) the
Board of Directors of the Company fails publicly to reaffirm its recommendation
of this Agreement, the Merger or the other transactions contemplated by this
Agreement within 10 business days of receipt of a written request by Parent
to
provide such reaffirmation following a Takeover Proposal.
SECTION
7.02. Effect of Termination. In the
event of termination of this Agreement by either the Company or Parent as
provided in Section 7.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of Parent,
Sub
or the Company under this Agreement, other than the provisions of
Section
3.01(s), the penultimate sentence of Section 5.02, Section 5.06, this Section 7.02 and Article VIII, which provisions shall survive such termination, and except to the extent that such termination results from the willful and material breach by a party of any of its representations, warranties, covenants or agreements set forth in this Agreement.
3.01(s), the penultimate sentence of Section 5.02, Section 5.06, this Section 7.02 and Article VIII, which provisions shall survive such termination, and except to the extent that such termination results from the willful and material breach by a party of any of its representations, warranties, covenants or agreements set forth in this Agreement.
SECTION
7.03. Amendment. This Agreement may be
amended by the parties hereto at any time before or after receipt of the
Stockholder Approval; provided, however, that after such approval
has been obtained, there shall be made no amendment that by law requires
further
approval by the stockholders of the Company without such approval having
been
obtained. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
SECTION
7.04. Extension; Waiver. At any time
prior to the Effective Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties,
(b) to the extent permitted by applicable law, waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto or (c) subject to the proviso to the first sentence of
Section 7.03 and to the extent permitted by applicable law, waive
compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed
on
behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION
7.05. Procedure for Termination or
Amendment. (a) A termination of this Agreement
pursuant to Section 7.01 or an amendment of this Agreement pursuant to
Section 7.03 shall, in order to be effective, require, in the case of the
Company, action by its Board of Directors or, with respect to any amendment
of
this Agreement pursuant to Section 7.03, the duly authorized committee of
its Board of Directors to the extent permitted by applicable
law. Termination of this Agreement prior to the Effective Time shall
not require the approval of the stockholders of the Company.
(b) The
Company may terminate this Agreement pursuant to Section 7.01(d)(ii) only
if (i) the Board of Directors of the Company has received a Superior
Proposal, (ii) in light of such Superior Proposal the Board of Directors of
the Company shall have determined in good faith, after consultation with
outside
counsel, that it is necessary for the Board of Directors of the Company to
withdraw or modify its approval or recommendation of this Agreement or the
Merger in order to comply with its fiduciary duty under applicable law,
(iii) the Company has notified Parent in writing of the determinations
described in clause (ii) above, (iv) at least five business days
following receipt by Parent of the notice referred to in clause (iii)
above, and taking into account any revised proposal made by Parent since
receipt
of the notice referred to in clause (iii) above, such Superior Proposal
remains a Superior Proposal and the Board of Directors of the Company has
again
made the determinations referred to in clause (ii) above, (v) the
Company is in compliance with Section 4.02, (vi) the Company has previously
paid the Parent Termination Fee and (vii) the Company’s Board of Directors
concurrently approves, and the Company concurrently enters into, a definitive
agreement providing for the implementation of such Superior
Proposal.
General
Provisions
SECTION
8.01. Nonsurvival of Representations and
Warranties. None of the representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time. This Section 8.01 shall not limit
any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
SECTION
8.02. Notices. Except for notices that
are specifically required by the terms of this Agreement to be delivered
orally,
all notices, requests, claims, demands and other communications hereunder
shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by overnight courier (providing proof of delivery)
to the parties at the following addresses (or at such other address for a
party
as shall be specified by like notice):
if
to
Parent or Sub, to:
Xxxx
Corporation
000
Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxx 00000
Telecopy
No.: (000) 000-0000
Attention: Xxxxxx
X. Pain, Esq.
with
a
copy to:
Cravath,
Swaine & Xxxxx LLP
Worldwide
Plaza
000
Xxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Telecopy
No.: (000) 000-0000
Attention: Xxxxxx
X. Xxxxxxxx, III, Esq.
Xxxxxx
X.
Xxxxxx, Esq.
if
to the
Company, to:
Pioneer
Companies, Inc.
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Telecopy
No.: (000) 000-0000
Attention: Xxxx
Xxxxxxx, Esq.
with
a
copy to:
Xxxxx
Xxxxxxx & Xxxx LLP
3400
JPMorgan Chase Tower
000
Xxxxxx Xxxxxx
Xxxxxxx,
Xxxxx 00000
Telecopy
No.: (000) 000-0000
Attention: Xxxxx
Xxxxx, Esq.
SECTION
8.03. Definitions. For purposes of this
Agreement:
(a) an
“Affiliate” of any person means another person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first person;
(b) “Capital
Stock” of any person, means any share of capital stock of, any other equity
interest in, or equity security of, or any other voting interest in, or voting
security of, such person.
(c) “Knowledge”
of any person that is not an individual means, with respect to any matter
in
question, the actual knowledge of such person’s executive officers, without any
requirement of investigation, provided that with respect to the Company,
the
executive officers shall consist solely of Xxxxxxx XxXxxxxx, Xxxx Xxxxxxx,
Xxxxx
Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxx Xxxxxxxxxx, Xxxx
Xxxxx
and Xxx Xxxxxxx;
(d) “Material
Adverse Change” or “Material Adverse Effect” means any change, effect, event,
occurrence, state of facts or development which individually or in the aggregate
(i) is materially adverse to the business, financial condition, properties,
assets, liabilities (contingent or otherwise) or results of operations of
the
Company and its Subsidiaries, taken as a whole, or (ii) will prevent or
materially impede, interfere with, hinder or delay the consummation by the
Company of the Merger or the other transactions contemplated by this Agreement;
provided that none of the following shall be deemed, either alone or in
combination, to constitute, and none of the following shall be taken into
account in determining whether there has been or will be, a Material Adverse
Effect or a Material Adverse Change:
(A)
any
change, effect, event, occurrence, state of facts or development relating
to the
North American economy or securities markets in general;
(B)
any
adverse change, effect, event, occurrence, state of facts or development
reasonably attributable to conditions affecting the industry in which the
Company operates, including decreases in sales prices, increases in the cost
of
raw materials, including electricity and salt, increases in rail transportation
costs or any regulatory or rail industry action which limits or restricts
the
transportation of chlorine by rail, so long as the change, effect, event,
occurrence, state of facts or development does not materially disproportionately
impact the Company;
(C)
any
failure, in and of itself, by the Company to meet any internal or published
projections, forecasts or revenue or earnings predictions for any period
ending
on or after the date of this Agreement (it being understood that the facts
or
occurrences giving rise to or contributing to such failure may be deemed
to
constitute, or be taken into account in determining whether there has been
or
will be, a Material Adverse Effect or Material Adverse Change); and
(D)
any
adverse change, effect, event, occurrence, state of facts or development
attributable to the announcement, pendency or consummation of the Merger
or
Parent’s ownership or proposed ownership of the Company;
(e) “person”
means an individual, corporation, partnership, limited liability company,
joint
venture, association, trust, unincorporated organization or other entity;
and
(f) a
“Subsidiary” of any person means another person, an amount of the voting
securities, other voting rights or voting partnership interests of which
is
sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50% or more of
the
equity interests of which) is owned directly or indirectly by such first
person.
SECTION
8.04. Interpretation. When a reference
is made in this Agreement to an Article, a Section, Exhibit or Schedule,
such
reference shall be to an Article of, a Section of, or an Exhibit or Schedule
to,
this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and
shall
not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation”. The words “hereof”, “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. References to “this Agreement” shall include the Company
Disclosure Schedule. All terms defined in this Agreement shall have
the defined meanings when used in any certificate or other document made
or
delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as
well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any Contract or statute
defined or referred to herein or in any Contract that is referred to herein
means such Contract or statute as from time to time amended, modified or
supplemented, including (in the case of Contracts) by waiver or consent and
(in
the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated
therein. References to a person are also to its permitted successors
and assigns.
SECTION
8.05. Consents and Approvals. For any
matter under this Agreement requiring the consent or approval of any party
to be
valid and binding on the parties hereto, such consent or approval must be
in
writing.
SECTION
8.06. Counterparts. This Agreement may
be executed in one or more counterparts (including by facsimile), all of
which
shall be considered one and the same agreement and shall become effective
when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
SECTION
8.07. Entire Agreement; No Third-Party
Beneficiaries. This Agreement (including any exhibits and
schedules hereto) and the Confidentiality Agreement (a) constitute the
entire agreement, and supersede all prior agreements and understandings,
both
written and oral, among the parties with respect to the subject matter of
this
Agreement and the Confidentiality Agreement and (b) except for the
provisions of Article II, Section 5.04(a)(iii) and Section 5.05, are
not intended to and do not confer upon any person other than the parties
hereto
any legal or equitable rights or remedies.
SECTION
8.08. GOVERNING LAW. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF
DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION
8.09. Assignment. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned,
in
whole or in part, by operation of law or otherwise by any of the parties
without
the prior written consent of the other parties, and any assignment without
such
consent shall be null and void, except that Sub, upon prior written notice
to
the Company, may assign, in its sole discretion, any of or all its rights,
interests and obligations under this Agreement to Parent or to any direct
or
indirect wholly owned Subsidiary of Parent, but no such assignment shall
relieve Sub of any of its obligations hereunder. Subject
to the preceding sentence, this Agreement will be binding upon, inure to
the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
SECTION
8.10. Specific Enforcement; Consent to
Jurisdiction. The parties agree that irreparable damage would
occur and that the parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction
or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in
the
State of Delaware or in any state court in the State of Delaware, this being
in
addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal court located in
the
State of Delaware or of any state court located in the State of Delaware
in the
event any dispute arises out of this Agreement or the transactions contemplated
by this Agreement, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any
such
court and (c) agrees that it will not bring any action relating to this
Agreement or the transactions contemplated by this Agreement in any court
other
than a Federal court located in the State of Delaware or a state court located
in the State of Delaware.
SECTION
8.11. Waiver of Jury Trial. Each party
hereto hereby waives, to the fullest extent permitted by applicable law,
any
right it may have to a trial by jury in respect of any suit, action or other
proceeding arising out of this Agreement or the transactions contemplated
hereby. Each party hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such party would not, in the event of any action, suit or proceeding,
seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement, by, among
other
things, the mutual waiver and certifications in this
Section 8.11.
SECTION
8.12. Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions
of this
Agreement shall nevertheless remain in full force and effect. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to
modify this Agreement so as to effect the original intent of the parties
as
closely as possible to the fullest extent permitted by applicable law in
an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
IN
WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to
be
signed by their respective officers hereunto duly authorized, all as of the
date
first written above.
|
XXXX
CORPORATION,
|
|
|
by
|
|
| /s/ Xxxxxx X. Xxxx | |
|
Name: Xxxxxx
X. Xxxx
|
|
|
Title:
Chairman, President and Chief Executive
Officer
|
|
|
PRINCETON
MERGER CORP.,
|
|
|
by
|
|
| /s/ Xxxx X. XxXxxxxx | |
|
Name: Xxxx
X. XxXxxxxx
|
|
|
Title:
President
|
|
|
PIONEER
COMPANIES, INC.,
|
|
|
by
|
|
| /s/ Xxxxxxx X. XxXxxxxx | |
|
Name: Xxxxxxx
X. XxXxxxxx
|
|
TO
THE
MERGER AGREEMENT
Index
of Defined Terms
|
Term
|
|
|
409A
Authorities
|
Section 3.01(l)(xii)
|
|
Accounting
and IT
List
|
Section
5.13(b)
|
|
Accounting
and IT Terminated
Employees
|
Section
5.13(b)
|
|
Accounting
and IT Termination
Date
|
Section
5.13(b)
|
|
Acquisition
Agreement
|
Section 4.02(b)
|
|
Affiliate
|
Section 8.03(a)
|
|
Agreement
|
Preamble
|
|
AJCA
|
Section 3.01(l)(xii)
|
|
Appraisal
Shares
|
Section
2.01(d)
|
|
Canadian
Competition
Laws
|
Section
5.03
|
|
Canadian
Filings
|
Section
5.03
|
|
Capital
Stock
|
Section
8.03(b)
|
|
cause
|
Section
5.13(c)
|
|
Certificate
|
Section 2.01(c)
|
|
Certificate
of
Merger
|
Section 1.03
|
|
Closing
|
Section 1.02
|
|
Closing
Date
|
Section 1.02
|
|
Code
|
Section 2.02(h)
|
|
Commonly
Controlled
Entity
|
Section 3.01(k)
|
|
Company
|
Preamble
|
|
Company
Adverse Recommendation
Change
|
Section 4.02(b)
|
|
Company
Benefit
Agreements
|
Section 3.01(g)
|
|
Company
Benefit
Plans
|
Section 3.01(k)
|
|
Company
Bylaws
|
Section 3.01(a)
|
|
Company
Certificate
|
Section 1.05(a)
|
|
Company
Common
Stock
|
Preamble
|
|
Company
Consolidated
Group
|
Section 3.01(n)(xiv)
|
|
Company
Disclosure
Schedule
|
Section 3.01
|
|
Company
Pension
Plan
|
Section 3.01(l)(i)
|
|
Company
Preferred
Stock
|
Section 3.01(c)(i)
|
|
Company
Restricted
Shares
|
Section 3.01(c)(i)
|
|
Company
SEC
Documents
|
Section 3.01(e)(i)
|
|
Company
Stock-Based
Awards
|
Section 3.01(c)(i)
|
|
Company
Stock
Options
|
Section 3.01(c)(ii)
|
|
Company
Stock
Plans
|
Section 3.01(c)(i)
|
|
Confidentiality
Agreement
|
Section 5.02
|
|
Continuing
Employees
|
Section
5.09(a)
|
|
Contract
|
Section 3.01(d)
|
|
Convertible
Notes
|
Section
3.01(c)(i)
|
|
debt
obligations
|
Section
3.01(i)(i)
|
|
Default
Rate
|
Section
5.06(d)
|
|
DGCL
|
Section 1.01
|
|
Effective
Time
|
Section 1.03
|
|
Environmental
Claim
|
Section 3.01(j)(ii)
|
|
Environmental
Laws
|
Section 3.01(j)
|
|
Environmental
Permits
|
Section 3.01(j)(ii)
|
|
ERISA
|
Section 3.01(j)(i)
|
|
Exchange
Act
|
Section 3.01(d)
|
|
Exchange
Fund
|
Section 2.02(a)
|
|
Filed
Company SEC
Documents
|
Section 3.01(e)(i)
|
|
GAAP
|
Section 3.01(e)(i)
|
|
Governmental
Entity
|
Section 3.01(d)
|
|
Grant
Date
|
Section 3.01(c)(ii)
|
|
Hazardous
Materials
|
Section 3.01(j)(ii)
|
|
HSR
Act
|
Section 3.01(d)
|
|
HSR
Filing
|
Section 5.03(a)
|
|
Intellectual
Property
|
Section 3.01(p)(iv)
|
|
IRS
|
Section 3.01(l)(i)
|
|
Knowledge
|
Section 8.03(c)
|
|
Legal
Provisions
|
Section 3.01(j)(i)
|
|
Liens
|
Section 3.01(b)
|
|
Material
Adverse
Change
|
Section 8.03(d)
|
|
Material
Adverse
Effect
|
Section 8.03(d)
|
|
Merger
|
Preamble
|
|
Merger
Action
|
Section
3.01(m)
|
|
Merger
Consideration
|
Section 2.01(c)
|
|
Multiemployer
Plan
|
Section
3.01(l)(iii)
|
|
Nonqualified
Deferred Compensation
Plan
|
Section 3.01(l)(xii)
|
|
Notice
of Adverse
Recommendation
|
Section 4.02(b)
|
|
Officer
and Other Employee
List
|
Section
5.13(a)
|
|
Officer
and Other Employee Termination
Date
|
Section
5.13(a)
|
|
Parachute
Gross Up
Payment
|
Section 3.01(m)
|
|
Parent
|
Preamble
|
|
Parent
Termination
Fee
|
Section 5.06(b)(ii)
|
|
Participant
|
Section 3.01(g)
|
|
Paying
Agent
|
Section 2.02(a)
|
|
Permits
|
Section 3.01(j)(i)
|
|
person
|
Section 8.03(e)
|
|
Primary
Company
Executives
|
Section 3.01(m)
|
|
Proxy
Statement
|
Section 3.01(d)
|
|
Release
|
Section 3.01(j)(ii)
|
|
Representatives
|
Section 4.02(a)
|
|
Restricted
Contracts
|
Section
3.01(i)(iii)
|
|
Restraints
|
Section 6.01(c)
|
|
SEC
|
Section 3.01(d)
|
|
Section
262
|
Section
2.01(d)
|
|
Securities
Act
|
Section 3.01(e)(i)
|
|
Social
Security
Act
|
Section 3.01(v)(v)
|
|
SOX
|
Section 3.01(e)(i)
|
|
Specified
Contracts
|
Section 3.01(u)(i)
|
|
Stockholder
Approval
|
Section 3.01(q)
|
|
Stockholders’
Meeting
|
Section 5.01(b)
|
|
Sub
|
Preamble
|
|
Subsidiary
|
Section 8.03(e)
|
|
Superior
Proposal
|
Section 4.02(a)
|
|
Surviving
Corporation
|
Section 1.01
|
|
Takeover
Proposal
|
Section 4.02(a)
|
|
taxes
|
Section 3.01(n)(xiv)
|
|
taxing
authority
|
Section 3.01(n)(xiv)
|
|
tax
returns
|
Section 3.01(n)(xiv)
|
|
Title
IV
Plan
|
Section
3.01(l)(iii)
|
TO
THE
MERGER AGREEMENT
Amended
and Restated Certificate of Incorporation
of
the
Surviving Corporation
FIRST: The
name of the corporation (hereinafter called the “Corporation”) is Princeton
Merger Corp.
SECOND: The
address, including street, number, city, and county, of the registered office
of
the Corporation in the State of Delaware is Corporate Trust Center, 0000
Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, County of New Castle; and the name of
the
registered agent of the Corporation in the State of Delaware at such address
is
The Corporation Trust Company.
THIRD: The
purpose of the Corporation is to engage in any lawful act or activity for
which
corporations may be organized under the General Corporation Law of the State
of
Delaware.
FOURTH: The
aggregate number of shares which the Corporation shall have authority to
issue
is 1,000 shares of Common Stock, par value $0.01 per share.
FIFTH: In
furtherance and not in limitation of the powers conferred upon it by law,
the
Board of Directors of the Corporation is expressly authorized to adopt, amend
or
repeal the Bylaws of the Corporation.
SIXTH: To
the fullest extent permitted by the General Corporation Law of the State
of
Delaware as it now exists and as it may hereafter be amended, no director
or
officer of the Corporation shall be personally liable to the Corporation
or any
of its stockholders for monetary damages for breach of fiduciary duty as
a
director or officer; provided, however, that nothing contained in
this Article SIXTH shall eliminate or limit the liability of a director or
officer (i) for any breach of the director’s or officer’s duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith
or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the General Corporation Law of the State of
Delaware or (iv) for any transaction from which the director or officer derived
an improper personal benefit. No amendment to or repeal of this
Article SIXTH shall apply to or have any effect on the liability or alleged
liability of any director or officer of the Corporation for or with respect
to
any acts or omissions of such director or officer occurring prior to such
amendment or repeal.
SEVENTH: The
Corporation shall, to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as the same may be amended
and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Section from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said
Section. Such indemnification shall be mandatory and not
discretionary. The indemnification provided for herein shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors
or
otherwise, both as to action in his or her official capacity and as to action
in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure
to
the benefit of the heirs, executors, and administrators of such a
person. Any repeal or modification of this Article SEVENTH shall not
adversely affect any right to indemnification of any persons existing at
the
time of such repeal or modification with respect to any matter occurring
prior
to such repeal or modification.
The
Corporation shall to the fullest extent permitted by the General Corporation
Law
of the State of Delaware advance all costs and expenses (including, without
limitation, attorneys’ fees and expenses) incurred by any director or officer
within 15 days of the presentation of same to the Corporation, with respect
to any one or more actions, suits or proceedings, whether civil, criminal,
administrative or investigative, so long as the Corporation receives from
the
director or officer an unsecured undertaking to repay such expenses if it
shall
ultimately be determined that such director or officer is not entitled to
be
indemnified by the Corporation under the General Corporation Law of the State
of
Delaware. Such obligation to advance costs and expenses shall be mandatory,
and
not discretionary, and shall include, without limitation, costs and expenses
incurred in asserting affirmative defenses, counterclaims and cross
claims. Such undertaking to repay may, if first requested in writing
by the applicable director or officer, be on behalf of (rather than by) such
director or officer, provided that in such case the Corporation shall have
the
right to approve the party making such undertaking.
EIGHTH: Unless
and except to the extent that the Bylaws of the Corporation shall so require,
the election of directors of the Corporation need not be by written
ballot.
2
