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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
by and among
SUNBEAM CORPORATION
SENTINEL ACQUISITION CORP.
and
FIRST ALERT, INC.
dated as of
February 28, 1998
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TABLE OF CONTENTS
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Company Actions . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3 SEC Documents . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.4 Directors . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.5 The Merger . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.6 Effective Time . . . . . . . . . . . . . . . . . . . . . 8
Section 1.7 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.8 Stockholders' Meeting . . . . . . . . . . . . . . . . . . 8
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock . . . . . . . . . . . . . . . 10
Section 2.2 Exchange of Certificates . . . . . . . . . . . . . . . . 11
Section 2.3 Dissenters' Rights . . . . . . . . . . . . . . . . . . . 12
Section 2.4 Transfer of Shares After the
Effective Time. . . . . . . . . . . . . . . . . . . . . 13
Section 2.5 Company Stock Plans . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Representations and Warranties of
the Company . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND THE PURCHASER
Section 4.1 Representations and Warranties of
Parent and the Purchaser . . . . . . . . . . . . . . . 31
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the
Company . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.2 Access; Confidentiality . . . . . . . . . . . . . . . . . 38
Section 5.3 Reasonable Efforts; Notification . . . . . . . . . . . . 38
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Section 5.4 No Solicitation . . . . . . . . . . . . . . . . . . . . . 40
Section 5.5 Publicity . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.6 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . 42
Section 5.7 State Takeover Laws . . . . . . . . . . . . . . . . . . . 42
Section 5.8 Indemnification and Insurance . . . . . . . . . . . . . . 42
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . . . . . . . . . . . 45
ARTICLE VII
TERMINATION
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . 48
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . 48
Section 8.2 Amendment and Modification. . . . . . . . . . . . . . . . 49
Section 8.3 Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . 49
Section 8.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.5 Interpretation . . . . . . . . . . . . . . . . . . . . . 50
Section 8.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.7 Entire Agreement; No Third Party
Beneficiaries; Rights of Ownership . . . . . . . . . . 51
Section 8.8 Severability . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.10 Assignment . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.11 Enforcement . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.12 Extension; Waiver . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.13 Procedure for Termination,
Amendment, Extension or Waiver. . . . . . . . . . . . . 52
SECTION 8.14 Certain Undertakings of Parent . . . . . . . . . . . . . 53
SECTION 8.15 Company Disclosure Schedule . . . . . . . . . . . . . . . 53
SECTION 8.16 Definitions . . . . . . . . . . . . . . . . . . . . . . . 53
Annex A Certain Conditions of the Offer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 28, 1998,
by and among SUNBEAM CORPORATION, a Delaware corporation ("Parent"), SENTINEL
ACQUISITION CORP., a Delaware corporation and a wholly-owned Subsidiary of
Parent (the "Purchaser"), and FIRST ALERT, INC., a Delaware corporation (the
"Company").
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have unanimously determined that it is fair to and in
the best interests of their respective stockholders for Parent to acquire the
Company pursuant to a Merger (as defined below) in which Purchaser (or a
wholly-owned Subsidiary thereof) shall be merged with and into the Company upon
the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, Parent proposes that the
Purchaser make an offer to purchase for cash the outstanding Shares (as defined
below) at a price of $5.25 per Share, net to the seller;
WHEREAS, concurrently with the execution and delivery of this
Agreement, certain stockholders of the Company have entered into a Stock Sale
Agreement (the "Stock Sale Agreement") with Parent pursuant to which, subject
to the terms and conditions specified therein, such stockholders are willing to
pay to Purchaser the proceeds upon the sale of certain Shares owned by such
stockholders after the date of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer. Subject to this Agreement not having
been terminated in accordance with the provisions of Section 7.1 hereof, as
promptly as practicable (but in no event later than five business days after
the public announcement of the execution hereof), the Purchaser shall commence
(within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as
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amended (the "Exchange Act")) a tender offer (the "Offer") for all of the
outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of
the Company at a price of $5.25 per Share, net to the seller in cash (such
price, or such higher price per Share as may be paid in the Offer, being
referred to herein as the "Offer Price"), subject to the conditions set forth
in Annex A hereto.
The obligations of the Purchaser to commence the Offer and to
accept for payment and to pay for any Shares validly tendered on or prior to
the expiration of the Offer and not withdrawn shall be subject only to the
conditions set forth in Annex A hereto. The Offer shall be made by means of an
offer to purchase (the "Offer to Purchase") containing the terms set forth in
this Agreement and the conditions set forth in Annex A hereto.
The Purchaser shall not decrease the Offer Price or decrease
the number of Shares sought or amend any other condition of the Offer in any
manner adverse to the holders of the Shares (other than with respect to
insignificant changes or amendments and subject to the penultimate sentence of
this Section 1.1) or impose additional conditions without the written consent
of the Company, provided, however, that if on the initial scheduled expiration
date of the Offer, which shall be 20 business days after the date the Offer is
commenced, all conditions to the Offer shall not have been satisfied or waived,
the Purchaser may, from time to time, in its sole discretion, extend the
expiration date provided, however, that the expiration date of the Offer may
not be extended beyond June 1, 1998. In addition, the Offer Price may be
increased, and the Offer may be extended to the extent required by law in
connection with such increase in each case without the consent of the Company.
The Purchaser shall, on the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, accept for payment and pay for Shares
validly tendered as promptly as practicable; provided, however, that if,
immediately prior to the initial expiration date of the Offer, the Shares
validly tendered and not withdrawn pursuant to the Offer equal less than 90% of
the outstanding Shares, the Purchaser may extend the Offer for a period not to
exceed ten business days, notwithstanding that all conditions to the Offer are
satisfied as of such expiration date of the Offer. The Purchaser agrees that
if all conditions set
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forth in Annex A are not satisfied on the initial expiration date of the Offer,
the Purchaser shall extend (and re- extend) the Offer through April 30, 1998 to
provide time to satisfy such conditions.
Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to
the Offer and represents that the Board of Directors, at a meeting duly called
and held, has (i) unanimously determined that each of the Agreement, the Offer
and the Merger (as defined in Section 1.5) are fair to and in the best
interests of the stockholders of the Company, (ii) unanimously approved the
Stock Sale Agreement, the Offer, the acquisition of Shares pursuant to the
Offer and the Merger for purposes of Section 203 of the DGCL (the "Section 203
Approval"), (iii) received the opinions of Xxxxxxx Xxxxx Xxxxxx and NationsBanc
Xxxxxxxxxx Securities, financial advisors to the Company, to the effect that
the Offer Price to be received by holders of Shares pursuant to the Offer and
the Merger is fair to the stockholders of the Company from a financial point of
view, (iv) approved this Agreement and the transactions contemplated hereby,
including the Offer and the Merger (collectively, the "Transactions") and (v)
resolved to recommend that the stockholders of the Company accept the Offer,
tender their Shares thereunder to the Purchaser and approve and adopt this
Agreement and the Merger. The Company has been advised by each of its
directors and by each executive officer who as of the date hereof is actually
aware (to the knowledge of the Company) of the Transactions contemplated hereby
that each such Person either intends to tender pursuant to the Offer all Shares
owned by such Person or vote all Shares owned by such Person in favor of the
Merger.
(b) In connection with the Offer, the Company will
promptly furnish or cause to be furnished to the Purchaser mailing labels,
security position listings and any available listing or computer file
containing the names and addresses of all holders of record of the Shares as of
a recent date, and shall furnish the Purchaser with such additional information
(including, but not limited to, updated lists of holders of the Shares and
their addresses, mailing labels and lists of security positions) and assistance
as the Purchaser or its agents may reasonably request in communicating the
Offer to the
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record and beneficial holders of the Shares. Subject to the requirements of
applicable Law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Merger,
Purchaser and its affiliates and associates shall hold in confidence the
information contained in any such labels, listings and files, will use such
information only in connection with the Offer and the Merger, and, if this
Agreement shall be terminated, will deliver to the Company all copies of such
information in their possession.
Section 1.3 SEC Documents.
(a) As soon as practicable on the date the Offer is
commenced, Parent and the Purchaser shall file with the United States
Securities and Exchange Commission (the "SEC") a Tender Offer Statement on
Schedule 14D-1 in accordance with the Exchange Act with respect to the Offer
(together with all amendments and supplements thereto and including the
exhibits thereto, the "Schedule 14D-1" and the Schedule 14D-1 together with all
amendments, supplements and exhibits thereto, including the Offer to Purchase,
being collectively the "Offer Documents"). Concurrently with the commencement
of the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 in accordance with the Exchange Act (together with
all amendments and supplements thereto and including the exhibits thereto, the
"Schedule 14D-9"), which shall, subject to the fiduciary duty of the Board
under applicable law, contain the recommendation referred to in clause (iv) of
Section 1.2(a) hereof.
(b) Parent and the Purchaser will take all steps
necessary to ensure that the Offer Documents, and the Company will take all
steps necessary to ensure that the Schedule 14D-9, will comply in all material
respects with the provisions of applicable Federal and state securities Laws
and, on the date filed with the SEC and on the date first published, sent or
given to the Company's stockholders, shall not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that Parent
and the Purchaser make no representation with respect to information furnished
by the Company for inclusion in the Offer Documents and the Company makes no
representation
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with respect to information furnished by Parent or the Purchaser for inclusion
in the Schedule 14D-9. The information supplied in writing by the Company for
inclusion in the Offer Documents and by Parent or the Purchaser for inclusion
in the Schedule 14D-9 will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Each of Parent and the Purchaser will
take all steps necessary to cause the Offer Documents, and the Company will
take all steps necessary to cause the Schedule 14D-9, to be filed with the SEC
and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable Federal and state securities Laws. Each of
Parent and the Purchaser, on the one hand, and the Company, on the other hand,
will promptly correct any information provided by it for use in the Offer
Documents and the Schedule 14D-9 if and to the extent that it shall have become
false and misleading in any material respect and the Purchaser will take all
steps necessary to cause the Offer Documents, and the Company will take all
steps necessary to cause the Schedule 14D-9, as so corrected to be filed with
the SEC and to be disseminated to holders of the Shares, in each case as and to
the extent required by applicable Federal and state securities Laws. Parent
and its counsel shall be given a reasonable opportunity to review and comment
upon the Schedule 14D-9 and all amendments and supplements thereto prior to
their filing with the SEC or dissemination to stockholders of the Company. The
Company agrees to provide in writing Parent and its counsel with any comments
the Company or its counsel may receive from the SEC or its staff with respect
to the Schedule 14D-9 promptly after the receipt of such comments and shall
provide Parent and its counsel an opportunity to participate, including by way
of discussions with the SEC or its staff, in the response of the Company to
such comments.
Section 1.4 Directors.
(a) Promptly upon the purchase of and payment for
any Shares by Parent or any of its Subsidiaries pursuant to the Offer, Parent
shall be entitled to
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designate such number of directors, rounded up to the next whole number, on the
Board of Directors such that the percentage of its designees on the Board shall
equal the percentage of the outstanding Shares beneficially owned by Parent and
its affiliates. In furtherance thereof, the Company shall, upon request of the
Purchaser, use its best efforts promptly to cause Parent's designees to be so
elected to the Company's Board, and in furtherance thereof, to the extent
necessary, increase the size of the Board of Directors. At such time, the
Company shall also cause Persons designated by Parent to constitute at least
the same percentage (rounded up to the next whole number) as is on the
Company's Board of Directors of (i) each committee of the Company's Board of
Directors, and (ii) each committee (or similar body) of the Board of Directors.
Notwithstanding the provisions of this Section 1.4, the parties hereto shall
use their respective reasonable best efforts to ensure that at least two of the
members of the Board shall, at all times prior to the Effective Time (as
defined in Section 1.6 hereof) be, Continuing Directors (as defined below).
For purposes hereof, the term "Continuing Director" shall mean (i) any member
of the Board as of the date hereof, (ii) any member of the Board who is
unaffiliated with, and not a designee or nominee of Parent or Purchaser, or
(iii) any successor of a Continuing Director who is (A) unaffiliated with, and
not a designee or nominee, of Parent or Purchaser, and (B) recommended to
succeed a Continuing Director by a majority of the Continuing Directors then on
the Board, and in each case under clause (iii), who is not an employee of the
Company. The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in
order to fulfill its obligations under this Section 1.4(a), including mailing
to stockholders the information required by such Section 14(f) and Rule 14f-1
(or, at Parent's request, furnishing such information to Parent for inclusion
in the Offer Documents initially filed with the SEC and distributed to the
stockholders of the Company) as is necessary to enable Parent's designees to be
elected to the Company's Board of Directors. Parent or the Purchaser will
supply the Company any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The provisions of this Section 1.4(a) are in addition to and shall
not limit any rights which the Purchaser, Parent or
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any of their affiliates may have as a holder or beneficial owner of Shares as a
matter of law with respect to the election of directors or otherwise.
(b) From and after the time, if any, that Parent's
designees constitute a majority of the Company's Board of Directors, any
amendment or modification of this Agreement, any amendment to the Certificate
of Incorporation or Bylaws inconsistent with this Agreement, any termination of
this Agreement by the Company, any extension of time for performance of any of
the obligations of Parent or the Purchaser hereunder, any waiver of any
condition to the Company's obligations hereunder or any of the Company's rights
hereunder or other action by the Company hereunder may be effected only by the
action of a majority of the Continuing Directors of the Company, which action
shall be deemed to constitute the action of any committee specifically
designated by the Board of Directors to approve the actions and Transactions
contemplated hereby and the full Board of Directors.
Section 1.5 The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time (as defined in Section 1.6 hereof),
the Company and the Purchaser shall consummate a merger (the "Merger") pursuant
to which (a) the Purchaser (or a wholly-owned Subsidiary thereof) shall be
merged with and into the Company and the separate corporate existence of the
Purchaser (or a wholly-owned Subsidiary thereof) shall thereupon cease and (b)
the Company shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation") and shall continue to
be governed by the Laws of the State of Delaware. In the event a wholly-owned
Subsidiary of the Purchaser rather than the Purchaser is merged with and into
the Company in the Merger, references herein to the Purchaser with respect to
the Merger shall be deemed to be references to such wholly-owned Subsidiary of
the Purchaser.
Pursuant to the Merger, (x) the Restated Certificate of
Incorporation of the Company (the Certificate of Incorporation"), as in effect
immediately prior to the Effective Time, shall be the initial certificate of
incorporation of the Surviving Corporation and (y) the by-laws of the Company
(the "By-laws"), as in effect immediately prior to the Effective Time, shall be
the initial By-laws of the Surviving Corporation, each until
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thereafter changed or amended as provided therein or by applicable law. The
Merger shall have the effects specified in the Delaware General Corporation Law
(the "DGCL").
The directors and officers of the Purchaser at the Effective
Time shall be the initial directors and officers, respectively, of the
Surviving Corporation, in each case until their respective successors are duly
elected and qualified.
Section 1.6 Effective Time. Parent, the Purchaser and the
Company will cause a certificate of merger, or, if applicable, a certificate of
ownership and merger (as applicable, the "Certificate of Merger"), to be
executed and filed on the date of the Closing (as defined in Section 1.7) (or
on such other date as Parent and the Company may agree) with the Secretary of
State of Delaware (the "Secretary of State") as provided in the DGCL. The
Merger shall become effective on the date on which the Certificate of Merger
has been duly filed with the Secretary of State or such time as is agreed upon
by the parties and specified in the Certificate of Merger, and such time is
hereinafter referred to as the "Effective Time."
Section 1.7 Closing. The closing of the Merger (the
"Closing") shall take place at 10:00 a.m., local time, on a date to be
specified by the parties, which shall be no later than the second business day
after satisfaction or waiver of all of the conditions set forth in Article VI
hereof and, in the event that Purchaser determines to extend the Offer for up
to ten business days as provided for in Section 1.1 hereof, no later than the
second business day after the earlier of the completion of such ten business
day period or 90% of the outstanding Shares have been validly tendered and not
withdrawn pursuant to the Offer (the "Closing Date"), at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, New York, New York, unless another
date or place is agreed to in writing by the parties hereto.
Section 1.8 Stockholders' Meeting.
(a) If required by applicable law in order to
consummate the Merger, the Company, acting
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through its Board of Directors, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and
hold a special meeting of its stockholders (the "Special Meeting") as
promptly as practicable following the acceptance for payment and
purchase of Shares by the Purchaser pursuant to the Offer for the
purpose of considering and taking action upon the approval of the
Merger and the adoption of this Agreement;
(ii) prepare and file with the SEC a
preliminary proxy or information statement in accordance with the
Exchange Act relating to the Merger and this Agreement and use its
best efforts (x) to obtain and furnish the information required to be
included by the Exchange Act and the SEC in the Proxy Statement (as
hereinafter defined) and, after consultation with Parent, to respond
promptly to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a definitive
proxy or information statement, including any amendment or supplement
thereto (the "Proxy Statement") to be mailed to its stockholders,
provided that no amendment or supplement to the Proxy Statement will
be made by the Company without consultation with Parent and its
counsel and (y) to obtain the necessary approvals of the Merger and
this Agreement by its stockholders; and
(iii) include in the Proxy Statement the
recommendation of the Board that stockholders of the Company vote in
favor of the approval of the Merger and the adoption of this
Agreement.
(b) Parent shall vote, or cause to be voted, all of
the Shares then owned by it, the Purchaser or any of its other Subsidiaries and
affiliates in favor of the approval of the Merger and the adoption of this
Agreement.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any Shares or any shares of capital stock of the Purchaser:
(a) Purchaser Capital Stock. Each issued and
outstanding share of capital stock of the Purchaser shall be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and
Purchaser-Owned Stock. All Shares that are owned by the Company or any
Subsidiary of the Company and any Shares owned by Parent, the Purchaser or any
Subsidiary of Parent or the Purchaser shall be cancelled and retired and shall
cease to exist and no consideration shall be delivered in exchange therefor.
(c) Exchange of Shares. Each issued and outstanding
Share (other than Shares to be cancelled in accordance with Section 2.1(b) and
any Shares which are held by stockholders exercising appraisal rights pursuant
to Section 262 of the DGCL ("Dissenting Stockholders")) shall be converted into
the right to receive the Offer Price in cash, payable to the holder thereof,
without interest (the "Merger Consideration"), upon surrender of the
certificate formerly representing such Share in the manner provided in Section
2.2. All such Shares, when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such Shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance
with Section 2.2, without interest, or the right, if any, to receive payment
from the Surviving Corporation of the "fair value" of such Shares as determined
in accordance with Section 262 of the XXXX.
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Section 2.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time,
Parent shall designate a bank or trust company to act as agent for the holders
of the Shares in connection with the Merger (the "Paying Agent") to receive the
funds to which holders of the Shares shall become entitled pursuant to Section
2.1(c). Parent shall, from time to time, make available to the Paying Agent
funds in amounts and at times necessary for the payment of the Merger
Consideration as provided herein. All interest earned on such funds shall be
paid to Parent.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Paying Agent shall mail to each
holder of record of a certificate or certificates, which immediately prior to
the Effective Time represented outstanding Shares (the "Certificates"), whose
Shares were converted pursuant to Section 2.1 into the right to receive the
Merger Consideration (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Paying Agent and
shall be in such form and have such other provisions as Parent and the Company
may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration for
each Share formerly represented by such Certificate and the Certificate so
surrendered shall forthwith be cancelled. If payment of the Merger
Consideration is to be made to a Person other than the Person in whose name the
surrendered Certificate is registered, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed or shall be otherwise
in proper form for transfer and that the Person requesting such payment shall
have paid any transfer and other taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid or is not applicable.
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Until surrendered as contemplated by this Section 2.2, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2.
The right of any stockholder to receive the Merger Consideration shall be
subject to and reduced by any applicable withholding obligation.
(c) Transfer Books; No Further Ownership Rights in
the Shares. At the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further registration of
transfers of the Shares on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of the Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares, except as otherwise provided for herein or
by applicable law. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be cancelled and exchanged
as provided in this Article II.
(d) Termination of Fund; No Liability. At any time
following six months after the Effective Time, the Surviving Corporation shall
be entitled to require the Paying Agent to deliver to it any funds (including
any interest received with respect thereto) which had been made available to
the Paying Agent and which have not been disbursed to holders of Certificates,
and thereafter such holders shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat or other similar Laws) only
as general creditors thereof with respect to the Merger Consideration payable
upon due surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, none of Parent, the Surviving Corporation or the
Paying Agent shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Section 2.3 Dissenters' Rights. Notwithstanding anything in
this Agreement to the contrary, if any Dissenting Stockholder shall demand to
be paid the "fair value" of such holder's Shares, as provided in Section 262 of
the DGCL, such Shares shall not be converted into or be exchangeable for the
right to receive the Merger
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Consideration except as provided in this Section 2.3 and the Company shall give
the Parent notice thereof and the Parent shall have the right to participate in
all negotiations and proceedings with respect to any such demands. Neither the
Company nor the Surviving Corporation shall, except with the prior written
consent of the Parent, voluntarily make any payment with respect to, or settle
or offer to settle, any such demand for payment. If any Dissenting Stockholder
shall fail to perfect or shall have effectively withdrawn or lost the right to
dissent, the Shares held by such Dissenting Stockholder shall thereupon be
treated as though such Shares had been converted into the Merger Consideration
pursuant to Section 2.1.
Section 2.4 Transfer of Shares After the Effective Time. No
transfer of Shares shall be made on the stock transfer books of the Surviving
Corporation at or after the Effective Time.
Section 2.5 Company Stock Plans. (a) Immediately prior to
the Effective Time, each then outstanding option to purchase shares (in each
case, an Option), whether or not then exercisable, shall be cancelled by the
Company and in consideration of such cancellation and except to the extent that
Parent or the Purchaser and the holder of any such Option otherwise agree, the
Company (or, at Parent's option, the Purchaser) shall pay to such holders of
Options an amount in respect thereof equal to the product of (A) the excess, if
any, of the Offer Price over the exercise price of each such Option and (B) the
number of Shares previously subject to the Option immediately prior to its
cancellation (such payment to be net of withholding taxes and without
interest). If required, the Company shall cause the Company's employees and
directors to consent to the transactions contemplated by this Section 2.5, no
later than the Effective Time.
(b) All stock option or other equity based plans
maintained with respect to the Shares ("Option Plans") shall terminate as of
the Effective Time and the provisions in any other Benefit Plan providing for
the issuance, transfer or grant of any capital stock of the Company or any
interest in respect of any capital stock of the Company shall be deleted as of
the Effective Time, and the Company shall use its best efforts to ensure that
following the Effective Time no holder of an
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Option or any participant in any Option Plan shall have any right thereunder to
acquire any capital stock of the Company, Parent or the Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Representations and Warranties of the Company.
The Company represents and warrants to Parent and the Purchaser as follows:
(a) Organization, Standing and Corporate Power.
Each of the Company and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction in which it is organized and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of the Company
and its Subsidiaries is duly qualified as a foreign corporation or licensed to
do business and is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing 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)
would not have a Material Adverse Effect on the Company. The Company has made
available to Parent complete and correct copies of the Certificate of
Incorporation of the Company and By-laws of the Company, in each case as
amended to the date of this Agreement, and has delivered the certificates of
incorporation and by-laws or other organizational documents of its
Subsidiaries, in each case as amended to the date of this Agreement, other than
Subsidiaries which are incorporated in a jurisdiction other than a State of the
United States. The respective certificates of incorporation and by-laws or
other organizational documents of the Subsidiaries of the Company do not
contain any provision limiting or otherwise restricting the ability of the
Company to control such Subsidiaries.
(b) Subsidiaries. The list of Subsidiaries of
the Company filed by the Company with its most recent Report on Form 10-K is a
true and accurate list of all the Subsidiaries of the Company which are
required to be set forth therein. All the outstanding shares of capital stock
of each Subsidiary are owned by the Company
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or by another wholly owned Subsidiary of the Company, free and clear of all
Liens, except as set forth in Schedule 3.1(b) of the Company Disclosure
Schedule. There are no other companies in which the Company has a direct or
indirect ownership interest.
(c) Capital Structure. The authorized capital
stock of the Company consists of 30,000,000 Shares and 1,000,000 shares of
preferred stock, par value $.01 per share (the Preferred Shares"). As of the
date hereof, (i) 24,335,112 Shares and no Preferred Shares were issued and
outstanding and (ii) 1,929,698 shares were reserved for issuance upon exercise
of outstanding Options. Except as set forth above, as of the date of this
Agreement: (i) no shares of capital stock or other voting securities of the
Company are issued, reserved for issuance or outstanding; (ii) there were no
stock appreciation rights, restricted stock grant or contingent stock grants
and there are no other outstanding contractual rights to which the Company is a
party the value of which is based on the value of Shares; (iii) all outstanding
shares of capital stock of the Company are, and all shares which may be issued
will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights; and (iv) 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, as of the date of this Agreement, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating the Company
or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of the Company or of any of its Subsidiaries or obligating the
Company or any of its Subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. There are not any outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its Subsidiaries.
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(d) Authority; Noncontravention; Company Action.
The Company has the requisite corporate power and authority to enter into this
Agreement and, subject to approval of this Agreement by the holders of a
majority of the outstanding Shares, to consummate the Merger contemplated by
this Agreement. 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, subject, in the case of the Merger, to approval of this
Agreement by the holders of a majority of the outstanding Shares. This
Agreement has been duly executed and delivered by the Company and, assuming
this Agreement constitutes the valid and binding obligation of Parent and the
Purchaser, constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that (i)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar Laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. Except as set
forth in Schedule 3.1(d) of the Company Disclosure Schedule, the execution and
delivery of this Agreement do not, and the consummation of the Transactions
contemplated by this Agreement (including the changes in the composition of the
Board of Directors of the Company) and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any lien or other
encumbrance upon any of the properties or assets of the Company or any of its
Subsidiaries under, (i) the Certificate of Incorporation, as amended, or
By-laws of the Company or the comparable charter or organizational documents of
any of its Subsidiaries, (ii) any loan or credit agreement note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its Subsidiaries or
their respective properties or assets (including all agreements described
pursuant to Section 3.1(t)) or (iii) any judgment, order, decree, statute, law,
ordinance, rule or
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regulation applicable to the Company or any of its Subsidiaries or their
respective properties or assets, other than, in the case of clauses (ii) or
(iii), any such conflicts, violations, defaults, rights or Liens that
individually or in the aggregate would not (x) impair in any material respect
the ability of the Company to perform its obligations under this Agreement, (y)
prevent or impede, in any material respect, the consummation of any of the
Transactions contemplated by this Agreement or (z) impair, prevent or impede
materially the conduct of the Company's business substantially as now
conducted. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Federal, state or local government or any
court, administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity") or any other
party, is required by the Company or any of its Subsidiaries in connection with
the execution and delivery of this Agreement by the Company or the consummation
by the Company of the Transactions contemplated by this Agreement, except for
(i) if required, the filing of a premerger notification and report form by the
Company under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the filing with the SEC of (x) the Schedule
14D-9, (y) a Proxy Statement and (z) such reports under Section 13(a) of the
Exchange Act as may be required in connection with this Agreement and the
Transactions contemplated by this Agreement, (iii) the filing of the
Certificate of Merger with the Secretary of State and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business, (iv) as may be required by any applicable state securities or
"blue sky" Laws, and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, (x) impair, in
any material respect, the ability of the Company to perform its obligations
under this Agreement, (y) prevent or significantly delay the consummation of
the Transactions contemplated by this Agreement or (z) impair, prevent or
impede materially the conduct of the Company's business substantially as now
conducted.
(e) SEC Documents; Financial Statements. The
Company has filed all reports, proxy statements, forms, and other documents
required to be filed with the
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SEC under the Securities Act and the Exchange Act since December 31, 1995 (the
"SEC Documents"). As of their respective dates, (i) the SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933
(the "Securities Act"), or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and (ii) none of the 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. The financial
statements of the Company included in the SEC Documents are true and complete
and comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present 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 set forth in Schedule 3.1(e) of
the Company Disclosure Schedule and except as set forth in the SEC Documents
filed and publicly available prior to the date of this Agreement, and except
for liabilities and obligations incurred in the ordinary course of business
consistent with past practice since the date of the most recent consolidated
balance sheet included in the SEC Documents filed and publicly available prior
to the date of this Agreement, neither the Company nor any of its Subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles
to be set forth on a consolidated balance sheet of the Company and its
consolidated Subsidiaries or in the notes thereto.
(f) Information Supplied. None of the
information supplied or to be supplied by the Company expressly for inclusion
or incorporation by reference in (i) the Offer Documents or (ii) the Proxy
Statement, will, and in the case of the Offer Documents, at the time the Offer
Documents are filed with the SEC and first
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published, sent or given to the Company's stockholders, or, in the case of the
Proxy Statement, on the date the Proxy Statement is first mailed to the
Company's stockholders and at the time of the meeting of the Company's
stockholders held to vote on approval and adoption of this Agreement, 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 false or
misleading. The Proxy Statement will comply as to form in all material
respects with the Exchange Act and the rules and regulations thereunder, 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 Parent or the Purchaser for inclusion or incorporation by reference
therein.
(g) Absence of Certain Changes or Events. Except
as set forth in SEC Documents or Schedule 3.1(g) of the Company Disclosure
Schedule, since September 28, 1997, the Company and its Subsidiaries have
conducted their respective businesses only in the ordinary course, and (i)
there has not been any Material Adverse Change in the Company and (ii) neither
the Company nor any of its Subsidiaries has taken any of the actions
contemplated by Section 5.1.
(h) Litigation. Except as set forth in SEC
documents or Schedules 3.1(h) and 3.1(x) of the Company Disclosure Schedule or
to the extent reserved for as reflected on the Company's financial statements
for the year ended December 31, 1996, there are (i) no suits, actions or
proceedings pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries that, individually or in the
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aggregate, would reasonably be expected to have a Material Adverse Effect, (ii)
no complaints, lawsuits, charges or other proceedings pending or, to the
knowledge of the Company, threatened in any forum by or on behalf of any
present or former employee of the Company or any of its Subsidiaries, any
applicant for employment or classes of the foregoing alleging breach of any
express or implied contract of employment, any law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, (iii) no judgments, decrees, injunctions or orders of
any Governmental Entity or arbitrator outstanding against the Company that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on the Company; and (iv) none of the Intellectual
Property is subject to any order, writ, judgment, injunction, decree,
determination or award that has, or would reasonably be expected to have a
Material Adverse Effect on the Company.
(i) Absence of Changes in Benefit Plans; SEC
Disclosure. Except as disclosed in Schedule 3.1(i) of the Company Disclosure
Schedule, there has not been any adoption or amendment by the Company or any of
its Subsidiaries or any ERISA Affiliate (as defined in Section 3.1(j) hereof)
of any Benefit Plan (as defined in Section 3.1(j) hereof) since September 28,
1997. Except as disclosed in Schedule 3.1(i) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has any formal plan
or commitment to create any additional Benefit Plan or modify or change any
existing Benefit Plan that would affect any employee or terminated employee of
the Company or a Subsidiary of the Company. All employment, consulting,
severance, termination, change in control or indemnification agreements,
arrangements or understandings between the Company or any of its Subsidiaries
and any current or former officer or director of the Company or any of its
Subsidiaries which are required to be disclosed in the SEC Documents have been
disclosed therein.
(j) Employee Benefits; ERISA. (i) Schedule
3.1(j) of the Company Disclosure Schedule contains a true and complete list of
each material bonus, deferred compensation, incentive compensation, stock
purchase, stock option, severance or termination pay, health insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement
plan, program, agreement or arrangement, and each other employee benefit plan,
program, agreement or arrangement, other than a non-material fringe benefit
plan, sponsored, maintained or contributed to or required to be contributed to
(at any time during the past six years) by the Company or any of its
Subsidiaries or by any trade or business, whether or not incorporated (an
"ERISA Affiliate"), that is a member of a "controlled group" within the meaning
of
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section 4001 of the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder ("ERISA") of
which the Company or a Subsidiary is a member or which is under "common
control" within the meaning of Section 4001 of ERISA, with the Company or a
Subsidiary, for the benefit of any employee or terminated employee of the
Company, its Subsidiaries or any ERISA Affiliate, whether formal or informal
(the "Benefit Plans").
(ii) With respect to each Benefit Plan, the Company
has delivered a true and complete copy thereof (including all amendments
thereto), as well as true and complete copies of the two most recent annual
reports, if required under ERISA, with respect thereto; the two most recent
actuarial reports, if required under ERISA, with respect thereto; the two most
recent reports prepared with respect thereto in accordance with Statement of
Financial Accounting Standards No. 87, Employer's Accounting for Pensions; the
most recent Summary Plan Description, together with each Summary of Material
Modifications, if required under ERISA with respect thereto; if the Benefit
Plan is funded through a trust or any third party funding vehicle, the trust or
other funding agreement (including all amendments thereto) and the latest
financial statements thereof; and the most recent determination letter received
from the Internal Revenue Service with respect to each Benefit Plan that is
intended to be qualified under section 401 of the Internal Revenue Code of
1986, as from time to time amended (the "Code").
(iii) No liability to the Pension Benefit Guaranty
Corporation ("PBGC") under Title IV of ERISA has been incurred by the Company,
its Subsidiaries or any ERISA Affiliate since the effective date of ERISA that
has not been satisfied in full, and no condition exists that presents a
material risk to the Company, its Subsidiaries or any ERISA Affiliate of
incurring a liability under such Title, other than liability for premiums due
the PBGC (which premiums have been paid when due). Each Benefit Plan has been
operated and administered in all material respects in accordance with its terms
and applicable law, including but not limited to ERISA and the Code.
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(iv) The PBGC has not instituted proceedings to
terminate any Benefit Plan and no condition exists that presents a material
risk that such proceedings will be instituted.
(v) With respect to each Benefit Plan that is
subject to Section 302 of the Code or Title IV of ERISA, the present value of
accrued benefits under such plan, based upon the actuarial assumptions used for
funding purposes in the most recent actuarial report prepared by such plan's
actuary with respect to such plan did not exceed, as of its latest valuation
date, the then current value of the assets of such plan allocable to such
accrued benefits.
(vi) Neither the Company, nor any Subsidiary of the
Company, nor any trust created thereunder, nor any trustee or administrator
thereof has engaged in a transaction in connection with which the Company or
any Subsidiary of the Company, any such trust, or any trustee or administrator
thereof, or any party dealing with any Benefit Plan or any such trust could be
subject to either a civil penalty assessed pursuant to section 409 or 502(i) of
ERISA or a tax imposed pursuant to section 4975 or 4976 of the Code.
(vii) No Benefit Plan is a "multiemployer pension
plan," as such term is defined in section 3(37) of ERISA.
(viii) Each Benefit Plan which is intended to be
"qualified" within the meaning of section 401(a) of the Code is so qualified
and the trusts maintained thereunder are exempt from taxation under section
501(a) of the Code and, to the knowledge of the Company, no event has occurred
to cause the loss of such qualified or exempt status.
(ix) No Benefit Plan provides health, death or
medical benefits (whether or not insured) with respect to current or former
employees of the Company or its Subsidiaries beyond their retirement or other
termination of service (other than (a) coverage mandated by applicable law or
(b) benefits the full cost of which is borne by the current or former employee
(or his beneficiary).
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(x) Except as set forth in Section 3.1(j) of the
Company Disclosure Schedule, the consummation of the Transactions contemplated
by this Agreement, alone, will not (a) entitle any current or former employee
or officer of the Company or any Subsidiary to severance pay, unemployment
compensation or any other payment, (b) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or
officer, (c) result in any prohibited transaction described in section 406 of
ERISA or section 4975 of the Code for which an exemption is not available, or
(d) require the Company or any ERISA Affiliate to fund or make any payments to
any trust or other funding vehicle in respect of any Benefit Plan.
(xi) There are no pending, threatened or, to the
knowledge of the Company, anticipated claims by or on behalf of any Benefit
Plan, by any employee or beneficiary covered under any such Benefit Plan, or
otherwise involving any such Benefit Plan (other than routine claims for
benefits).
(xii) No Benefit Plan of the Company or its
Subsidiaries or other arrangement authorizes grants of either stock
appreciation rights or restricted stock of the Company and there are no
outstanding stock appreciation rights or restricted stock of the Company.
(xiii) Except as set forth in Schedule 3.1(j) of
the Company Disclosure Schedule, no material Benefit Plan is not subject to
ERISA pursuant to Section 4(b)(4) of ERISA.
(k) Taxes. (i) Each of the Company and each of
its Subsidiaries has timely filed (or has had timely filed on its behalf) all
Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and correct in all material respects. Each of the Company and each of
its Subsidiaries has paid (or has had paid on its behalf) all Taxes (whether or
not shown as due on such Tax Returns), or the most recent financial statements
contained in the SEC Documents reflect adequate reserves in accordance with
generally accepted accounting principles for all Taxes not yet paid.
(ii) Except as set forth in Schedule 3.1(k) of the
Company Disclosure Schedule, (A) no deficiencies
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for any Taxes have been threatened, proposed, asserted or assessed against the
Company or any of its Subsidiaries, (B) no governmental authority is conducting
an audit with respect to Taxes or any Tax Return of the Company or any of its
Subsidiaries, (C) no extension or waiver of the statute of limitations with
respect to Taxes or any Tax Return has been granted by the Company or any of
its Subsidiaries, which remains in effect, (D) none of the Company or any of
its Subsidiaries is a party to any arrangement to allocate, share or indemnify
another party for Taxes, and (E) there are no liens for material Taxes upon the
assets of the Company or any of its Subsidiaries, except for liens for Taxes
not yet due.
(iii) As used in this Agreement, "Taxes" shall
include (A) any Federal, state, local or foreign net income, gross income,
receipts, windfall profit, severance, property, production, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative or
add-on minimum, ad valorem, transfer, stamp or environmental tax, or any other
tax, custom, duty, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or penalty, addition to tax or
additional amount imposed by any governmental authority, and (B) any liability
for the payment of amounts with respect to payments of a type described in
clause (A) as a result of being a member of an affiliated, consolidated,
combined or unitary group, or as a result of any obligation under a Tax sharing
arrangement or a Tax indemnity arrangement. As used in this Agreement, "Tax
Returns" shall mean all returns, reports, or statements required to be filed
with respect to any Tax (including any attachments thereto), including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
(l) No Excess Parachute Payments. Except as set
forth in Section 3.1(l) of the Company Disclosure Schedule, no amounts payable
as a result of the Transactions contemplated by this Agreement under the
Benefit Plans or any other plans or arrangements will constitute a "parachute
payment" to a "disqualified individual" as those terms are defined in section
280G of the Code, without regard to whether such payment is reasonable
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compensation for personal services performed or to be performed in the future.
(m) Compliance with Applicable Laws. Except as
set forth in Schedule 3.1(m) of the Company Disclosure Schedule, (i) to the
knowledge of the Company, the Company and each of its Subsidiaries have
complied and are presently complying in all material respects with all
applicable laws (whether statutory or otherwise), rules, regulations, orders,
ordinances, judgments or decrees of all governmental authorities (Federal,
state, local or otherwise) (collectively, "Laws"), including, but not limited
to, the Federal Occupational Safety and Health Act, the Federal Consumer
Product Safety Act, the rules and regulations of the Nuclear Regulatory
Commission, and all Laws relating to the safe conduct of business and
environmental protection and conservation, the Civil Rights Act of 1964 and
Executive Order 11246 concerning equal employment opportunity obligations of
Federal contractors and any applicable health, sanitation, fire, safety, labor,
zoning and building Laws and ordinances, and neither the Company nor any of its
Subsidiaries has received notification of any asserted present or past failure
to so comply, except such non-compliance that has not and will not prevent the
Company from carrying on its business substantially as now conducted or might
reasonably be expected to result in a Material Adverse Effect.
(ii) Each of the Company and its Subsidiaries has in
effect all material Federal, state, local and foreign governmental approvals,
authorizations, certificates, filings, franchises, licenses, notices, permits
and rights, including all authorizations under Environmental Laws ("Permits"),
necessary for it to own, lease or operate its properties and assets and to
carry on its business substantially as now conducted, there are no appeals nor
any other actions pending to revoke any such Permits, and there has occurred no
material default or violation under any such Permits.
(iii) To the knowledge of the Company, each of the
Company and its Subsidiaries is, and has been, and each of the Company's former
Subsidiaries, while a Subsidiary of the Company, was in compliance in all
material respects with all applicable Environmental Laws, except such
non-compliance that has not and will
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not prevent the Company from carrying on its business substantially as now
conducted or might reasonably be expected to result in a Material Adverse
Effect. To the knowledge of the Company, as of the date of this Agreement,
there are no circumstances or conditions that would be reasonably likely to
prevent or interfere with compliance by the Company or its Subsidiaries in the
future with Environmental Laws (or Permits issued thereunder) in effect as of
the date of this Agreement, except such circumstances or conditions that have
not and will not prevent the Company from carrying on its business
substantially as now conducted or might reasonably be expected to result in a
Material Adverse Effect.
(iv) Except as set forth on Schedule 3.1(m)(iv) of
the Company Disclosure Schedule, neither the Company nor any Subsidiary of the
Company has received any written claim, demand, notice, complaint, court order,
administrative order or request for information from any Governmental Entity or
private party, alleging violation of, or asserting any noncompliance with or
liability under or potential liability under, any Environmental Laws, except
for matters which are no longer threatened or pending and for which the Company
or its Subsidiaries are not subject to further requirements pursuant to an
administrative or court order, judgment, or a settlement agreement.
(v) To the knowledge of the Company, during the
period of ownership or operation by the Company and its Subsidiaries of any of
their respective current or previously owned or leased properties, there have
been no Releases of Hazardous Material in, on, under or affecting such
properties and none of the Company or its Subsidiaries have disposed of any
Hazardous Material or any other substance in a manner that has led, or could
reasonably be anticipated to lead to a Release except in each case for those
which individually or in the aggregate are not reasonably likely to have a
Material Adverse Effect. Prior to the period of ownership or operation by the
Company and its Subsidiaries of any of their respective current or previously
owned or leased properties, to the knowledge of the Company, no Hazardous
Material was generated, treated, stored, disposed of, used, handled or
manufactured at, or transported shipped or disposed of from, such current or
previously owned or leased properties, and there were no Releases of Hazardous
Material
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in, on, under or affecting any such property, except in each case for those
which individually or in the aggregate would not be reasonably likely to have a
Material Adverse Effect.
(vi) Except for leases entered into in the ordinary
course of business, as to which no notice of a claim for indemnity or
reimbursement has been received by the Company, and except as set forth on
Schedule 3.1(m)(vii) of the Company Disclosure Schedule, to the knowledge of
the Company, neither the Company nor any of its Subsidiaries has entered into
any agreement that may require it to pay to, reimburse, guarantee, pledge,
defend, indemnify, or hold harmless any Person for or against any Environmental
Liabilities and Costs.
(vii) Neither the Company nor any of its
Subsidiaries has treated, stored or disposed of "hazardous waste", as that term
is defined in the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq., analogous state Laws, or the regulations promulgated thereunder,
such that the Company or any of its Subsidiaries would be required to obtain a
permit under said Laws for such treatment, storage or disposal and the failure
to obtain such permit would have a Material Adverse Effect.
(n) The Section 203 Approval is valid and in full
force and effect. Section 203 of the DGCL will not apply to the Stock Sale
Agreement, the Offer, the acquisition of Shares pursuant to the Offer or the
Merger. No other state takeover statute or similar statute or regulation
applies or purports to apply to the Offer, the Merger or the other Transactions
contemplated hereby.
(o) Voting Requirements. The affirmative vote of
the holders of a majority of all the Shares entitled to vote approving this
Agreement is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve this Agreement and the
Transactions contemplated by this Agreement.
(p) Brokers. No broker, investment banker,
financial advisor or other Person, other than Xxxxxxx Xxxxx Xxxxxx and
NationsBanc Xxxxxxxxxx Securities, the fees and expenses of which will be paid
by the
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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 provided Parent true and correct copies of all agreements
between the Company and each of Xxxxxxx Xxxxx Xxxxxx and NationsBanc Xxxxxxxxxx
Securities, including, without limitations, any fee arrangements.
(q) Opinion of Financial Advisor. The Company
has received an opinions of Xxxxxxx Xxxxx Xxxxxx and NationsBanc Xxxxxxxxxx
Securities, to the effect that, as of the date of this Agreement, the
consideration to be received in the Offer and the Merger by the Company's
stockholders is fair to the Company's stockholders from a financial point of
view, and a complete and correct signed copy of such opinion has been, or
promptly upon receipt thereof will be, delivered to Parent. Company has been
authorized by Xxxxxxx Xxxxx Xxxxxx and NationsBanc Xxxxxxxxxx Securities to
permit the inclusion of such opinion in its entirety in the Offer Documents and
the Schedule 14D-9 and the Proxy Statement, so long as such inclusion is in
form and substance reasonably satisfactory to Xxxxxxx Xxxxx Xxxxxx, NationsBanc
Xxxxxxxxxx Securities and their respective counsel.
(r) Intellectual Property. Except as set forth
on Schedule 3.1(r) of the Company Disclosure Schedule, the Company and/or its
Subsidiaries owns, or is licensed or otherwise possesses legally enforceable
rights to use all patents, trademarks (registered or unregistered), trade
names, service marks and copyrights and applications therefor (collectively,
"Intellectual Property Rights") that are used in the business of the Company
and its Subsidiaries as currently conducted except as would not have a Material
Adverse Effect. Each of the Company and each of its Subsidiaries owns or has
sufficient unrestricted right to use the Intellectual Property Rights in order
to allow it to conduct, and continue to conduct, its business as currently
conducted in all material respects, and the consummation of the Transactions
contemplated hereby will not alter or impair such ability in any respect. To
the knowledge of the Company, there are no pending oppositions, cancellations,
invalidity proceedings, interferences or re-examination proceedings with
respect to the Intellectual Property
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Rights that are reasonably likely to have a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries has received any written notice from
any other Person pertaining to or challenging the right of the Company or any
of its Subsidiaries to use any of the Intellectual Property Rights. Except as
set forth in Section 3.1(r) of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries has made any claim of a violation or
infringement by others of its rights to or in connection with the Intellectual
Property Rights which is still pending.
(s) Title to Properties. Each of the Company and
each of its Subsidiaries has sufficiently good and valid title to, or an
adequate leasehold interest in, its material properties and assets (including
the real property) in order to allow it to conduct, and continue to conduct,
its business as currently conducted in all material respects.
(t) Contracts; Debt Instruments. Except as set
forth in the SEC Documents or Schedule 3.1(t) of the Company Disclosure
Schedule, there are no (i) agreements of the Company or any of its Subsidiaries
containing an unexpired covenant not to compete or similar restriction applying
to the Company or any of its Subsidiaries, (ii) interest rate, currency or
commodity hedging, swap or similar derivative transactions to which the Company
is a party or (iii) other contracts or amendments thereto that would be
required to be filed as an exhibit to a Form 10-K filed by the Company with the
SEC as of the date of this Agreement. Except to the extent set forth in the
SEC Documents or Schedule 3.1(t) of the Company Disclosure Schedule, to the
knowledge of the Company, there are no existing defaults (or circumstances or
events that, with the giving of notice or lapse of time or both would become
defaults) of the Company or any of its Subsidiaries (or, to the knowledge of
the Company, any other party thereto) under any of the agreements set forth in
Schedule 3.1(t) of the Company Disclosure Schedule.
(u) Labor Relations. Except to the extent set
forth in the SEC Documents or Schedule 3.1(u) of the Company Disclosure
Schedule, (i) to the knowledge of the Company, the Company and each of its
Subsidiaries is, and has at all times been, in material compliance
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with all applicable Laws respecting employment and employment practices, terms
and conditions of employment, wages, hours of work and occupational safety and
health, and are not engaged in any unfair labor practices as defined in the
National Labor Relations Act or other applicable law, ordinance or regulation,
except where the failure to comply would not be reasonably likely to cause a
Material Adverse Effect on the Company; (ii) there is no labor strike,
slowdown, stoppage or lockout actually pending, or to the knowledge of the
Company threatened against or affecting the Company or any of its Subsidiaries;
(iii) the Company or any of its Subsidiaries is not a party to or bound by any
collective bargaining or similar agreement with any labor organization. There
are no employment contracts or severance agreements with any employees of the
Company or any of its Subsidiaries, except as set forth in the SEC Documents or
in Schedule 3.1(j) of the Company Disclosure Schedule.
(v) Products Liability. As used in this subsection
3.1(v), the term "Product" shall mean any product designed, manufactured,
shipped, sold, marketed, distributed and/or otherwise introduced into the
stream of commerce by or on behalf of the Company or any of its Subsidiaries,
including, without limitation, any product sold in the United States by the
Company or any of its Subsidiaries as the distributor, agent, or pursuant to
any other contractual relationship with a non-U.S. manufacturer; and the term
"Defect" shall mean a defect or impurity of any kind, whether in design,
manufacture, processing, or otherwise, including, without limitation, any
dangerous propensity associated with any reasonably foreseeable use of a
Product, or the failure to warn of the existence of any defect, impurity, or
dangerous propensity. Except as set forth in Schedule 3.1(v) of the Company
Disclosure Schedule, (i) as of the date of this Agreement, there is no claim,
action, suit or proceeding pending before any Governmental Entity in which a
Product is alleged to have a Defect; (ii) nor, to the knowledge of the Company
and its Subsidiaries, as of the date of this Agreement, is any such claim,
action, suit or proceeding threatened or is there any valid basis for any such
claim, action, suit or inquiry, proceeding; (iii) nor, to the knowledge of the
Company and its Subsidiaries, would any such claim, action, suit or proceeding
referred to in clause (i) or (ii) of this Section 3.1(v), if adversely
determined, have, individually or in
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the aggregate, a Material Adverse Effect on the Company or any of its
Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND THE PURCHASER
Section 4.1 Representations and Warranties of Parent and the
Purchaser. Parent and the Purchaser represent and warrant to the Company as
follows:
(a) Organization, Standing and Corporate Power.
Each of Parent and the Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the jurisdiction in which each
is incorporated and has the requisite corporate power and authority to carry on
its business as now being conducted. Each of Parent and the Purchaser is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing 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) would not have a Material Adverse Effect on
Parent.
(b) Authority; Noncontravention. Parent and the
Purchaser have the requisite corporate power and authority to enter into this
Agreement and to consummate the Transactions contemplated by this Agreement.
The execution and delivery of this Agreement by Parent and the Purchaser and
the consummation by Parent and the Purchaser of the Transactions contemplated
by this Agreement have been duly authorized by all necessary corporate action
on the part of Parent and the Purchaser, as applicable. This Agreement has
been duly executed and delivered by Parent and the Purchaser and, assuming this
Agreement constitutes the valid and binding obligation of the Company,
constitutes a valid and binding obligation of each such party, enforceable
against each such party in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar Laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
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injunctive relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. The execution
and delivery of this Agreement do not, and the consummation of the Transactions
contemplated by this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the
creation of any lien upon any of the properties or assets of Parent under, (i)
the certificate of incorporation or by-laws of Parent or the Purchaser, (ii)
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or the Purchaser or their respective properties or assets,
other than, in the case of clause (ii), any such conflicts, violations,
defaults, rights or Liens that individually or in the aggregate would not (x)
impair in any material respect the ability of Parent and the Purchaser to
perform their respective obligations under this Agreement or (y) prevent or
impede the consummation of any of the Transactions contemplated by this
Agreement. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by Parent or
the Purchaser in connection with the execution and delivery of this Agreement
or the consummation by Parent or the Purchaser, as the case may be, of any of
the Transactions contemplated by this Agreement, except for (i) if required,
the filing of a premerger notification and report form under the HSR Act, (ii)
the filing with the SEC of (x) the Offer Documents and (y) such reports under
the Exchange Act as may be required in connection with this Agreement and the
Transactions contemplated by this Agreement, (iii) the filing of the
Certificate of Merger with the Secretary of State and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business, (iv) as may be required by an applicable state securities or
"blue sky" Laws, and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, (x) impair, in
any material respect, the ability of Parent to perform its obligations under
this Agreement or (y) prevent or significantly delay the consummation of the
Transactions contemplated by this Agreement.
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(c) Information Supplied. None of the
information supplied or to be supplied by Parent or the Purchaser expressly for
inclusion or incorporation by reference in the Offer Documents, the Schedule
14D-1, the Schedule 14D-9 or the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-1 or the Schedule 14D-9, at the time they are
filed with the SEC and first published, sent or given to the Company's
stockholders or, in the case of the Proxy Statement, on the date the Proxy
Statement is first mailed to the Company's stockholders and at the time of the
meeting of the Company's stockholders held to vote on approval and adoption of
this Agreement, 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 the Purchaser. The
Purchaser was formed solely for the purpose of engaging in the Transactions
contemplated hereby and has not engaged in any business activities or conducted
any operations other than in connection with the Transactions contemplated
hereby.
(e) Financing. Prior to the expiration of the
Offer, Purchaser will have all funds necessary for the purchase of the Shares
pursuant to the Offer. Prior to the Effective Time, Purchaser will have all
funds necessary to consummate the Merger and to consummate all other
transactions contemplated hereunder.
(f) Brokers. No broker, investment banker,
financial advisor or other Person, other than Xxxxxx Xxxxxxx & Co.
Incorporated, the fees and expenses of which will be paid by the Parent, 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 Parent or the Purchaser.
ARTICLE V
COVENANTS
Section 5.1 (a) Interim Operations of the Company. Until
the acquisition of the Shares pursuant
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to the Offer, except as specifically contemplated by this Agreement, the
Company shall and shall cause its Subsidiaries to carry on their respective
businesses in the ordinary course and use all reasonable best efforts
consistent with good business judgment to preserve intact their current
business organizations, keep available the services of their current officers
and key employees and preserve their relationships consistent with past
practice with desirable customers, suppliers, licensors, licensees,
distributors and others having business dealings with them to the end that
their goodwill and ongoing businesses shall be unimpaired in all material
respects at the Effective Time. Without limiting the generality of the
foregoing, the Company covenants and agrees that, except (i) as expressly
contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company
Disclosure Schedule or (iii) as agreed in writing by Parent, after the date
hereof and prior to the Effective Date:
(i) neither the Company nor any of its Subsidiaries
shall, directly or indirectly, amend its Certificate of Incorporation or
By-laws or similar organizational documents;
(ii) neither the Company nor any of its Subsidiaries
shall: (i)(A) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to the Company's capital stock
or that of its Subsidiaries, except that a wholly-owned Subsidiary of the
Company may declare and pay a dividend or make advances to its parent or the
Company or (B) redeem, purchase or otherwise acquire directly or indirectly any
of the Company's capital stock or that of its Subsidiaries; (ii) issue, sell,
pledge, dispose of or encumber any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of capital stock of any class of
the Company or its Subsidiaries, other than Shares issued upon the exercise of
Options outstanding on the date hereof in accordance with the Option Plans as
in effect on the date hereof; or (iii) split, combine or reclassify the
outstanding capital stock of the Company or of any of the Subsidiaries of the
Company;
(iii) except as permitted by this Agreement, neither
the Company nor any of its Subsidiaries
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shall acquire or agree to acquire (A) by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, joint venture, association or other
business organization or division thereof (including entities which are
Subsidiaries of the Company or any of the Company's Subsidiaries) or (B) any
assets, including real estate, except (x) purchases in the ordinary course of
business consistent with past practice or (y) expenditures consistent with the
Company's current capital budget previously provided to Parent (the "Capital
Budget");
(iv) neither the Company nor any of its Subsidiaries
shall make any new capital expenditure or expenditures, other than capital
expenditures not to exceed, in the aggregate, the amounts provided for capital
expenditures in the Capital Budget;
(v) neither the Company nor any of its Subsidiaries
shall, except in the ordinary course of business and except as otherwise
permitted by this Agreement, amend or terminate any material contract or
agreement set forth in the SEC Documents to which the Company or any Subsidiary
is a party where such amendment or termination would have a Material Adverse
Affect, or waive, release or assign any material rights or claims;
(vi) neither the Company nor any of its Subsidiaries
shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber
any property or assets other than in the ordinary course of business and
consistent with past practice;
(vii) neither the Company nor any of its
Subsidiaries shall: (i) enter into any employment or severance agreement with
or, except in accordance with the existing written policies of the Company,
grant any severance or termination pay to any officer, director or key employee
of the Company or any its Subsidiaries; or (ii) hire or agree to hire any new
or additional key employees or officers;
(viii) neither the Company nor any of its
Subsidiaries shall, except as required to comply with applicable law or
expressly provided in this Agreement, (A) adopt, enter into, terminate or amend
any Benefit
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Plan or other arrangement for the current or future benefit or welfare of any
director, officer or current or former employee, except to the extent necessary
to coordinate any such Benefit Plans with the terms of this Agreement, (B)
increase in any manner the compensation or fringe benefits of, or pay any bonus
to, any director, officer or employee (except for normal increases or bonuses
in the ordinary course of business consistent with past practice to employees
other than directors, officers or senior management personnel and that, in the
aggregate, do not result in a significant increase in benefits or compensation
expense to the Company and its Subsidiaries relative to the level in effect
prior to such action (but in no event shall the aggregate amount of all such
increases exceed 3% of the aggregate annualized compensation expense of the
Company and its Subsidiaries reported in the most recent audited financial
statements of the Company included in the SEC Documents)), (C) pay any benefit
not provided for under any Benefit Plan, (D) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or Benefit
Plan (including the grant of stock options, stock appreciation rights, stock
based or stock related awards, performance units or restricted stock, or the
removal of existing restrictions in any Benefit Plans or agreements or awards
made thereunder) or (E) 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 Benefit Plan;
(ix) neither the Company nor any of its Subsidiaries
shall: (i) incur or assume any long-term debt, or except in the ordinary course
of business, incur or assume any short-term indebtedness in amounts not
consistent with past practice; (ii) incur or modify any material indebtedness
or other liability except as set forth in Schedule 5.1 of the Company
Disclosure Schedule; (iii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other Person, except in the ordinary course of business and
consistent with past practice; (iv) make any loans, advances or capital
contributions to, or investments in, any other Person (other than to wholly
owned Subsidiaries of the Company or customary loans or advances to employees
in accordance with past practice); (v) settle any claims other than in the
ordinary course of business, in accordance
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with past practice, and without admission of liability; or (vi) enter into any
material commitment or transaction;
(x) neither the Company nor any of its Subsidiaries
shall change any of the accounting methods used by it unless required by GAAP;
(xi) neither the Company nor any of its Subsidiaries
shall make any Tax election or settle or compromise any material Tax liability;
(xii) neither the Company nor any of its
Subsidiaries shall pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of any such
claims, liabilities or obligations, in the ordinary course of business and
consistent with past practice, of claims, liabilities or obligations reflected
or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of the Company and its consolidated
subsidiaries; or, except in the ordinary course of business consistent with
past practice, waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the Company or any of
its Subsidiaries is a party; and
(xiii) neither the Company nor any of its
Subsidiaries will enter into an agreement, contract, commitment or arrangement
to do any of the foregoing, or to authorize, recommend, propose or announce an
intention to do any of the foregoing.
(b) Other Actions. The Company shall not, and shall
not permit any of its Subsidiaries to, take any action that would result in (i)
any of its representations and warranties set forth in this Agreement that are
qualified as to materiality becoming untrue, (ii) any of such representations
and warranties that are not so qualified becoming untrue in any material
respect or (iii) any of the conditions to the Offer set forth in Annex A not
being satisfied (subject to the Company's right to take action specifically
permitted by Section 5.4).
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Section 5.2 Access; Confidentiality. Upon reasonable notice,
the Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Parent, access, during normal business hours during the
period prior to the Effective Time, to all its properties, books, contracts,
commitments and records, and, during such period, the Company shall (and shall
cause each of its Subsidiaries to) furnish promptly to the Parent (a) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of Federal or
state securities Laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Except as otherwise
agreed to by the Company, unless and until Parent and the Purchaser shall have
purchased at least a majority of the outstanding Shares pursuant to the Offer,
Parent will be bound by the terms of a confidentiality agreement with the
principal stockholders of the Company, dated February 16, 1998 (the
"Confidentiality Agreement").
Section 5.3 Reasonable Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties agrees to use all 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 Offer and
the Merger, and the other Transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from any Governmental Entity and the making of all
necessary registrations and filings (including filings with any Governmental
Entity, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the Transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order entered by
any court or other
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Governmental Entity vacated or reversed, and (iv) the execution and delivery of
any additional instruments necessary to consummate the Transactions
contemplated by, and to fully carry out the purposes of, this Agreement;
provided, however, that in connection with any filing or submission or other
action required to be made or taken by any Party to effect the Merger and all
other Transactions contemplated hereby, the Company shall not without the prior
written consent of Parent commit to any divestiture transaction and Parent
shall not be required to divest or hold separate or otherwise take or commence
to take any action that, in the reasonable discretion of Parent, limits its
freedom of action with respect to, or its ability to retain, the Company or any
of its affiliates or any material portion of the assets of the Company. In
connection with and without limiting the foregoing, the Company and its Board
of Directors shall (i) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
the Offer, the Merger, this Agreement or any of the other Transactions
contemplated by this Agreement and (ii) if any state takeover statute or
similar statute or regulation becomes applicable to the Offer, the Merger or
this Agreement or any other transaction contemplated by this Agreement, take
all action necessary to ensure that the Offer, 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 the Offer, the Merger,
this Agreement and the other Transactions contemplated by this Agreement.
(b) Each of the Company, Parent and Purchaser
shall give prompt notice to the other of (i) any of their representations or
warranties contained in this Agreement becoming untrue or inaccurate in any
respect (including in the case of representations or warranties receiving
knowledge of any fact, event or circumstance which may cause any representation
qualified as to the knowledge to be or become untrue or inaccurate in any
respect) or (ii) the failure by them to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied
by them under this Agreement; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the
parties or the
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conditions to the obligations of the parties under this Agreement.
Section 5.4 No Solicitation. (a) The Company shall not, nor
shall it permit any of its Subsidiaries to, nor shall it authorize (and shall
use its best efforts not to permit) any officer, director or employee of, or
any investment banker, attorney or other advisor or representative of, the
Company or any of its Subsidiaries to, (i) solicit or initiate, or knowingly
encourage the submission of, any Takeover Proposal or (ii) participate in any
discussions or negotiations regarding, or furnish to any Person any information
with respect to, or take any other action to knowingly facilitate the making of
any proposal that constitutes, or may reasonably be expected to lead to, any
Takeover Proposal; provided, however, that, prior to the acceptance for payment
of Shares pursuant to the Offer, if in the reasonable determination of the
Board of Directors, after receiving advice from outside legal counsel to the
Company, such failure to act would be inconsistent with its fiduciary duties to
the Company's stockholders under applicable law, the Company may, in response
to an unsolicited Takeover Proposal, and subject to compliance with Section
5.4(c), (A) furnish information with respect to the Company to any Person
pursuant to a confidentiality agreement with terms and conditions similar to
the Confidentiality Agreement and (B) participate in negotiations regarding
such Takeover Proposal. For purposes of this Agreement, "Takeover Proposal"
means (i) any bona fide proposal or offer from any Person relating to any
direct or indirect acquisition or purchase of all or a substantial part of the
assets of the Company or any of its Subsidiaries or of any class of equity
securities of the Company or any of its Subsidiaries or any tender offer or
exchange offer that if consummated would result in any Person beneficially
owning shares of any class of equity securities of the Company or any of its
Subsidiaries, or any merger, consolidation, business combination, sale of
substantially all of the assets, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its Subsidiaries other than
the Transactions contemplated by this Agreement, or any other transaction the
consummation of which would reasonably be expected to impede, interfere with,
prevent or materially delay the Offer or the Merger or which would reasonably
be expected to dilute materially the benefits to Parent
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of the Transactions contemplated hereby which (ii) the Company's Board of
Directors reasonably determines in good faith (based on advice of its financial
advisors) is more favorable to all of the Company's stockholders from a
financial point of view than the Offer and the Merger (taking into account any
improvements to the Offer and the Merger proposed in writing by Parent).
(b) Except as set forth in this Section 5.4(b),
neither the Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or propose to withdraw or modify, in a manner adverse
to Parent or the Purchaser, the approval or recommendation by the Board of
Directors or any such committee of the Offer, this Agreement or the Merger,
(ii) approve or recommend, or propose to approve or recommend, any Takeover
Proposal or (iii) enter into any agreement with respect to any Takeover
Proposal. Notwithstanding the foregoing, in the event that prior to the time
of acceptance by the Purchaser for payment of Shares in the Offer if in the
reasonable determination of the Board of Directors, and after receiving advice
from outside legal counsel to the Company, failure to do so would be
inconsistent with its fiduciary duties to the Company's stockholders under
applicable law, the Board of Directors may (subject to the terms of this and
the following sentences) withdraw or modify its approval or recommendation of
the Offer, this Agreement or the Merger, approve or recommend a Takeover
Proposal, or enter into an agreement with respect to a Takeover Proposal, in
each case at any time following delivery by the Company to Parent of written
notice (a "Notice of Takeover Proposal") advising Parent that the Board of
Directors has received a Takeover Proposal, and specifying the material terms
and conditions of such Takeover Proposal and identifying the Person making such
Takeover Proposal unless the Takeover Proposal by its terms prohibits
disclosure.
(c) In addition to the obligations of the Company
set forth in paragraph (b) (i) the Company shall advise Parent of any request
for information, and the material terms and conditions of such request and the
identity of the Person making any such Takeover Proposal if allowed by the
Takeover Proposal or inquiry, and (ii) the Company will keep Parent fully
informed of the status and details (including amendments or proposed
amendments) of any such request or inquiry.
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Section 5.5 Publicity. The initial press release with
respect to the execution of this Agreement shall be a joint press release
acceptable to Parent and the Company. Thereafter, so long as this Agreement is
in effect, neither the Company, Parent nor any of their respective affiliates
shall issue or cause the publication of any press release or other announcement
with respect to the Merger, this Agreement or the other Transactions
contemplated hereby without the prior consultation of the other party.
Section 5.6 Transfer Taxes. All liability for transfer or
other similar Taxes arising out of or related to the Offer and the Merger or
the consummation of any other transaction contemplated by this Agreement, and
due to the property owned by the Company or any of its Subsidiaries or
affiliates ("Transfer Taxes") shall be borne by the Company, and the Company
shall file or cause to be filed all Tax Returns relating to such Transfer Taxes
which are due, and, to the extent appropriate or required by law, the
stockholders of the Company shall cooperate with respect to the filing of such
Tax Returns.
Section 5.7 State Takeover Laws. Notwithstanding any other
provision in this Agreement, in no event shall the Section 203 Approval be
withdrawn, revoked or modified by the Board of Directors of the Company. If
any state takeover statute other than Section 203 of the DGCL becomes or is
deemed to become applicable to the Stock Sale Agreement, the Offer, the
acquisition of Shares pursuant to the Offer or the Merger, the Company shall
take all action necessary to render such statute inapplicable to all of the
foregoing.
Section 5.8 Indemnification and Insurance.
(a) The Certificate of Incorporation and By-Laws
of the Surviving Corporation shall contain the provisions with respect to
indemnification and exculpation set forth in the Certificate of Incorporation
and By-Laws of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who at
the Effective Time were directors, officers, employees or agents of the
Company, unless such modification is required by law.
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(b) The Company shall, to the fullest extent
permitted under applicable law or under the Company's Certificate of
Incorporation or By-Laws and regardless of whether the Merger becomes
effective, indemnify and hold harmless, and, after the Effective Time, the
Surviving Corporation shall, to the fullest extent permitted under applicable
law or under the Surviving Corporation's Certificate of Incorporation or
By-Laws, indemnify and hold harmless, each present and former director, officer
or employee of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties") against any costs or expenses (including attorneys'
fees), judgments, fines, losses, claims, damages and liabilities incurred in
connection with, and amounts paid in settlement of, any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative and wherever asserted, bought or filed, (x) arising out of or
pertaining to the transactions contemplated by this Agreement or (y) otherwise
with respect to any acts or omissions or alleged acts or omissions occurring at
or prior to the Effective Time, to the same extent as provided in the
respective Certificate of Incorporation or By-Laws of the Company or the
Subsidiaries as in effect on the date hereof, in each case for a period of six
years after the date hereof. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (i) any counsel retained by the Indemnified Parties for any period after
the Effective Time must be reasonably satisfactory to the Surviving
Corporation, (ii) after the Effective Time, the Surviving Corporation shall pay
the reasonable fees and expenses of such counsel, promptly after statements
therefor are received, and (iii) the Surviving Corporation will cooperate in
the defense of any such matter; provided, however, that the Surviving
Corporation shall not be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld or delayed); and
provided, further, that, in the event that any claim or claims for
indemnification are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until the
disposition of any and all such claims. The Indemnified Parties as a group may
retain only one law firm to represent them with respect to any single action
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the
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positions of any two or more Indemnified Parties. The indemnity agreements of
Parent and the Surviving Corporation in this Section 5.8(b) shall extend, on
the same terms to, and shall inure to the benefit of and shall be enforceable
by, each person or entity who controls, or in the past controlled, any present
or former director, officer or employee of the Company or any of its
Subsidiaries.
(c) For a period of six years after the Effective
Time, Parent shall cause the Surviving Corporation to maintain in effect, if
available, directors' and officers' liability insurance covering those persons
who are currently covered by the Company's directors' and officers' liability
insurance policy (a copy of which has been made available to Parent) on terms
(including the amounts of coverage and the amounts of deductibles, if any) that
are comparable to the terms now applicable to directors and officers of Parent,
or, if more favorable to the Company's directors and officers, the terms now
applicable to them under the Company's current policies; provided, however,
that in no event shall Parent or the Surviving Corporation be required to
expend in excess of 200% of the annual premium currently paid by the Company
for such coverage; and provided further, that if the premium for such coverage
exceeds such amount, Parent or the Surviving Corporation shall purchase a
policy with the greatest coverage available for such 200% of the annual
premium.
(d) From and after the Effective Time, Parent
shall guarantee the obligations of the Surviving Corporation under this Section
5.8.
(e) This Section shall survive the consummation
of the Merger at the Effective Time, is intended to benefit the Company, the
Surviving Corporation and the Indemnified Parties, shall be binding on all
successors and assigns of the Surviving Corporation and shall be enforceable by
the Indemnified Parties. In the event that Parent or Surviving Corporation or
any of their successors or assigns (i) consolidates or merges into any other
person or entity and shall not be the continuing or surviving corporation or
entity in such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person or entity, then and in such
case, proper provisions shall be
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made so that the successors and assigns of Parent or the Surviving Corporation
(as the case may be) assume the obligations of Parent and the Surviving
Corporation set forth in this Section.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing Date of each of the
following conditions, any and all of which may be waived in whole or in part by
the Company, Parent or the Purchaser, as the case may be, to the extent
permitted by applicable law:
(a) Prior Performance. Each party shall have
performed in all material respects its respective obligations under this
Agreement required to be performed by it prior to the Effective Time;
(b) Representations and Warranties. All
representations and warranties contained in this Agreement shall have been true
and correct in all material respects at the time made and shall be true and
correct in all material respects as of the Effective Time as though made on and
as of such date;
(c) Stockholder Approval. This Agreement shall have
been approved and adopted by the requisite vote of the stockholders of the
Company, if required by applicable law and the Certificate of Incorporation, in
order to consummate the Merger;
(d) Statutes; Consents. No statute, rule, order,
decree or regulation shall have been enacted or promulgated by any government
or any governmental agency or authority of competent jurisdiction which
prohibits the consummation of the Merger;
(e) Injunctions. There shall be no order or
injunction of a court or other governmental authority of competent jurisdiction
in effect precluding, restraining, enjoining or prohibiting consummation of the
Merger;
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(f) Purchase of Shares in Offer. Parent, the
Purchaser or their affiliates shall have purchased Shares pursuant to the
Offer; and
(g) Option Plan. The employees and the directors of
the Company shall have consented to the transactions contemplated in Section
2.5.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated
and the Merger contemplated herein may be abandoned at any time prior to the
Effective Time, whether before or after approval of matters presented in
connection with the Merger by the stockholders of the Company:
(a) By the mutual written consent of Parent and the
Company; provided, however, that if Parent shall have a majority of the
directors pursuant to Section 1.4, such consent of the Company may only be
given if approved by the Continuing Directors.
(b) By either of Parent or the Company:
(i) if the Offer shall have expired without any
Shares being purchased therein by June 1, 1998; provided, however,
that the right to terminate this Agreement under this Section
7.1(b)(i) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted
in, the failure of Parent or the Purchaser, as the case may be, to
purchase the Shares pursuant to the Offer on or prior to such date; or
(ii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their
reasonable efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the Transactions contemplated by
this Agreement and such order,
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decree, ruling or other action shall have become final and
non-appealable.
(c) By the Board of Directors of the Company:
(i) if the Company has approved a Takeover Proposal
in accordance with Section 5.4(b), provided the Company has complied
with all provisions thereof, including the notice provisions therein,
and that it makes simultaneous payment of the Expenses and the
Termination Fee; or
(ii) if, prior to the purchase of the Shares
pursuant to the Offer, Parent or the Purchaser breaches or fails in
any material respect to perform or comply with any of its covenants
and agreements contained herein or breaches its representations and
warranties in any material respect; or
(iii) if Parent or the Purchaser shall have
terminated the Offer or the Offer expires without Parent or the
Purchaser, as the case may be, purchasing any Shares pursuant thereto;
provided that the Company may not terminate this Agreement pursuant to
this Section 7.1(c)(iii) if the Company is in material breach of this
Agreement; or
(iv) if Parent, the Purchaser or any of their
affiliates shall have failed to commence the Offer on or prior to five
business days following the date of the initial public announcement of
the Offer; provided, that the Company may not terminate this Agreement
pursuant to this Section 7.1(c)(iv) if the Company is in material
breach of this Agreement.
(d) By Parent or the Purchaser:
(i) if prior to the purchase of the Shares pursuant
to the Offer, the Board of Directors of the Company shall have
withdrawn, or modified or changed in a manner adverse to Parent or the
Purchaser its approval or recommendation of the Offer, this Agreement
or the Merger or shall have approved
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a Takeover Proposal in accordance with Section 5.4(b); or
(ii) if Parent or the Purchaser shall have
terminated the Offer without Parent or the Purchaser purchasing any
Shares thereunder, provided that Parent or the Purchaser may not
terminate this Agreement pursuant to this Section 7.1(d)(ii) if Parent
or the Purchaser is in material breach of this Agreement; or
(iii) if, due to an occurrence that if occurring
after the commencement of the Offer would result in a failure to
satisfy any of the conditions set forth in Annex A hereto, Parent, the
Purchaser, or any of their affiliates shall have failed to commence
the Offer on or prior to five business days following the date of the
initial public announcement of the Offer.
Section 7.2 Effect of Termination. In the event of
termination of this Agreement by either the Company or Parent or Purchaser as
provided in Section 7.1, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of Parent, the
Purchaser or the Company, other than the provisions of Section 3.1(p), 4.1(f),
the last sentence of Section 5.2, this Section 7.2 and Article VIII and except
to the extent that such termination results from the wilful and material breach
by a party of any of its representations, warranties, covenants or agreements
set forth in this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. (a) Except as provided below,
all fees and expenses incurred in connection with the Offer, the Merger, this
Agreement and the Transactions contemplated hereby shall be paid by the party
incurring such fees or expenses, whether or not the Offer or the Merger is
consummated.
(b) The Company shall pay, or cause to be paid,
in same day funds to Parent the amount of
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$3,750,000 (the "Termination Fee") upon demand if (i) Parent or the Purchaser
terminates this Agreement under Section 7.1(d)(i), (ii) the Company terminates
this Agreement pursuant to Section 7.1(c)(i) or (iii) prior to any termination
of this Agreement, a Takeover Proposal shall have been made and within nine
months after the termination of this Agreement a transaction constituting a
Takeover Proposal is consummated or the Company enters into an agreement with
respect to, or approves or recommends a Takeover Proposal (whether or not
related to a Takeover Proposal made prior to any termination of this
Agreement), provided, that no payment shall be made if this Agreement has been
terminated pursuant to Section 7.1(b)(i), 7.1(c)(ii), 7.1(c)(iii) or 7.1(c)(iv)
hereof and; provided, further, that if a Takeover Proposal (whether or not
related to a Takeover Proposal made prior to any termination of the Agreement)
is made at a lower price per share than the Offer Price, than the Company shall
only pay in same day funds to the Purchaser the amount of Parent's and
Purchaser's documented expenses (not to exceed $500,000) in connection with
this Agreement and the transactions contemplated thereby.
Section 8.2 Amendment and Modification. Subject to
applicable law, this Agreement may be amended, modified and supplemented in any
and all respects, whether before or after any vote of the stockholders of the
Company contemplated hereby, by written agreement of the parties hereto (which
in the case of the Company shall include approvals as contemplated in Section
1.4(b)), at any time prior to the Closing Date with respect to any of the terms
contained herein; provided, however, that after the approval of this Agreement
by the stockholders of the Company, no such amendment, modification or
supplement shall reduce the amount or change the form of the Merger
Consideration or otherwise adversely affect the rights of stockholders.
Section 8.3 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
schedule, instrument or other document delivered pursuant to this Agreement
shall survive the Effective Time. This Section 8.3 shall not limit any
covenant or agreement of the parties which by its terms contemplates
performance after the Effective Date of the Merger.
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Section 8.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon receipt, and shall
be given to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Parent or the Purchaser, to:
Sunbeam Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
(b) if to the Company, to:
First Alert, Inc.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Section 8.5 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation". As used in this Agreement, the term
"affiliate(s)" shall have the meaning set forth in Rule l2b-2 of the Exchange
Act.
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Section 8.6 Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 8.7 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement and the Confidentiality Agreement
(including the documents and the instruments referred to herein and therein):
(a) constitute the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Section 5.6 and Section
5.8 is not intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.
Section 8.8 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated unless the economic or legal substance of the
Transactions is affected in an adverse way to any party.
Section 8.9 Governing Law. This Agreement shall be governed
by and construed in accordance with the Laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
Section 8.10 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the Purchaser may assign, in
its sole discretion, any or all of its rights, interests and obligations
hereunder to Parent or to any direct or indirect wholly owned Subsidiary of
Parent. 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.
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SECTION 8.11 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. 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 court of the
United States located in the State of Delaware or in Delaware state court, 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 any Delaware state court in the event any dispute arises out of
this Agreement or any of 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 any of the Transactions
contemplated by this Agreement in any court other than a Federal or state court
sitting in the State of Delaware.
SECTION 8.12 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) waive any
inaccuracies in the representations and warranties of the other parties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 8.2, waive compliance by the
other parties with any of the agreements or conditions contained in this
Agreement. 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 those rights.
SECTION 8.13 Procedure for Termination, Amendment, Extension
or Waiver. A termination of this Agreement pursuant to Section 7.1, an
amendment of this Agreement pursuant to Section 8.2 or an extension or waiver
pursuant to Section 8.12 shall, in order to be effective, require in the case
of Parent, the Purchaser or the Company, action by its Board of Directors or
the duly
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authorized designee of its Board of Directors; provided, however, that in the
event that Purchaser's designees are appointed or elected to the Board of
Directors of the Company as provided in Section 1.4, after the acceptance for
payment of Shares pursuant to the Offer and prior to the Effective Time, except
as otherwise contemplated by this Agreement the affirmative vote of a majority
of the Continuing Directors of the Company shall be required by the Company to
amend this Agreement by the Company.
SECTION 8.14 Certain Undertakings of Parent. Parent shall
perform, or cause to be performed, any obligation of Purchaser under this
Agreement which shall have been breached by Purchaser.
SECTION 8.15 Company Disclosure Schedule. Notwithstanding
anything to the contrary contained herein, and without regard to the execution
of this Agreement by the parties hereto, this Agreement shall not be effective
and have no force and effect unless (i) within 12 hours of its execution by the
parties hereto, the definitive Company Disclosure Schedule is delivered by the
Company to Parent and (ii) Parent, within 12 hours after such delivery,
delivers written notice to the Company that it is satisfied with the matters
contained therein. Anything which is disclosed in one section of the Company
Disclosure Schedule shall be deemed disclosed for other sections thereof, as
long as such disclosure is reasonably apparent to a reader of the entire
Company Disclosure Schedule.
SECTION 8.16 Definitions. For purposes of this Agreement:
"Benefit Plans" has the meaning assigned thereto in Section 3.1(j).
"By-laws" means the by-laws of has the meaning assigned thereto in Section 1.5.
"Certificate of Incorporation" has the meaning assigned thereto in Section 1.5.
"Certificate of Merger" has the meaning assigned thereto in Section 1.6.
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"Certificates" has the meaning assigned thereto in Section 2.2.
"Closing" has the meaning assigned thereto in Section 1.7.
"Closing Date" has the meaning assigned thereto in Section 1.7.
"Code" means the Internal Revenue Code of 1986.
"Company" means First Alert, Inc.
"Continuing Director" has the meaning assigned thereto in Section 1.4.
"Defect" has the meaning assigned thereto in Section 3.1(v).
"DGCL" means the Delaware General Corporation Law.
"Dissenting Stockholders" has the meaning assigned thereto in Section 2.1(c).
"Effective Time" has the meaning assigned thereto in Section 1.6.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder.
"Environmental Laws" means all foreign, Federal, state and local Laws,
regulations, rules and ordinances relating to pollution or protection of the
environment, including, without limitation, Laws relating to Releases or
threatened Releases of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, ambient air, surface water,
groundwater, land, surface and subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, Release,
transport or handling of Hazardous Materials, and all Laws and regulations with
regard to recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials, and all Laws relating to endangered or
threatened species of fish, wildlife and plants and the management or use of
natural resources.
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"Environmental Liabilities and Costs" means all liabilities, obligations,
responsibilities, obligations to conduct cleanup, losses, damages,
deficiencies, punitive damages, consequential damages, treble damages, costs
and expenses (including, without limitation, all reasonable fees, disbursements
and expenses of counsel, expert and consulting fees and costs of investigations
and feasibility studies and responding to government requests for information
or documents), fines, penalties, restitution and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future, resulting from any claim or demand, by any Person or entity, whether
based in contract, tort, implied or express warranty, strict liability, joint
and several liability, criminal or civil statute, including any Environmental
Law, or arising from environmental, health or safety conditions, or the Release
or threatened Release of Hazardous Materials into the environment.
"ERISA Affiliate" has the meaning assigned thereto in Section 3.1(j).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financing Agreement" means the Financing and Security Agreement among First
Alert, Inc., BRK Brands, Inc., BRK Brands Europa LTD. and NationsBank, N.A.
dated May 14, 1997.
"Governmental Entity" has the meaning assigned thereto in Section 3.1(d).
"Hazardous Materials" means all substances defined as hazardous substances in
the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R.
Section 300.5, or substances defined as hazardous substances, hazardous
materials, toxic substances, hazardous wastes, pollutants or contaminants,
under any Environmental Law, or substances regulated under any Environmental
Law, including, but not limited to, petroleum (including crude oil or any
fraction thereof), asbestos, and polychlorinated biphenyls.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
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"Indemnified Parties" has the meaning assigned thereto in Section 5.8(b).
"Intellectual Property Rights" has the meaning assigned thereto in Section
3.1(r).
"Laws" has the meaning assigned thereto in Section 3.1(m).
"Lien" means any conditional sale agreement, default of title, easement,
encroachment, encumbrance, hypothecation, infringement, lien, mortgage, pledge,
reservation, restriction, security interest, title retention or other security
arrangement, or any adverse right or interest, charge or claim of any nature
whatsoever of, on, or with respect to any asset, property or property interest;
provided, however, that the term "Lien" shall not include
(i) liens for water and sewer charges and current Taxes not yet due
and payable or being contested in good faith;
(ii) mechanics', carriers', workers', repairers', materialmens',
warehousemens' and other similar liens arising or incurred in the ordinary
course of business; or
(iii) all liens approved in writing by the other party hereto.
"Material Adverse Change" or "Material Adverse Effect" means, when used in
connection with the Company or Parent, any change or effect (or any development
that, insofar as can reasonably be foreseen, is likely to result in any change
or effect) that is materially adverse to the business, properties, assets,
financial condition or results of operations of such party and its Subsidiaries
taken as a whole, other than any such changes or effects (i) set forth or
contemplated by the Company Disclosure Schedule (but not any supplement or
amendment thereto); or (ii) set forth or described in the SEC Documents.
"Merger" has the meaning assigned thereto in Section 1.5.
"Merger Consideration" has the meaning assigned thereto in Section 2.1.
"Minimum Condition" has the meaning assigned thereto in Annex A.
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"Notice of Takeover Proposal" has the meaning assigned thereto in Section
5.4(b).
"Offer" has the meaning assigned thereto in Section 1.1.
"Offer Documents" has the meaning assigned thereto in Section 1.3.
"Offer Price" has the meaning assigned thereto in Section 1.1.
"Offer to Purchase" has the meaning assigned thereto in Section 1.1.
"Option Plans" has the meaning assigned thereto in Section 2.5(b).
"Option" has the meaning assigned thereto in Section 2.5.
"Parent" means Sunbeam Corporation.
"Paying Agent" has the meaning assigned thereto in Section 2.2(a).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" has the meaning assigned thereto in Section 3.1(m)(ii).
"Person" means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity.
"Product" has the meaning assigned thereto in Section 3.1(v).
"Proxy Statement" has the meaning assigned thereto in Section 1.8.
"Purchaser" means Sentinel Acquisition, Inc.
"Release" means any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment (including, without limitation, ambient air,
surface water, groundwater, and surface or subsurface strata) or into or out of
any property, including
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the movement of Hazardous Materials through or in the air, soil, surface water,
groundwater or property.
"Schedule 14D-1" has the meaning assigned thereto in Section 1.3.
"Schedule 14D-9" has the meaning assigned thereto in Section 1.3.
"SEC" means the United States Securities and Exchange Commission.
"SEC Documents" has the meaning assigned thereto in Section 3.1(e).
"Secretary of State" means the Secretary of State of Delaware.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" has the meaning assigned thereto in Section 1.1.
"Special Meeting" has the meaning assigned thereto in Section 1.8.
a "Subsidiary" of any Person means any corporation, partnership, joint venture
or other entity in which such Person (i) owns, directly or indirectly, 50% or
more of the outstanding voting securities or equity interests, (ii) is entitled
to elect at least a majority of the Board of Directors or similar governing
body, or (iii) is a general partner.
"Surviving Corporation" means First Alert, Inc. after the Merger.
"Takeover Proposal" has the meaning assigned thereto in Section 5.4(a).
"Tax Returns" has the meaning assigned thereto in Section 3.1(k)(iv).
"Taxes" has the meaning assigned thereto in Section 3.1(k)(iv).
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"Termination Fee" has the meaning assigned thereto in Section 8.1(b).
"Transactions" has the meaning assigned thereto in Section 1.2(a).
"Transfer Taxes" has the meaning assigned thereto in Section 5.6.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
SUNBEAM CORPORATION
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President &
General Counsel
SENTINEL ACQUISITION CORP.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President &
General Counsel
FIRST ALERT, INC.
By: /s/ B. XXXXXX XXXXXXX
------------------------------------
Name: B. Xxxxxx Xxxxxxx
Title: President and
Chief Executive Officer
64
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other
provisions of the Offer, and in addition to (and not in limitation of) the
Purchaser's rights to extend and amend the Offer at any time in its sole
discretion (subject to the provisions of the Merger Agreement), the Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for, and may delay
the acceptance for payment of or, subject to the restriction referred to above,
the payment for, any tendered Shares, and may terminate or amend the Offer as
to any Shares not then paid for, if (i) there shall not have been validly
tendered and not withdrawn prior to the expiration of the Offer such number of
Shares which, when added to the Shares, if any, beneficially owned by Parent,
would constitute at least 50.1% of the Shares outstanding on a fully diluted
basis (the "Minimum Condition"), (ii) any applicable waiting period under the
HSR Act has not expired or terminated, or (iii) at any time on or after the
date of the Merger Agreement and before the time of payment for any such
Shares, any of the following events shall occur and be continuing:
(a) there shall have been any action taken, or any
statute, rule, regulation, judgment, order or injunction promulgated, entered,
enforced, enacted, issued or deemed applicable to the Offer or the Merger by
any domestic or foreign Federal or state governmental regulatory or
administrative agency or authority or court or legislative body or commission
which directly or indirectly (l) prohibits, or imposes any material limitations
on, Parent's or the Purchaser's ownership or operation (or that of any of their
respective Subsidiaries or affiliates) of all or a material portion of their or
the Company's businesses or assets, or compels Parent or the Purchaser or their
respective Subsidiaries and affiliates to dispose of or hold separate any
material portion of the business or assets of the Company or Parent and their
respective Subsidiaries, in each case taken as a whole, (2) prohibits, or makes
illegal, the acceptance for payment, payment for or purchase of Shares or the
consummation of the Offer, the Merger or the other transactions
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65
contemplated by the Merger Agreement, (3) results in the delay in or restricts
the ability of the Purchaser, or renders the Purchaser unable, to accept for
payment, pay for or purchase some or all of the Shares, (4) imposes material
limitations on the ability of the Purchaser or Parent effectively to exercise
full rights of ownership of the Shares, including, without limitation, the
right to vote the Shares purchased by it on all matters properly presented to
the Company's stockholders, or (5) otherwise materially adversely affects the
consolidated financial condition, businesses or results of operations of the
Company and its Subsidiaries, taken as a whole;
(b) there shall have occurred (1) any general
suspension of trading in, or limitation on prices for, securities on the New
York Stock Exchange or in the NASDAQ National Market System, (2) a declaration
of a banking moratorium or any suspension of payments in respect of banks in
the United States (whether or not mandatory), (3) a commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, (4) any material limitation (whether or
not mandatory) by any foreign or United States governmental authority on the
extension of credit by banks or other financial institutions, (5) a change in
general financial bank or capital market conditions which has a material
adverse effect the ability of financial institutions in the United States to
extend credit or syndicate loans, or (6) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof;
(c) (1) the representations and warranties of the
Company set forth in the Merger Agreement shall not be true and correct in any
material respect as of the date of the Merger Agreement and as of consummation
of the Offer as though made on or as of such date (unless made as of a certain
date), (2) the Company shall have failed to comply with its covenants and
agreements under the Merger Agreement in all material respects or (3) there
shall have occurred any events or changes which have had or which are
reasonably likely to have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole;
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(x) the Company's Board of Directors shall have
withdrawn, or modified or changed in a manner adverse to Parent or the
Purchaser (including by amendment of the Schedule 14D-9) its recommendation of
the Offer, the Merger Agreement, or the Merger, or recommended another proposal
or offer, or the Board of Directors of the Company, upon request of the
Purchaser, shall fail to reaffirm such approval or recommendation or shall have
resolved to do any of the foregoing;
(e) the Merger Agreement shall have terminated in
accordance with its terms; or
(f) the Company shall not have obtained a waiver to
the provision in its Financing Agreement that an event of default shall occur
and exist thereunder as a result of the purchase of the Shares in a number
equal to or greater than the Minimum Condition pursuant to the Offer.
which in the sole judgment of Parent or the Purchaser, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
the Purchaser) giving rise to such condition makes it inadvisable to proceed
with the Offer and/or with such acceptance for payment of or payments for
Shares.
The foregoing conditions are for the sole benefit of Parent
and the Purchaser may be waived by Parent or the Purchaser, in whole or in part
at any time and from time to time in the sole discretion of Parent or the
Purchaser. The failure by Parent or the Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
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