EXHIBIT (C)(1)
AGREEMENT AND PLAN OF MERGER
AMONG
FALCON PRODUCTS, INC.
SY ACQUISITION, INC.
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INDUSTRIES, INC.
Dated as of May 5, 1999
TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
Page
ARTICLE I THE OFFER............................................... 1
Section 1.1 The Offer............................................... 1
Section 1.2 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Actions................................. 2
Section 1.3 Directors............................................... 3
ARTICLE II THE MERGER.............................................. 4
Section 2.1 The Merger.............................................. 4
Section 2.2 Closing................................................. 4
Section 2.3 Effective Time.......................................... 4
Section 2.4 Effects of the Merger................................... 5
Section 2.5 Certificate of Incorporation; Bylaws.................... 5
Section 2.6 Directors and Officers.................................. 5
ARTICLE III MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER; DISSENTING SHARES................. 5
Consideration for the Merger; Conversion or Cancellation
Section 3.1 of Shares in the Merger................................. 5
Section 3.2 Stockholders Meeting.................................... 5
Section 3.3 Payment for Shares in the Merger........................ 6
Section 3.4 Transfer of Shares After the Effective Time............. 7
Section 3.5 Stock Options and Associate Purchase Plan............... 7
Section 3.6 Dissenting Shares....................................... 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇....... 8
Section 4.1 Organization, Qualification, Etc........................ 8
Section 4.2 Capital Stock........................................... 9
Corporate Authority Relative to this Agreement; No
Section 4.3 Violation; No Conflict.................................. 9
Section 4.4 Reports and Financial Statements; Corporate Records..... 10
Section 4.5 No Undisclosed Liabilities.............................. 10
Section 4.6 No Violation of Law..................................... 10
Section 4.7 Environmental Laws and Regulations...................... 10
Section 4.8 Employee Matters; ERISA................................. 11
Section 4.9 Absence of Certain Changes or Events.................... 12
Section 4.10 Investigations; Litigation.............................. 12
Proxy Statement; Offer Documents; Schedule 14D-9; Proxy
Section 4.11 Statement............................................... 12
Section 4.12 Y2K Compliance.......................................... 13
Section 4.13 Takeover Laws........................................... 13
Section 4.14 Tax Matters............................................. 13
Section 4.15 Opinion of Financial Advisor............................ 14
Section 4.16 Required Vote of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Stockholders........... 14
Section 4.17 Labor Matters........................................... 14
Section 4.18 Certain Agreements...................................... 15
Section 4.19 Title to Assets; Liens.................................. 15
Section 4.20 Insurance............................................... 16
Section 4.21 Intellectual Property................................... 16
(i)
Page
ARTICLE V REPRESENTATIONS AND WARRANTIES OF FALCON AND SUB........ 17
Section 5.1 Organization, Qualification, Etc........................ 17
Corporate Authority Relative to this Agreement; No
Section 5.2 Violation; No Conflict.................................. 17
Section 5.3 Financing............................................... 18
Section 5.4 Offer Documents; Schedule 14D-9; Proxy Statement........ 18
Section 5.5 Lack of Ownership of Shares............................. 18
Section 5.6 Solvency................................................ 18
ARTICLE VI COVENANTS AND AGREEMENTS................................ 18
Section 6.1 Conduct of Business by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.................. 18
Section 6.2 Investigation........................................... 20
Section 6.3 Obligations of Falcon and Sub........................... 21
Section 6.4 [Intentionally Omitted]................................. 21
Section 6.5 Employee Benefit Plans.................................. 21
Section 6.6 Filings; Other Action................................... 21
Section 6.7 Further Assurances...................................... 22
Section 6.8 No Solicitation......................................... 22
Section 6.9 Public Announcements.................................... 23
Section 6.10 Indemnification and Insurance........................... 23
Section 6.11 Additional Reports...................................... 24
Section 6.12 Notifications........................................... 24
Section 6.13 Employment Agreements................................... 24
Section 6.14 Termination of ESOP..................................... 25
ARTICLE VII CONDITIONS TO THE MERGER................................ 25
Conditions to Each Party's Obligation to Effect the
Section 7.1 Merger.................................................. 25
ARTICLE VIII TERMINATION, WAIVER, AMENDMENT AND CLOSING.............. 25
Section 8.1 Termination or Abandonment.............................. 25
Section 8.2 Effect of Termination................................... 26
Section 8.3 Amendment or Supplement................................. 27
Section 8.4 Extension of Time, Waiver, Etc.......................... 27
ARTICLE IX MISCELLANEOUS........................................... 27
Section 9.1 No Survival of Representations and Warranties........... 27
Section 9.2 Expenses................................................ 27
Section 9.3 Counterparts; Effectiveness............................. 28
Section 9.4 Governing Law........................................... 28
Section 9.5 Notices................................................. 28
Section 9.6 Assignment; Binding Effect.............................. 29
Section 9.7 Severability............................................ 29
Section 9.8 Enforcement of Agreement................................ 29
Section 9.9 Miscellaneous........................................... 29
Section 9.10 Headings................................................ 29
Section 9.11 Certain Defined Terms................................... 29
Section 9.12 Finders or Brokers...................................... 29
ANNEX A Certain Conditions of the Offer.................................. 31
(ii)
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of May 5, 1999 (this
"Agreement"), is among Falcon Products, Inc., a Delaware corporation
("Falcon"), SY Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Falcon ("Sub"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Industries, Inc., a Delaware
corporation ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇").
Whereas, the Board of Directors of each of Falcon, Sub, and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, has, subject to the conditions set forth in this Agreement,
unanimously determined that it is in the best interests of its stockholders
for Sub to acquire ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on the terms and subject to the conditions
set forth herein; and
Whereas, in furtherance thereof, it is proposed that Sub shall make a cash
tender offer (the "Offer") to acquire all of the outstanding shares (the
"Shares") of Common Stock, par value $.05 per share (the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Common Stock"), of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, at a price of $16.50 per share (such
amount, or any greater amount per share paid pursuant to the Offer, being
hereinafter referred to as the "Per Share Amount"), net to the seller in cash,
in accordance with the terms and subject to the conditions of this Agreement;
and
Whereas, concurrently with the execution and delivery of this Agreement,
and as a condition to Falcon's and Sub's willingness to enter into this
Agreement, Falcon and Sub have entered into separate Stockholder Agreements,
dated as of the date hereof (the "Stockholder Agreements"), with each of the
Principal Stockholders (as hereinafter defined), pursuant to which each
Principal Stockholder has agreed, among other things, to tender all Shares
owned by such Principal Stockholder pursuant to the Offer and to vote such
Shares in favor of the Merger; and
Whereas, the parties desire to make certain representations, warranties,
covenants and agreements in connection with the Offer and the Merger (as
hereinafter defined) and also to prescribe various conditions to the Offer and
the Merger.
Now, Therefore, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) Unless this Agreement has been terminated in accordance with Section
8.1, Sub shall commence, within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Offer as promptly
as practicable (but in no event later than the fifth business day from and
including the date of initial public announcement of this Agreement). Sub
shall accept for payment Shares which have been validly tendered and not
withdrawn pursuant to the Offer following expiration of the Offer promptly
following the time that all conditions to the Offer shall have been satisfied
or waived by Sub, except that the Minimum Condition (as hereinafter defined)
may not be waived. The obligation of Sub to accept for payment, purchase and
pay for Shares tendered pursuant to the Offer shall be subject only to the
conditions set forth in Annex A and to the further condition that a number of
Shares which, together with any Shares beneficially owned by Falcon or Sub,
represent not less than a majority of the Shares then outstanding on a Fully
Diluted Basis (as hereinafter defined) shall have been validly tendered and
not withdrawn prior to the final expiration date of the Offer (the "Minimum
Condition"). "Fully Diluted Basis" means, as of any time, all of the Shares
plus all shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock required to be issued or
issuable pursuant to options, warrants, securities or obligations of any kind
under employee stock or similar benefit plans or otherwise, whether or not
vested or exercisable. Unless previously approved by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in
writing, no change in the Offer may be made (i) which decreases the
price per Share payable in the Offer, (ii) which changes the form of
consideration to be paid in the Offer, (iii) which reduces the maximum number
of Shares to be purchased in the Offer or the Minimum Condition, (iv) which
imposes conditions to the Offer in addition to those set forth in Annex A
hereto or which modifies the conditions set forth in Annex A in a manner
adverse to the holders of Shares, (v) which amends any other term of the Offer
in a manner adverse to the holders of the Shares, or (vi) extends the
expiration of the Offer beyond the scheduled expiration date (the initial
scheduled expiration date being 20 business days following commencement of the
Offer); provided, however, that notwithstanding the foregoing, subject to
Section 8.1, if the conditions set forth in Annex A are not satisfied or, to
the extent permitted by this Agreement, waived by Falcon, Falcon will extend
the Offer from time to time for the shortest time periods permitted by law and
which it reasonably believes are necessary until the consummation of the
Offer; and provided further, that Falcon and Sub shall have the right to
extend the Offer for up to ten business days after the initial scheduled
expiration date notwithstanding the prior satisfaction of the conditions set
forth in Annex A. Subject to the terms and conditions of the Offer and this
Agreement, Sub shall, and Falcon shall cause Sub to, pay for all Shares
validly tendered and not withdrawn pursuant to the Offer that Sub becomes
obligated to purchase pursuant to the Offer as soon as practicable after the
expiration of the Offer.
(b) As soon as practicable on the date of commencement of the Offer, Falcon
and Sub shall file with the Securities and Exchange Commission (the "SEC") a
Tender Offer Statement on Schedule 14D-1 with respect to the Offer (together
with any supplement or amendments thereto, the "Schedule 14D-1"). The Schedule
14D-1 will include, as exhibits, the Offer to Purchase, form of letter of
transmittal and summary advertisement (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). The Offer
Documents will comply in all material respects as to form with the
requirements of applicable federal securities laws. Falcon, Sub and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ each agree promptly to correct any information provided by them for
use in the Offer Documents if and to the extent that it shall have become
false or misleading in any material respect and Falcon and Sub agree to take
all steps necessary to cause the Offer Documents and any amendments or
supplements thereto to be filed with the SEC and to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its counsel shall be given a reasonable
opportunity to review and comment upon the Offer Documents and any amendments
thereto in each case prior to the filing thereof with the SEC. Falcon and Sub
agree to provide ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its counsel a written copy of any
comments or other communications (whether written or oral) that Falcon, Sub or
their counsel may receive from time to time from the SEC or its Staff with
respect to the Offer Documents as soon as practicable after receipt thereof.
Section 1.2 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Actions.
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ hereby approves of and consents to the Offer and
represents that its Board of Directors, including all of the disinterested
directors, at a meeting duly called and held, has, subject to the terms and
conditions set forth herein, (i) approved this Agreement and the transactions
contemplated hereby (including, without limitation, the Offer, the Merger, the
Stockholder Agreements, and the transactions contemplated thereby), and such
approval constitutes approval of this Agreement and the transactions
contemplated hereby (including, without limitation, the Offer, the Merger, the
Stockholder Agreements, and the transactions contemplated thereby), for
purposes of Section 203 of the Delaware General Corporation Law, as amended
(the "DGCL"), such that it will not apply to the transactions contemplated by
this Agreement (including, without limitation, the Offer, the Merger, the
Stockholder Agreements, and the transactions contemplated thereby); (ii)
unanimously determined that each of the Offer and the Merger are fair to and
in the best interests of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ stockholders;
and (iii) resolved to recommend that the stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
accept the Offer, tender their Shares thereunder to Sub and approve and adopt
this Agreement and the Merger; provided, that such recommendation may be
withdrawn, modified or amended if the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
determines in good faith, based on advice of its outside counsel, that such
action is necessary in order for the Board to comply with its obligations or
duties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its stockholders under applicable law. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ consents to the inclusion of such recommendation and approval in the
Offer Documents, subject to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ right to withdraw, modify or
amend its recommendation.
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(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ hereby agrees to file with the SEC, on the date the
Schedule 14D-1 is filed with the SEC, a Solicitation/Recommendation Statement
on Schedule 14D-9 (together with any amendments or supplements thereto, the
"Schedule 14D-9") containing the recommendation described in Section 1.2(a).
The Schedule 14D-9 will comply in all material respects as to form with the
requirements of applicable federal securities laws. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Falcon,
and Sub each agree promptly to correct any information provided by them for
use in the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ further agrees to
take all steps necessary to cause the Schedule 14D-9 and any amendments or
supplements thereto to be filed with the SEC and disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Notwithstanding anything to the contrary in this Agreement,
the Board of Directors may withdraw, modify or amend its recommendation if the
Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ reasonably determines in good faith,
based on advice of its outside counsel, that such action is necessary in order
for the Board to comply with its obligations or duties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
its stockholders under applicable law. Falcon and its counsel shall be given a
reasonable opportunity to review and comment upon the Schedule 14D-9 and any
amendments thereto in each case prior to the filing thereof with the SEC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agrees to provide Falcon and Sub and their counsel a written
copy of any comments or other communications (whether written or oral) that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its counsel may receive from time to time from the SEC or
its Staff with respect to the Schedule 14D-9 as soon as practicable after
receipt thereof.
(c) In connection with the Offer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will cause its transfer
agent promptly to furnish Falcon and Sub with mailing labels, security
position listings and any available listing or computer files containing the
names and addresses of the record holders of the Shares as of a recent date
and shall furnish Sub with such additional information and assistance
(including, without limitation, updated lists of stockholders, mailing labels
and lists of securities positions) as Sub or its agents may reasonably request
in communicating, and advocating acceptance of the Offer to the record and
beneficial holders of Shares. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Offer Documents,
Falcon and Sub shall hold such listings and other information in confidence
and in accordance with the terms of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Confidentiality
Agreement (as hereinafter defined), and shall use the information contained in
any such labels, listings and files only in connection with the Offer and the
Merger, and, if this Agreement is terminated, will deliver to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
all copies of such information (and extracts and summaries thereof) then in
their or their agent's or advisor's possession in accordance with the terms of
the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Confidentiality Agreement.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for any Shares by Falcon or
any of its Subsidiaries which represent at least a majority of the outstanding
Shares on a fully diluted basis, Falcon shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Board of
Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as is equal to the product of the total number of
directors on such Board (giving effect to the directors designated by Falcon
pursuant to this sentence) multiplied by the percentage that the number of
Shares so purchased bears to the total number of Shares then outstanding on a
Fully Diluted Basis. In furtherance thereof, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall, upon
request of Sub, use its best efforts promptly either (at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
election) to increase the size of its Board of Directors or secure the
resignations of such number of its incumbent directors, or both, as is
necessary to enable Falcon's designees to be so elected to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
Board, and shall take all actions available to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to cause
Falcon's designees to be so elected. At such time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall, if
requested by Falcon, also cause persons designated by Falcon to constitute at
least the same percentage (rounded up to the next whole number) as is on
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Board of Directors of (i) each committee of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ Board of Directors, (ii) each board of directors (or similar body)
of each Subsidiary (as defined in Section 9.11) of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and (iii)
each committee (or similar body) of each such board.
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ obligations to appoint designees to the Board of
Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be subject to Section 14(f) of the Exchange
Act. At the request and expense of Falcon, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall
3
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 Section 1.3(a), including mailing to stockholders the information
required by such Section 14(f) and Rule 14f-1 as is necessary to enable
Falcon's designees to be elected to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Board of Directors.
Falcon will provide to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in writing and be solely responsible
for all information required by such Section 14(f) and Rule 14f-1 with respect
to its nominees, officers, directors and affiliates.
(c) If Falcon's designees are elected or appointed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
Board of Directors, until the Effective Time (as defined in Section 2.3),
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Board shall include at least two directors who are directors
on the date hereof (the "Independent Directors"), provided that, in such
event, if the number of Independent Directors shall be reduced below two for
any reason whatsoever, any remaining Independent Directors (or Independent
Director, if there shall be only one remaining) shall be entitled to designate
persons to fill such vacancies who shall be deemed to be Independent Directors
for purposes of this Agreement or, if no Independent Director then remains,
the other directors shall designate two persons to fill such vacancies who
shall not be stockholders, affiliates or associates of Falcon or Sub and such
persons shall be deemed to be Independent Directors for purposes of this
Agreement. Notwithstanding anything in this Agreement to the contrary, if
Falcon's designees are elected to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Board, after the
acceptance for payment of Shares pursuant to the Offer and prior to the
Effective Time, the affirmative vote of a majority of the Independent
Directors shall be required and shall be sufficient to authorize any
termination of this Agreement by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, any amendment of this
Agreement requiring action by the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, any
extension of time for the performance of any of the obligations or other acts
of Falcon or Sub under this Agreement, any waiver of compliance with any of
the agreements or conditions under this Agreement for the benefit of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, any action to seek to enforce any obligation of Falcon or Sub under
this Agreement and any other action by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Board of Directors
under or in connection with this Agreement. The Independent Directors shall be
appointed as a Special Committee of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Board of Directors and
shall have full power solely with respect to the matters set forth in the
previous sentence to be approved by the Independent Directors. In connection
herewith, the Independent Directors (in their capacity as the Special
Committee) shall be authorized, on behalf of and at the expense of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, to retain legal advisors.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, Sub shall be merged
with and into ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Merger") at the Effective Time. As of the
Effective Time, the separate corporate existence of Sub shall cease and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall be the surviving corporation (the "Surviving Corporation") and
shall succeed to and assume all the rights and obligations of Sub in
accordance with the DGCL.
Section 2.2 Closing. The closing of the Merger (the "Closing") will take
place at a location mutually acceptable to the parties hereto at 10:00 a.m. on
a date to be specified by the parties (the "Closing Date"), which shall be no
later than the first business day after satisfaction or waiver of the
conditions set forth in Article VII, unless another time or date is agreed to
by the parties hereto.
Section 2.3 Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on or after the Closing Date, the parties shall file a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions
of the DGCL and shall make all other filings or recordings required under the
DGCL. The Merger shall become effective at such time as the Delaware Secretary
of State accepts the Certificate of Merger for record, or at such subsequent
date or time as Falcon and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall agree and specify in the
Certificate of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
4
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
property of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Sub shall vest in the Surviving Corporation,
and all liabilities and obligations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Sub shall become
liabilities and obligations of the Surviving Corporation.
Section 2.5 Certificate of Incorporation; Bylaws. The Certificate of
Incorporation of Sub, as in effect immediately prior to the execution of this
Agreement, shall be the Certificate of Incorporation of the Surviving
Corporation except that Article FIRST thereof shall read as follows: "FIRST:
The name of the corporation is ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Industries, Inc." and, as so
amended, shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate
of Incorporation. The bylaws of Sub, as in effect immediately prior to the
execution of this Agreement, shall be the bylaws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
Section 2.6 Directors and Officers. The directors of Sub at the Effective
Time shall be the directors of the Surviving Corporation and the officers of
Sub at the Effective Time shall be the officers of the Surviving Corporation,
in each case until their respective successors are duly elected and qualified.
ARTICLE III
MERGER CONSIDERATION; CONVERSION OR CANCELLATION
OF SHARES IN THE MERGER; DISSENTING SHARES
Section 3.1 Consideration for the Merger; Conversion or Cancellation of
Shares in the Merger. At the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any Shares or capital stock
of Sub:
(a) Each Share that is issued and outstanding immediately prior to the
Effective Time other than Dissenting Shares (as defined in Section 3.6) and
Shares owned by Falcon, Sub or any direct or indirect wholly owned
subsidiary of Falcon (collectively, "Falcon Companies") or any of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ direct or indirect wholly-owned subsidiaries or shares held in
the treasury of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall, by virtue of the Merger and without
any action on the part of Sub, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or the holder thereof, be
cancelled and extinguished and converted into the right to receive the Per
Share Amount in cash (the "Merger Consideration"), payable to the holder
thereof, without interest thereon, less any applicable withholding of
taxes, upon the surrender of the certificate formerly representing such
Share in the manner provided in Section 3.3.
(b) Each Share issued and outstanding and owned by any of the Falcon
Companies other than Sub or any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ direct or indirect
wholly owned subsidiaries or authorized but unissued shares held by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ immediately prior to the Effective Time shall cease to be
outstanding, be cancelled and retired without payment of any consideration
therefor and cease to exist.
(c) Each share of common stock of Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one validly
issued, fully paid and non-assessable share of common stock of the
Surviving Corporation.
Section 3.2 Stockholders Meeting. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, acting through its Board
of Directors, shall, if required by applicable law in order to consummate the
Merger:
(i) duly call, give notice of, convene and hold a special meeting of its
stockholders (the "Stockholders Meeting"), to be held as soon as
practicable after Sub shall have purchased Shares pursuant to the Offer,
for the purpose of considering and taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and this Agreement and include in any
preliminary or definitive proxy statement or information statement with
respect to the Stockholders' Meeting (the "Proxy Statement"), the
recommendation of the Board of
5
Directors that stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ vote in favor of the
approval of this Agreement and the transactions contemplated hereby unless
the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ determines in good faith, based
on advice of its outside counsel, that not taking any such action is
necessary in order for the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to comply
with its obligations or duties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its stockholders under
applicable law; and
(iii) use all reasonable efforts to obtain and furnish the information
required to be included by it in the Proxy Statement and, after
consultation with Falcon and Sub, respond promptly to any comments made by
the SEC with respect to the Proxy Statement and any preliminary version
thereof and cause the Proxy Statement to be mailed to its stockholders at
the earliest practicable time following the expiration or termination of
the Offer and obtain the necessary approvals by its stockholders of this
Agreement and the transactions contemplated hereby unless the Board of
Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ determines in good faith, based on advice of
its outside counsel, that not taking any such action is necessary in order
for the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to comply with its
obligations or duties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its stockholders under
applicable law.
(a) Falcon agrees that it will provide ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with the information
concerning Falcon and Sub required by applicable law to be included in the
Proxy Statement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Falcon agree to use commercially reasonable efforts to
cause the Special Meeting to occur within 90 days after the purchase of Shares
pursuant to the Offer. At the Stockholders' Meeting, Falcon, Sub, and their
affiliates will vote all Shares owned by them in favor of approval of this
Agreement and the transactions contemplated hereby.
(b) Notwithstanding the foregoing, if Falcon, Sub, and any of their
Subsidiaries shall acquire at least 90% of the then outstanding Shares, the
parties hereto agree, subject to Article VII, to take all necessary and
appropriate action to cause the Merger to become effective in accordance with
Section 253 of the DGCL as soon as practicable after such acquisition, without
a meeting of the stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Section 3.3 Payment for Shares in the Merger. The manner of making payment
for Shares in the Merger shall be as follows:
(a) At or prior to the Effective Time, Falcon shall deposit with or for
the account of a bank or trust company having net capital of not less than
$100,000,000 and designated by Falcon (the "Payment Agent"), for the
benefit of the holders of Shares, the funds necessary to make the payments
contemplated by Section 3.1 (the "Payment Fund"). The Payment Agent shall,
pursuant to irrevocable instructions, deliver the Merger Consideration out
of the Payment Fund.
(b) As soon as practicable after the Effective Time, but in any event no
later than five (5) business days thereafter, the Payment Agent shall mail
to each holder of record (other than holders of certificates representing
Shares referred to in Section 3.1(b)) of a certificate or certificates
which immediately prior to the Effective Time represented outstanding
Shares (the "Certificates") 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 proper delivery of the Certificates to
the Payment Agent and shall be in such form and have such other customary
provisions as Falcon shall 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 Payment Agent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Payment
Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration without any interest thereon,
less any applicable withholding of taxes, and the Certificate so
surrendered shall forthwith be canceled. The Merger Consideration with
respect to the Shares represented thereby may be paid to a person other
than the person in whose name the Certificate so surrendered is registered
if such Certificate shall be properly endorsed or otherwise be in proper
form for transfer and the person requesting such issuance shall pay any
transfer or other nonincome taxes required by reason of the payment of the
Merger Consideration to a person other
6
than the registered holder or establish to the satisfaction of the Payment
Agent that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 3.3, each Certificate shall be deemed at
any time after the Effective Time to represent only the right to receive,
upon such surrender thereof, the Merger Consideration with respect to each
of the Shares represented thereby, without interest.
(c) Any portion of the Payment Fund which remains undistributed to the
holders of the Certificates as of the date which is one year after the
Effective Time shall be delivered to Falcon, upon demand, and any holders
of the Certificates who have not theretofore complied with this Article III
shall thereafter look only to Falcon or the Surviving Corporation for
payment of their claim for Merger Consideration.
(d) None of Falcon, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Sub or the Payment Agent shall be
liable to any person in respect of any cash from the Payment Fund delivered
to a public official pursuant to any applicable abandoned property, escheat
or similar law. If any Certificate shall not have been surrendered prior to
seven years after the Effective Time (or immediately prior to such earlier
date on which any Merger Consideration would otherwise escheat to or become
the property of any governmental body or authority), any such Merger
Consideration, to the extent permitted by applicable law, shall become the
property of the Surviving Corporation, free and clear of all claims and
interest of any person previously entitled thereto.
(e) The Payment Agent shall invest any cash included in the Payment Fund
on a daily basis as directed by Falcon. Any interest and other income
resulting from such investments shall be paid to Falcon.
(f) If any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond in such amount
as the Surviving Corporation may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Payment Agent
will issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration.
Section 3.4 Transfer of Shares After the Effective Time. At the Effective
Time, the stock transfer books of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be closed, and there
shall be no further registration of transfers on the stock transfer books of
the Surviving Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Payment Agent for any reason,
they shall be canceled and exchanged as provided in this Article III.
Section 3.5 Stock Options and Associate Purchase Plan.
(a) Each option granted to a ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ employee, consultant or
director to acquire shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock ("Option") that is
outstanding immediately prior to the purchase of Shares pursuant to the Offer
(irrespective of whether such Options are then exercisable) shall, on the
fifth business day after the purchase by Sub of Shares pursuant to the Offer,
be cancelled in exchange for a single lump sum cash payment equal to the
product of (i) the number of shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock subject to
such Option and (ii) the excess of the Per Share Amount over the exercise
price per share of such Option.
(b) Except as set forth in Section 3.5(a), each Option that is outstanding
immediately prior to the Effective Time, whether or not then vested or
exercisable, shall, effective as of the Effective Time, be cancelled and no
payments shall be made with respect thereto.
(c) Not later than the twentieth business day following the commencement of
the Offer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have taken all required actions so that
following the purchase of Shares pursuant to the Offer, no holder of stock
options will have any right to receive shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock
upon exercise of a stock option.
Section 3.6 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, any Shares which are held by stockholders who did not vote in
favor of the Merger and who comply with all of the relevant provisions of
Section 262 of the DGCL (the "Dissenting Shares") shall not be converted into
or be exchanged for the right to receive the Merger Consideration, but instead
shall be converted into the right to receive payment from the Surviving
Corporation with respect to such Dissenting Shares in accordance with the
DGCL, unless
7
and until such holders shall have failed to perfect or shall have effectively
withdrawn or lost their rights to appraisal under the DGCL. If any such holder
shall have failed to perfect or shall have effectively withdrawn or lost such
right, such holder's Shares shall be entitled to the Merger Consideration in
accordance with Section 3.3. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall give prompt notice to Sub
and Falcon of any demands received by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for appraisal of Shares,
and Sub and Falcon shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
shall not, except with the prior written consent of Sub and Falcon, make any
payments with respect to, or settle or offer to settle, any such demands.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ represents and warrants to Falcon and Sub that, except as
set forth in the Disclosure Schedule attached to and made a part of this
Agreement, all of the statements contained in this Article IV are true and
correct as of the date of this Agreement (or, if made as of a specified date,
as of such date). Each exception set forth in the Disclosure Schedule and each
other response to this Agreement set forth in the Disclosure Schedule is
identified by reference to, or has been grouped under a heading referring to,
one or more specific sections of this Agreement. Each such exception or
response may be deemed to be an exception or response to one or more other
sections only if the level of particularity or manner of disclosure of the
fact or item expressly disclosed would permit a reasonable person to find such
disclosure relevant to another section.
Section 4.1 Organization, Qualification, Etc. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to own
its properties and assets and to carry on its business as it is now being
conducted and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its properties or the conduct of its
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing would not, individually
or in the aggregate, have a Material Adverse Effect (as hereinafter defined)
on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. As used in this Agreement, any reference to any state of
facts, event, change or effect having a "Material Adverse Effect" on or with
respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon, as the case may be, means a Material
Adverse Effect on the assets, business, results of operations or financial
condition of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries (as defined in Section
9.11), taken as a whole or Falcon and its Subsidiaries, taken as a whole, as
the case may be. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has heretofore furnished, or otherwise made
available, to Falcon a complete and correct copy, as applicable, of the
Certificate or Articles of Incorporation and the Bylaws, each as amended to,
and in full force and effect as of, the date hereof, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
each of its Subsidiaries. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries
is in violation of any of the provisions of its Certificate or Articles of
Incorporation or By-laws.
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ does not own, directly or indirectly, any equity or
other ownership interest in any corporation, partnership, joint venture, or
other entity or enterprise, except for the Subsidiaries. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is
not subject to any corporate or contractual obligation or requirement to make
any investment, loan or capital contribution to any corporation, partnership,
joint venture or other entity or enterprise, other than its Subsidiaries. Each
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, has the corporate power and authority to own its properties and
to carry on its business as it is now being conducted, and is duly qualified
to do business and is in good standing in each jurisdiction in which the
ownership of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so
qualified or to be in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. All the
outstanding shares of capital stock of, or other ownership interests in,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries are validly issued, fully paid and non-
assessable and are owned by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, directly or indirectly, free and
clear of all liens, claims, charges or encumbrances. There are no existing
subscriptions, options, warrants, rights of first refusal, preemptive rights,
calls, commitments, agreements or conversion rights of any character relating
to the issued or unissued capital stock or other securities of, or other
ownership interests in, any Subsidiary of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
8
Section 4.2 Capital Stock.
(a) The authorized stock of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ consists of 30,000,000 shares
of common stock, par value $.05 per share ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock"). As
of March 10, 1999, there were 8,761,417 shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock
issued and outstanding. All the outstanding shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common
Stock have been validly issued and are fully paid and non-assessable and have
not been issued in violation of any preemptive or similar rights. As of the
date of this Agreement, there were no outstanding subscriptions, options,
warrants, rights or other arrangements (including, without limitation, any
stockholders' rights plan) or commitments obligating ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to issue
any shares of its capital stock nor are there outstanding any securities which
are convertible into or exchangeable for any shares of capital stock of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has no obligations of any kind to issue any
additional securities other than options and other rights to receive or
acquire not in excess of 227,801 shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock
granted on or prior to December 31, 1998, pursuant to employee incentive or
benefit plans, programs and arrangements and non-employee director plans.
(b) Except for the issuance of shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock
pursuant to the options referred to in the last sentence of Section 4.2(a) and
except as permitted in Section 6.1(i), since March 10, 1999, no shares of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock have been issued.
(c) The issuance and sale of all of the outstanding shares of capital stock
described in this Section 4.2 have been in compliance with federal and state
securities laws. There are no outstanding obligations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to
repurchase, redeem or otherwise acquire any shares of capital stock of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and no person has any right to cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to repurchase,
redeem or otherwise acquire any shares of capital stock of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Section 4.3 Corporate Authority Relative to this Agreement; No Violation;
No Conflict. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has the corporate power and authority necessary
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and, except, with respect to the Merger,
for the approval of its stockholders, no other corporate proceedings on the
part of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and, assuming this Agreement
constitutes a valid and binding Agreement of the other parties hereto, this
Agreement constitutes a valid and binding agreement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
enforceable against ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in accordance with its terms. Other than
in connection with or in compliance with the provisions of the DGCL (including
the approval of the Merger by the stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇), the
Exchange Act, and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act") (collectively, the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Required
Approvals"), no authorization, consent or approval of, or filing by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ with, any governmental body or authority or other person is necessary
for the execution and delivery of this Agreement or for the consummation by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of the transactions contemplated by this Agreement. Neither
the execution and delivery of this Agreement by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor the
consummation by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of the transactions contemplated by this
Agreement will (a) result in a breach or violation of the organizational
documents of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or of any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries; (b)
result in a breach or violation of any provision of, or constitute a default
(or an event which, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any party (with the
giving of notice, the passage of time or otherwise) to terminate, accelerate
or modify, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, contract,
agreement, lease or other instrument or obligation to which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
any of its Subsidiaries is a party; (c) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of
its Subsidiaries or any of the properties or assets of any of them; or (d)
give any governmental body or authority the right to revoke, withdraw,
suspend, cancel, terminate or modify any governmental authorization held by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries.
9
Section 4.4 Reports and Financial Statements; Corporate Records. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ has previously made available to Falcon true and complete copies of:
(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Annual Reports on Form 10-K filed with the SEC for each
of the years ended December 31, 1996 through 1998 (the "Annual Reports"); (ii)
each definitive proxy statement filed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with the SEC from
December 31, 1995 until the date of this Agreement (the "Proxy Statements");
(iii) each final prospectus filed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with the SEC from
December 31, 1996 until the date of this Agreement ("Prospectuses"); and (iv)
all Current Reports on Form 8-K filed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with the SEC since
the end of its last fiscal year until the date of this Agreement ("Current
Reports").
(a) All of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Annual Reports, Proxy Statements,
Prospectuses, and Current Reports (collectively, the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SEC
Reports") at the time filed (and in the case of registration statements and
proxy statements, on the dates of their effectiveness and the dates of
mailing, respectively) (i) complied in all material respects with the
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act and the rules and regulations promulgated
thereunder, and (ii) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The audited consolidated financial statements and
unaudited consolidated interim financial statements included in the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ SEC Reports (including any related notes and schedules) fairly
present the financial position of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its consolidated
Subsidiaries as of the dates thereof and the results of operations and cash
flows for the periods then ended (subject, where appropriate, to normal year-
end adjustments), in each case in accordance with past practice and generally
accepted accounting principles in the United States ("GAAP") consistently
applied during the periods involved (except as otherwise disclosed in the
notes thereto or in the case of unaudited statements, as permitted by the
rules of the SEC or Form 10-Q). Since December 31, 1995, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has
timely filed all reports, registration statements and other filings required
to be filed by it with the SEC under the Exchange Act, the Securities Act and
the rules and regulations of the SEC.
(b) The minute books of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
corporate Subsidiaries contain accurate records of all meetings held of, and
corporate action taken by, the stockholders and the Board of Directors of such
companies, and no meeting of any such stockholders or Board of Directors has
been held for which minutes have not been prepared and are not contained in
such minute books.
Section 4.5 No Undisclosed Liabilities. As of the date hereof, neither
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries has any liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, that would be
required by GAAP to be reflected on a consolidated balance sheet of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, except liabilities or obligations (a) reflected in any of the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ SEC Reports filed prior to the date of this Agreement, or (b)
incurred in the ordinary course of business since December 31, 1998.
Section 4.6 No Violation of Law. The businesses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental body or authority or any judgment, decision or
order entered by any governmental authority.
Section 4.7 Environmental Laws and Regulations. As of the date hereof (a)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and each of its Subsidiaries is in compliance with all
applicable federal, state, local and foreign laws and regulations relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata) (collectively, "Environmental Laws"), which compliance
includes, but is not limited to, the possession by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its
Subsidiaries of all material permits and other governmental authorizations
required under applicable Environmental Laws, and compliance with the terms
and conditions thereof; (b) neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its
Subsidiaries has received written notice of, or, to the knowledge of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, is the subject of, any actions, causes of action, claims,
investigations, demands or notices by any person alleging liability under or
non-compliance with any Environmental Law ("Environmental Claims"); and (c) to
the knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, there are no circumstances that are
reasonably likely to prevent or interfere with such compliance in the future.
There are no past or present actions or activities, including, without
limitation, the release, emission, discharge or disposal of any Hazardous
Material
10
at any site presently owned by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its Subsidiaries or used in
the conduct of their business, that could form the basis of any claim against
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its Subsidiaries under Environmental Laws. For purposes of
this Section 4.7, "Hazardous Material" means chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products and any other substance or material regulated as toxic or
hazardous pursuant to any Environmental Law.
Section 4.8 Employee Matters; ERISA. Set forth in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
Disclosure Schedule is a true and complete list of all material employee
benefit plans maintained or contributed to as of the date hereof by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any of its Subsidiaries covering their present and former
employees or directors or their beneficiaries, or providing benefits to such
persons in respect of services provided to any such entity, including, but not
limited to, any employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), any
deferred compensation, bonus, stock option, restricted stock, incentive
compensation, severance or change in control agreement or plan, and any other
material benefit arrangement or payroll practice (collectively, the "▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Benefit Plans").
(a) All contributions and other payments required to be made by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any of its Subsidiaries to or under any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit
Plan (or to any person pursuant to the terms thereof) have been made or the
amount of such payment or contribution obligation has been reflected in the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SEC Reports.
(b) Each of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit Plans intended to be "qualified"
within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code") has received a favorable determination letter from the
Internal Revenue Service (the "IRS") as to such qualified status.
(c) All ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit Plans are in compliance with all applicable
provisions of ERISA and the Code, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries do
not have any liabilities or obligations with respect to any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Benefit Plan, whether or not accrued, contingent or otherwise.
(d) With respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit Plans, individually and in the
aggregate, no event has occurred and, to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ knowledge, there
does not now exist any condition or set of circumstances that could subject
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries to any material liability arising
under ERISA or the Code (including, without limitation, any liability to any
such plan or the Pension Benefit Guaranty Corporation (the "PBGC")), or under
any indemnity agreement to which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries is
a party, except liability for benefit claims and funding obligations payable
in the ordinary course.
(e) None of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit Plans that are "welfare plans"
within the meaning of Section 3(1) of ERISA provides for any retiree benefits
other than continuation coverage required to be provided under Section 4980B
of the Code or Part 6 of Title I of ERISA.
(f) Except as provided in the termination benefit agreements listed and
identified as such in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Disclosure Schedule which are in
effect on the date hereof (the "Change of Control Employment Agreements"), the
consummation or announcement of any transaction contemplated by this Agreement
will not (whether alone or upon the occurrence of any additional or further
acts or events) result in any (A) payment (whether of severance pay or
otherwise) becoming due from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries to any
officer, employee, former employee or director thereof or to the trustee under
any "rabbi trust" or similar arrangement, or (B) benefit under any ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Benefit Plan being established or becoming accelerated, vested or
payable. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries is a party to (A)
any management, employment, deferred compensation, severance (including any
payment, right or benefit resulting from a change in control), bonus or other
contract for personal services with any current or former officer, director or
employee (whether or not characterized as a plan for purposes of ERISA), (B)
any material consulting contract with any person who prior to entering into
such contract was a director or officer of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its
Subsidiaries, or (C) any plan, agreement, arrangement or understanding similar
to any of the items described in clause (A) or (B) of this sentence.
11
(g) The consummation or announcement of any transaction contemplated by
this Agreement will not (either alone or upon the occurrence of any additional
or further acts or events) result in the disqualification of any of the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Benefit Plans intended to be qualified under, result in a prohibited
transaction or breach of fiduciary duty under, or otherwise violate, ERISA or
the Code.
(h) Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries nor any of their
directors, officers, employees or agents, nor any "party in interest" or
"disqualified person," as such terms are defined in Section 3 of ERISA and
Section 4975 of the Code has, with respect to any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit
Plan, engaged in or been a party to any "prohibited transaction," as such term
is defined in Section 4975 of the Code or Section 406 of ERISA which is not
otherwise exempt, which could result in the imposition of either a penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975
of the Code or which could constitute a breach of fiduciary duty, in each case
applicable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(i) No ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit Plan subject to Section 412 of the Code has
incurred any now existing "accumulated funding deficiency" (as defined in
ERISA), whether or not waived. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its
Subsidiaries has incurred, and none of such entities reasonably expects to
incur, any material liability to the PBGC with respect to any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Benefit Plan. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries is a party
to, and neither has incurred or reasonably expects to incur, any withdrawal
liability with respect to any "multiemployer plan" (as defined in Section
3(37) of ERISA) for which there is any outstanding liability.
(j) None of the assets of any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit Plans which hold
assets are invested in securities of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(k) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is in compliance with the notice provisions and all
other provisions of COBRA and the Health Insurance Portability and
Accountability Act of 1996.
(l) Since December 31, 1998, no change has occurred in the base salary of
any person who is a party to a Change of Control Employment Agreement.
Section 4.9 Absence of Certain Changes or Events. From December 31, 1998 to
the date of this Agreement, the businesses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its
Subsidiaries have been conducted in all material respects in the ordinary
course and there has not been any event, occurrence, development or state of
circumstances or facts that has had or is reasonably likely to have a Material
Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Since December 31, 1998, neither ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ nor any of its Subsidiaries has engaged in any transaction which, if
done after the execution of this Agreement, would violate Sections 6.1(e)
through (k), 6.1(n) through (q), or 6.1(s) through (u) hereof.
Section 4.10 Investigations; Litigation. As of the date of this Agreement:
(a) no investigation or review by any governmental body or authority
with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries is pending nor
has any governmental body or authority notified ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of an
intention to conduct the same and, to the knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, no
such investigation or review has been threatened; and
(b) there are no actions, suits or proceedings pending (or, to ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ knowledge, threatened) against or affecting ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, its
Subsidiaries, or any of the properties of any of them, at law or in equity,
before any federal, state, local or foreign governmental body or authority.
Section 4.11 Proxy Statement; Offer Documents; Schedule 14D-9; Proxy
Statement. None of the Schedule 14D-9, any information supplied in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ specifically for inclusion in the Offer Documents, and the
information to be filed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in connection with the Offer
pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information
Statement"), shall at the each of the times the Schedule 14D-9, the Offer
Documents, the Information Statement, and any amendments or supplements
thereto
12
are filed with the SEC and are first published, sent or given to stockholders
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as the case may be, 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 made therein, in the light of the
circumstances under which they are made, not misleading. The Proxy Statement
and the Information Statement shall not, at each of the dates any such
document (or any amendment or supplement thereto) is first mailed to
stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, with respect to the Information Statement at
the time Shares are accepted for payment in the Offer, and with respect to the
Proxy Statement at the time of the Stockholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
are made, not misleading. The Schedule 14D-9, the Information Statement and
the Proxy Statement shall comply in all material respects as to form with the
applicable requirements of the Exchange Act and the applicable rules and
regulations thereunder. Notwithstanding the foregoing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ makes
no representation or warranty with respect to statements made in any of the
foregoing documents based on information supplied in writing by Falcon or Sub
or any of their representatives specifically for inclusion therein.
Section 4.12 Y2K Compliance. None of the computer software, computer
firmware, computer hardware (whether general or special purpose) or other
similar or related items of automated, computerized or software systems that
are used or relied on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or by any of its Subsidiaries in the
conduct of the businesses of any or all of them will malfunction, cease to
function, generate incorrect data, or produce incorrect results when
processing, providing or receiving (i) date-related data from, into and
between the twentieth and twenty-first centuries or (ii) date-related data in
connection with any date in the twentieth and twenty-first centuries, except
where such malfunctions would not have a Material Adverse Effect on ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.
Section 4.13 Takeover Laws. Prior to the date hereof, the Board of
Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has taken all necessary action so that the
execution of this Agreement and the consummation of the transactions
contemplated hereby, including the Offer, the Merger, and the Stockholder
Agreements, shall be exempt under or not subject to Section 203 of the DGCL
and any other state law that purports to limit or restrict business
combinations or the ability to acquire shares of capital stock.
Section 4.14 Tax Matters.
(a) (i) All Tax Returns that are required to be filed on or before the
Closing Date by or with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries
have been or will be duly and timely filed and reflect all tax liabilities of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries required to be shown thereon; (ii) all
Taxes which are shown to be due on any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Tax Returns have been
or will be timely paid in full; (iii) all withholding tax requirements imposed
on or with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries have been
satisfied in full in all respects; (iv) no action, suit, proceeding, audit,
claim assessment, deficiency or adjustment has been asserted, assessed or is
pending with respect to any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Tax Return or any of its
Subsidiaries; (v) neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries has any
liability for any Taxes in excess of amounts paid or reserves established
therefor; and (vi) there is not in force any extension of time with respect to
the due date for the filing of any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Tax Return or any waiver or
agreement for any extension of time for the assessment or payment of any tax
due with respect to the period covered by any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Tax Return and
no requests for such waivers or agreements are pending. Neither ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ nor any of its Subsidiaries is the subject of any currently ongoing
tax audit which is reasonably likely to have a Material Adverse Effect on
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. With respect to any taxable period ended prior to December
31, 1995, all federal income ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Tax Returns have been audited by
the IRS or are closed by the applicable statute of limitations.
(b) There are no material liens with respect to Taxes upon any of the
properties or assets, real or personal, tangible or intangible of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any of its Subsidiaries (other than liens with respect to Taxes
not yet due). No material claim by an authority in a jurisdiction where none
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its Subsidiaries files tax returns that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
or any of its Subsidiaries is or may be subject to taxation by that
jurisdiction is currently pending or, to the knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
likely to be asserted. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has not filed an election under Section
341(f) of the Code to be treated as a consenting corporation. Neither
13
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries is obligated by any contract,
agreement or other arrangement to indemnify any other person with respect to
any material Taxes.
(c) None of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or could result,
separately or in the aggregate, in the payment of (x) any "excess parachute
payments" within the meaning of Section 280G of the Code (without regard to
the exceptions set forth in Section 280G(b)(4) and 280G(b)(5) of the Code) or
(y) any amount for which a deduction would be disallowed under Section 162 of
the Code; since January 1, 1995, none of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its
Subsidiaries has been a member of a group filing a consolidated federal income
Tax Return (other than a group the common parent of which was ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇); no liability has been asserted with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
any of its Subsidiaries for the Taxes of any Person (other than any of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or
any corresponding provision of state, local or foreign Tax law), as a
transferee or successor, by contract, or otherwise; and none of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any of its Subsidiaries has net operating losses or other tax
attributes presently subject (without regard to the transactions contemplated
by this Agreement) to limitation under Sections 382, 383, or 384 of the Code,
or the federal consolidated return regulations.
(d) Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries is a party to, or
is bound by or has any obligation under any tax sharing agreement or similar
agreement or arrangement.
(e) Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries has agreed to make,
or is required to make, any material adjustment under Section 481(a) of the
Code by reason of a change in accounting method or otherwise and the IRS has
not proposed any such adjustment or change in accounting method.
(f) Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries is, or has been, a
United States Real Property Holding Corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(g) For purposes of this Agreement: (i) "Taxes" means any and all federal,
state, local, foreign or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without
limitation, taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, occupation,
transfers, premiums, leases, services, capital stock, payroll, employment,
social security, workers' compensation, unemployment compensation, or net
worth, environmental taxes and taxes or other charges in the nature of excise,
withholding, customs duties, ad valorem or value added, and (ii) "Tax Return"
means any return, report or similar statement (including the schedules
attached to it) filed or required to be filed with respect to any Tax,
including, without limitation, any information return, claim for refund or
declaration of estimated Tax (or any amendments to any of the foregoing).
Section 4.15 Opinion of Financial Advisor. The Board of Directors of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ has received the opinion of Lazard Freres & Co. LLC ("Lazard
Freres"), dated the date of this Agreement, to the effect that as of such date
the cash consideration to be received by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ stockholders
pursuant to the Offer and the Merger is fair to such stockholders from a
financial point of view. A copy of the written opinion of Lazard Freres has
been delivered to Falcon.
Section 4.16 Required Vote of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Stockholders. The affirmative
vote of the holders of a majority of the outstanding shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Common Stock is required to approve the Merger. No other vote of the
stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is required by law, the Certificate or
Incorporation or the bylaws of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or otherwise to approve this
Agreement and the transactions contemplated hereby.
Section 4.17 Labor Matters. None of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its
Subsidiaries is a party to or bound by any collective bargaining or similar
agreement with any labor organization, and there are no employment,
14
labor, or collective bargaining agreements which pertain to employees of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries. No employees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
any of its Subsidiaries are represented by any labor organization. No labor
organization or group of employees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its
Subsidiaries has made a pending demand for recognition or certification. There
are no representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to the knowledge of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, threatened to be brought or filed, with the National Labor Relations
Board or any other labor relations tribunal or authority. There are no unfair
labor practice charges, grievances, complaints, strikes, work stoppages,
lockouts, material arbitrations or material grievances, or other material
labor disputes pending, or, to the knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, threatened
against or involving ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries.
Section 4.18 Certain Agreements. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its
Subsidiaries is a party or subject to any oral or written agreement, contract,
policy, license, document, instrument, arrangement or commitment relating to
or constituting (i) Indebtedness (as hereinafter defined) in an amount
exceeding $500,000; (ii) leases for real or personal property in which the
amounts of payments which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any Subsidiary is required to
make on an annual basis exceeds $250,000; (iii) agreement, contract, policy,
license document, instrument, arrangement or commitment that limits in any
material respect the freedom of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ to compete in any line of business or with any person or in any
geographical area or which would so limit the freedom of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
any Subsidiary of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ after the Effective Time; (iv) agreement or
contract outside of the ordinary course of business of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries that involves performance of services or
delivery of goods or materials by or to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ Subsidiaries of an amount or value in excess of $250,000; (v) joint
venture or partnership agreements involving a sharing of profits, losses,
costs, or liabilities by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
Subsidiaries with any person other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries;
(vi) power of attorney granted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
Subsidiaries that is currently effective and outstanding; (vii) agreement or
contract entered into other than in the ordinary course of business that
contains or provides for an express undertaking by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries to be responsible for consequential damages;
(viii) agreement or contract for capital expenditures in excess of $200,000;
(ix) written warranty, guaranty, and/or other similar undertaking with respect
to contractual performance extended by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ Subsidiaries other than in the ordinary course of business; or (x)
other document or undertaking which, after giving effect to the transactions
contemplated by this Agreement, purports to restrict or bind Falcon or any of
its Subsidiaries other than the Surviving Corporation and its Subsidiaries in
any respect. "Indebtedness" means any liability in respect of (A) borrowed
money, (B) capitalized lease obligations, (C) the deferred purchase price of
property or services (other than trade payables in the ordinary course of
business) and (D) guarantees of any of the foregoing. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
nor any of its Subsidiaries is in default (or would be in default with notice
or lapse of time, or both) under any indenture, note, credit agreement, loan
document, lease, contract, policy, license, document, instrument, arrangement
or commitment, whether or not such default has been waived, which default,
alone or in the aggregate with other such defaults, is reasonably likely to
have a Material Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
Section 4.19 Title to Assets; Liens. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ owns, holds through
valid leases, or otherwise has the common law or contractual right to use,
directly or through its Subsidiaries, all of its inventory, accounts
receivable, property, equipment and other assets, and such assets are free and
clear of any mortgages, liens, charges, encumbrances, or title defects of any
nature whatsoever, except for such mortgages, liens, charges, encumbrances or
title defects which are not reasonably likely to adversely affect the value of
such property as carried on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ financial statements contained
in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ SEC Reports filed prior to the date of this Agreement and
would not have a Material Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and its Subsidiaries have valid and enforceable leases for the premises and
the equipment, furniture and fixtures purported to be leased by them, except
for leases, the failure of which to have or be enforceable, are not reasonably
likely to have a Material Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Set forth in the
Disclosure Schedule is a complete list of all items of personal property
located on the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ premises that are owned by ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and are not included among the assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
15
Section 4.20 Insurance. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and each of its Subsidiaries are
insured, and during each of the past five calendar years have been insured,
with insurers whose current rating by A M Best is at least B+6 against such
risks and in such amounts as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured. The policies
of fire, theft, liability and other insurance maintained with respect to the
assets or businesses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries (copies of which
have been made available to Falcon) (i) provide coverage which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
deems to be adequate coverage against loss, (ii) are sufficient for ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and its Subsidiaries to be in compliance with all legal requirements
applicable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries and all agreements
and contracts to which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries is a party
or by which any of them are bound, (iii) will continue (absent affirmative
action by Falcon to cancel such policies) in full force and effect following
consummation of the Merger and (iv) do not provide for any retrospective
premium adjustment or other experienced-based liability on the part of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor
any of its Subsidiaries has received written notice of cancellation,
termination, or current or prospective nonrenewal with respect to any material
insurance policy of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its Subsidiaries or notice that the
issuer of any material insurance policy is not willing or able to perform its
obligations thereunder. The insurance policies of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its
Subsidiaries are valid and enforceable policies. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
each of its Subsidiaries has paid all premiums due, has otherwise performed
all of its respective material obligation under, and has given notice to all
appropriate insurers of all material claims that may be insured by any
material insurance policy.
Section 4.21 Intellectual Property.
(a) The Disclosure Schedule sets forth a true, correct and complete list
(including, to the extent applicable, registration, application or file
numbers) of all patents, trademarks, trade names, service marks, domain names
and registered copyrights and material non-registered copyrights used by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries which are material to the conduct
of their business, and all registrations of or application for registration of
any of the foregoing, including any additions thereto or extensions,
continuations, renewals of divisions thereof (setting forth the registration,
issue or serial number and a description of the same) (collectively, together
with all trade dress, trade secrets, processes, formulae, designs, know-how
and other intellectual property rights that are so used, the "Intellectual
Property"). Falcon has heretofore been furnished with true, correct and
complete copies of each registration or application for registration covering
any of the Intellectual Property which is registered with, or in respect of
which any application for registration has been filed with, any governmental
body or authority.
(b) The Intellectual Property includes all of the material intellectual
property rights owned or licensed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries that
are reasonably necessary to conduct their business as it is now conducted or
is expected to be conducted. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, directly or through its
Subsidiaries, has good, marketable and exclusive title to, and the valid and
enforceable power and unqualified right to use, the Intellectual Property free
and clear of all liens or other encumbrances and (B) no person or entity other
than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries has any right or interest of any
kind or nature in or with respect to the Intellectual Property or any portion
thereof or any rights to use, market or exploit the Intellectual Property or
any portion thereof.
(c) Neither the existence nor the sale, license, lease, transfer, use,
reproduction, distribution, modification or other exploitation by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any of its Subsidiaries of any of the Intellectual Property does,
did or will (i) infringe on any patent, trademark, copyright or other right of
any other person, (ii) constitute a misuse or misappropriation of any trade
secret, know-how, process, proprietary information or other right of any other
person, or (iii) entitle any other person to any interest therein, or right to
compensation from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries or any of their
respective successors or assigns (it being understood and agreed that, insofar
as the foregoing representation and warranty relates to Intellectual Property
that is licensed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries by any third
party, such representation and warranty is made only to the knowledge of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any of its Subsidiaries has
received any complaint,
16
assertion, threat or allegation or otherwise has notice of any lawsuit, claim,
demand, proceeding or investigation involving matters of the type contemplated
by the immediately preceding sentence or is aware of any facts or
circumstances that could reasonably be expected to give rise to any such
lawsuit, claim, demand, proceeding or investigation. There are no restrictions
on the ability of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, any of its Subsidiaries, or any of the
successors or assigns to sell, license, lease, transfer, use, reproduce,
distribute, modify or otherwise exploit any Intellectual Property.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF FALCON AND SUB
Falcon and Sub jointly and severally represent and warrant to ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ that all of the statements contained in this Article V are true and
correct as of the date of this Agreement (or if made as of a specified date,
as of such date).
Section 5.1 Organization, Qualification, Etc. Each of Falcon and Sub is a
corporation duly organized, validly existing and of active status or in good
standing under the laws of its jurisdiction of organization and has the
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted and is duly qualified to do business
and is of active status or in good standing in each jurisdiction in which the
ownership of its properties or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so
qualified or to be in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on Falcon. The copies of Falcon's
and Sub's Certificate of Incorporation and bylaws which have been made
available to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ are complete and correct and in full force and
effect on the date hereof. Neither Falcon nor Sub is in violation of any of
the provisions of its Certificate of Incorporation or By-laws.
Section 5.2 Corporate Authority Relative to this Agreement; No Violation;
No Conflict. Each of Falcon and Sub has the corporate power and authority
necessary to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized
by the Boards of Directors of Falcon and Sub and no other corporate
proceedings on the part of Falcon or Sub are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Falcon and Sub and, assuming this
Agreement constitutes a valid and binding Agreement of the other parties
hereto, this Agreement constitutes a valid and binding agreement of Falcon and
Sub, enforceable against each of them in accordance with its terms (except
insofar as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
Other than in connection with or in compliance with the provisions of the
DGCL, the Exchange Act, and the HSR Act (collectively, the "Falcon Required
Approvals"), no authorization, consent or approval of, or filing by Falcon or
Sub with, any governmental body or authority or other person is necessary for
the execution and delivery of this Agreement or the consummation by Falcon or
Sub of the transactions contemplated hereby except where the failure to obtain
such authorizations, consents or approvals or make such filing is not
reasonably likely to have a Material Adverse Effect on Falcon. Neither the
execution and delivery of this Agreement by Falcon and Sub nor the
consummation by Falcon and Sub of the transactions contemplated by this
Agreement will (a) result in a breach or violation of the organizational
documents of Falcon or Sub or of any of Falcon's Subsidiaries; (b) result in a
breach or violation of any provision of, or constitute a default (or an event
which, with the giving of notice, the passage of time or otherwise, would
constitute a default) under, or entitle any party (with the giving of notice,
the passage of time or otherwise) to terminate, accelerate or modify, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Falcon or Sub or any of Falcon's
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, contract, agreement, lease or other
instrument or obligation to which Falcon or Sub or any of its Falcon's
Subsidiaries is a party; (c) subject to the
17
matters set forth in the preceding sentence, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Falcon or Sub or
any of Falcon's Subsidiaries or any of the properties or assets of any of
them; or (d) give any governmental body or authority the right to revoke,
withdraw, suspend, cancel, terminate or modify any governmental authorization
held by Falcon or any of its Subsidiaries, except as would not, individually
or in the aggregate, have a Material Adverse Effect on Falcon.
Section 5.3 Financing. Falcon has obtained a commitment letter (the
"Commitment Letter") from financially responsible third parties providing for
sufficient funds to (a) pay the Per Share Amount pursuant to the Offer, (b)
pay the Merger Consideration pursuant to the Merger, and (c) pay all fees and
expenses in connection with this Agreement and the transactions contemplated
hereby.
Section 5.4 Offer Documents; Schedule 14D-9; Proxy Statement. None of the
Offer Documents nor any of the information supplied by Falcon or any of its
Subsidiaries in writing specifically for inclusion in the Schedule 14D-9
shall, at each of the times the Offer Documents, the Schedule 14D-9, and any
amendments or supplements thereto are filed with the SEC and are first
published, sent or given to stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as the case may
be, 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 made therein, in the light of the circumstances under which they
are made, not misleading. The information supplied in writing by Falcon
specifically for inclusion in the Proxy Statement or Information Statement
shall not, at each of the dates any such document (or any amendment or
supplement thereto) is first mailed to stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, with
respect to the Information Statement at the time Shares are accepted for
payment in the Offer, and with respect to the Proxy Statement at the time of
the Stockholders' Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading. Notwithstanding the
foregoing, Falcon and Sub make no representation or warranty with respect to
any of the foregoing documents based on information supplied by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any of its representatives. The Offer Documents shall comply in
all material respects as to form with the applicable requirements of the
Exchange Act and the applicable rules and regulations thereunder.
Section 5.5 Lack of Ownership of Shares. Neither Falcon nor any of its
Subsidiaries owns any Shares or other securities convertible into Shares.
Section 5.6 Solvency. Immediately after the Effective Time and after giving
effect to the changes in the Surviving Corporation's assets and liabilities as
a result of the Merger, neither Falcon nor the Surviving Corporation shall be
insolvent, have unreasonably small capital with which to engage in its
business, or have incurred debts beyond its ability to pay as they become due.
ARTICLE VI
COVENANTS AND AGREEMENTS
It is further agreed as follows:
Section 6.1 Conduct of Business by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. From the date hereof
and prior to the time the directors of Falcon have been elected to, and shall
constitute a majority of, the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ pursuant
to Section 1.3(a) or the date, if any, on which this Agreement is earlier
terminated pursuant to Section 8.1 (the "Termination Date"), and except as
specifically set forth in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Disclosure Schedule or as may be
agreed to in writing by Falcon hereto or as may be permitted pursuant to this
Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall, and shall cause each of its Subsidiaries to:
(a) conduct its operations in all material respects according to their
ordinary and usual course of business in substantially the same manner as
heretofore conducted;
18
(b) use reasonable best efforts to preserve intact its business
organization in all material respects, keep available the services of its
executive officers and key employees as a group, subject to changes in the
ordinary course, and maintain satisfactory relationships with suppliers,
distributors, customers and others having business relationships with them;
(c) confer at such times as Falcon may reasonably request with one or
more representatives of Falcon to report material operational matters and
the general status of ongoing operations (in each case to the extent Falcon
reasonably requires such information) and consult with Falcon regarding
material operational decisions;
(d) promptly notify Falcon of any emergency or other change in the
normal course of its businesses or in the operation of its properties and
of any complaints, investigations or hearings (or communications indicating
that the same may be contemplated) of any governmental body or authority;
(e) not authorize or pay any dividends on or make any distribution with
respect to its outstanding shares of stock;
(f) not, except as contemplated by Section 6.5 hereof or as may be
required by applicable law, enter into or amend any employment, severance
or similar agreements or arrangements with any of their directors or
executive officers;
(g) not (subject to the provisions of Section 6.8) authorize, announce
an intention to authorize, or enter into an agreement with respect to, any
merger, consolidation or business combination (other than this Agreement
and the transactions contemplated hereby), any acquisition of a material
amount of assets or securities, any disposition of a material amount of
assets or securities, or any release or relinquishment of any material
contract rights, in each case, not in the ordinary course of business;
(h) except pursuant to the Merger as provided for in Section 2.5, not
propose or adopt any amendments to its corporate charter or by-laws;
(i) not issue any shares of capital stock, except upon exercise of
options heretofore issued pursuant to existing employee plans, programs or
arrangements and non-employee director plans;
(j) not grant, confer or award any options, warrants, conversion rights
or other rights not existing on the date hereof to acquire any shares of
its capital stock;
(k) not purchase, redeem, or offer to purchase or redeem any shares of
its stock or any securities convertible into or exchangeable for shares of
stock, except for the deemed repurchase of options in accordance with
Section 3.5 of this Agreement, or purchases, redemptions and offers to
purchase in the ordinary course of business in connection with employee
incentive and benefit plans, programs or arrangements in existence on the
date hereof;
(l) not, except as contemplated by this Agreement or as may be required
by applicable law, amend in any material respect the terms of its employee
benefit plans, programs or arrangements or any severance or similar
agreements or arrangements in existence on the date hereof, enter into or
amend any employment or consulting agreement, adopt or enter into any new
employee benefit plans, programs or arrangements or any severance or
similar agreements or arrangements or increase the base salary of any
person who is a party to a Change of Control Employment Agreement or make
any payments under any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Benefit Plan to any director,
employee, independent contractor or consultant (except in the ordinary
course of business and in amounts and in a manner consistent with past
practice or as otherwise required by law or the provisions of such ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Benefit Plan);
(m) not (i) enter into any material loan agreement or incur any
indebtedness in excess of an aggregate of $100,000 or amend any ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ credit facility to increase the amount that may be borrowed
thereunder, (ii) make or enter into any agreement or contract for capital
expenditures in excess of $50,000, (iii) enter into any lease for any real
property in excess of $50,000 or any lease for personal property in excess
of $20,000 or (iv) enter into any agreement or contract outside of the
ordinary course of business that involves performance of services or
delivery of goods or materials of an amount or value in excess of $50,000;
19
(n) not make or change any material Tax election, file any amendment to
any federal income Tax Return unless required by law, enter into any
closing agreement, or settle or compromise any material Tax liability;
(o) not adjust, split, combine or reclassify its capital stock;
(p) not enter into any agreement, understanding or arrangement with
respect to the sale or voting of its capital stock;
(q) not create any new subsidiaries;
(r) except as required by this Agreement, not take any action which
could reasonably be expected to adversely affect or delay the ability of
any of the parties hereto to obtain any approval of any governmental or
regulatory body required to consummate the transactions contemplated
hereby;
(s) not directly or indirectly sell, transfer, lease, pledge, mortgage,
encumber or otherwise dispose of any material property or assets other than
in the ordinary course of business;
(t) not enter into any financial derivative contracts;
(u) not change in any material respect its accounting policies, methods
or procedures except as required by GAAP;
(v) except as may be required by this Agreement or applicable law, not
do any act or omit to do any act which would cause a breach of any
contract, commitment or obligation by which it is bound;
(w) except as otherwise permitted by Section 6.8, not take any action
which could cause the conditions to the Offer set forth on Annex A hereto
to not be satisfied;
(x) not, other than pursuant to this Agreement, take any action to cause
the shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Common Stock to cease to be quoted on any of
the stock exchanges on which such shares are now quoted;
(y) continue to provide training for employees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
its Subsidiaries commensurate with the training provided by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and its Subsidiaries over the past twelve months;
(z) subject to the limitations contained in this Agreement, continue the
level of recruiting activity and process employed over the past twelve
months;
(aa) not agree, in writing or otherwise, to take any of the foregoing
actions or take any action which would make any representation or warranty
contained in Article IV hereof (except for representations and warranties
made as of a specified date) untrue and incorrect in any material respect
as of the Effective Time;
(bb) not pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course of
business and consistent with past practice, of liabilities reflected or
reserved against in the March 31, 1999 balance sheet or subsequently
incurred in the ordinary course of business and consistent with past
practice; and
(cc) not settle or compromise any pending or threatened suit, action or
claim not covered by insurance (without giving effect to deductibles in
determining whether coverage exists) that is material or which relates to
the Agreement or any of the transactions contemplated thereby, including
the Offer and the Merger.
Section 6.2 Investigation. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall afford to Falcon and to
Falcon's officers, employees, accountants, counsel and other authorized
representatives full and complete access during normal business hours,
throughout the period prior to the earlier of the Effective Time or the
Termination Date, to its and its Subsidiaries' facilities, properties,
contracts, commitments, books, and records (including but not limited to tax
returns) and any report, schedule or other document filed or received by it
pursuant to the requirements of federal or state securities laws and shall use
its reasonable best efforts to cause its representatives to furnish promptly
such additional financial and operating data and other information as to the
businesses and properties of each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and each of its
Subsidiaries as may from time to time be reasonably requested; provided, that
nothing herein shall require ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries to
disclose any information to the other
20
that would cause a violation of any contractual confidentiality obligation.
The parties hereby agree that each of them will treat any such information in
accordance with the Confidentiality Agreement dated as of April 22, 1999,
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Falcon (the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Confidentiality
Agreement"). Notwithstanding any provision of this Agreement to the contrary,
no party shall be obligated to make any disclosure in violation of applicable
laws or regulations.
Section 6.3 Obligations of Falcon and Sub. Neither Falcon nor Sub or any of
their Subsidiaries shall take any action which would make any representation
or warranty contained in Article V hereof (except for representations and
warranties made as of a specific date) untrue or incorrect in any material
respect or cause any of the conditions to the Offer set forth in Annex A or
the conditions to the Merger set forth in Article VII not to be satisfied.
Section 6.4 [Intentionally Omitted]
Section 6.5 Employee Benefit Plans. Simultaneously with the consummation of
the Offer, Falcon shall take all actions necessary or appropriate with respect
to employees employed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries from and
after the purchase of any Shares pursuant to the Offer ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Employees") to accomplish the following:
(i) with respect to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Industries, Inc. Employees'
Pension Plan, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Industries, Inc. Salaried Employees'
Pension Plan, and the Sellers & ▇▇▇▇▇▇▇▇▇, Inc. Employees' Pension Plan,
each as amended and restated as of January 1, 1994, to allow ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Employees participating in any of such plans as of the Closing
Date to continue to participate in such plan (without amendment thereto,
except as may be required by applicable law) from and after the Closing
Date for a period of not less than three years thereafter; and
(ii) with respect to the employee benefit plans and programs maintained
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ immediately prior to the Closing Date other than the
plans identified in clause (i) and the Employee Stock Ownership Plan,
either, at the sole election of Falcon, to (A) allow ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Employees continue to participate from and after the Closing Date in such
plans or (B) permit ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Employees to immediately thereafter
participate in the employee benefit plans or programs maintained by Falcon
or any of its Subsidiaries for their employees generally (the "Falcon
Plans") other than Falcon's stock option plans or any employee stock
purchase plan meeting the requirements of Section 423 of the Code;
provided, however, that, if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ group health plan is
terminated or discontinued, Falcon shall permit each ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Employee and his or her eligible dependents (including, without limitation,
all such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Employee's dependents covered by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
group health plan as of the time such coverage ceases) to be covered under
a Falcon Plan that (x) provides medical and dental benefits to the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Employee and such eligible dependents effective immediately upon
the cessation of coverage of such individuals under ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ group
health plan, (y) credits such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Employee, for the year during
which such coverage under such Falcon Plan begins, with any deductibles and
co-payment already incurred during such year under ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ group
health plan, and (z) waives any preexisting condition restrictions to the
extent necessary to provide immediate coverage. Each of Falcon, the
Surviving Corporation, the Subsidiaries of each of them, and the Falcon
Plans shall recognize each ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Employee's years of service and
level of seniority with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries for purposes
of terms of employment and eligibility, vesting and benefit determination
under the Falcon Plans. The provisions of this Section 6.5 shall be
applicable only during an employee's employment with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Falcon or a Subsidiary of either of them and shall not constitute an
agreement to employ or continue the employment of any person.
Section 6.6 Filings; Other Action. Subject to the terms and conditions
herein provided, each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Falcon shall (a) as soon as
practicable, make the filings and thereafter make any other required
submissions under the HSR Act; (b) use reasonable efforts to cooperate with
one another in (i) determining whether any filings are required to be made
with, or consents, permits, authorizations or approvals are required to be
obtained from any third party, governmental or regulatory bodies or
authorities of federal, state and local jurisdictions in connection with the
execution and delivery of this Agreement and the consummation of the
21
transactions contemplated hereby and thereby, and (ii) timely making all such
filings and timely seeking all such consents, permits, authorizations or
approvals; and (c) use reasonable efforts to take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary, proper
or advisable to consummate and make effective the transactions contemplated
hereby, including, without limitation, taking all such further action as
reasonably may be necessary to resolve such objections, if any, as the Federal
Trade Commission, the Antitrust Division of the Department of Justice, state
antitrust enforcement authorities, or any other person may assert under
relevant antitrust or competition laws with respect to the transactions
contemplated hereby.
Section 6.7 Further Assurances. Each of the Parties shall use its
reasonable best efforts to take all action and to do all things necessary,
proper or advisable to consummate the transactions contemplated by this
Agreement (including, without limitation, using its reasonable efforts to
cause the conditions to the consummation of the Offer set forth in Annex A
hereto and the conditions to the Merger set forth in Article VII for which
they are responsible to be satisfied as soon as reasonably practicable and to
prepare, execute and deliver such further instruments and take or cause to be
taken such other and further action as any other party hereto shall reasonably
request). Without limiting the generality of the foregoing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
shall provide, and shall cause its employees and advisers to provide, all
necessary cooperation in connection with the arrangement of any financing to
be consummated contemporaneously with or at or after the consummation of the
transactions contemplated by this Agreement, including without limitation the
preparation of offering memoranda, private placement memoranda, prospectuses
and similar documents and the execution and delivery of those certificates or
documents required in connection therewith, such as any certificate of the
chief financial officer of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with respect to solvency matters,
comfort letters of accountants, and legal opinions as may be requested by
Falcon. All fees, costs and expenses incurred in connection therewith shall be
the responsibility of Falcon.
Section 6.8 No Solicitation.
(a) From the date hereof until the termination of this Agreement, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ will not, and shall not authorize or permit, any of its officers,
directors, employees, attorneys, financial advisors, agents or other
representatives or those of any of its Subsidiaries ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
Representatives") to, directly or indirectly, (a) solicit or initiate any
Takeover Proposal (as hereinafter defined), including without limitation by
disclosure of non-public information, or (b) engage in discussions or
negotiations relating to or accept any Takeover Proposal; provided, however,
that nothing contained in this Section 6.8 shall prohibit ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
its Board of Directors from (i) taking and disclosing a position with respect
to a tender offer by a third party pursuant to Rules 14d-9 and 14e-2(a)
promulgated by the SEC under the Exchange Act, or (ii) at any time prior to
the purchase of Shares pursuant to the Offer, engaging in discussions or
negotiations with, and furnishing information (including non-public
information) concerning ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries, and their
respective businesses, properties or assets to, any third party which makes a
Takeover Proposal (without any solicitation or initiation, directly or
indirectly, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Representatives
after the date of this Agreement) if the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
determines in good faith, based on advice of its outside counsel (who may be
its regularly engaged outside counsel), that the failure to take such action
will violate its obligations or duties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its stockholders
under applicable law, or (iii) provided this Agreement is terminated pursuant
to Section 8.1(d), accepting a Superior Proposal. Prior to furnishing
information to or entering into discussions or negotiations with any person,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall receive from such person or entity an executed
confidentiality agreement in reasonably customary form on terms not in the
aggregate materially more favorable to such person or entity than the terms
contained in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Confidentiality Agreement (as defined in Section
6.2 hereof). ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall immediately cease and cause to be
terminated any existing solicitation, initiation, encouragement, activity,
discussion or negotiation with any person conducted heretofore by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Representative with respect to any Takeover
Proposal existing on the date hereof. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agrees not to release
any third party from, or waive any provision of, any standstill agreement to
which it is a party or any confidentiality agreement between it and another
person who has made, or who may reasonably be considered likely to make, or
who was given access in order to consider making, a Takeover Proposal, unless
its Board of Directors determines in good faith, based on advice of its
outside counsel (who may be its regularly engaged outside counsel), that
failure to
22
take such action will violate its obligations or duties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
its stockholders under applicable law. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall notify Falcon
orally and in writing of any such Takeover Proposal received (including,
without limitation, the terms and conditions of any such proposal and the
identity of the person making it), within 24 hours of the receipt thereof, and
shall keep Falcon informed of the general status and any material changes in
the terms and conditions of such Takeover Proposal. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agrees to
promptly provide to Falcon any information concerning ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, its
Subsidiaries, business, properties or assets furnished to any third party
which makes a Takeover Proposal and which has not previously been provided to
Falcon.
(b) Except as set forth in this Section 6.8, neither the Board of Directors
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Falcon, the approval or
recommendation by the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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. Subject to compliance with all of the
applicable provisions of this Section 6.8, prior to the time of acceptance for
payment of Shares pursuant to the Offer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇' Board of Directors
may withdraw or modify its approval or recommendation of the Offer, this
Agreement or the Merger, approve or recommend a Superior Proposal, or enter
into an agreement with respect to a Superior Proposal, in each case at any
time after the third business day following Falcon's receipt of written notice
(including by facsimile) from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ advising Falcon that the Board
of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has received a Superior Proposal which it
intends to accept, specifying the material terms and conditions of such
Superior Proposal and identifying the person making such Superior Proposal,
but only if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have caused its financial and legal advisors
to negotiate with Falcon to make such adjustments to the terms and conditions
of this Agreement as would enable ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to proceed with the
transactions contemplated hereby on such adjusted terms.
(c) For purposes of this Agreement, "Takeover Proposal" means any bona fide
offer, proposal or other indication of interest regarding any of the following
(other than the transactions provided for in this Agreement): (i) any merger,
consolidation, share exchange, recapitalization, business combination or other
similar transaction involving ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its Subsidiaries; (ii)
any sale, lease, exchange, mortgage, pledge, transfer or other disposition of
a significant portion of the assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries,
taken as a whole, in a single transaction or series of related transactions
(other than sales of inventory or used equipment in the ordinary course of
business); (iii) any purchase of, or tender offer or exchange offer for, 20
percent or more of the outstanding shares of capital stock of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
by any person or the filing of a registration statement under the Securities
Act in connection therewith; or (iv) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage in any
of the foregoing. For purposes of this Agreement, "Superior Proposal" means an
unsolicited Takeover Proposal on terms which the Board of Directors of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ determines in good faith to be more favorable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'
stockholders than the Offer and the Merger (based on advice of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇'▇ independent financial advisor that the value of the consideration
provided for in such proposal is superior to the value of the consideration
provided for in the Offer and the Merger) for which financing, to the extent
required, is then committed or which, in the good faith reasonable judgment of
the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (based on advice from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇' independent financial advisor) is reasonably capable of being
financed by such third party provided that the Board of Directors of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ has also, among other things, duly considered the timing of such
Takeover Proposal and the likelihood that such Takeover Proposal will be
consummated.
Section 6.9 Public Announcements. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Falcon will consult
with each other before issuing any press release relating to this Agreement or
the transactions contemplated herein and shall not issue any such press
release prior to such consultation except as may be required by law or by
obligations pursuant to any listing agreement with any national securities
exchange.
Section 6.10 Indemnification and Insurance.
(a) Falcon and Sub agree that all rights to exculpation and indemnification
for acts or omissions occurring prior to the Effective Time now existing in
favor of the current or former directors or officers (the "Indemnified
23
Parties") of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as provided in its Certificate of Incorporation
or By-laws or in any agreement, in each case as in effect as of the date
hereof, shall survive the Merger and shall continue in full force and effect
in accordance with their terms without amendment thereof. For three years from
the Effective Time, Falcon shall indemnify the Indemnified Parties to the same
extent as such Indemnified Parties are entitled to indemnification pursuant to
the preceding sentence.
(b) For three years from the Effective Time, Falcon shall maintain in
effect ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ current directors' and officers' liability insurance
covering those persons who are currently covered by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
directors' and officers' liability insurance policies and shall purchase such
policy on or prior to the Closing Date; provided, however, that in no event
shall Falcon be required to expend in the aggregate an amount in excess of
150% of the annual premiums currently paid by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for such
insurance, and, provided, further, that if the aggregate premiums of such
insurance coverage exceed such amount, Falcon shall be obligated to obtain a
policy with the greatest coverage available for a cost not exceeding such
amount.
(c) Falcon shall use reasonable efforts to cause any person or entity that
purchases all or substantially all of the assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ within
three years after the Effective Time to become bound by the covenants
contained in this Section.
Section 6.11 Additional Reports. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall furnish to Falcon
copies of any reports of the type referred to in Section 4.4 which it files
with the SEC on or after the date hereof, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ represents and
warrants that as of the dates of each of such reports, such reports will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statement therein,
in light of the circumstances under which they were made, not misleading. Any
unaudited consolidated interim financial statements included in such reports
(including any related notes and schedules) will fairly present the financial
position of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its consolidated Subsidiaries as of the dates
thereof and the results of operations and changes in financial position or
other information included therein for the periods or as of the date then
ended (subject, where appropriate, to normal year-end adjustments), in each
case in accordance with past practice and GAAP consistently applied during the
periods involved (except as otherwise disclosed in the notes thereto).
Section 6.12 Notifications
(a) Between the date of this Agreement and the Closing Date, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ will promptly notify Falcon in writing if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ becomes
aware that any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ representations and warranties were
materially untrue as of the date of this Agreement or if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
becomes aware of any fact or condition that causes any of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇
representations or warranties to be materially untrue as of such date as if
made on and as of such date (except for representations and warranties made as
of a specified date, which need be true only as of such specified date).
During the same period, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will promptly notify Falcon of the
occurrence of any material breach of any covenant of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in this
Article VI or of the occurrence of any event that may make the satisfaction of
the conditions in Annex A hereto or Article VII impossible or unlikely.
(b) Between the date of this Agreement and the Closing Date, Falcon will
promptly notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in writing if Falcon becomes aware that any of
Falcon's representations and warranties were materially untrue as of the date
of this Agreement or if Falcon becomes aware of any fact or condition that
causes any of Falcon's representations or warranties to be materially untrue
as of such date as if made on and as of such date (except for representations
and warranties made as of a specified date, which need be true only as of such
specified date). During the same period, Falcon will promptly notify ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of the occurrence of any material breach of any covenant of Falcon in
this Article VI or of the occurrence of any event that may make the
satisfaction of the conditions in Annex A hereto or Article VII impossible or
unlikely.
Section 6.13 Employment Agreements. Simultaneously with the consummation of
the Offer, Falcon shall offer to each of Messrs. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇ ▇'▇▇▇▇
employment agreements in the form set forth in Schedule 6.13 of the attached
Disclosure Schedule.
24
Section 6.14 Termination of ESOP. Prior to the Effective time, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall take all actions necessary or appropriate to terminate the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Employee Stock Ownership Plan subject to and effective upon
the occurrence of the Effective Time.
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger. The
obligations of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the following conditions:
(a) Falcon shall have accepted for payment and paid for all Shares
validly tendered in the Offer and not withdrawn; provided, however, that
neither Falcon nor Sub may invoke this condition if Sub shall have failed
to purchase Shares so tendered and not withdrawn in violation of the terms
of this Agreement or the Offer.
(b) The holders of issued and outstanding shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Common Stock shall have duly approved the Merger in the manner, if any,
required by applicable law; provided that Falcon and Sub shall vote all of
their Shares in favor of the Merger.
(c) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
court or other tribunal or governmental body or authority which prohibits
the consummation of the transactions contemplated herein substantially on
the terms contemplated hereby. If any order, decree or injunction is
issued, each party shall use its reasonable efforts to remove any such
order, decree or injunction.
(d) Any waiting periods applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated and all consents
and authorizations shall have been obtained the failure to have obtained
which would violate any applicable law, rule, or regulation or have a
Material Adverse Effect.
(e) Sub shall have purchased Shares pursuant to the Offer.
ARTICLE VIII
TERMINATION, WAIVER, AMENDMENT AND CLOSING
Section 8.1 Termination or Abandonment. Notwithstanding anything contained
in this Agreement to the contrary, this Agreement may be terminated and
abandoned at any time prior to the Effective Time, whether before or after any
approval of the matters presented in connection with the Merger by the
stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
(a) by the mutual written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Falcon;
(b) (i) by either ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon if Shares shall not have
been purchased pursuant to the Offer on or before July 15, 1999 and (ii) by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ if after 90 days following the commencement of the Offer,
the conditions to the Offer have not been satisfied or waived and Sub shall
not have elected to extend the Offer; provided, that the party seeking to
terminate this Agreement pursuant to this Section 8.1(b) shall not have
breached in any material respect its obligations under this Agreement in
any manner that shall have proximately contributed to the failure to
purchase Shares pursuant to the Offer on or before such date;
(c) by either ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon if (i) a statute, rule,
regulation or executive order shall have been enacted, entered or
promulgated prohibiting the purchase of Shares pursuant to the Offer or the
consummation of the Merger substantially on the terms contemplated hereby
or (ii) an order, decree, ruling or injunction shall have been entered
permanently restraining, enjoining or otherwise prohibiting the purchase of
Shares pursuant to the Offer or consummation of the Merger substantially on
the terms contemplated hereby and such order, decree, ruling or injunction
shall have become final and non-
25
appealable; provided, that the party seeking to terminate this Agreement
pursuant to this Section 8.1(c)(ii) shall have used its reasonable best
efforts to remove such injunction, order or decree;
(d) by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ prior to the purchase of Shares pursuant to the
Offer if the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ determines in good faith
(based upon advice of its independent financial advisor and outside
counsel, as appropriate) that (i) a Takeover Proposal constitutes a
Superior Proposal and (ii) the failure to accept such Superior Proposal
will violate its obligations or duties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its
stockholders under applicable law, provided, that this Agreement shall not
terminate pursuant to this Section 8.1(d) unless (A) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ has
provided Falcon with two business days' prior written notice of its
intention to accept such Superior Proposal, together with a detailed
description of the terms and conditions of such Superior Proposal and (B)
simultaneously with such termination ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ enters into a
definitive acquisition, merger or similar agreement to effect such Superior
Proposal and pays the Termination Fee (as defined in Section 8.2(b))
required pursuant to Section 8.2(b);
(e) by either ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon prior to the purchase of any
Shares pursuant to the Offer if the other shall have breached, or failed to
comply with, in any material respect any of its obligations under this
Agreement or any representation or warranty made by such other party shall
have been untrue when made or as of the time of such termination as if made
on and as of such time (except for representations and warranties made as
of a specified date, which need be true only as of the specified date),
provided such breach, failure or misrepresentation is not cured prior to
the earlier of ten (10) days after notice thereof from the other party or
two (2) business days prior to the date upon which the Offer expires, and
with respect to any covenant or agreement or any representation or warranty
not qualified by "Material Adverse Effect," such breaches, failures or
misrepresentations, individually or in the aggregate, results or is
reasonably likely to result in a Material Adverse Effect on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
or Falcon, as the case may be;
(f) by Falcon (i) if the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any
committee of the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (A) shall withdraw,
modify or change in any adverse manner (including by amendment of the
Schedule 14D-9) to Falcon or Sub, or fail to reconfirm upon the request of
Falcon, its approval or recommendation of this Agreement, the Offer or the
Merger, (B) shall approve or recommend any Takeover Proposal, in each case,
other than by Falcon or an affiliate of Falcon, or (C) shall resolve to
take any of the actions specified in clauses (A) or (B) above;
(g) by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ if Sub fails to commence the Offer on or prior to
five business days following the date of initial public announcement of the
Offer, provided that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may not terminate this Agreement
pursuant to this Section 8.1(g) if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is at such time in
breach in any material respect of its obligations under this Agreement; or
(h) by either of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon if the Offer shall have been
terminated, or the Offer has expired without any Shares being purchased
therein; provided, however that the right to terminate this Agreement under
this Section 8.1(h) 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 termination of the Offer or the failure of Falcon or Sub,
as the case may be, to purchase Shares pursuant to the Offer on or prior to
such date; and provided, further, that no termination by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
shall be effective pursuant to Section 8.1(d) under circumstances in which
a Termination Fee would be payable by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ under Section 8.2
unless concurrently with such termination, such Termination Fee is paid in
full by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in accordance with the provisions of Section 8.2.
Section 8.2 Effect of Termination. If this Agreement is terminated as
provided in Section 8.1, and subject to the provisions of Section 9.1, this
Agreement (except for the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Confidentiality Agreement referred
to in Section 6.2) shall forthwith become void and there shall be no liability
on the part of any of the Parties, except (i) as set forth in this Section 8.2
and in Section 4.11, Section 5.4, Section 9.2, and Section 9.12 hereof, and
(ii) nothing herein shall relieve any party from liability for any willful
breach hereof.
(a) If (i) prior to the termination of this Agreement, any person shall
have commenced, publicly proposed or communicated to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a
Takeover Proposal and (X) the Minimum Condition shall not have been
26
satisfied, (Y) this Agreement shall have been terminated pursuant to Section
8.1(b)(c)(e) or (g), and (Z) prior to the first anniversary of such
termination ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall consummate with any third party any
transaction described in clauses (i), (ii), and (iii) of the definition of
"Takeover Proposal" contained in Section 6.8(c); or if (ii) this Agreement is
terminated by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon pursuant to Section 8.1(d) or Section
8.1(f), respectively; then, in any such event, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall pay to
Falcon a termination fee of $4,750,000 (the "Termination Fee"), which amount
shall be paid by wire transfer of immediately available funds to an account
designated by Falcon.
(b) (i) The Termination Fee payable to Falcon under Section 8.2(a)(i) shall
be paid promptly but in no event later than one business day after the last of
the specified events shall have occurred; and (ii) the Termination Fee payable
to Falcon under Section 8.2(a)(ii) shall be paid (A) in the case of a
termination by Falcon pursuant to Section 8.1(f), within three business days
after notice of termination, and (B) in the case of a termination by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ pursuant to Section 8.1(d), concurrently with such termination.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Falcon agree that the agreements contained in
Section 8.2(b) above are an integral part of the transactions contemplated by
this Agreement. If ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ fails to promptly pay to Falcon or Sub any
fee due under such Section 8.2(b), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall pay the costs and
expenses (including legal fees and expenses) in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid fee at the
publicly announced prime rate of [name of bank] from the date such fee was
required to be paid. If Falcon receives any fee pursuant to Section 8.2(b),
Falcon shall not assert or pursue in any manner, directly or indirectly, any
claim or cause of action against ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of its affiliates,
officers or directors based in whole or in part upon a breach of this
Agreement by them or their receipt, consideration, negotiation,
recommendation, or approval of a Takeover Proposal or the exercise by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of its right of termination under Section 8.1(d).
Section 8.3 Amendment or Supplement. Subject to applicable law, at any time
before or after approval of the matters presented in connection with the
Merger by the stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and prior to the Effective Time,
this Agreement may be amended or supplemented in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and Falcon with respect to any of the terms contained in this Agreement,
except that following approval by the stockholders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, no such
amendment or supplement shall reduce the amount or change the form of the
Merger Consideration, without further approval by the stockholders of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.
Section 8.4 Extension of Time, Waiver, Etc. At any time prior to the
Effective Time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Falcon may to the extent legally allowed:
(a) extend the time for the performance of any of the obligations or acts of
the other party; (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto; or (c) waive compliance with any of the agreements or
conditions of the other party contained herein. Notwithstanding the foregoing,
no failure or delay by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon in exercising any right
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right hereunder. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed each of the parties.
ARTICLE IX
MISCELLANEOUS
Section 9.1 No Survival of Representations and Warranties. None of the
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Merger,
except for the agreements set forth in Article I and Article II, the
provisions of Section 6.5, Section 6.7, and Section 6.10 and this Article IX.
Section 9.2 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby shall be paid by the party
27
incurring such expenses, and the filing fee required in connection with the
premerger notification under the HSR Act shall be paid by Falcon; provided,
that if Falcon terminates this Agreement other than as permitted under Section
8.1, Falcon shall pay all reasonable and customary expenses actually incurred
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its Subsidiaries in connection with the Offer, it being
understood and agreed that such payment shall not be in lieu of any other
remedy otherwise available to the Company as a result of such termination by
Falcon.
Section 9.3 Counterparts; Effectiveness. This Agreement may be executed in
two or more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument,
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered (by telecopy or otherwise) to the other
parties.
Section 9.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
Section 9.5 Notices. All notices and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when received if personally delivered; when
transmitted and the appropriate telecopy confirmation is received if
transmitted by telecopy or similar electronic transmission method; one working
day after it is sent, if sent by recognized expedited delivery service; and
five days after it is sent, if mailed, first class mail, certified mail,
return receipt requested, with postage prepaid. In each case notice shall be
sent to:
To ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Industries, Inc.
▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chairman of the Board and Chief Executive
Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Falcon:
Falcon Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may have specified in writing to the
other using the procedures specified above in this Section 9.5.
28
Section 9.6 Assignment; Binding Effect. 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. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 9.7 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
Section 9.8 Enforcement of Agreement. The parties hereto agree that money
damages or other remedy at law would not be sufficient or adequate remedy for
any breach or violation of, or a default under, this Agreement by them and
that in addition to all other remedies available to them, each of them shall
be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach, violation
or default and to any other equitable relief, including, without limitation,
specific performance, without bond or other security being required.
Section 9.9 Miscellaneous. This Agreement:
(a) along with the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Confidentiality Agreement and
Stockholder's Agreements constitutes the entire agreement, and supersedes
all other prior agreements and understandings, both written and oral,
between the parties, or any of them, with respect to the subject matter
hereof and thereof; and
(b) except for the provisions of Section 6.5, Section 6.10, and Section
6.13 hereof, which shall be enforceable by the persons who are to benefit
thereunder, is not intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
Section 9.10 Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
Section 9.11 Certain Defined Terms. References in this Agreement to
"Subsidiaries" of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon shall mean any corporation or
other form of legal entity of which more than 50% of the outstanding voting
securities or ownership are on the date hereof directly or indirectly owned by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon, as the case may be. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Disclosure
Schedule contains a full and complete list of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ Subsidiaries
as of the date hereof. References in this Agreement (except as specifically
otherwise defined) to "affiliates" shall mean, as to any person, any other
person which, directly or indirectly, controls, or is controlled by, or is
under common control with, such person. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management or policies of a person,
whether through the ownership of securities or partnership of other ownership
interests, by contract or otherwise. References in the Agreement to "person"
shall mean an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including, without limitation, a
governmental body or authority. References to "Principal Stockholders" means
each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇. References in this Agreement
to "knowledge" mean the actual knowledge of any of Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇ ▇'▇▇▇▇, in each case after due investigation.
Section 9.12 Finders or Brokers. Except for Lazard Freres with respect to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation with
respect to Falcon, neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ nor Falcon nor any Subsidiary of
either of them has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who might
be entitled to any fee or any commission in connection with or upon
consummation of the Merger.
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Industries, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
Falcon Products, Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and CEO
SY Acquisition, Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
30
ANNEX A
Certain Conditions of the Offer
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Sub's rights to extend the Offer (subject to the
provisions of the Merger Agreement), Sub 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 Sub'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 other restrictions referred to above, the payment for, any
tendered Shares, and may terminate the Offer and not accept for payment any
Shares, if (i) any applicable waiting period under the HSR Act has not expired
or terminated prior to the expirations of the Offer, (ii) the Minimum
Condition has not been satisfied, or (iii) at any time on or after the date of
the Merger Agreement and before the time of acceptance of Shares for payment
pursuant to the Offer, any of the following events shall have occurred.
(a) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Governmental
Entity, to the Offer or the Merger that (i) prohibits or imposes any
limitations on Falcon's or Sub's ownership or operation (or that of any of
their respective Subsidiaries or affiliates) of all or a portion of their or
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ businesses or assets, or to compel Falcon or Sub or their
respective Subsidiaries and affiliates to dispose of or hold separate any
portion of the business or assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon and their
respective subsidiaries, which prohibition, limitation, disposition or hold
separate obligation could reasonably be expected to have a Material Adverse
Effect on Falcon and its Subsidiaries, (ii) restrains or prohibits the making
or consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by the Agreement, (iii) imposes material
limitations on the ability of Sub, or renders Sub unable, to accept for
payment, pay for or purchase some or all of the Shares pursuant to the Offer
and the Merger or (iv) imposes material limitations on the ability of Sub or
Falcon 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ stockholders;
(b) (i) the Board of Directors of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any committee
thereof) shall have withdrawn, modified or changed in any adverse manner to
Falcon and Sub, or failed to reconfirm upon the request of Falcon, its
approval or recommendation of the Offer, the Merger, or the Agreement, or
shall have endorsed, approved or recommended any other Takeover Proposal or
(ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have entered into any agreement with respect to any
Superior Proposal in accordance with Section 8.1(d) of the Agreement;
(c) the representations and warranties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ set forth in the
Agreement shall not be true and correct, in each case (i) as of the date
referred to in any representation or warranty which addresses matters as of a
particular date, or (ii) as to all other representations and warranties, as of
the date of the Agreement and as of the scheduled expiration of the Offer, and
with respect to any representations or warranties not qualified by "Material
Adverse Effect," unless the inaccuracies under such representations and
warranties, taking all the inaccuracies under all such representations and
warranties together in their entirety, could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have failed to perform any obligation or to
comply with any agreement or covenant to be performed or complied with by it
under the Agreement other than any failure which would not have, either
individually or in the aggregate, a Material Adverse Effect on ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇;
(e) the Agreement shall have been terminated by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or Falcon
or Sub in accordance with its terms or Falcon or Sub shall have reached an
agreement or understanding in writing with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ providing for
termination or amendment of the Offer or delay in payment for the Shares,
which, in the reasonable judgment of Falcon and Sub, in any such case, and
regardless of the circumstances giving rise to any such conditions, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
of or payment for Shares;
31
(f) there shall have been an event, occurrence, development, or state of
circumstances or facts that is reasonably likely to have a Material Adverse
Effect on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; or
(g) any Person or "group" (as defined in Section 13(d)(3) of the Exchange
Act), other than Falcon, Sub, any affiliate of either of them, or any group of
which any of them is a member, shall have acquired or commenced a tender or
exchange offer to acquire beneficial ownership (as determined pursuant to Rule
13d-3 promulgated under the Exchange Act) of 20% or more of the Shares; or
(h) there shall have occurred and be continuing (1) any general suspension
of trading in, or limitation on prices for, securities on the New York Stock
Exchange, Inc., or any material disruption or material adverse change in the
financial or capital markets generally or for syndicated bank credits or high
yield securities similar to those of the Senior Facilities or Bridge Notes
referred to in the Commitment Letter, (2) the declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (3) the commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States and having had or being reasonably likely to have
a Material Adverse Effect or would restrain, prohibit or delay beyond the
Final Termination Date the consummation of the Offer, or (4) in the case of
any of the situations described in clauses (1) through (3) inclusive existing
at the date of this Agreement, a material acceleration, escalation or
worsening thereof.
The foregoing conditions (other than the Minimum Condition) are for the
sole benefit of Falcon and Sub and, subject to the Merger Agreement, may be
asserted by Falcon or Sub regardless of the circumstances giving rise to such
condition or may be waived by Falcon or Sub in whole or in part at any time
and from time to time in its sole discretion. The failure by Falcon or Sub 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.
32
