Exhibit 2
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EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 13, 2000
AMONG
MINOLTA-QMS, INC.,
MINOLTA CO., LTD.
AND
MINOLTA INVESTMENTS COMPANY
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TABLE OF CONTENTS
PAGE
ARTICLE I THE OFFER 1
SECTION 1.1 The Offer 1
SECTION 1.2 Company Actions 3
SECTION 1.3 SEC Documents 3
ARTICLE II THE MERGER 4
SECTION 2.1 The Merger 4
SECTION 2.2 Effective Time 5
SECTION 2.3 Closing of the Merger 5
SECTION 2.4 Effects of the Merger 5
SECTION 2.5 Certificate of Incorporation and Bylaws 5
SECTION 2.6 Directors 5
SECTION 2.7 Officers 6
ARTICLE III CONVERSION OF SHARES 6
SECTION 3.1 Conversion of Capital Stock 6
(a) Merger Sub Capital Stock 6
(b) Cancellation of Treasury Stock and Merger Sub-Owned Stock 6
(c) Exchange of Shares 6
SECTION 3.2 Exchange of Certificates 6
(a) Paying Agent 6
(b) Exchange Procedures 7
(c) Transfer Books; No Further Ownership Rights in Shares 7
(d) Termination of Fund; No Liability 7
(e) Lost Certificates 8
SECTION 3.3 Withholding Taxes 8
SECTION 3.4 Stock Options; Warrants 8
SECTION 3.5 Appraisal Rights 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY 10
SECTION 4.1 Organization and Qualification; Subsidiaries 10
SECTION 4.2 Capitalization of the Company and Its Subsidiaries 10
SECTION 4.3 Authority Relative to This Agreement; Stockholder Approval 11
SECTION 4.4 SEC Reports; Financial Statements 12
SECTION 4.5 No Undisclosed Liabilities 13
SECTION 4.6 Absence of Changes 13
SECTION 4.7 Schedule 14D-9; Offer Documents; Proxy Statement 13
SECTION 4.8 Consents and Approvals; No Violations 14
SECTION 4.9 No Default 14
SECTION 4.10 Litigation 15
SECTION 4.11 Compliance with Applicable Law 15
SECTION 4.12 Tax Matters 15
SECTION 4.13 Opinion of Financial Advisor 16
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 4.14 Brokers 16
SECTION 4.15 Takeover Statute; Dissenters' Rights 16
SECTION 4.16 Amendment to the Company Rights Agreement 16
ARTICLE V REPRESENTATION AND WARRANTIES OF PARENT AND MERGER SUB 17
SECTION 5.1 Organization 17
SECTION 5.2 Authority Relative to This Agreement 17
SECTION 5.3 Proxy Statement; Offer Documents 17
SECTION 5.4 Consents and Approvals; No Violations 18
ARTICLE VI COVENANTS RELATED TO CONDUCT OF BUSINESS 19
SECTION 6.1 Conduct of Business of the Company 19
SECTION 6.2 Access to Information 21
ARTICLE VII ADDITIONAL AGREEMENTS 22
SECTION 7.1 Company Stockholder Meeting, Proxy Statement 22
SECTION 7.2 Reasonable Best Efforts 23
SECTION 7.3 Acquisition Proposals 23
SECTION 7.4 Public Announcements 23
SECTION 7.5 Indemnification; Directors' and Officers' Insurance 24
SECTION 7.6 Notification of Certain Matters 25
SECTION 7.7 SEC Filings 26
SECTION 7.8 Obligations of Merger Sub 26
SECTION 7.9 Antitakeover Statutes 26
ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGER 26
SECTION 8.1 Conditions to Each Party's Obligations to Effect the Merger 26
ARTICLE IX TERMINATION; AMENDMENT; WAIVER 27
SECTION 9.1 Termination 27
SECTION 9.2 Effect of the Termination 28
SECTION 9.3 Fees and Expenses 28
SECTION 9.4 Amendment 29
SECTION 9.5 Extension; Waiver 29
ARTICLE X MISCELLANEOUS 29
SECTION 10.1 Nonsurvival of Representations and Warranties 29
SECTION 10.2 Entire Agreement; Assignment 29
SECTION 10.3 Notices 30
SECTION 10.4 Governing Law 31
SECTION 10.5 Descriptive Headings 31
SECTION 10.6 Parties in Interest 31
SECTION 10.7 Severability 31
SECTION 10.8 Specific Performance 31
SECTION 10.9 Counterparts 32
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 10.10 Interpretation 32
SECTION 10.11 Definitions 33
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Glossary of Defined Terms
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Defined Terms Defined in Section
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Acquiring Person.....................................................4.19
Acquisition Proposal.............................................10.11(a)
Audit Date............................................................4.5
beneficial ownership.............................................10.11(b)
beneficially own.................................................10.11(b)
Certificate of Merger..............................................2.2(a)
Certificates.......................................................3.2(b)
Closing...............................................................2.1
Closing Date..........................................................2.1
Code..................................................................3.3
Common Stock.....................................................Recitals
Company..........................................................Recitals
Company Board....................................................Recitals
Company Disclosure Schedule....................................Article IV
Company Option Plans...............................................3.4(b)
Company Permits......................................................4.11
Company Requisite Vote.............................................4.3(b)
Company Rights Agreement...........................................1.1(a)
Company SEC Reports...................................................4.4
Company Securities.................................................4.2(a)
Company Stock Option...............................................3.4(a)
Company Stockholder Meeting........................................7.1(a)
Covered Transactions.................................................4.15
DGCL..................................................................2.1
Dissenting Shares.....................................................3.5
Dissenting Stockholders...............................................3.5
Effective Time........................................................2.2
Exchange Act.......................................................1.1(a)
Financial Advisor..................................................1.2(a)
FTC................................................................7.2(b)
GAAP..................................................................4.4
Governmental Entity...................................................4.8
Indemnified Parties................................................7.5(a)
Indemnified Party..................................................7.5(a)
know.............................................................10.11(c)
knowledge........................................................10.11(c)
Law...................................................................4.9
Lien...............................................................4.2(b)
Material Adverse Effect..........................................10.11(d)
Merger................................................................2.1
Merger Consideration...............................................3.1(c)
Merger Sub.......................................................Recitals
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Defined Terms Defined in Section
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Offer..............................................................1.1(a)
Offer Documents....................................................1.3(a)
Offer Price........................................................1.1(a)
Offer to Purchase..................................................1.1(b)
Parent...........................................................Recitals
Paying Agent.......................................................3.2(a)
person...........................................................10.11(e)
Preferred Stock....................................................4.2(a)
Proxy Statement.......................................................4.7
Rights.............................................................1.1(a)
Schedule TO........................................................1.3(a)
Schedule 14D-9.....................................................1.3(a)
SEC................................................................1.1(c)
Securities Act........................................................4.4
Shares.............................................................1.1(a)
Special Committee................................................Recitals
Stock Acquisition Date...............................................4.16
subsidiary.......................................................10.11(f)
Surviving Corporation.................................................2.1
Takeover Statutes....................................................4.15
Taxes............................................................10.11(g)
Transactions.......................................................1.2(a)
Warrant...............................................................4.2
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of September 13, 2000, is
among Minolta-QMS, Inc., a Delaware corporation (the "COMPANY"), Minolta Co.,
Ltd., a Japanese corporation ("PARENT"), and Minolta Investments Company, a
Delaware corporation and a direct wholly owned subsidiary (as hereinafter
defined) of Parent ("MERGER SUB").
WHEREAS, Merger Sub beneficially owns approximately 57% of the
outstanding shares of common stock, par value $.01 per share (the "COMMON
STOCK"), of the Company; and
WHEREAS, it is proposed that Merger Sub make a cash tender offer to
acquire all outstanding shares of Common Stock not already owned by Merger Sub
including the associated Rights (as hereinafter defined) for $6.00 per share,
net to the seller in cash, upon the terms and subject to the conditions set
forth herein; and
WHEREAS, the Board of Directors of the Company (the "COMPANY BOARD"),
based on the unanimous recommendation of a special committee of independent
directors of the Company (the "SPECIAL COMMITTEE"), has (i) determined that each
of this Agreement, the Offer (as hereinafter defined) and the Merger (as
hereinafter defined) pursuant to which Merger Sub shall merge with and into the
Company, with the Company as the surviving corporation, is fair to and in the
best interests of the stockholders of the Company (other than Parent or Merger
Sub), (ii) resolved to approve the Offer, the Merger and this Agreement and the
transactions contemplated hereby and (iii) recommended acceptance of the Offer
and, if applicable, adoption of this Agreement by such stockholders of the
Company, subject to the terms and conditions set forth herein; and
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, Parent and Merger Sub hereby
agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer. (a) As promptly as practicable, Merger Sub shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT")) a tender offer (the "Offer") for all of
the outstanding shares of Common Stock (other than for shares owned by the
Parent or Merger Sub at the time of the Offer), including
the associated rights to purchase shares of Series A Participating Preferred
Stock of the Company (the "RIGHTS" and together with the Common Stock, the
"SHARES") pursuant to the Rights Agreement, dated as of March 8, 1999, between
the Company and South Alabama Trust Company, Inc., as Rights Agent (the "COMPANY
RIGHTS AGREEMENT"), at a price of $6.00 per Share, net to the seller in cash
(such price, or such higher price per Share as may be paid in the Offer, being
referred to herein as the "OFFER PRICE"), subject to the conditions set forth in
Annex A hereto.
(b) The obligations of Merger Sub to commence the Offer and to accept
for payment and to pay for any Shares validly tendered on or prior to the
expiration of the Offer and not withdrawn shall be subject only to the
conditions set forth in Annex A hereto. The Offer shall be made by means of an
offer to purchase (the "OFFER TO PURCHASE") containing the terms set forth in
this Agreement and the conditions set forth in Annex A hereto. Merger Sub shall
not, without the prior written consent of the Company, (i) terminate the Offer,
except in accordance with the terms of Annex A attached hereto or (ii) extend
the expiration of the Offer except as specifically provided herein.
(c) Merger Sub expressly reserves the right to modify the terms of the
Offer; provided, that, without the Company's prior written consent, Merger Sub
shall not decrease the Offer Price or decrease the number of Shares sought,
change the form of consideration or amend any other condition of the Offer in
any manner adverse to the holders of the Shares (other than with respect to
insignificant changes or amendments and subject to the penultimate sentence of
this Section 1.1(c)) or impose additional conditions without the prior written
consent of the Company; provided further, however, that, if on the initial
scheduled expiration date of the Offer, which shall be 20 business days after
the date that the Offer is commenced, all conditions to the Offer shall not have
been satisfied or waived, Merger Sub may, from time to time until such time as
all such conditions are satisfied or waived, in its sole discretion, extend the
expiration date; provided, however, that the expiration date of the Offer may
not be extended beyond 60 calendar days after commencement of the Offer. In
addition, the Offer Price may be increased and the Offer may be extended to the
extent required by applicable Law (as hereinafter defined) in connection with
such increase, in each case without the consent of the Company. If, immediately
prior to the initial expiration date of the Offer, the Shares validly tendered
and not withdrawn pursuant to the Offer together with the Shares beneficially
owned by Parent or Merger Sub equal less than 90% of the outstanding Shares,
Merger Sub may extend the Offer for a period not to exceed 20 business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer. In addition, Merger Sub may make available a
"subsequent offering period," in accordance with Rule 14d-11 of the United
States Securities and Exchange Commission (the "SEC"), of not greater than 20
business days. On the terms and subject to the prior satisfaction or waiver of
the conditions of the Offer and this Agreement, Merger Sub shall, and
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Parent shall cause Merger Sub to, accept for payment and pay for all Shares
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after the expiration of the Offer.
SECTION 1.2 Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents that the Company Board, based on the
unanimous recommendation of the Special Committee, has (i) determined that each
of the Agreement, the Offer and the Merger (as hereinafter defined) are
advisable and fair to, and in the best interests of, the stockholders of the
Company (other than Parent or Merger Sub), (ii) received the opinion of The
Xxxxxxxx-Xxxxxxxx Company, LLC, financial advisor to the Company (the "FINANCIAL
ADVISOR"), to the effect that, subject to the assumptions therein stated, the
Offer Price to be received by holders of Shares pursuant to the Offer and the
Merger Consideration (as hereinafter defined) pursuant to the Merger is fair to
the stockholders of the Company (other than Parent or Merger Sub) from a
financial point of view, (iii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (collectively, the
"TRANSACTIONS") and (iv) resolved to recommend that the stockholders of the
Company (other than Parent or Merger Sub) accept the Offer, tender their Shares
thereunder to Merger Sub and approve and adopt this Agreement and the Merger.
The Company has been advised by each of its directors and by each executive
officer who as of the date hereof is actually aware (to the knowledge of the
Company) of the Transactions that each such person either intends to tender
pursuant to the Offer all Shares owned by such person or vote all Shares owned
by such person in favor of the Merger.
(b) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to Merger Sub mailing labels, security position listings
and any available listings or computer files containing the names and addresses
of all holders of record of the Shares as of a recent date, and shall furnish
Merger Sub with such additional information (including, but not limited to,
updated lists of holders of the Shares and their addresses, mailing labels and
lists of security positions) and such assistance as Merger Sub or its agents may
reasonably request in communicating the Offer to the record and beneficial
holders of the Shares. Subject to the requirements of applicable Law, and except
for such steps as are necessary to disseminate the Offer Documents (as
hereinafter defined) and any other documents necessary to consummate the Merger,
Merger Sub and its affiliates and associates shall hold in confidence the
information contained in any such labels, listings and files and all other
information delivered pursuant to this Section 1.2(b), will use such information
only in connection with the Offer and the Merger and, if this Agreement shall be
terminated, will deliver to the Company all copies, extracts or summaries of
such information in their possession or the possession of their agents.
SECTION 1.3 SEC Documents. (a) On the date the Offer is commenced,
Parent and Merger Sub shall file with SEC (i) a Tender Offer Statement on
Schedule TO in accordance with the Exchange Act with respect to the Offer
(together with all amendments and supplements thereto and including the exhibits
thereto, the "SCHEDULE TO") and (ii) together with the Company, a Rule 13e-3
Transaction Statement on Schedule 13E-3 with respect to the Offer which shall be
filed as part of the Schedule TO. The Schedule TO will include, as exhibits, the
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Offer to Purchase and a form of letter of transmittal (collectively, together
with any amendments and supplements thereto, the "OFFER DOCUMENTS").
Concurrently with the filing of the Schedule TO by Parent and Merger Sub, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 in accordance with the Exchange Act (together with all amendments
and supplements thereto and including the exhibits thereto, the "SCHEDULE
14D-9"), which shall, except as otherwise provided herein, contain the
recommendation referred to in clause (iv) of Section 1.2(a) hereof.
(b) Parent and Merger Sub will take all steps necessary to ensure that
the Offer Documents, and the Company will take all steps necessary to ensure
that the Schedule 14D-9, will comply in all material respects with the
provisions of applicable Federal and state securities Laws. The information
provided and to be provided by Parent, Merger Sub or the Company for use in the
Schedule TO, the Offer Documents and the Schedule 14D-9 shall not, on the date
first filed with the SEC or first published, sent or provided to stockholders,
as the case may be, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Each of Parent and Merger Sub will take all steps
necessary to cause the Offer Documents, and the Company will take all steps
necessary to cause the Schedule 14D-9, to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable Federal and state securities Laws. Each of Parent and
Merger Sub, on the one hand, and the Company, on the other hand, will promptly
correct any information provided by it for use in the Offer Documents and the
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and Merger Sub will take all steps necessary
to cause the Offer Documents, and the Company will take all steps necessary to
cause the Schedule 14D-9, as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable Federal and state securities Laws. Parent and its counsel
shall be given a reasonable opportunity to review and comment upon the Schedule
14D-9 and all amendments and supplements thereto prior to their filing with the
SEC or dissemination to stockholders of the Company. The Company agrees to
provide Parent and its counsel with copies of any written comments that the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments and each of Parent
and Merger Sub agrees to provide the Company and its counsel with copies of any
written comments that Parent, Merger Sub or their counsel may receive from the
SEC or its staff with respect to the Offer Documents promptly after the receipt
of such comments.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger. At the Effective Time (as hereinafter defined)
and upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Merger Sub
shall be merged with and into the Company (the "MERGER"). Following the Merger,
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the Company shall continue as the surviving corporation (the "SURVIVING
CORPORATION") and the separate corporate existence of Merger Sub shall cease.
SECTION 2.2 Effective Time. Subject to the provisions of this
Agreement, Parent, Merger Sub and the Company shall cause the Merger to be
consummated by filing an appropriate Certificate of Merger or, if applicable, a
Certificate of Ownership and Merger, or other appropriate documents (as
applicable, the "CERTIFICATE OF MERGER") with the Secretary of State of the
State of Delaware in such form as required by, and executed in accordance with,
the relevant provisions of the DGCL, as soon as practicable on or after the
Closing Date (as hereinafter defined). The Merger shall become effective upon
such filing or at such time thereafter as is provided in the Certificate of
Merger (the "EFFECTIVE TIME").
SECTION 2.3 Closing of the Merger. The closing of the Merger (the
"CLOSING") will take place at a time and on a date to be specified by the
parties (the "CLOSING DATE"), which shall be no later than the second business
day after satisfaction or waiver of the conditions set forth in Article VIII
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions), at the
offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other time, date or place as agreed to in writing by the
parties hereto.
SECTION 2.4 Effects of the Merger. The Merger shall have the effects
set forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 2.5 Certificate of Incorporation and Bylaws. The certificate of
incorporation of Merger Sub in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation, except that the name
of the Surviving Corporation shall be Minolta-QMS, Inc., until amended in
accordance with applicable Law. The bylaws of the Merger Sub in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable Law.
SECTION 2.6 Directors. The directors of Merger Sub at the Effective
Time shall be the initial directors of the Surviving Corporation, to hold office
in accordance with the certificate of incorporation and bylaws of the Surviving
Corporation until their successors are duly elected or appointed and qualified
or until their earlier death, resignation or removal; provided, however, that
immediately following the Effective Time, the Board of Directors of the
Surviving Corporation shall be comprised of those individuals set forth on
Schedule 2.6 hereto and shall include Xxxxxx X. Xxxxxxx and Shoei Yamana.
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SECTION 2.7 Officers. The officers of the Company at the Effective Time
shall be the initial officers of the Surviving Corporation, to hold office in
accordance with the certificate of incorporation and bylaws of the Surviving
Corporation until their successors are duly elected or appointed and qualified
or until their earlier death, resignation or removal.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the merger and without any action on the part of the holders of any
Shares or any shares of capital stock of Merger Sub:
(a) Merger Sub Capital Stock. Each issued and outstanding share of
common stock, par value $.01 per share, of Merger Sub shall be converted into
and become one fully paid and nonassessable share of common stock, par value
$.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Merger Sub-Owned Stock. All
Shares that are owned by the Company or any subsidiary of the Company and any
Shares owned by Parent, Merger Sub or any subsidiary of Parent or Merger Sub
shall be cancelled and retired and shall cease to exist and no consideration
shall be delivered in exchange therefor.
(c) Exchange of Shares. Each issued and outstanding Share (other than
Shares to be cancelled in accordance with Section 3.1(b) and Dissenting Shares
(as hereinafter defined)) shall be converted into the right to receive the Offer
Price in cash, without interest (the "MERGER CONSIDERATION"). All such Shares,
when so converted, shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration therefor upon the
surrender of such certificate in accordance with Section 3.2, without interest.
SECTION 3.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall designate a
bank, trust company or other person, reasonably acceptable to the Company, to
act as agent for the holders of the Shares in connection with the Merger (the
"PAYING AGENT") to receive the funds to which holders of the Shares shall become
entitled pursuant to Section 3.1(c). Parent shall, from time to time, make
available to the Paying Agent funds in amounts and at times necessary for the
prompt payment of the Merger Consideration as provided herein. All interest
earned on such funds shall be paid to Parent.
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(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of a certificate or certificates which immediately prior to the Effective
Time represented outstanding Shares (the "CERTIFICATES") whose Shares were
converted into the right to receive the Merger Consideration pursuant to Section
3.1, (i) a letter of transmittal (which shall specify that delivery shall be
effective, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Paying Agent and shall be in such form not
inconsistent with this Agreement as Parent may specify) and (ii) instructions
for use in surrendering the Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent, together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, Parent shall cause
the Paying Agent to pay to the holder of such Certificate the Merger
Consideration, and the Certificate so surrendered shall forthwith be cancelled.
In the event of a surrender of a Certificate representing Shares which are not
registered in the transfer records of the Company under the name of the person
surrendering such Certificate, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
Taxes (as hereinafter defined) required by reason of payment to a person other
than the registered holder of such Certificate or establish to the satisfaction
of the Paying Agent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 3.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration which the holder thereof
has the right to receive in respect of such Certificate pursuant to the
provisions of this Article III. No interest shall be paid or will accrue on the
Merger Consideration payable to holders of Certificates pursuant to the
provisions of this Article III.
(c) Transfer Books; No Further Ownership Rights in Shares. At the
Effective Time, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of the Shares on
the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares outstanding immediately prior to
the Effective Time shall cease to have rights with respect to such Shares,
except as otherwise provided for herein or by applicable Law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this Article III.
(d) Termination of Fund; No Liability. At any time following six months
after the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any funds (including any interest received
with respect thereto) which had been made available to the Paying Agent and
which have not been disbursed to holders of Certificates, and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar Laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
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their Certificates, without any interest thereon. Notwithstanding the foregoing,
none of Parent, the Surviving Corporation or the Paying Agent shall be liable to
any holder of a Certificate for Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
(e) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent shall pay in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration pursuant to this Agreement.
SECTION 3.3 Withholding Taxes. Parent and Merger Sub shall be entitled
to deduct and withhold, or cause the Paying Agent to deduct and withhold, from
the Offer Price or the Merger Consideration payable to a holder of Shares
pursuant to the Offer or the Merger any withholding and stock transfer Taxes and
such amounts as are required under the Internal Revenue Code of 1986, as amended
(the "CODE"), or any applicable provision of state, local or foreign Tax law.
Parent shall take appropriate steps to minimize such Taxes. To the extent that
amounts are so withheld by Parent or Merger Sub, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the Shares in respect of which such deduction and withholding was made by Parent
or Merger Sub.
SECTION 3.4 Stock Options; Warrants. (a) Immediately prior to the
Effective Time, each then outstanding option to purchase any shares of capital
stock of the Company (in each case, a "COMPANY STOCK OPTION"), whether or not
then exercisable, shall be cancelled by the Company and, in consideration of
such cancellation, the Company (or, at Parent's option, Merger Sub) shall pay to
such holders of Company Stock Options an amount in respect thereof equal to the
product of (A) the excess, if any, of the Offer Price over the exercise price of
each such Company Stock Option and (B) the number of Shares previously subject
to the Company Stock Option immediately prior to its cancellation (such payment
to be net of withholding taxes and without interest).
(b) The Company shall take all actions necessary and appropriate so
that all stock options or other equity based plans maintained with respect to
the Shares, including, without limitation, the plans listed in Section 4.2
hereof ("COMPANY OPTION PLANS"), shall terminate as of the Effective Time and
the provisions in any other benefit plan providing for the issuance, transfer or
grant of any capital stock of the Company or any interest in respect of any
capital stock of the Company shall be deleted as of the Effective Time, and the
Company shall use its best efforts to ensure that following the Effective Time
no holder of a Company Stock Option or any participant in any Company Option
Plan shall have any right thereunder to acquire any capital stock of the
Company, Parent, Merger Sub or the Surviving Corporation.
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(c) Prior to the Effective Time, the Company shall (i) obtain all
necessary consents from, and provide (in a form acceptable to Parent) any
required notices to, holders of Company Stock Options and (ii) amend the terms
of the applicable Company Option Plan, in each case as is necessary to give
effect to the provisions of paragraphs (a) and (b) of this Section 3.4.
(d) Immediately prior to the Effective Time, the Warrant (as
hereinafter defined) shall be cancelled by the Company and, pursuant to the
terms of the Warrant, and except to the extent that Parent or Merger Sub and the
holder of the Warrant otherwise agree, the holder of the Warrant shall have the
right to receive, in lieu of the Shares theretofore purchasable upon the
exercise of the Warrant an amount in respect thereof equal to the product of (A)
the excess, if any, of the Offer Price over the exercise price of the Warrant
and (B) the number of Shares previously subject to such Warrant immediately
prior to its cancellation (such payment to be net of withholding taxes and
without interest). The Company shall obtain the consent of the holder of the
Warrant to the transactions contemplated by this Section 3.4(d) no later than
the Effective Time in a form acceptable to Parent. The Company shall provide to
the holder of the Warrant any required notice (in a form acceptable to Parent)
under the Warrant.
SECTION 3.5 Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, Shares (the "DISSENTING SHARES") that are issued and
outstanding immediately prior to the Effective Time and 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
STOCKHOLDERS") shall not be converted into or be exchangeable for the right to
receive the Merger Consideration, unless 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 Dissenting Stockholder shall have failed to
perfect or shall have effectively withdrawn or lost such right, such holder's
Shares shall thereupon be converted into and become exchangeable for the right
to receive, as of the Effective Time, the Merger Consideration without any
interest thereon. The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any Shares, attempted withdrawals of such demands and
any other instruments served pursuant to the DGCL and received by the Company
relating to stockholders' rights of appraisal, and (ii) the opportunity to
direct all negotiations and proceedings with respect to demands for appraisal
under the DGCL. Neither the Company nor the Surviving Corporation shall, except
with the prior written consent of Parent, voluntarily make any payment with
respect to, or settle or offer to settle, any such demand for payment. If any
Dissenting Stockholder shall fail to perfect or shall have effectively withdrawn
or lost the right to dissent, the Shares held by such Dissenting Stockholder
shall thereupon be treated as though such Shares had been converted into the
right to receive the Merger Consideration pursuant to Section 3.1(c).
9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as set forth in the disclosure schedule delivered by the Company
to Parent prior to the execution of this Agreement (the "COMPANY DISCLOSURE
SCHEDULE") (each section of which qualifies the correspondingly numbered
representation and warranty or covenant to the extent specified therein), the
Company hereby represents and warrants to each of Parent and Merger Sub as
follows:
SECTION 4.1 Organization and Qualification; Subsidiaries. (a) The
Company and each of its subsidiaries, is a corporation or legal entity duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has all requisite corporate, partnership
or similar power and authority to own, lease and operate its properties and to
carry on its businesses as now conducted and proposed by the Company to be
conducted. Each of the Company and its subsidiaries is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing does not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
SECTION 4.2 Capitalization of the Company and Its Subsidiaries. (a) The
authorized capital stock of the Company, immediately prior to the Closing, will
consist of (i) 25,000,000 Shares of which, as of the date hereof, 13,266,131 are
issued and outstanding and (ii) 500,000 shares of Preferred Stock, no par value,
of which (A) 250,000 shares have been designated Series A Participating
Preferred Stock and reserved for issuance upon the exercise of the Rights
distributed to the holders of the Common Stock pursuant to the Company Rights
Agreement and (B) none of which are issued and outstanding as of the date
hereof. All issued and outstanding Shares (i) have been duly authorized and
validly issued, (ii) are fully paid and non-assessable, (iii) were issued in
compliance with all applicable federal and state Laws concerning the issuance of
securities and (iv) are free of preemptive rights. As of the date hereof, (i)
2,599,468 Shares were reserved for issuance and issuable upon or otherwise
deliverable in connection with the exercise of outstanding options issued to
directors, officers, employees and consultants pursuant to the Company's stock
option plans (the "Company Stock Options") and (ii) 100,000 Shares were reserved
for issuance and issuable upon or otherwise deliverable in connection with the
exercise of the warrant (the "WARRANT") to purchase 100,000 Shares, exercisable
until December 31, 2001 at an exercise price of $3.181, issued to INK (AL) QRS:
12-21, Inc. Except as and to the extent publicly disclosed by the Company in the
Company SEC Reports (as hereinafter defined), since March 23, 2000, no shares of
the Company's capital stock have been issued other than pursuant to Company
Stock Options already in existence on such date, and, since July 13, 2000, no
Company Stock Options have been granted. Except as set forth above, as of the
10
date hereof, there are outstanding (i) no shares of capital stock or other
voting securities of the Company; (ii) no securities of the Company or any of
its subsidiaries convertible into or exchangeable for shares of capital stock or
voting securities of the Company; (iii) except for the Company Rights Agreement,
no options or other rights to acquire from the Company or any of its
subsidiaries, and no obligations of the Company or any of its subsidiaries to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company; and (iv) no
equity equivalents, interests in the ownership or earnings of the Company or any
of its subsidiaries or other similar rights (including stock appreciation
rights) (collectively, "COMPANY SECURITIES"). There are no outstanding
obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities. There are no stockholder agreements,
voting trusts or other agreements or understandings to which the Company or any
of its subsidiaries is a party or to which it is bound relating to the voting of
any shares of capital stock of the Company. Section 4.2 of the Company
Disclosure Schedule sets forth information regarding the current exercise price,
date of grant and number granted of Company Stock Options for each holder
thereof. Following the Effective Time, no holder of Company Stock Options will
have any right to receive shares of common stock of the Surviving Corporation
upon exercise of the Company Stock Options.
(b) All of the outstanding capital stock of the Company's subsidiaries
is owned by the Company, directly or indirectly, free and clear of any Lien (as
hereinafter defined) or any other limitation or restriction (including any
restriction on the right to vote or sell the same, except as may be provided as
a matter of Law). There are no securities of the Company or its subsidiaries
convertible into or exchangeable for, no options or other rights to acquire from
the Company or its subsidiaries, and no other contract, understanding,
arrangement or obligation (whether or not contingent) providing for the issuance
or sale, directly or indirectly of, any capital stock or other ownership
interests in, or any other securities of, any subsidiary of the Company. There
are no outstanding contractual obligations of the Company or its subsidiaries to
repurchase, redeem or otherwise acquire any outstanding shares of capital stock
or other ownership interests in any subsidiary of the Company. For purposes of
this Agreement, "LIEN" means, with respect to any asset (including, without
limitation, any security) any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
SECTION 4.3 Authority Relative to This Agreement; Stockholder Approval.
(a) The Company has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
No other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
(other than, with respect to the Merger and this Agreement, the Company
Requisite Vote (as hereinafter defined)). This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid, legal and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
11
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principals of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(b) The Company Board has, by unanimous vote of those present and
acting on the unanimous recommendation of the Special Committee, duly and
validly authorized the execution and delivery of this Agreement and approved the
consummation of the transactions contemplated hereby, and taken all corporate
actions required to be taken by the Company Board for the consummation of the
transactions, including the Offer and the Merger, contemplated hereby and has
resolved (i) to deem this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, taken together, advisable and fair to, and
in the best interests of, the Company and its stockholders (other than Parent or
Merger Sub); and (ii) to recommend that the stockholders of the Company approve
and adopt this Agreement. The Company Board has directed that this Agreement, to
the extent required, be submitted to the stockholders of the Company for their
approval. The affirmative approval of the holders of Shares representing a
majority of the votes that may be cast by the holders of all outstanding Shares
(voting as a single class) as of the record date for the Company (the "COMPANY
REQUISITE VOTE") is the only vote of the holders of any class or series of
capital stock of the Company necessary to adopt this Agreement and approve the
transactions contemplated hereby, including the Offer and the Merger.
SECTION 4.4 SEC Reports; Financial Statements. The Company has filed
all required forms, reports and documents with the SEC since October 3, 1997,
each of which has complied in all material respects with all applicable
requirements of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and the Exchange Act, each as in effect on the dates such forms, reports and
documents were filed. The Company has heretofore delivered to Parent, in the
form filed with the SEC (including any amendments thereto), (i) its Annual
Reports on Form 10-K for each of the fiscal years ended on or after October 3,
1997; (ii) all definitive proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held since October 3, 1997; and (iii)
all other reports or registration statements filed by the Company with the SEC
since October 3, 1997 (the "COMPANY SEC REPORTS"). None of such forms, reports
or documents, including, without limitation, any financial statements or
schedules included or incorporated by reference therein, contained, when filed,
any untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of the Company
included in the Company SEC Reports complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto and fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis ("GAAP") (except as
may be indicated in the notes thereto), the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for the
12
periods then ended (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments). Except as and to the extent
publicly disclosed by the Company in the Company SEC Reports filed prior to the
date hereof, since December 31, 1991, there has not been any change, or any
application or request for any change, by the Company or any of its subsidiaries
in accounting principles, methods or policies for financial accounting or Tax
purposes (subject, in the case of the unaudited interim financial statements, to
normal year-end adjustments).
SECTION 4.5 No Undisclosed Liabilities. Except as and to the extent
publicly disclosed by the Company in the Company SEC Reports filed prior to the
date hereof or reflected in written information provided to the Company Board or
to representatives of Parent after August 10, 1999 and prior to the date hereof,
as of December 31, 1999 (the "AUDIT DATE"), none of the Company or its
subsidiaries has any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, and whether due or to become due or asserted
or unasserted, which would be required by GAAP to be reflected in, reserved
against or otherwise described in the consolidated balance sheet of the Company
(including the notes thereto) or which do or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
SECTION 4.6 Absence of Changes. Except as and to the extent publicly
disclosed by the Company in the Company SEC Reports filed as of the date hereof
or reflected in written information provided to the Company Board or to
representatives of Parent after August 10, 1999 and prior to the date hereof,
since the Audit Date the business of the Company and its subsidiaries has been
carried on only in the ordinary and usual course consistent with past practice,
none of the Company or its subsidiaries has incurred any liabilities of any
nature, whether or not accrued, contingent or otherwise, which do or which would
reasonably be expected to have, and there have been no events, changes or
effects with respect to the Company or its subsidiaries, which do or which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
SECTION 4.7 Schedule 14D-9; Offer Documents; Proxy Statement. Neither
the Schedule 14D-9, any other document required to be filed by the Company with
the SEC in connection with the Transactions, nor any information supplied by the
Company for inclusion in the Offer Documents shall, at the respective times the
Schedule 14D-9, any such other filings by the Company, the Offer Documents or
any amendments or supplements thereto are filed with the SEC or are first
published, sent or given to stockholders of the Company, 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 light of the circumstances under which they are made, not
misleading. The proxy statement (the "PROXY STATEMENT") relating to the Company
Stockholder Meeting (as hereinafter defined) to be held in connection with the
Merger, if required to be held pursuant to applicable Law will not, on the date
the Proxy Statement (including any amendment or supplement thereto) is first
mailed to stockholders of the Company, contain any untrue statement of a
13
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 light of the
circumstances under which they are made, not misleading or shall, at the time of
the Company Stockholder Meeting or at the Effective Time, omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Company Stockholder Meeting
which shall have become false or misleading in any material respect. The
Schedule 14D-9, any other document required to be filed by the Company with the
SEC in connection with the Transactions and the Proxy Statement will, when filed
by the Company with the SEC, comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to the statements made in any of the foregoing
documents based on and in conformity with information supplied in writing by or
on behalf of Parent or Merger Sub specifically for inclusion therein.
SECTION 4.8 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Exchange Act, state securities or blue sky
Laws, the filing and recordation of the Certificate of Merger as required by the
DGCL and as otherwise set forth in Section 4.8 to the Company Disclosure
Schedule, no filing with or notice to, and no permit, authorization, consent or
approval of, any court or tribunal or administrative, governmental or regulatory
body, agency or authority (a "GOVERNMENTAL ENTITY") is necessary for the
execution and delivery by the Company of this Agreement or the consummation by
the Company of the transactions contemplated hereby, except where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings or give such notice does not and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company. Neither the execution, delivery and performance of this Agreement by
the Company nor the consummation by the Company of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of the
respective certificate or articles of incorporation or bylaws (or similar
governing documents) of the Company or any of its subsidiaries, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound, or (iii) violate any Law applicable to the
Company or any of its subsidiaries or any of their respective properties or
assets, except in the case of (ii) or (iii) for violations, breaches or defaults
which do not or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company.
SECTION 4.9 No Default. Neither the Company nor any of its subsidiaries
are in violation of any term of (i) its certificate of incorporation, bylaws or
14
other organizational documents, (ii) any agreement or instrument related to
indebtedness for borrowed money or any other agreement to which it is a party or
by which it is bound, or (iii) any foreign or domestic law, order, writ,
injunction, decree, ordinance, award, stipulation, statute, judicial or
administrative doctrine, rule or regulation entered by a Governmental Entity
("LAW") applicable to the Company, its subsidiaries or any of their respective
properties or assets, the consequence of which violation does or would
reasonably be expected to (A) have, individually or in the aggregate, a Material
Adverse Effect on the Company or (B) prevent or materially delay the performance
of this Agreement by the Company.
SECTION 4.10 Litigation. Except as and to the extent publicly disclosed
by the Company in the Company SEC Reports filed as of the date hereof, there is
no suit, claim, action, proceeding or investigation pending or, to the Company's
knowledge, threatened against the Company or any of its subsidiaries or any of
their respective properties or assets which (a) does or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company or (b) as of the date hereof, questions the validity of this
Agreement or any action to be taken by the Company in connection with the
consummation of the transactions contemplated hereby or could otherwise prevent
or delay the consummation of the transactions contemplated by this Agreement.
Except as and to the extent publicly disclosed by the Company in the Company SEC
Reports filed as of the date hereof, none of the Company or its subsidiaries is
subject to any outstanding order, writ, injunction or decree which does or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
SECTION 4.11 Compliance with Applicable Law. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "COMPANY PERMITS"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals which do not or
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. The Company and its subsidiaries are in
compliance with the terms of the Company Permits, except where the failure to so
comply does not or would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. The businesses of the
Company and its subsidiaries are not being conducted in violation of any Law
applicable to the Company or its subsidiaries, except for violations or possible
violations which do not and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company. To
the Company's knowledge, no investigation or review by any Governmental Entity
with respect to the Company or its subsidiaries is pending or threatened, nor,
to the Company's knowledge, has any Governmental Entity indicated an intention
to conduct the same, other than those which do not or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
SECTION 4.12 Tax Matters. There are no employment, severance or
termination agreements, other compensation arrangements or Employee Benefit
Plans currently in effect which provide for the payment of any amount (whether
15
in cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement that would give rise to a payment
which is nondeductible by reason of Section 280G of the Code.
SECTION 4.13 Opinion of Financial Advisor. The Financial Advisor has
delivered to the Company Board its opinion, dated the date of this Agreement, to
the effect that, as of such date, the consideration to be received in the Offer
and the Merger by the Company's stockholders is fair to the Company's
stockholders (other than Parent or Merger Sub) from a financial point of view,
and such opinion has not been withdrawn or modified. The Company has been
authorized by the Financial Advisor to permit the inclusion of such opinion in
its entirety in the Offer Documents and the Schedule 14D-9 and the Proxy
Statement, so long as such inclusion is in form and substance reasonably
satisfactory to the Financial Advisor and its counsel.
SECTION 4.14 Brokers. No broker, finder or investment banker (other
than the Financial Advisor, a true and correct copy of whose engagement
agreement has been provided to Parent) is entitled to any brokerage, finder's or
other fee or commission or expense reimbursement in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Company or any of its affiliates.
SECTION 4.15 Takeover Statute; Dissenters' Rights. The Company has
taken all action required to be taken by it in order to exempt this Agreement,
the Offer, the acquisition of Shares pursuant to the Offer, the Merger, and the
transactions contemplated hereby and thereby from, and this Agreement, the
Offer, the acquisition of Shares pursuant to the Offer, the Merger, and the
transactions contemplated hereby and thereby (the "COVERED Transactions") are
exempt from, the requirements of any "moratorium", "control share", "fair
price", "affiliate transaction", "business combination" or other antitakeover
Laws and regulations of any state (collectively, "TAKEOVER STATUTES"),
including, without limitation, Section 203 of the DGCL, or any antitakeover
provision in the Company's certificate of incorporation and bylaws. The
provisions of Section 203 of the DGCL do not apply to the Covered Transactions.
SECTION 4.16 Amendment to the Company Rights Agreement. The Company
Board has taken all necessary action (including any amendment thereof) under the
Company Rights Agreement so that (a) none of the execution or delivery of this
Agreement or any other transaction contemplated hereby will cause (i) the Rights
to become exercisable under the Company Rights Agreement, (ii) Parent or Merger
Sub to be deemed an "Acquiring Person" (as defined in the Company Rights
Agreement), or (iii) the "Stock Acquisition Date" (as defined in the Company
Rights Agreement) to occur upon any such event; and (b) Parent, Purchaser and
their affiliates will be excluded from the definition of Acquiring Person under
the Company Rights Agreement.
16
ARTICLE V
REPRESENTATION AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the Company as
follows:
SECTION 5.1 Organization. (a) Each of Parent and its subsidiaries is a
corporation duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
businesses as now conducted or proposed by Parent to be conducted, except where
the failure to be duly organized, existing and in good standing or to have such
power and authority would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent.
(b) Each of Parent and its subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing does not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent.
SECTION 5.2 Authority Relative to This Agreement. (a) Each of Parent
and Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the Transactions contemplated hereby.
No other corporate proceedings on the part of Parent or Merger Sub are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by each
of Parent and Merger Sub and constitutes a valid, legal and binding agreements
of each of Parent and Merger Sub, enforceable against each of Parent and Merger
Sub in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
(b) The Board of Directors of Merger Sub and Parent as the sole
stockholder of Merger Sub have duly and validly authorized the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, and taken all corporate actions required to be taken by such Boards of
Directors and Parent as the sole stockholder of Merger Sub for the consummation
of the transactions.
SECTION 5.3 Proxy Statement; Offer Documents. The Offer Documents and
any other documents to be filed by Parent or Merger Sub with the SEC or any
other Government Entity in connection with the Merger and the other Transactions
17
will (in the case of the Offer Documents and any such other documents filed with
the SEC under the Securities Act or the Exchange Act) comply as to form in all
material respects with the requirements of the Exchange Act and the Securities
Act, respectively, and will not, on the date of filing with the SEC or, in the
case of the Proxy Statement, on the date the Proxy Statement is first mailed to
stockholders of the Company, 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 or shall, at the time of the Company
Stockholder Meeting or at the Effective Time, omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Company Stockholder Meeting which shall have
become false or misleading in any material respect. Notwithstanding the
foregoing, neither Parent nor Merger Sub makes any representation or warranty
with respect to the statements made in any of the foregoing documents based on
and in conformity with information supplied by or on behalf of the Company
specifically for inclusion therein.
SECTION 5.4 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Exchange Act, state securities or blue sky
Laws and the filing and recordation of the Certificate of Merger as required by
the DGCL, no filing with or notice to, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution and delivery
by Parent or Merger Sub of this Agreement or the consummation by Parent or
Merger Sub of the Transactions contemplated hereby, except where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings or give such notice do not or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent. Neither
the execution, delivery and performance of this Agreement by Parent or Merger
Sub nor the consummation by Parent or Merger Sub of the Transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the respective articles of incorporation or bylaws (or similar
governing documents) of Parent or Merger Sub or any of Parent's subsidiaries,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or Lien) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which Parent
or Merger Sub or any of Parent's subsidiaries is a party or by which any of them
or any of their respective properties or assets may be bound or (iii) violate
any Law applicable to Parent or Merger Sub or any of Parent's subsidiaries or
any of their respective properties or assets, except in the case of (ii) or
(iii) for violations, breaches or defaults which do not or would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on Parent.
18
ARTICLE VI
COVENANTS RELATED TO CONDUCT OF BUSINESS
SECTION 6.1 Conduct of Business of the Company. Except as contemplated
by this Agreement, during the period from the date hereof to the Effective Time,
the Company will, and will cause each of its subsidiaries to, conduct its
operations in the ordinary and usual course of business consistent with past
practice and, to the extent consistent therewith, with no less diligence and
effort than would be applied in the absence of this Agreement, seek to preserve
intact its current business organizations, seek to keep available the service of
its current officers and employees and seek to preserve its relationships with
customers, suppliers and others having business dealings with it to the end that
goodwill and ongoing businesses shall be unimpaired at the Effective Time.
Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement or in the Company Disclosure Schedule,
prior to the Effective Time, neither the Company nor any of its subsidiaries
will, without the prior written consent of Parent:
(a) amend its certificate of incorporation or bylaws (or other similar
governing instrument) or amend, modify or terminate the Company Rights
Agreement;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities convertible into or exchangeable for any
stock or any equity equivalents (including, without limitation, any stock
options or stock appreciation rights), except for (i) the issuance or sale of
Shares pursuant to outstanding Company Stock Options or (ii) the issuance or
sale of Shares pursuant to the outstanding Warrant;
(c) (i) split, combine or reclassify any shares of its capital stock;
(ii) declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock; (iii) make any other actual, constructive or deemed distribution in
respect of any shares of its capital stock or otherwise make any payments to
stockholders in their capacity as such; or (iv) redeem, repurchase or otherwise
acquire any of its securities or any securities of any of its subsidiaries
(including redeeming any Rights);
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of the Company or any of its subsidiaries (other than the Merger);
(e) alter through merger, liquidation, reorganization, restructuring or
in any other fashion the corporate structure or ownership of any subsidiary;
(f) (i) incur or assume any long-term or short-term debt or issue any
debt securities, except for borrowings under existing lines of credit in the
ordinary and usual course of business consistent with past practice and in
19
amounts not material to the Company and its subsidiaries taken as a whole; (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person,
except in the ordinary and usual course of business consistent with past
practice and in amounts not material to the Company and its subsidiaries, taken
as a whole, and except for obligations of the wholly owned subsidiaries of the
Company; (iii) make any loans, advances or capital contributions to, or
investments in, any other person (other than to the wholly owned subsidiaries of
the Company or customary loans or advances to employees in the ordinary and
usual course of business consistent with past practice and in amounts not
material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of capital stock of the Company or its subsidiaries; or (v)
mortgage or pledge any of its material assets, tangible or intangible, or create
or suffer to exist any material Lien thereupon;
(g) except as may be required by Law or as contemplated by this
Agreement, enter into, adopt or amend or terminate any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation right,
restricted stock, performance unit, stock equivalent, stock purchase agreement,
pension, retirement, deferred compensation, employment, severance or other
employee benefit agreement, trust, plan, fund, award or other arrangement for
the benefit or welfare of any director, officer or employee in any manner, or
(except as set forth in Section 6.1(g) of the Company Disclosure Schedule, and
as required under existing agreements) increase in any manner the compensation
or fringe benefits of any director, officer or employee or pay any benefit not
required by any plan and arrangement as in effect as of the date hereof
(including, without limitation, the granting of stock appreciation rights or
performance units);
(h) acquire, sell, lease or dispose of any assets outside the ordinary
and usual course of business consistent with past practice or any assets which
in the aggregate are material to the Company and its subsidiaries taken as a
whole, enter into any commitment or transaction outside the ordinary and usual
course of business consistent with past practice or grant any exclusive
distribution rights;
(i) except as may be required as a result of a change in Law or in
GAAP, change any of the accounting principles or practices used by it;
(j) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary and usual course of business
consistent with past practice or as required by GAAP;
(k) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein; (ii) enter into any contract or
agreement, other than in the ordinary and usual course of business consistent
with past practice or amend in any material respect any material contracts or
agreements; (iii) authorize any new capital expenditure or expenditures which,
20
individually, is in excess of $100,000 or, in the aggregate, are in excess of
$300,000; or (iv) enter into or amend any contract, agreement, commitment or
arrangement providing for the taking of any action that would be prohibited
hereunder;
(l) make or revoke any Tax election, or settle or compromise any Tax
liability, or change (or make a request to any taxing authority to change) any
aspect of its method of accounting for Tax purposes;
(m) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
and usual course of business consistent with past practice of liabilities
reflected or reserved against in the consolidated financial statements of the
Company and its subsidiaries or incurred in the ordinary and usual course of
business consistent with past practice or waive the benefits of, or agree to
modify in any manner, any confidentiality, standstill or similar agreement to
which the Company or any of its subsidiaries is a party;
(n) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;
(o) enter into any agreement or arrangement that limits or otherwise
restricts the Company or any of its subsidiaries or any successor thereto or
that could, after the Effective Time, limit or restrict the Surviving
Corporation and its affiliates (including Parent) or any successor thereto, from
engaging or competing in any line of business or in any geographic area; or
(p) take, propose to take, or agree in writing or otherwise to take,
any of the actions described in Sections 6.1(a) through 6.1(o) or any action
which would make any of the representations or warranties of the Company
contained in this Agreement (i) which are qualified as to materiality untrue or
incorrect or (ii) which are not so qualified untrue or incorrect in any material
respect.
SECTION 6.2 Access to Information. Between the date hereof and the
Effective Time, the Company will give Parent and Merger Sub and their authorized
representatives (including counsel, financial advisors and auditors) reasonable
access during normal business hours to all employees, plants, offices,
warehouses and other facilities and to all books and records of the Company and
its subsidiaries, will permit Parent and Merger Sub to make such inspections as
Parent and Merger Sub may reasonably require and will cause the Company's
officers and those of its subsidiaries to furnish Parent and Merger Sub with
such financial and operating data and other information with respect to the
business, properties and personnel of the Company and its subsidiaries as Parent
or Merger Sub may from time to time reasonably request, provided that no
investigation pursuant to this Section 6.2 shall affect or be deemed to modify
any of the representations or warranties made by the Company.
21
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 Company Stockholder Meeting, Proxy Statement. (a) If
required by applicable Law in order to consummate the Merger, the Company,
acting through its Board of Directors, shall, in accordance with applicable Law,
its Certificate of Incorporation and By-laws:
(i) as promptly as practicable following the acceptance for
payment and purchase of Shares by Merger Sub pursuant to the Offer duly
call, give notice of, convene and hold a special meeting of its
stockholders (the "COMPANY STOCKHOLDER MEETING") for the purposes of
considering and taking action upon the approval of the Merger and the
approval and adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and (x)
obtain and furnish the information required to be included by the SEC in
the Proxy Statement and, after consultation with Parent, respond promptly
to any comments made by the SEC with respect to the preliminary proxy or
information statement and cause a definitive proxy or information
statement, including any amendment or supplement thereto to be mailed to
its stockholders at the earliest practicable date; provided that no
amendment or supplement to the Proxy Statement will be made by the Company
without consultation with Parent and its counsel and (y) use its
reasonable best efforts to obtain the necessary approvals of the Merger
and this Agreement by its stockholders; and
(iii) unless this Agreement has been terminated in accordance
with Article IX, subject to its rights pursuant to Section 7.3, include in
the Proxy Statement the recommendation of its Board of Directors that
stockholders of the Company vote in favor of the approval of the Merger
and the approval and adoption of this Agreement.
(b) Parent shall vote, or cause to be voted, all of the Shares then
owned by it, Merger Sub or any of its other Subsidiaries in favor of the
approval and adoption of this Agreement.
(c) Notwithstanding anything else herein or in this Section 7.1, in the
event that Parent, Merger Sub and any other Subsidiaries of Parent shall acquire
in the aggregate a number of the outstanding shares of each class of capital
stock of the Company, pursuant to the Offer or otherwise, sufficient to enable
Merger Sub or the Company to cause the Merger to become effective under
applicable Law without a meeting of stockholders of the Company, the parties
hereto shall, at the request of Parent and subject to Article VIII, take all
necessary and appropriate action to cause the Merger to become effective as soon
22
as practicable after the consummation of such acquisition, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
SECTION 7.2 Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws to consummate the
Offer and the Merger and the other Transactions contemplated by this Agreement.
SECTION 7.3 Acquisition Proposals. (a) From the date hereof until the
termination hereof, the Company will not, nor will it permit any of its
subsidiaries to, nor will it authorize or permit any officer, director or
employee of or any investment banker, attorney, accountant or other advisor or
representative of, the Company or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage the submission of any Acquisition
Proposal (as hereinafter defined) or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate, any Acquisition Proposal or any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Acquisition Proposal.
(b) Neither the Company Board nor the Special Committee will withdraw
or modify, or propose to withdraw or modify, in a manner adverse to Parent, its
approval or recommendation of this Agreement, the Offer or the Merger unless the
Company Board or the Special Committee, after consultation with and based upon
the advice of independent legal counsel, determines in good faith that such
action is necessary for the Company Board or the Special Committee to comply
with the fiduciary duties to the Company's stockholders under applicable Law.
Nothing contained in this Section 7.3(b) shall prohibit the Company from taking
and disclosing to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders which, in the good faith reasonable judgment of the
Company Board and the Special Committee, based on the advice of independent
legal counsel, is required under applicable Law; provided, that except as
otherwise permitted in this Section 7.3(b), the Company does not withdraw or
modify, or propose to withdraw or modify, its position with respect to the Offer
or the Merger or approve or recommend, or propose to approve or recommend, an
Acquisition Proposal. Notwithstanding anything contained in this Agreement to
the contrary, any action by the Company Board or the Special Committee permitted
by, and taken in accordance with, this Section 7.3(b) shall not constitute a
breach of this Agreement by the Company. Nothing in this Section 7.3(b) shall
(i) permit the Company to terminate this Agreement (except as provided in
Article IX hereof) or (ii) affect any other obligations of the Company under
this Agreement.
SECTION 7.4 Public Announcements. Each of Parent, Merger Sub and the
Company will consult with one another before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by this Agreement, including, without limitation, the Merger, and
shall not issue any such press release or make any such public statement prior
23
to such consultation, except as may be required by applicable Law or by
obligations pursuant to any listing agreement with the New York Stock Exchange,
as determined by Parent, Merger Sub or the Company, as the case may be.
SECTION 7.5 Indemnification; Directors' and Officers' Insurance. (a)
Following the Effective Time, Parent shall cause the Surviving Corporation, to
the fullest extent permitted by applicable Law, to indemnify, defend and hold
harmless each person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, a director, officer or
employee of the parties hereto or any subsidiary thereof (each an "INDEMNIFIED
PARTY" and, collectively, the "INDEMNIFIED PARTIES") against all losses,
expenses (including reasonable attorneys' fees and expenses), claims, damages or
liabilities or, subject to the proviso of the next succeeding sentence, amounts
paid in settlement, arising out of actions or omissions occurring at or prior to
the Effective Time and whether asserted or claimed prior to, at or after the
Effective Time that are in whole or in part (i) based on, or arising out of the
fact that such person is or was a director, officer or employee of such party or
a subsidiary of such party or (ii) based on, arising out of or pertaining to the
transactions contemplated by this Agreement. In the event of any such loss,
expense, claim, damage or liability (whether or not arising before the Effective
Time), (i) the Surviving Corporation shall pay the reasonable fees and expenses
of counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to the Surviving Corporation, promptly after statements
therefor are received and otherwise advance to such Indemnified Party upon
request reimbursement of documented expenses reasonably incurred, in either case
to the extent not prohibited by DGCL and upon receipt of any affirmation and
undertaking required by the DGCL, (ii) the Surviving Corporation will cooperate
in the defense of any such matter and (iii) any determination required to be
made with respect to whether an Indemnified Party's conduct complies with the
standards set forth under the DGCL and the Company's certificate of
incorporation or bylaws shall be made by independent counsel mutually acceptable
to Parent and the Indemnified Party; provided, however, that the Surviving
Corporation shall not be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld). The Indemnified
Parties as a group may retain only one law firm with respect to each related
matter except to the extent there is, in the opinion of counsel to an
Indemnified Party, under applicable standards of professional conduct, a
conflict on any significant issue between positions of any two or more
Indemnified Parties.
(b) For a period of six (6) years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect the policies of
directors' and officers' liability insurance maintained by the Company for the
benefit of those persons who are covered by such policies at the Effective Time
(or the Surviving Corporation may substitute therefor policies of at least the
same coverage with respect to matters occurring prior to the Effective Time), to
the extent that such liability insurance can be maintained annually at a cost to
the Surviving Corporation not greater than 150 percent of the premium for the
current Company directors' and officers' liability insurance; provided that if
24
such insurance cannot be so maintained or obtained at such costs, the Surviving
Corporation shall maintain or obtain as much of such insurance as can be so
maintained or obtained at a cost equal to 150 percent of the current annual
premiums of the Company for such insurance.
(c) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity or such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in either such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation shall assume the
obligations set for in this Section 7.5.
(d) To the fullest extent permitted by Law, from and after the
Effective Time, all rights to indemnification now existing in favor of the
employees, agents, directors or officers of the Company and its subsidiaries
with respect to their activities as such prior to the Effective Time, as
provided in the Company's certificate of incorporation or bylaws, in effect on
the date thereof or otherwise in effect on the date hereof, shall survive the
Merger and shall continue in full force and effect for a period of not less than
six years from the Effective Time.
(e) The provisions of this Section 7.5 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
SECTION 7.6 Notification of Certain Matters. The Company shall give
prompt notice to Parent and Merger Sub, and Parent and Merger Sub shall give
prompt notice to the Company, of (i) the occurrence or nonoccurrence of any
event the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement, which is qualified as to
materiality, to be untrue or inaccurate, or any representation or warranty not
so qualified, to be untrue or inaccurate in any material respect at or prior to
the Effective Time, (ii) any material failure of the Company, Parent or Merger
Sub, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder, (iii) any notice of,
or other communication relating to, a default or event which, with notice or
lapse of time or both, would become a default, received by it or any of its
subsidiaries subsequent to the date of this Agreement and prior to the Effective
Time, under any contract or agreement material to the financial condition,
properties, businesses, results of operations or prospects of it and its
subsidiaries taken as a whole to which it or any of its subsidiaries is a party
or is subject, (iv) any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement, or (v) any
Material Adverse Effect in their respective financial condition, properties,
businesses, results of operations or prospects, taken as a whole, other than
changes resulting from general economic conditions; provided, however, that the
delivery of any notice pursuant to this Section 7.6 shall not cure such breach
or non-compliance or limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
25
SECTION 7.7 SEC Filings. Each of Parent and the Company shall promptly
provide the other party (or its counsel) with copies of all filings made by the
other party or any of its subsidiaries with the SEC or any other state or
federal Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
SECTION 7.8 Obligations of Merger Sub. Parent will take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
SECTION 7.9 Antitakeover Statutes. If any Takeover Statute is or may
become applicable to the Merger, each of Parent and Company shall take such
actions as are necessary so that the transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise act to eliminate or minimize the effects of any Takeover Statute
on the Merger.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 8.1 Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following conditions, any or all of which may be
waived in whole or in part by the party being benefited thereby, to the extent
permitted by applicable Law:
(a) This Agreement shall have been approved and adopted by the Company
Requisite Vote, if required by applicable Law.
(b) There shall not be in effect any Law of any Governmental Entity of
competent jurisdiction, restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement or permitting
such consummation only subject to any condition or restriction that has or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company (or an effect on Parent and its subsidiaries that,
were such effect applied to the Company and its subsidiaries, has or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company) and no Governmental Entity shall have instituted
any proceeding which continues to be pending seeking any such Law.
(c) Merger Sub or its affiliates shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer.
26
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
SECTION 9.1 Termination. This Agreement may be terminated and the
Merger contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after approval of matters presented in connection with
the Merger by the stockholders of the Company:
(a) By the mutual written consent of Parent and the Company;
(b) By either of Parent or the Company if (i) a statute, rule or
executive order shall have been enacted, entered or promulgated prohibiting the
Transactions on the terms contemplated by this Agreement or (ii) any
governmental entity shall have issued an order, decree or ruling or taken any
other action (which order, decree, ruling or other action the parties hereto
shall use their reasonable efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the Transactions and such order,
decree, ruling or other action shall have become final and non-appealable.
(c) By either of Parent or the Company if the Offer has not been
consummated on or before the ninetieth (90) day following the commencement of
the Offer (or, if such date is not a business day in the United States, the
first such business day thereafter) or the Effective Time shall not have
occurred on or before the two hundred and tenth (210) day following the
commencement of the Offer (or, if such date is not a business day in the United
States, the first such business day thereafter); provided, that the party
seeking to terminate this Agreement pursuant to this Section 9.1(c) 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 consummate
the Merger on or before such date;
(d) By the Company:
(i) if Parent or Merger Sub shall have terminated the Offer or
the Offer expires without Merger Sub purchasing any Shares pursuant thereto;
provided, that the Company may not terminate this agreement pursuant to this
Section 9.1(d)(i) if the Company is in material breach of this Agreement; or
(ii) if there shall be a material breach by Parent or Merger
Sub of any of their representations, warranties, covenants or agreements
contained in this Agreement; or
(e) By Parent or Merger Sub:
(i) If prior to the purchase of the Shares pursuant to the
Offer, (A) the Company Board or the Special Committee shall have withdrawn, or
modified or changed in a manner adverse to Parent or Merger Sub its approval or
recommendation of the Offer, this Agreement or the Merger or shall have
27
recommended or approved an Acquisition Proposal, or (B) there shall have been a
material breach of any provision of Section 7.3; or
(ii) if Parent or Merger Sub shall have terminated the Offer
without Parent or Merger Sub purchasing any Shares thereunder; provided that
Parent or Merger Sub may not terminate this Agreement pursuant to this Section
9.1(e)(ii) if Parent or Merger Sub is in material breach of this Agreement; or
(iii) if there shall be a material breach by the Company of
any of its representations, warranties, covenants or agreements contained in
this Agreement. SECTION 9.2 Effect of the Termination. In the event of
termination of this Agreement by either the Company or Parent or Merger Sub as
provided in Section 9.1, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of Parent, Merger Sub or
the Company, other than the provisions of this Section 9.2, Section 9.3 and
Article X and except to the extent that such termination results from the
willful and material breach by a party of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
SECTION 9.3 Fees and Expenses. (a) Except as provided below, all fees
and expenses incurred in connection with the Offer, the Merger, this Agreement
and the Transactions shall be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated.
(b) If Parent or Merger Sub terminates this Agreement pursuant to
Section 9.1(e)(i), then the Company shall pay, or cause to be paid to Parent, or
Merger Sub, at the time of termination, an amount equal to $500,000 (the
"TERMINATION FEE") plus an amount equal to Parent's and Merger Sub's actual and
reasonably documented out-of-pocket expenses incurred by Parent or Merger Sub in
connection with the Offer, the Merger, this Agreement and the consummation of
the Transactions, including, without limitation, the fees (other than any
break-up, success or other contingent fee) and out-of-pocket expenses payable to
all banks, investment banking firms and other financial institutions and persons
and their respective agents and counsel incurred in connection with acting as
Parent's or Merger Sub's financial advisor with respect to, or arranging or
committing to provide or providing any financing for, the Transactions up to an
aggregate of $250,000 (the "EXPENSES"). Any payments required to be made
pursuant to this Section 9.3 shall be made by wire transfer of same day funds to
an account designated by Parent.
(c) The Company shall pay all Taxes, such as (a) transfer, stamp and
documentary Taxes or fees and (b) sales, use, gains, real property transfer and
other or similar Taxes or fees, incident to preparing for, entering into and
carrying out this Agreement and the consummation of the transactions
contemplated hereby.
28
(d) The Company acknowledges that the agreements contained in this
Section 9.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Company, Parent and Merger
Sub would not have entered into this Agreement; accordingly, if the Company
fails to promptly pay the amount due pursuant to this Section 9.3, and, in order
to obtain such payment, Parent commences a suit which results in a judgment
against the Company for the fee set forth in this Section 9.3, the Company shall
pay to Parent its costs and expenses (including attorneys' fees) in connection
with such suit, together with interest from the date of termination of this
Agreement on the amounts owed at the prime rate of Citibank, N.A. in effect from
time to time during such period plus two percent.
SECTION 9.4 Amendment. This Agreement may be amended by action taken by
the Company, Parent and Merger Sub at any time before or after approval of the
Merger by the Company Requisite Vote but, after any such approval, no amendment
shall be made which requires the approval of such stockholders under applicable
Law without such approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
SECTION 9.5 Extension; Waiver. At any time prior to the Effective Time,
each party hereto (for these purposes, Parent and Merger Sub shall together be
deemed one party and the Company shall be deemed the other party) may (i) extend
the time for the performance of any of the obligations or other acts of the
other party, (ii) waive any inaccuracies in the representations and warranties
of the other party contained herein or in any document, certificate or writing
delivered pursuant hereto, or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure of
either party hereto to assert any of its rights hereunder shall not constitute a
waiver of such rights.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Nonsurvival of Representations and Warranties. None of the
representations, warranties, covenants and agreements in this Agreement or in
any exhibit, schedule or instrument delivered pursuant to this Agreement shall
survive beyond the Effective Time, except for those covenants and agreements
contained herein and therein that by their terms apply or are to be performed in
whole or in part after the Effective Time and this Article X. This Section 10.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
SECTION 10.2 Entire Agreement; Assignment. (a) This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and
29
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by operation of Law (including, but not
limited to, by merger or consolidation) or otherwise; provided, however, that
Merger Sub may assign, in its sole discretion, any or all of its rights,
interests and obligations under this Agreement to any direct wholly owned
subsidiary of Parent, but no such assignment shall relieve Parent or Merger Sub
of its obligations hereunder if such assignee does not perform such obligations.
Any assignment in violation of the preceding sentence shall be void. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
SECTION 10.3 Notices. All notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (i) five business days following sending by registered or
certified mail, postage prepaid, (ii) when sent if sent by facsimile; provided,
that the fax is promptly confirmed by telephone confirmation thereof, (iii) when
delivered, if delivered personally to the intended recipient and (iv) one
business day following sending by overnight delivery via a national courier
service, and in each case, addressed to a party at the following address for
such party:
if to Parent or to Merger Minolta Co., Ltd.
Sub, to: 3-13, 2-Chome, Xxxxxx-Xxxxx, Xxxx-Xx
Xxxxx 000-0000, Xxxxx
Attention: Xx. Xxxxxxxxx Xxxxxxx, Manager
of Legal Division
Facsimile: 00-0-0000-0000
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company, to: Minolta-QMS, Inc.
Xxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx,
Senior Vice President and
Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
00
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
and
Hand Xxxxxxxx, LLC
First Xxxxxxxx Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
SECTION 10.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without giving
effect to the choice of Law principles thereof.
SECTION 10.5 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 10.6 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Section 7.5, nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
SECTION 10.7 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) if necessary, a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
SECTION 10.8 Specific Performance. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
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injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at Law or in
equity. In addition, each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a federal or state court sitting in the State of
Delaware.
SECTION 10.9 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 10.10 Interpretation. (a) The words "hereof," "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." All terms defined in
this Agreement shall have the defined meanings contained herein when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time, amended, qualified or supplemented, including (in
the case of agreements and instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and all attachments
thereto and instruments incorporated therein. References to a person are also to
its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to September 13, 2000. The phrase "made available" in this agreement
shall mean that the information referred to has been actually delivered to the
party to whom such information is to be made available.
(c) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
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by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
SECTION 10.11 Definitions. (a) "ACQUISITION PROPOSAL" means an offer or
proposal regarding any of the following (other than the transactions
contemplated by this Agreement) involving the Company or any of its
subsidiaries: (i) any merger, consolidation, share exchange, recapitalization,
business combination or other similar transaction; (ii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of all or
substantially all the assets of the Company and its subsidiaries, taken as a
whole, in a single transaction or series of related transactions; (iii) any
tender offer or exchange offer for 20 percent or more of the outstanding Shares
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.
(b) "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" shall have the meaning
provided in Section 13(d) of the Exchange Act and the rules and regulations
thereunder.
(c) "KNOW" or "KNOWLEDGE" means, with respect to any party, the actual
knowledge of such party's executive officers, without any duty of inquiry.
(d) "MATERIAL ADVERSE EFFECT" means with respect to any entity, any
change, circumstance or effect that, individually or in the aggregate with all
other changes, circumstances and effects, is or is reasonably likely to be
materially adverse to (i) the assets, properties, condition (financial or
otherwise) or results of operations of such entity and its subsidiaries taken as
a whole or (ii) the ability of such party to consummate the transactions
contemplated by this Agreement, excluding any such effect resulting from or
arising in connection with (A) general economic conditions affecting generally
the industry in which the Company competes or (B) general market conditions in
the United States.
(e) "PERSON" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).
(f) "SUBSIDIARY" means, when used with reference to any entity, any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other subsidiary of such party is a general or
managing partner or (ii) a majority of the outstanding voting securities or
interests of which, having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation or other organization, is directly or indirectly
owned or controlled by such party or by any one or more of its subsidiaries.
(g) "TAX" or "TAXES" means all Taxes, charges, fees, imposts, levies,
gaming or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
33
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated Taxes, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to Tax or additional amounts imposed by any taxing authority (domestic
or foreign) and shall include any transferee liability in respect of Taxes, any
liability in respect of Taxes imposed by contract, Tax sharing agreement, Tax
indemnity agreement or any similar agreement.
[signature page follows]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
MINOLTA CO., LTD.
By:/s/ Xxxxxxxxxx Xxx
----------------------------------------------
Name: Xxxxxxxxxx Xxx
Title: President and Representative Director
MINOLTA INVESTMENTS COMPANY
By:/s/ Xxxxx X. Xxxx
----------------------------------------------
Name: Xxxxx X. Hans
Title: Vice President and Secretary
MINOLTA-QMS, INC.
By:/s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
35
ANNEX A
-------
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings
set forth in the Agreement and Plan of Merger of which this Annex A is a part.
Notwithstanding any other provision of the Offer, Merger 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 Merger 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 the restriction referred to above, the payment
for, any tendered Shares, and, subject to the terms of the Merger Agreement, may
delay acceptance for payment or terminate the Offer and not accept for payment
any tendered Shares, if at any time on or after the date of the Merger Agreement
and prior to the acceptance for payment of Shares pursuant to the Offer, any of
the following events shall occur:
A. there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any suit, action or proceeding shall be taken
by any Governmental Entity (i) seeking to prohibit or impose any material
limitations on Parent's or Merger Sub's ownership or operation (or that of
any of their respective subsidiaries or affiliates) of all or a material
portion of their or the Company's businesses or assets, (ii) seeking to
compel Parent or Merger Sub or their respective subsidiaries and
affiliates to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and their respective
subsidiaries, in each case taken as a whole, (iii) seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other Transactions, (iv) seeking to obtain from
the Company any damages that would be reasonably likely to have a Material
Adverse Effect on the Company, (v) seeking to impose material limitations
on the ability of Merger Sub, or rendering Merger Sub unable, to accept
for payment, pay for or purchase some or all of the Shares pursuant to the
Offer and the Merger, (vi) imposes material limitations on the ability of
Merger Sub or Parent effectively to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote the Shares
purchased by it on all matters properly presented to the Company's
stockholders, or (vii) which otherwise is reasonably likely to have a
Material Adverse Effect on the Company or, as a result of the
Transactions, Parent and its Subsidiaries; or
B. there shall have occurred (1) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange, the
American Stock Exchange or in the Nasdaq National Market System, for a
period in excess of twenty-four hours (excluding suspensions or
limitations resulting solely from physical damage or interference with
such exchanges not related to market conditions), (2) a declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States (whether or not mandatory), (3) the commencement of a
war, armed hostilities or other international or national calamity
directly or indirectly involving the United States, (4) any limitation or
proposed limitation (whether or not mandatory) by any United States
governmental authority or agency that has a material adverse effect
generally on the extension of credit by banks or other financial
institutions, (5) any change in general financial bank or capital market
conditions which has a material adverse effect on the ability of financial
institutions in the United States to extend credit or syndicate loans, (6)
any decline in either the Dow Xxxxx Industrial Average or the Standard &
Poor's Index of 500 Industrial Companies by an amount in excess of 25%
measured from the close of business on the date of this Agreement or (7)
in the case of any of the situations in clauses (1) through (5) inclusive,
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
C. the representations and warranties of the Company set forth in the Merger
Agreement shall not be true and accurate as of the date of consummation of
the Offer as though made on or as of such date (except for those
representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time which
need only be true and accurate as of such date or with respect to such
period) or the Company shall have breached or failed to perform or comply
with any obligation, agreement or covenant required by the Merger
Agreement to be performed or complied with by it except, in each case
where the failure of such representations and warranties to be true and
accurate (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein), or the failure to perform or
comply with such obligations, agreements or covenants, do not,
individually or in the aggregate, have a Material Adverse Effect on the
Company or a materially adverse effect on the ability to consummate the
Offer or the Merger; or
D. the Company's Board of Directors or the Special Committee (i) shall have
withdrawn, or modified or changed in a manner adverse to Parent or Merger
Sub (including by amendment of the Schedule 14D-9) its recommendation of
the Offer, the Merger Agreement, or the Merger, (ii) shall have
recommended an Acquisition Proposal, (iii) shall have adopted any
resolution to effect any of the foregoing, or (iv) upon request of Merger
Sub, shall fail to reaffirm its approval or recommendation of the Offer,
the Merger Agreement, or the Merger; or
E. the Merger Agreement shall have been terminated in accordance with its
terms
which in the reasonable judgment of Parent or Merger Sub, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
Merger Sub) giving rise to such condition makes it inadvisable to proceed with
the Offer and/or with such acceptance for payment of or payments for Shares.
The foregoing conditions are for the sole benefit of Parent and Merger
Sub and may be waived by Parent or Merger Sub, in whole or in part, at any time
and from time to time, in the sole discretion of Parent or Merger Sub. The
failure by Parent or Merger Sub at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
37
