EXHIBIT 2.1
Execution Copy
--------------
AGREEMENT AND PLAN OF MERGER
by and among
XXXX X. XXXXXXX COMPANY,
M & F WORLDWIDE CORP.
and
H ACQUISITION CORP.
Dated as of December 19, 2006
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms........................................1
ARTICLE II
THE MERGER
Section 2.1 The Merger...................................................9
Section 2.2 Closing; Effective Time......................................9
Section 2.3 Effects of the Merger........................................9
Section 2.4 Articles of Incorporation; Bylaws...........................10
Section 2.5 Directors and Officers of Surviving Corporation.............10
ARTICLE III
EFFECT OF THE MERGER ON CAPITAL STOCK AND EXCHANGE OF CERTIFICATES
Section 3.1 Effect on Capital Stock.....................................10
Section 3.2 Treatment of Options and Other Equity Awards................11
Section 3.3 Adjustment of Merger Consideration..........................12
Section 3.4 Dissenting Shares...........................................12
Section 3.5 Payment and Exchange of Certificates........................13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization................................................15
Section 4.2 Authority; Enforceability...................................16
Section 4.3 Non-Contravention...........................................16
Section 4.4 Governmental Consents.......................................17
Section 4.5 Capitalization of the Company...............................17
Section 4.6 Company Subsidiaries........................................19
Section 4.7 SEC Reports; Financial Information..........................19
Section 4.8 No Undisclosed Liabilities..................................19
Section 4.9 Absence of Certain Changes or Events........................20
Section 4.10 Contracts...................................................21
Section 4.11 Title to Properties; Assets.................................23
Section 4.12 Compliance with Law and Reporting Requirements..............24
Section 4.13 Litigation..................................................25
Section 4.14 Employee Compensation and Benefit Plans; ERISA..............25
Section 4.15 Labor Matters...............................................28
Section 4.16 Intellectual Property.......................................29
Section 4.17 Privacy Policies............................................32
Section 4.18 Environmental Laws..........................................32
Section 4.19 Taxes.......................................................34
Section 4.20 Disclosure Documents........................................35
Section 4.21 Insurance...................................................36
Section 4.22 Customers and Suppliers.....................................36
Section 4.23 Rights Agreement............................................37
Section 4.24 Fairness Opinion............................................38
Section 4.25 Brokers.....................................................38
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 5.1 Organization................................................38
Section 5.2 Authority; Enforceability...................................38
Section 5.3 Non-Contravention...........................................39
Section 5.4 Governmental Consents.......................................39
Section 5.5 Financing...................................................39
Section 5.6 Disclosure Documents........................................40
Section 5.7 Brokers.....................................................40
Section 5.8 Operations of Merger Sub....................................40
Section 5.9 Ownership of Company Capital Stock; Affiliates and
Associates..................................................40
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Conduct of Business Prior to the Closing....................41
Section 6.2 Shareholders Meeting; Board Recommendation..................44
Section 6.3 Proxy Statement...............................................
Section 6.4 Access to Information; Certain Notices......................45
Section 6.5 Solicitation................................................46
Section 6.6 Further Action; Reasonable Best Efforts.....................49
Section 6.7 Directors' and Officers' Indemnification and Insurance......51
Section 6.8 Public Announcements........................................52
Section 6.9 Financing...................................................52
Section 6.10 Notification..................................................
Section 6.11 Employment and Benefits Matters.............................55
Section 6.12 Section 16(b)...............................................57
Section 6.13 Takeover Statutes...........................................57
Section 6.14 Retention Bonuses...........................................57
ARTICLE VII
CONDITIONS PRECEDENT TO MERGER
Section 7.1 Mutual Conditions to Closing................................58
Section 7.2 Conditions to Obligations of Parent and Merger Sub..........58
Section 7.3 Conditions to Obligations of the Company....................59
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination.................................................59
Section 8.2 Effect of Termination.......................................60
Section 8.3 Fees and Expenses...........................................61
Section 8.4 Procedure for Termination...................................62
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties and Agreements..63
Section 9.2 Notices.....................................................63
Section 9.3 Severability................................................64
Section 9.4 Entire Agreement............................................64
Section 9.5 Assignment..................................................64
Section 9.6 Amendment...................................................65
Section 9.7 Waiver......................................................65
Section 9.8 No Third Party Beneficiaries................................65
Section 9.9 Governing Law...............................................65
Section 9.10 Jurisdiction................................................65
Section 9.11 Waiver of Jury Trial........................................66
Section 9.12 Consents and Approvals......................................66
Section 9.13 Counterparts................................................66
Section 9.14 Interpretation..............................................66
INDEX OF DEFINED TERMS
Acceptable Confidentiality Agreement.................................Section 1.1
Action...............................................................Section 1.1
Affiliate............................................................Section 1.1
Agreement...............................................................Preamble
Alternative Financing.............................................Section 6.9(b)
Antitrust Law........................................................Section 1.1
Benefit Plans....................................................Section 4.14(a)
Board...................................................................Recitals
Board Recommendation..............................................Section 4.2(b)
Business Day.........................................................Section 1.1
Capitalization Date...............................................Section 4.5(a)
Certificate.......................................................Section 3.5(b)
Certificate of Merger................................................Section 2.2
Closing..............................................................Section 2.2
Closing Date.........................................................Section 2.2
Code.................................................................Section 1.1
Company.................................................................Preamble
Company Common Stock..............................................Section 3.1(b)
Company Disclosure Letter.............................................Article IV
Company Employees................................................Section 6.11(a)
Company Intellectual Property........................................Section 1.1
Company Preferred Stock...........................................Section 4.5(a)
Company Takeover Proposal.........................................Section 6.5(g)
Company Termination Fee..............................................Section 1.1
Completion Period....................................................Section 1.1
Confidentiality Agreement............................................Section 1.1
Continuation Period..............................................Section 6.11(a)
Contract.............................................................Section 1.1
control..............................................................Section 1.1
Copyrights...........................................................Section 1.1
Customer Information................................................Section 4.17
Damages...........................................................Section 6.7(a)
Debt Commitment Letters...........................................Section 5.5(a)
Debt Financing....................................................Section 5.5(a)
Director Compensation Plans..........................................Section 1.1
Dissenters Provisions.............................................Section 3.4(a)
Dissenting Shares.................................................Section 3.4(a)
Effective Time.......................................................Section 2.2
Encumbrance..........................................................Section 1.1
Environmental Claim...........................................Section 4.18(a)(i)
Environmental Laws...........................................Section 4.18(a)(ii)
Equity Interest......................................................Section 1.1
ERISA................................................................Section 1.1
ERISA Affiliate..................................................Section 4.14(c)
ESPP..............................................................Section 3.2(d)
Exchange Act.........................................................Section 1.1
Final Purchase Date...............................................Section 3.2(d)
Foreign Plans....................................................Section 4.14(a)
Funded Indebtedness...............................................Section 4.5(d)
GAAP.................................................................Section 1.1
GBCC....................................................................Recitals
Governmental Authority...............................................Section 1.1
Governmental Order...................................................Section 1.1
Hazardous Materials.........................................Section 4.18(a)(iii)
HSR Act..............................................................Section 1.1
Incentive Plans..................................................Section 6.11(d)
Indebtedness.........................................................Section 1.1
Intellectual Property................................................Section 1.1
Key Customers.......................................................Section 4.22
Key Suppliers.......................................................Section 4.22
Knowledge............................................................Section 1.1
Law..................................................................Section 1.1
Leased Real Property.............................................Section 4.11(b)
License..............................................................Section 1.1
Made Available.......................................................Section 1.1
Material Adverse Effect..............................................Section 1.1
Material Contract................................................Section 4.10(a)
Merger..................................................................Recitals
Merger Consideration..............................................Section 3.1(b)
Merger Sub..............................................................Preamble
New Debt Commitment Letters.......................................Section 5.5(b)
New Plans........................................................Section 6.11(a)
Notice Period.....................................................Section 6.5(c)
NYSE.................................................................Section 1.1
Old Plans........................................................Section 6.11(a)
Option...............................................................Section 1.1
Outside Date......................................................Section 8.1(c)
Owned Real Property..............................................Section 4.11(a)
Parent..................................................................Preamble
Parent Termination Fee...............................................Section 1.1
Patents..............................................................Section 1.1
Payee.............................................................Section 3.5(c)
Paying Agent......................................................Section 3.5(a)
Payment Date........................................................Section 6.14
Permitted Encumbrances...............................................Section 1.1
Person...............................................................Section 1.1
Pre-Closing Service..............................................Section 6.11(b)
Printed Products Key Customers......................................Section 4.22
Printed Products Key Suppliers......................................Section 4.22
Privacy Policy......................................................Section 4.17
Property.........................................................Section 4.11(b)
Proxy Statement.....................................................Section 4.20
Real Property Leases.............................................Section 4.11(b)
Recommendation Withdrawal............................................Section 6.2
Registered Intellectual Property.................................Section 4.16(a)
Release......................................................Section 4.18(a)(iv)
Representatives......................................................Section 1.1
Required Financial Information....................................Section 6.9(a)
Requisite Shareholder Vote........................................Section 4.2(a)
Restricted Share.....................................................Section 1.1
Retention Bonus.....................................................Section 6.14
Rights Agreement....................................................Section 4.23
S&S Key Customers...................................................Section 4.22
S&S Key Suppliers...................................................Section 4.22
Xxxxxxxx-Xxxxx Act............................................Section 4.12(b)(i)
Scantron Key Customers..............................................Section 4.22
Scantron Key Suppliers..............................................Section 4.22
SEC...................................................................Article IV
SEC Reports.......................................................Section 4.7(a)
Securities Act.......................................................Section 1.1
Shareholders Meeting.................................................Section 6.2
Shares............................................................Section 3.1(b)
Software.............................................................Section 1.1
Software Documentation...............................................Section 1.1
Stock Appreciation Right.............................................Section 1.1
Stock Equivalent.....................................................Section 1.1
Subsidiaries.........................................................Section 1.1
Superior Proposal.................................................Section 6.5(g)
Surviving Corporation................................................Section 2.1
Takeover Laws.....................................................Section 4.2(b)
Tax..................................................................Section 1.1
Tax Return...........................................................Section 1.1
Trade Secrets........................................................Section 1.1
Trademarks...........................................................Section 1.1
Unauthorized Code....................................................Section 1.1
WARN Act.........................................................Section 4.15(e)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of December 19, 2006
(this "Agreement") by and among Xxxx X. Xxxxxxx Company, a Georgia corporation
(the "Company"), M & F Worldwide Corp., a Delaware corporation ("Parent"), and H
Acquisition Corp., a Georgia corporation and a wholly owned Subsidiary of Parent
("Merger Sub").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the board of directors of the Company (the "Board")
has unanimously (i) determined that it is in the best interests of the Company
and the shareholders of the Company, and declared it advisable, to enter into
this Agreement with Merger Sub providing for the merger (the "Merger") of Merger
Sub with and into the Company in accordance with the Georgia Business
Corporation Code (the "GBCC"), upon the terms and subject to the conditions set
forth herein, (ii) approved the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
including the Merger, and (iii) resolved to recommend adoption of this Agreement
by the shareholders of the Company; and
WHEREAS, the boards of directors of Parent and Merger Sub have
each approved this Agreement and declared it advisable for Parent and Merger Sub
to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. As used in this Agreement, the
following terms have the following meanings:
"Acceptable Confidentiality Agreement" means a confidentiality
and standstill agreement containing confidentiality, standstill and
no-solicitation covenants no less restrictive to the counterparty thereto
(including as to duration of such covenants) than those contained in the
Confidentiality Agreement.
"Action" means any claim, action, suit, arbitration,
mediation, inquiry, proceeding or investigation by or before any Governmental
Authority, arbitrator or mediator.
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"Antitrust Law" means the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, and
all other federal, state and foreign, if any, statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines and other Laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or lessening of
competition or the creation or strengthening of a dominant position through
merger or acquisition, in any case that are applicable to the transactions
contemplated by this Agreement.
"Business Day" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by Law to be closed in
The City of New York.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Intellectual Property" means all Intellectual
Property used or held for use in connection with the businesses of the Company
and/or its Subsidiaries as such businesses are currently conducted.
"Company Termination Fee" means $52,500,000 in cash.
"Completion Period" means a period of 45 consecutive days
after the date hereof throughout which (i) Parent shall have the Required
Financial Information that the Company is required to provide to Parent pursuant
to Section 6.9(a) and (ii) the conditions set forth in Section 7.1 shall be
satisfied and no event shall have occurred and no condition shall exist that
would cause any of the conditions set forth in Sections 7.2(a) or 7.2(b) to fail
to be satisfied assuming the Closing were to be scheduled for any time during
such 45 consecutive day period; provided, however, that the "Completion Period"
shall not be deemed to have commenced if, prior to the completion of the
Completion Period, Deloitte & Touche LLP shall have withdrawn or qualified its
audit opinion with respect to any financial statements contained in the SEC
Reports; provided, further, however, that if the financial statements included
in the Required Financial Information that is available to Parent on the first
day of any such 45-day period would be "stale," within the meaning of Rule 3-12
of Regulation S-X under the Securities Act, on any day during such 45-day period
if a registration statement using such financial statements were to be filed
with the SEC on such date and there are less than 30 days remaining in such
45-day period, then such 45-day period shall be extended to a date that is 30
days from the date such Required Financial Information first would become
"stale" (within the meaning of Rule 3-12 of Regulation S-X under the Securities
Act).
"Confidentiality Agreement" means the confidentiality
agreement dated March 20, 2006, between Xxxxxx American Corp. and the Company.
"Contract" means any contract, agreement, commitment,
arrangement, lease (including with respect to personal property) or other
instrument or deed, whether written or oral.
"control" (including the terms "controlled by" and "under
common control with"), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, by Contract or otherwise, including,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Director Compensation Plans" means the Company 2005
Compensation Plan for Non-Employee Directors, as amended through December 15,
2005, and the Company Compensation Plan for Non-Employee Directors, as amended
through January 17, 2002.
"Encumbrance" means any security interest, pledge, mortgage,
lien, charge, hypothecation, option to purchase or lease or otherwise acquire
any interest, conditional sales Contract, claim, restriction, covenant,
easement, right of way, title defect, adverse claim of ownership or use,
transfer restriction, voting Contract, proxy or other limitation on voting
rights or other encumbrance of any kind, other than any obligation to accept
returns of inventory in the ordinary course of business and other than those
arising by reason of restrictions on transfers under federal, state or foreign
securities Laws.
"Equity Interest" means (i) with respect to a corporation, any
and all classes or series of shares of capital stock, (ii) with respect to a
partnership, limited liability company, trust or similar Person, any and all
classes or series of units, interests or other partnership/limited liability
company interests and (iii) with respect to any other Person, any other security
representing any ownership interest or participation in such Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"GAAP" means United States generally accepted accounting
principles and practices as in effect from time to time consistently applied.
"Governmental Authority" means any federal, state, provincial,
local or foreign government, governmental, regulatory or administrative
authority, self-regulatory organization, agency or commission, workers',
employees' or labor or any similar council or organization, or any court,
tribunal, or judicial or arbitral body (including any political or other
subdivision, department or branch of any of the foregoing).
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means, with respect to any Person, (i)
indebtedness of such Person, whether or not contingent, for borrowed money, (ii)
other indebtedness of such Person evidenced by notes, bonds or debentures, (iii)
capitalized leases classified as indebtedness of such Person under GAAP, (iv)
all indebtedness created or arising under any conditional sale or other title
retention Contract with respect to property acquired by such Person (even though
the rights and remedies of the seller or lender under such Contract in the event
of default are limited to repossession or sale of such property), (v) any
obligation of such Person, whether or not contingent, for the deferred purchase
price of assets, property or services (other than trade payables incurred in the
ordinary course of business and other current liabilities), (vi) all obligations
of such Person pursuant to or evidenced by hedging, swap or factoring Contracts
or other similar instruments, (vii) obligations, contingent or otherwise, of
such Person to purchase, redeem, retire, defease or otherwise acquire for value
any capital stock of such Person or any warrants, rights or options to acquire
such capital stock, valued, in the case of redeemable preferred stock, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends, (viii) all Indebtedness of another Person referred to in
clauses (i) through (vii) above guaranteed directly or indirectly, jointly or
severally, in any manner by such Person, or in effect guaranteed directly or
indirectly, jointly or severally, by such Person through a Contract (a) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (b) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss, (c) to supply funds to or in any manner
invest in the debtor (including any Contract to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (d) otherwise to assure a creditor against loss, (ix) Indebtedness referred
to in clauses (i) through (viii) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Encumbrance on property (including accounts and Contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, (x) reimbursement obligations of such Person with
respect to letters of credit, bankers' acceptance or similar facilities issued
for the account of such Person, (xi) obligations under any acquisition Contracts
pursuant to which such Person is responsible for any earn-out or other
contingent payments and (xii) obligations in respect of performance, bid,
litigation or similar bonds; in each of the foregoing cases, together with all
accrued interest and accrued fees thereon.
"Intellectual Property" means all intellectual property and
industrial property rights of any kind or nature existing anywhere in the world,
including (i) all patents, patent applications and patent disclosures, together
with all reissuances, continuations, continuations-in-part, divisions,
revisions, substitutions, extensions and reexaminations thereof ("Patents"),
(ii) all trademarks, service marks, logos, slogans, design marks, trade names,
corporate names, domain names, trade dress, and other similar designations of
origin together with all goodwill symbolized thereby ("Trademarks"), (iii) all
copyrights and copyrightable works ("Copyrights"), (iv) all mask works, (v) all
trade secrets and confidential or proprietary information (including ideas,
research and development, inventions, know-how, formulas, manufacturing and
production processes and techniques, methods, schematics, technology, technical
data, designs, drawings, specifications, customer and supplier lists, customer
information, financial information, pricing and cost information and business
and marketing plans and proposals) ("Trade Secrets"), (vi) all computer software
(including in both object code and source code formats), algorithms, data,
databases, and other proprietary technology ("Software"), (vii) all rights of
privacy, rights of publicity, and rights to personal information, (viii) moral
rights and rights of attribution and integrity, (ix) all applications for
registration and registrations for any of the foregoing, (x) all rights in, to
or under any of the foregoing and in, to or under other similar intangible
assets, and (xi) all rights and remedies against past, present, and future
infringement, misappropriation, or other violation thereof.
"Knowledge" means, with respect to the Company, the actual
knowledge of the Persons set forth in Section 1.1(a) of the Company Disclosure
Letter and, with respect to Parent, the actual knowledge of the Persons set
forth in Section 1.1(a) of the Parent Disclosure Letter.
"Law" means any statute, law, ordinance, regulation, rule,
code, principle of common law or equity or other requirement of law of a
Governmental Authority or any Governmental Order.
"License" means any permit, order, decree, consent, approval,
license, registration, qualification, finding of suitability or other
authorization from a Governmental Authority.
"Made Available" means that the information referred to (i)
has been actually delivered to Parent at least two (2) Business Days prior to
the date of this Agreement or (ii) was posted at least two (2) Business Days
prior to the date of this Agreement on the Company's electronic data site
located at xxxxx://xxxxxxxx.xxxxxxxxxxx.xxx (and which has been identified as a
new addition to such site for at least two (2) Business Days following the date
on which it is first made available and has not been modified subsequently);
provided, however, that any document specifically referred to in Section 1.1(b)
of the Company Disclosure Schedule shall be deemed to be "Made Available" if
such document was posted prior to the execution of this Agreement on the
Company's electronic data site located at xxxxx://xxxxxxxx.xxxxxxxxxxx.xxx
(provided such document has been identified as a new addition to such site and
has not been modified subsequently).
"Material Adverse Effect" means any change, effect, event,
circumstance or development, individually or in the aggregate, together with all
other changes, effects, events, circumstances or developments, that is or would
reasonably be expected to (i) have a materially adverse effect on the business,
assets, financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole, other than any change, effect, event,
circumstance or development resulting from (A) general economic or financial
market conditions, (B) compliance with the express terms of, or the taking of
any action expressly required by, this Agreement, (C) any actions taken, or
failure to take action, or such other changes or events, in each case, to which
Parent has expressly consented or requested in writing, (D) conditions affecting
the Company's industries, (E) any failure, in and of itself, by the Company to
meet projections, forecasts or revenue or earnings predictions for any period
ending on or after the date of this Agreement (it being understood that the
facts or occurrences giving rise to or contributing to such failure may be
deemed to constitute, or be taken into account in determining whether there has
been or will be, a Material Adverse Effect), (F) the announcement or pendency of
this Agreement, the transactions contemplated hereby or performance of or
compliance with the terms of this Agreement, and (G) changes in GAAP; provided,
however, that with respect to clause (A), such change, effect, event,
circumstance or development does not disproportionately impact the Company and
its Subsidiaries, taken as a whole, and that with respect to clause (D), such
change, effect, event, circumstance or development does not disproportionately
impact any of the Printed Products, Software & Services or Scantron business
segments of the Company and its Subsidiaries, as applicable, or (ii) prevent,
materially delay or materially impede the ability of the Company to consummate
the transactions contemplated by the Agreement.
"NYSE" means the New York Stock Exchange.
"Option" means each option granted by the Company to purchase
shares of Company Common Stock pursuant to any Benefit Plan.
"Parent Termination Fee" means $52,500,000 in cash.
"Permitted Encumbrances" means (i) liens for taxes,
assessments and governmental charges or levies imposed upon the Company or its
Subsidiaries not yet due and payable for which appropriate reserves have been
established or which are being contested in good faith by appropriate
proceedings, (ii) Encumbrances imposed by Law which are not yet due and payable
and have arisen in the ordinary course of business (including zoning,
entitlement and other land use regulations), (iii) pledges or deposits to secure
obligations under workers' compensation Laws or similar Laws or to secure public
or statutory obligations, (iv) mechanics', carriers', workers', repairers' and
similar Encumbrances imposed upon the Company or its Subsidiaries arising or
incurred in the ordinary course of business and (v) such other imperfections or
irregularities in title, charges, easements, survey exceptions, leases,
subleases, license agreements and other occupancy agreements, reciprocal
easement agreements, restrictions and other customary encumbrances on title to
real property; provided, that none of the foregoing, individually or in the
aggregate, adversely affect in any material respect (A) the continued use of the
property to which they relate in the conduct of the business currently conducted
thereon or (B) the value or resale value of the property to which they relate.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization, Governmental Authority, joint
venture, limited liability company or other entity.
"Representatives" means, collectively, any Person's officers,
partners, directors, employees, affiliates, attorneys, consultants, financing
sources, agents or other advisors or representatives.
"Restricted Share" means each share of Company Common Stock
granted by the Company pursuant to any Benefit Plan that is outstanding as of
the relevant time but is subject to vesting or other forfeiture restrictions or
a right of repurchase by the Company as of such time.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Software Documentation" means all user manuals, training
materials, and other similar materials relating to the Software included in the
Company Intellectual Property.
"Stock Appreciation Right" means each stock appreciation right
award with respect to a share of Company Common Stock granted by the Company
pursuant to any Benefit Plan.
"Stock Equivalent" means each stock equivalent with respect to
a share of Company Common Stock granted by the Company under a Director
Compensation Plan.
"Subsidiaries" of a Person means any and all corporations,
partnerships, limited liability companies and other entities, whether
incorporated or unincorporated, with respect to which such Person, directly or
indirectly, owns (i) a right to a majority of the profits of such entity, (ii)
securities having the power to elect a majority of the board of directors or
similar body governing the affairs of such entity or (iii) a general partnership
interest, managing member or similar interest entitling such Person to govern
the affairs of such entity.
"Taxes" means all federal, state, provincial, local,
territorial and foreign income, profits, franchise, license, capital, capital
gains, transfer, ad valorem, wage, severance, occupation, import, custom, gross
receipts, payroll, sales, employment, use, property, real estate, excise, value
added, goods and services, estimated, stamp, unclaimed or abandoned alternative
or add-on minimum, environmental, withholding and any other taxes, duties,
assessments or governmental tax charges of any kind whatsoever, together with
all interest, penalties and additions imposed with respect to such amounts.
"Tax Returns" means all returns, declarations, reports, claims
for refund or information returns or statements relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof filed or to
be filed with any Tax Authority in connection with the determination, assessment
or collection of Taxes.
"Unauthorized Code" means any "virus," "Trojan horse," "worm,"
"back door," "time bomb," "drop dead device," (as such terms are commonly
understood in the software industry), or any other code, software routines or
hardware components designed or intended to have, or capable of, any of (i)
permitting unauthorized access or disabling, erasing, or otherwise harming any
computer, systems, software, or other device on which code is stored or
installed, (ii) disabling a computer program automatically with the passage of
time or under the positive control of a Person other than an authorized licensee
or owner of a copy of or rights in the program or (iii) damaging or destroying
any data, file or information without the user's consent.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions of
this Agreement and in accordance with the GBCC, at the Effective Time, Merger
Sub shall be merged with and into the Company. As a result of the Merger, the
separate corporate existence of Merger Sub will cease and the Company will
continue under the name "Xxxx X. Xxxxxxx Company" as the surviving corporation
of the Merger under the GBCC (the "Surviving Corporation").
Section 2.2 Closing; Effective Time. Subject to the provisions of
Article VII, the closing of the Merger (the "Closing") will take place at 10:00
a.m., New York time, as soon as practicable, but in no event later than the
fifth Business Day after the satisfaction or (to the extent permitted by law)
waiver of the conditions set forth in Article VII (excluding conditions that, by
their terms, cannot be satisfied until the Closing, but the Closing shall be
subject to the satisfaction or (to the extent permitted by law) waiver of those
conditions), at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four
Times Square, New York, New York (or the Closing may take place at such other
place or at such other date as Parent and the Company may mutually agree in
writing); provided, however, that notwithstanding the satisfaction or waiver of
the conditions set forth in Article VII, the parties will not be required to
effect the Closing until the earlier to occur of (a) a date specified by Parent
on at least three (3) Business Days' notice to the Company and (b) the final day
of the Completion Period. The date on which the Closing actually occurs is
hereinafter referred to as the "Closing Date". Prior to the Closing, Parent
shall prepare and on the Closing Date the Surviving Corporation shall cause the
Merger to be consummated by filing an appropriate certificate of merger (the
"Certificate of Merger") with the Secretary of State of the State of Georgia, in
such form as required by, and executed in accordance with, the relevant
provisions of the GBCC (the date and time of the filing of the Certificate of
Merger with the Secretary of State of the State of Georgia, or such later time
as is specified in the Certificate of Merger and as is agreed to by the parties,
being the "Effective Time") and the parties shall make all other filings or
recordings required under the GBCC in connection with the Merger, including
publication of the notice of merger contemplated by Section 14-2-1105.1 of the
GBCC.
Section 2.3 Effects of the Merger. The Merger shall have the effects
set forth in Section 14-2-1106 of the GBCC. Without limiting the generality of
the foregoing and subject thereto, at the Effective Time, all the property,
rights, privileges, immunities, 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 2.4 Articles of Incorporation; Bylaws. At the Effective Time,
(a) the Articles of Incorporation of the Surviving Corporation shall be amended
to read in their entirety as the Articles of Incorporation of Merger Sub read
immediately prior to the Effective Time, except that the name of the Surviving
Corporation shall be "Xxxx X. Xxxxxxx Company" and (b) the bylaws of the
Surviving Corporation shall be amended so as to read in their entirety as the
bylaws of Merger Sub as in effect immediately prior to the Effective Time, until
thereafter amended in accordance with applicable Law, except the references to
Merger Sub's name shall be replaced by references to "Xxxx X. Xxxxxxx Company".
Section 2.5 Directors and Officers of Surviving Corporation. The
directors of Merger Sub and the officers of the Company (other than those who
Merger Sub determines shall not remain as officers of the Surviving
Corporation), in each case, as of the Effective Time shall, from and after the
Effective Time, be the directors and officers, respectively, of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation or bylaws of the Surviving Corporation.
ARTICLE III
EFFECT OF THE MERGER ON CAPITAL STOCK AND EXCHANGE OF CERTIFICATES
Section 3.1 Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of Parent, Merger Sub, the
Company or the holders of any of the following securities:
(a) Each share of common stock of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock, par value $0.01,
of the Surviving Corporation.
(b) Each share of Common Stock, par value $1.00 per share, of
the Company (the "Company Common Stock") issued and outstanding immediately
prior to the Effective Time (other than any shares of Company Common Stock to be
canceled pursuant to Section 3.1(c) and any Dissenting Shares) ("Shares") shall
be converted into the right to receive in cash an amount per Share (subject to
any applicable withholding Tax specified in Section 3.5(c)) equal to $52.75 in
cash, without interest (the "Merger Consideration"). At the Effective Time, each
holder of a certificate theretofore representing any such shares of Company
Common Stock shall cease to have any rights with respect thereto, except the
right to receive Merger Consideration upon surrender of such certificates in
accordance with Section 3.5, without interest.
(c) Each Share held in the treasury of the Company, or
otherwise owned by Parent or Merger Sub, or owned by any direct or indirect
Subsidiary of such Persons, in each case immediately prior to the Effective
Time, shall be canceled without any conversion thereof and no consideration
shall be paid with respect thereto.
Section 3.2 Treatment of Options and Other Equity Awards.
(a) As of the Effective Time, each Option will be canceled and
extinguished, and the holder thereof will be entitled to receive an amount in
cash equal to the excess (if any) of (i) the product of (A) the number of Shares
subject to such Option and (B) the Merger Consideration over (ii) the aggregate
exercise price of such Option, without interest and less any required
withholding Taxes as specified in Section 3.5(c). All payments with respect to
canceled Options shall be made by the Paying Agent as promptly as reasonably
practicable after the Effective Time from funds deposited by or at the direction
of the Surviving Corporation to pay such amounts in accordance with Section
3.5(a). Prior to the Effective Time, the Company shall take any and all actions
necessary to effectuate the cancelation of Options pursuant to this Section
3.2(a), including adopting any plan amendments.
(b) As of the Effective Time, each Stock Appreciation Right
will be canceled and extinguished, and the holder thereof will be entitled to
receive, in full satisfaction of the rights of such holder with respect thereto,
an amount in cash equal to the excess (if any) of (i) the lesser of (A) the
"target price" applicable thereto (if any) and (B) the Merger Consideration over
(ii) the "xxxxx xxxxx" applicable thereto, without interest and less any
required withholding Taxes as specified in Section 3.5(c). All payments with
respect to canceled Stock Appreciation Rights shall be made by the Paying Agent
as promptly as reasonably practicable after the Effective Time from funds
deposited by or at the direction of the Surviving Corporation to pay such
amounts in accordance with Section 3.5(a). Prior to the Effective Time, the
Company shall take any and all actions necessary to effectuate the cancelation
of Stock Appreciation Rights pursuant to this Section 3.2(b).
(c) As of the Effective Time, each Restricted Share that is
issued and outstanding as of the Effective Time shall, by virtue of the Merger
and without any action on the part of any holder of Restricted Shares, become
fully vested. Each vested Restricted Share issued and outstanding immediately
prior to the Effective Time (other than any such shares to be canceled pursuant
to Section 3.1(c) and any Dissenting Shares) shall be converted into the right
at the Effective Time to receive, as promptly as reasonably practicable
following the Effective Time, a cash payment with respect thereto equal to the
Merger Consideration, without interest and less any required withholding Taxes
as specified in Section 3.5(c). At the Effective Time, each holder of a
Restricted Share (other than any Dissenting Shares, which shall have the rights
set forth in Section 3.4) shall cease to have any rights with respect thereto,
except the right to receive Merger Consideration. Prior to the Effective Time,
the Company shall take any and all actions necessary to effectuate this Section
3.2(c), including providing holders of Restricted Shares with notice of their
rights with respect to any such Restricted Shares as provided herein.
(d) Prior to the Effective Time, the Company shall take such
action as is necessary to cause the ending date of the then current offering
period under the Company's Employee Stock Purchase Plan (the "ESPP") to be at
least thirty (30) days prior to the Effective Time, subject to the terms of such
plan (the "Final Purchase Date"). On the Final Purchase Date, the Company shall
apply the funds credited as of such date under such ESPP within each
participant's payroll withholding account to the purchase of whole Shares of the
Company in accordance with the terms of such ESPP and shall prevent the
commencement of any new purchase or offering period.
(e) As of the Effective Time, each Stock Equivalent that is
outstanding immediately prior to the Effective Time shall cease to represent a
right to receive upon distribution a share of Company Common Stock and shall
instead be converted automatically into a right to receive an amount in cash
determined in accordance with the terms of the applicable Director Compensation
Plan (including applicable interest accruing after the Effective Time).
Following the Effective Time, Parent shall, and shall cause the Surviving
Corporation to, comply with the terms of the Director Compensation Plans,
subject to the adjustments pursuant to this Section 3.2(e).
Section 3.3 Adjustment of Merger Consideration. Notwithstanding
anything in this Agreement to the contrary, if, between the date of this
Agreement and the Effective Time, the issued and outstanding Shares shall have
been changed into a different number of shares or a different class by reason of
any stock split, reverse stock split, stock dividend, reclassification,
redenomination, recapitalization, split-up, combination, exchange of shares or
other similar transaction, the Merger Consideration and any other dependent
items shall be appropriately adjusted to provide to the holders of Company
Common Stock the same economic effect as contemplated by this Agreement prior to
such action and as so adjusted shall, from and after the date of such event, be
the Merger Consideration or other dependent item, subject to further adjustment
in accordance with this sentence.
Section 3.4 Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the
contrary, Shares outstanding immediately prior to the Effective Time and held by
a holder who is entitled to demand and properly demands appraisal of such Shares
(the "Dissenting Shares") pursuant to, and who complies in all respects with,
Article 13 of the GBCC (the "Dissenters Provisions"), shall be entitled to
payment of the fair value of such Dissenting Shares in accordance with the
Dissenters Provisions; provided, however, that if any such holder shall fail to
perfect or otherwise shall waive, withdraw or lose the right to dissent under
the Dissenters Provisions, then the right of such holder to be paid the fair
value of such holder's Dissenting Shares shall cease and such Dissenting Shares
shall be deemed to have been converted as of the Effective Time into, and to
have become exchangeable solely for the right to receive, the Merger
Consideration.
(b) The Company will give Parent prompt notice of any notice
received by the Company of intent to demand the fair value of any Shares,
withdrawals of such notices and any other instruments served pursuant to the
Dissenters Provisions and received by the Company and Parent shall have the
right to participate in all negotiations and proceedings with respect to the
exercise of dissenters' rights under the Dissenters Provisions. The Company will
not, except with the prior written consent of Parent, make any payment or other
commitment with respect to any such exercise of dissenters' rights or offer to
settle or settle any such rights.
Section 3.5 Payment and Exchange of Certificates.
(a) Following the date of this Agreement and in any event not
less than three (3) Business Days prior to the mailing of the Proxy Statement to
the shareholders of the Company, Parent shall designate a bank or trust company
reasonably acceptable to the Company to act as Paying Agent in connection with
the Merger (the "Paying Agent"). Promptly after the Effective Time, Parent will,
or cause the Surviving Corporation to, deposit in trust with, the Paying Agent,
the aggregate consideration to which shareholders, holders of Options, holders
of Stock Appreciation Rights, and holders of Restricted Shares of the Company
become entitled under this Article III. Until used for that purpose, the funds
shall be invested by the Paying Agent, as directed by Parent or the Surviving
Corporation, in obligations of or guaranteed by the United States of America or
obligations of an agency of the United States of America which are backed by the
full faith and credit of the United States of America, in commercial paper
obligations rated A-1 or P-1 or better by Xxxxx'x Investors Services Inc. or
Standard & Poor's Corporation, or in deposit accounts, certificates of deposit
or banker's acceptances of, repurchase or reverse repurchase agreements with, or
Eurodollar time deposits purchased from, commercial banks, each of which has
capital, surplus and undivided profits aggregating more than $500,000,000 (based
on the most recent financial statements of the banks which are then publicly
available at the SEC or otherwise).
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause the Paying Agent to mail to each Person who was a record
holder of Company Common Stock immediately prior to the Effective Time, whose
shares were converted pursuant to Article III into the right to receive the
Merger Consideration, (i) a form of letter of transmittal for use in effecting
the surrender of stock certificates which immediately prior to the Effective
Time represented Company Common Stock (each, a "Certificate") in order to
receive payment of the Merger Consideration (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificate shall pass,
only upon actual delivery of the Certificates to the Paying Agent (or effective
affidavits of loss in lieu thereof), and shall otherwise be in customary form)
and (ii) instructions for use in effecting the surrender of the Certificates (or
effective affidavits of loss in lieu thereof) in exchange for payment of the
Merger Consideration. When the Paying Agent receives a Certificate (or effective
affidavits of loss in lieu thereof), together with a properly completed and
executed letter of transmittal and any other required documents, the Paying
Agent shall pay to the holder of the Shares represented by the Certificate (or
effective affidavits of loss in lieu thereof), or as otherwise directed in the
letter of transmittal, the Merger Consideration with regard to each Share
represented by such Certificate, less any required Tax withholdings in
accordance with Section 3.5(c), and the Certificate shall be canceled. No
interest shall be paid or accrued on the Merger Consideration payable upon the
surrender of Certificates. If payment is to be made to a Person other than the
Person in whose name a surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered must be properly
endorsed or otherwise be in proper form for transfer, and the Person who
surrenders the Certificate must provide funds for payment of any transfer or
other Taxes required by reason of the payment to a Person other than the
registered holder of the surrendered Certificate or establish to the
satisfaction of the Surviving Corporation that all Taxes have been paid or are
not applicable. After the Effective Time, a Certificate shall represent only the
right to receive the Merger Consideration in respect of the Shares represented
by such Certificate, without any interest thereon.
(c) Parent, the Surviving Corporation and Paying Agent, as
applicable, shall be entitled to deduct and withhold from the consideration and
any other amount otherwise payable to a holder of Shares, Options, Stock
Appreciation Rights, or Restricted Shares pursuant to the Merger or this
Agreement (each, a "Payee ") such amounts as are required to be withheld under
the Code, the rules and regulations promulgated thereunder or any applicable
provision of state, local or foreign tax Law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Payee in respect of which such deduction
and withholding was made.
(d) If a Certificate has been lost, stolen or destroyed, the
Surviving Corporation will cause the Paying Agent to accept an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen or destroyed
instead of the Certificate; provided, that the Surviving Corporation may require
the Person to whom any Merger Consideration is paid, as a condition precedent to
the payment thereof, to give the Surviving Corporation a bond in such sum as it
may direct or otherwise indemnify the Surviving Corporation in a manner
reasonably satisfactory to the Surviving Corporation against any claim that may
be made against the Surviving Corporation with respect to the Certificate
claimed to have been lost, stolen or destroyed.
(e) At any time which is more than six (6) months after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds which had been deposited with the Paying
Agent and have not been disbursed in accordance with this Article III (including
interest and other income received by the Paying Agent in respect of the funds
made available to it), and after the funds have been delivered to the Surviving
Corporation, Persons entitled to payment in accordance with this Article III
shall be entitled to look solely to the Surviving Corporation (subject to
abandoned property, escheat or other similar Laws) for payment of the Merger
Consideration upon surrender of the Certificates held by them, without any
interest thereon. Any portion of the funds deposited with the Paying Agent
remaining unclaimed as of a date which is immediately prior to such time as such
amounts would otherwise escheat to or become property of any government entity
shall, to the extent permitted by applicable Law, become the property of the
Surviving Corporation free and clear of any claims or interest of any Person
previously entitled thereto. None of the Surviving Corporation, Parent, Merger
Sub or the Paying Agent will be liable to any Person entitled to payment under
this Article III for any consideration which is delivered to a public official
pursuant to any abandoned property, escheat or similar Law.
(f) From and after the Effective Time, the Surviving
Corporation shall not record on the stock transfer books of the Company or the
Surviving Corporation any transfers of shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented for transfer, they shall be canceled and
treated as having been surrendered for the Merger Consideration in respect of
the Shares represented thereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the corresponding section of the disclosure
letter provided by the Company to Parent prior to the execution of this
Agreement (the "Company Disclosure Letter") (it being understood that any
information set forth in one section or subsection of the Company Disclosure
Letter shall be deemed to apply to each other Section or subsection of this
Agreement to the extent that its relevance is reasonably apparent on its face)
and except as expressly disclosed in reasonable detail in any report, schedule,
form, statement or other document filed with or furnished to the Securities and
Exchange Commission (the "SEC") by the Company since December 31, 2005, each as
filed prior to the date of this Agreement (other than disclosures in the "Risk
Factors" section of the Company's Annual Report on Form 10-K and any other
disclosures included in such filings that are predictive or forward looking in
nature), the Company hereby represents and warrants to Parent and Merger Sub
that:
Section 4.1 Organization. Each of the Company and each of its
Subsidiaries is duly organized, validly existing and in good standing under the
Laws of its respective jurisdiction of organization, and has the requisite
corporate or similar power and authority to own its properties and to carry on
its business as presently conducted and is duly qualified or licensed to do
business and is in good standing (where such concept exists) as a foreign
corporation or other entity in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
or licensing necessary, except where the failure to be so qualified, licensed or
in good standing would not have a Material Adverse Effect. Complete and correct
copies of the articles of incorporation and bylaws or other organizational
documents of each of the Company and each of its Subsidiaries, in each case as
currently in full force and effect, have been Made Available to Parent. The
Company is not in violation of the provisions of its governing documents. None
of the Subsidiaries of the Company is in violation in any material respect of
the provisions of its governing documents.
Section 4.2 Authority; Enforceability.
(a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement. The
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated by this Agreement
have been duly and validly authorized by the Board, and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated by this Agreement (except that
consummation of the Merger is subject to adoption of this Agreement by the
affirmative vote of a majority of the votes entitled to be cast by the holders
of the outstanding shares of Company Common Stock voting together as a single
voting group (the "Requisite Shareholder Vote")).
(b) The Board at a duly held meeting has unanimously (i)
determined that it is in the best interests of the Company and its shareholders,
and declared it advisable, to enter into this Agreement, (ii) adopted this
Agreement and the consummation of the transactions contemplated hereby,
including the Merger and (iii) resolved to recommend that the shareholders of
the Company approve the adoption of this Agreement and directed that such matter
be submitted for consideration of the shareholders of the Company at the
Shareholders Meeting (this clause (iii), the "Board Recommendation"). Assuming
the accuracy of the representations and warranties contained in Section 5.9, no
"moratorium", "control share acquisition", "business combination", "fair price"
or other form of anti-takeover Laws or regulations (collectively, "Takeover
Laws") are applicable in the State of Georgia or in any other U.S. or foreign
jurisdiction in which any of the Company's Subsidiaries are organized or formed,
or to the Company's Knowledge, in any other jurisdiction, to the execution,
delivery or performance of this Agreement, the consummation of the Merger, or
the other transactions contemplated by this Agreement.
(c) This Agreement has been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery by the other
parties, constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar Laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding
in equity or at Law).
Section 4.3 Non-Contravention. The execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
Merger and the other transactions contemplated hereby do and will not (a)
violate or conflict with or result in any breach of any provision of the
respective articles of incorporation or bylaws (or other similar governing
documents) of the Company or any of its Subsidiaries, (b) assuming that all
consents, approvals and authorizations contemplated by clauses (a) - (e) of
Section 4.4 have been obtained and all filings described in such Section have
been made and the receipt of the Requisite Shareholder Vote, conflict with or
violate any Law applicable to the Company or any of its Subsidiaries or by which
its or any of their respective properties are bound, or (c) require the consent,
approval or authorization of, or notice to or filing with any third party with
respect to, or result in any breach or violation of or constitute a default (or
an event which with notice or lapse of time or both would become a default) or
result in the loss of a benefit or a change in the rights and obligations under,
or give rise to any right of termination, cancellation, amendment or
acceleration of, any note, bond, mortgage, indenture, Contract, license, permit
or other obligation to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries or its or any of their
respective properties are bound, except, in the case of clauses (b) and (c) of
this Section 4.3, for any such conflict, violation, breach, default, loss, right
or other occurrence which would not have a Material Adverse Effect.
Section 4.4 Governmental Consents. The execution, delivery and
performance of this Agreement by the Company and the consummation by it of the
transactions contemplated by this Agreement do not and will not require any
consent, approval, authorization or permit of, action by, filing with or
notification to, any Governmental Authority, except as required under or
pursuant to (a) the HSR Act, (b) the Exchange Act, (c) state securities,
takeover and "blue sky" Laws, (d) the rules and regulations of the NYSE, (e) the
GBCC, and (f) any other consent, approval, authorization, permit, action, filing
or notification the failure of which to make or obtain would not have a Material
Adverse Effect.
Section 4.5 Capitalization of the Company.
(a) The authorized capital stock of the Company consists of
144,000,000 shares of Company Common Stock and 500,000 shares of Preferred
Stock, par value $1.00 per share ("Company Preferred Stock"). As of the close of
business on December 18, 2006 (the "Capitalization Date"), (i) 37,907,497 shares
of Company Common Stock were issued and outstanding (including 491,887
outstanding Restricted Shares), (ii) 12,252,466 shares of Company Common Stock
were held in the treasury of the Company or by the Company's Subsidiaries, (iii)
an aggregate of 2,924,650 shares of Company Common Stock were reserved for
issuance upon or otherwise deliverable in connection with the exercise of
outstanding Options, (iv) 44,775 shares of Company Common Stock were reserved
and available for issuance under the ESPP, (v) Stock Equivalents representing
209,211 shares of Company Common Stock were credited to accounts under the
Director Compensation Plans, (vi) 343,250 Stock Appreciation Rights were
outstanding and (vii) 35,000,000 shares of Company Common Stock were reserved
and available for issuance upon exercise of the Rights (as defined in the Rights
Agreement) issued pursuant to the Rights Agreement. As of the date of this
Agreement, the Company has outstanding Options to purchase 2,924,650 shares of
Company Common Stock with a weighted average exercise price of $29.69 per share.
No shares of Company Preferred Stock are outstanding. From the close of business
on the Capitalization Date until the date of this Agreement, no Shares have been
issued except for Shares issued pursuant to the exercise of Options in
accordance with their terms. All outstanding shares of capital stock of the
Company and each of its Subsidiaries (other than Restricted Shares) are duly
authorized, validly issued, fully paid and nonassessable, and are not subject to
and were not issued in violation of any preemptive or similar rights, purchase
option, call, or right of first refusal or similar rights. Except as set forth
above, there are no outstanding shares, options, warrants, calls, stock
appreciation rights, or other rights or commitments or any other Contracts of
any character relating to dividend rights or to the sale, issuance or voting of,
or the granting of rights to acquire, any shares of capital stock or voting
securities of the Company or any of its Subsidiaries, or any securities or
obligations convertible into, exchangeable for or evidencing the right to
purchase any shares of capital stock or voting securities of the Company or any
of its Subsidiaries.
(b) Except as set forth in Section 4.5(a), (i) there are no
preemptive rights of any kind which obligate the Company or any of its
Subsidiaries to issue or deliver any shares of capital stock or voting
securities of the Company or any of its Subsidiaries, (ii) there are no
securities or obligations convertible or exchangeable into or exercisable for,
or giving any Person a right to subscribe for or acquire from the Company or any
of its Subsidiaries, any shares of capital stock or voting securities of the
Company or any of its Subsidiaries and (iii) there is no Contract pursuant to
which the Company or any of its Subsidiaries is or may become obligated to
repurchase or redeem any shares of capital stock or voting securities of the
Company or its Subsidiaries or any securities or obligations convertible or
exchangeable into or exercisable for, any shares of capital stock or voting
securities of the Company or its Subsidiaries, in the case of clauses (ii) and
(iii), other than pursuant to Benefit Plans. Other than the Options and the
Stock Equivalents, the Company and its Subsidiaries do not have outstanding any
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or which are convertible, exchangeable or exercisable for or into
securities having the right to vote) with the shareholders of the Company or any
Subsidiary on any matter.
(c) As of the Capitalization Date, (i) each outstanding Option
has the exercise price, has an exercise period, and is held by the holder set
forth with respect thereto in Section 4.5(c)(i) of the Company Disclosure Letter
and (ii) each outstanding Stock Appreciation Right has the "xxxxx xxxxx", has
the "target price" (if any), has an exercise period, and is held by the holder
set forth with respect thereto in Section 4.5(c)(ii) of the Company Disclosure
Letter. All outstanding Options have an exercise price equal to no less than the
fair market value (as defined in the applicable Benefit Plan) of the underlying
Shares on the date of grant. From the Capitalization Date to the date of this
Agreement, there have been no changes to the information set forth in Sections
4.5(c)(i) or (ii) of the Company Disclosure Letter, except as a result of the
exercise, expiration or forfeiture of Options or the Stock Appreciation Rights.
(d) As of December 15, 2006, the only principal amount of
outstanding indebtedness for borrowed money of the Company and its Subsidiaries
(not including intercompany amounts, undrawn letters of credit, capital leases
or purchase price obligations with respect to acquisitions) (such indebtedness,
"Funded Indebtedness") is $218,559,000 in aggregate principal amount under the
Credit Agreement, dated as of July 3, 2006, by and among the Company, the
several banks and other financial institutions from time to time party thereto,
and Wachovia Bank, National Association in its capacity as administrative agent.
As of the date of this Agreement, the principal amount of outstanding Funded
Indebtedness of the Company and its Subsidiaries does not exceed $245,000,000 in
the aggregate.
Section 4.6 Company Subsidiaries. Section 4.6 of the Company Disclosure
Letter lists, as of the date of this Agreement, each Subsidiary of the Company
and the jurisdiction of organization thereof. All the outstanding Equity
Interests of each Subsidiary of the Company are owned, directly or indirectly,
by the Company free and clear of any Encumbrances, other than Permitted
Encumbrances. Except for its interests in its Subsidiaries, the Company does not
own, directly or indirectly, any Equity Interest in any other Person.
Section 4.7 SEC Reports; Financial Information.
(a) The Company has filed with the SEC all forms, documents,
certifications, registration statements and reports required to be filed or
furnished by it with the SEC since January 1, 2004 (as amended to date, the "SEC
Reports"). As of their respective dates, or, if amended, as of the date of the
last such amendment, the SEC Reports complied as to form in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be. None of the SEC Reports at the time filed or, if amended, as of the
date of such amendment, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. As of the date hereof, there are no outstanding or
unresolved comments from the SEC staff with respect to any of the SEC Reports.
(b) Each of the consolidated financial statements (including
all related notes and schedules) of the Company included (or incorporated by
reference) in the SEC Reports fairly presents in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
as at the respective dates thereof and their consolidated results of operations
and consolidated cash flows for the respective periods then ended (subject, in
the case of the unaudited statements, to normal year-end audit adjustments and
to any other adjustments described therein including the notes thereto, which
are not expected to be significant) in conformity with GAAP (except, in the case
of the unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be expressly
referred to therein or in the notes thereto).
Section 4.8 No Undisclosed Liabilities. Except (a) as reflected or
reserved against on the face of the most recent consolidated balance sheet of
the Company included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2005, or (b) for liabilities or obligations incurred in the
ordinary course of business consistent with past practice since December 31,
2005, neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
other than those which would not have a Material Adverse Effect.
Section 4.9 Absence of Certain Changes or Events. Since December 31,
2005, there has not been any Material Adverse Effect. From September 29, 2006
through the date of this Agreement, the Company and its Subsidiaries have
conducted their respective businesses in the ordinary course of business
consistent with past practice and, except as otherwise contemplated by this
Agreement, neither the Company nor any of its Subsidiaries has:
(a) declared, set aside, made or paid any dividend or other
distribution payable in cash, stock, property or otherwise with respect to any
Equity Interests or any options, warrants, convertible securities or other
rights to acquire any Equity Interest (except for regular quarterly dividends
not exceeding $0.175 per share of Company Common Stock and any dividends or
distributions by a Subsidiary wholly owned, directly or indirectly, by the
Company);
(b) reclassified, combined, split, subdivided, redeemed,
purchased or otherwise acquired any Equity Interests of the Company or any of
its Subsidiaries or any options, warrants, convertible securities or other
rights to acquire any Equity Interest of the Company or any of its Subsidiaries
(other than the acquisition by the Company of Shares, Options, Stock
Appreciation Rights, Restricted Shares and Stock Equivalents pursuant to the
Benefit Plans);
(c) except as required by applicable Law of jurisdictions
outside the United States, (i) granted to any current or former directors,
officers, employees or consultants, any increase in compensation or fringe
benefits, except for increases in the ordinary course of business with respect
to employees who are not directors or officers of the Company, (ii) granted to
any current or former directors, officers or employees, any right to receive
severance or termination pay not provided for under a Benefit Plan or Foreign
Plan listed on Section 4.14 of the Company Disclosure Letter or (iii) entered
into, amended or modified any Benefit Plans or employment, change of control or
severance Contract with any of its current or former directors, officers,
employees or consultants;
(d) (i) acquired, leased or licensed from any Person (by
merger, consolidation, acquisition of stock or assets or otherwise) or sold,
disposed of, leased or licensed (by merger, consolidation, sale of stock or
assets or otherwise) any corporation, partnership or other business organization
or division thereof, any Equity Interests therein or any assets, in each case,
which are material to the Company and its Subsidiaries, taken as a whole, other
than purchases and sales of inventory, non-merchandise supplies, and other
assets in the ordinary course of business or (ii) incurred or guaranteed, or
modified in any material respect, any Indebtedness or made any loans, advances
or capital contributions to, or investments in, any other Person (other than a
Subsidiary of the Company);
(e) made any changes in accounting policies or procedures,
except as required by GAAP or a Governmental Authority;
(f) made or revoked any material Tax election, or changed any
material Tax accounting principles, except as required by applicable Law; or
(g) agreed to take any of the actions described in Sections
4.9(a) through 4.9(g).
Section 4.10 Contracts.
(a) As of the date of this Agreement, the Company has Made
Available to Parent correct and complete copies of, each Contract to which the
Company or any of its Subsidiaries is a party or by which the Company, any of
its Subsidiaries or any of their respective properties or assets is bound which:
(i) (A) would be required to be filed by the Company
as a "material contract" pursuant to Item 601(b)(10) of Regulation S-K under the
Securities Act or disclosed by the Company on a Current Report on Form 8-K, (B)
is to be performed after the date of this Agreement, and (C) has not been filed
or incorporated by reference in any SEC Report in unredacted form;
(ii) contains covenants that materially limit the
ability of the Company or any of its Subsidiaries (or which, following the
consummation of the Merger, could restrict the ability of the Surviving
Corporation) to compete in any business or with any Person or in any geographic
area, or to sell, supply or distribute any service or product, except for any
such Contract that may be canceled without any penalty or other liability to the
Company or any of its Subsidiaries upon notice of 60 days or less;
(iii) relates to the formation, creation, operation,
management or control of any partnership or joint venture;
(iv) involves any exchange-traded or over-the-counter
swap, forward, future, option, cap, floor or collar financial Contract, or any
other interest-rate or foreign currency protection Contract;
(v) evidences or relates to Indebtedness (other than
the endorsement of negotiable instruments for collection in the ordinary course
of business);
(vi) involves any Key Customers or Key Suppliers
(other than purchase orders, sales orders or invoices under such Contracts
entered into in the ordinary course of business consistent with past practice);
(vii) are Contracts with customers or suppliers of
the Company or its Subsidiaries containing a provision which provides that any
term or terms of such Contract will be no less favorable to such customers or
suppliers either individually or in the aggregate than similar provisions in any
other Contract;
(viii) was (A) entered into after December 31, 2005
or (B) has not yet been consummated, that, in the case of either (A) or (B),
involves the acquisition or disposition, directly or indirectly (by merger or
otherwise), of assets or capital stock or other equity interests for aggregate
consideration under such Contract in excess of $1 million (other than
acquisitions or dispositions of assets in the ordinary course of business
consistent with past practice, including acquisitions and dispositions of
inventory);
(ix) by its terms calls for payments by the Company
and/or its Subsidiaries under such Contract of more than $1 million in any
12-month period or $10 million over the term of such Contract;
(x) involves any acquisition since January 1, 2004,
pursuant to which the Company or any of its Subsidiaries has continuing
indemnification, "earn-out" or other contingent payment obligations, in each
case, that could result in payments in excess of $250,000;
(xi) is between (A) the Company or any of its
Subsidiaries, on the one hand, and (B) any other Affiliate of the Company (other
than its Subsidiaries), on the other hand, of the type that would be required to
be disclosed under Item 404 of Regulation S-K under the Securities Act;
(xii) involves any labor union or other employee
organization, including any works council or foreign trade union or trade
association;
(xiii) (A) grants to the Company and/or any of its
Subsidiaries any rights in, to or under any Company Intellectual Property (other
than any Contract (i) which grants rights to use readily available commercial
Software that is generally available on nondiscriminatory pricing terms or (ii)
which grants to the Company or a Subsidiary the right to use a third party's
trademarks on printed products in exchange for a royalty, in the case of either
(i) or (ii), entered into in the ordinary course of business consistent with
past practice), or (B) restricts any rights of the Company or any of its
Subsidiaries in, to or under Company Intellectual Property, or permit third
Persons to use or register any Company Intellectual Property (other than any
such Contract entered into in the ordinary course of business consistent with
past practice);
(xiv) obligates the Company or any of its
Subsidiaries to provide indemnification or a guarantee;
(xv) is a Real Property Lease; or
(xvi) is (A) an employment Contract between the
Company and any officer of the Company or any of its Subsidiaries (including the
heads of each business segment) or (B) a Contract containing any covenant in
favor of the Company which limits the ability of any past officer of the Company
or any of its Subsidiaries, or would limit the ability of any present officer of
the Company or any of its Subsidiaries upon the termination of such officer's
employment, to compete against the Company, any of its Subsidiaries or any of
their respective business units.
Each Contract of the type described in clauses (i) through (xvi) and any
Contract entered into after the date of this Agreement that would have
constituted a Material Contract if entered into prior to the date hereof is
referred to herein as a "Material Contract".
(b) Each Material Contract is valid and binding on, and
enforceable in accordance with its terms against, the Company and any Subsidiary
of the Company which is a party thereto and, to the Knowledge of the Company,
each other party thereto and is in full force and effect, and the Company and
its Subsidiaries have performed and complied with all obligations required to be
performed or complied with by them under each Material Contract. There is no
default under any Material Contract by the Company or any of its Subsidiaries
or, to the Knowledge of the Company, by any other party thereto, and no event
has occurred that with the lapse of time or the giving of notice or both would
constitute a default thereunder by the Company or any of its Subsidiaries, or to
the Knowledge of the Company, by any other party thereto, except which would not
have a Material Adverse Effect.
Section 4.11 Title to Properties; Assets.
(a) As of the date of this Agreement, a complete and correct
list of all of the real property owned by the Company and its Subsidiaries is
set forth in Section 4.11(a) of the Company Disclosure Letter (collectively with
any real property acquired by the Company or any of its Subsidiaries after the
date of this Agreement, the "Owned Real Property").
(b) As of the date of this Agreement, Section 4.11(b) of the
Company Disclosure Letter contains a complete and correct schedule of all leases
and subleases (including addendums and amendments) under which the Company or
any of its Subsidiaries use or occupy or have the right to use or occupy, any
real property (collectively with any real property leases or subleases entered
into by the Company or any of its Subsidiaries after the date of this Agreement,
the "Real Property Leases") (the land, buildings and other improvements covered
by the Real Property Leases being herein called the "Leased Real Property" and,
collectively with the Owned Real Property, the "Property"), which schedule sets
forth the address of the Leased Real Property covered thereby. Each Real
Property Lease has been Made Available to Parent. The Company and its
Subsidiaries enjoy peaceful and undisturbed possession under each Real Property
Lease.
(c) Each of the Company and its Subsidiaries (i) has good and
valid fee simple title to the Owned Real Property, (ii) owns or has a valid
right to use, as applicable, the assets that are material to the operation of
the business of the Company and its Subsidiaries (except, in the case of
personal property, for such assets as are no longer used or useful in the
conduct of its businesses or as have been disposed of in the ordinary course of
business consistent with past practice) and (iii) has good and valid leasehold
interests in all of its Leased Real Property. All property, assets and Owned
Real Property are free and clear of all Encumbrances other than Permitted
Encumbrances.
Section 4.12 Compliance with Law and Reporting Requirements.
(a) Except as would not have a Material Adverse Effect, (i)
neither the Company nor any of its Subsidiaries is in violation of, or has
violated, any Law, or has received any written notice of any violation of Law,
(ii) the Company and each of its Subsidiaries has and is in compliance with all
Licenses required to conduct their respective businesses as now being conducted
and all such Licenses are valid and in full force and effect and (iii) none of
the Company or its Subsidiaries has received any written notification from any
Governmental Authority threatening to revoke any such License.
(b) (i) The Company has been since January 1, 2003 and is in
compliance in all material respects with (A) the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") and (B) the applicable
listing and corporate governance rules and regulations of the NYSE.
(ii) The Company has designed disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that
material information relating to the Company, including its consolidated
Subsidiaries, is made known to the chief executive officer and the chief
financial officer of the Company by others within those entities. To the
Knowledge of the Company, such disclosure controls and procedures are effective
in timely alerting the chief executive officer and the chief financial officer
of the Company to material information required to be included in the Company's
periodic reports required under the Exchange Act.
(iii) The Company has disclosed, based on its most
recent evaluation prior to the date hereof, to the Company's auditors and the
audit committee of the Board (A) any significant deficiencies and material
weaknesses in the design or operation of internal controls over financial
reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect the Company's ability to record, process,
summarize and report financial information and (B) any fraud or allegation of
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company's internal controls over financial
reporting.
(iv) As of the date hereof, to the Company's
Knowledge, the Company has not identified any material control deficiencies
other than as disclosed in Section 4.12(b)(iv) of the Company Disclosure Letter.
To the Company's Knowledge, its auditors and its chief executive officer and
chief financial officer will be able to give the certifications and attestations
required pursuant to the rules and regulations adopted pursuant to Section 404
of the Xxxxxxxx-Xxxxx Act, without qualification, when next due.
(c) None of the Company's Subsidiaries is subject to the
reporting requirements of Sections 13(a) or 15(d) under the Exchange Act.
(d) The Company and its Subsidiaries are and, within the last
two (2) years have been, in compliance in all material respects with all
applicable provisions of the Xxxxx-Xxxxx-Xxxxxx Act and the rules and
regulations related thereto and other applicable privacy Laws, including those
related to the exchange, disclosure or sharing of customer or personal
information or information security.
Section 4.13 Litigation. There are no Actions pending or, to the
Knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, except as would not have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries nor any of their respective properties is or
are a party or subject to or in default under any Governmental Order except as
would not have a Material Adverse Effect. There are no formal or informal
inquiries or investigations by the SEC or other Governmental Authority, other
governmental inquiries or investigations or internal investigations or material
whistle blower complaints pending, or to the Knowledge of the Company,
threatened, or otherwise involving the Company or any of its Subsidiaries,
including regarding any accounting policies or practices of the Company or any
malfeasance by any officer of the Company or any of its Subsidiaries. This
Section 4.13 does not relate to environmental matters which are the subject of
Section 4.18.
Section 4.14 Employee Compensation and Benefit Plans; ERISA.
(a) Section 4.14(a) of the Company Disclosure Letter sets
forth a correct and complete list, as of the date of this Agreement, of all
material (i) employee benefit plans, programs and Contracts, including pension,
retirement, profit sharing, deferred compensation, stock option, change in
control, retention, equity or equity-based compensation, stock purchase,
employee stock ownership, severance pay, vacation, bonus or other incentive
plans, all medical, vision, dental or other health plans, all life insurance
plans, all employment Contracts, and all other employee benefit plans or fringe
benefit plans, including "employee benefit plans" as that term is defined in
Section 3(3) of ERISA, in each case, whether oral or written, funded or
unfunded, or insured or self-insured, maintained by the Company or any of its
Subsidiaries, or to which the Company or any of its Subsidiaries contributes or
is obligated to contribute, or with respect to which the Company or any of its
Subsidiaries has or may have any liability (contingent or otherwise), in each
case, for or to any current or former employees, directors, officers or
consultants of the Company or any of its Subsidiaries located primarily in the
United States and/or their dependents (collectively, the "Benefit Plans"), and
(ii) benefit plans that are comparable to the Benefit Plans and that are
maintained pursuant to the Laws of a country other than the United States, other
than benefit plans that are required to be maintained under the Laws of the
applicable country (collectively, the "Foreign Plans"). For purposes of this
Agreement, the term "plan," when used with respect to Foreign Plans, shall mean
a "scheme" or other employee benefit program or arrangement in accordance with
specific country usage.
(b) Each Benefit Plan intended to be subject to Code Section
401(a) and each trust established in connection with any such Benefit Plan which
is intended to be tax exempt under Code Section 501(a) has been determined by
the Internal Revenue Service to be qualified under Code Section 401(a) or exempt
from taxation under Code Section 501(a), as the case may be, or the remedial
amendment period for such determination has not expired, and, to the Knowledge
of the Company, no event has occurred that would adversely affect such
determination. Except as would not have a Material Adverse Effect: (i) all the
Benefit Plans and the related trusts comply with and have been administered in
compliance with (A) the applicable provisions of ERISA, (B) all applicable
provisions of the Code, (C) all other applicable Laws, and (D) their terms and
the terms of any applicable collective bargaining or applicable collective labor
Contracts; and, in each case, neither the Company nor any of its Subsidiaries
has received any written notice from any Governmental Authority questioning or
challenging such compliance; (ii) there are no unresolved claims or disputes
under the terms of, or in connection with, the Benefit Plans other than claims
for benefits which are payable in the ordinary course; (iii) there has not been
any nonexempt prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) with respect to any Benefit Plan; (iv) no
litigation has been commenced with respect to any Benefit Plan and, to the
Knowledge of the Company, no such litigation is threatened (other than routine
claims for benefits in the normal course); and (v) there are no audits or
investigations by a Governmental Authority pending or, to the Knowledge of the
Company, threatened in connection with any Benefit Plan.
(c) Neither the Company nor any ERISA Affiliate (i) sponsors
or contributes to a Benefit Plan that is a "defined benefit plan" (as defined in
ERISA Section 3(35)); (ii) has an "obligation to contribute" (as defined in
ERISA Section 4212) to a Benefit Plan that is a "multiemployer plan" (as defined
in ERISA Sections 4001(a)(3) and 3(37)(A)); (iii) has any liability, contingent
or otherwise, under Title IV of ERISA with respect to a Benefit Plan; or (iv)
except as listed in Section 4.14(c) of the Company Disclosure Letter, sponsors,
maintains or contributes to any plan, program or arrangement that provides for
post-retirement or other post-employment welfare benefits (other than coverage
or benefits (A) required to be provided under Part 6 of Subtitle B of Title I of
ERISA or any other similar applicable Law or (B) the full cost of which is borne
by the employee or former employee (or any of their beneficiaries)). For
purposes of this Section 4.14, "ERISA Affiliate" shall mean any trade or
business, whether or not incorporated, that together with the Company would be
deemed to be a single employer for purposes of Section 4001 of ERISA or Sections
414(b), (c), (m), (n) or (o) of the Code. The terms of each Benefit Plan listed
in Section 4.14(c) of the Company Disclosure Letter do not restrict the ability
of the Company to amend or terminate such Benefit Plan.
(d) Except as would not have a Material Adverse Effect: (i)
each Foreign Plan and related trust, if any, complies with and has been
administered in compliance with (A) the applicable Laws of the applicable
foreign country and (B) its terms and the terms of any applicable collective
bargaining, collective labor or works council Contracts and, in each case,
neither the Company nor any of its Subsidiaries has received any written notice
from any Governmental Authority questioning or challenging such compliance, (ii)
each Foreign Plan which, under the Laws of the applicable foreign country, is
required to be registered or approved by any Governmental Authority, has been so
registered or approved, (iii) all contributions to each Foreign Plan required to
be made by the Company or its Subsidiaries through the Closing Date have been or
shall be made or, if applicable, shall be accrued in accordance with
country-specific accounting practices, (iv) there are no unresolved claims or
disputes under the terms of, or in connection with, the Foreign Plans other than
claims for benefits which are payable in the ordinary course, (v) no litigation
has been commenced with respect to any Foreign Plan and, to the Knowledge of the
Company, no such litigation is threatened (other than routine claims for
benefits in the normal course), and (vi) there are no audits or investigations
by a Governmental Authority pending or, to the Knowledge of the Company,
threatened in connection with any Foreign Plan. Section 4.14(d) of the Company
Disclosure Letter designates each Foreign Plan that is a defined benefit pension
plan.
(e) Except as may be required by applicable Law or as
expressly provided in this Agreement, neither the Company nor any of its
Subsidiaries has adopted, announced or otherwise made known any plan or
commitment to create any additional Benefit Plans or Foreign Plans or to amend
or modify any existing Benefit Plan or Foreign Plan in such a manner as to
materially increase the cost of such Benefit Plan or Foreign Plan to the Company
or any of its Subsidiaries.
(f) Except as provided in this Agreement or as required under
applicable Law, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement will (either
alone or together with any other event): (i) result in any material payment
(including any bonus, severance, deferred compensation, forgiveness of
indebtedness or golden parachute payment) becoming due to any current or former
employee under any Benefit Plan or Foreign Plan; (ii) increase in any material
respect any benefit otherwise payable under any Benefit Plan or Foreign Plan;
(iii) result in the acceleration in any material respect of the time of payment
or vesting of any such benefits under any Benefit Plan or Foreign Plan; (iv)
result in any material obligation to fund any trust or other arrangement with
respect to compensation or benefits under a Benefit Plan or Foreign Plan; or (v)
limit, in any way, the surviving Corporation's ability to amend or terminate any
Benefit Plan or Foreign Plan. Other than the payments that may be made to the
persons listed in Section 4.14(f) of the Company Disclosure Letter, no payment
or benefit which has been, will or may be made by the Company or any of its
Subsidiaries with respect to any current or former employee in connection with
the execution and delivery of this Agreement or the consummation of the
transaction contemplated by this Agreement could result in any "excess parachute
payments" within the meaning of Section 280G(b)(1) of the Code or
nondeductibility under Section 162(m) of the Code.
(g) Except as would not have a Material Adverse Effect,
neither the Company nor any of its Subsidiaries has classified any individual as
an "independent contractor" or similar status who, according to a Benefit Plan
or Foreign Plan or applicable Law, should have been classified as an employee.
To the Knowledge of the Company, neither the Company nor any of its Subsidiaries
has any material liability by reason of any individual who provides or provided
services to the Company or any of its Subsidiaries, in any capacity, being
improperly excluded from participating in any Benefit Plan or Foreign Plan.
(h) Correct and complete copies have been Made Available to
Parent by the Company of all written Benefit Plans and Foreign Plans (including
all amendments and attachments thereto) (or, in the case of award agreements
relating to equity-based or equity-related awards, forms of agreements); all
related trust documents; all insurance Contracts or other funding arrangements
to the degree applicable; the two most recent annual information filings (Form
5500) and annual financial reports for those Benefit Plans and Foreign Plans
(where required by applicable Law); the most recent determination letter from
the Internal Revenue Service (where required by applicable Law); and the most
recent summary plan descriptions, if any, for the Benefit Plans or Foreign Plans
(including, for any Benefit Plan or Foreign Plan that is not embodied in a
document, a written description of the Benefit Plan or Foreign Plan).
(i) The execution and delivery of this Agreement in and of
itself will not result in the accelerated vesting of any Restricted Share or
Option.
Section 4.15 Labor Matters.
(a) Neither the Company nor any of its Subsidiaries is a party
to or bound by any labor or collective bargaining agreement, and no employees of
the Company or any of its Subsidiaries are represented by any labor organization
with respect to their employment with the Company or its Subsidiaries.
(b) No representation election petition or application for
certification has been filed by any employees of the Company or any of its
Subsidiaries, nor is such a petition or application pending with the National
Labor Relations Board or any other labor relations tribunal or authority, and to
the Knowledge of the Company, there are no activities or proceedings of any
labor union to organize any of the employees of the Company or any of its
Subsidiaries. There is no pending or, to the Knowledge of the Company,
threatened, labor dispute, strike, walkout, work stoppage, slowdown, grievance,
lockout or other collective labor action involving employees of the Company or
any of its Subsidiaries, and no such action has occurred within the past five
(5) years.
(c) Except as would not have a Material Adverse Effect, (i)
the Company and each of its Subsidiaries are in compliance with all applicable
local, state, federal and foreign Laws relating to employment and employment
practices, including Laws relating to employment discrimination, terms and
conditions of employment, hours of work and the payment of wages, classification
of employees and independent contractors, health and safety, disability rights
or benefits, equal employment opportunity, workers' compensation and labor
relations, (ii) there are no actions, lawsuits, claims, charges or controversies
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries brought by or on behalf of any applicant for employment,
any current or former employee or any class of the foregoing, relating to any
such Law, or alleging breach of any express or implied contract of employment,
wrongful termination of employment, or alleging any other discriminatory,
wrongful or tortious conduct in connection with the employment relationship, and
(iii) neither the Company nor any of its Subsidiaries has received any notice of
the intent of the Equal Employment Opportunity Commission or any other
Governmental Authority responsible for the enforcement of labor or employment
Laws to conduct an investigation with respect to or relating to the Company or
any of its Subsidiaries, and no such investigation is in progress.
(d) None of the Company or any of its Subsidiaries is liable
for any material payment to any trust or other fund or to any Governmental
Authority with respect to unemployment compensation benefits or social security
benefits or obligations for employees (other than routine payments to be made in
the normal course of business, consistent with past practice).
(e) The Company and each of its Subsidiaries are and have been
in compliance in all material respects with all notice and other requirements of
the Worker Adjustment and Retraining Notification Act of 1988, as amended (the
"WARN Act"), and any applicable similar state, local or foreign Law.
(f) To the Company's Knowledge, no employee of the Company or
any of its Subsidiaries is in violation of any term of any employment contract,
invention assignment agreement, non-disclosure agreement, non-competition
agreement, non-solicitation agreement, or any restrictive covenant to a former
employer relating (i) to the right of any such employee to be employed by the
Company or any Subsidiary because of the nature of the business conducted by the
Company or any Subsidiary or (ii) to the use of trade secrets or proprietary
information of others.
Section 4.16 Intellectual Property.
(a) Section 4.16(a) of the Company Disclosure Letter sets
forth, as of the date of this Agreement, a correct and complete list of all
United States and foreign (i) issued Patents and Patent applications, (ii)
Trademark registrations and applications for registration, (iii) Copyright
registrations and applications for registration, (iv) mask work registrations
and applications for registration, and (v) any Software included in the Company
Intellectual Property, in each case which are material to the conduct of the
business as presently conducted by any of the Company's Printed Products,
Software & Services or Scantron business segments, as applicable, and owned by
the Company or any of its Subsidiaries (other than the Software described in the
foregoing clause (v), collectively, and together with any items described in
clauses (i) though (iv) obtained by the Company or any of its Subsidiaries after
the date hereof, the "Registered Intellectual Property"). Section 4.16(a) of the
Company Disclosure Letter sets forth, as of the date of this Agreement, with
respect to each such item of Registered Intellectual Property (A) a correct and
complete list of the jurisdictions in which such item of Registered Intellectual
Property has been registered or in which an application has been filed, (B) the
applicable registration, application, or serial number, and (C) the record
owner. The Company or its Subsidiary is the sole and exclusive beneficial and
record owner of all of the Registered Intellectual Property, and all of the
Registered Intellectual Property is subsisting and, to the Company's Knowledge,
valid.
(b) The Company or any Subsidiary of the Company has not taken
any action or failed to take any action, or used or enforced (or failed to use
or enforce) any of the Registered Intellectual Property in a manner that would
result in the abandonment, cancellation, invalidity, or unenforceability of any
of the Registered Intellectual Property.
(c) Except as would not have a Material Adverse Effect, the
Company and/or its Subsidiaries has a valid right to use, or is the owner of all
right, title and interest in and to all of the Company Intellectual Property, in
each case free and clear of any and all Encumbrances (except Permitted
Encumbrances). No Action has been asserted or, to the Knowledge of the Company,
threatened, against the Company or any of its Subsidiaries in the past two (2)
years challenging the Company's or any of its Subsidiary's exclusive ownership
of, or right to use, any material Company Intellectual Property (including any
proceeding before any Intellectual Property office), nor, to the Company's
Knowledge, is there a substantial basis for any such Action.
(d) The conduct of the businesses of the Company and its
Subsidiaries as currently conducted does not infringe, misappropriate, or
otherwise violate any Person's Intellectual Property, and there has been no such
Action asserted or, to the Knowledge of the Company, threatened, in the past two
(2) years against the Company or any of its Subsidiaries, nor to the Company's
Knowledge, is there a substantial basis for any such Action.
(e) To the Company's Knowledge, no Person is infringing,
misappropriating, or otherwise violating any Company Intellectual Property, and
no such Action has been threatened in writing or asserted against any Person by
the Company or any of its Subsidiaries or, to the Company's Knowledge, any other
Person, in the past two (2) years.
(f) The Company and each of its Subsidiaries have taken all
reasonable measures to protect the confidentiality of all Trade Secrets included
in the Company Intellectual Property.
(g) No former or current partner, director, shareholder,
officer, member of management or personnel of the Company or any of its
Subsidiaries will, after giving effect to the transactions contemplated hereby,
own or retain any ownership rights in any material Company Intellectual
Property.
(h) The consummation of the transactions contemplated in this
Agreement and any related agreements, will not (with or without notice or the
lapse of time or both) (i) result in the loss or impairment of, or give rise to
any right of any third Person to terminate or restrict, (ii) require payment of
any additional amounts or the consent of any Governmental Authority or third
Person in respect of, or (iii) result in the grant or transfer to any other
Person of, in each case, the Company's or any of its Subsidiaries' rights in or
to any of the Company Intellectual Property, except as would not have a Material
Adverse Effect.
(i) With respect to the Software included in the Company
Intellectual Property, (i) neither the Company, its Subsidiaries, nor, to the
Company's Knowledge, any of their licensees have experienced any defects in such
Software, including any error or omission in the processing of any transactions
other than defects which have been corrected, which defects, errors, or
omissions would have a Material Adverse Effect, and (ii) to the Company's
Knowledge, no such Software (x) contains any Unauthorized Code or (y) is subject
to the terms of any "open source" or other similar license that provides for the
source code of the Software to be publicly distributed or dedicated to the
public. During the two (2) years prior to the date hereof, (A) to the Company's
Knowledge, there have been no security breaches in the Company's or any of its
Subsidiary's information technology systems, and (B) there have been no
disruptions in any of the Company's or its Subsidiaries' information technology
systems, in each case that would have a Material Adverse Effect. The Company and
its Subsidiaries have implemented disaster recovery and backup plans and systems
that are customary and adequate for companies in this and similar industries to
address the nature and level of risk. The Company and each of its Subsidiaries
are in compliance in all material respects with such plans. Copies of all such
material plans have been Made Available to Parent. As of the Closing, copies of
all material Software Documentation shall have been made available to Parent.
(j) With respect to the material Software included in the
Company Intellectual Property and owned by the Company or any of its
Subsidiaries, (i) such Software performs substantially in accordance with the
applicable Software Documentation, (ii) no source code for such Software has
been made available by the Company to any escrow agent or other Person who is
not currently an employee of the Company or its Subsidiary, and the Company or
its Subsidiaries have no duty or obligation (whether present, contingent or
otherwise) to make available the source code for any Software to any such
Person, and (iii) no Person other than the Company or its Subsidiary possesses
any exclusive right or license to use, exploit, assert or enforce any rights in
or to such Software.
Section 4.17 Privacy Policies.
Copies of the respective privacy policies (each, a "Privacy
Policy") of the Company and each of its Subsidiaries regarding the collection
and use of information, including non-public financial information, received
from or related to its customers (and customers of its customers) or other
individual persons ("Customer Information") currently in effect with respect to
any Customer Information collected, used or held by the Company or any of its
Subsidiaries have been Made Available to Parent. To the Company's Knowledge,
neither the Company nor any of its Subsidiaries has at any time during the last
five years collected, received or used any Customer Information in violation of
its respective Privacy Policies or applicable Law. No Action has been asserted
or, to the Knowledge of the Company, threatened against the Company or any of
its Subsidiaries alleging a violation of any Person's privacy or personal
information or data rights or violation of any other Law with respect to
collection, use or disclosure of Customer Information and the consummation of
the transactions contemplated by this Agreement will not breach or otherwise
cause any violation of the Company's or any of its Subsidiary's respective
Privacy Policies or Law. Each of the Company and each of its Subsidiaries has
reasonable (taking into account the nature of the information being collected)
security measures and safeguards, including written information security
programs, in place to ensure the security and confidentiality of Customer
Information, protect against any anticipated threats or hazards to the security
or integrity of Customer Information and protect its Customer Information from
access or use by any person in a manner violative of Law or an applicable
Privacy Policy and, to the Knowledge of the Company, no Person has gained such
access or made such use of any Customer Information. The Company has Made
Available to Parent copies of its written information security programs with
respect to protection of Customer Information.
Section 4.18 Environmental Laws.
(a) For purposes of this Agreement, the following terms have
the following meanings:
(i) "Environmental Claim" means any written claim,
action, cause of action, investigation or notice by any person or entity
received by the Company or any of its Subsidiaries alleging potential liability
(including potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from (A)
the presence, Release or threatened Release of any Hazardous Materials that (x)
would reasonably be expected to create liability under Environmental Law on
behalf of the Company or (y) are at concentrations requiring investigation or
remediation under Environmental Law by the Company or any of its Subsidiaries at
any location, whether or not owned or operated by the Company, or (B)
circumstances that would reasonably be expected to form the basis of any
violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Laws" means all applicable Laws
relating to pollution or protection of human health or the environment,
including Laws relating to the occupational exposure to, or Releases or
threatened Releases of Hazardous Materials, Laws relating to the manufacture,
processing, distribution, use, treatment, storage, transport or handling of
Hazardous Materials, and Laws relating to recordkeeping, notification,
disclosure and reporting requirements for Hazardous Materials.
(iii) "Hazardous Materials" means chemicals,
pollutants, contaminants, wastes, toxic or hazardous substances, including all
substances defined as Hazardous Substances, Oils, Pollutants or Contaminants in
the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R.
ss. 300.5, petroleum and petroleum products, asbestos and polychlorinated
biphenyls.
(iv) "Release" means any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching
or migration into the environment (including ambient air, surface water,
groundwater and surface or subsurface strata) or into or out of any property,
including the movement of Hazardous Materials through or in the air, soil,
surface water, groundwater or property.
(b) Except as would not have a Material Adverse Effect:
(i) The Company and each of its Subsidiaries are and
have been within the past five (5) years in material compliance with all
applicable Environmental Laws (which compliance includes the possession of all
permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof).
(ii) There is no Environmental Claim pending or, to
the Knowledge of the Company, threatened, against the Company or any of its
Subsidiaries or, to the Knowledge of the Company, against any other Person whose
liability for any Environmental Claim the Company or any of its Subsidiaries has
retained or assumed either contractually or by operation of Law.
(iii) There are no past or present actions,
activities, circumstances, conditions, events or incidents resulting from the
Company's or any of its Subsidiary's activities, including the Release,
threatened Release or presence of any Hazardous Material, which would reasonably
be expected to form the basis of any Environmental Claim against the Company or
any of its Subsidiaries.
(iv) The Company has Made Available for inspection to
Parent complete and correct copies of any reports, studies, technical analyses,
tests or monitoring currently possessed or prepared by or on behalf of the
Company during the past seven (7) years pertaining to Hazardous Materials in,
on, beneath or adjacent to any property currently or formerly owned, operated or
leased by the Company or its Subsidiaries, or regarding compliance with
applicable Environmental Law.
(v) The representations and warranties contained in
this Section 4.18 shall be the sole and exclusive representations and warranties
of the Company and each of its Subsidiaries with respect to Environmental Laws,
Environmental Claims, Hazardous Materials or otherwise relating to environmental
matters.
Section 4.19 Taxes.
(a) Each of the Company and its Subsidiaries has duly and
timely filed all material Tax Returns required to be filed by it, and all such
Tax Returns are true, correct and complete in all material respects.
(b) Each of the Company and its Subsidiaries has duly and
timely paid in full all material Taxes required to be paid by it (whether or not
shown due on any Tax Return), except for those Taxes being contested in good
faith and for which adequate reserves have been established in the financial
statements of the Company in accordance with GAAP.
(c) Each of the Company and its Subsidiaries has made adequate
provision in the financial statements of the Company (in accordance with GAAP)
for all Taxes of the Company and its Subsidiaries not yet due.
(d) Each of the Company and its Subsidiaries has withheld and
paid over to the relevant taxing authority all material Taxes required to have
been withheld and paid in connection with payments to employees, independent
contractors, creditors, stockholders or other third parties.
(e) Neither the Company nor any of its Subsidiaries has
received written notice of any pending or threatened audit, proceeding,
examination or litigation or similar claim that has been commenced or is
presently pending with respect to any material Taxes or material Tax Return of
the Company or any of its Subsidiaries.
(f) Since January 1, 1998, no written claim has been made by
any tax authority in a jurisdiction where any of the Company or its Subsidiaries
does not file a Tax Return that the Company or any of its Subsidiaries is or may
be subject to a material amount of taxation in that jurisdiction.
(g) No material deficiency with respect to any Taxes has been
proposed, asserted or assessed in writing against the Company or any of its
Subsidiaries that has not been finally resolved and paid in full, and no
requests for waivers of the time to assess any material amount of Taxes are
pending.
(h) There are no outstanding written Contracts, consents or
waivers to extend the statutory period of limitations applicable to the
assessment of any material Taxes or deficiencies against the Company or any of
its Subsidiaries, and no power of attorney granted outside the ordinary course
of business by either the Company or any of its Subsidiaries with respect to any
material Taxes is currently in force.
(i) Neither the Company nor any of its Subsidiaries (A) is a
party to or bound by any Contract providing for the allocation, sharing or
indemnification of any material amount of Taxes (other than those between and
among the Company and its Subsidiaries, each of which is listed in Section 4.19
of the Company Disclosure Letter), (B) has been a member of an affiliated group
(or similar state, local or foreign filing group) filing a consolidated Tax
Return for a period that is open under the statute of limitations (other than
the group the common parent of which is the Company) or (C) has any liability
for the Taxes of any person (other than the Company or any of its Subsidiaries)
under Treasury Regulations Section 1.1502-6 (or any similar provision of state,
local or foreign Law), or as a transferee or successor.
(j) There are no Encumbrances for Taxes upon the assets or
properties of the Company or any of its Subsidiaries, except for Permitted
Encumbrances.
(k) Neither the Company nor any of its Subsidiaries will be
required to include any item of income in, or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of any (i) change in method of accounting for a
taxable period ending on or prior to the Closing Date, or (ii) "closing
agreement," as described in Section 7121 of the Code (or any corresponding
provision of state, local or foreign Law), entered into on or prior to the
Closing Date, or (iii) any ruling received from or any Contract entered into
with the Internal Revenue Service.
(l) The Company has Made Available to Parent or Merger Sub
complete and accurate copies of (i) all audit reports, letter rulings, technical
advice memoranda, and similar documents issued by any tax authority relating to
the United States Federal, state, local or foreign Taxes (in excess of $150,000
in the case of state, local and foreign tax audit reports) due from or with
respect to the Company and its Subsidiaries for any tax year beginning after
January 1, 2002 and (ii) any closing Contracts entered into by any of the
Company and its Subsidiaries with any tax authority, in each case existing on
the date hereof.
(m) Neither the Company nor any of its Subsidiaries has made
any distribution of stock, and no distribution of stock of the Company or any of
its Subsidiaries has been made, in a transaction described in Section 355 of the
Code.
Section 4.20 Disclosure Documents. The proxy statement (the "Proxy
Statement") relating to the Merger and the other transactions contemplated
hereby, to be filed by the Company with the SEC in connection with seeking the
adoption of this Agreement by the shareholders of the Company will not, at the
time filed with the SEC or at the time first mailed to the shareholders of the
Company or at the time of the Shareholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company will cause
the Proxy Statement and all related SEC filings to comply as to form in all
material respects with the requirements of the Exchange Act applicable thereto
as of the date of such filing. No representation is made by the Company with
respect to statements made in the Proxy Statement based on information supplied,
or required to be supplied, by Parent, Merger Sub or any of their Affiliates in
writing specifically for inclusion or incorporation by reference therein.
Section 4.21 Insurance. The Company and each of its Subsidiaries is
covered by valid, collectible and currently effective insurance policies issued
in favor of the Company and any of its Subsidiaries that are customary and
adequate for companies of similar size in the industry and locales in which the
Company and its Subsidiaries operate, including coverage which the Company has
agreed to carry under any Contract with third parties to address its insurance
obligations under such Contracts. All such insurance policies do not have limits
that are impaired in any material amounts, and to the Company's Knowledge, each
policy is issued by an insurance company with a valid License to conduct
business in the applicable jurisdiction where coverage would apply. Section 4.21
of the Company Disclosure Letter sets forth, as of the date of this Agreement, a
correct and complete list of all material insurance policies, including
commercial general liability, automobile liability, workers compensation,
umbrella, errors and omissions, professional liability, cyber-risk, employee
dishonesty/crime, pension trust/fiduciary liability, directors and officers
liability and employment practices liability (other than an insurance policy
that is disclosed as a Benefit Plan). Each of these policies is issued in favor
of the Company and all of its Subsidiaries, or pursuant to which the Company or
any of the Subsidiaries is a named insured or otherwise a beneficiary. With
respect to each such insurance policy, except as would not have a Material
Adverse Effect, (a) such policy is in full force and effect and all premiums due
thereon have been paid, (b) neither the Company nor any of its Subsidiaries is
in breach or default, and neither the Company nor any of its Subsidiaries has
taken any action or failed to take any action which, with notice or the lapse of
time, would constitute such a breach or default, or permit termination or
modification of, any such policy, and (c) to the Knowledge of the Company, no
insurer on any such policy has been declared insolvent or placed in
receivership, rehabilitation, conservatorship, liquidation, or a rating agency
has determined that it is financially impaired, and no notice of cancellation,
termination or non-renewal has been received with respect to any such policy.
Section 4.22 Customers and Suppliers. Section 4.22 of the Company
Disclosure Letter sets forth, as of the date of this Agreement, a complete and
correct list of (a) (i) the top 20 customers of the "Printed Products" segment
of the Company and its Subsidiaries based upon revenue generated therefrom in
fiscal year 2006 (on an annualized basis) (the "Printed Products Key Customers")
and sets forth opposite the name of such Printed Products Key Customer the
approximate amount of revenue attributable to such Printed Products Key Customer
during such period, and (ii) the top 20 suppliers of the "Printed Products"
segment of the Company and its Subsidiaries based upon aggregate amounts paid
thereto in fiscal year 2006 (on an annualized basis) (the "Printed Products Key
Suppliers") and sets forth opposite the name of such Printed Products Key
Supplier the approximate aggregate amounts paid to such Printed Products Key
Supplier during such period, (b) (i) the top 20 customers of the "Software &
Services" segment of the Company and its Subsidiaries based upon revenue
generated therefrom in fiscal year 2006 (on an annualized basis) (the "S&S Key
Customers") and sets forth opposite the name of such S&S Key Customer the
approximate amount of revenue attributable to such S&S Key Customer during such
period, and (ii) the top 20 suppliers of the "Software & Services" segment of
the Company and its Subsidiaries based upon aggregate amounts paid thereto in
fiscal year 2006 (on an annualized basis) (the "S&S Key Suppliers") and sets
forth opposite the name of such S&S Key Supplier the approximate aggregate
amounts paid to such S&S Key Supplier during such period, and (c) (i) the top 20
customers of the "Scantron" segment of the Company and its Subsidiaries based
upon revenue generated therefrom in fiscal year 2006 (on an annualized basis)
(the "Scantron Key Customers" and, together with the Printed Products Key
Customers and the S&S Key Customers, the "Key Customers")) and sets forth
opposite the name of such Scantron Key Customer the approximate amount of
revenue attributable to such Scantron Key Customer during such period, and (ii)
the top 20 suppliers of the "Scantron" segment of the Company and its
Subsidiaries based upon aggregate amounts paid thereto in fiscal year 2006 (on
an annualized basis) (the "Scantron Key Suppliers" and, together with the
Printed Products Key Suppliers and the S&S Key Suppliers, the "Key Suppliers")
and sets forth opposite the name of such Scantron Key Supplier the approximate
aggregate amounts paid to such Scantron Key Supplier during such period. Since
December 31, 2005 to the date of this Agreement, (i) no Key Customer or Key
Supplier has cancelled or otherwise terminated its relationship with the Company
or any of its Subsidiaries, (ii) neither the Company nor any of its Subsidiaries
has received any notice from any Key Customer or Key Supplier to the effect that
any such Key Customer or Key Supplier intends to (A) terminate or adversely
modify in any material respect its relationship with the Company or any of its
Subsidiaries or (B) initiate a bidding or rebidding process or request proposals
with respect to any business currently provided by the Company or any of its
Subsidiaries and (iii) neither the Company nor any of its Subsidiaries has been
involved in any material dispute with a Key Customer or Key Supplier.
Section 4.23 Rights Agreement. The Company has amended, and the Company
and the Board have taken all necessary action to amend, the Rights Agreement,
dated as of December 17, 1998, between the Company and Xxxxx Fargo Bank, N.A.
(as amended, the "Rights Agreement"), to (a) render it inapplicable to this
Agreement and the transactions contemplated hereby, including the Merger, (b)
render the Rights (as defined in the Rights Agreement) issued pursuant to the
Rights Agreement inapplicable to the execution and delivery of this Agreement
and consummation of the Merger and ensure that none of the execution and
delivery of this Agreement or the consummation of the Merger will result in (i)
the Rights becoming exercisable, (ii) cause Parent or any of its Affiliates or
Associates (each as defined in the Rights Agreement) to become an Acquiring
Person (as defined in the Rights Agreement) or (iii) give rise to a Distribution
Date (as defined in the Rights Agreement). The Rights will expire in their
entirety immediately prior to the Effective Time without any payment being made
in respect thereof. The Company has Made Available to Parent a complete and
correct copy of such amendment.
Section 4.24 Fairness Opinion. The Board has received an oral opinion
from Xxxxxxx, Sachs & Co., to the effect that, as of the date of such opinion,
the Merger Consideration to be received by the holders of Shares is fair to such
holders from a financial point of view. An executed copy of the written opinion
of Xxxxxxx, Xxxxx & Co. will be delivered to Parent solely for informational
purposes promptly after receipt thereof by the Company.
Section 4.25 Brokers. Except for Xxxxxxx, Sachs & Co., no agent,
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission from the Company or any of its Subsidiaries in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has Made Available
to Parent a complete and correct copy of its engagement letter with Xxxxxxx,
Xxxxx & Co. and there are no amounts payable to Xxxxxxx, Sachs & Co. in
connection with this Agreement and the transactions contemplated by this
Agreement other than as set forth in such engagement letter.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally, represent and warrant to
the Company as follows:
Section 5.1 Organization. Each of Parent and Merger Sub is duly
organized, validly existing and in good standing under the Laws of the state of
its organization, and has the requisite corporate or similar power and authority
to own its properties and to carry on its business as presently conducted and is
duly qualified or licensed to do business and is in good standing (where such
concept exists) as a foreign corporation or other entity in each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such qualification or licensing necessary, except where the failure to be
so qualified, licensed or in good standing would not reasonably be expected to,
prevent, materially delay or materially impede the ability of Parent or Merger
Sub to consummate the transactions contemplated by this Agreement.
Section 5.2 Authority; Enforceability. Each of Parent and Merger Sub
has the corporate or other power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution and delivery by
Parent and Merger Sub of this Agreement and the consummation by Parent and
Merger Sub of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or other action on the part of Parent and
Merger Sub. This Agreement has been duly executed and delivered by Parent and
Merger Sub and, assuming due authorization, execution and delivery by the
Company, constitutes a legal, valid and binding agreement of Parent and Merger
Sub, as applicable, enforceable against each of them in accordance with their
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at Law).
Section 5.3 Non-Contravention. The execution, delivery and performance
of this Agreement by Parent and Merger Sub does not and will not (a) conflict
with or violate the certificate of incorporation or bylaws (or equivalent
organizational documents) of Parent or Merger Sub, (b) assuming that all
consents, approvals and authorizations contemplated by Section 5.4 have been
obtained and all filings described in such Section have been made, conflict with
or violate any Law applicable to Parent or Merger Sub or by which Parent or
Merger Sub or any of their respective properties are bound or (c) result in any
breach or violation of or constitute a default (or an event which with notice or
lapse of time or both would become a default) or result in the loss of a benefit
under, or give rise to any right of termination, cancellation, amendment or
acceleration of, any note, bond, mortgage, indenture, Contract, license, permit
or other obligation to which Parent or Merger Sub is a party or by which Parent
or Merger Sub or any of their respective properties are bound, except, in the
case of clauses (b) and (c), for any such conflict, violation, breach, default,
loss, right or other occurrence which would not reasonably be expected to,
prevent, materially delay or materially impede the ability of Parent or Merger
Sub to consummate the transactions contemplated by this Agreement.
Section 5.4 Governmental Consents. The execution, delivery and
performance of this Agreement by Parent and Merger Sub and the consummation by
Parent and Merger Sub of the transactions contemplated by this Agreement do not
and will not require any consent, approval, authorization or permit of, action
by, filing with or notification to, any Governmental Authority, except as
required under or pursuant to (a) the HSR Act, (b) the Exchange Act, (c) state
securities, takeover and "blue sky" Laws, (d) the rules and regulations of the
NYSE, (e) the GBCC and (f) any other consent, approval, authorization, permit,
action, filing or notification the failure of which to make or obtain would not
reasonably be expected to, prevent, materially delay or materially impede the
ability of Parent and Merger Sub to consummate the transactions contemplated by
this Agreement.
Section 5.5 Financing.
(a) Parent and Merger Sub have delivered to the Company a copy
of an executed commitment letter from Credit Suisse Securities (USA) LLC and
Credit Suisse (as the same may be amended and replaced in accordance with
Section 6.9(b), collectively, the "Debt Commitment Letters"), pursuant to which,
and subject to the terms and conditions thereof, the lender parties thereto have
committed to lend the amounts set forth therein to Parent or to one or more of
its Subsidiaries in one or more separate financings for the purpose of funding
the transactions contemplated by this Agreement (the "Debt Financing").
(b) As of the date hereof, the Debt Commitment Letters are in
full force and effect and have not been withdrawn or terminated or otherwise
amended or modified in any material respect. Each of the Debt Commitment
Letters, in the form so delivered, is a legal, valid and binding obligation of
Parent and Merger Sub and the other parties thereto. There are no conditions
precedent or other contingencies related to the funding of the full amount of
the Debt Financing, other than as set forth in or contemplated by the Debt
Commitment Letters. Subject to the terms and conditions of the Debt Commitment
Letters, and subject to the terms and conditions of this Agreement, the
aggregate proceeds contemplated by the Debt Commitment Letters, together with
the available cash of the Company, will be sufficient for Parent and Merger Sub
to pay the aggregate Merger Consideration payable pursuant to Article III and
consummate the Merger upon the terms contemplated by this Agreement. All
commitment and other fees required to be paid under the Debt Commitment Letters
prior to the date hereof have been paid. As of the date hereof, to the Knowledge
of Parent, there is no state of facts existing as of the date of this Agreement
that will preclude satisfaction as of the Effective Time of the conditions
contemplated by the Debt Commitment Letters. Nothing contained in this Agreement
shall prohibit Parent or Merger Sub from entering into Contracts relating to the
financing or the operation of Parent, Merger Sub, or the Surviving Corporation.
Notwithstanding anything in this Agreement to the contrary, one or more Debt
Commitment Letters may be amended or superseded at the option of Parent after
the date of this Agreement but prior to the Effective Time by instruments (the
"New Debt Commitment Letters") which amend or replace existing Debt Commitment
Letters and/or contemplate co-investment by or financing from one or more other
or additional parties; provided, that the terms of the New Debt Commitment
Letters shall not (i) expand upon the conditions precedent to the Debt Financing
as set forth in the Debt Commitment Letters in any material respect or (ii)
reasonably be expected to delay the Closing. In such event, the term "Debt
Commitment Letters" as used herein shall be deemed to include the Debt
Commitment Letters that are not so amended or superseded at the time in question
and the New Debt Commitment Letters to the extent then in effect.
Section 5.6 Disclosure Documents. None of the information supplied or
to be supplied by Parent or Merger Sub or any of their respective Affiliates
specifically for inclusion or incorporation by reference in the Proxy Statement
will, at the time filed with the SEC or at the time first mailed to the
shareholders of the Company or at the time of the Shareholders Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
Section 5.7 Brokers. Except as set forth on Section 5.7 of the Parent
Disclosure Letter, no agent, broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission payable by the Company in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent.
Section 5.8 Operations of Merger Sub. Merger Sub has been formed solely
for the purpose of engaging in the transactions contemplated hereby and prior to
the Effective Time will have engaged in no other business activities and will
have incurred no liabilities or obligations other than as contemplated herein.
Section 5.9 Ownership of Company Capital Stock; Affiliates and
AssociatesSection 5.10 . Neither Parent, Merger Sub nor any of their respective
Subsidiaries is an "interested shareholder" of the Company or an "associate" or
"affiliate" of any "interested shareholder" of the Company (as such terms are
defined in the GBCC).
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Conduct of Business Prior to the Closing. The Company
covenants and agrees that, during the period from the date hereof until the
Closing Date, except as contemplated by this Agreement or as set forth in the
corresponding subsection of Section 6.1 of the Company Disclosure Letter, or
unless Parent shall otherwise agree in writing (such consent not to be
unreasonably withheld or delayed), the Company will conduct and will cause each
of its Subsidiaries to conduct its operations according to its ordinary course
of business consistent with past practice, and the Company will use and will
cause each of its Subsidiaries to use its commercially reasonable efforts to
preserve intact its business organization, to keep available the services of its
current officers and employees and to preserve the goodwill of and maintain
satisfactory relationships with those Persons having business relationships with
the Company or any of its Subsidiaries. Between the date of this Agreement and
the Closing Date, except as otherwise expressly contemplated by this Agreement
or as set forth in the corresponding subsection of Section 6.1 of the Company
Disclosure Letter, neither the Company nor any of its Subsidiaries shall without
the prior written consent of Parent (such consent not to be unreasonably
withheld or delayed):
(a) amend or otherwise change its articles of incorporation or
bylaws (or other comparable governing documents);
(b) issue, deliver, sell, pledge, transfer, convey, dispose of
or encumber any Equity Interests of any class or securities convertible into or
exchangeable for any such Equity Interests of the Company or any of its
Subsidiaries, or any options, warrants, convertible securities or other rights
of any kind to acquire or receive any Equity Interests of the Company or any of
its Subsidiaries, or any other ownership interest or voting security, of the
Company or any of its Subsidiaries, other than (i) the issuance of Shares upon
the exercise of Options and in settlement of other equity-based or equity
related awards outstanding on the date hereof or in accordance with the ESPP to
the extent set forth in Section 3.2(d), in each case in accordance with their
present terms, (ii) as required to comply with any Benefit Plan in effect on the
date of this Agreement or (iii) issuances by a wholly owned Subsidiary of the
Company of capital stock to such Subsidiary's parent or another wholly owned
Subsidiary of the Company;
(c) declare, set aside, make or pay any dividend or other
distribution payable in cash, stock, property or otherwise with respect to any
of its Equity Interests or any options, warrants, convertible securities or
other rights of any kind to acquire or receive any Equity Interest (except for
regular quarterly dividends not exceeding $0.175 per share of Company Common
Stock and any dividend or distribution by a wholly owned Subsidiary to the
Company or any other wholly owned Subsidiary);
(d) (i) reclassify, combine, split, subdivide, redeem,
purchase or otherwise acquire any Equity Interests of the Company or any of its
Subsidiaries or any options, warrants, convertible securities or other rights of
any kind to acquire or receive any Equity Interest of the Company or any of its
Subsidiaries (other than the acquisition by the Company of Shares, Options,
Stock Appreciation Rights, Restricted Shares, and Stock Equivalents pursuant to
the Benefit Plans) or engage in any internal reorganization or restructuring of
the ownership structure of any of its Subsidiaries or the businesses or
divisions of the Company or any of its Subsidiaries or (ii) redeem, repurchase,
prepay, defease or otherwise acquire any Indebtedness of the Company or any of
its Subsidiaries;
(e) acquire, lease or license from any Person (by merger,
consolidation, acquisition of stock or assets or otherwise) or sell, dispose of,
encumber, lease or license (by merger, consolidation, sale of stock or assets or
otherwise) any corporation, partnership or other business organization or
division thereof, any Equity Interests therein, or any assets, other than (i)
purchases and sales of inventory and non-merchandise supplies in the ordinary
course of business consistent with past practice and (ii) purchases and sales of
other assets in the ordinary course of business consistent with past practice
and for an amount not in excess of $1,000,000 in the aggregate;
(f) incur, modify, guarantee, assume, endorse or otherwise
become responsible for any Indebtedness or make any loans, advances or capital
contributions to, or investments in, any other Person (other than a wholly owned
Subsidiary), in each case, other than (i) any renewal in the ordinary course of
business consistent with past practice of (but not any replenishment of amounts
drawn under) any letter of credit outstanding as of the date of this Agreement
or any letter of credit or performance or bid bond entered into in the ordinary
course of business consistent with past practice and for an amount not in excess
of $500,000 in any single transaction or series of related transactions or $2.5
million in the aggregate and (ii) Funded Indebtedness that can be repaid without
prepayment or other penalty that is incurred in the ordinary course of business
consistent with past practice to the extent that the aggregate amount of Funded
Indebtedness of the Company and its Subsidiaries outstanding (on a consolidated
basis) does not exceed $245 million in the aggregate (giving effect to such
incurrence);
(g) offer, place, arrange or propose any issuance of debt
securities or commercial bank or other credit facilities of the Company or any
of its Subsidiaries (other than pursuant to the Debt Financing or Alternative
Financing);
(h) enter into, make any proposal for, renew, extend or amend
or modify in any material respect, terminate, cancel, or waive, release or
assign any right or claim under, any Contract which is or, if applicable, would
be, a Material Contract or is or would be material to the Company or its
Subsidiaries, in each case, other than in the ordinary course of business
consistent with past practice;
(i) accelerate the delivery or sale of products or the
incurrence of capital expenditures, or offer discounts on sale of products or
premiums on purchase of raw materials, except in the ordinary course of business
consistent with past practice;
(j) except (i) as contemplated by this Agreement, (ii) to the
extent required under any Benefit Plan or Foreign Plan as in effect on the date
hereof, or (iii) as required by applicable Law (including as necessary to comply
with Section 409A of the Code) (A) increase the compensation or fringe benefits
of, or pay any bonus to, any current or former director, officer, employee or
consultant of the Company or any of its Subsidiaries (except in the ordinary
course of business consistent with past practice with respect to employees who
are not directors or officers), (B) terminate or make any amendment or
modification to any existing Benefit Plan or Foreign Plan, other than any such
amendment or modification that does not materially increase the costs to the
Company and its Subsidiaries with respect to such Benefit Plan or Foreign Plan,
(C) take any action to fund the payment of compensation or benefits under any
Benefit Plan or Foreign Plan, (D) exercise any discretion to accelerate the
vesting or payment of any compensation or benefit under any Benefit Plan or
Foreign Plan, (E) grant any new equity based awards (including the grant of
stock options, stock appreciation rights, stock based or stock related awards,
performance units, restricted stock units, or restricted stock), (F) except in
the ordinary course of business consistent with past practice with respect to
employees who are not directors or officers, grant any other awards under any
Benefit Plan or Foreign Plan, (G) materially change any actuarial or other
assumption used to calculate funding obligations with respect to any Benefit
Plan or Foreign Plan or change the manner in which contributions to any Benefit
Plan or Foreign Plan are made or the basis on which such contributions are
determined, (H) adopt or enter into any new employee benefit or compensation
plan, arrangement or employment Contract, or (I) permit any current or former
director, officer or employee of the Company or any of its Subsidiaries who is
not already a party to or a participant in a Benefit Plan or Foreign Plan
providing compensation, benefits, or accelerated vesting or payment upon (either
alone or together with any other event) a "change in control," "change of
control," reorganization, separation or similar transaction involving the
Company or any of its Subsidiaries to become a party to or a participant in any
such Benefit Plan or Foreign Plan;
(k) enter into any transaction or Contract between (i) the
Company or any of its Subsidiaries, on the one hand, and (ii) any other
Affiliate of the Company (other than its Subsidiaries), on the other hand, of
the type that would be required to be disclosed under Item 404 of Regulation
S-K;
(l) settle or dismiss any Action threatened against, relating
to or involving the Company and any of its Subsidiaries in connection with any
business, asset or property of the Company and any of its Subsidiaries, other
than in the ordinary course of business consistent with past practice but not in
excess of $500,000, in any individual case, or $1.5 million, in the aggregate,
or in a manner that would prohibit or materially restrict in any material
respect the operation of the Company;
(m) (i) make, change or revoke any material Tax election or
change any method of tax accounting, (ii) enter into any settlement or
compromise of any Tax liability in excess of $500,000, in any individual case,
or $1.5 million, in the aggregate, (iii) file any amended Tax Return with
respect to any material amount of Tax, (iv) change any annual Tax accounting
period, (v) enter into any closing Contract or request any ruling relating to
any material amount of Tax, (vi) waive or extend the statute of limitations
relating to any material Taxes or (vii) surrender any right to claim a material
amount of any Tax refund;
(n) make any changes in accounting policies or procedures,
except as required by GAAP or a Governmental Authority;
(o) except to the extent necessary to take any actions that
the Company is otherwise permitted to take pursuant to Section 6.5 (and in such
case only in accordance with the terms of Section 6.5), waive any of its rights
under, or release any other party from, amend, or fail to enforce its rights
under, any standstill provision of any Contract;
(p) except to the extent necessary in the ordinary conduct of
the businesses of the Company or its Subsidiaries consistent with past practice,
grant or acquire, agree to grant to or acquire from any Person, or dispose of or
permit to lapse any rights to, any material Company Intellectual Property, or
disclose or agree to disclose to any Person, other than representatives of
Parent, any Trade Secret;
(q) at any time during the ninety (90) days before the Closing
Date, without materially complying with the notice and other requirements of the
WARN Act, effectuate (i) a "plant closing" (as defined in the WARN Act)
affecting any site of employment or one or more facilities or operating units
within any site of employment or facility of the Company and/or any of its
Subsidiaries, or (ii) a "mass layoff" (as defined in the WARN Act) affecting any
site of employment or facility of the Company and/or any of its Subsidiaries; or
(r) agree to take any of the actions described in Sections
6.1(a) through 6.1(q).
Section 6.2 Shareholders Meeting; Board Recommendation. As promptly as
practicable after the SEC clears the Proxy Statement, the Company, acting
through the Board, and in accordance with applicable Law, shall (a) duly call,
give notice of, convene and hold a meeting of its shareholders solely for the
purpose of adopting this Agreement (the "Shareholders Meeting") and (b) (i)
subject to Section 6.5(c), include in the Proxy Statement the Board
Recommendation and (ii) use its reasonable best efforts to obtain the Requisite
Shareholder Vote. Except in accordance with Section 6.5(c), neither the Board
nor any committee thereof shall (A) withdraw (or modify or qualify in a manner
adverse to Parent in any material respect), or publicly propose to withdraw the
Board Recommendation or (B) fail to include the Board Recommendation in the
Proxy Statement (any action described in clause (A) or (B) above being referred
to as a "Recommendation Withdrawal"). Notwithstanding any Recommendation
Withdrawal, unless this Agreement is terminated in accordance with Section 8.1,
this Agreement shall be submitted to the shareholders of the Company at the
Shareholders Meeting for the purpose of adopting this Agreement.
Section 6.3 Proxy Statement.
(a) As soon as practicable following the date of this
Agreement, the Company shall prepare and file with the SEC (subject to the prior
review and approval of Parent, which approval shall not be unreasonably
withheld) the Proxy Statement. The Company and Parent shall cooperate with each
other in the preparation of the Proxy Statement. Without limiting the generality
of the foregoing, prior to filing or mailing the Proxy Statement (or, in each
case, any amendment or supplement thereto) or responding to any comments of the
SEC or its staff with respect thereto, the Company shall provide Parent
reasonable opportunity to review and comment on such document or response and
shall include in such document or response comments reasonably proposed by
Parent.
(b) If, at any time prior to the Effective Time, any
information relating to the Company, Parent or Merger Sub or any of their
respective Affiliates should be discovered by the Company, Parent or Merger Sub
which should be set forth in an amendment or supplement to the Proxy Statement
so that the Proxy Statement shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, the party that discovers such
information shall promptly notify the other parties and, to the extent required
by applicable Law, the Company shall disseminate an appropriate amendment
thereof or supplement thereto describing such information to the Company's
shareholders.
(c) The Company and Parent shall use their reasonable best
efforts, after consultation with the other party, to resolve all SEC comments
with respect to the Proxy Statement as promptly as practicable after receipt
thereof. Each of the Company and Parent shall as soon as reasonably practicable
notify the other party of the receipt of any comments from or other
correspondence with the SEC staff with respect to the Proxy Statement and any
request by the SEC for any amendment to the Proxy Statement or for additional
information (and promptly deliver a copy of such comments, correspondence or
request to the other party). The Company shall cause the Proxy Statement to be
mailed to its shareholders as promptly as practicable.
Section 6.4 Access to Information; Certain Notices.
(a) To the extent permitted by applicable Law, during the
period from the execution of this Agreement through the earlier of the
termination of this Agreement pursuant to its terms and the Effective Time, the
Company (i) shall, and shall cause each of its Subsidiaries to, subject to
reasonable restrictions imposed from time to time upon advice of counsel
respecting the provision of privileged communications or any applicable
confidentiality agreement with any Person (provided that the Company shall use
its reasonable best efforts to obtain waivers under such agreements or implement
requisite procedures to enable the provision of reasonable access without
violating such agreement), afford representatives of Parent and its
Representatives reasonable access during normal business hours to officers,
employees, agents, and representatives of the Company and its Subsidiaries and
to all properties of the Company and its Subsidiaries, and will furnish, within
a reasonable time, to Parent all financial, operating and other data and
information (including extracts and copies of books, records, Contracts and
other documents concerning the operations and business of the Company or any of
its Subsidiaries), including access to its personnel as Parent may reasonably
request, and (ii) shall furnish monthly financial statements (including
unaudited monthly consolidated balance sheets of the Company and its
Subsidiaries for each month then ended and related consolidated statements of
earnings for the Company and its operating segments and cash flows as well as a
forecast for the remainder of the then-current fiscal year) that the Company
furnishes the Board in the ordinary course consistent with past practice to
Parent promptly after providing such financial statements to the Board.
(b) The Company shall promptly notify Parent if (i) any Key
Customer or Key Supplier has cancelled, otherwise terminated or adversely
modified its relationship with the Company or any of its Subsidiaries, (ii) the
Company or any of its Subsidiaries has received any notice from any Key Customer
or Key Supplier to the effect that any such Key Customer intends to (A)
terminate or adversely modify in any material respect its relationship with the
Company or any of its Subsidiaries or (B) request proposals with respect to any
business currently provided by the Company or any of its Subsidiaries and (iii)
the Company or any of its Subsidiaries is involved in any material dispute with
a Key Customer or Key Supplier. For purposes of this Section 6.4(b), (1) "Key
Customer" shall be as defined in Section 4.22 but shall also include any
customer that would have been a Key Customer had it been a customer of the
Company or any of its Subsidiaries as of the date hereof and (2) "Key Supplier"
shall be as defined in Section 4.22 but shall also include any supplier that
would have been a Key Supplier had it been a supplier of the Company or any of
its Subsidiaries as of the date hereof.
(c) All information obtained pursuant to this Section 6.4
shall continue to be governed by the Confidentiality Agreement, it being
understood that Parent and Merger Sub, jointly and severally, affirm and assume
all obligations of confidentiality of Xxxxxx American Corp. thereunder.
(d) No investigation or notice delivered pursuant to this
Section 6.4 or otherwise shall operate as a waiver or affect any representation,
warranty or agreement in this Agreement of any party or any condition to the
obligations of the parties.
Section 6.5 Solicitation.
(a) From the date of this Agreement until the earlier of the
Effective Time or the date this Agreement is terminated pursuant to Section 8.1,
the Company shall not, and shall cause its Subsidiaries, Affiliates and its and
their Representatives not to, (i) initiate, solicit or knowingly encourage or
facilitate (including by way of providing information) the submission of any
inquiries, proposals or offers that constitute, or would reasonably be expected
to lead to, any Company Takeover Proposal, or participate or engage in any
discussions or negotiations with respect thereto, (ii) approve or recommend, or
publicly propose to approve or recommend, a Company Takeover Proposal, (iii)
enter into any merger agreement, letter of intent or other Contract providing
for or relating to a Company Takeover Proposal, (iv) enter into any Contract
requiring the Company to abandon, terminate or fail to consummate the
transactions contemplated by this Agreement, or (v) propose or agree to do any
of the foregoing (provided that this clause (v) will not affect the Company's
right to negotiate with a Person in respect of a Company Takeover Proposal or
Superior Proposal in compliance with Section 6.5(b) or Section 6.5(c)). The
Company shall, and shall cause its Subsidiaries, Affiliates and its and their
Representatives to, immediately cease and cause to be terminated any activities
that would otherwise be a violation of this Section 6.5(a) conducted heretofore
with respect to any Company Takeover Proposal and will cause any such parties
(and their agents or advisors) in possession of confidential information
regarding the Company or any of the Company Subsidiaries to return or destroy
such information.
(b) Notwithstanding anything to the contrary contained in
Section 6.5(a), if at any time following the date of this Agreement and prior to
obtaining the Requisite Shareholder Vote, (i) the Company receives an
unsolicited bona fide written Company Takeover Proposal from any third party and
(ii) the Board determines in good faith, after consultation with its independent
financial advisor and outside counsel, that (A) such Company Takeover Proposal
constitutes, or would reasonably be expected to result in, a Superior Proposal,
and (B) the failure to provide non-public information concerning the Company or
enter into discussions or negotiations with such third party would reasonably be
expected to be inconsistent with its fiduciary duties under applicable Law, then
the Company may (x) furnish information with respect to the Company and its
Subsidiaries to the Person making such Company Takeover Proposal (subject to the
execution of an Acceptable Confidentiality Agreement) and (y) participate in
discussions or negotiations with the person making such Company Takeover
Proposal regarding such Company Takeover Proposal; provided the Company will
promptly (within two (2) Business Days) provide to Parent any non-public
information that is provided to a third party concerning the Company or its
Subsidiaries not previously provided to Parent. The Company shall promptly
(within one (1) Business Day) notify Parent in the event it receives a Company
Takeover Proposal, including the material terms and conditions thereof and the
identity of the Person making such Company Takeover Proposal, and shall keep
Parent reasonably apprised as to the status and any material developments,
discussions and negotiations concerning the same. Without limiting the
foregoing, the Company will promptly (within one (1) Business Day) notify Parent
orally and in writing if it determines to begin providing information or to
engage in negotiations concerning a Company Takeover Proposal.
(c) Notwithstanding anything in this Agreement to the
contrary, at any time prior to obtaining the Requisite Shareholder Vote, if the
Board determines in good faith (after consultation with its independent
financial advisor and outside counsel) that the failure to take such action
would reasonably be expected to be inconsistent with its fiduciary duties under
applicable Law, the Board may effect a Recommendation Withdrawal; provided,
however, the Board may not effect a Recommendation Withdrawal unless:
(A) the Company shall have provided prior written
notice to Parent at least three (3) Business Days in advance (the
"Notice Period"), of its intention to effect such a Recommendation
Withdrawal which notice shall specify the reasons therefor, including,
if the basis of the Recommendation Withdrawal is a Superior Proposal,
the terms and conditions of any such Superior Proposal (including the
identity of the party making such Superior Proposal), and shall have
contemporaneously provided a copy of the relevant proposed transaction
Contracts with the party making such Superior Proposal; and
(B) prior to effecting such Recommendation
Withdrawal, the Company shall, and shall cause its financial advisors
and outside counsel to, during the Notice Period, negotiate with Parent
in good faith (to the extent Parent desires to negotiate) to make such
adjustments in the terms and conditions of this Agreement so that there
is no longer a basis for such Recommendation Withdrawal.
In the event of any material revisions to any applicable Superior Proposal, the
Company shall be required to deliver a new written notice to Parent and to
comply with the requirements of this Section 6.5(c) with respect to such new
written notice. Notwithstanding anything to the contrary herein, the Company
shall not be entitled to enter into any Contract (other than an Acceptable
Confidentiality Agreement) with respect to a Superior Proposal unless this
Agreement has been or is concurrently terminated by its terms pursuant to
Section 8.1 and the Company has concurrently paid to Parent the Company
Termination Fee payable pursuant to Section 8.3.
(d) Any violations of the restrictions set forth in this
Section 6.5 by any Representative of the Company or any of its Subsidiaries
shall be deemed to be a breach of this Section 6.5 by the Company.
(e) The Company shall not take any action to (i) amend the
Rights Agreement or redeem the Rights (as defined in the Rights Agreement), or
(ii) exempt any Person from the restrictions on "business combinations"
contained in Article 11 of the GBCC (or any similar provisions) or otherwise
cause such restrictions not to apply.
(f) Nothing contained in this Agreement shall prohibit the
Company from (i) taking and disclosing to its shareholders a position
contemplated by Rule 14d-9 and Rule 14e-2(a) promulgated under the Exchange Act
or (ii) making any required disclosure to the Company's shareholders if, in the
good faith judgment of the Board, after consultation with and receipt of advice
from its outside counsel, failure to disclose such information would reasonably
be expected to be inconsistent with its obligations under applicable Law;
provided however, that in no event shall the Company or the Board or any
committee thereof take, or agree or resolve to take, any action prohibited by
Section 6.2.
(g) For purposes of this Agreement, the following terms have
the meanings assigned below:
"Company Takeover Proposal" means any inquiry, proposal or
offer from any Person or group of Persons other than Parent or its
Affiliates relating to any direct or indirect acquisition or purchase
of a business that constitutes 15% or more of the net revenues, net
income or assets of the Company and its Subsidiaries, taken as a whole,
or 15% or more of any class or series of securities of the Company or
any of its Subsidiaries, any tender offer or exchange offer that if
consummated would result in any Person or group of Persons beneficially
owning 15% or more of any class or series of capital stock of the
Company, or any merger, reorganization, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or
similar transaction involving the Company (or any Subsidiary or
Subsidiaries of the Company whose business constitutes 15% or more of
the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole); and
"Superior Proposal" means a bona fide Company Takeover
Proposal (except that references to 15% will be deemed to be references
to "more than 66?%") made in writing and not solicited by the Company
in violation of Section 6.5 that is on terms that the Board determines
in good faith (after consultation with its independent financial
advisor), taking into account, among other things, all legal, financial
(including the effect of any Company Termination Fee payable) and other
aspects of the Company Takeover Proposal and the third party making the
Company Takeover Proposal (including the financial capability of such
third party to consummate the Company Takeover Proposal), is more
favorable to the Company's shareholders than the transactions
contemplated by this Agreement, as amended from time to time.
Section 6.6 Further Action; Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement,
each of the parties agrees to use its reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws and regulations to
consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement. Without limiting the foregoing, (i)
each of the Company, Parent and Merger Sub agrees to make any required
submissions under the HSR Act that the Company or Parent determines should be
made, in each case, with respect to the Merger and the transactions contemplated
hereby as promptly as practicable and to make other required filings pursuant to
other Antitrust Laws with respect to the transactions contemplated by this
Agreement as promptly as practicable after the date of this Agreement and to
supply as promptly as practicable any additional information and documentary
material that may be requested pursuant to the HSR Act or other Antitrust Laws
and use its reasonable best efforts to take or cause to be taken all actions
necessary, proper or advisable consistent with this Section 6.6 to cause the
expiration or termination of the applicable waiting periods under the HSR Act or
other Antitrust Laws as soon as practicable, and (ii) Parent, Merger Sub and the
Company shall cooperate with one another (A) in promptly determining whether any
filings are required to be or should be made or consents, approvals, permits or
authorizations are required to be or should be obtained under any other federal,
state or foreign Law or whether any consents, approvals or waivers are required
to be or should be obtained from other parties to Contracts material to the
Company's or its Subsidiaries' business in connection with the consummation of
the transactions contemplated by this Agreement and (B) in promptly making any
such filings, furnishing information required in connection therewith and
seeking to obtain timely any such consents, permits, authorizations, approvals
or waivers. Subject to the terms and conditions set forth in this Agreement and
applicable Law, Parent and the Company shall (1) promptly notify the other party
of any communication to that party from any Governmental Authority in respect of
any filing, investigation or inquiry concerning this Agreement or the Merger,
(2) if practicable, permit the other party the opportunity to review in advance
all the information relating to the Company and its Subsidiaries or Parent and
its Subsidiaries, as the case may be, that appears in any filing made with, or
written materials submitted to, any third party and/or any Governmental
Authority in connection with the Merger and the other transactions contemplated
by this Agreement and incorporate the other party's reasonable comments; (3) not
participate in any substantive meeting or discussion with any Governmental
Authority in respect of any filing, investigation, or inquiry concerning this
Agreement or the Merger unless it consults with the other party in advance, and,
to the extent permitted by such Governmental Authority, gives the other party
the opportunity to attend; and (4) furnish the other party with copies of all
correspondences, filings, and written communications between them and their
Subsidiaries and Representatives, on the one hand, and any Governmental
Authority or its respective staff, on the other hand, with respect to this
Agreement and the Merger, provided, however, that any materials may be redacted
before being provided to the other party (i) to remove references concerning the
valuation of Parent, the Company, or any of their Subsidiaries, (ii) financing
arrangements, (iii) as necessary to comply with contractual arrangements, and
(iv) as necessary to address reasonable privilege or confidentiality. Each of
the Company and Parent shall promptly notify the other party if such party
becomes aware that any third party has any objection to the Merger on antitrust
or anti-competitive grounds.
(b) The parties shall use their reasonable best efforts to
resolve any objections that may be asserted by any Person with respect to the
transactions contemplated by this Agreement under Antitrust Laws or other
applicable Law in order to enable the transactions contemplated by this
Agreement to be consummated as promptly as practicable. In connection therewith,
if any Action is pending or threatened challenging the transactions contemplated
by this Agreement as inconsistent with or violative of any Antitrust Law or
other applicable Law, the parties shall cooperate and use reasonable best
efforts to vigorously contest and resist any such Action, and to have vacated,
reversed or overturned any Governmental Order under any Antitrust Law that is in
effect and that prohibits, delays or restricts the transactions contemplated by
this Agreement.
(c) Notwithstanding anything to the contrary in this
Agreement, in connection with obtaining any approval or consent from any Person
(other than a Governmental Authority) with respect to the Merger, (i) without
the prior written consent of Parent, none of the Company or any of its
Subsidiaries shall pay or commit to pay to such Person whose approval or consent
is being solicited any cash or other consideration, make any commitment or incur
any liability or other obligation due to such Person and (ii) neither Parent nor
Merger Sub shall be required to pay or commit to pay to such Person whose
approval or consent is being solicited any cash or other consideration, make any
commitment or to incur any liability or other obligation.
(d) Nothing in this Agreement shall obligate the Company,
Parent, Merger Sub or any of their respective Affiliates to (i) limit in any
manner whatsoever or not exercise any rights of ownership of any securities
(including the Shares), or divest, dispose of or hold separate any securities or
all or a portion of their respective businesses, assets or properties or of the
business, assets or properties of the Company or any of its Subsidiaries (or
agree to do any of the foregoing), (ii) limit in any manner whatsoever the
ability of such entities (A) to conduct their respective businesses or own their
respective businesses, assets or properties or to conduct the businesses or own
the businesses, properties or assets of the Company and its Subsidiaries or (B)
to control their respective businesses or operations or the businesses or
operations of the Company and its Subsidiaries (or agree to do any of the
foregoing) or (iii) take or agree to take any other action or agree to any other
limitation or restriction, that (in the case of clause (i), (ii) or (iii) above)
could reasonably be expected to have a material adverse effect on the business,
assets, financial condition or results of operations of either (1) Parent and
its Affiliates, taken as a whole, or (2) any of the Company's Printed Products,
Software & Services or Scantron business segments; provided, however, that the
Company shall be obligated to take or agree to take any such action or agree to
any such limitation or restriction to the extent requested in writing by Parent,
provided that the effectiveness of any such action or agreement is contingent
upon the Closing.
Section 6.7 Directors' and Officers' Indemnification and Insurance.
(a) From and after the Effective Time, the Surviving
Corporation shall to the fullest extent permitted by Law indemnify and hold
harmless (and comply with all of the Company's and its Subsidiaries' existing
obligations to advance funds for expenses) (i) the present and former officers
and directors of the Company and its Subsidiaries against any and all costs or
expenses (including reasonable attorneys' fees and expenses), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any actual or threatened claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative
("Damages"), arising out of, relating to or in connection with any acts or
omissions occurring or alleged to occur prior to or at the Effective Time,
including the approval of this Agreement, the Merger or the other transactions
contemplated by this Agreement or arising out of or pertaining to the
transactions contemplated by this Agreement and (ii) any such Person against any
and all Damages arising out of acts or omissions in connection with such Person
serving as an officer, director or other fiduciary in any entity if such service
was at the request or for the benefit of the Company or any of its Subsidiaries,
in each case as provided by the terms of the Company articles of incorporation
or bylaws and under any Contracts as in effect on the date of this Agreement
(complete and correct copies of which have been Made Available to Parent).
(b) Parent shall cause the Surviving Corporation to obtain, at
the Effective Time, a prepaid (or "tail") directors' and officers' liability
insurance policy in respect of acts or omissions occurring at or prior to the
Effective Time for six years from the Effective Time covering each person
currently covered by the Company's directors' and officers' liability insurance
policies, on terms with respect to such coverage and amounts no less favorable
than those of such policies, taken together, as in effect on the date of this
Agreement; provided, however, that in no event shall Parent or the Surviving
Corporation be required to expend more than the amount set forth in Section
6.7(b) of the Company Disclosure Letter to obtain such insurance coverage
pursuant to this Section 6.7(b). It is understood and agreed that in the event
such coverage cannot be obtained for up to such amount, Parent shall cause the
Surviving Corporation to obtain such coverage as may be obtained for such
aggregate amount.
(c) This Section 6.7 shall survive the consummation of the
Merger and is intended to be for the benefit of, and shall be enforceable by,
present or former directors or officers of the Company or its Subsidiaries,
their respective heirs and personal representatives and shall be binding on the
Surviving Corporation and its successors and assigns. The agreements and
covenants contained herein shall not be deemed to be exclusive of any other
rights to which any such present or former director or officer is entitled,
whether pursuant to Law, Contract or otherwise. Nothing in this Agreement is
intended to, shall be construed to or shall release, waive or impair any rights
to directors' and officers' insurance claims under any policy that is or has
been in existence with respect to the Company or any of its Subsidiaries or
their respective officers, directors and employees, it being understood and
agreed that the indemnification provided for in this Section 6.7 is not prior to
or in substitution for any such claims under any such policies.
Section 6.8 Public Announcements. No public release or announcement
concerning the transactions contemplated by this Agreement shall be issued by
any party without the prior written consent of the Company and Parent (which
consent shall not be unreasonably withheld or delayed), except as such release
or announcement may be required by Law or the rules or regulations of any
applicable United States securities exchange or regulatory or governmental body
to which the relevant party is subject or submits, wherever situated, in which
case the party required to make the release or announcement shall use its
reasonable best efforts to allow each other party reasonable time to comment on
such release or announcement in advance of such issuance, it being understood
that the final form and content of any such release or announcement, to the
extent so required, shall be at the final discretion of the disclosing party.
Section 6.9 Financing.
(a) Prior to the Closing, the Company shall, and shall cause
its Subsidiaries to, and shall use reasonable best efforts to cause the
respective officers, employees, consultants and advisors, including legal and
accounting advisors, of the Company and its Subsidiaries to, provide to Parent
such cooperation as may be reasonably requested by Parent in connection with the
arrangement of the Debt Financing, including (i) participation in meetings,
presentations, road shows, due diligence sessions and sessions with rating
agencies, (ii) assisting with the preparation of financial information and other
materials for rating agency presentations, offering documents, private placement
memoranda, registration statements, bank information memoranda, prospectuses,
business projections and similar documents required in connection with the Debt
Financing and providing all representation letters and other materials requested
by its independent accountants for the preparation and use of such financial
information as contemplated by this Section 6.9(a), (iii) causing its
independent accountants to provide assistance and cooperation to Parent,
including participating in drafting sessions and accounting due diligence
sessions, assisting in the preparation of any pro forma financial statements to
be included in the documents referred to in clause (ii) above, providing consent
to Parent to use their audit reports relating to the Company and providing any
necessary "comfort letters", (iv) assisting in the negotiation of, and executing
and delivering, definitive financing documents, including pledge and security
documents, and certificates, legal opinions, management representation letters
or other documents, to the extent reasonably requested by Parent (including
certificates of the chief financial officer of the Company or any Subsidiary
with respect to solvency matters and consents of accountants for use of their
reports in materials relating to the Debt Financing) and otherwise reasonably
facilitating the pledging of collateral, (v) providing reasonable access by
Parent and any Debt Financing or Alternative Financing sources, and their
respective officers, employees, consultants and advisors (including legal,
valuation, and accounting advisors) to the books and records, properties,
officers, directors, agents and Representatives of the Company and its
Subsidiaries, (vi) obtaining surveys and title insurance reasonably requested by
Parent, (vii) as promptly as practicable, furnishing to Parent and its Debt
Financing or Alternative Financing sources with all financial and other
pertinent information regarding the Company and its Subsidiaries reasonably
requested by Parent to consummate the Debt Financing, including all historical
and pro forma financial statements and financial data regarding the Company and
its Subsidiaries, in each case of the scope, type and form (A) that is required
by the Securities Act (including Regulations S-K and S-X thereunder and other
accounting rules and regulations of the SEC) for inclusion in a registration
statement to be filed with the SEC and (B) that is otherwise customarily
included in private placement memoranda relating to private placements under
Rule 144A of the Securities Act and bank information memoranda, in each case at
the time during the Company's (or such segment's) fiscal year such offerings
will be made (all such information described in this clause (vii), the "Required
Financial Information"), (viii) taking all actions necessary to (A) permit the
prospective lenders involved in the Debt Financing to evaluate the Company's
assets, cash management and accounting systems, policies and procedures relating
thereto for the purpose of establishing collateral arrangements and (B)
establish bank and other accounts and blocked account Contracts and lock box
arrangements in connection with the foregoing, and (ix) taking all corporate
actions necessary to permit consummation of the Debt Financing; provided, that
nothing herein shall require such cooperation to the extent it would interfere
unreasonably with the business or operation of the Company or its Subsidiaries.
The Company hereby consents to the use of its and its Subsidiaries' logos in
connection with the Debt Financing.
(b) Parent shall use its reasonable best efforts to arrange
the Debt Financing on the terms and conditions described in the Debt Commitment
Letters, including using reasonable best efforts to (i) negotiate definitive
Contracts with respect to the Debt Financing on the terms and conditions
reflected in the Debt Commitment Letters or on other terms no less favorable to
Parent, (ii) satisfy on a timely basis all conditions applicable to Parent in
such definitive Contracts that are within its control and (iii) consummate the
Debt Financing at or prior to the Closing. In the event any portion of the Debt
Financing becomes unavailable for any reason on the terms and conditions
contemplated in the Debt Commitment Letters, Parent shall use its reasonable
best efforts to obtain alternative financing from alternative sources
("Alternative Financing"). Parent shall keep the Company reasonably apprised as
to the status of, and any material developments relating to, the Debt Financing
or Alternative Financing.
Section 6.10 Notification. During the period commencing upon the
execution and delivery of this Agreement by all of the parties and terminating
upon the earlier to occur of the Effective Time and the termination of this
Agreement pursuant to and in accordance with Section 8.1, the Company shall
promptly notify Parent in writing of any event, condition, fact or circumstance
that would make the timely satisfaction of any of the conditions set forth in
Section 7.1 or Section 7.2 impossible or unlikely, which notice shall indicate
that it is being delivered in accordance with this Section 6.10. No such
notification shall be deemed to supplement or amend the Company Disclosure
Letter for the purpose of (a) determining the accuracy of any of the
representations and warranties made by the Company in this Agreement, or (b)
determining whether any of the conditions set forth in Section 7.1, Section 7.2
or Section 7.3 has been satisfied. Delivery of notification pursuant to this
Section 6.10 shall not limit or otherwise affect the remedies available
hereunder to any party receiving such notice.
Section 6.11 Employment and Benefits Matters.
(a) For a period beginning at the Effective Time and ending on
the 12-month anniversary of the Effective Time (such period, the "Continuation
Period"), the employees of the Company and its Subsidiaries who remain in the
employment of Parent, the Surviving Corporation or any of their subsidiaries
following the Effective Time (the "Company Employees") shall receive
compensation and employee benefits that, in the aggregate, are substantially
comparable to the employee benefits provided under the Company's employee
benefit plans to such employees in accordance with their terms in effect
immediately prior to the Effective Time; provided that neither Parent nor the
Surviving Corporation nor any of their Subsidiaries shall have any obligation to
issue or adopt any plans or arrangements providing for the issuance of shares of
capital stock, warrants, options, stock appreciation rights or other rights in
respect of any shares of capital stock of any entity or any securities
convertible or exchangeable into such shares pursuant to any such plans or
arrangements; provided further that no plans or arrangements of the Company or
any of its Subsidiaries providing for such issuance shall be taken into account
in determining whether employee benefits are substantially comparable in the
aggregate. Following the Continuation Period, the Company Employees shall be
entitled to participate in the employee benefit plans maintained by Parent and
its Subsidiaries (including equity-based and equity-related plans) to the same
extent as other similarly situated employees of Parent and its Subsidiaries.
(b) To the extent that any employee benefit plan of Parent or
its Subsidiaries is made available to any Company Employee, on or following the
Effective Time, Parent shall cause to be granted to such Company Employee credit
for all service with the Company and its Subsidiaries prior to the Effective
Time (as well as service with any predecessor employer of the Company or any
such Subsidiary, to the extent service with the predecessor employer is
recognized by the Company or such Subsidiary) (such service, "Pre-Closing
Service") for all purposes, including determining eligibility to participate,
level of benefits, vesting and benefit accruals (other than for benefit accrual
purposes under any employee pension benefit plan (as defined in Section 3(2) of
ERISA)); provided, however, that Pre-Closing Service need not be recognized to
the extent that such recognition would result in any duplication of benefits for
the same period of service. In addition, and without limiting the generality of
the foregoing: (i) each Company Employee shall be immediately eligible to
participate, without any waiting time, in any and all employee benefit plans
sponsored by Parent and its Subsidiaries (other than the Benefit Plans and
Foreign Plans) (such plans, collectively, the "New Plans ") to the extent
coverage under any such New Plan replaces coverage under a comparable Benefit
Plan or Foreign Plan in which such Company Employee participates immediately
before the Effective Time (such plans, collectively, the "Old Plans"); and (ii)
for purposes of each New Plan providing medical, dental, pharmaceutical, vision
and/or disability benefits to any Company Employee, Parent shall use
commercially reasonable efforts to cause all waiting periods, pre-existing
condition exclusions and actively-at-work requirements of such New Plan to be
waived for such Company Employee and his or her covered dependents, and Parent
shall use commercially reasonable means to cause any eligible expenses incurred
by such Company Employee and his or her covered dependents during the portion of
the plan year of the Old Plan ending on the date such employee's participation
in the corresponding New Plan begins to be given full credit under such New Plan
for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket
requirements applicable to such Company Employee and his or her covered
dependents for the applicable plan year as if such amounts had been paid in
accordance with such New Plan.
(c) Without limiting the generality of Sections 6.11(a) and
6.11(b), Parent shall, or shall cause the Surviving Corporation to, maintain the
severance plans of the Company and its Subsidiaries pursuant to their material
terms as in effect at the Effective Time for a period of one year following the
Effective Time and to provide each Company Employee who is employed primarily in
the United States or Puerto Rico and whose employment is terminated by Parent,
the Surviving Corporation or their Subsidiaries on or prior to the first
anniversary of the Effective Time without cause (as determined by Parent or its
Subsidiaries) with severance and other separation benefits that are no less
favorable in the aggregate than what would be payable to such Company Employee
pursuant to the severance plan or policy that was applicable to such Company
Employee as of the Effective Time. For purposes of determining the severance and
other separation benefits to which a Company Employee shall become entitled
pursuant to the preceding sentence, such Company Employee's service with Parent
and its Subsidiaries and all Pre-Closing Service shall be recognized.
(d) Without limiting the generality of Section 6.11(a), with
respect to the annual performance period in which the Effective Time occurs,
Parent shall, or shall cause the Surviving Corporation to, (i) honor and
continue in all material respects the cash incentive compensation plans
maintained by the Company and its Subsidiaries at the Effective Time (the
"Incentive Plans") pursuant to their respective terms (except as modified by the
following clauses (ii) and (iii)) as in effect at the Effective Time with
respect to the annual performance period thereunder commencing prior to and
ending after the Effective Time, (ii) at the time(s) prescribed by the Incentive
Plans as in effect at the Effective Time, make payments to the Company Employees
in accordance with the applicable material terms of the Incentive Plans as in
effect at the Effective Time (without regard to any plan provision requiring an
employee to remain continuously employed until the date that payments under the
applicable Incentive Plan are made) and (iii) provide any Company Employee whose
employment is terminated by Parent, the Surviving Corporation or their
Subsidiaries without cause (as determined by Parent or its Subsidiaries) prior
to the time at which such payments are made with an amount in cash equal to such
Company Employee's target annual bonus in effect under the applicable Incentive
Plan as of the Effective Time, prorated to reflect the portion of such annual
performance period that elapsed prior to such termination.
(e) Notwithstanding anything in this Agreement to the
contrary, no provision of this Agreement shall be deemed to (i) guarantee
employment for any period of time for, or preclude the ability of Parent or the
Surviving Corporation or any of their Subsidiaries to terminate, any Company
Employee for any reason or (ii) subject to the limitations and requirements
specifically set forth in this Section 6.11, require Parent or the Surviving
Corporation or any of their Subsidiaries to continue any Benefit Plan or New
Plan or prevent the amendment, modification or termination thereof after the
Closing Date.
(f) Parent hereby agrees to take the actions set forth in
Section 6.11(f) of the Company Disclosure Letter to the extent applicable.
Section 6.12 Section 16(b). The Company shall take all steps reasonably
necessary to cause the dispositions of equity securities of the Company
(including derivative securities) in connection with the transactions
contemplated by this Agreement by each individual who is a director or executive
officer of the Company to be exempt under Rule 16b-3 promulgated under the
Exchange Act.
Section 6.13 Takeover Statutes. The parties shall use their respective
reasonable best efforts (a) to take all action necessary so that no Takeover Law
is or becomes applicable to the Merger or any of the other transactions
contemplated by this Agreement and (b) if any such Takeover Law is or becomes
applicable to any of the foregoing, to take all action necessary so that the
Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such Takeover Law on the
Merger and the other transactions contemplated by this Agreement.
Section 6.14 Retention Bonuses. In the event that (a) the Closing
occurs, on the date that is 30 days following the Closing or (b) the Agreement
is terminated, on the date that is 30 days following such termination (in either
case, the "Payment Date") (or, if such date is not a Business Day, the next
Business Day following such date), the Surviving Corporation or the Company, as
applicable, shall pay to each employee of the Company or its Subsidiaries who is
listed in Section 6.14 of the Company Disclosure Letter the amount of cash set
forth therein with respect to such employee (as to each such employee, the
"Retention Bonus"), provided, that such employee remains continuously employed
by the Company or any of its Subsidiaries (including, if the Closing occurs, the
Surviving Corporation or any of its Subsidiaries) from the date hereof through
and including the applicable Payment Date; provided, further, that in the event
that any such employee's employment is terminated involuntarily without cause
(as determined by the Company or the Surviving Corporation, as applicable) prior
to the applicable Payment Date, such employee shall be treated for purposes of
this Section 6.14 as having been employed on such Payment Date and shall be
entitled to receive the Retention Bonus within 30 days following termination. In
the event the Agreement is terminated and Retention Bonuses are paid by the
Company, Parent shall only be obligated to reimburse the Company in the event it
is required to pay the Company the Parent Termination Fee in accordance with
Section 8.3(d).
ARTICLE VII
CONDITIONS PRECEDENT TO MERGER
Section 7.1 Mutual Conditions to Closing. The respective obligations of
each party to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment at or prior to the Closing, of each of the
following conditions:
(a) this Agreement shall have been adopted by the shareholders
of the Company by the Requisite Shareholder Vote in accordance with the
Company's articles of incorporation and the GBCC;
(b) any waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
expired; and
(c) no temporary restraining order, preliminary or permanent
injunction or other order issued by any Governmental Authority of competent
jurisdiction or other legal restraint which prohibits, restrains or renders
illegal the consummation of the Merger shall be in effect.
Section 7.2 Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate the transactions contemplated
by this Agreement shall be further subject to the satisfaction or waiver by
Parent at or prior to the Closing, of each of the following conditions:
(a) the representations and warranties of the Company
contained in this Agreement (disregarding all qualifications and exceptions
contained therein regarding materiality or a Material Adverse Effect or any
similar standard or qualification), shall be true, complete and correct as of
the date of this Agreement and as of the Closing Date as though made on and as
of such date (unless any such representation or warranty is made only as of a
specific date, in which event such representation or warranty shall be true,
complete and correct as of such specific date), except where the failure of any
such representation or warranty to be so true, complete and correct would not
have a Material Adverse Effect;
(b) the Company and its Subsidiaries shall have performed in
all material respects each of the obligations, and complied in all material
respects with each of the agreements and covenants, required to be performed by
or complied with by them under this Agreement at or prior to the Closing Date;
(c) Parent shall have received a certificate of an executive
officer of the Company, certifying that the conditions set forth in Sections
7.2(a) and (b) have been satisfied; and
(d) no administrative or judicial Action brought by or on
behalf of a Governmental Authority shall be pending or threatened challenging
the Merger as inconsistent with or violative of any Antitrust Law.
Section 7.3 Conditions to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated under this Agreement
shall be further subject to the satisfaction or waiver by the Company at or
prior to the Closing of the following conditions:
(a) the representations and warranties of Parent and Merger
Sub contained in this Agreement (disregarding all qualifications and exceptions
contained therein regarding materiality or any similar standard or
qualification), shall be true, complete and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of such date
(unless any such representation or warranty is made only as of a specific date,
in which event such representation or warranty shall be true, complete and
correct as of such specific date), except where the failure of such
representations and warranties to be so true, complete and correct would not
prevent, materially delay or materially impede the ability of Parent or Merger
Sub to consummate the transactions contemplated by this Agreement;
(b) each of Parent and Merger Sub shall have performed in all
material respects the obligations, and complied in all material respects with
the agreements and covenants, required to be performed by or complied with by it
under this Agreement at or prior to the Closing Date; and
(c) the Company shall have received a certificate of an
executive officer of Parent, certifying that the conditions set forth in
Sections 7.3(a) and (b) have been satisfied.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
Merger may be abandoned (notwithstanding approval thereof by the Requisite
Shareholder Vote) prior to the Effective Time (with any termination by Parent
also being an effective termination by Merger Sub):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent if any preliminary or
permanent injunction or other order or other legal restraint which prohibits,
restrains or renders illegal the consummation of the Merger shall have become
final and non appealable; provided, that the party seeking to terminate this
Agreement shall have used its reasonable best efforts to contest, appeal and
remove such injunction, order or other legal restraint;
(c) by either the Company or Parent, if the Merger shall not
have been consummated on or before December 31, 2007 (the "Outside Date");
provided, however, that, in the event the Completion Period has not terminated
on or before the Outside Date, the Outside Date may be extended by Parent (by
written notice to the Company) to the day following the last day of the
Completion Period (and, if so extended, the "Outside Date" shall be deemed to
refer to such later date); provided, further, however, the right to terminate
this Agreement pursuant to this Section 8.1(c) shall not be available to a party
if the failure of the Closing to occur by such date shall be primarily due to
the failure of such party to perform or observe the covenants and agreements of
such party set forth in this Agreement;
(d) by either the Company or Parent, if the Requisite
Shareholder Vote shall not have been obtained at the Shareholders Meeting or at
any adjournment or postponement thereof at which a vote on such adoption was
taken;
(e) by the Company if a breach of any representation,
warranty, covenant or agreement on the part of Parent or Merger Sub set forth in
this Agreement shall have occurred which would cause any of the conditions set
forth in Sections 7.3(a) or (b) not to be satisfied, and such breach is
incapable of being cured by the Outside Date;
(f) by Parent:
(i) if a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement
shall have occurred which would cause any of the conditions set forth in
Sections 7.2(a) or (b) not to be satisfied, and such breach is incapable of
being cured by the Outside Date; or
(ii) if the Board, any committee thereof or the
Company shall have (A) effected a Recommendation Withdrawal, (B) taken any of
the actions described in clauses (ii), (iii), (iv) or (v) of Section 6.5(a)
(whether or not permitted to do so), or (C) failed to call the Shareholders
Meeting in accordance with this Agreement.
Section 8.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 8.1, this Agreement shall forthwith become null and void and
there shall be no liability or obligation on the part of any party or their
respective Subsidiaries or Affiliates, except Sections 4.25, 5.7, 6.4(c), 6.14,
this Section 8.2, Section 8.3 and Article IX will survive such termination;
provided, however, that nothing herein shall relieve the Company from
liabilities for damages or other costs or expenses incurred or suffered by
Parent or Merger Sub as a result of any willful breach by the Company of any of
its representations, warranties, covenants or other agreements set forth in this
Agreement.
Section 8.3 Fees and Expenses.
(a) Except as provided in this Section 8.3, all fees and
expenses incurred in connection with the Merger and the transactions
contemplated by this Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated.
(b) In the event that this Agreement is terminated by Parent
pursuant to Section 8.1(f)(ii), then the Company shall pay to Parent the Company
Termination Fee as promptly as practicable (but in any event within one (1)
Business Day) following such termination.
(c) In the event that (i) this Agreement is terminated by
Parent or the Company pursuant to Section 8.1(c) (but only if the Shareholders
Meeting has not been held) or Section 8.1(d) (or, after the Shareholders Meeting
has been held and there has been a failure by the Company to obtain the
Requisite Shareholder Vote, and this Agreement becomes terminable for such
reason, the Company terminates this Agreement for any other reason), (ii) at any
time prior to such termination a Company Takeover Proposal has been publicly
announced or publicly made known and not irrevocably withdrawn, and (iii) within
12 months after such termination, the Company or any of its Subsidiaries enters
into a definitive Contract with respect to, or consummates, any Company Takeover
Proposal, then the Company shall pay to Parent on the date of, and as a
condition to, such execution or consummation, the Company Termination Fee. For
purposes of this Section 8.3(c), the term "Company Takeover Proposal" shall have
the meaning assigned to such term in Section 6.5(g), except that all references
to 15% therein shall be deemed to be references to "more than 50%".
(d) In the event that this Agreement is terminated by the
Company or Parent pursuant to Section 8.1(b) or Section 8.1(c) and at the time
of any such termination all of the conditions set forth in Article VII have been
satisfied or waived except for (1) any of the conditions set forth in Sections
7.1(b), 7.1(c) (in the case of Section 7.1(c), only to the extent that the
condition set forth therein has not been satisfied due to a temporary
restraining order, preliminary or permanent injunction or other order issued by
any Governmental Authority of competent jurisdiction or other legal restraint
relating to U.S. Antitrust Laws which prohibits, restrains or renders illegal
the consummation of the Merger being in effect) and 7.2(d) (in the case of
Section 7.2(d), only to the extent that the condition set forth therein has not
been satisfied due to an administrative or judicial Action brought by or on
behalf of a Governmental Authority being pending or threatened challenging the
Merger as inconsistent with or violative of any U.S. Antitrust Law) and (2) such
other conditions that are capable of being satisfied on the date of termination
but, by their terms, cannot be satisfied until the Closing Date, then Parent
shall pay to the Company as promptly as practicable, but in no event later than
one (1) Business Day after such termination, the Parent Termination Fee and up
to an aggregate of $12,000,000 with respect to the retention bonuses described
in Section 6.14, to the extent the Company is obligated to pay such bonuses to
certain employees of the Company and its Subsidiaries in accordance with Section
6.14.
(e) In the event this Agreement is terminated under
circumstances in which the Parent Termination Fee has been paid pursuant to
Section 8.3(d) and, within 12 months after such termination, the Company or any
of its Subsidiaries enters into a definitive Contract with respect to, or
consummates, any Company Takeover Proposal that has consideration with a value
that is equal to or higher than $52.75 per share of Company Common Stock (as
appropriately adjusted to give effect to any stock split, reverse stock split,
stock dividend, reclassification, redenomination, recapitalization, split-up,
combination, exchange of shares or other similar transaction), the Company shall
reimburse the Parent Termination Fee to Parent on the date of, and as a
condition to, such execution or consummation. For purposes of this Section
8.3(e), the term "Company Takeover Proposal" shall have the meaning assigned to
such term in Section 6.5(g), except that all references to 15% therein shall be
deemed to be references to "more than 50%".
(f) Any amount that becomes payable pursuant to Section
8.3(b), 8.3(c) or 8.3(d) shall be paid by wire transfer of immediately available
funds to an account designated by the party entitled to receive such payment.
The parties agree and understand that in no event shall the Company or Parent be
required to pay the Company Termination Fee or the Parent Termination Fee,
respectively, on more than one occasion. The parties acknowledge and agree that
the agreements contained in this Section 8.3 are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
the parties would not enter into this Agreement, and that any amounts payable
pursuant to this Section 8.3 do not constitute a penalty. If the Company fails
to pay as directed in writing by Parent any amounts due to Parent or Merger Sub
pursuant to this Section 8.3 or Parent fails to pay the Company any amounts due
to the Company pursuant to this Section 8.3 within the time periods specified in
this Section 8.3, the Company or Parent, as applicable, shall pay the costs and
expenses (including reasonable legal fees and expenses) incurred by Parent or
the Company, as applicable, in connection with any action, including the filing
of any lawsuit, taken to collect payment of such amounts, together with interest
on such unpaid amounts at the prime lending rate prevailing during such period
as published in The Wall Street Journal, calculated on a daily basis from the
date such amounts were required to be paid until the date of actual payment.
Section 8.4 Procedure for Termination. A termination of this Agreement
pursuant to Section 8.1 shall, in order to be effective, require action by the
board of directors of the terminating party. Termination of this Agreement prior
to the Effective Time shall not require the approval of the shareholders of the
Company.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants and agreements, shall survive the Effective Time, except for (a) those
covenants and agreements contained herein that by their terms apply or are to be
performed in whole or in part at or after the Effective Time and then only to
such extent and (b) this Article IX.
Section 9.2 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section 9.2 prior to 5:00 p.m. (New
York time) on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement later than 5:00 p.m. (New
York time) on any date and earlier than 11:59 p.m. (New York time) on such date,
(iii) when received, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as follows:
(a) If to the Company:
Xxxx X. Xxxxxxx Company
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
with a copy to:
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, III, Esq.
and a copy to:
King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
C. Xxxxxxx Xxxxxx, Esq.
if to Parent or Merger Sub, to:
M & F Worldwide Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
and a copy to:
Xxxxxxxx Xxxxxxx LLP
Banc of America Plaza
000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxx, Esq.
Section 9.3 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated by this Agreement are
consummated as originally contemplated to the greatest extent possible.
Section 9.4 Entire Agreement. This Agreement, the Company Disclosure
Letter and the Confidentiality Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede all prior
agreements and undertakings, both written and oral, between the parties with
respect to the subject matter hereof.
Section 9.5 Assignment. This Agreement may not be assigned by any party
by operation of Law or otherwise without the prior written consent of each of
the other parties (which consent may be granted or withheld in the sole
discretion of such other party), except that the Agreement may be assigned by
Parent or Merger Sub to an Affiliate of such party; provided that the party
making such assignment shall not be released from its obligations hereunder. Any
attempted assignment in violation of this Section 9.5 shall be void.
Section 9.6 Amendment. Subject to applicable Law, this Agreement may be
amended by the parties by action taken by or on behalf of their respective
boards of directors at any time prior to the Closing Date, whether before or
after approval of the transactions contemplated by this Agreement by the
shareholders of the Company; provided, however, that, after adoption of this
Agreement by the shareholders of the Company, no amendment may be made which
under applicable Law requires the further approval of the shareholders of the
Company without such further approval. This Agreement may not be amended except
by an instrument in writing signed by each of the parties.
Section 9.7 Waiver. At any time prior to the Effective Time, any party
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and (c)
subject to the requirements of applicable Law, waive compliance with any of the
agreements or conditions contained for the benefit of such party contained
herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby. The
failure of any party to assert any rights or remedies shall not constitute a
waiver of such rights or remedies.
Section 9.8 No Third Party Beneficiaries. Except for Section 6.7 (which
is intended to be for the benefit of the Persons referred to therein, and may be
enforced by any such Persons), this Agreement shall be binding upon and inure
solely to the benefit of the parties and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person
any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.
Section 9.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF EXCEPT AND ONLY TO THE EXTENT THE LAWS OF THE STATE OF GEORGIA
MANDATORILY APPLY.
Section 9.10 Jurisdiction. The parties agree that irreparable damage
would occur and that the parties would not have any adequate remedy at law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any state or federal court located
in the State of Delaware, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties (a)
consents to submit itself to the personal jurisdiction of any state or federal
court located in the State of Delaware in the event any dispute arises out of
this Agreement or the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement or the transactions contemplated by
this Agreement in any court other than a state or Federal court located in the
State of Delaware.
Section 9.11 Waiver of Jury Trial. Each party hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any suit, action or other proceeding arising out of this
Agreement or the transactions contemplated hereby. Each party (a) certifies that
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such party would not, in the event of any action,
suit or proceeding, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties have been induced to enter into this Agreement,
by, among other things, the mutual waiver and certifications in this Section
9.11.
Section 9.12 Consents and Approvals. For any matter under this
Agreement requiring the consent or approval of any party to be valid and binding
on the parties, such consent or approval must be in writing.
Section 9.13 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. For purposes of this
Agreement, facsimile signatures shall be deemed originals.
Section 9.14 Interpretation. When a reference is made in this Agreement
to an Article or Section, such reference shall be to an Article or Section of
this Agreement unless otherwise indicated. All references to this Agreement
shall be deemed to include references to the "plan of merger" contained herein
(as such term is used in the GBCC). The table of contents and headings contained
in this Agreement are for convenience of reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". When a
reference in this Agreement is made to a "party" or "parties," such reference
shall be to a party or parties to this Agreement unless otherwise indicated.
Unless the context requires otherwise, the terms "hereof," "herein," "hereby,"
"hereto" and derivative or similar words in this Agreement refer to this entire
Agreement. Unless the context requires otherwise, words in this Agreement using
the singular or plural number also include the plural or singular number,
respectively, and the use of either gender herein shall be deemed to include the
other gender. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
IN WITNESS WHEREOF, the Company, Parent and Merger Sub have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
XXXX X. XXXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chairman of the Board,
President and Chief
Executive Officer
M & F WORLDWIDE CORP.
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: President and Chief
Executive Officer
H ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: President and Chief
Executive Officer