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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 2)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
COHR INC.
(Name of Subject Company)
COHR INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
192567105
(CUSIP Number of Class of Securities)
RAYMOND E. LIST
PRESIDENT AND CHIEF EXECUTIVE OFFICER
21540 PLUMMER STREET
CHATSWORTH, CA 91311
(818) 773-2647
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
WITH A COPY TO:
ROBERT B. KNAUSS
MUNGER, TOLLES & OLSON LLP
355 SOUTH GRAND AVENUE
35TH FLOOR
LOS ANGELES, CALIFORNIA 90071-1560
(213) 683-9100
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This Amendment No. 2 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9, as amended (the
"Schedule 14D-9) of COHR Inc., a Delaware corporation (the "Company"), relating
to the Revised Offer (as defined below) made by TCF Acquisition Corporation, a
Delaware corporation (the "Purchaser"), which is currently owned by Three Cities
Fund II, L.P. and Three Cities Offshore II, C.V., disclosed in its Tender Offer
Statement on Schedule 14D-1 (as may be amended or supplemented from time to
time, the "Schedule 14D-1") to purchase all the outstanding Shares of the
Company upon the terms and subject to the conditions set forth in the Offer to
Purchase (as may be amended or supplemented from time to time, the "Offer to
Purchase") and the related Letter of Transmittal (the terms and conditions of
which, together with any amendments or supplements thereto, collectively
constitute the "Revised Offer"). The purpose of this Amendment No. 2 is to
describe the changes in the Revised Offer from the Purchaser's initial tender
offer described in the Offer to Purchase dated January 4, 1999, including the
increase in the tender offer price per Share being offered by the Purchaser to
$6.50 net cash per Share, and to amend and supplement Items 2, 3(b), 4, 5, 8,
and 9 of the Schedule 14D-9, as set forth below. All capitalized terms used
herein but not otherwise defined shall have the meanings ascribed to such terms
in the Schedule 14D-9.
ITEM 2. TENDER OFFER OF THE BIDDER
Item 2 is hereby amended and restated in its entirety as follows:
This Schedule 14D-9 relates to the Revised Offer made by the Purchaser,
disclosed in the Schedule 14D-1 to purchase all the outstanding Shares at a
price of $6.50 per Share, net to the seller in cash (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase and
the related Letter of Transmittal. The Supplement, dated February 5, 1999 (the
"Supplement"), to the Offer to Purchase, dated January 4, 1999, is filed as
Exhibit (a)(8) hereto, and the Letter of Transmittal (as amended) is filed as
Exhibit (a)(9) hereto.
The Revised Offer is being made pursuant to an Amended and Restated
Plan and Agreement of Merger dated as of February 4, 1999, between the Company
and the Purchaser (the "Amended Merger Agreement"), which provides for the
making of the Revised Offer by the Purchaser, subject to the conditions and upon
the terms of the Amended Merger Agreement, and for the subsequent merger of the
Purchaser with and into the Company (the "Merger"). The Amended Merger Agreement
amends and restates the Plan and Agreement of Merger dated as of December 24,
1999 (the "Original Merger Agreement"). In the Merger, each Share outstanding at
the Effective Time (as defined in the Amended Merger Agreement) (other than
Shares held by Three Cities Funds, the Purchaser, or Shares held by stockholders
validly exercising appraisal rights pursuant to the General Corporation Law of
the State of Delaware (the "DGCL")) will, by virtue of the Merger and without
any action by the holder thereof, be converted into the right to receive,
without interest, $6.50 per Share in cash (the "Merger Consideration"). The
principal changes from the Original Merger Agreement to the Amended Merger
Agreement are summarized in Item 4(b)(1) below, and the Amended Merger Agreement
is filed as Exhibit (c)(3) hereto and is incorporated herein by reference.
The Schedule 14D-1 states that the principal executive offices of the
Purchaser and Three Cities are located at 650 Madison Avenue, New York, New York
10022.
ITEM 3. IDENTITY AND BACKGROUND
The second paragraph under "Stock Options" in Item 3(b)(i) is hereby
amended and restated in its entirety as follows:
The transactions contemplated by the Amended Merger Agreement will
constitute a "change in control" for purposes of the Company's existing stock
option plans and stock option grants. As a result, all outstanding options will
become vested and exercisable upon the occurrence of a "change in control" (as
respectively defined in such plans and grants). Mr. Daniel F. Clark was granted
50,000 options in June 1998 with an exercise price of $5.125, and Messrs.
Bernie Bartoszek, Ed Gravell, David Roesler, and Joseph Strange were granted
(i) 5,000, (ii) 10,000, (iii) 10,000, and (iv) 5,000 options, respectively, in
November 1998 with an exercise price of $5.125, and are the only executive
officers having options with an exercise price that is less than $6.50. No
director of the Company has options with an exercise price of less than $6.50.
The paragraph under "Indemnification" in Item 3(b)(i) is hereby amended
and restated in its entirety as follows:
Indemnification. Under the terms of the Amended Merger Agreement, the
Company (as the surviving corporation in the Merger) will honor, and will not
amend or modify for a period of not less than six years after the date of the
Amended Merger Agreement, any and all obligations of the Company and its
subsidiaries to indemnify present and former directors, officers or employees of
the Company or its subsidiaries with respect to matters which occur on or prior
to the date of the
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Merger, whether provided in the certificate of incorporation or by-laws of the
Company or any of its subsidiaries, in certain of the Company's employment
agreements listed on an exhibit to the Amended Merger Agreement or under the
DGCL. The Company will maintain in effect for not less than six years after the
date of the Merger with respect to occurrences or omissions prior to the date of
the Merger the Company's policies of directors and officers' liability insurance
(which need not insure the Company against risk other than the Company's
obligation to insure officers and directors) with coverage limits comparable to
those of the policies in effect at the date of the Amended Merger Agreement (the
"Current Policies") to the extent that insurance can be purchased for premiums
totaling not more than $100,000 plus any premiums paid for the Current Policies
which are refunded because the Current Policies are terminated before their
expiration dates (if that occurs), or to the extent that coverage cannot be
purchased for that amount, reduce the coverage or increase the deductible amount
in order to obtain the maximum coverage which can be purchased for that amount.
Item 3(b)(ii) is hereby amended and restated in its entirety as
follows:
(ii) Terms of the Amended Merger Agreement. The summary of the Amended
Merger Agreement contained in the "Introduction" and in Sections 2, 7, 11 and 16
of the Offer to Purchase, dated January 4, 1999, as supplemented by the those
terms summarized in Item 4(b)(1) below, is incorporated herein by reference.
Such summary should be read in its entirety for a description of the terms and
provisions of the Amended Merger Agreement, and the Amended Merger Agreement is
incorporated herein by reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) RECOMMENDATIONS OF THE BOARD OF DIRECTORS
Item 4(a) is hereby amended and supplemented by addition of the
following:
At a meeting held on February 4, 1999, the Company's Board of Directors
(the "Board") unanimously (i) approved the Revised Offer and the terms of the
Amended Merger Agreement, (ii) determined that the terms of the Revised Offer
and the Merger are fair to, and in the best interests of, holders of Shares and
(iii) recommended that holders of Shares accept the Revised Offer and tender
their Shares pursuant to the Revised Offer. Messrs. Uhrig and Wright did not
participate in such meeting since they are affiliated with the Purchaser.
Accordingly, the Board (excluding Messrs. Uhrig and Wright) unanimously
recommend that the stockholders of the Company tender their Shares pursuant to
the Revised Offer. A copy of the Company's letter to the stockholders of the
Company communicating the Board's recommendation is filed as Exhibit (a)(10)
hereto and is incorporated herein by reference.
(b)(1) BACKGROUND
Item 4(b)(1) is hereby amended and supplemented by addition of the
following:
On January 25, 1999 , the Company received a letter from Managed Health
Care Associates, Inc. ("MHA") in which MHA expressed interest in making a
proposal to acquire all of the Common Shares at a price of $8.00 per Share
contingent on MHA's being satisfied with the results of a due diligence
investigation of the Company, which MHA stated it could complete in 8 days.
Additionally, MHA informed the Company that it had commenced litigation against
the Company in the Delaware Chancery Court. (See Item 8(e) of this Amendment No.
2). In MHA's complaint filed in connection with such litigation, MHA alleged,
among other things, that on December 22, 1998, Mr. Ritterbush, a director of the
Company, met with several directors of MHA and that MHA informed Mr. Ritterbush
that it was prepared to pay $8.00 per Share in cash for each outstanding Share.
Mr. Ritterbush did meet with MHA on December 22, 1998 but strongly disagrees
with MHA's characterization of its interest.
On January 26, 1999, counsel for the Company received a letter from
counsel for MHA which stated, among other things, that (i) MHA's proposal was to
purchase the Company for $8.00 per Share, net to the seller in cash, (ii) MHA
was seeking to obtain the financing necessary to complete the transaction,
(iii) MHA intended to perform a due diligence investigation of the Company and
(iv) MHA expected the Company to pay any termination fees due to the Purchaser
upon
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termination of the Original Merger Agreement. The letter also stated that MHA
would withdraw, without prejudice, its previously commenced litigation once the
Company confirmed to MHA that the Company would not commence litigation in
connection with MHA's proposal. A copy of this letter has been filed as Exhibit
(a)(11) hereto and is incorporated by reference herein.
As required under the Original Merger Agreement, the Company informed
the Purchaser of its discussions with MHA and continued to do so throughout
such discussions.
The Board met by teleconference on January 26, 1999, with the Company's
financial and legal advisors participating. Messrs. Uhrig and Wright did not
participate in such meeting. At such meeting, the Board created a Special
Committee, consisting of Messrs. Reitnouer, Barber, Meyer, and Simpson (the
"Special Committee"), to assist the Board in considering the MHA proposal. After
discussion, the Board decided to permit representatives of MHA to begin a due
diligence investigation of the Company on January 27, 1999.
On January 29, 1999, the Company received from MHA a letter signed by
representatives of Banque Nationale de Paris ("BNP") and MHA in which BNP stated
that, assuming satisfactory completion by MHA and BNP of a due diligence
investigation with respect to the assets and businesses of the Company,
including satisfaction as to the status of the Stockholder Suits and the
operating performance of the Company's MasterPlan division, BNP was highly
confident that it would be able to arrange a syndicate of lenders for the
proposed financing necessary to complete an acquisition of the Company by MHA at
a price of $8.00 per Share. A copy of this letter has been filed as Exhibit
(a)(12) hereto and is incorporated by reference herein.
Under the Original Merger Agreement, the Company had the right to
consider an acquisition proposal which met the definition of a Superior Proposal
if it was submitted within 20 business days after the Purchaser filed its
Schedule 14D-1. February 2, 1999 was the last day of that 20 business day
period. On February 2, 1999, after MHA had completed its initial due diligence,
counsel for the Company received a letter from counsel for MHA stating that MHA
wished to consummate a transaction in which it would be willing to pay $7.00 per
Share in cash for all outstanding Common Shares, contingent on MHA's being
satisfied with the results of its further due diligence and negotiating a
satisfactory merger agreement, and conditioned upon the Company's not disclosing
MHA's identity or the identities of its stockholders in the Company's public
filings (the "MHA Proposal"). A copy of this letter has been filed as Exhibit
(a)(13) hereto and is incorporated by reference herein. The letter from counsel
for MHA was accompanied by a new letter from BNP which was revised later in the
day by BNP. The revised letter stated that BNP was highly confident that BNP
could arrange a syndicate of lenders to finance a transaction at a price of $7
per Share (stating the proposed financing needs to be $46 million plus closing
costs), conditioned on, among other things, BNP's and MHA's "completing due
diligence of the assets and business of COHR" with results satisfactory to MHA
and BNP, "including satisfaction as to the status of pending litigation and the
operating performance of MasterPlan" and subject to final agreement by MHA, MHA
stockholders, and BNP on the final terms, conditions and pricing of the
syndicated loan. A copy of this letter has been filed as Exhibit (a)(14) hereto
and is incorporated by reference herein.
The Special Committee met once and the Board met twice by
teleconference on February 2, 1999 to discuss the letters from MHA and BNP, with
the Company's financial and legal advisors participating at such meetings.
Messrs. Uhrig and Wright left the first Board meeting after an informational
report on the status of the MHA discussions and did not participate in the
second Board meeting. After its first meeting, the Board instructed the
Company's financial and legal advisors to attempt to obtain further
clarification of the MHA Proposal.
On February 2, 1999, counsel for the Purchaser sent a letter to counsel
for the Company expressing its view that the letters from counsel for MHA and
from BNP did not constitute a Superior Proposal, as defined in the Original
Merger Agreement. The letter from counsel for the Purchaser asserted, among
other things, that (1) the letters from counsel to MHA and BNP did not
constitute a proposal but at most constituted a statement that at some time in
the reasonably near future MHA might be in a position to make a proposal and (2)
the letters made it clear that MHA did not have the financial resources
necessary to carry out the transaction described in the letter. Therefore, the
Purchaser asserted (i) the letters from counsel for MHA and from BNP did not
satisfy the requirement in the Original Merger Agreement that a Superior
Proposal be received within 20 business days after the Purchaser's Schedule
14D-1 was filed with the SEC (which period ended on February 2, 1999), (ii) MHA
could not meet a requirement that to be a "Superior Proposal," a proposal had to
be from a proposed acquirer which the Board determines in good faith has the
financial resources necessary to carry out the transaction, and (iii) the highly
contingent nature of the confidence expressed in the letter from BNP, combined
with the fact that MHA was seeking 100% financing, made it difficult to view
what was described in the letter from MHA's counsel as "not subject to a
financing contingency" (another requirement for a proposal to constitute a
Superior Proposal). A copy of this letter has been filed as Exhibit (a)(15)
hereto and is incorporated by reference herein.
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At the Board's second meeting on February 2, 1999, the Board, after
consultation with the Company's financial and legal advisors (who, among other
things, reported on their further discussions with MHA), deemed itself to be in
receipt of a Superior Proposal (as defined in the Original Merger Agreement).
The Board considered, among other things, that it had been told that Advent
International Corporation, a stockholder of MHA, and other MHA stockholders had
agreed to guarantee up to $30 million of MHA's borrowings. On the next day, the
Company received a letter in which Advent and the other MHA stockholders
confirmed that they had committed up to $30 million in the form of cash or
guarantees to BNP and further stated that the commitment "is subject to all the
limitations contained in the letter dated February 2, 1998 [sic] and BNP's
highly confident letter attached thereto, which limitations are incorporated
herein by reference." A copy of this letter has been filed as Exhibit (a)(16)
hereto and is incorporated by reference herein.).
Later on February 2, 1999, counsel for the Company informed counsel for
the Purchaser of the Board's determination. Counsel for the Company stated that
(i) the Board did not agree with the Purchaser's interpretation of the Original
Merger Agreement, (ii) the Board deemed itself to be in receipt of a Superior
Proposal (as defined in the Original Merger Agreement), (iii) the Board had 10
business days to consider and accept, if it resolved to do so, such proposal,
and (iv) if the Board resolved to accept such proposal, the Purchaser would have
10 business days from notice thereof to match the price per Share offered in
such proposal.
On February 3, 1999, the Purchaser sent a letter to Lynn Reitnouer, the
Chairman of the Board, in which the Purchaser (i) reiterated its belief that the
February 2, 1999 letter from counsel for MHA, as supplemented, did not meet the
minimum requirements for receipt of a Superior Proposal, but (ii) proposed to
modify the Original Merger Agreement so (a) the Purchaser would pay $5.50 per
Share for Shares which are purchased through the Offer, (b) the expiration date
of the Offer would be not less than 10 business days and not more than 20
business days after the revised terms of the Offer are announced, (c) the
Purchaser would pay, promptly after the Offer expires, $5.50 for each Share
properly tendered and not withdrawn, (d) as promptly as practicable after the
expiration of the Offer, the Purchaser would cause the Merger to take place and
the Company's stockholders to receive $5.50 per Share as a result of the Merger,
(e) if the Stockholder Suits were settled by August 2, 1999 on a basis which
would not require the Company to pay more than $1 million, net of any insurance
proceeds, the Purchaser would pay an additional $1.50 per Share to the persons
whose Shares were purchased through the Offer or who were stockholders at the
time of the Merger (increasing the total payment to $7.00 per Share), and (f)
provisions relating to offers by persons other than the Purchaser would be
deleted from the Original Merger Agreement. The letter said that proposal would
remain available until 7:00 P.M., New York City time, on February 3, 1999. A
copy of this letter has been filed as Exhibit (a)(17) hereto and is incorporated
by reference herein.
The Board met on February 3, 1999 to consider the new proposal from the
Purchaser, with the Company's financial and legal advisors participating.
Messrs. Uhrig and Wright did not participate in the meeting. Following the
meeting, at the request of the Board, the Company's financial and legal advisors
informed the Purchaser that the members of the Board participating had
unanimously rejected the Purchaser's new proposal. They said that the Board
would continue to pursue the MHA transaction, but would consider a further offer
from the Purchaser if the Purchaser offered $7.00 per Share, without
contingencies. After that proposal was rejected by the Purchaser, such advisors
indicated that the Board had authorized them to state that the Board might be
willing to consider an offer of $6.50 per Share which is payable quickly and not
subject to contingencies (including the outcome of efforts to settle the
Stockholder Suits).
On February 3, 1999, the Purchaser announced that the Expiration Time
would be extended to 12:00 Midnight, New York City time, on February 16, 1999.
On February 3, 1999, the Company received a draft merger agreement from
MHA.
On February 4, 1999, Mr. Uhrig, on behalf of the Purchaser, met with
Mr. Reitnouer in Los Angeles and said the Purchaser would be willing to offer
$6.50 per Share, payable without regard to whether or on what basis the
Stockholder Suits might be settled, and set forth the terms of the Revised
Offer. This offer expired at the end of the day on February 4, 1999, and was
conditioned on the Company not disclosing it to MHA until the next day.
Later on February 4, 1999, the Board met to consider the new proposal
from the Purchaser, with the Company's financial and legal advisors
participating. Messrs. Uhrig and Wright did not participate in the meeting. The
Board (i) approved the Revised Offer proposed by the Purchaser, the Merger, and
the terms of the Amended Merger Agreement, (ii) determined that the terms of the
Revised Offer and the Merger are fair to and in the best interests of the
Company's stockholders (other
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than the Purchaser and its affiliates), and (iii) recommended that the
Company's stockholders accept the Revised Offer and tender their Shares in
response to it. At that meeting, Lehman Brothers discussed with the Board the
Revised Offer and various factors that should be considered in connection with
such offer, including the alternative of negotiating further with MHA.
Later at the February 4, 1999 Board meeting, at the request of the
Board, Lehman Brothers orally presented its opinion to the Board that the
consideration of $6.50 per Share was fair from a financial point of view to the
Company's stockholders (other than the Purchaser and its affiliates) and later
delivered its written opinion confirming such oral opinion. The Board also
approved amending the Original Merger Agreement to incorporate the terms of the
Revised Offer and Merger.
Prior to the opening of trading on February 5, 1999, the Company
announced the amended terms of the Revised Offer and the extension of the
Expiration Time of the Revised Offer to midnight, New York City time, on
February 24, 1999.
On February 5, 1999 the Company and the Purchaser entered into the
Amended Merger Agreement.
The Amended Merger Agreement differs from the Original Merger Agreement
principally in that:
- the cash price of the Revised Offer is $6.50 per Share,
without regard to the outcome of efforts to settle the
Stockholder Suits (i.e., with no change in what is being paid
based upon whether the Stockholder Suits are settled);
- the Expiration time of the Revised Offer (midnight, New York
City time, on February 24, 1999) may not be extended beyond
March 8, 1999 without the Company's consent;
- the Merger is no longer conditioned on the Purchaser and its
stockholders owning at least 85% of the outstanding Shares
after the Purchaser acquires the Shares which are tendered in
response to the Revised Offer;
- because the price being paid in the Revised Offer will be
$6.50 per Share without regard to the outcome of the efforts
to settle the Stockholder Suits, the Merger Consideration will
be $6.50 per share without regard to the outcome of the
efforts to settle the Stockholder Suits; and
- the provisions which permitted the Company to entertain
unsolicited acquisition proposals and terminate the Original
Merger Agreement because of a Superior Proposal were deleted
(the last day for the Company to receive an acquisition
proposal which could have been a basis for it to terminate the
Original Merger Agreement was February 2, 1999).
(2) REASONS FOR THE RECOMMENDATIONS
Item 4(b)(2) is hereby amended and supplemented by addition of the
following:
In addition to the factors the Board considered in making
determinations and recommendations with respect to the initial Offer of the
Purchaser pursuant to the Original Merger Agreement, the Board considered
numerous other factors in making determinations and recommendations with respect
to the Revised Offer, including, without limitation, the following:
(i) The cash price of $6.50 per Share in the Revised Offer,
without regard to the outcome of the efforts to settle the Stockholder
Suits, is significantly greater than the Purchaser's price of $5.375 in
the initial Offer and significantly more certain than the contingent
price of $6.375 in the initial Offer. Such price is also more certain
than the $7.00 per Share price contained in the MHA Proposal.
Additionally, the difference between the $7.00 per Share contained in
the MHA Proposal and the $6.50 per Share contained in the Revised Offer
decreases if such amounts are risk adjusted to their respective present
values because the Revised Offer has fewer contingencies and can be
consummated more quickly.
(ii) The high likelihood that the Revised Offer and Merger
would be consummated, including the ability of the Three Cities Funds
to finance the Revised Offer and the Merger, the absence of a financing
condition, and the absence of a condition that there be no material
adverse change in the Company after December 24, 1998.
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(iii) Although the Board received a bid from MHA for $7.00 per
Share and deemed it a receipt of a Superior Proposal (as defined in the
Original Merger Agreement), there was no certainty that the MHA
Proposal would be consummated. The MHA Proposal was subject to MHA and
its stockholders being satisfied with the results of their additional
due diligence, and BNP being satisfied with its due diligence,
including with respect to the pending litigation and the operating
performance of the Company's MasterPlan division, and the execution of
a satisfactory merger agreement. Additionally, MHA's initial draft of
its merger agreement with the Company contained significantly more
representations and warranties by the Company than the Original Merger
Agreement, and MHA discussed the possibility of adding a material
adverse change condition and a cash or cash equivalent condition to
consummating the MHA Proposal. This, together with the Company's
further discussions with MHA, indicated to the Company that negotiating
definitive agreements with MHA providing for $7.00 per Share would
likely be more difficult than it originally anticipated, as compared to
the relative certainty of completing a transaction with the Purchaser
at $6.50 per Share more quickly.
(iv) The risks to the Company, if it continued to pursue the
MHA Proposal, of not completing a transaction with MHA, including (a)
the adverse effect a failed transaction would have on the Company's
customer and vendor relationships and employee morale and (b) the
potential competitive harm to the Company in light of the confidential
and proprietary information provided or to be provided to MHA, a
competitor of the Company.
(v) The harm to the Company's financial position if the
Original Merger Agreement was terminated and the MHA Proposal was not
consummated since the Company would have had to pay to the Purchaser a
termination fee of $1.7 million and certain other costs and expenses.
(vi) The low probability that the MHA Proposal would be
improved with a higher price per Share or with a reduction in
contingencies. The Board specifically considered that MHA reduced the
price at which it expressed interest from $8.00 per Share to $7.00 per
Share after its initial due diligence. In addition, the Original Merger
Agreement effectively required MHA to make its best bid by February 2,
1999 since such bid could be matched by the Purchaser under the
Original Merger Agreement, and the Board therefore believed that if MHA
were willing to make a bid higher than $7.00 per Share, it would have
done so by February 2, 1999.
(vii) The fact that the Purchaser's revised proposal to the
Company setting forth the Revised Offer expired on February 4, 1999,
the same day it was first offered to the Company, and the condition
that such offer not be disclosed to MHA until the next day.
(viii) The oral opinion of Lehman Brothers delivered on
February 4, 1999 (which opinion was subsequently confirmed in writing
on the same day), to the effect that, as of the date of such opinion
and based upon and subject to certain matters stated in such opinion,
the $6.50 per Share cash consideration to be offered to holders of
Shares (other than the Purchasers and its affiliates) in the Revised
Offer and the Merger was fair, from a financial point of view, to such
holders. The full text of Lehman Brothers' written opinion, which sets
forth the assumptions made, matters considered and limitations on the
review undertaken by Lehman Brothers, is attached hereto as Annex A and
is incorporated herein by reference. Lehman Brothers' opinion is
directed only to the fairness, from a financial point of view, of the
$6.50 per Share consideration to be offered in the Revised Offer and
the Merger by holders of Shares (other than the Purchaser and its
affiliates) and is not intended to constitute, and does not constitute
a recommendation as to whether any stockholders should tender Shares
pursuant to the Offer. Holders of Shares are urged to read such opinion
carefully in its entirety.
In considering the Revised Offer, the Board did not assign relative
weights to the above factors or any of the other factors considered by the Board
or determine that any factor was more significant than another. Rather, the
Board viewed its position and recommendations as being based on the totality of
the information presented to and considered by it. In addition, it is possible
that different members of the Board assigned different weights to the various
factors described above.
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ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Item 5 is hereby amended and supplemented by addition of the following:
As part of its role as exclusive financial advisor, Lehman Brothers has
delivered to the Board an opinion that the consideration of $6.50 per Share to
be offered in the Revised Offer and Merger was, as of February 4, 1999, fair to
the Company's stockholders (other than the Purchaser and its affiliates).
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 is hereby amended and supplemented by addition of the following:
(d) ANTITRUST COMPLIANCE. Pursuant to the requirements of the Hart
Scott Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the
Company filed a Notification and Report Form with respect to the Offer and the
Merger with the Antitrust Division of the Department of Justice and the Federal
Trade Commission ("FTC") on January 15, 1999. On January 26, 1999, the FTC
informed counsel for the Company that the FTC had granted early termination of
the waiting period under the HSR Act for the purchase of the Shares by the
Purchaser pursuant to the Offer and the Merger.
(e) CERTAIN LITIGATION. On January 25, 1999, MHA filed a complaint in
the matter of Managed Healthcare Associates, Inc., a New Jersey corporation, v.
COHR Inc., a Delaware corporation in Delaware Chancery Court. Among other
things, MHA sought declaratory and injunctive relief requiring the Company to
permit MHA to make its proposal despite standstill provisions of an existing
confidentiality agreement between MHA and the Company and enjoining the Company
from consummating the transaction contemplated by the Original Merger Agreement.
ITEM 9. MATERIALS TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
+(a)(8) Supplement, dated February 5, 1999, to Offer to Purchase dated
January 4, 1999.
+(a)(9) Letter of Transmittal (amended).
*(a)(10) Text of letter to stockholders of the Company dated January 8, 1999.
(a)(11) Text of letter from counsel for MHA to counsel for the Company
dated January 26, 1999.
(a)(12) Text of letter from BNP to MHA dated January 27, 1999.
(a)(13) Text of letter from counsel for MHA to counsel for the Company
dated February 2, 1999.
(a)(14) Text of letter from BNP to MHA dated February 2, 1999.
+(a)(15) Text of letter from counsel for the Purchaser to counsel for the
Company dated February 2, 1999.
(a)(16) Text of letter from MHA stockholders to the Company dated February
3, 1999.
+(a)(17) Text of letter from the Purchaser to the Company dated February 3,
1999.
*(a)(18) Opinion of Lehman Brothers Inc. dated February 4, 1999.
(c)(3) Amended and Restated Plan and Agreement of Merger, dated as of
February 4, 1999.
</TABLE>
- ----------
* Included in materials delivered to stockholders of the Company.
+ Filed as an exhibit to the Purchaser's Amendment No. 1 to Tender Offer
Statement on Schedule 14D-1 filed on February 5, 1999.
7
<PAGE> 9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
COHR Inc.
By:/s/ RAYMOND E. LIST
-------------------------------------
Raymond E. List
Chief Executive Officer
Dated as of February 8, 1999
8
<PAGE> 1
EXHIBIT (a)(10)
[COHR LETTERHEAD]
Raymond E. List
PRESIDENT AND CHIEF EXECUTIVE OFFICER
February 8, 1999
To the Stockholders of COHR Inc.:
I am pleased to report that on February 5, 1999, COHR Inc. (the
"Company") entered into an Amended and Restated Plan and Agreement of Merger
(the "Amended Merger Agreement") with TCF Acquisition Corporation, a Delaware
corporation (the "Purchaser"), a wholly-owned subsidiary of Three Cities Fund
II, L.P. and Three Cities Offshore II, C.V., that provides for the acquisition
of all of the common stock, par value $0.01 per share, of the Company (the
"Shares" or, individually, a "Share") by the Purchaser at a price of $6.50 per
Share net to the seller in cash, without interest, a significant improvement
over the Purchaser's previous offer. In response to a proposal by a third party
to purchase the Company, the Purchaser modified its outstanding tender offer to,
among other things, increase the price to $6.50 per Share (the "Revised Offer"),
and such offer has been extended and is currently scheduled to expire at 12:00
midnight, Eastern Standard Time, on February 24, 1999, unless it is further
extended.
Following the successful completion of the Revised Offer and upon
approval by stockholder vote, if required, the Purchaser will be merged with and
into the Company (the "Merger"), and all Shares not purchased in the Revised
Offer will be converted into the right to receive, without interest, an amount
in cash equal to $6.50 per Share.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE TERMS OF THE
AMENDED MERGER AGREEMENT, THE REVISED OFFER AND THE MERGER, DETERMINED THAT THE
REVISED OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
HOLDERS OF SHARES AND RECOMMENDS THAT ALL HOLDERS OF SHARES ACCEPT THE REVISED
OFFER AND TENDER THEIR SHARES PURSUANT TO THE REVISED OFFER. MESSRS. UHRIG AND
WRIGHT DID NOT PARTICIPATE IN SUCH MEETING SINCE THEY ARE AFFILIATED WITH THE
PURCHASER.
Accompanying this letter is a copy of the Company's Amendment No. 2 to
the Solicitation/Recommendation Statement on Schedule 14D-9 filed by the Company
with the Securities and Exchange Commission. The Board of Directors of the
Company has received an opinion of Lehman Brothers Inc., financial advisor to
the Company, as to the fairness from a financial point of view of the $6.50 per
Share cash consideration to be offered to the holders of Shares (other than the
Purchaser and its affiliates) in the Revised Offer and the Merger.
Please refer to the Offer to Purchase, as supplemented, and related
materials of the Purchaser, including a Letter of Transmittal (as amended) for
use in tendering Shares. These documents were sent to you under separate cover
by the Purchaser and set forth the terms and conditions of the Revised Offer and
provide instructions as to how to tender your Shares.
WE URGE YOU TO READ CAREFULLY EACH OF THE ENCLOSED MATERIALS AND THE
MATERIALS SENT TO YOU BY THE PURCHASER.
The management and directors of COHR Inc. thank you for the support you
have given the Company.
Sincerely,
Raymond E. List
President and Chief Executive Officer
<PAGE> 1
EXHIBIT (a)(11)
[LETTERHEAD OF SWIDLER BERLIN SHEREFF FRIEDMAN, LLP]
January 26, 1999
VIA FAX: (213) 687-3702
Robert B. Knauss, Esq.
Munger, Tolles & Olsen
355 South Grand Avenue
35th Floor
Los Angeles, California 90071
Re: Managed Health Care Associates, Inc./COHR
Dear Rob:
This letter is written on behalf of Managed Healthcare Associates, Inc.
("MHA") in response to the six issues raised on the conference call with us
today.
1. MHA's proposal is for $8.00 per share in cash net to each
seller of common stock of COHR, Inc. (the "Company").
2. MHA is working diligently to obtain the financing necessary to
complete the transaction. MHA has been working closely with
its current lender Banque Nationale de Paris to arrange the
financing. MHA believes it will be in a position to discuss
the specifies of its financing structure and make its lender
available for further discussion tomorrow.
3. MHA intends to do as much due diligence as is available in the
next few days in order to reach a comfort level with respect
to the shareholder lawsuits, such that it is willing to
consummate the transaction along the lines outlined in the
proposal dated January 25, 1999 sent to the Company. MHA
expects that the Company will make available all documents,
including but not limited to, plaintiffs damage study, its
counsel, counsel to the Company's insurance company and all
other relevant personnel and documentation for MHA to complete
its due diligence. MHA's proposal contemplates that subject to
the satisfactory completion of its due diligence, the
liability for the shareholder lawsuits will be assumed by MHA.
<PAGE> 2
4. We will provide a preliminary due diligence outline no later
than 9:00 A.M. on Wednesday, January 27, 1999.
5. MHA acknowledges the obligations of the Company with respect
to the breakup fee and would expect the Company to pay the
breakup fee upon the termination of the merger agreement with
Three Cities.
6. We anticipate that we will arrive in California to proceed
with due diligence on January 27, 1999 at around 12:00 noon.
California time. We would expect to work through the weekend
to complete our due diligence.
In reliance upon your representations that the board of the Company
intends to move forward in good faith with MHA, MHA is willing to withdraw the
complaint it filed in Delaware without prejudice, provided the Company agrees
that it will not commence litigation in connection with MHA's proposal. MHA
shall withdraw such complaint promptly after the Company agrees to the
foregoing.
I trust that this letter has addressed the concerns you have raised.
Very truly yours,
Charles I. Weissman
CIW: slc
<PAGE> 1
EXHIBIT (a)(12)
[LETTERHEAD OF BNP CAPITAL MARKETS, LLC]
January 27, 1999
Managed Healthcare Associates, Inc.
25-A Vreeland Road
Suite 203
PO Box 789
Florham Park, NJ 07932-0789
Attention: Mr. Sandy Irene
COHR, Inc.
Dear Sirs:
Based on our discussions concerning Managed Healthcare Associates,
Inc.'s proposed acquisition of COHR, Inc., a publicly-held corporation (the
"COHR"), Banque Nationale de Paris ("BNP") is pleased to advise you that, based
on the information currently available to it concerning such proposed
acquisition and assuming completion by you and BNP of a due diligence
investigation with respect to the assets and businesses of COHR and its
subsidiaries in scope, and with results, satisfactory to you and it, including
satisfaction as to status of pending litigation and the operating performance of
MasterPlan, BNP is highly confident that it would be able to arrange a syndicate
of lenders for the proposed financing necessary to complete the acquisition at a
price of $8 per share. In offering this undertaking, please be advised that
BNP's expression of confidence is based on its experience in syndicating loans
of this nature and also assumes the absence of any material adverse change in
loan syndication or financial or capital market conditions generally from those
currently in effect.
You agree that this letter is for your confidential use only and will
not be disclosed by you to any person other than to COHR and to your and its
accountants, attorneys and other advisors, and then only on a "need to know"
basis in connection with evaluating the proposed acquisition and on a
confidential basis. You agree that you will permit BNP to review and approve any
reference to BNP contained in any press release or similar public disclosure
prior to public release.
Please evidence your acceptance of the provisions of this letter by
signing a copy of this letter and returning it to the undersigned.
<PAGE> 2
Very truly yours,
BANQUE NATIONALE DE PARIS
By_____________________________________
Title:
By_____________________________________
Title:
ACCEPTED this 27th day
of January, 1999
MANAGED HEALTHCARE ASSOCIATES, INC.
By_________________________________
Title:
<PAGE> 1
EXHIBIT (a)(13)
[LETTERHEAD OF SWIDLER BERLIN SHEREFF FRIEDMAN, LLP]
February 2, 1999
VIA FAX: (213) 683-4087
Kevin Masuda, Esq.
Munger, Tolles & Olsen
355 South Grand Avenue
35th Floor
Los Angeles, California 90071
Re: Managed Health Care Associates, Inc./COHR
Dear Kevin:
This letter will serve to further modify our letters on behalf of
Managed Health Care Associates, Inc. ("MHA") dated January 26, 1999 and January
27, 1999. After considerable due diligence, MHA wishes to consummate a
transaction in which it would be willing to pay $7.00 per share in cash to each
seller of common stock of COHR, Inc. (the "Company"). This offer constitutes an
approximate 30% premium to the current Three Cities' transaction. With respect
to the financing, enclosed is a newly executed highly confident letter from
Banque Nationale de Paris ("BNP") with respect to the financing necessary for
MHA to consummate the transaction as described above. As you are well aware, MHA
has devoted substantial time and effort to completing its due diligence
investigation, and feels that it has made significant progress toward
completion.
As to the issues raised with us yesterday, we will send you a draft
merger agreement no later than the close of business on Wednesday. The draft
will be marked to show changes from the agreement executed with TCF. The draft
will contain certain additional representations and warranties. As the
representatives and warranties do not survive the closing, MHA does not believe
that these additions should pose any problems. We would expect to fully
negotiate such merger agreement in the coming week. If MHA satisfactorily
completes its due diligence and can negotiate a satisfactory merger agreement,
MHA would be prepared to consummate the transaction along the lines outlined
above. As for BNP's due diligence, MHA believes, consistent with BNP's letter,
that BNP requires certain due diligence which MHA believes will be completed no
later than the time MHA is prepared to execute a merger agreement.
Finally, our proposal is conditioned upon the Company not disclosing
the identity of MHA
<PAGE> 2
or any of its shareholders in any public filing. Obviously, we trust that you
will communicate this requirement to each of the directors of the Company.
I trust this letter has answered all of your questions.
Very truly yours,
Charles I. Weissman
CIW:sic
(Enclosure)
<PAGE> 1
EXHIBIT (a)(14)
[LETTERHEAD OF BANQUE NATIONALE DE PARIS]
February 2, 1999
Managed Health Care Associates, Inc.
25-A Vreeland Road
Suite 203
PO Box 789
Florham Park, NJ 07932-0789
Attention: Mr. Sandy Irene
COHR, Inc.
Dear Sirs:
Based on our discussions concerning Managed Health Care Associates,
Inc.'s proposed acquisition of COHR, Inc., a publicly-held corporation ("COHR"),
Banque Nationale de Paris ("BNP") is pleased to advise you that, based on the
information currently available to it concerning such proposed acquisition and
assuming completion by you and BNP of a due diligence investigation with respect
to the assets and businesses of COHR and its subsidiaries in scope, and with
results, satisfactory to you and it, including satisfaction as to the status of
pending litigation and the operating performance of MasterPlan, BNP is highly
confident that it would be able to arrange a syndicate of lenders for the
proposed financing necessary to complete the acquisition at a price of $7 per
share (proposed financing needs total $46 million plus closing costs), subject
to final agreement MHA, MHA shareholders, and BNP of final terms, conditions,
and pricing for such facilities. In offering this undertaking, please be advised
that BNP's expression of confidence is based on its experience in syndicating
loans of this nature and also assumes the absence of any material adverse change
in loan syndication or financial or capital market conditions generally from
those currently in effect.
You agree that this letter is for your confidential use only and will
not be disclosed by you to any person other than to COHR and to your and its
accountants, attorneys and other advisors, and then only on a "need to know"
basis in connection with evaluating the proposed acquisition and on a
confidential basis. You agree that you will permit BNP to review and approve any
reference to BNP contained in any press release or similar public disclosure
prior to public release.
<PAGE> 2
Please evidence your acceptance of the provisions of this letter by
signing a copy of this letter and returning it to the undersigned.
Very truly yours,
BANQUE NATIONALE DE PARIS
By_____________________________________
Title:
By_____________________________________
Title:
ACCEPTED this 2nd day
of February, 1999
MANAGED HEALTHCARE ASSOCIATES, INC.
By_________________________________
Title:
<PAGE> 1
EXHIBIT (a)(16)
February 3, 1999
VIA FAX: (213) 683-4087
Special Committee of the Board of Directors of COHR, Inc.
c/o Robert Knauss, Esq.
Munger, Tolles & Olsen
355 South Grand Avenue
35th Floor
Los Angeles, California 90071
Re: Managed Health Care Associates, Inc./COHR
Dear Mr. Knauss:
This letter will confirm the representations made by representatives of
Managed Health Care Associates, Inc. ("MHA") that the shareholders of MHA have
committed up to $30 million in the form of cash or guarantees to Banque
Nationale de Paris ("BNP") in connection with BNP's issuance of its "highly
confident" letter relating to the proposed acquisition by MHA of COHR, Inc. (the
"Company"). The shareholders of MHA consist of funds managed by Advent
International Corporation, Sandy Irene, Larry Irene and certain other
shareholders. The commitment referred to above is subject to all of the
limitations contained in the letter dated February 2, 1998 and BNP's highly
confident letter attached thereto, which limitations are incorporated herein by
reference. This letter is being provided at the request of, and for the
information of, the Special Committee of the Board of Directors in connection
with its consideration of MHA's proposal to purchase the Company. This letter
may not be reproduced, summarized, described or referred to, provided to any
person or otherwise made public or used for any other purpose without the prior
written consent of the shareholders of MHA. This letter shall not be construed
to grant any rights to any equity holders of the Company.
Very truly yours,
Global Private Equity III Limited By:__________________________
Partnership Sandy A. Irene
Advent Partners Limited Partnership _____________________________
Robert J. Irene
Advent PGGM/Global Limited
Partnership (Class A)
Advent Partners (NA) GPE III _____________________________
Limited Partnership Lawrence S. Irene
Advent Partners GPE III Limited
Partnership
By: Advent International Corporation,
General Partner,
By: _____________________________
<PAGE> 1
EXHIBIT (a)(18)
LEHMAN BROTHERS
February 4, 1998
COHR Inc.
Board of Directors
21540 Plummer Street
Chatsworth, California 91311
Members of the Board:
We understand that Three Cities Research, Inc. ("TCR") has entered into
an agreement to initiate an unconditional tender offer for any and all of the
outstanding shares of the common stock of COHR Inc. (the "Company") for $6.50
per share in cash (the "Proposed Transaction"). The terms and conditions of the
Proposed Transaction are set forth in more detail in the Plan and Agreement of
Merger dated as of December 24, 1998, as amended and restated, as of February 4,
1999 between COHR Inc. and TCF Acquisition Corporation, a wholly owned
subsidiary of TCR (the "Agreement"). TCR currently owns approximately 48.3% of
the Company's outstanding common stock.
We have been requested by the Board of Directors of the Company to
render our opinion with respect to the fairness, from a financial point of view,
to the Company's stockholders (other than TCR or its affiliates) (the "Public
Stockholders") of the consideration to be offered to the Public Stockholders in
the Proposed Transaction. We have not been requested to opine as to, and our
opinion does not in any manner address, the Company's underlying business
decision to proceed with or effect the Proposed Transaction.
In arriving at our opinion, we reviewed and analyzed: (1) a draft copy
of the Agreement and the specific terms of the Proposed Transaction, (2)
publicly available information concerning the Company that we believe to be
relevant to our analysis, including its Annual Report on Form 10-K for the
fiscal year ended March 31, 1998 and its Quarterly Reports on Form 10-Q for the
quarters ended June 30, 1998 and September 30, 1998, (3) financial and operating
information with respect to the business, operations and prospects of the
Company furnished to us by the Company, including without limitation current
projections prepared by management of the Company and information regarding
recent financial performance of the Company (4) a trading history of the
Company's common stock from December 16, 1996 to the present and a comparison of
that trading history with those of other companies that we deemed relevant, (5)
a comparison of the historical financial results and present financial condition
of the Company with those of other companies that we deemed relevant, (6) a
comparison of the financial terms of the Proposed Transaction with the financial
terms of certain other transactions that we deemed relevant and (7) the results
of our prior efforts to solicit indications of interest from third parties with
respect to a purchase of the Company. In addition, we have had discussions with
the management of the Company concerning its business, operations, assets,
financial condition and prospects and have undertaken such other studies,
analyses and investigations as we deemed appropriate.
In arriving at our opinion, we have assumed and relied upon the
accuracy and completeness of the financial and other information used by us
without assuming any responsibility for independent verification of such
information and have further relied upon the assurances of management of the
Company that they are not aware of any facts or circumstances that would make
such information inaccurate or misleading. With respect to the financial
projections of the Company, upon advice of the Company we have assumed that such
projections have been reasonably prepared on a basis reflecting the best
currently available estimates and judgments of the management of the Company as
to the future financial performance of the Company, and that the Company will
perform substantially in accordance with such projections. In arriving at our
opinion, we have conducted only a limited physical inspection of the properties
and facilities of the Company and have not made or obtained any evaluations or
appraisals of the assets or liabilities of the Company. In addition, since the
initiation of discussions with TCR, you have not authorized us to solicit, and
we have not solicited, any indications of interest from any third party with
respect to the purchase
<PAGE> 2
of all or a part of the Company's business. However, in arriving at our opinion,
we have considered an unsolicited proposal received from a third party and
analyzed the terms of such proposal and the risks of such third party being
unable or unwilling to proceed with a proposed acquisition on terms acceptable
to the Company. Our opinion necessarily is based upon market, economic and other
conditions as they exist on, and can be evaluated as of, the date of this
letter.
Based upon and subject to the foregoing, we are of the opinion as of
the date hereof that, from a financial point of view, the consideration to be
offered to the Public Stockholders in the Proposed Transaction is fair to the
Public stockholders.
We have acted as financial advisor to the Company in connection with
the Proposed Transaction and will receive a fee for our services which is
contingent upon the consummation of the Proposed Transaction. In addition, the
Company has agreed to indemnify us for certain liabilities that may arise out of
the rendering of this opinion. We also have performed various investment banking
services for the Company in the past and have received customary fees for such
services.
This opinion is for the use and benefit of the Board of Directors of
the Company and is rendered to the Board of Directors in connection with its
consideration of the Proposed Transaction. This opinion is not intended to be
and does not constitute a recommendation to any stockholder of the Company as to
whether to accept the consideration to be offered to such stockholder in
connection with the Proposed Transaction.
Very truly yours,
LEHMAN BROTHERS
<PAGE> 1
EXHIBIT (c)(3)
AMENDED AND RESTATED PLAN AND AGREEMENT OF MERGER
DATED AS OF
FEBRUARY 4, 1999
BETWEEN
COHR INC.
AND
TCF ACQUISITION CORPORATION
<PAGE> 2
<TABLE>
<CAPTION>
<S> <C>
Article 1 THE AMENDED TENDER OFFER.................................................. 1
1.1 The Amended Tender Offer..................................................... 1
1.2 Company Action............................................................... 3
Article 2 THE MERGER................................................................ 5
2.1 Agreement to Effect Merger................................................... 5
2.2 The Merger................................................................... 5
2.3 Certificate of Incorporation................................................. 6
2.4 By-Laws...................................................................... 6
2.5 Directors.................................................................... 6
2.6 Officers..................................................................... 6
2.7 Stock of the Company......................................................... 6
2.8 Stock of Acquisition......................................................... 7
2.9 Stockholders Meeting......................................................... 7
2.10 Voting by Acquisition........................................................ 8
2.11 Dissenting Shares............................................................ 8
2.12 Payment for Shares........................................................... 9
2.13 Options and Warrants........................................................ 11
Article 3 EFFECTIVE TIME OF MERGER................................................. 11
3.1 Date of the Merger.......................................................... 11
3.2 Execution of Certificate of Merger.......................................... 11
3.3 Effective Time of the Merger................................................ 12
Article 4 REPRESENTATIONS AND WARRANTIES........................................... 12
4.1 Representations and Warranties of Acquisition............................... 12
4.2 Representations and Warranties of the Company............................... 16
4.3 Termination of Representations and Warranties............................... 22
Article 5 ACTIONS PRIOR TO THE MERGER.............................................. 22
5.1 Activities Until Effective Time............................................. 22
5.2 HSR Act Filings............................................................. 24
5.3 Proxy Statements and Stockholders' Meetings................................. 25
5.4 No Solicitation of Offers; Notice of Proposals from Others.................. 25
5.5 Acquisition's Efforts to Fulfill Conditions................................. 26
5.6 Company's Efforts to Fulfill Conditions..................................... 26
Article 6 CONDITIONS PRECEDENT TO MERGER........................................... 26
6.1 Conditions to the Company's Obligations..................................... 27
6.2 Conditions to Acquisition's Obligations..................................... 27
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
Article 7 TERMINATION.............................................................. 29
7.1 Right to Terminate.......................................................... 29
7.2 Manner of Terminating Agreement............................................. 29
7.3 Effect of Termination....................................................... 30
Article 8 ABSENCE OF BROKERS....................................................... 30
8.1 Representations and Warranties Regarding Brokers and Others................. 30
Article 9 OTHER AGREEMENTS......................................................... 30
9.1 Indemnification for Prior Acts.............................................. 30
9.3 Agreement Regarding Directors............................................... 32
9.5 Control of Stockholder Suits................................................ 33
Article 10 GENERAL.................................................................. 33
10.1 Expenses.................................................................... 33
10.2 Access to Properties, Books and Records..................................... 33
10.3 Press Releases.............................................................. 34
10.4 Entire Agreement............................................................ 34
10.5 Effect of Disclosures....................................................... 34
10.6 Captions.................................................................... 35
10.7 Prohibition Against Assignment.............................................. 35
10.8 Notices and Other Communications............................................ 35
10.9 Governing Law............................................................... 37
10.10 Amendments.................................................................. 37
10.11 Counterparts................................................................ 37
</TABLE>
2
<PAGE> 4
AMENDED AND RESTATED PLAN AND AGREEMENT OF MERGER
This is an Amended and Restated Plan and Agreement of Merger (the
"Agreement") dated as of February 4, 1999 between COHR Inc. (the "Company"), a
Delaware corporation, and TCF Acquisition Corporation ("Acquisition"), a
Delaware corporation. This Agreement amends and restates the Plan and Agreement
of Merger dated as of December 24, 1998 (the "Original Merger Agreement")
between the Company and Acquisition.
ARTICLE 1
THE AMENDED TENDER OFFER
1.1 The Amended Tender Offer. (a) On December 24, 1998, Three Cities
Fund II, L.P. and Three Cities Offshore II C.V. (the "Three Cities Funds")
purchased from funds managed by Franklin Research, Inc. (the "Franklin Funds")
and by Strong Capital Management, Inc. (the "Strong Funds" and, together with
the Franklin Funds, the "Funds") substantially all the stock of the Company
which the Funds owned, and the Company and Acquisition entered into the Original
Merger Agreement. On January 4, 1999, Acquisition commenced a tender offer (the
"Original Offer") for any and all the outstanding common stock of the Company
("Common Stock") at a price (the "Tender Offer Price") of $5.375 per share of
Common Stock, which would be increased to $6.375 per share of Common Stock under
certain circumstances, pursuant to the Original Merger Agreement. Not later than
the first business day after the date of this Agreement, Acquisition will make a
public announcement that it has amended the Original Offer to increase the
Tender Offer Price to $6.50 per share of Common Stock in cash. The Original
Offer, as amended, is referred to as the "Amended Tender Offer".
(b) On January 4, 1999, the Purchaser filed a Schedule 14D-1 with
the Securities and Exchange Commission ("SEC") ("Original Schedule 14D-1").
Promptly after the public announcement of the amendment to the Original Offer
described above, Acquisition will file with
1
<PAGE> 5
the SEC an amendment to the Original Schedule 14D-1 with respect to the Amended
Tender Offer (the "Amended Schedule 14D-1" and together with any further
amendments or supplements, the "Schedule 14D-1"), including forms of a
supplement to the Offer to Purchase dated January 4, 1999 with regard to the
Original Offer and a letter of transmittal (the Schedule 14D-1 and the documents
included in it by which the Amended Tender Offer will be made, as they may be
further supplemented or amended, being the "Offer Documents"). Promptly after
that, Acquisition will communicate the Amended Tender Offer to the record
holders and beneficial owners of the Common Stock. Each of Acquisition and the
Company will promptly correct any information provided by it for use in the
Offer Documents if and to the extent that information becomes incomplete or
inaccurate in any material respect, and Acquisition will supplement or amend the
Offer Documents to the extent required by the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the rules under it, file the amended or
supplemented Offer Documents with the SEC and, if required, disseminate the
amended Offer Documents to the Company's stockholders. The Company and its
counsel will be given a reasonable opportunity to review the Offer Documents and
any amendments or supplements to them before they are filed with the SEC or
disseminated to the Company's stockholders.
(c) The day on which the Amended Tender Offer expires (the
"Expiration Date") will not be earlier than 10 business days, and (except as
provided in subparagraph (e) or with the Company's consent) will not be later
than 20 business days after the day on which the Amended Schedule 14D-1 is filed
with the SEC.
(d) [Intentionally deleted.]
(e) [Intentionally deleted.]
(f) Subject to the conditions to the Amended Tender Offer set
forth on Exhibit 1.1-E and the other conditions set forth in this Agreement,
Acquisition will, not later than five
2
<PAGE> 6
days after the Expiration Date, accept for payment and pay for all the shares of
Common Stock which are properly tendered in response to the Amended Tender Offer
and not withdrawn (including shares which were tendered in response to the
Original Offer and not withdrawn). The obligation of Acquisition to accept for
payment and pay for shares which are properly tendered and not withdrawn will
not be subject to any conditions other than those set forth on Exhibit 1.1-E.
Acquisition will not (i) decrease the Amended Tender Offer Price below that
described in subparagraphs (a) and (d), (ii) decrease the number of shares being
solicited in the Amended Tender Offer, (iii) change the form of consideration
payable in the Amended Tender Offer, or (iv) modify or add to the conditions set
forth on Exhibit 1.1-E or (v) extend the Expiration Date to a day which is more
than 20 business days after the day on which the Amended Schedule 14D-1 is filed
with the SEC, except that (A) if the Amended Tender Offer is modified to
increase the Amended Tender Offer Price or in any other manner permitted by this
Agreement, the Expiration Date may be extended until 10 business days after the
day on which Acquisition makes a public announcement of the modification, (B) if
anyone other than Acquisition makes a tender offer for Common Stock before the
Amended Tender Offer expires, Acquisition may extend the Expiration Date until
not more than 10 business days after the other tender offer expires, and (C) if
Acquisition is prevented by an order of a court or other governmental agency
from accepting shares which are tendered in response to the Amended Tender
Offer, Acquisition may extend the Expiration Date until 10 business days after
Acquisition is able to accept shares without violating any order of any court or
other governmental agency.
1.2 Company Action. (a) The Company approves of and consents to the
Amended Tender Offer and represents and warrants that the Board has (i)
determined that this Agreement and the transactions contemplated by it are fair
to and in the best interests of the Company and its stockholders, (ii) approved
this Agreement and the transactions contemplated
3
<PAGE> 7
by it, including the Three Cities Funds' purchase of the stock of the Company
which the Funds own, the Amended Tender Offer and the Merger (described in
Article 2), and (iii) resolved to recommend that the Company's stockholders
accept the Amended Tender Offer, tender their shares in response to the Amended
Tender Offer, and adopt and approve this Agreement and the Merger.
Simultaneously with the execution of this Agreement, each of the directors and
executive officers of the Company has agreed to tender and sell his or her
shares of Common Stock in response to the Amended Tender Offer, except that
directors and executive officers whose sales of their shares in response to the
Amended Tender Offer might result in liability under Section 16(b) of the
Exchange Act have agreed that if they do not tender and sell their shares in
response to the Amended Tender Offer, they will vote their shares in favor of
the Merger.
(b) On or before February 8, 1999, the Company will file with the
SEC an amendment to the Solicitation/Recommendation Statement on Schedule 14D-9
filed by the Company on January 6, 1999 (the "Amended Schedule 14D-9" and
together with any further amendments or supplements, the "Schedule 14D-9")
containing the recommendations described in subparagraph (a) and will
disseminate the Amended Schedule 14D-9 as required by Rule 14d-9 under the
Exchange Act. The Company and Acquisition each agrees to correct promptly any
information provided by it for use in the Amended Schedule 14D-9 if and to the
extent that information is or becomes incomplete or inaccurate in any material
respect and the Company will file any corrected Schedule 14D-9 with the SEC and
disseminate the corrected Schedule 14D-9 to the Company's stockholders to the
extent required by the Exchange Act or the rules under it.
(c) In connection with the Amended Tender Offer, the Company will
promptly furnish Acquisition with mailing labels, security position listings and
any other available listing or computer files containing the names and addresses
of the record holders or beneficial owners
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of shares of Common Stock as of a recent date and the Company will furnish
Acquisition with such additional information and assistance (including, without
limitation, updated lists of stockholders, mailing labels and lists of
securities positions) as Acquisition or its representatives may reasonably
request in order to communicate the Amended Tender Offer to the record holders
and beneficial owners of the Common Stock. Subject to the requirements of
applicable law, Acquisition will hold in confidence the information contained in
any such labels, listings or files, and will use that information only in
connection with the Amended Tender Offer and the Merger. If this Agreement is
terminated, Acquisition will return to the Company the originals and all copies
of that information which are in Acquisition's possession.
ARTICLE 2
THE MERGER
2.1 Agreement to Effect Merger. If the conditions to the Merger set
forth in Paragraph 6.2 are satisfied or waived, Acquisition will take all steps
in its power, including voting, and causing its affiliates to vote, all the
Common Stock beneficially owned by any of them in favor of adoption of this
Agreement and approval of the Merger, to cause Acquisition to be merged into the
Company (the "Merger") on the terms and with the effects set forth in Paragraphs
2.2 through 2.8.
2.2 The Merger. In the Merger, Acquisition will be merged into the
Company, which will be the surviving corporation of the Merger (the "Surviving
Corporation"). Except as specifically provided in this Agreement, when the
Merger becomes effective, (i) the real and personal property, other assets,
rights, privileges, immunities, powers, purposes and franchises of the Company
will continue unaffected and unimpaired by the Merger, (ii) the separate
existence of Acquisition will terminate, and Acquisition's real and personal
property, other assets, rights, privileges, immunities, powers, purposes and
franchises will be merged into the
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Surviving Corporation, and (iii) the Merger will have the other effects
specified in Section 259 of the Delaware General Corporation Law (the "DGCL").
2.3 Certificate of Incorporation. From the Effective Time (described in
Paragraph 3.3) until subsequently amended (subject to Paragraph 9.1), the
Certificate of Incorporation of Acquisition immediately before the Effective
Time will be the Certificate of Incorporation of the Surviving Corporation, and
that Certificate of Incorporation, separate and apart from this Agreement, may
be certified as the Certificate of Incorporation of the Surviving Corporation.
2.4 By-Laws. At the Effective Time, the By-Laws of Acquisition
immediately before the Effective Time will be the By-Laws of the Surviving
Corporation, until they are altered, amended or repealed (subject to Paragraph
9.1).
2.5 Directors. The directors of Acquisition immediately before the
Effective Time will be the directors of the Surviving Corporation after the
Effective Time and will hold office in accordance with the By-Laws of the
Surviving Corporation for the respective terms shown on Exhibit 2.5.
2.6 Officers. The officers of the Company immediately before the
Effective Time will be the officers of the Surviving Corporation after the
Effective Time and will hold office at the pleasure of the Board of Directors of
the Surviving Corporation.
2.7 Stock of the Company.(a) Except as provided in subparagraph (b), at
the Effective Time each share of Common Stock which is outstanding immediately
before the Effective Time will be converted into and become the right to receive
a sum in cash equal to the Amended Tender Offer Price (the "Merger Price").
(b) Each share of Common Stock held in the treasury of the
Company, and each share of Common Stock held by Acquisition or by any direct or
indirect subsidiary of the
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Company, immediately before the Effective Time will, at the Effective Time, be
cancelled and cease to exist and no payment will be made with respect to any of
those shares.
2.8 Stock of Acquisition. At the Effective Time, each share of common
stock, par value $1.00 per share, of Acquisition ("Acquisition common stock")
which is outstanding immediately before the Effective Time will be converted
into and become one share of common stock of the Surviving Corporation
("Surviving Corporation Common Stock"). At the Effective Time, a certificate
which represented Acquisition common stock will automatically become and be a
certificate representing the number of shares of Surviving Corporation Common
Stock into which the Acquisition common stock represented by the certificate was
converted.
2.9 Stockholders Meeting. If the conditions described in clauses (a) and
(b) of Paragraph 2.1 are satisfied, and if approval by the Company's
stockholders is required by applicable law in order to consummate the Merger,
the Company will:
(a) hold a special meeting of its stockholders as soon as
practicable following the Expiration Date for the purpose of adopting this
Agreement and approving the Merger (the "Stockholders Meeting");
(b) as promptly as practicable after the Expiration Date, (i)
file with the SEC a proxy statement (the "Proxy Statement") and other proxy
soliciting materials relating to the Stockholders Meeting, (ii) respond promptly
to any comments made by the staff of the SEC with respect to the Proxy Statement
or other proxy soliciting materials, (iii) cause the Proxy Statement to be
mailed to its stockholders at the earliest practicable time following the
Expiration Date, and (iv) in all other respects, use its best efforts to cause
its stockholders to adopt this Agreement and approve the Merger; and
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(c) include in the Proxy Statement the recommendation of the
Board that the stockholders of the Company vote in favor of the adoption of this
Agreement and approve the Merger, unless the Board, based upon written advice
from its counsel, determines in good faith that the failure to amend or withdraw
that recommendation could reasonably be expected to be a breach of the
directors' fiduciary duties under applicable law.
2.10 Voting by Acquisition. Until (a) the earlier of the Expiration Time
or such time as this Agreement is terminated and (b) if the conditions described
in clauses (a) and (b) of Paragraph 2.1 are satisfied, the earlier of the
Effective Time or such time as this Agreement is terminated, (i) Acquisition
will not, and Acquisition will cause the Three Cities Funds not to, dispose of
any of stock of the Company (except to a parent or subsidiary of Acquisition
which agrees to be bound by Paragraph 2.1 and this Paragraph) and (ii)
Acquisition will, and Acquisition will cause the Three Cities Funds to, vote all
shares of Common Stock which Acquisition or the Three Cities Funds own or
otherwise have the power to vote as required by Paragraph 2.1.
2.11 Dissenting Shares. (a) Notwithstanding any provision of this
Agreement to the contrary, Common Stock that is outstanding immediately prior to
the Effective Time which is held by stockholders who have complied with Section
262 of the DGCL (including making a timely demand for appraisal and not voting
in favor of or consenting to the Merger) will not be converted into the right to
receive the Merger Price. Instead, if the Merger takes place, the Surviving
Corporation will pay the holders of those shares the fair value of the shares
determined as provided in Section 262 of the DGCL. Shares held by stockholders
who fail to perfect, or who otherwise properly withdraw or lose, their rights to
receive the fair value of their shares determined under Section 262 of the DGCL
will be deemed to have been converted, at the later of the Effective Time or the
time they withdraw or lose their rights to receive the fair value of their
shares, into the right to receive the Merger Price, without any interest.
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(b) The Company will promptly give Acquisition (i) notice of any
demands for appraisal received by the Company, any withdrawals of any such
demands, and any other instruments served pursuant to Section 262 of the DGCL
which the Company receives and (ii) the opportunity to direct all negotiations
and proceedings with respect to demands for appraisal under the DGCL. The
Company will not, except with the prior written consent of Acquisition, make any
payment with respect to any demands for payment of the fair value of shares or
offer to settle or settle any such demands.
2.12 Payment for Shares. (a) Prior to the Effective Time, Acquisition
will designate a bank or trust company to act as Paying Agent in connection with
the Merger (the "Paying Agent"). At, or immediately before, the Effective Time,
Acquisition will provide the Paying Agent with the funds necessary to make the
payments contemplated by Paragraph 2.7. Until used for that purpose, the funds
will be invested by the Paying Agent, as directed by Acquisition, 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 Moody's Investors Services Inc. or Standard & Poors' 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 with capital, surplus and undivided profits
aggregating more than $200 million (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
will cause the Paying Agent to mail to each person who was a record holder of
Common Stock at the Effective Time, a form of letter of transmittal for use in
effecting the surrender of stock certificates representing Common Stock
("Certificates") in order to receive payment of the Merger Price. When the
Paying Agent receives a Certificate, together with a properly completed and
executed
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letter of transmittal and any other required documents, the Paying Agent will
pay to the holder of the Certificate, or as otherwise directed in the letter of
transmittal, the Merger Price with regard to the shares represented by the
Certificate, and the Certificate will be cancelled. No interest will be paid or
accrued on the cash 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, the surrendered Certificate 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 the tax has been paid. After the Effective Time, a Certificate
which has not been surrendered will represent only the right to receive the
Merger Price, without any interest.
(c) If a Certificate has been lost, stolen or destroyed, the
Surviving Corporation will accept an affidavit and indemnification reasonably
satisfactory to it instead of the Certificate.
(d) At any time which is more than six months after the Effective
Time, the Surviving Corporation may require the Paying Agent to deliver to it
any funds which had been made available to the Paying Agent and have not been
disbursed to holders of shares of Common Stock (including, without limitation,
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, former stockholders of the Company must look to the Surviving
Corporation for payment of the Merger Price upon surrender of the Certificates
held by them. Neither the Surviving Corporation nor the Paying Agent will be
liable to any former stockholder of the Company for any Merger consideration
which is delivered to a public official pursuant to any abandoned property,
escheat or similar law.
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(e) After the Effective Time, the Surviving Corporation will not
record any transfers of shares of Common Stock on the stock transfer books of
the Company or the Surviving Corporation, and the stock ledger of the Company
will be closed. If, after the Effective Time, Certificates are presented for
transfer, they will be cancelled and treated as having been surrendered for the
Merger Price.
2.13 Options and Warrants. At the Effective Time, each option or warrant
issued by the Company which is outstanding at that time will become the right to
receive a sum in cash equal to (a) the amount, if any, by which the Merger Price
exceeds the per share exercise price of the option or warrant, times (b) the
number of shares of Common Stock issuable upon exercise of the option or warrant
in full. In order to receive the amount to which a holder of an option or
warrant is entitled under this Paragraph, the holder must deliver to the Company
(i) any certificate or option agreement relating to the option or warrant and
(ii) a document in which the holder acknowledges that the payment the holder is
receiving is in full satisfaction of any rights the holder may have under or
with regard to the option or warrant.
ARTICLE 3
EFFECTIVE TIME OF MERGER
3.1 Date of the Merger. The day on which the Merger is to take place
(the "Merger Date") will be (a) the day on which the Merger is approved by the
holders of a majority of the outstanding shares of Common Stock or (b) if
stockholder approval of the Merger is not required by applicable law or by the
rules of the Nasdaq National Market (if they are applicable), a day designated
by Acquisition which will be not later than 10 days after the Expiration Date.
The Merger Date may be changed with the consent of the Company and Acquisition.
3.2 Execution of Certificate of Merger. Not later than 3:00 P.M. on the
day before the Merger Date, (a) Acquisition and the Company will each execute a
certificate of merger (the
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"Certificate of Merger") substantially in the form of Exhibit 3.2 and deliver it
to Rogers & Wells for filing with the Secretary of State of Delaware. Rogers &
Wells will be instructed that, if it is notified on the Merger Date that all the
conditions in Article VI have been fulfilled or waived, it is to cause the
Certificate of Merger to be filed with the Secretary of State of Delaware on the
Merger Date or as soon after that date as is practicable.
3.3 Effective Time of the Merger. The Merger will become effective at
11:59 P.M. on the day when the Certificate of Merger is filed with the Secretary
of State of Delaware (that being the "Effective Time").
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Acquisition. Acquisition
represents and warrants to the Company as follows:
(a) Acquisition is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) Acquisition has all corporate power and authority necessary
to enable it to enter into this Agreement and carry out the transactions
contemplated by this Agreement. All corporate actions necessary to authorize
Acquisition to enter into this Agreement and carry out the transactions
contemplated by it have been taken. This Agreement has been duly executed by
Acquisition and is a valid and binding agreement of Acquisition, enforceable
against Acquisition in accordance with its terms.
(c) Neither the execution or delivery of this Agreement or of any
document to be delivered in accordance with this Agreement nor the consummation
of the transactions contemplated by this Agreement or by any document to be
delivered in accordance with this
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Agreement will violate, result in a breach of, or constitute a default (or an
event which, with notice or lapse of time or both would constitute a default)
under, the Certificate of Incorporation or by-laws of Acquisition, any agreement
or instrument to which Acquisition or any subsidiary of Acquisition is a party
or by which any of them is bound, any law, or any order, rule or regulation of
any court or governmental agency or other regulatory organization having
jurisdiction over Acquisition or any of its subsidiaries, except violations or
breaches of, or defaults under, agreements or instruments which would not have a
Material Adverse Effect on any of the Company, Acquisition or either of the
Three Cities Funds.
(d) No governmental filings, authorizations, approvals or
consents, or other governmental action, other than the termination or expiration
of waiting periods under the Hart Scott Rodino Antitrust Improvements Act of
1976 (the "HSR Act"), if any, are required to permit Acquisition to fulfill all
its obligations under this Agreement.
(e) Acquisition was formed solely for the purpose of engaging in
the transaction contemplated by this Agreement. Acquisition has not, and at the
Effective Time will not have, engaged in any activities or incurred, directly or
indirectly, any obligations or liabilities, except the activities relating to or
contemplated by this Agreement and obligations or liabilities incurred in
connection with those activities and with the transactions contemplated by this
Agreement.
(f) Neither the Offer Documents nor any information supplied by
Acquisition for inclusion in the Schedule 14D-9 or the Amended Schedule 14D-9
will, at the respective times the Schedule 14D-1, the Amended Schedule 14D-1,
the Schedule 14D-9 and the Amended Schedule 14D-9 are filed with the SEC and
first published, sent or given to the Company's stockholders, contain a false or
misleading statement with respect to any material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
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On the date the Proxy Statement is mailed to the Company's stockholders and on
the date of the Stockholders Meeting, none of the information supplied by
Acquisition for inclusion in the Proxy Statement will be false or misleading
with respect to any material fact or will 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
or necessary to correct any statement in any earlier communication with respect
to the Stockholders Meeting or the solicitation of proxies to be used at the
Stockholders Meeting. However, Acquisition does not make any representations or
warranties with respect to information supplied by the Company or any of its
affiliates or representatives for inclusion in the Offering Documents, or with
respect to the Schedule 14D-9, the Amended Schedule 14D-9 or the Proxy Statement
(except to the extent of information supplied by Acquisition for inclusion in
the Schedule 14D-9, the Amended Schedule 14D-9 or the Proxy Statement). The
Offering Documents will comply as to form in all material respects with the
requirements of the Exchange Act and the rules under it.
(g) Acquisition is wholly owned by the Three Cities Funds. The
Three Cities Funds have, or have arranged equity investments or loans which will
provide, sufficient funds to enable Acquisition to purchase and pay for in a
timely manner all the Common Stock which is tendered in response to the Amended
Tender Offer and enable Acquisition to fulfill in a timely manner all of its
other obligations under this Agreement.
(h) Neither Acquisition nor either of the Three Cities Funds is
the subject of any suit or governmental proceeding which seeks to prevent
Acquisition from completing the transactions which are the subject of this
Agreement, nor, to the best of Acquisition's knowledge, has any such suit or
proceeding been threatened.
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(i) Prior to purchasing Common Stock from either of the Funds,
the Three Cities Funds disclosed to the Funds the principal terms of this
Agreement, including the terms relating to the amount of the Tender Offer Price
and the amount of the Merger Price.
(j) In connection with the purchase of Common Stock from the
Funds, the Three Cities Funds have obtained from the Funds assignments of (i)
all claims the Funds have or may have as purchasers or holders of Common Stock
against the Company, any directors, officers, agents or employees of, or
underwriters, accountants or attorneys for, the Company or any other persons
arising out of or relating to disclosure, or omissions to disclosure, by the
Company relating to its or its subsidiaries' business, operating results,
financial condition or prospects or to any other subjects, (ii) all rights
arising out of or resulting from those claims or the subject matter of those
claims, and (iii) all rights to payments, and all other rights which they have
or to which they in the future become entitled as the holders of those claims
(including all the claims and rights the Funds may have as members of any class
or alleged class of plaintiffs, or otherwise as stockholders of the Company
during the relevant time period, in the Stockholder Suits).
(k) In acquiring claims and rights relating to Sherleigh
Associates Inc. Profit Sharing Plan v. Cohr, Inc., et. al. in the United States
District Court, Central District of California, 988-3028 JSL (BQRx); Leonard
Leeds v. Umesh Malhotra, et. al. in the Superior Court of the State of
California, County of Los Angeles, BC 189490; Marcia Zabronsky, et. al. v. Cohr,
Inc. et. al. in the United States District Court, Central District of
California, Western Division, 98-3493 R (Ex); Robert Schug v. Paul Chopra, et.
al. in the Superior Court of the State of California, County of Los Angeles, BC
190933; Charles Birdu v. Cohr, Inc. et. al in the United States District Court,
Central District of California, 98-4177 WMB(AJWx) and any other suits brought by
or on behalf of stockholders of the Company relating to the occurrences which
are the subject of those five suits (together, the "Stockholder Suits"), the
Three Cities Funds were at all times
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advised by competent counsel of their own choosing, and they have not been
represented by anyone who is a counsel for any of the plaintiffs in any of the
Stockholder Suits.
4.2 Representations and Warranties of the Company. The Company
represents and warrants to Acquisition as follows:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) The Company has all corporate power and authority necessary
to enable it to enter into this Agreement and carry out the transactions
contemplated by this Agreement. All corporate actions necessary to authorize the
Company to enter into this Agreement and carry out the transactions contemplated
by it, other than adoption of this Agreement by the stockholders of the Company,
have been taken. This Agreement has been duly executed by the Company and is a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(c) Neither the execution and delivery of this Agreement or of
any document to be delivered in accordance with this Agreement nor the
consummation of the transactions contemplated by this Agreement or by any
document to be delivered in accordance with this Agreement will violate, result
in a breach of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, the Certificate of
Incorporation or By-Laws of the Company, any agreement or instrument to which
the Company or any subsidiary of the Company is a party or by which any of them
is bound, any law, or any order, rule or regulation of any court or governmental
agency or other regulatory organization having jurisdiction over the Company or
any of its subsidiaries except violations or breaches of, or defaults under,
agreements or instruments which would not have a Material Adverse Effect on any
of the Company, Acquisition or either of the Three Cities Funds.
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(d) Except as shown on Exhibit 4.2-D, no governmental filings,
authorizations, approvals, or consents, or other governmental action, other than
the expiration or termination of waiting periods under the HSR Act, if any, are
required to permit the Company to fulfill all its obligations under this
Agreement.
(e) Effective concurrently with the execution of the Original
Merger Agreement, the Board approved increasing in the number of members
constituting the entire Board to ten and elected J. William Uhrig and Wm. Robert
Wright II to fill the resulting two vacancies on the Board.
(f) As of the date of the Original Merger Agreement, the Company
and each of its subsidiaries is qualified to do business as a foreign
corporation in each state in which it is required to be qualified, except states
in which the failure to qualify, in the aggregate, would not have a Material
Adverse Effect upon the Company. As used in this Agreement, the term "Material
Adverse Effect" upon a company means a material adverse effect upon (i) the
consolidated financial position of that company and its subsidiaries taken as a
whole, or (ii) the consolidated results of operations of that company and its
subsidiaries taken as a whole compared with the consolidated results of their
operations during the same period of the prior year. For the purposes of the
definition of Material Adverse Effect, (x) an adverse change in financial
condition will be material if it is a material reduction of working capital,
tangible net worth or net asset value, and (y) an adverse change in results of
operations will be material if it is a material reduction in total revenues, net
income before income taxes or net income.
(g) The only authorized stock of the Company is 20,000,000 shares
of Common Stock and 2,000,000 shares of preferred stock, par value $.01 per
share. At the date of the Original Merger Agreement, the only outstanding stock
of the Company is 6,433,189 shares of Common Stock. All those shares have been
duly authorized and issued and are fully paid and
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non-assessable. Except as shown on Exhibit 4.2-G, as of the date of the Original
Merger Agreement, the Company has not issued any options, warrants or
convertible or exchangeable securities, and is not a party to any other
agreements, which require, or upon the passage of time, the payment of money or
the occurrence of any other event may require, the Company to issue or sell any
of its stock. The Company, with the approval of the Board, has amended the
Rights Agreement (the "Rights Agreement") dated November 23, 1998 between the
Company and ChaseMellon Shareholder Services LLC, to exclude the Three Cities
Funds and Acquisition from the definition of "Acquiring Person" in the Rights
Agreement. As a result of that amendment, neither the purchase of Common Stock
by the Three Cities Funds from the Funds nor any of the transactions
contemplated by this Agreement will result in there being a Distribution Date
under the Rights Agreement or otherwise entitle anyone to exercise Rights under
the Rights Agreement.
(h) Except as shown on Exhibit 4.2-G or 4.2-H, as of the date of
the Original Merger Agreement, (i) each of the corporations and other entities
of which the Company owns directly or indirectly 50% or more of the equity (each
corporation or other entity of which a company owns directly or indirectly 50%
or more of the equity being a "subsidiary" of that company) has been duly
organized, and is validly existing and in good standing under the laws of its
state of incorporation, (ii) all outstanding shares of stock of the Company's
subsidiaries owned by the Company or any of its subsidiaries are duly
authorized, validly issued, fully paid and non-assessable and are not subject to
any preemptive rights, and (iii) neither the Company nor any of its subsidiaries
has issued any options, warrants or convertible or exchangeable securities, or
is a party to any other agreements, which require, or upon the passage of time,
the payment of money or the occurrence of any other event may require, the
Company or any subsidiary to issue or sell any of its stock or other equity
interests, and, there are no registration
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covenants or transfer or voting restrictions with respect to outstanding
securities of any of the Company's subsidiaries.
(i) Since February 16, 1996, the Company has filed with the SEC
all forms, statements, reports and documents it has been required to file under
the Securities Act of 1993, as amended, the Exchange Act or the rules under
them.
(j) The Company's Annual Report on Form 10-K for the year ended
March 31, 1998 (the "1998 10-K") and its Report on Form 10-Q for the period
ended September 30, 1998 (the "September 10-Q") which were filed with the
Securities and Exchange Commission, including the documents incorporated by
reference in each of them, each contained all the information required to be
included in it and, when it was filed, did not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made in it, in light of the circumstances under which they were made,
not misleading. Without limiting what is said in the preceding sentence, the
financial statements included in the 1998 10-K all were prepared, and the
financial information included in the September 10-Q was derived from financial
statements which were prepared, in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis (except
that financial information included in the September 10-Q does not contain notes
and is subject to normal year end adjustments) and presented fairly the
consolidated financial condition and the consolidated results of operations of
the Company and its subsidiaries at the dates, and for the periods, to which
they relate. As of the date of the Original Merger Agreement, the Company has
not filed any reports with the Securities and Exchange Commission with regard to
any period which ended, or any event which occurred, after September 30, 1998,
except a Form 8-A which the Company filed on November 25, 1998 and a Form 8-K
which the Company filed on December 21, 1998.
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(k) Between September 30, 1998 and the date of the Original
Merger Agreement, (i) the Company and its subsidiaries conducted their
businesses in the ordinary course and in the same manner in which they were
conducted prior to September 30, 1998, and (ii) nothing occurred which,
individually or in aggregate, had a Material Adverse Effect on the Company and
its subsidiaries taken as a whole.
(l) The assets of the Company and its subsidiaries at the date of
the Original Merger Agreement constitute, in the aggregate, all the assets
(including, but not limited to, intellectual property rights) used in or
necessary to the conduct of their businesses as they were being conducted at the
date of the Original Merger Agreement.
(m) The Company and it subsidiaries at all times prior to and at
the date of the Original Merger Agreement complied with all applicable Federal,
state, local and foreign laws and regulations, except failures to comply which
would not reasonably have been expected, in the aggregate, to have a Material
Averse Effect on the Company.
(n) The Company and each of its subsidiaries has all licenses and
permits which, at the date of the Original Merger Agreement, were required to
enable them to conduct their businesses as they currently are being conducted,
except licenses or permits the lack of which would not reasonably be expected,
in the aggregate, to have a Material Adverse Effect on the Company.
(o) As of the date of the Original Merger Agreement, the Company
and each of its subsidiaries has filed when due all Tax Returns which it has
been required to file and has paid all Taxes shown on those returns to be due.
Those Tax Returns accurately reflect all Taxes required to have been paid,
except to the extent of items which may be disputed by applicable taxing
authorities but for which there is substantial authority to support the position
taken by the Company or the subsidiary and which have been adequately reserved
against in
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accordance with GAAP on the balance sheet at September 30, 1998 included in the
September 10-Q. Except as shown on Exhibit 4.2-O, as of the date of the Original
Merger Agreement, (i) no extension of time given by the Company or any of its
subsidiaries for completion of the audit of any of its Tax Returns is in effect,
(ii) no tax lien has been filed by any taxing authority against the Company or
any of its subsidiaries or any of their assets, (iii) no Federal, state or local
audits or other administrative proceedings or court proceedings with regard to
Taxes are presently pending with regard to the Company or any of its
subsidiaries, (iv) neither the Company nor any subsidiary is a party to any
agreement providing for the allocation or sharing of Taxes, (v) neither the
Company nor any subsidiary has participated in or cooperated with an
international boycott as that term is used in Section 999 of the Internal
Revenue Code of 1986, as amended (the "Code") and (vi) neither the Company nor
any subsidiary has filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to any disposition of a
Subsection (f) asset (as that term is defined in Section 341(f)(4) of the Code)
owned by the Company or any subsidiary. For the purposes of this Agreement, the
term "Taxes" means all taxes (including, but not limited to, withholding taxes),
assessments, fees, levies and other governmental charges, and any related
interest or penalties. For the purposes of this Agreement, the term "Tax Return"
means any report, return or other information required to be supplied to a
taxing authority in connection with Taxes.
(p) Except as shown on Exhibit 4.2-P, as of the date of the
Original Merger Agreement, neither the Company nor any subsidiary has received
any notice of material non-compliance or material liability under any Federal,
state or local environmental laws or regulations relating to real property owned
or leased by the Company or by a subsidiary.
(q) Neither the Schedule 14D-9 nor the Amended Schedule 14D-9,
nor any information supplied by the Company for inclusion in the Offering
Documents will, at the respective times the Schedule 14D-9, the Amended Schedule
14D-9, the Schedule 14D-1 and
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the Amended Schedule 14D-1 are filed with the SEC and first published, sent or
given to the Company's stockholders, contain a false or misleading statement
with respect to any material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. On the day the
Proxy Statement is mailed to the Company's stockholders and on the day of the
Stockholders Meeting, the Proxy Statement will not contain a false or misleading
statement with respect to any material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading
or necessary to correct any statement in any earlier communication with respect
to the Stockholders Meeting or the solicitation of proxies to be used at the
Stockholders Meeting. However, the Company does not make any representations or
warranties with respect to information supplied by Acquisition or any of its
affiliates or representatives for inclusion in the Schedule 14D-9, the Amended
Schedule 14D-9 or the Proxy Statement, or with respect to the Offering Documents
(except to the extent of information supplied by the Company for inclusion in
the Offering Documents). The Schedule 14D-9, the Amended Schedule 14D-9 and
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules under it.
4.3 Termination of Representations and Warranties. The representations
and warranties in Paragraphs 4.1, 4.2 and 8.1 will terminate at the Expiration
Date, and neither the Company nor Acquisition, nor any of their respective
stockholders, will have any rights or claims as a result of any of those
representations or warranties after the Expiration Date.
Article 5
ACTIONS PRIOR TO THE MERGER
5.1 Activities Until Effective Time. From the date of the Original
Merger Agreement to the date of this Agreement, the Company has acted, and has
caused each of its subsidiaries
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to act, as described in subparagraphs (a) through (o) below. In addition, from
the date of this Agreement until the Effective Time, except as described on
Exhibit 5.1, the Company will continue to, and will continue to cause each of
its subsidiaries to, except with the written consent of Acquisition and the
Company:
(a) Operate its business in the ordinary course and in a manner
consistent with the manner in which it is being operated at the date of this
Agreement.
(b) Take all reasonable steps available to it to maintain the
goodwill of its business and, except as otherwise requested by Acquisition, the
continued employment of its executives and other employees.
(c) At its expense, maintain all its assets in good repair and
condition, except to the extent of reasonable wear and use and damage by fire or
other unavoidable casualty.
(d) Not make any borrowings other than borrowings in the ordinary
course of business under working capital lines which are disclosed in the notes
to the consolidated balance sheet at March 31, 1998 included in the 1998 10-K or
the consolidated balance sheet at September 30, 1998 included in the September
10-Q.
(e) Not enter into any contractual commitments involving capital
expenditures, loans or advances, and not voluntarily incur any contingent
liabilities, except in each case in the ordinary course of business.
(f) Not redeem or purchase any of its stock and not declare or
pay any dividends, or make any other distributions or repayments of debt to its
stockholders (other than payments by subsidiaries of the Company to the Company
or to other wholly owned subsidiaries of the Company).
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<PAGE> 27
(g) Not make any loans or advances (other than advances for
travel and other normal business expenses) to stockholders, directors, officers
or employees.
(h) Maintain its books of account and records in the usual
manner, in accordance with GAAP applied on a consistent basis, subject to normal
year-end adjustments and accruals.
(i) Comply in all material respects with all applicable laws and
regulations of governmental agencies.
(j) Not sell, dispose of or encumber any property or assets, or
engage in any activities or transactions, except in each case in the ordinary
course of business.
(k) Not enter into or amend any employment, severance or similar
agreements or arrangements, or increase the salaries of any employees, other
than through normal annual merit increases averaging not more than 10%.
(l) Not adopt, become an employer with regard to, or amend any
employee compensation, employee benefit or post-employment benefit plan.
(m) Not amend its certificate of incorporation or by-laws.
(n) Not (i) issue or sell any of its stock (except upon exercise
of options which are outstanding on the date of this Agreement) or any options,
warrants or convertible or exchangeable securities or (ii) split, combine, or
reclassify its outstanding stock.
(o) Not authorize or enter into any agreement to take any of the
actions referred to in subparagraphs (a ) through (n) above.
5.2 HSR Act Filings. The Company and Acquisition has each made the
filing it is required to make under the HSR Act with regard to the transactions
which are the subject of this
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Agreement and they have been notified that the waiting periods required by the
HSR Act have been terminated. The Company and Acquisition will each provide
information and cooperate in all other respects to assist the other of them in
making any further filings required under the HSR Act.
5.3 Proxy Statements and Stockholders' Meetings
(a) If the conditions in clauses (a) and (b) of Paragraph 2.1 are
satisfied and stockholder approval of the Merger is required by applicable law
or by rules of the Nasdaq National Market (if they are applicable), the Company
will (i) file the Proxy Statement with the SEC as promptly as practicable after
the Expiration Date, (ii) use its best efforts to cause review of the Proxy
Statement by the SEC staff to be completed as promptly as practicable, (iii)
recommend to its stockholders that they vote in favor of the Merger and permit
that recommendation to be described in the Proxy Statement, (iv) as promptly as
practicable, and in any event within 10 days after the Company is informed that
the SEC staff has no further comments about the Proxy Statement, cause the Proxy
Statement to be mailed to its stockholders and (v) cause the Stockholders
Meeting to be held not later than the 30th day after the day on which the Proxy
Statement is mailed.
(b) Acquisition will (i) supply to the Company all information in
Acquisition's possession, including any required financial statements of
Acquisition, which the Company is required to include in the Proxy Statement and
in all other respects cooperate with the Company in its efforts to file the
Proxy Statement with the SEC and cause review of the Proxy Statement to be
completed as promptly as practicable after it is filed with the SEC.
5.4 No Solicitation of Offers; Notice of Proposals from Others. (a) The
Company will not, and will not authorize or permit its or any of its
subsidiaries' officers, directors, employees, agents or representatives
(including any investment banker, attorney or accountant
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retained by it or by any of its subsidiaries) directly or indirectly to
initiate, solicit, encourage or otherwise facilitate any inquiry or the making
of any proposal or offer with respect to a merger, reorganization, share
exchange, consolidation or similar transaction involving the Company, or any
purchase of or tender offer for, all or any significant portion of the Company's
equity securities or any significant portion of the assets of the Company and
its subsidiaries on a consolidated basis (each of these being an "Acquisition
Proposal").
(b) [Intentionally deleted.]
(c) If the Company receives an Acquisition Proposal, or the
Company learns that someone other than Acquisition is contemplating soliciting
tenders of Common Stock or otherwise proposes to acquire the Company or its
Common Stock if the Company's stockholders do not tender their Common Stock to
Acquisition or do not approve the Merger, the Company will promptly notify
Acquisition of that fact and provide Acquisition with all information in the
Company's possession which Acquisition reasonably requests regarding the
Acquisition Proposal, solicitation of tenders or other proposed transaction, and
the Company will promptly, from time to time, provide Acquisition with any
additional information the Company obtains regarding the Acquisition Proposal,
the solicitation of tenders or the other proposed transaction.
5.5 Acquisition's Efforts to Fulfill Conditions. Acquisition will use
its best efforts to cause all the conditions set forth in Paragraph 6.1 to be
fulfilled on or before the Merger Date.
5.6 Company's Efforts to Fulfill Conditions. The Company will use its
best efforts to cause all the conditions set forth in Paragraph 6.2 to be
fulfilled on or before the Merger Date.
ARTICLE 6
CONDITIONS PRECEDENT TO MERGER
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6.1 Conditions to the Company's Obligations. The obligations of the
Company to complete the Merger are subject to satisfaction of the following
conditions (any or all of which may be waived by the Company):
(a) The representations and warranties of Acquisition contained
in this Agreement will, except as contemplated by this Agreement, be true and
correct in all material respects on the Merger Date with the same effect as
though made on that date (except that representations or warranties which
related expressly to a specified date or a specified period need only to have
been true and correct with regard to the specified date or period), and
Acquisition will have delivered to the Company a certificate dated that date and
signed by the President or a Vice President of Acquisition to that effect.
(b) Acquisition will have fulfilled in all material respects all
its obligations under this Agreement required to have been fulfilled on or
before the Merger Date.
(c) No order will have been entered by any court or governmental
authority and be in force which invalidates this Agreement or restrains the
Company from completing the transactions which are the subject of this
Agreement.
(d) If stockholder approval of the Merger is required by
applicable law or by the rules of the Nasdaq National Market (if they are
applicable), the Merger will have been approved by the holders of a majority of
the outstanding shares of Common Stock.
6.2 Conditions to Acquisition's Obligations. The obligations of
Acquisition to complete the Merger are subject to the following conditions (any
or all of which may be waived by Acquisition):
(a) The representations and warranties of the Company contained
in this Agreement will, except as contemplated by this Agreement, be true and
correct in all material
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respects on the Merger Date with the same effect as though made on that date
(except that representations or warranties which related expressly as of a
specified date or a specified period need only to have been true and correct
with regard to the specified date or period), and the Company will have
delivered to Acquisition a certificate dated that date and signed by the
President or a Vice President of the Company to that effect.
(b) The Company will have fulfilled in all material respects all
its obligations under this Agreement required to have been fulfilled on or
before the Merger Date.
(c) No order will have been entered by any court or governmental
authority and be in force which invalidates this Agreement or restrains
Acquisition from completing the transactions which are the subject of this
Agreement and no action will be pending against the Company or Acquisition
relating to the transactions which are the subject of this Agreement which
presents a reasonable likelihood of resulting in an award of damages against the
Company or Acquisition which would be material after the Merger to the Company
and its subsidiaries taken as a whole.
(d) J. William Uhrig and Wm. Robert Wright II (or replacements
designated by Acquisition) will have been members of the Board at all times
since this Agreement was signed by the Company and by Acquisition.
(e) If stockholder approval of the Merger is required by
applicable law or by the rules of the Nasdaq National Market (if they are
applicable), the Merger will have been approved by the holders of at least a
majority of the outstanding shares of Common Stock.
(f) If stockholder approval of the Merger is required by
applicable law or by the rules of the Nasdaq National Market (if they are
applicable), the Effective Time will occur not later than 120 days after the
Expiration Time, unless the Effective Time is delayed until after
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then because of actions of Acquisition or its affiliates (other than the Company
and its subsidiaries) or because of Acquisition's failure to fulfill obligations
under this Agreement.
ARTICLE 7
TERMINATION
7.1 Right to Terminate. This Agreement may be terminated at any time
prior to the Effective Time (whether or not the Company's stockholders have
approved the Merger):
(a) By mutual consent of the Company and Acquisition.
(b) By Acquisition if the condition in Paragraph 6.2(f) is not
fulfilled.
(c) By the Company if (i) it is determined that any of the
representations or warranties of Acquisition contained in this Agreement was not
complete and accurate in all material respects on the date of this Agreement or
(ii) any of the conditions in Paragraph 6.1 is not satisfied or waived by the
Company on or before the Merger Date.
(d) By Acquisition if (i) it is determined that any of the
representations or warranties of the Company contained in this Agreement was not
complete and accurate in all material respects on the date of this Agreement or
(ii) any of the conditions in Paragraph 6.2 is not satisfied or waived by
Acquisition on or before the Merger Date.
(e) [Intentionally deleted.]
(f) [Intentionally deleted.]
7.2 Manner of Terminating Agreement If at any time the Company has the
right under Paragraph 7.1 to terminate this Agreement, it can terminate this
Agreement by a notice to the other of them that it is terminating this
Agreement.
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\ 7.3 Effect of Termination. If this Agreement is terminated pursuant to
Paragraph 7.1, after this Agreement is terminated, neither party will have any
further rights or obligations under this Agreement other than Acquisition's
obligations under Paragraph 9.1. Nothing contained in this Paragraph will,
however, relieve either party of liability for any breach of this Agreement
which occurs before this Agreement is terminated.
ARTICLE 8
ABSENCE OF BROKERS
8.1 Representations and Warranties Regarding Brokers and Others. The
Company and Acquisition each represents and warrants to the other of them that
nobody acted as a broker, a finder or in any similar capacity in connection with
the transactions which are the subject of this Agreement, except that Lehman
Brothers, Inc. acted as financial advisor to the Company and Sanders Morris
Mundy & Co. has assisted the Three Cities Funds in connection with the purchases
of Common Stock from the Funds. The Company will pay all fees of Lehman
Brothers, Inc. (which will not exceed $900,000) and reimbursement of Lehman
Brothers, Inc. for out-of-pocket expenses (which will not exceed $25,000) and
the Three Cities Funds will pay all fees of Sanders Morris Mundy & Co. The
Company and Acquisition each indemnifies the other of them against, and agrees
to hold the other of them harmless from, all losses, liabilities and expenses
(including, but not limited to, reasonable fees and expenses of counsel and
costs of investigation) incurred because of any claim by anyone for compensation
as a broker, a finder or in any similar capacity by reason of services allegedly
rendered to the indemnifying party in connection with the transactions which are
the subject of this Agreement.
ARTICLE 9
OTHER AGREEMENTS
9.1 Indemnification for Prior Acts. (a) The Surviving Corporation will
honor, and will not amend or modify for a period of not less than six years
after the date of this Agreement,
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any and all obligations of the Company and its subsidiaries to indemnify present
and former directors, officers or employees of the Company or its subsidiaries
(each an "Indemnified Party") with respect to matters which occur on or prior to
the Effective Time, whether provided in the certificate of incorporation or
by-laws of the Company or any of its subsidiaries, in any of the agreements
listed on Exhibit 9.1-A(1) or under the DGCL. The Surviving Corporation will
maintain in effect for not less than six years after the Effective Time with
respect to occurrences or omissions prior to the Effective Time directors and
officers' liability insurance (which need not insure the Company against risk
other than the Company's obligation to insure officers and directors) with
coverage limits comparable to those of the policies in effect at the date of
this Agreement (the "Current Policies") to the extent that insurance can be
purchased for premiums totaling not more than $100,000 plus any premiums paid
for the Current Policies which are refunded because the Current Policies are
terminated before their stated expiration dates (if that occurs), or to the
extent that coverage cannot be purchased for that amount, reduce the coverage or
increase the deductible amount in order to obtain the maximum coverage which can
be purchased for that amount.
(b) Without limiting the foregoing, in the event any indemnified
claim ("Claim") is brought against any Indemnified Party after the Effective
Time, (i) the Indemnified Parties may retain the Company's regularly engaged
independent legal counsel, or other independent legal counsel satisfactory to
them and to the Surviving Corporation, (ii) the Surviving Corporation shall pay
all reasonable fees and expenses of counsel for the Indemnified Parties as
described below promptly as statements therefor are received and (iii) the
Surviving Corporation will use its best efforts to assist in the vigorous
defense of any such matter, provided that the Surviving Corporation shall not be
liable for any settlement of any Claim effected without its written consent,
which consent shall not be unreasonably withheld. Any Indemnified Party wishing
to claim indemnification with regard to a Claim, upon learning of the Claim,
shall notify the
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Surviving Corporation of the Claim (although the failure so to notify the
Surviving Corporation shall not relieve the Surviving Corporation from any
liability which the Surviving Corporation may have, except to the extent such
failure materially prejudices the Surviving Corporation), and shall deliver to
the Surviving Corporation the undertaking contemplated by Section 145(e) of the
DGCL. The Indemnified Parties as a group may retain one law firm (in addition to
local counsel) to represent them with respect to each such matter unless there
is, under applicable standards of professional conduct (as determined by counsel
to the Indemnified Parties), a conflict on any significant issue between the
positions of any two or more Indemnified Parties, in which event, such
additional counsel as may be required may be retained by the Indemnified
Parties. The Company will pay the fees and expenses of the one law firm (plus
local counsel) and, if there is a conflict as described in the preceding
sentence, fees and expenses of one additional law firm (plus local counsel).
Under no circumstances will the Company be required to pay the fees and expenses
of more than two law firms (plus local counsel) with regard to any Claim or
group of related Claims.
(c) The provisions of this Paragraph 9.1 are intended to be for
the benefit of, and will be enforceable by, the respective directors, officers
and employees of the Company or its subsidiaries to which it relates and their
heirs and representatives and will be binding upon the Surviving Corporation.
9.2 [Intentionally deleted.]
9.3 Agreement Regarding Directors. Until Acquisition purchases all the
shares of Common Stock which are properly tendered in response to the Amended
Tender Offer and not withdrawn or this Agreement terminates, neither of the
Three Cities Funds nor Acquisition will vote any Common Stock or take any other
action to cause (i) anyone other than J. William Uhrig and Wm. Robert Wright II
(or replacements for them designated by Acquisition) to be elected to
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the Board (except by voting at an annual meeting of stockholders in favor of the
Board's nominees for election to the Board), (ii) the number of directors
constituting the entire Board to be increased or decreased, or (iii) any
director to be removed from the Board other than for cause.
9.4 [Intentionally deleted.]
9.5 Control of Stockholder Suits. At least until the Expiration Date,
the Company, under the direction of the Board, will control any and all
negotiations and decisions with respect to the Stockholder Suits, and
Acquisition will not, and will cause the Three Cities Funds not to, communicate
about the Stockholder Suits with counsel for the plaintiffs in the Stockholder
Suits, the Company's insurance carriers or their counsel, or any other party
involved in the Stockholder Suits, without the express prior consent of the
Company or its counsel.
ARTICLE 10
GENERAL
10.1 Expenses. The Company and Acquisition will each pay its own
expenses in connection with the transactions which are the subject of this
Agreement, including legal fees.
10.2 Access to Properties, Books and Records. From the date of this
Agreement until the Effective Time, the Company will, and will cause each of its
subsidiaries to, give representatives of Acquisition full access during normal
business hours to all of their respective properties, books and records.
Acquisition will, and will cause its representatives to, hold all information it
receives as a result of its access to the properties, books and records of the
Company or its subsidiaries in confidence, except to the extent that information
(i) is or becomes available to the public (other than through a breach of this
Agreement), (ii) becomes available to Acquisition from a third party which,
insofar as Acquisition is aware, is not under an
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obligation to the Company, or to a subsidiary of the Company, to keep the
information confidential, (iii) was known to Acquisition or its affiliates
(which includes the Three Cities Funds and Three Cities Research, Inc.) before
it was made available to Acquisition or its representative by the Company or a
subsidiary, or (iv) otherwise is independently developed by Acquisition or its
affiliates. If this Agreement is terminated prior to the Effective Time,
Acquisition will, at the request of the Company, deliver to the Company all
documents and other material obtained by Acquisition from the Company or a
subsidiary in connection with the transactions which are the subject of this
Agreement or evidence that that material has been destroyed by Acquisition.
10.3 Press Releases. The Company and Acquisition will consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement, except that nothing in this Paragraph
will prevent either party from making any statement when and as required by law
or by the rules of any securities exchange or securities quotation or trading
system on which securities of that party or an affiliate are listed, quoted or
traded.
10.4 Entire Agreement. This Agreement and the documents to be delivered
in accordance with this Agreement contain the entire agreement between the
Company and Acquisition relating to the transactions which are the subject of
this Agreement and those other documents, all prior negotiations, understandings
and agreements between the Company and Acquisition are superseded by this
Agreement and those other documents, and there are no representations,
warranties, understandings or agreements concerning the transactions which are
the subject of this Agreement or those other documents other than those
expressly set forth in this Agreement or those other documents.
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10.5 Effect of Disclosures. Any information disclosed by a party in any
representation or warranty contained in this Agreement (including exhibits to
this Agreement) will be treated as having been disclosed in connection with each
representation and warranty made by that party in this Agreement.
10.6 Captions. The captions of the articles and paragraphs of this
Agreement are for reference only, and do not affect the meaning or
interpretation of this Agreement.
10.7 Prohibition Against Assignment. Neither this Agreement nor any
right of any party under it may be assigned, except that Acquisition may assign
its rights under this Agreement to a corporation or other entity a majority of
the equity of which is owned by the Three Cities Funds.
10.8 Notices and Other Communications. Any notice or other communication
under this Agreement must be in writing and will be deemed given when it is
delivered in person or sent by facsimile (with proof of receipt at the number to
which it is required to be sent), on the business day after the day on which it
is sent by a major nationwide overnight delivery service, or on the third
business day after the day on which it is mailed by first class mail from within
the United States of America, to the following addresses (or such other address
as may be specified after the date of this Agreement by the party to which the
notice or communication is sent):
If to Acquisition:
TCF Acquisition Corporation
c/o Three Cities Research, Inc.
650 Madison Avenue
New York, New York
Attention: J. William Uhrig
Facsimile: 212-980-1142
with a copy to:
David W. Bernstein
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Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
Facsimile: 212-878-8375
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If to the Company.:
COHR Inc.
2540 Plummer Street
Chatsworth, CA 91311
Attention: President
Facsimile: 818-717-8426
with a copy to:
Robert B. Knauss
Munger Tolles & Olson LLP
355 South Grand Avenue
Los Angeles, CA 90071
Facsimile No.:213-687-3702
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10.9 Governing Law. This Agreement will be governed by, and construed
under, the substantive laws of the State of Delaware.
10.10 Amendments. This Agreement may be amended only by a document in
writing signed by both the Company and Acquisition.
10.11 Counterparts. This Agreement may be executed in two or more
counterparts, some of which may be signed by fewer than all the parties or may
contain facsimile copies of pages signed by some of the parties. Each of those
counterparts will be deemed to be an original copy of this Agreement, but all of
them together will constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company and Acquisition have executed this
Agreement, intending to be legally bound by it, on the day shown on the first
page of this Agreement.
COHR INC.
By:
-------------------------------
Title:
TCF ACQUISITION CORPORATION
By:
-------------------------------
Title: President
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Exhibit 1.1-E
Acquisition will not be required to accept for payment or pay for any
Common Stock tendered in response to the Amended Tender Offer if:
(a) Any statute, rule, regulation, order or injunction has been enacted,
promulgated, entered or enforced by any national or state government or
governmental authority or by any United States court of competent jurisdiction,
that would make the acquisition of the tendered Common Stock by Acquisition
illegal or otherwise prohibit consummation of the Amended Tender Offer or the
Merger; or
(b) There has been (i) a general suspension of trading in, or limitation
on prices for, securities on the New York Stock Exchange or the Nasdaq National
Market System which continued for at least three business days, (ii) the
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States (whether or not mandatory) which continued for at
least three business days, (iii) the commencement of a war or armed hostilities
or any other international or national calamity directly or indirectly involving
the United States, which has a significant adverse effect on the functioning of
financial markets in the United States, (iv) any limitation (whether or not
mandatory) by any United States governmental authority or agency on the
extension of credit by banks or other financial institutions which would have a
material adverse effect on Acquisition's ability to purchase and pay for all the
Common Stock which is tendered in response to the Amended Tender Offer and to
carry out the Merger on the terms contemplated by the Agreement or (v) there is
a material acceleration or worsening of any of the conditions described in
clauses (i) through (iv) which exists at the date of the commencement of the
Amended Tender Offer.
(c) Any of the representations or warranties of the Company in the
Agreement is not true and correct as of the date of the Agreement (except that
representations or warranties which related expressly as of a specified date or
period need only to have been true and correct with regard to the specified date
or period), except failures to be true and correct which would not, in the
aggregate, have a Material Adverse Effect upon the Company or adversely affect
Acquisition's legal ownership of the tendered Common Stock, Acquisition's legal
ability to consummate the Merger as contemplated by the Agreement, or the
ownership of the Surviving Corporation after the Merger by the persons which own
the stock of Acquisition immediately before the Merger;
(d) Without limiting the condition in subparagraph (c), Acquisition
learns that the 1998 10-K or the September 10-Q contained a false or misleading
statement with respect to a material fact or omitted to state a material fact
required to be stated therein or which may be necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than with regard to matters which are the subject of the
Stockholder Suits);
(e) The Company has not performed all the obligations it is required to
have performed under the Agreement by the Expiration Date, except failures which
(i) would, in the aggregate, not materially impair or delay the ability of
Acquisition to consummate the purchase of the Common Stock which is tendered in
response to the Amended Tender Offer or the ability of Acquisition and the
Company to effect the Merger, (ii) have been caused by or result from a breach
of the Agreement by Acquisition; or (iii) do not, and are not reasonably
expected to, have a Material Adverse Effect on the Company.
(f) The Agreement has been terminated in accordance with its terms; or
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(g) The Board withdraws or modifies in a manner adverse to Acquisition
the Board's approval or recommendation of the Amended Tender Offer or the
Merger.
The conditions set forth above are for the sole benefit of Acquisition,
and may be waived by Acquisition, in whole or in part. Any delay by Acquisition
in exercising the right to terminate the Amended Tender Offer because any of the
conditions are not fulfilled will not be deemed a waiver of its right to do so.
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