AGREEMENT AND PLAN OF MERGER
dated as of
JUNE 28, 2000
by and among
KENNY INDUSTRIAL SERVICES, L.L.C.,
CANISCO ACQUISITION, INC.,
and
CANISCO RESOURCES, INC.
ARTICLE 1 THE OFFER AND MERGER 1
Section 1.1. The Offer 1
Section 1.2. Voting Agreement 3
Section 1.3. Company Action 3
Section 1.4. Directors 4
Section 1.5. The Merger 4
Section 1.6. Effective Time 5
Section 1.7. Closing 5
Section 1.8. Directors and Officers of the Surviving Corporation 5
Section 1.9. Subsequent Actions 5
Section 1.10. Stockholders' Meeting 6
Section 1.11. Merger Without Meeting of Stockholders 6
ARTICLE 2 CONVERSION OF SECURITIES 6
Section 2.1. Conversion of Capital Stock 6
Section 2.2. Exchange of Certificates 7
Section 2.3. Dissenting Share 8
Section 2.4. Company Option Plans 9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 9
Section 3.1. Corporate Existence and Power 9
Section 3.2. Corporate Authorization 10
Section 3.3. Governmental Authorization 10
Section 3.4. Non-Contravention 10
Section 3.5. Capitalization 11
Section 3.6. Subsidiaries 11
Section 3.7. Commission Filings 12
Section 3.8. Financial Statements 13
Section 3.9. Health and Safety Matters 13
Section 3.10. Absence of Certain Changes 13
Section 3.11. No Undisclosed Liabilities 14
Section 3.12. Litigation 14
Section 3.13. Taxes 14
Section 3.14. Employee Benefit Plans 15
Section 3.15. Compliance with Laws 17
Section 3.16. Finders' or Advisors' Fees 17
Section 3.17. Environmental Matters 17
Section 3.18. Permits 18
Section 3.19. Material Contracts 19
Section 3.20. Opinion of Financial Advisor 20
Section 3.21. Takeover Statutes and Charter Provisions 20
Section 3.22. Intellectual Property Matters 20
Section 3.23. Insurance 20
Section 3.24. Title to Assets; Liens 20
Section 3.25. Material Information 21
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT 21
Section 4.1. Corporate Existence and Power 21
Section 4.2. Corporate Authorization 21
Section 4.3. Governmental Authorization 22
Section 4.4. Non-Contravention 22
Section 4.5. Finders' or Advisors' Fees 22
ARTICLE 5 COVENANTS 22
Section 5.1. Conduct of the Company 22
Section 5.2. HSR Act 24
Section 5.3. Access to Information 24
Section 5.4. Reasonable Best Efforts; Consents and Approvals 24
Section 5.5. No Solicitation 25
Section 5.6. Additional Agreements 26
Section 5.7. Publicity 26
Section 5.8. Notification of Certain Matters 26
Section 5.9. State Takeover Laws 26
Section 5.10. Resignations 26
Section 5.11. Interim Directors 26
Section 5.12. Disclosure Documents 26
ARTICLE 6 CONDITIONS TO THE MERGER 27
Section 6.1. Conditions to the Obligations of Each Party 27
ARTICLE 7 TERMINATION 27
Section 7.1. Termination 27
Section 7.2. Effect of Termination 29
Section 7.3. Fees and Expenses 29
ARTICLE 8 MISCELLANEOUS 30
Section 8.1. Notices 30
Section 8.2. Non-Survival of Representations and Warranties 31
Section 8.3. Amendments; No Waivers 31
Section 8.4. Successors and Assigns 31
Section 8.5. Governing Law 31
Section 8.6. Jurisdiction 32
Section 8.7. Counterparts; Effectiveness 32
Section 8.8. Entire Agreement 32
Section 8.9. Captions 32
Section 8.10. Severability 32
Section 8.11. No Prejudice 32
Section 8.12. Words in Singular and Plural Form; Gender 32
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
June 28, 2000, by and among KENNY INDUSTRIAL SERVICES, L.L.C., a Delaware
limited liability company ("Parent"), CANISCO ACQUISITION, INC., a
Delaware corporation ("Merger Subsidiary"), and CANISCO RESOURCES, INC., a
Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Merger Subsidiary and
the Company and the Operating Board of Parent have approved this
Agreement, and deem it advisable and in the best interests of their
respective stockholders or interest holders, as applicable, to consummate
the Merger (as defined below) of Merger Subsidiary with and into the
Company following the Offer (as defined below) in accordance with the
General Corporation Law of the State of Delaware (the "DGCL") and on the
terms and conditions set forth in this Agreement; and
WHEREAS, in furtherance thereof, it is proposed that Merger
Subsidiary make the Offer (as defined below) to acquire all shares of the
issued and outstanding common stock, par value $0.0025 per share, of the
Company ("Shares" or "Company Common Stock") for $1.00 per Share in cash;
and
WHEREAS, the Board of Directors of the Company has determined that
the consideration to be paid for each Share in the Offer and the Merger is
fair to the holders of Shares and has resolved to recommend that the
holders of Shares accept the Offer and approve this Agreement and each of
the transactions contemplated by this Agreement, including the Offer and
the Merger (the "Transactions"), on the terms and conditions set forth in
this Agreement; and
WHEREAS, Parent, Merger Subsidiary and the Company desire to make
certain representations, warranties, covenants, and agreements in
connection with the Offer and the Merger.
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein,
the parties agree as follows:
ARTICLE 1
THE OFFER AND MERGER
Section 1.1. The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 7.1 and none of the events set forth in Annex A
hereto shall have occurred and be continuing, as promptly as practicable
and in any event no later than July 10, 2000, Merger Subsidiary shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) an offer (the "Offer") to
purchase for cash all Shares at a price of $1.00 per Share (such price or
any higher price as shall be paid in respect of the Shares in the Offer
being referred to herein as the "Offer Price"), subject to there being
validly tendered and not withdrawn prior to the expiration of the Offer
that number of Shares which, together with the Shares beneficially owned
by Parent or Merger Subsidiary, represents at least a majority of the
Shares outstanding on a fully diluted basis (the "Minimum Condition") and
the other conditions set forth in Annex A hereto. Subject to the prior
satisfaction or waiver (except that the Minimum Condition may not be
waived) of the Minimum Condition and the other conditions of the Offer set
forth in Annex A hereto, Merger Subsidiary shall consummate the Offer in
accordance with its terms and accept for payment and pay for all Shares
tendered pursuant to the Offer as soon as it is legally permitted to do so
under applicable law. The obligations of Merger Subsidiary to commence
the Offer and to accept for payment and to pay for any Shares validly
tendered on or prior to the expiration of the Offer and not withdrawn
shall be subject only to the Minimum Condition and the other conditions
set forth in Annex A hereto. The Offer shall be made by means of an offer
to purchase (the "Offer to Purchase") containing the terms set forth in
this Agreement, the Minimum Condition, and the other conditions set forth
in Annex A hereto. The initial expiration date of the Offer shall be the
20th business day following the commencement of the Offer (determined
using Rule 14d-2 under the Exchange Act). Without the prior written
consent of the Company, neither Parent nor Merger Subsidiary shall (i)
decrease the Offer Price, (ii) decrease the number of Shares to be
purchased in the Offer, (iii) change the form of consideration payable in
the Offer, (iv) add to or change the conditions to the Offer set forth in
Annex A, (v) waive the Minimum Condition or (vi) make any other change in
the terms or conditions of the Offer. Notwithstanding the foregoing,
Merger Subsidiary may, without the consent of the Company, (i) extend the
Offer in increments of not more than five business days each, if at the
scheduled expiration date of the Offer any of the conditions to Merger
Subsidiary's obligation to purchase Shares are not satisfied, until such
time as such conditions are satisfied or waived, (ii) extend the Offer for
any period required by any rule, regulation, interpretation or position of
the SEC or the staff thereof applicable to the Offer and (iii) make
available a subsequent offering period (within the meaning of Rule 14d-11
under the Exchange Act) ("Subsequent Offering Period"). Without limiting
the right of Merger Subsidiary to extend the Offer, provided that this
Agreement shall not have been terminated in accordance with Article 7
hereof, if any applicable waiting period under the HSR Act has not expired
or terminated, then, at the request of the Company, Merger Subsidiary will
extend the Offer from time to time until the earlier of the consummation
of the Offer or the date which is sixty (60) days from the date of this
Agreement. Merger Subsidiary shall, subject to the terms and conditions
of the Offer, accept for payment Shares tendered as soon as it is legally
permitted to do so under applicable law.
(b) As soon as practicable, on the date the Offer is commenced,
Parent and Merger Subsidiary shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule TO with
respect to the Offer (together with all amendments and supplements thereto
and including the exhibits thereto, the "Schedule TO"). The Schedule TO
will include the summary term sheet required thereby and, as exhibits, the
Offer to Purchase and a form of letter of transmittal and summary
advertisement (collectively, together with any amendments and supplements
thereto, the "Offer Documents"). Parent and Merger Subsidiary further
agree to take all steps necessary to cause the Offer Documents to be filed
with the SEC and to be disseminated to holders of Shares, in each case as
and to the extent required by applicable federal securities laws. Parent
and Merger Subsidiary, on the one hand, and the Company, on the other
hand, agree to correct promptly any information provided by it for use in
the Offer Documents if and to the extent that it shall have become false
and misleading in any material respect and Merger Subsidiary further
agrees to take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given the
opportunity to review the Schedule TO before it is filed with the SEC. In
addition, Parent and Merger Subsidiary agree to provide the Company and
its counsel in writing with any comments, whether written or oral, Parent,
Merger Subsidiary or their counsel may receive from time to time from the
SEC or its staff with respect to the Offer Documents promptly after the
receipt of such comments, and any written responses thereto.
(c) In the event that, following a Subsequent Offering Period, if
any, Merger Subsidiary has acquired Shares purchased in the Offer and such
shares represent less than 90% of the Shares outstanding on a fully-
diluted basis, the parties agree that they shall enter into a stock option
agreement, on customary terms, pursuant to which the Company shall grant
to Merger Subsidiary an option to purchase that number of Shares equal to
the number of Shares that, when added to the number Shares owned by the
Merger Subsidiary and its affiliates immediately following expiration of
the Subsequent Offering Period, shall constitute 90% of the Shares then
outstanding on a fully diluted basis.
Section 1.2. Voting Agreement. Concurrently herewith, Michael J.
Olson, Teddy Mansfield, Ralph A. Trallo, Dale L. Ferguson, Thomas P.
McShane, and W. Lawrence Petcovic shall execute a voting agreement (the
"Voting Agreement"), a copy of which Voting Agreement is attached hereto
as Exhibit A.
Section 1.3. Company Actions
(a) Concurrently with the commencement of the Offer, the Company
shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall contain
the recommendation referred to in clause (iii) of Section 3.2(b) hereof
unless such recommendation has been withdrawn or modified in accordance
with Section 5.5. The Company further agrees to take all steps necessary
to cause the Schedule 14D-9 to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company, on the one
hand, and Parent and Merger Subsidiary, on the other hand, agree to
correct promptly any information provided by it for use in the Schedule
14D-9 if and to the extent that it shall have become false and misleading
in any material respect and the Company further agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case as and
to the extent required by applicable federal securities laws. Parent,
Merger Subsidiary and their counsel shall be given the opportunity to
review the Schedule 14D-9 before it is filed with the SEC. In addition,
the Company agrees to provide Parent, Merger Subsidiary and their counsel
in writing with any comments, whether written or oral, the Company or its
counsel may receive from time to time from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments,
and any written or oral responses thereto.
(b) In connection with the Offer, the Company will promptly furnish
or cause to be furnished to Merger Subsidiary mailing labels, security
position listings and any available listing or computer file containing
the names and addresses of the record holders of the Shares as of a recent
date, and shall furnish Merger Subsidiary with such information and
assistance as Merger Subsidiary or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of the
Shares.
Section 1.4. Directors
(a) Promptly upon the purchase of and payment for any Shares by
Parent or any of its Subsidiaries which represents at least a majority of
the outstanding Shares (on a fully diluted basis), Parent shall be
entitled to designate such number of directors, rounded up to the next
whole number, on the Board of Directors of the Company as is equal to the
product of the total number of directors on such Board (giving effect to
the directors designated by Parent pursuant to this sentence) multiplied
by the percentage that the aggregate number of Shares beneficially owned
by the Parent and Merger Subsidiary bears to the total number of Shares
then outstanding. The Company shall, upon request of Parent, use its
reasonable best efforts promptly either to increase the size of its Board
of Directors, including by amending the By-laws of the Company if
necessary to so increase the size of such Board of Directors, or secure
the resignations of such number of its incumbent directors, or both, as is
necessary to enable Parent's designees to be so elected or appointed to
the Company's Board of Directors, and shall use its best efforts to cause
Parent's designees to be so elected or appointed at such time. At such
time, the Company shall, upon the request of Parent, also cause persons
designated by Parent to constitute the same percentage (rounded up to the
next whole number) as is on the Company's Board of Directors of (i) each
committee of the Company's Board of Directors, (ii) each board of
directors (or similar body) of each Subsidiary of the Company, and (iii)
each committee (or similar body) of each such board.
(b) In the event that Parent's designees are elected to the Company's
Board of Directors, until the Effective Time (as defined below), the
Company shall cause its Board of Directors to have at least three
directors who are directors on the date hereof and are neither officers
nor employees of the Company (the "Independent Directors"), provided that
if any Independent Directors may not serve due to death or disability, the
remaining Independent Directors (or Independent Director, if there is only
one remaining) shall be entitled to designate another person or persons
who served as a director on the date hereof to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement
or, if no Independent Director then remains, the other directors shall
designate three persons to fill such vacancies and such persons shall be
deemed to be Independent Directors for purposes of this Agreement.
Notwithstanding anything in this Agreement to the contrary, in the event
that Parent's designees constitute a majority of the Company's Board of
Directors, after the acceptance for payment of Shares pursuant to the
Offer and prior to the Effective Time, the affirmative vote of a majority
of the Independent Directors shall be required to (i) amend or terminate
this Agreement by the Company, (ii) exercise or waive any of the Company's
rights, benefits or remedies hereunder, (iii) amend the Certificate of
Incorporation or By-laws of the Company or (iv) take any other action of
the Company's Board of Directors under or in connection with this
Agreement; provided, that if there shall be no Independent Directors as a
result of such persons' deaths, disabilities or refusal to serve, such
actions may be effected by majority vote of the entire Board of Directors
of the Company.
Section 1.5. The Merger
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company and Merger Subsidiary shall consummate a
merger (the "Merger") pursuant to which (i) Merger Subsidiary shall be
merged with and into the Company and the separate corporate existence of
Merger Subsidiary shall thereupon cease, (ii) the Company shall be the
successor or surviving corporation in the Merger and shall continue to be
governed by the laws of the State of Delaware, and (iii) the separate
corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger.
The corporation surviving the Merger is sometimes hereinafter referred to
as the "Surviving Corporation." The Merger shall have the effects set
forth in the DGCL.
(b) The Certificate of Incorporation of Merger Subsidiary, as in
effect immediately prior to the Effective Time, shall be the Certificate
of Incorporation of the Surviving Corporation, except as to the name of
the Surviving Corporation, until thereafter amended as provided by law and
such Certificate of Incorporation.
(c) The By-laws of Merger Subsidiary, as in effect immediately prior
to the Effective Time, shall be the By-laws of the Surviving Corporation,
except as to the name of the Surviving Corporation, until thereafter
amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-laws.
Section 1.6. Effective Time. Parent, Merger Subsidiary, and the
Company will cause an appropriate Certificate of Merger (the "Certificate
of Merger") to be executed and filed on the date of the Closing (as
defined below) (or on such other date as Parent and the Company may agree)
with the Secretary of State of the State of Delaware as provided in the
DGCL. The Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Secretary of State of
the State of Delaware or such time as is agreed upon by the parties and
specified in the Certificate of Merger, and such time is hereinafter
referred to as the "Effective Time."
Section 1.7. Closing. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., Eastern Time, on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction or waiver of all of the conditions set forth in Article 6
hereof (the "Closing Date"), at the offices of Wolf, Block, Schorr and
Solis-Cohen LLP, Philadelphia, Pennsylvania, unless another date or place
is agreed to in writing by the parties hereto.
Section 1.8. Directors and Officers of the Surviving Corporation.
The directors of Merger Subsidiary immediately prior to the Effective Time
shall, from and after the Effective Time, be the directors of the
Surviving Corporation, and the officers of the Company immediately prior
to the Effective Time shall, from and after the Effective Time, be the
officers of the Surviving Corporation, in each case until their respective
successors shall have been duly elected or appointed or qualified or until
their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-laws.
Section 1.9. Subsequent Actions. If at any time after the Effective
Time the Surviving Corporation will consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise
in the Surviving Corporation its right, title or interest in, to or under
any of the rights, properties or assets of either of the Company or Merger
Subsidiary acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger or otherwise to carry out
this Agreement, the officers and directors of the Surviving Corporation
shall be authorized to execute and deliver, in the name and on behalf of
either the Company or Merger Subsidiary, all such deeds, bills of sale,
instruments of conveyance, assignments and assurances and to take and do,
in the name and on behalf of each of such corporations or otherwise, all
such other actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or
otherwise to carry out this Agreement.
Section 1.10. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger,
the Company, acting through its Board of Directors, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as
reasonably practicable following the acceptance for payment and
purchase of Shares by Merger Subsidiary pursuant to the Offer for
the purpose of considering and taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and
use its reasonable best efforts to obtain and furnish the
information required to be included by the SEC in the Proxy
Statement (as defined below) and, after consultation with Parent, to
respond promptly to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a definitive
proxy or information statement (the "Proxy Statement") to be mailed
to its stockholders;
(iii) subject to the applicable provisions of this Agreement,
include in the Proxy Statement the recommendation of the Board of
Directors that stockholders of the Company vote in favor of the
approval of the Merger and the adoption of this Agreement; and
(iv) use its reasonable best efforts to solicit from holders
of Shares proxies in favor of the Merger and shall take all other
action reasonably necessary or advisable to secure the approval of
stockholders required by the DGCL to effect the Merger.
(b) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, Merger Subsidiary or any of its other
Subsidiaries and affiliates in favor of the approval of the Merger and the
adoption of this Agreement.
Section 1.11. Merger Without Meeting of Stockholders. Notwithstanding
Section 1.10 hereof, in the event that Parent, Merger Subsidiary or any
other Subsidiary of Parent shall acquire at least 90% of the outstanding
shares of each class of capital stock of the Company, pursuant to the
Offer or otherwise, the parties hereto agree, at the request of Parent and
subject to Article 6 hereof, to take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
ARTICLE 2
CONVERSION OF SECURITIES
Section 2.1. Conversion of Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holders
of any shares of Company Common Stock or common stock, par value $0.01 per
share, of Merger Subsidiary (the "Merger Subsidiary Common Stock"):
(a) Merger Subsidiary Common Stock. Each issued and outstanding
share of the Merger Subsidiary Common Stock shall be converted into and
become one fully paid and nonassessable share of common stock of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. All
shares of Company Common Stock that are owned by the Company as treasury
stock and any shares of Company Common Stock owned by Parent, Merger
Subsidiary or any other wholly owned Subsidiary of Parent shall be
cancelled and retired and shall cease to exist and no consideration shall
be delivered in exchange therefore.
(c) Conversion of Shares. Each issued and outstanding share of
Company Common Stock (other than shares to be cancelled in accordance with
Section 2.1(b) hereof and other than Dissenting Shares (as defined in
Section 2.3 hereof)) shall be converted into the right to receive the
Offer Price, payable to the holder thereof in cash, without interest (the
"Merger Consideration"). From and after the Effective Time, all such
shares of Company Common Stock shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration therefore upon the surrender of such certificate in
accordance with Section 2.2 hereof, without interest.
Section 2.2. Exchange of Certificates
(a) Paying Agent. Parent shall designate a bank or trust company to
act as agent for the holders of Shares in connection with the Merger (the
"Paying Agent") to receive the funds to which holders of Shares shall
become entitled pursuant to Section 2.1(c) hereof. Prior to the Effective
Time, Parent or Merger Subsidiary shall deposit, or cause to be deposited,
with the Paying Agent the aggregate Merger Consideration. For purposes of
determining the amount of Merger Consideration to be so deposited, Parent
and Merger Subsidiary shall assume that no stockholder of the Company will
perfect any right to appraisal of his, her or its Shares. Such funds shall
be invested by the Paying Agent as directed by Parent or the Surviving
Corporation pending payment thereof by the Paying Agent to the holders of
the Shares. Earnings from such investments shall be the sole and
exclusive property of Parent and the Surviving Corporation, and no part of
such earnings shall accrue to the benefit of holders of Shares.
(b) Exchange Procedures. Promptly after the Effective Time, the
Paying Agent shall mail to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the "Certificates"), whose
shares were converted pursuant to Section 2.1 hereof into the right to
receive the Merger Consideration (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates, to the
Paying Agent and shall be in such form and have such other provisions as
Parent may reasonably specify) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for payment of the Merger
Consideration. The Company and its counsel shall be given the opportunity
to review such letter of transmittal and such instructions. Upon
surrender of a Certificate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by Parent, together with such
letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefore the Merger Consideration for
each share of Company Common Stock formerly represented by such
Certificate and the Certificate so surrendered shall forthwith be
cancelled. If payment of the Merger Consideration is to be made to a
person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper
form for transfer and that the person requesting such payment shall have
paid any transfer and other taxes required by reason of the payment of the
Merger Consideration to a person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of
the Surviving Corporation that such tax either has been paid or is not
payable. Until surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.2, without interest thereon.
(c) Transfer Books; No Further Ownership Rights in Company Common
Stock. At the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further registration of
transfers of Shares on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, except as otherwise provided for
herein or by applicable law. If, after the Effective Time, Certificates
are presented to the Surviving Corporation for any reason, they shall be
cancelled and exchanged as provided in this Article 2.
(d) Termination of Fund; No Liability. At any time following six
months after the Effective Time, the Surviving Corporation shall be
entitled to require the Paying Agent to deliver to it any funds (including
any interest received with respect thereto) which had been made available
to the Paying Agent and which have not been disbursed (or of which
disbursement is not pending subject only to the Paying Agent's routine
administrative procedures) to holders of Certificates, and thereafter such
holders shall be entitled to look only to the Surviving Corporation
(subject to abandoned property, escheat or other similar laws) for payment
of the Merger Consideration in respect of their Certificates, without any
interest thereon. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or other similar
law.
Section 2.3. Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary,
Shares outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in
writing and who has complied with all of the relevant provisions of
Section 262 of the DGCL ("Dissenting Shares") shall not be converted into
a right to receive the Merger Consideration, unless such holder fails to
perfect or withdraws or otherwise loses its right to appraisal. A holder
of Dissenting Shares shall be entitled to receive payment of the appraised
value of such Shares held by it in accordance with the provisions of
Section 262 of the DGCL, unless, after the Effective Time, such holder
fails to perfect or withdraws or loses its right to appraisal, in which
case such Shares shall be converted into and represent only the right to
receive the Merger Consideration, without interest thereon, upon surrender
of the Certificate or Certificates representing such Shares pursuant to
Section 2.2.
(b) The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any Shares, attempted withdrawals of such demands
and any other instruments served pursuant to the DGCL and received by the
Company relating to rights of appraisal and (ii) the opportunity to share
in the conduct of all negotiations and proceedings with respect to demands
for appraisal under the DGCL. Except with the prior written consent of
Parent, the Company shall not voluntarily make any payment with respect to
any demands for appraisal or settle or offer to settle any such demands
for appraisal.
Section 2.4. Company Option Plans. Parent and the Company shall take
all actions necessary to provide that, effective as of the Effective Time,
(i) each outstanding stock option, stock equivalent right or right to
acquire Shares (an "Option") granted by the Company pursuant to any
written or oral plan or agreement whether or not then exercisable or
vested, shall be cancelled and (ii) in consideration of such cancellation,
Parent shall, or shall cause the Surviving Corporation to, pay to such
holders of Options, whether or not then exercisable or vested, an amount
in respect thereof equal to the product of (A) the excess, if any, of the
Offer Price over the exercise price of each such Option (which, in the
case of any stock equivalent right, shall be zero) and (B) the number of
Shares subject thereto (such payment, if any, to be net of applicable
withholding and excise taxes). As of the Effective Time, the Options and
the related plans and agreements shall terminate and all rights under any
provision of any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of
the Company or any of its Subsidiaries shall be cancelled. The Company
shall take all action necessary to ensure that, after the Effective Time,
no person shall have any right under such plan or agreements or any other
plan, program or arrangement with respect to equity securities of the
Surviving Corporation or any Subsidiary thereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that except as set
forth in the disclosure schedules delivered by the Company to Parent
simultaneously with the execution of this Agreement (the "Company
Disclosure Schedules"):
Section 3.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted, except for those the absence of
which would not, individually or in the aggregate, have a Material Adverse
Effect (as defined below) on the Company. The Company is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except
for those jurisdictions where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company. For purposes of this Agreement, a "Material Adverse Effect" or
"material adverse change" with respect to any Person means any change,
effect, event or occurrence that has a material adverse impact on the
financial condition, business, liabilities, properties, assets, prospects
or results of operations of such Person and its Subsidiaries taken as a
whole. The Company has heretofore made available to Parent true and
complete copies of the Company's Certificate of Incorporation and By-laws
as currently in effect.
Section 3.2. Corporate Authorization.
(a) The execution, delivery and performance by the Company of this
Agreement, other agreements contemplated hereby (the "Ancillary
Agreements") to which the Company is a party (the "Company Ancillary
Agreements") and the consummation by the Company of the transactions
contemplated hereby and thereby are within the Company's corporate powers
and, except for any required approval by the Company's stockholders in
accordance with DGCL (the "Company Stockholder Approval") in connection
with the consummation of the Merger, have been duly authorized by all
necessary corporate action. The affirmative vote of holders of the
outstanding shares of Company Common Stock having votes representing a
majority of the votes of all such outstanding capital stock, voting
together as a single class, in favor of the approval and adoption of this
Agreement and the Merger is the only vote of the holders of any of the
Company's capital stock necessary in connection with consummation of the
Merger. Assuming due authorization, execution and delivery of this
Agreement, the Ancillary Agreements to which Parent and/or Merger
Subsidiary is a party (the "Parent Ancillary Agreements") by Parent and
Merger Subsidiary, as applicable, each of this Agreement and the Company
Ancillary Agreements constitutes a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, and to general equity principles.
(b) The Company's Board of Directors, at a meeting duly called and
held, has (i) determined that this Agreement and the transactions
contemplated hereby (including the Merger) are advisable, fair to and in
the best interests of the Company's stockholders, (ii) approved and
adopted this Agreement and the transactions contemplated hereby (including
the Merger), and (iii) resolved to recommend that the Company stockholders
vote for the approval and adoption of this Agreement and the Merger.
Section 3.3. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement, the Company Ancillary
Agreements and the consummation by the Company of the transactions
contemplated hereby and thereby require no action by or in respect of, or
filing by the Company with, any governmental body, agency, official or
authority other than (a) the filing of a certificate of merger in
connection with the Merger in accordance with DGCL and applicable laws of
any other state, (b) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder (the "HSR Act"), (c)
compliance with any applicable requirements of the Exchange Act,
(d) compliance with any applicable requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder
(the "Securities Act"), (e) state blue sky laws, and (f) other actions or
filings which if not taken or made would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or prevent or
materially delay the Company's consummation of the Merger.
Section 3.4. Non-Contravention. Except as set forth on Schedule 3.4,
the execution, delivery and performance by the Company of this Agreement,
the Company Ancillary Agreements and the consummation by the Company of
the transactions contemplated hereby and thereby do not and will not (a)
contravene or conflict with the Certificate of Incorporation or By-laws of
the Company, (b) assuming compliance with the matters referred to in
Section 3.3 and subject to receipt of the Company Stockholder Approval,
contravene or conflict with or constitute a violation of any provision of
any law, regulation, judgment, injunction, order or decree known by the
Company to be binding upon or applicable to the Company or any of its
Subsidiaries, (c) subject to receipt of the Company Stockholder Approval,
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of the Company or
any of its Subsidiaries or to a loss of any benefit to which the Company
or any of its Subsidiaries is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any of
its Subsidiaries or any license, franchise, permit or other similar
authorization held by the Company or any of its Subsidiaries, or (d)
result in the creation or imposition of any Lien (as defined below) on any
asset of the Company or any of its Subsidiaries, except for such
contraventions, conflicts or violations referred to in clause (b) or
defaults, rights of termination, cancellation or acceleration, or losses
or Liens referred to in clause (c) or (d) that would not, individually or
in the aggregate, have a Material Adverse Effect on the Company.
Notwithstanding the foregoing, the termination, cancellation, violation,
or breach of any of the agreements referred to in clauses (x) or (y) of
Section 3.19(b) shall be deemed to have a Material Adverse Effect on the
Company. For purposes of this Agreement, "Lien" means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset other than any such
mortgage, lien, pledge, charge, security interest or encumbrance (i) for
Taxes (as defined in Section 3.13) not yet due or being contested in good
faith or (ii) which is a carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like lien arising in the ordinary
course of business. Neither the Company nor any Subsidiary of the Company
is a party to any agreement that expressly limits the ability of the
Company or any Subsidiary of the Company to compete in or conduct any line
of business or compete with any Person or in any geographic area or during
any period of time.
Section 3.5. Capitalization. The authorized capital stock of the
Company consists of 25,000,000 shares of Company Common Stock. As of the
close of business on June 26, 2000, there were outstanding 2,536,565
shares of Company Common Stock and no other shares of capital stock or
other voting securities of the Company were then outstanding. All
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable.
Except as set forth on Schedule 3.5, there were no outstanding options,
warrants or other rights to acquire from the Company, and no preemptive or
similar rights, subscription or other rights, convertible or exchangeable
securities, agreements, arrangements or commitments of any character,
relating to the capital stock of the Company, obligating the Company to
issue, transfer or sell, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company or obligating the Company to grant, extend or
enter into any such option, warrant, subscription or other right,
convertible or exchangeable security, agreement, arrangement or
commitment. Since the close of business on the date hereof, the Company
has not issued any shares of capital stock or any such securities or
rights to purchase capital stock of the Company. Except as required by
the terms of any Options, there are no outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company.
Section 3.6. Subsidiaries.
(a) Each Subsidiary of the Company is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, has all powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business
as now conducted, except for those the absence of which would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company. For purposes of this Agreement,
the word "Subsidiary" when used with respect to any Person means any other
Person, whether incorporated or unincorporated, of which (i) more than 50%
of the securities or other ownership interests or (ii) securities or other
interests having by their terms ordinary voting power to elect more than
50% of the board of directors or others performing similar functions with
respect to such corporation or other organization, is directly owned or
controlled by such Person or by any one or more of its Subsidiaries. Each
Subsidiary of the Company is duly qualified to do business and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
(b) All of the outstanding capital stock of, or other ownership
interests in, each Subsidiary of the Company is, directly or indirectly,
owned by the Company. Except as set forth on Schedule 3.6(b), all shares
of capital stock of, or other ownership interests in, Subsidiaries of the
Company, directly or indirectly, owned by the Company are owned free and
clear of any Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose
of such capital stock or other ownership interests). There are no
outstanding options, warrants or other rights to acquire from the Company
or any of its Subsidiaries, and, except as may be required by applicable
foreign corporate laws, no preemptive or similar rights, subscriptions or
other rights, convertible or exchangeable securities, agreements,
arrangements or commitments of any character, relating to the capital
stock of any Subsidiary of the Company, obligating the Company or any of
its Subsidiaries to issue, transfer or sell, any capital stock, voting
securities or other ownership interests in, or any securities convertible
into or exchangeable for any capital stock, voting securities or ownership
interests in, any Subsidiary of the Company or obligating the Company or
any Subsidiary of the Company to grant, extend or enter into any such
option, warrant, subscription or other right, convertible or exchangeable
security, agreement, arrangement or commitment. There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire from any Person (other than the Company or a
wholly owned Subsidiary of the Company) any outstanding shares of capital
stock of any Subsidiary of the Company or any rights or securities
described in the preceding sentence.
Section 3.7. Commission Filings.
(a) The Company has made available to Parent (i) its annual reports
on Form 10-K for its fiscal years ended March 31, 1998 and 1999, (ii) its
quarterly reports on Form 10-Q for the three-month periods ended June 30,
1999, September 30, 1999, and December 31, 1999 (the Form 10-Q for the
three-month period ended December 31, 1999 being the "Form 10-Q") and
(iii) all of its other reports, statements, schedules and registration
statements filed with the SEC since December 31, 1999 (the documents
referred to in this Section 3.7(a) being referred to collectively as the
"Company Commission Documents").
(b) As of its filing date, each Company Commission Document complied
as to form in all material respects with the applicable requirements of
the Exchange Act and the Securities Act.
(c) As of its filing date, each Company Commission Document filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading.
Section 3.8. Financial Statements. The unaudited consolidated
financial statements and unaudited consolidated interim financial
statements of the Company (including any related notes and schedules)
included in its annual and quarterly reports on Form 10-K and 10-Q,
respectively, referred to in Section 3.7 present fairly, in all material
respects, the financial position of the Company and its Subsidiaries as of
the dates thereof and their results of operations and cash flows for the
periods then ended, in each case in conformity with GAAP applied on a
consistent basis (except as may be indicated in the notes thereto). For
purposes of this Agreement, "Company Balance Sheet" means the consolidated
balance sheet of the Company as of December 31, 1999 set forth in the
Company's Form 10-Q for the three-month period ended December 31, 1999 and
"Company Balance Sheet Date" means December 31, 1999.
Section 3.9. Health and Safety Matters. To the knowledge of the
Company, neither the Company nor any of its Subsidiaries is in material
violation of, or has violated, any applicable provisions of any laws,
rules and regulations relating to the protection of the public or an
employee's health or safety, including but not limited to the Occupational
Safety and Health Act of 1970, as amended. In addition, to the knowledge
of the Company, neither the Company nor any of its Subsidiaries have
received any violations, citations or similar notices relating to such
matters.
Section 3.10. Absence of Certain Changes. Since the Company Balance
Sheet Date, except as set forth on Schedule 3.10, the Company and its
Subsidiaries have conducted their respective businesses in the ordinary
course, consistent with past practice, and there has not been:
(a) any event, occurrence or development which, individually or in
the aggregate, would have, or reasonably be expected to have, a Material
Adverse Effect on the Company;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption or other acquisition by the Company
or any of its Subsidiaries of any outstanding shares of their capital
stock;
(c) any amendment of any material term of any outstanding security of
the Company or any of its Subsidiaries;
(d) any transaction or commitment made, or any contract, agreement or
settlement entered into, by (or judgment, order or decree affecting) the
Company or any of its Subsidiaries relating to its assets or business
(including the acquisition or disposition of any material amount of
assets) or any relinquishment by the Company or any of its Subsidiaries of
any contract or other right, in either case, material to the Company and
its Subsidiaries taken as a whole, other than transactions, commitments,
contracts, agreements or settlements (including without limitation
settlements of litigation and tax proceedings) in the ordinary course of
business consistent with past practice and those contemplated by this
Agreement;
(e) any change in any method of accounting or accounting practice by
the Company or any of its Subsidiaries, except for any such change which
is required by reason of a concurrent change in GAAP;
(f) any (i) grant of any severance or termination pay to (or
amendment to any such existing arrangement with) any director, officer or
employee of the Company or any of its Subsidiaries, (ii) entering into of
any employment, deferred compensation, supplemental retirement or other
similar agreement (or any amendment to any such existing agreement) with
any director, officer or employee of the Company or any of its
Subsidiaries, (iii) increase in, or accelerated vesting and/or payment of,
benefits under any existing severance or termination pay policies or
employment agreements or (iv) increase in or enhancement of any rights or
features related to compensation, bonus or other benefits payable to
directors, officers or employees of the Company or any of its
Subsidiaries, in each case, other than in the ordinary course of business
consistent with past practice;
(g) any material Tax (as defined below) election made or changed, any
material audit settled or any material amended Tax Returns (as defined
below) filed; or
(h) any action which, if taken during the period from the date of
this Agreement through the Effective Time, would constitute a breach of
Section 5.1.
Section 3.11. No Undisclosed Liabilities. Except as set forth on
Schedule 3.11, there are no liabilities of the Company or any Subsidiary
of the Company of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise (that individually or in
the aggregate exceed $100,000), other than:
(a) liabilities disclosed or provided for in the Company Balance
Sheet;
(b) liabilities incurred since the date of the Company Balance Sheet
in the ordinary course of business in excess of $500,000 (excluding
customer contracts); and
(c) liabilities under this Agreement.
Section 3.12. Litigation. Except as set forth on Schedule 3.12, there
is no action, suit, investigation or proceeding pending against, or to the
knowledge of the Company threatened against or affecting, the Company or
any of its Subsidiaries or any of their respective properties or any of
their respective officers or directors before any court or arbitrator or
any governmental body, agency or official except as would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Merger.
Neither the Company nor any Subsidiary is subject to any outstanding
order, writ, injunction or decree.
Section 3.13. Taxes.
(a) Except as provided for in the Company Balance Sheet (including
the notes thereto), (i) all Company Tax Returns required to be filed with
any taxing authority by, or with respect to, the Company and its
Subsidiaries have been filed in accordance with all applicable laws; (ii)
the Company and its Subsidiaries have timely paid all Taxes shown as due
and payable on the Company Tax Returns that have been so filed, and, as of
the time of filing, the Company Tax Returns correctly reflected in all
material respects the facts regarding the income, business, assets,
operations, activities and the status of the Company and its Subsidiaries
(other than Taxes which are being contested in good faith and for which
adequate reserves are reflected on the Company Balance Sheet); (iii) the
Company and its Subsidiaries have made provision for all Taxes payable by
the Company and its Subsidiaries for which no Company Tax Return has yet
been filed; (iv) the charges, accruals and reserves for Taxes with respect
to the Company and its Subsidiaries reflected on the Company Balance Sheet
are adequate under GAAP to cover the Tax liabilities accruing through the
date thereof; (v) there is no action, suit, proceeding, audit or claim now
proposed or to the knowledge of the Company, pending against or with
respect to the Company or any of its Subsidiaries in respect of any Tax
where there is a reasonable possibility of an adverse determination; (vi)
to the knowledge of the Company, neither the Company nor any of its
Subsidiaries is liable for any Tax imposed on any entity other than such
Person, except as the result of the application of Treas. Reg. Sections
1.1502-6 (and any comparable provision of the tax laws of any state, local
or foreign jurisdiction) to the affiliated group of which the Company is
the common parent, and (vii) no deficiency for any Tax has been asserted
or assessed by a taxing authority against the Company or any of its
Subsidiaries which deficiency has not been paid or reserved for (other
than deficiencies which are being contested in good faith and for which
adequate reserves are reflected on the Company Balance Sheet). For
purposes of this Agreement, "Taxes" shall mean any and all taxes, charges,
fees, levies or other assessments, including, without limitation, all net
income, gross income, gross receipts, excise, stamp, real or personal
property, ad valorem, withholding, social security (or similar),
unemployment, occupation, use, production, service, service use, license,
net worth, payroll, franchise, severance, transfer, recording, employment,
premium, windfall profits, environmental (including taxes under Section
59A of the Internal Revenue Code of 1986, as amended (the "Code")),
customs duties, capital stock, profits, disability, sales, registration,
value added, alternative or add-on minimum, estimated or other taxes,
assessments or charges imposed by any federal, state, local or foreign
governmental entity ("Governmental Entity") and any interest, penalties,
or additions to tax attributable thereto for periods up to the Effective
Date. For purposes of this Agreement, "Tax Returns" shall mean any
return, report, form or similar statement required to be filed with
respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
(b) There are no material disputes pending, or claims asserted in
writing for, Taxes or assessments upon the Company or any of its
Subsidiaries, nor has the Company or any of its Subsidiaries been
requested in writing to give any currently effective waivers extending the
statutory period of limitation applicable to any federal or state income
tax return for any period.
(c) There are no Tax liens upon any property or assets of the Company
or any of its Subsidiaries except liens for current Taxes not yet due.
Section 3.14. Employee Benefit Plans.
(a) For purposes of this Agreement, the term "Company Employee Plans"
shall mean and include: each management, consulting, non-compete,
employment, severance or similar contract, plan, including, without
limitation, all capital stock plans, arrangement or policy applicable to
any director, former director, employee or former employee of the Company
and each plan, program, policy, agreement or arrangement (written or
oral), providing for compensation, bonuses, profit-sharing, stock option
or other stock related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (including any self-
insured arrangements), health or medical benefits, disability benefits,
workers' compensation, supplemental unemployment benefits, severance
benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits) or
other employee benefits of any kind, whether funded or unfunded, which is
maintained, administered or contributed to by the Company or any
Subsidiary and covers any employee or director or former employee or
director of the Company or any Subsidiary, or under which the Company has
any liability, contingent or otherwise (including but not limited to each
"employee benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")). The
Company Disclosure Schedule sets forth a list of each Company Employee
Plan.
(b) To the knowledge of the Company, each Company Employee Plan has
been established and maintained in material compliance with its terms and
with the requirements prescribed by any and all statutes, orders, rules
and regulations (including but not limited to ERISA and the Code) which
are applicable to such Plan. Schedule 3.14(b) sets forth the Company
Employee Plans which are classified as a "multiemployer plan," as defined
in Section 3(37) of ERISA.
(c) To the knowledge of the Company, neither the Company nor any
affiliate of the Company has incurred a liability under Title IV of ERISA
that has not been satisfied in full, and, to the knowledge of the Company,
no condition exists that presents a material risk to the Company or any
affiliate of the Company of incurring any such liability. To the
knowledge of the Company, all contributions required to be made under the
terms of any Company Employee Plan maintained in the United States have
been made, and, where applicable to a Company Employee Plan, the Company
and its affiliates have complied, to the knowledge of the Company, with
the minimum funding requirements under Section 412 of the Code and
Section 302 of ERISA with respect to each such Company Employee Plan.
(d) To the knowledge of the Company, with respect to each Company
Employee Plan which is subject to Title IV of ERISA, (i) the present value
of accrued benefits under such Company Employee Plan, based upon the
actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such Company Employee Plan's actuary with
respect to such Company Employee Plan, did not, as of its latest valuation
date, exceed the then current value of the assets of such Company Employee
Plan allocable to such accrued benefits, (ii) no "reportable event"
(within the meaning of Section 4043 of ERISA) has occurred with respect to
any Company Employee Plan for which the 30-day notice requirement has not
been waived, and (iii) no condition exists which would subject the Company
or any Company Subsidiary to any fine under Section 4071 of ERISA.
(e) Each Company Employee Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified and has been so qualified
during the period from its adoption to date, and each trust forming a part
thereof is exempt from federal income tax pursuant to Section 501(a) of
the Code and, to the Company's knowledge, no circumstances exist which
will adversely affect such qualification or exemption.
(f) Except as set forth on Schedule 3.14(f), no director or officer
or other employee of the Company or any of its Subsidiaries will become
entitled to any retirement, severance or similar benefit or enhanced or
accelerated benefit (including any acceleration of vesting or lapse of
repurchase rights or obligations with respect to any Company stock plans
or other benefit under any compensation plan or arrangement of the
Company) solely as a result of the transactions contemplated hereby; and
(ii) no payment made or to be made to any current or former employee or
director of the Company or any of its affiliates by reason of the
transactions contemplated hereby (whether alone or in connection with any
other event) will constitute an "excess parachute payment" within the
meaning of Section 280G of the Code.
(g) Since the Company Balance Sheet Date, there has been no amendment
to, or change in employee participation or coverage under, any Company
Employee Plan which would materially increase the expense of maintaining
such Company Employee Plan above the level of the expense incurred in
respect thereof for the 12 months ended on the Company Balance Sheet Date.
(h) To the knowledge of the Company, the Company and its Subsidiaries
are in material compliance with all applicable federal, state, local and
foreign statutes, laws, (including without limitation, common law),
judicial decisions, regulations, ordinances, rules, judgments, orders and
codes respecting employment, employment practices, labor, terms and
conditions of employment and wages and hours, and no work stoppage or
labor strike against the Company and its Subsidiaries are pending or, to
the knowledge of the Company, threatened, nor are the Company and its
Subsidiaries involved in or, to the knowledge of the Company, threatened
with any labor dispute, grievance (other than ordinary, immaterial
individual grievances), or litigation relating to labor matters involving
any employees. There are no suits, actions, disputes, claims (other than
routine claims for benefits), investigations or audits pending or, to the
knowledge of the Company, threatened in connection with any Company
Employee Plan.
Section 3.15. Compliance with Laws. Neither the Company nor any of
its Subsidiaries is in violation of, or has violated, any applicable
provisions of any laws, statutes, ordinances or regulations except for any
violations that, individually or in the aggregate, would not have a
Material Adverse Effect on the Company.
Section 3.16. Finders' or Advisors' Fees. There is no investment
banker, broker, finder or other intermediary which has been retained by or
is authorized to act on behalf of the Company or any of its Subsidiaries
who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement.
Section 3.17. Environmental Matters.
(a) The Company and its Subsidiaries (i) are in material compliance
with all, and are not subject to any material liability with respect to,
any applicable Environmental Laws (as defined below), (ii) hold or have
applied for all material Environmental Permits (as defined below) and
(iii) are in material compliance with their respective Environmental
Permits.
(b) Neither the Company nor any of its Subsidiaries has received any
written notice, demand, letter, claim or request for information alleging
that the Company or any of its Subsidiaries may be in violation of, or
liable under, any Environmental Law.
(c) Neither the Company nor any of its Subsidiaries (i) has entered
into or agreed to any consent decree or order or is subject to any
judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation, sampling,
monitoring, treatment, remediation, removal or cleanup of Hazardous
Materials (as defined below) and, no investigation, litigation or other
proceeding is pending or, to the knowledge of the Company, threatened with
respect thereto, or (ii) is an indemnitor in connection with any
threatened or asserted claim by any third-party indemnitee for any
liability under any Environmental Law or relating to any Hazardous
Materials; and
(d) None of the real property owned or leased by the Company or any
Company Subsidiary is listed or, to the knowledge of the Company, proposed
for listing on the "National Priorities List" under CERCLA (as defined
below), as updated through the date hereof, or any similar state or
foreign list of sites requiring investigation or cleanup.
(e) For purposes of this Agreement:
(i) "CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
(ii) "Environmental Laws" means any federal, state, local or
foreign statute, law, ordinance, regulation, rule, code, treaty,
writ or order and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent decree, judgment, stipulation, injunction, permit,
authorization, opinion, or agency requirement, in each case having
the force and effect of law, relating to the pollution, protection,
investigation or restoration of the environment or natural
resources, including, without limitation, those relating to the use,
handling, presence, transportation, treatment, storage, disposal,
release, threatened release or discharge of Hazardous Materials or
to noise, odor, wetlands, contamination or any injury or threat of
injury to persons or property.
(iii) "Environmental Permits" means any permit, approval,
identification number, license and other authorization required
under any applicable Environmental Law.
(iv) "Hazardous Materials" means (a) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (b)
any chemical, material or other substance defined or regulated as
toxic or hazardous or as a pollutant or contaminant or waste under
any applicable Environmental Law.
Section 3.18. Permits. Each of the Company and its Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals,
clearances and orders other than Environmental Permits of any domestic or
foreign governmental, administrative or judicial authority known by the
Company to be necessary for the Company or any of its Subsidiaries to own,
lease and operate its properties or to carry on their respective
businesses in the manner as they are now being conducted (the "Company
Permits"), and all such Company Permits are valid, and in full force and
effect, except where the failure to have, or the suspension or
cancellation of, any of the Company Permits would neither, individually or
in the aggregate, (a) have a Material Adverse Effect on the Company nor
(b) prevent or materially delay the performance of this Agreement by the
Company. No suspension or cancellation of any of the Company Permits is
pending or, to the knowledge of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits would neither, individually or in the aggregate, (a) have a
Material Adverse Effect on the Company nor (b) prevent or materially delay
the performance of this Agreement by the Company.
Section 3.19. Material Contracts.
(a) The Company Disclosure Schedules set forth a complete and correct
list of all agreements of the following types to which the Company or any
of its Subsidiaries is a party or may be bound (collectively, the
"Material Contracts"): (i) employment, severance, termination, consulting
and retirement agreements that are not terminable "at will";
(ii) agreements which involve payment by the Company of more than $100,000
or which are not cancelable without penalty by the Company in less than 60
days, (iii) royalty and licensing agreements of the Company acting as a
licensor; (iv) agreements with any labor organization or other collective
bargaining unit; (v) agreements for the purchase, sale or lease of any
real estate; (vi) agreements for the sale of assets material to the
operation of the Company's business other than in the ordinary course of
business or the grant of any preferential rights to purchase any such
material assets; (vii) agreements which contain provisions requiring the
Company or any Subsidiary to indemnify any person not entered into in the
ordinary course of business consistent with past practice; (viii) joint
venture agreements or other agreements involving the sharing of profits;
(ix) agreements (including, without limitation, agreements not to compete
and exclusivity agreements) that reasonably could be interpreted to impose
any restriction on any business operations of the Company or its
Subsidiaries, except for agreements containing restrictions that would not
have a the Material Adverse Effect on the Company; or (x) any agreements
that are material to the conduct of the business of the Company and its
Subsidiaries.
(b) All the Material Contracts (including without limitation (x) the
subordinated promissory notes made by the Company (i) in favor of Teddy
Mansfield and R. Dean Mansfield, individually, dated as of December 31,
1997 and (ii) in favor of Teddy Mansfield and R. Dean Mansfield, jointly,
dated as of April 22, 1998, and (y) the credit and security agreement, as
amended, by and among GMAC Commercial Credit (formerly BNY Financial
Corporation) and Cannon Sline, Inc. and Icesolv, Inc., dated as of June
28, 1996, as amended April 17, 1998, are valid and in full force and
effect on the date hereof (except to the extent they have previously
expired in accordance with their terms) and constitute legal, valid and
binding obligations of, and are legally enforceable against, the Company
or any of its Subsidiaries which is a party thereto, and to the knowledge
of the Company, the other party or respective parties thereto. To the
knowledge of the Company, there have been no threatened cancellations
thereof and no outstanding disputes thereunder, except such that would not
have a the Material Adverse Effect. Each of the Company and its
Subsidiaries has in all material respects performed all the obligations
under the Material Contracts required to be performed by the Company and
its Subsidiaries to date. The Company is not in default, and to the
Company's knowledge, no party is in default, in any material respect under
any of the Material Contracts, and there has not occurred any event which
(whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a default, except for
defaults which would not in the aggregate reasonably be expected to have a
Material Adverse Effect. True and complete copies of all Material
Contracts have been delivered to Parent or made available for inspection.
Section 3.20. Opinion of Financial Advisor. The Company has received
the opinion of Hempstead & Co. to the effect that, as of the date of its
opinion, the Merger Consolidation is fair from a financial point of view
to the holders of shares of Company Common Stock.
Section 3.21. Takeover Statutes and Charter Provisions. The Board of
Directors of the Company has taken the necessary action to render control
share acquisitions provisions and business combinations provisions of
DGCL, and any other potentially applicable anti-takeover or similar
statute or regulation inapplicable to this Agreement and the transactions
contemplated hereby.
Section 3.22. Intellectual Property Matters.
(a) To the knowledge of the Company, the Company and its Subsidiaries
own, free and clear of all Liens, or have the right to use pursuant to
valid license, sublicense, agreement or permission all items of
Intellectual Property (as defined in Section 3.22(b)) necessary for their
operations as presently conducted. To the knowledge of the Company, the
conduct of the Company's and its Subsidiaries' businesses as currently
conducted does not interfere with, infringe upon, misappropriate or
violate any of the Intellectual Property (as defined below) rights of any
third party which would result in a Material Adverse Effect on the
Company. To the knowledge of the Company, no third party has interfered
with, infringed upon, misappropriated, diluted, violated or otherwise come
into conflict with any Intellectual Property rights of the Company or any
of its Subsidiaries which would result in a Material Adverse Effect on the
Company.
(b) The term "Intellectual Property" as used in this Agreement means,
collectively, patents, trademarks, service marks, trade dress, logos,
trade names, Internet domain names, designs, slogans and general
intangibles of like nature, copyrights and all registrations,
applications, reissuances, continuations, continuations-in-part,
revisions, extensions, reexaminations and associated good will with
respect to each of the foregoing, computer software (including source and
object codes), computer programs, computer data bases and related
documentation and materials, data, documentation, technology, trade
secrets, confidential business information (including ideas, formulae,
algorithms, models, methodologies, compositions, know-how, manufacturing
and production processes and techniques, research and development
information, drawings, designs, plans, proposals and technical data,
financial, marketing and business data and pricing and cost information)
and other intellectual property rights (in whatever form or medium).
Section 3.23. Insurance. The Company maintains insurance coverage
with reputable insurers in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in
businesses similar to that of the Company.
Section 3.24. Title to Assets; Liens. The Company and each of its
Subsidiaries has good and marketable title in fee simple to all its real
property and good title to all its leasehold interests and other
properties, as reflected in the Company Balance Sheet, except for
properties and assets that have been disposed of in the ordinary course of
business since the date of such balance sheet, free and clear of all
mortgages, liens, pledges, charges or encumbrances of any nature
whatsoever, except (i) liens for current taxes, payments of which are not
yet delinquent, (ii) such imperfections in title and easements and
encumbrances, if any, as are not substantial in character, amount or
extent and do not materially detract from the value, or interfere with the
present use of the property subject thereto or affected thereby, or
otherwise materially impair the Company's business operations or (iii) as
disclosed in the Company Commission Documents or on Schedule 3.24, and
except for such matters, which individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Company.
All leases under which the Company leases any real or personal property
are in good standing, valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event which with notice or lapse of time or both would become a
default which could reasonably be expected to have a Material Adverse
Effect on the Company. The Company Disclosure Schedule sets forth all
liens and securities interests granted by the Company or any of its
Subsidiaries to third parties.
Section 3.25. Material Information. No representations or warranties
by the Company in this Agreement and no statements or information
contained in the Company Disclosure Schedule, or in any certificate
furnished or to be furnished by the Company to Parent pursuant to the
provisions of this Agreement, contain or will contain any untrue statement
of a material fact or omit or will omit to state any material fact
necessary, in light of the circumstances under which it was made, in order
to make the statements herein or therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that except as set
forth in the disclosure schedules delivered by Parent to the Company
simultaneously with the execution of this Agreement (the "Parent
Disclosure Schedules"):
Section 4.1. Corporate Existence and Power. Parent is a limited
liability company and Merger Subsidiary is a corporation in each case duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all corporate or limited liability
company powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except for
those the absence of which would not, individually or in the aggregate,
have a Material Adverse Effect on Parent. Parent is duly qualified to do
business as a foreign limited liability company and is in good standing in
each jurisdiction where the character of the property owned or leased by
it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect on
Parent. Since the date of its incorporation, Merger Subsidiary has not
engaged in any activities other than in connection with or as contemplated
by this Agreement. Parent has heretofore made available to the Company
true and complete copies of Parent's certificate of formation and limited
liability company operating agreement and Merger Subsidiary's certificate
of incorporation and by-laws as currently in effect.
Section 4.2. Corporate Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary
of the transactions contemplated hereby and thereby are within the
corporate and limited liability company powers of Parent and Merger
Subsidiary and have been duly authorized by all necessary corporate and
limited liability company action. Assuming due authorization, execution
and delivery of this Agreement by the Company, each of this Agreement and
the Parent Ancillary Agreements constitutes a valid and binding agreement
of each of Parent and Merger Subsidiary, in each case enforceable against
such party in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 4.3. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary
of the transactions contemplated hereby and thereby require no action by
or in respect of, or filing by Parent or Merger Subsidiary with, any
governmental body, agency, official or authority other than (a) the filing
of the Certificate of Merger in connection with the Merger in accordance
with DGCL and applicable laws of any other state, (b) compliance with any
applicable requirements of the HSR Act, (c) compliance with any applicable
requirements of the Exchange Act, (d) compliance with any applicable
requirements of the Securities Act, and (e) other actions or filings which
if not taken or made would not, individually or in the aggregate, have a
Material Adverse Effect on Parent or prevent or materially delay Parent's
and/or Merger Subsidiary's consummation of the Merger.
Section 4.4. Non-Contravention. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the Parent
Ancillary Agreements and the consummation by Parent and Merger Subsidiary
of the transactions contemplated hereby and thereby do not and will not
(a) contravene or conflict with the certificate of formation or the
limited liability company operating agreement of Parent or the certificate
of incorporation or by-laws of Merger Subsidiary, (b) assuming compliance
with the matters referred to in Section 4.3, contravene or conflict with
or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to Parent
or any of its Subsidiaries, (c) constitute a default under or give rise to
any right of termination, cancellation or acceleration of any right or
obligation of Parent or any of its Subsidiaries or to a loss of any
benefit to which Parent or any of its Subsidiaries is entitled under any
provision of any agreement, contract or other instrument binding upon
Parent or any of its Subsidiaries or any license, franchise, permit or
other similar authorization held by Parent or any of its Subsidiaries or
(d) result in the creation or imposition of any Lien on any asset of
Parent or any of its Subsidiaries, except for such contraventions,
conflicts or violations referred to in clause (b) or defaults, rights of
termination, cancellation or acceleration, or losses or Liens referred to
in clause (c) or (d) that would not, individually or in the aggregate,
have a Material Adverse Effect on Parent.
Section 4.5. Finders' or Advisors' Fees. There is no investment
banker, broker, finder or other intermediary which has been retained by or
is authorized to act on behalf of Parent or any of its Subsidiaries who
might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement.
ARTICLE 5
COVENANTS
Section 5.1. Conduct of the Company. From the date of this Agreement
until the Effective Time, the Company and its Subsidiaries shall conduct
their business in the ordinary course consistent with past practice and
shall use their reasonable best efforts to preserve intact their business
organizations and relationships with third parties. Without limiting the
generality of the foregoing, from the date of this Agreement until the
Effective Time without the prior written consent of Parent:
(a) the Company will not, and will not permit any of its Subsidiaries
to, adopt or propose any change in its certificate of incorporation or by-
laws;
(b) the Company will not, and will not permit any Subsidiary of the
Company to, adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its Subsidiaries (other than
transactions between direct and/or indirect wholly owned Subsidiaries of
the Company);
(c) the Company will not, and will not permit any Subsidiary of the
Company to, issue, sell, transfer, pledge, dispose of or encumber any
shares of, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares
of capital stock of any class or series of the Company or any of its
Subsidiaries other than issuances of Company Common Stock pursuant to the
exercise of Options that are outstanding on the date of this Agreement;
(d) the Company will not (i) split, combine, subdivide or reclassify
its outstanding shares of capital stock, or (ii) declare, set aside or pay
any dividend or other distribution payable in cash, stock or property with
respect to its capital stock;
(e) the Company will not, and will not permit any Subsidiary of the
Company to, redeem, purchase or otherwise acquire directly or indirectly
any of the Company's or its Subsidiaries' capital stock;
(f) the Company will not amend the terms (including the terms
relating to accelerating the vesting or lapse of repurchase rights or
obligations) of any Options or other stock based awards;
(g) the Company will not, and will not permit any Subsidiary of the
Company to, (i) grant any severance or termination pay to (or amend any
such existing arrangement with) any director, officer or employee of the
Company or any of its Subsidiaries, (ii) enter into any employment,
deferred compensation or other similar agreement (or any amendment to any
such existing agreement) with any director, officer or employee of the
Company or any of its Subsidiaries, (iii) increase any benefits payable
under any existing severance or termination pay policies or employment
agreements, (iv) increase, other than customary periodic increases in the
ordinary course of business, (or amend the terms of) any compensation,
bonus or other benefits payable to directors, officers or employees of the
Company or any of its Subsidiaries or (v) permit any director, officer or
employee who is not already a party to an agreement or a participant in a
plan providing benefits upon or following a "change in control" to become
a party to any such agreement or a participant in any such plan;
(h) the Company will not, and will not permit any of its Subsidiaries
to, acquire a material amount of assets or property of any other Person;
(i) the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, license or otherwise dispose of any material amount of
assets or property except pursuant to existing contracts or commitments or
otherwise in the ordinary course of business;
(j) except for any such change which is required by reason of a
concurrent change in GAAP, the Company will not, and will not permit any
Subsidiary of the Company to, change any method of accounting or
accounting practice used by it;
(k) the Company will not, and will not permit any Subsidiary of the
Company to, enter into any joint venture, partnership or other similar
arrangement;
(l) the Company will not, and will not permit any of its Subsidiaries
to, take any action that would make any representation or warranty of the
Company hereunder inaccurate in any material respect at, or as of any time
prior to, the Effective Time;
(m) the Company will not make or change any Tax election, settle any
audit or file any amended Tax Returns, except in the ordinary course of
business consistent with past practice; and
(n) the Company will not, and will not permit any of its Subsidiaries
to, agree or commit to do any of the foregoing.
Section 5.2. HSR Act. The Company and Parent shall cooperate with
one another and shall take all reasonable actions necessary to prepare and
file as soon as practicable following the date hereof notifications under
the HSR Act and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission or the Antitrust Division of
the Department of Justice for additional information or documentation and
to respond as promptly as practicable to all inquiries and requests
received from any State Attorney General or any other Governmental Entity
in connection with antitrust or competition matters. The Company and
Parent agree that the Parent shall be responsible for paying the fee in
connection with such filing.
Section 5.3. Access to Information. Upon reasonable prior notice,
the Company shall (and shall cause each of its Subsidiaries to) afford to
the officers, employees, accountants, counsel, investment bankers,
financial advisors and other representatives of Parent, access, during
normal business hours during the period prior to the Effective Time, to
all of its offices, properties, books, contracts, commitments and records
and such financial and operating data as such representatives of Parent
may reasonably request. Unless otherwise required by law and until the
Effective Time, Parent and Merger Subsidiary will hold any such
information which is nonpublic in confidence in accordance with the
provisions of the Agreement for Exchange of Confidential Information
Confidentiality Agreement, dated June 9, 2000, between the Company and
Parent (the "Confidentiality Agreement").
Section 5.4. Reasonable Best Efforts; Consents and Approvals. Upon
the terms and subject to the conditions hereof, each of the parties hereto
shall use its reasonable best efforts to obtain in a timely manner all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings, and to use all reasonable best efforts to take,
or cause to be taken, all other actions and to do, or cause to be done,
all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement. Each of the Company, Parent and Merger Subsidiary will take
all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement
and the transactions contemplated hereby (which actions shall include,
without limitation, furnishing all information determined by their
respective counsel to be required under the HSR Act and in connection with
approvals of or filings with any other Governmental Entity) and will
promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any of
their Subsidiaries in connection with this Agreement and the transactions
contemplated hereby. Each of the Company, Parent and Merger Subsidiary
will, and will cause its Subsidiaries to, take all reasonable actions
determined by their respective counsel to be necessary to obtain (and will
cooperate with each other in obtaining) any consent, authorization, order
or approval of, or any exemption by, or to provide any required notice to,
any Governmental Entity or other public or private third party required to
be obtained or made by Parent, Merger Subsidiary, the Company or any of
their Subsidiaries in connection with the Merger or the taking of any
action contemplated thereby or by this Agreement.
Section 5.5. No Solicitation. From the date hereof until the
termination of this Agreement in accordance with its terms, neither the
Company nor any of its Subsidiaries or affiliates shall (and the Company
shall use its reasonable best efforts to cause its and each of its
Subsidiaries' officers, directors, employees, representatives and agents,
including, but not limited to, investment bankers, attorneys and
accountants, not to), directly or indirectly, solicit, participate in,
initiate or knowingly encourage discussions or negotiations with, provide
any information to, or enter into any agreement with, any corporation,
partnership, person or other entity or group (other than Parent or any of
its affiliates or representatives) concerning any merger, business
combination, tender offer, exchange offer, sale of all or substantially
all of its business, assets, capital stock or debt securities or any
significant equity or debt investment in the Company or any similar
transactions involving the Company (an "Acquisition Proposal"). The
Company further agrees that it will immediately cease any existing
activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. Notwithstanding the
foregoing, prior to the time of acceptance of Shares for payment pursuant
to the Offer, the Company may, directly or indirectly, provide access and
furnish information concerning its business, properties or assets to any
corporation, partnership, person or other entity or group pursuant to
customary confidentiality agreements, and may negotiate and participate in
discussions and negotiations with such entity or group if (x) such entity
or group has submitted an unsolicited bona fide written proposal to the
Board of Directors of the Company relating to any such transaction, (y)
such proposal provides for the acquisition for cash or readily marketable
securities of all of the outstanding Shares or all or substantially all of
the assets of the Company, and (z) the Board of Directors of the Company
determines in good faith, after consultation with its independent
financial advisor, that such proposal is financially superior to the Offer
and the Merger and fully financed or reasonably capable of being financed.
A proposal meeting all of the criteria in the preceding sentence is
referred to herein as a "Superior Proposal." The Company will immediately
notify Parent of any Superior Proposal, or if an inquiry is made, will
keep Parent fully apprised of all developments with respect to any
Superior Proposal, will immediately provide to Parent copies of any
written materials received by the Company in connection with any Superior
Proposal, discussion, negotiation or inquiry and the identity of the party
making any Superior Proposal or inquiry or engaging in such discussion or
negotiation. The Company will promptly provide to Parent any non-public
information concerning the Company provided to any other party which was
not previously provided to Parent. Notwithstanding anything to the
contrary contained in this Agreement, only in connection with the valid
termination of this Agreement pursuant to Section 7.1(c)(i) hereof, the
Board of Directors of the Company may (i) withdraw, modify or change in a
manner adverse to Parent or Merger Subsidiary, or propose to withdraw, or
propose to modify or change in a manner adverse to Parent or the Merger
Subsidiary, the approval or recommendation by such Board of Directors of
the Offer, this Agreement or the Merger, (ii) approve or recommend, or
propose to approve or recommend, any Acquisition Proposal or (iii) enter
into any agreement with respect to any Acquisition Proposal.
Section 5.6. Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under
applicable laws and regulations, or to remove any injunctions or other
impediments or delays, legal or otherwise, to consummate and make
effective the Merger and the other transactions contemplated by this
Agreement. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the Company and Parent
shall use all reasonable efforts to take, or cause to be taken, all such
necessary actions.
Section 5.7. Publicity. The initial press release with respect to
the execution of this Agreement shall be a joint press release acceptable
to Parent and the Company. Thereafter, so long as this Agreement is in
effect, neither the Company, Parent nor any of their respective affiliates
shall issue or cause the publication of any press release or other
announcement with respect to the Merger, this Agreement or the other
transactions contemplated hereby without the prior consultation of the
other party, except as may be required by law.
Section 5.8. Notification of Certain Matters. The Company shall give
prompt notice to Parent and Parent shall give prompt notice to the
Company, of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would cause any representation or
warranty of any party contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time and
(ii) any material failure of the Company or Parent to comply with or
satisfy any covenant, condition or agreement of any party to be complied
with or satisfied by it hereunder; provided, however, that the delivery of
any notice pursuant to this Section 5.8 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such
notice, and provided, further, that the breaching party shall have up to
one business day prior to the then scheduled expiration date of the Offer
(or, if applicable, the offer in any Subsequent Offering Period) in which
to cure such event or failure to the reasonable satisfaction of the non-
breaching party.
Section 5.9. State Takeover Laws. If Section 203 of the DGCL or any
other state takeover statute becomes or is deemed to become applicable to
the Company, the Offer, the acquisition of Shares pursuant to the Offer or
the Merger, the Board of Directors of the Company shall take all action
necessary to render such statute inapplicable to all of the foregoing.
Section 5.10. Resignations. At or prior to the Effective Time, the
Company shall obtain the resignations as of the Effective Time of each
director of the Company (other than Parents' designees elected or
appointed pursuant to Section 1.4) and, if so requested by Parent, of any
director of any Subsidiary of the Company.
Section 5.11. Interim Directors. Pursuant to Section 1.4(b) hereof,
the Company shall take all action necessary to cause a sufficient number
of its current directors to continue as Independent Directors of the
Company until the Effective Time.
Section 5.12. Disclosure Documents. Neither the Schedule 14D-9, any
other document required to be filed by the Company with the SEC in
connection with the Transactions, nor any information supplied by the
Company for inclusion in the Offer Documents will, at the respective times
the Schedule 14D-9, any such other filings by the Company, the Offer
Documents or any amendments or supplements thereto are filed with the SEC
or are first mailed to Company stockholders, as the case may be, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement (or any amendment thereof or supplement
thereto), if any, will not, at the date mailed to Company stockholders and
at the time of the Special Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Schedule
14D-9, any such other filings by the Company and the Proxy Statement, if
any, will comply as to form in all material respects with the provisions
of the applicable federal securities laws and the rules and regulations
thereunder.
ARTICLE 6
CONDITIONS TO THE MERGER
Section 6.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction (or, to the extent legally
permissible, waiver) of the following conditions:
(a) this Agreement and the Merger shall have been approved and
adopted by the stockholders of the Company if required by and in
accordance with DGCL;
(b) no statute, rule, order, decree, regulation, executive order,
ruling or temporary or permanent injunction shall have been enacted,
entered, promulgated or enforced by any Governmental Entity of competent
jurisdiction which, as of the Effective Time, prohibits the consummation
of the Merger or otherwise limits or restricts ownership or operation of
the business of the Surviving Corporation and all foreign or domestic
governmental consents, orders and approvals, including but not limited to
approval under the HSR Act required for the consummation of the Merger
shall have been obtained and shall be in effect at the Effective Time and
shall not limit or restrict ownership or the operation of the business of
the Surviving Corporation; and
(c) Merger Subsidiary or any of its affiliates shall have purchased
shares of Company Common Stock pursuant to the Offer.
ARTICLE 7
TERMINATION
Section 7.1. Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after stockholder approval thereof:
(a) By the mutual consent of the Operating Board of Parent and the
Board of Directors of the Company.
(b) By either of the Board of Directors of the Company or the
Operating Board of Parent:
(i) if shares of Company Common Stock shall not have been
purchased pursuant to the Offer on or prior to September 30, 2000;
provided, however, that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of Merger Subsidiary to
purchase shares of Company Common Stock pursuant to the Offer on or
prior to such date; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action (which order, decree,
ruling or other action the parties hereto shall use their reasonable
efforts to lift), in each case, permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have
become final and non-appealable.
(c) By the Board of Directors of the Company:
(i) if, prior to the purchase of shares of Company Common
Stock pursuant to the Offer, the Board of Directors of the Company
shall have withdrawn, or modified or changed in a manner adverse to
Parent or Merger Subsidiary, its approval or recommendation of the
Offer, this Agreement, or the Merger in order to approve and permit
the Company to execute a definitive agreement providing for a
Superior Proposal; provided that (A) at least three business days
prior to terminating this Agreement pursuant to this Section
7.1(c)(i) the Company has provided Parent with written notice
advising Parent that the Board of Directors of the Company has
received a Superior Proposal that it intends to accept, specifying
the material terms and conditions of such Superior Proposal, and
identifying the person making such Superior Proposal and (B) the
Company shall have caused its financial and legal advisors to
negotiate in good faith with Parent to make such adjustments in the
financial terms of a revised Agreement that are equal or superior to
the financial terms of such Superior Proposal; and further provided
that simultaneously with any termination of this Agreement pursuant
to this Section 7.1(c)(i), the Company shall pay to Parent the
Termination Fee (as defined below); and further provided that the
Company may not terminate this Agreement pursuant to this Section
7.1(c)(i) if the Company is in material breach of this Agreement; or
(ii) if, prior to the purchase of shares of Company Common
Stock pursuant to the Offer, Parent or Merger Subsidiary breaches or
fails in any material respect to perform or comply with any of its
material covenants and agreements contained herein or breaches its
representations and warranties in any material respect; or
(iii) if Parent or Merger Subsidiary, as the case may be,
shall have terminated the Offer, or the Offer shall have expired,
without Parent or Merger Subsidiary, as the case may be, purchasing
any shares of Company Common Stock pursuant thereto; provided that
the Company may not terminate this Agreement pursuant to this
Section 7.1(c)(iii) if the Company is in material breach of this
Agreement.
(d) By the Operating Board of Parent:
(i) if, until July 19, 2000, during which period Parent
shall conduct its financial, operating, environmental, tax,
accounting, business, and legal due diligence review of the Company,
Parent shall have discovered any information which would result in a
breach of any of the Company's representations or warranties
contained in this Agreement; or
(ii) if, prior to the purchase of shares of Company Common
Stock pursuant to the Offer, the Board of Directors of the Company
shall have withdrawn, or modified or changed in a manner adverse to
Parent or Merger Subsidiary, its approval or recommendation of the
Offer, this Agreement, or the Merger or shall have recommended an
Acquisition Proposal or offer, or shall have executed an agreement
in principle (or similar agreement) or definitive agreement
providing for a tender offer or exchange offer for any shares of
capital stock of the Company, or a merger, consolidation or other
business combination with a person or entity other than Parent,
Merger Subsidiary or their affiliates (or the Board of Directors of
the Company resolves to do any of the foregoing); provided that
Parent may not terminate this Agreement pursuant to this Section
7.1(d)(ii) if Parent or Merger Subsidiary is in material breach of
this Agreement; or
(iii) if Parent or Merger Subsidiary, as the case may be,
shall have terminated the Offer, or the Offer shall have expired,
without Parent or Merger Subsidiary, as the case may be, purchasing
any shares of Company Common Stock thereunder; provided that Parent
may not terminate this Agreement pursuant to this Section
7.1(d)(iii) if it or Merger Subsidiary is in material breach of this
Agreement.
Section 7.2. Effect of Termination. In the event of the termination
of this Agreement as provided in Section 7.1 hereof, written notice
thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void, except for Article 8 which
shall survive such termination, and there shall be no liability on the
part of the Parent, Merger Subsidiary or the Company except (a) for fraud
or for breach of this Agreement, with damages to be limited to out-of-
pocket costs and (b) as set forth in this Section 7.2 and Section 7.3.
Section 7.3. Fees and Expenses.
(a) Except as contemplated by this Agreement, including Sections
7.3(b) and 7.3(c) hereof, all costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated
hereby shall be paid by the party incurring such expenses.
(b) If (w) the Board of Directors of the Company shall terminate this
Agreement pursuant to Section 7.1(c)(i) hereof, (x) the Operating Board of
Parent shall terminate this Agreement pursuant to Section 7.1(d)(ii)
hereof, or (y) (I) the Board of Directors of the Company shall terminate
this Agreement pursuant to Section 7.1(b)(i) or Section 7.1(c)(iii) and
prior thereto there shall have been publicly announced another Acquisition
Proposal or (II) the Operating Board of Parent shall terminate this
Agreement pursuant to Section 7.1(b)(i) or Section 7.1(d)(iii) due to a
failure to satisfy the Minimum Condition or the conditions contained in
paragraphs (h) or (i) of Annex A and Parent shall have reasonably
determined that such failure is attributable to there having been publicly
announced another Acquisition Proposal, then in any such case as described
in clause (w), (x) or (y) (each such case of termination being referred to
as a "Trigger Event"), the Company shall (not later than two business days
after such termination of this Agreement or, in the case of any
termination by the Company pursuant to Section 7.1(c)(i) hereof,
simultaneously with such termination pay to Parent an amount in cash equal
to the sum of (i) Parent's documented out-of-pocket expenses, incurred in
connection with this Agreement and the transactions contemplated hereby
not to exceed $1,000,000; and (ii) $500,000 (together, the "Termination
Fee"). Parent and the Company agree that the agreement contained in this
Section 7.3(b) is an integral part of the transactions contemplated by
this Agreement and constitutes liquidated damages and not a penalty.
(c) In the event that this Agreement is terminated pursuant to
Section 7.1(b)(i) due to a failure to satisfy the Minimum Condition or the
Operating Board of Parent shall terminate this Agreement pursuant to
Section 7.1(d)(iii) due to a failure to satisfy the Minimum Condition, the
Company shall (not later than 2 business days after such termination of
this Agreement) pay to Parent an amount equal to $1,000,000 in cash;
provided, however, that no payment shall be required pursuant to this
Section 7.3(c) if payment is made by the Company to Parent pursuant to
Section 7.3(b). Parent and the Company agree that the agreement contained
in this Section 7.3(c) is an integral part of the transactions
contemplated by this Agreement and constitutes liquidated damages and not
a penalty.
ARTICLE 8
MISCELLANEOUS
Section 8.1. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile or similar
writing) and shall be given,
if to Parent or Merger Subsidiary, to:
Kenny Industrial Services, L.L.C.
414 N. Orleans, Suite 202
Chicago, Illinois 60610
Attention: Chief Executive Officer
Facsimile No.: (312) 645-9518
with a copy to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Attention: Timothy R.M. Bryant
Facsimile No.: (312) 984-7700
if to the Company, to:
Canisco Resources, Inc.
300 Delaware Avenue, Suite 714
Wilmington, Delaware 19801
Attention: President
Facsimile No.: (302) 777-5409
with a copy to:
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
Attention: William J. Morehouse
Facsimile No.: (215) 977-2740
or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other parties. Each such notice,
request or other communication shall be effective (a) if given by
facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate facsimile confirmation is
received or (b) if given by any other means, when delivered at the address
specified in this Section.
Section 8.2. Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective
Time.
Section 8.3. Amendments; No Waivers
(a) Any provision of this Agreement (including the Exhibits and
Schedules hereto) may be amended or waived prior to the Effective Time at
any time, if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Company, Parent and Merger
Subsidiary, or in the case of a waiver, by the party against whom the
waiver is to be effective; provided that after the receipt of any such
approval, if any such amendment or waiver shall by applicable law requires
further approval of stockholders, the effectiveness of such amendment or
waiver shall be subject to the necessary stockholder approval.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive
of any rights or remedies provided by law.
Section 8.4. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided that no party
may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties
hereto except that Merger Subsidiary may transfer or assign, in whole or
from time to time in part, to one or more of its affiliates, its rights
under this Agreement, but any such transfer or assignment will not relieve
Merger Subsidiary of its obligations hereunder.
Section 8.5. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware, without
regard to principles of conflicts of law.
Section 8.6. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement, or the transactions contemplated hereby
or thereby may be brought in any federal or state court located in the
State of Delaware, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on
any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section
8.1 shall be deemed effective service of process on such party.
Section 8.7. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto.
Section 8.8. Entire Agreement. This Agreement (including the
Exhibits and Schedules) constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.
No provision of this Agreement or any other agreement contemplated hereby
is intended to confer on any Person other than the parties hereto any
rights or remedies.
Section 8.9. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 8.10. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such a determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby be consummated
as originally contemplated to the fullest extent possible.
Section 8.11. No Prejudice. This Agreement has been jointly prepared
by the parties hereto and the terms hereof shall not be construed in favor
of or against any party on account of its participation in such
preparation.
Section 8.12. Words in Singular and Plural Form; Gender. Words used
in the singular form in this Agreement shall be deemed to import the
plural, and vice versa, as the sense may require and words importing one
gender shall include the other two.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and
year first above written.
KENNY INDUSTRIAL SERVICES,
L.L.C.
By:
Name:
Title:
CANISCO ACQUISITION, INC.
By:
Name:
Title:
CANISCO RESOURCES, INC.
By:
Name:
Title:
______
Defined Terms Cross-References
Term Section
Acquisition Proposal Section 5.5
Agreement Preamble
Ancillary Agreements Section 3.2(a)
CERCLA Section
3.17(e)(i)
Certificates Section 2.2(b)
Certificate of Merger Section 1.6
Closing Section 1.7
Closing Date Section 1.7
Code Section
3.13(a)
Company Preamble
Company Ancillary Agreements Section 3.2(a)
Company Balance Sheet Section 3.8
Company Balance Sheet Date Section 3.8
Company Breakup Fee Section 7.2(a)
Company Commission Documents Section 3.7
Company Common Stock Recitals
Company Disclosure Schedules Article 3
Company Employee Plans Section 3.14
Company Permits Section 3.18
Company Stockholder Approval Section 3.2(a)
Confidentiality Agreement Section 5.3
DGCL Recitals
Dissenting Shares Section 2.3(a)
Effective Time Section 1.6
Environmental Laws Section
3.17(e)(ii)
Environmental Permits Section
3.17(e)(iii)
ERISA Section
3.14(a)
Exchange Act Section 1.1(a)
Governmental Entity Section
3.13(a)
Hazardous Materials Section
3.17(e)(iv)
HSR Act Section 3.3
Independent Directors Section 1.4(b)
Intellectual Property Section
3.22(b)
Lien Section 3.4
Material Adverse Effect Section 3.1
material adverse change Section 3.1
Material Contracts Section
3.19(a)
Merger Section 1.5
Merger Consideration Section 2.1(c)
Merger Subsidiary Preamble
Merger Subsidiary Common Stock Section 2.1
Minimum Condition Section 1.1(a)
National Priorities List Section
3.17(d)
Offer Section 1.1(a)
Offer Documents Section 1.1(b)
Offer Price Section 1.1(a)
Offer to Purchase Section 1.1(a)
Option Section 2.4
Parent Preamble
Parent Ancillary Agreements Section 3.2(a)
Parent Disclosure Schedules Article 4
Paying Agent Section 2.2(a)
Proxy Statement Section
1.10(a)(ii)
SEC Section 1.1(b)
Securities Act Section 3.3
Shares Recitals
Schedule 14D-9 Section 1.3
Schedule TO Section 1.1(b)
Special Meeting Section
1.10(a)(i)
Subsequent Offering Period Section 1.1
Subsidiary Section 3.6
Superior Proposal Section 5.5
Surviving Corporation Section 1.5(d)
Taxes Section
3.13(a)
Tax Returns Section 3.3(a)
Transactions Recitals
Trigger Event Section 7.3(b)
Voting Agreement Section 1.2
ANNEX A
CONDITIONS TO THE TENDER OFFER
Notwithstanding any other provisions of the Offer, and in addition
to (and not in limitation of) the Merger Subsidiary's rights to extend and
amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), the Merger Subsidiary shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to the Merger Subsidiary's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer),
pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and
may terminate the Offer as to any Shares not then paid for, if (i) the
Minimum Condition shall not have been satisfied; (ii) any applicable
waiting period under the HSR Act has not expired or terminated; or (iii)
at any time on or after the date of this Agreement and before the time of
payment for any such Shares, any of the following events shall occur:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity (i) seeking to prohibit or impose
any limitations on Parent's or Merger Subsidiary's ownership or operation
(or that of any of their respective Subsidiaries or affiliates) of all or
a material portion of their or the Company's businesses or assets, or to
compel Parent or Merger Subsidiary or their respective Subsidiaries and
affiliates to dispose of or hold separate any portion of the business or
assets of the Company or Parent and their respective Subsidiaries, in each
case taken as a whole, (ii) challenging the acquisition by Parent or
Merger Subsidiary of any Shares under the Offer, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by this
Agreement, or seeking to obtain from the Company, Parent or Merger
Subsidiary any damages, (iii) seeking to impose limitations on the ability
of Merger Subsidiary, or rendering Merger Subsidiary unable, to accept for
payment, pay for or purchase some or all of the Shares pursuant to the
Offer and the Merger, or (iv) seeking to impose limitations on the ability
of Merger Subsidiary or Parent effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
the Shares purchased by it on all matters properly presented to the
Company's stockholders;
(b) there shall be any statute, rule, regulation, judgment, order
or injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(iv) of paragraph (a) above;
(c) there shall have occurred and continue to exist (i) any
general suspension of trading in, or limitation on prices for, securities
on the New York Stock Exchange for a period in excess of three hours
(excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market
conditions) or (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether
or not mandatory);
(d) any of the representations and warranties of the Company set
forth in this Agreement shall not be true and correct, as if such
representations and warranties were made at the time of such determination
(except as to any such representation and warranty which speaks as of a
specific date, which must be untrue or incorrect as of such specific
date), except where the failure to be so true and correct would not,
individually or in the aggregate, reasonably be likely to have a Material
Adverse Effect;
(e) the Company shall have breached or failed to perform any
material obligation or to comply with any material agreement or covenant
of the Company to be performed or complied with by it under this
Agreement;
(f) there shall have occurred any events or changes which have had
or which are reasonably likely to have or constitute, individually or in
the aggregate, a Material Adverse Effect on the Company;
(g) the Merger Agreement shall have been terminated in accordance
with its terms;
(h) (i) any person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent or its affiliates or any
group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 promulgated under the
Exchange Act) of 10% or more of any class or series of capital stock of
the Company (including the Shares) (or any person beneficially owning 5%
or more of any class or series of capital stock of the Company (including
the Shares) on the date of this Agreement shall increase such person's
beneficial ownership by 1% or more in excess of such beneficial ownership
as reported in an SEC filing publicly filed prior to the date of this
Agreement), through the acquisition of stock, the formation of a group or
otherwise, or shall have been granted an option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of 10% or more
of any class or series of capital stock of the Company (including the
Shares); and (ii) any person or group shall have entered into a definitive
agreement or agreement in principle with the Company with respect to a
merger, consolidation or other business combination with the Company; or
(i) the Company's Board of Directors or any committee thereof (i)
shall have withdrawn, or modified or changed in a manner adverse to Parent
or Merger Subsidiary (including by amendment of the Schedule 14D-9), its
recommendation of the Offer, this Agreement, or the Merger, (ii) shall
have recommended another proposal or offer, (iii) shall have resolved to
do any of the foregoing and (iv) shall have taken a neutral position or
made no recommendation with respect to the Transactions; and
which in the sole judgment of Parent or Merger Subsidiary, in any such
case, makes it inadvisable to proceed with the Offer or with such
acceptance for payment or payments.
The foregoing conditions are for the sole benefit of Merger
Subsidiary and Parent and, subject to Section 1.1(a) of the Merger
Agreement, may be waived by Parent or Merger Subsidiary, in whole or in
part at any time and from time to time in the sole discretion of Parent or
Merger Subsidiary. The failure by Parent or Merger Subsidiary at any time
to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
