<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------------
TRIDENT INTERNATIONAL, INC.
(Name of Subject Company)
ITW ACQUISITION INC.
ILLINOIS TOOL WORKS INC.
(Bidders)
-------------------------
<TABLE>
<S> <C>
Common Stock, $.01 Par Value Per Share Common Stock 895934107
(Title of Class of Securities) (CUSIP Number of Class of Securities)
</TABLE>
-------------
Stewart S. Hudnut, Esq.
Senior Vice President, General
Counsel and Secretary
Illinois Tool Works Inc.
3600 W. Lake Avenue
Glenview, IL 60025-5811
(708) 657-4074
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Bidders)
Copy to: Charles J. McCarthy, Ltd.
Jenner & Block
One IBM Plaza
Chicago, IL 60611-7602
CALCULATION OF FILING FEE
TRANSACTION VALUATION*: $115,118,603 AMOUNT OF FILING FEE**: $23,024
- ----------------------------
* For purposes of calculating the filing fee only. This calculation is based
upon the price offered per Share and the aggregate number of (a) 6,466,692
outstanding Shares of Common Stock, $.01 par value per share (the
"Shares"), of the Subject Company, (b) 442 Shares which are subject to the
Subject Company's employee stock purchase plan, (c) 485,931 Shares subject
to employee and non-employee stock options, and (d) 23,820 Shares subject
to warrants, all as of the date of the Merger Agreement as represented
therein by the Subject Company. The calculation assumes the exercise of
all such options and warrants and the issuance of the Shares under the
stock purchase plan.
** The amount of filing fee, calculated in accordance with Rule 0-11(d) under
the Securities Exchange Act of 1934, as amended, equals 1/50 of one
percent of the Transaction Valuation.
[ ] Check box if any part of the fee is offset by Rule 0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the
previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
Amount Previously Paid: Not Applicable
Form or Registration No.: Not Applicable
Filing Party: Not Applicable
This Tender Offer Statement on Schedule 14D-1 relates to the offer by ITW
Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of Illinois Tool Works Inc.,
<PAGE> 2
a Delaware corporation ("Parent"), to purchase all of the outstanding shares of
Common Stock, $.01 par value per Share (the "Shares"), of Trident International,
Inc., a Delaware corporation (the "Company"), at a purchase price of $16.50 per
Share, net to the seller in cash, without interest thereon, less applicable
federal withholding taxes, and upon the terms and subject to the conditions set
forth in the Offer to Purchase dated January 13, 1999 (the "Offer to Purchase"),
a copy of which is attached hereto as Exhibit (a)(1), and in the related Letter
of Transmittal (which, together with the Offer to Purchase, constitute the
"Offer"), a copy of which is attached to hereto as Exhibit (a)(2).
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is Trident International, Inc., and the
address of its principal executive offices is 1114 Federal Road, Brookfield,
Connecticut 06804.
(b) The exact title of the class of equity securities being sought in the
Offer is Common Stock, $.01 par value per share, of the Company. The information
set forth in the Introduction (the "Introduction") and Section 1 ("Terms of the
Offer") of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(d) and (g) This Statement is filed by the Purchaser and Parent. The
information set forth in Section 8 ("Certain Information Concerning the
Purchaser and Parent") of the Offer to Purchase and in Schedule I ("Directors
and Executive Officers of the Purchaser and Parent") thereto is incorporated
herein by reference.
(e) and (f) During the last five years, none of the Purchaser, Parent or,
to the best knowledge of the Purchaser or Parent, any of the persons listed in
Schedule I to the Offer to Purchase, (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a
party to a civil proceeding of a judicial or administrative body and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning the Purchaser and Parent"), Section 10 ("Background of the Offer and
the Merger") and Section 12 ("Purpose of the Offer and the Merger") of the Offer
to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a)-(c) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(g) The information set forth in the Introduction, Section 10
("Background of the Offer and the Merger"), Section 11 ("The Merger Agreement"),
Section 12 ("Purpose of the Offer and the Merger") and Section 14 ("Possible
Effects of the Offer on the Market for the Shares, The Nasdaq National Market
Listing and Exchange Act Registration") of the Offer to Purchase is incorporated
herein by reference.
2
<PAGE> 3
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) and (b) None of the Purchaser, Parent or, to the best knowledge of the
Purchaser and Parent, their executive officers and directors, currently
beneficially owns any Shares of the Company, and none of the aforementioned has
effected any transaction in the Shares during the past 60 days from the date
hereof. The information set forth in the Introduction and Section 8 ("Certain
Information Concerning the Purchaser and Parent") of, and Schedule I ("Directors
and Executive Officers of the Purchaser and Parent") to, the Offer to Purchase
is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser and Parent"), Section 10 ("Background of
the Offer and the Merger") and Section 12 ("Purpose of the Offer and the
Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in the Introduction and Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The summary financial information relating to Parent set forth in Section 8
("Certain Information Concerning the Purchaser and Parent") of the Offer to
Purchase is incorporated herein by reference.
The incorporation by reference herein of the above-referenced financial
information does not constitute an admission that such information is material
to a decision by a stockholder of the Company whether to sell, tender or hold
Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION
(a) None.
(b) and (c) The information set forth in the Introduction, Section 2
("Acceptance for Payment and Payment for Shares") and Section 16 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 14 ("Possible Effects of the Offer
on the Market for the Shares, The Nasdaq National Market Listing and Exchange
Act Registration") and Section 16 ("Certain Legal Matters") of the Offer to
Purchase is incorporated herein by reference.
(e) The information set forth in Section 16 ("Certain Legal Matters") of
the Offer to Purchase is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference.
3
<PAGE> 4
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) Offer to Purchase dated January 13, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Information Agent to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published on January 13, 1999.
(a)(8) Press Release issued by Parent on January 13, 1999.
(b)(1) Second Amended and Restated Credit Agreement among Illinois
Tool Works Inc., The First National Bank of Chicago, as
Agent, and other financial institutions who are signatories
to the Credit Agreement dated as of September 30, 1998.
(b)(2) Line of credit letter agreement dated November 1, 1998
between The First National Bank of Chicago and Illinois Tool
Works Inc., and letter amendment dated December 28, 1998.
(c) Agreement and Plan of Merger, dated as of January 6, 1999,
by and among Trident International, Inc., Illinois Tool
Works Inc. and ITW Acquisition Inc. (Schedules to the
agreement have been omitted from this filing and will be
furnished to the Securities and Exchange Commission upon
request.)
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
ITW Acquisition Inc.
By: /s/ HUGH J. ZENTMYER
------------------------------------
Name: Hugh J. Zentmyer
----------------------------------
Title: President
-----------------------------------
Illinois Tool Works Inc.
By: /s/ HUGH J. ZENTMYER
------------------------------------
Name: Hugh J. Zentmyer
----------------------------------
Title: Executive Vice President
-----------------------------------
Date: January 13, 1999
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
(a)(1) Offer to Purchase dated January 13, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from the Information Agent to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published on January 13, 1999.
(a)(8) Press Release issued by Parent on January 13, 1999.
(b)(1) Second Amended and Restated Credit Agreement among Illinois
Tool Works Inc., The First National Bank of Chicago, as
Agent, and other financial institutions who are signatories
to the Credit Agreement dated as of September 30, 1998, as
amended.
(b)(2) Line of credit agreement dated November 1, 1998 between The
First National Bank of Chicago and Illinois Tool Works Inc.,
and letter amendment dated December 28, 1998.
(c>) Agreement and Plan of Merger, dated as of January 6, 1999,
by and among Trident International, Inc., Illinois Tool
Works Inc. and ITW Acquisition Inc. (Schedules to the
agreement have been omitted from this filing and will be
furnished to the Securities and Exchange Commission upon
request.)
</TABLE>
5
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
TRIDENT INTERNATIONAL, INC.
at
$16.50 PER SHARE NET
by
ITW ACQUISITION INC.
a wholly owned subsidiary of
ILLINOIS TOOL WORKS INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, FEBRUARY 10, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS: (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE (THE "SHARES"), OF TRIDENT
INTERNATIONAL, INC. (THE "COMPANY") WHICH CONSTITUTES AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES ON A FULLY DILUTED BASIS (ASSUMING THE EXERCISE OF ALL
OUTSTANDING OPTIONS AND WARRANTS) (THE "MINIMUM SHARE CONDITION"); AND (2) THE
EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS CONTAINED
IN THE OFFER TO PURCHASE. SEE SECTIONS 1 AND 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF
THE OFFER AND THE MERGER, ARE ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS
OF, THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT THE STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES.
-------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of the holder's
Shares should either
(i) complete and sign the Letter of Transmittal (or facsimile
thereof) in accordance with the instructions in the Letter of
Transmittal and mail or deliver the Letter of Transmittal and any other
required documents to First Chicago Trust Company of New York (the
"Depositary") and either deliver the certificates for such Shares to the
Depositary along with the Letter of Transmittal or deliver such Shares
pursuant to the procedure for book-entry transfer set forth in Section
3, or
(ii) request the stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction on behalf of
the stockholder. A stockholder whose Shares are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or
other nominee if the stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available, or who is unable to deliver all documents
required by the Letter of Transmittal to the Depositary prior to the expiration
of the Offer, or who cannot complete the procedure for book-entry transfer on a
timely basis, may tender such Shares by following the procedure for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase and the Letter of
Transmittal may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
JANUARY 13, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ -1-
1. Terms of the Offer...................................... -3-
2. Acceptance for Payment and Payment for Shares........... -4-
3. Procedures for Tendering Shares......................... -5-
4. Withdrawal Rights....................................... -7-
5. Certain Federal Income Tax Consequences................. -8-
6. Price Range of Shares; Dividends........................ -9-
7. Certain Information Concerning the Company.............. -9-
8. Certain Information Concerning the Purchaser and
Parent.................................................... -13-
9. Source and Amount of Funds.............................. -15-
10. Background of the Offer and the Merger.................. -15-
11. The Merger Agreement.................................... -17-
12. Purpose of the Offer and the Merger..................... -26-
13. Dividends and Distributions............................. -27-
14. Possible Effects of the Offer on the Market for the
Shares, The Nasdaq National Market Listing and Exchange
Act Registration........................................ -28-
15. Conditions of the Offer................................. -29-
16. Certain Legal Matters................................... -31-
17. Fees and Expenses....................................... -32-
18. Miscellaneous........................................... -33-
</TABLE>
Schedule I -- Directors and Executive Officers of the Purchaser and Parent
<PAGE> 3
To the Stockholders of Trident International, Inc.:
INTRODUCTION
ITW Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Illinois Tool Works Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of Common Stock, par value $.01
per share (the "Shares"), of Trident International, Inc., a Delaware corporation
(the "Company"), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which together, as
amended from time to time, constitute the "Offer").
Your attention is directed to the following:
- THE TENDER PRICE IS $16.50 per share, net to the tendering stockholder.
(This price is referred to as the "Per Share Amount.")
You will not pay brokerage commissions or, except as described in
Instruction 6 to the Letter of Transmittal, transfer taxes.
No interest will be paid, but, in certain cases, federal income taxes may
be withheld as explained in Section 3, "Procedures for Tendering
Shares -- Backup Federal Income Tax Withholding and Substitute Form W-9"
and in Instruction 6 to the Letter of Transmittal.
- THE OFFER EXPIRES AT 12 midnight, New York City time, on Wednesday,
February 10, 1999, unless extended. (See Section 1, "Terms of the
Offer.")
- THE PROCEDURES FOR TENDERING YOUR SHARES are explained in Section 3 and
cover the following methods of delivery:
(i) Delivery of your stock certificates to the Depositary;
(ii) Book-entry delivery by a financial institution; and
(iii) Guaranteed delivery by certain financial institutions
(including most banks, savings and loan associations and brokerage
houses.)
A completed and signed Letter of Transmittal (or an Agent's Message (as
defined) in connection with a book-entry delivery) is required. (See
Section 3, "Procedures for Tendering Shares," and Instructions 1, 5 and
7 of the Letter of Transmittal.)
- YOU MAY WITHDRAW your tendered Shares at any time before expiration of
the Offer and, unless your Shares are accepted for payment, they may be
withdrawn at any time after March 13, 1999. (See Section 4, "Withdrawal
Rights.")
- FOR FEDERAL INCOME TAX PURPOSES, the sale of your Shares in the Offer
will be a taxable event. (See Section 5, "Certain Federal Income Tax
Consequences.")
- THE OFFER IS CONDITIONED upon, among other things,
(i) there being validly tendered and not properly withdrawn before
the expiration of the Offer, a majority of the issued and outstanding
Shares (determined on a fully diluted basis assuming the exercise of all
outstanding options and warrants); this condition is called the "Minimum
Share Condition" and based on information from the Company the number of
Shares needed to satisfy this condition is 3,488,443; and
(ii) the expiration or termination of all applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"). (See Section 1, "Terms of the Offer" and
Section 15, "Conditions of the Offer.")
- THE DEPOSITARY for delivery of stock certificates, the Letter of
Transmittal and any other required documents before expiration of the
Offer is First Chicago Trust Company of New
<PAGE> 4
York. The addresses and telephone numbers for the Depositary are on the
back cover of this Offer to Purchase.
- THE INFORMATION AGENT is MacKenzie Partners, Inc. Questions and requests
for assistance, or requests for additional copies of the Offer to
Purchase and the Letter of Transmittal may be directed to the Information
Agent at the following address and telephone numbers:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (call collect)
or
Call Toll Free: 1-800-322-2885
Company Board Recommendation. The Board of Directors of the Company (the
"Company Board") has unanimously determined that the Merger Agreement (defined
below) and the transactions contemplated thereby, including the Offer and the
Merger (defined below), are advisable and fair to, and in the best interests of,
the stockholders of the Company and recommends that all holders of the Shares
accept the Offer and tender their Shares to the Purchaser.
Merger Agreement. The Offer is being made pursuant to an Agreement and Plan
of Merger, dated as of January 6, 1999, among Parent, the Purchaser and the
Company (the "Merger Agreement"). The Merger Agreement provides, among other
things, for the making of the Offer by the Purchaser, and further provides that,
following the completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement and applicable Delaware law, the Purchaser
will be merged into the Company (the "Merger"). Upon the Merger, the Company
will become a subsidiary of Parent. If the Purchaser acquires at least a
majority of the outstanding Shares (on a fully diluted basis) in the Offer, it
will be able to effect the Merger without the affirmative vote of any other
stockholder of the Company.
Fairness Opinion. The Company Board has received the written opinion of The
Robinson-Humphrey Company, LLC ("Robinson-Humphrey"), financial advisor to the
Company, that the consideration to be received by the stockholders of the
Company (other than the holders of Shares that are affiliates of Parent)
pursuant to the Merger Agreement is fair to such stockholders from a financial
point of view. A copy of the opinion of Robinson-Humphrey is attached to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9") which is being distributed to the stockholders of the Company. The
Robinson-Humphrey opinion should be read in its entirety for the assumptions
made, the procedures followed, the matters considered and the limits of the
review made by Robinson-Humphrey in connection with such opinion. The
Robinson-Humphrey opinion was prepared for the Company Board and does not
constitute a recommendation to any stockholder as to whether to tender shares
pursuant to the Offer. Robinson-Humphrey was not retained as an advisor or agent
to the Company's stockholders.
Company Directors and Officers. The Company has advised the Purchaser that,
to the knowledge of the Company, all the directors and officers of the Company
intend to tender their Shares pursuant to the Offer.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
2
<PAGE> 5
THE TENDER OFFER
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any extension or amendment to the Offer), the Purchaser will accept for
payment and pay for all Shares validly tendered on or before the Expiration Date
(as hereinafter defined) and not withdrawn in accordance with Section 4 of this
Offer to Purchase. The term "Expiration Date" means 12:00 Midnight, New York
City time, on Wednesday, February 10, 1999, unless and until the Purchaser, in
its sole discretion, shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by the Purchaser, shall expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Share Condition and the expiration or termination of all applicable
waiting periods under the HSR Act. See Section 15, which sets forth in full the
conditions to the Offer (the "Offer Conditions"). Subject to the provisions of
the Merger Agreement and the applicable rules and regulations of the Securities
and Exchange Commission (the "Commission"), the Purchaser reserves the right, in
its sole discretion, to waive any or all conditions to the Offer and to make any
other changes in the terms and conditions of the Offer. Subject to the
provisions of the Merger Agreement and the applicable rules and regulations of
the Commission, if by the Expiration Date any or all of such conditions to the
Offer have not been satisfied, the Purchaser reserves the right (but shall not
be obligated) to (i) terminate the Offer and return all tendered Shares to
tendering stockholders, (ii) waive such unsatisfied conditions and purchase all
Shares validly tendered or (iii) extend the Offer and, subject to the terms of
the Offer (including the rights of stockholders to withdraw their Shares),
retain the Shares which have been tendered, until the termination of the Offer,
as extended.
The Merger Agreement provides that, without the consent of the Company,
neither Parent nor the Purchaser will
(i) amend the Offer to decrease the Per Share Amount or change the
form of consideration to be paid in the Offer or
(ii) except as required by law or any rule, regulation or
interpretation in the opinion of counsel to Parent, or required by any
position of the Commission or the staff thereof, extend the time of
expiration of the Offer; provided that if the Offer Conditions have not
been satisfied, the Purchaser, in its discretion, may extend the Offer,
from time to time for up to an aggregate of 10 business days; also, if
immediately before the expiration of the Offer (as it may be extended) the
Shares tendered and not withdrawn are less than 90% of the Shares then
outstanding (on a fully diluted basis), the Purchaser, in its discretion,
may extend the Offer even if at that time all Offer Conditions are then
satisfied, but the extension, when added to any prior discretionary
extensions, may not exceed an aggregate of 10 business days.
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement thereof, such announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date. Without
limiting the manner in which the Purchaser may choose to make any public
announcement, except as provided by applicable law (including Rules 14d-4(c) and
14d-6(d) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which require that material changes be promptly disseminated to holders
of the Shares), the Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service by such time.
If the Purchaser makes a material change in the terms of the Offer, or if
it waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the
3
<PAGE> 6
terms of the Offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality, of the changes. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought, a minimum
10 business day period from the date of such change is generally required to
allow for adequate dissemination to stockholders. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment and will pay for all Shares validly tendered
and not withdrawn on or before the Expiration Date as soon as practicable after
the later of the Expiration Date or the satisfaction or waiver of the conditions
set forth in Section 15; provided that the Purchaser may extend the Offer for a
period not to exceed 10 business days if the Shares tendered and not withdrawn
are less than 90% of the Shares outstanding (on a fully diluted basis) even if
all conditions have been satisfied or waived. The Purchaser expressly reserves
the right to delay acceptance of Shares for payment in order to comply in whole
or in part with any applicable law. Any such delays will be effected in
compliance with Rule 14e-1 under the Exchange Act. All conditions of the Offer
must either be satisfied or waived prior to the acceptance of Shares and waiver
of a material condition may require dissemination to stockholders of information
concerning the waiver. For a description of the Purchaser's right to terminate
the Offer and not accept for payment or pay for Shares or to delay acceptance
for payment or payment for Shares, see Sections 1 and 15.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates
representing such Shares ("Share Certificates") or a timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility (defined below), a properly completed and duly
executed Letter of Transmittal (or an originally signed facsimile copy thereof),
and any other required documents. For a description of the procedures for
tendering Shares, see Section 3.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn if, as and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting payment to stockholders whose Shares have been accepted for
payment.
If, for any reason whatsoever, acceptance for payment of any Shares
tendered pursuant to the Offer is delayed, or the Purchaser is unable to accept
for payment Shares tendered pursuant to the Offer, then, without prejudice to
the Purchaser's rights set forth herein, the Depositary may, nevertheless, on
behalf of the Purchaser and subject to Rule 14e-I under the Exchange Act, retain
tendered Shares and such Shares may not be withdrawn except to the extent the
tendering stockholder is entitled to withdrawal rights. See Section 4.
4
<PAGE> 7
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
PAYMENT.
If any tendered Shares are not purchased pursuant to the Offer for any
reason or if Share Certificates are submitted for more Shares than are tendered,
Share Certificates for Shares not purchased or tendered will be returned,
without expense to the tendering stockholder (or, in the case of Shares tendered
by book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, such Shares will be
credited to an account maintained at the Book-Entry Transfer Facility), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
3. PROCEDURES FOR TENDERING SHARES. Except as set forth below, in order for
Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal
(or an originally signed facsimile copy thereof), properly completed and duly
executed, with any required signature guarantees or an Agent's Message (defined
below) in connection with a book-entry delivery of Shares, and any other
documents required, must be received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase on or before the
Expiration Date and either (i) the certificates for tendered Shares must be
received by the Depositary or such Shares must be tendered pursuant to the
procedure for book-entry transfer described below and a confirmation of the
book-entry transfer ("Book-Entry Confirmation") must be received by the
Depositary, in each case on or before the Expiration Date or (ii) the tendering
holder must comply with the guaranteed delivery procedure described below. If
Share Certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or an originally signed
facsimile copy thereof) must accompany each such delivery.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
Book-Entry Transfers. The Depositary will establish an account with respect
to the Shares at the Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
system of the Book-Entry Transfer Facility may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account at the Book-Entry Transfer Facility in accordance with
the Book-Entry Transfer Facility's procedures for such transfer. Although
delivery of Shares may be effected through book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility, the Letter of
Transmittal (or an originally signed facsimile copy thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer, and any other required
documents, must, in any case, be transmitted to and received by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase on
or before the Expiration Date, or the tendering stockholder must comply with the
guaranteed delivery procedure described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY BY ITSELF DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution (including
most banks, savings and loan associations and brokerage houses) which is a
member of a recognized Medallion Program approved by The Securities Transfer
Association Inc., including the Securities Transfer Agents Medallion Program
(STAMP), (any such financial institution an "Eligible Institution"). Signatures
on a Letter of Transmittal need not be guaranteed (a) if the Letter of
Transmittal is signed by the
5
<PAGE> 8
registered holder of the Shares tendered and such holder has not completed the
box entitled "Special Payment Instructions" on the Letter of Transmittal or (b)
if such Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available, or such stockholder is unable to deliver all documents required by
the Letter of Transmittal to the Depositary on or prior to the Expiration Date
or the procedure for delivery by book-entry transfer cannot be completed on a
timely basis, such Shares may nevertheless be tendered if all the following
conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary as provided below prior to the Expiration Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation) for all
tendered Shares, in proper form for transfer, together with a Letter of
Transmittal (or an originally signed facsimile copy thereof), properly
completed and duly executed, with any required signature guarantees (or in
the case of a book-entry transfer, an Agent's Message) and any other
documents required by the Letter of Transmittal, are received by the
Depositary within three Nasdaq National Market ("NNM") trading days after
the date of execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmations with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or an originally signed facsimile copy thereof),
together with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message), and any other documents required. Accordingly,
payment might not be made to all tendering stockholders at the same time and
will depend upon when Share Certificates or Book-Entry Confirmations of such
Shares are received into the Depositary's account at the Book-Entry Transfer
Facility.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Appointment as Proxy. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Purchaser
as such stockholder's attorneys-in-fact and proxies, with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser (and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after January 6, 1999, which is the date of the Merger
Agreement). All such proxies are coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts such Shares for payment and deposits the purchase price
thereof with the Depositary pursuant to the Offer. Upon such acceptance for
payment, all prior proxies or consents given by such stockholder with respect to
such Shares (and such other Shares and securities) will, without further action,
be revoked, and no subsequent powers of attorney and proxies may be
6
<PAGE> 9
given, nor any subsequent written consents executed, by such stockholder and, if
given or executed, will not be effective. The designees of the Purchaser will,
with respect to such Shares and other securities, be empowered, among other
things, to exercise all voting and other rights of such stockholder as they in
their sole discretion may deem proper at any annual, special or adjourned
meeting of the Company's stockholders or any adjournment or postponement
thereof, by written consent in lieu of any such meeting or otherwise. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's payment of such Shares, the
Purchaser is able to exercise full voting rights with respect to such Shares and
other securities, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any Shares
tendered pursuant to any of the procedures described above will be determined in
the sole discretion of the Purchaser, whose determination will be final and
binding. The Purchaser reserves the absolute right to reject any or all tenders
of Shares determined by it not to be in proper form or the acceptance for
payment of which may, in the opinion of the Purchaser's counsel, be unlawful.
The Purchaser also reserves the absolute right to waive any defect or
irregularity in the tender of Shares of any particular stockholder whether or
not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been properly made
until all defects and irregularities relating thereto have been cured or waived.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the Instructions thereto) will be final
and binding. None of the Purchaser, the Depositary, the Information Agent or any
other person is or will be under any duty to give notification of any defects or
irregularities in tenders or will incur any liability for failure to give any
such notification.
Backup Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the payor of such
cash with such stockholder's correct taxpayer identification number ("TIN") on a
substitute Form W-9 and certify, under penalties of perjury, that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%. All stockholders
surrendering Shares pursuant to the Offer should complete and sign the
substitute Form W-9 included in the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is proved in a manner satisfactory to the
Depositary). Certain stockholders (including among others all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 of the
Letter of Transmittal.
Other Requirements. The acceptance for payment by the Purchaser of tenders
of Shares pursuant to any one of the procedures described above will constitute
a binding agreement between the tendering stockholder and the Purchaser upon the
terms and subject to the conditions of the Offer, including the tendering
stockholder's representation and warranty that such stockholder is the holder of
the Shares being tendered within the meaning of, and that the tender of the
Shares complies with, Rule 14e-4 under the Exchange Act.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer may be
withdrawn at any time on or before the Expiration Date. Thereafter, such tenders
are irrevocable, except that they may be withdrawn after March 13, 1999 unless
theretofore accepted for payment as provided in this Offer to Purchase. If the
Purchaser extends the Offer, is delayed in its acceptance for payment of Shares
or is unable to purchase Shares validly tendered pursuant to the Offer for any
reason, then,
7
<PAGE> 10
without prejudice to the Purchaser's rights under the Offer, the Depositary may,
on behalf of the Purchaser, retain tendered Shares, and such Shares may not be
withdrawn except as otherwise described in this Section 4.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such notice
of withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn, if different from that of the person who
tendered such Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the name of the registered holder (if different from the tendering
stockholder), the serial numbers shown on the particular certificates evidencing
Shares to be withdrawn and a signed notice of withdrawal must also be submitted
to the Depositary, and the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Shares tendered for
the account of an Eligible Institution. If Shares have been delivered pursuant
to the procedures for book-entry transfer as set forth in Section 3, any notice
of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determinations will be final and binding. The Purchaser
reserves the absolute right to reject any and all withdrawals determined by it
not to be in proper form. The Purchaser also reserves the absolute right to
waive any defect or irregularity in any withdrawal of Shares of any particular
stockholder whether or not similar defects or irregularities are waived in the
case of other stockholders. None of the Purchaser, Parent, any of their
affiliates or assigns, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or will incur any liability for failure to give any
such notification.
Withdrawals may not be rescinded, and any Shares properly withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer. However,
withdrawn Shares may be re-tendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The summary of tax consequences
set forth below is for general information only and is based on the law as
currently in effect. The tax treatment of each stockholder will depend in part
upon such stockholder's particular situation.
Sales of Shares by stockholders of the Company pursuant to the Offer, as
well as the receipt of cash by stockholders pursuant to the Merger or the
exercise of dissenter's rights in accordance with Section 262 of the Delaware
General Corporation Law ("DGCL"), will be taxable transactions for federal
income tax purposes, and may also be taxable transactions for state, local,
foreign and other tax purposes.
In general, a stockholder who sells Shares pursuant to the Offer or
receives cash pursuant to the Merger or who exercises dissenters' rights under
the DGCL will recognize gain or loss for federal income tax purposes equal to
the difference between the holder's adjusted tax basis in the Shares transferred
pursuant to the Offer, the Merger or the exercise of dissenter's rights and the
amount of cash received. For federal income tax purposes, in the event Shares
are held by a stockholder as a capital asset, such gain or loss will be
long-term capital gain or loss if such Shares have been held for more than one
year. Otherwise, gain or loss on Shares held as a capital asset at the time of
such sale will be short-term capital gain or loss. It should be noted that the
Internal Revenue Code contains certain limitations on the use of capital losses.
Gain or loss will be calculated separately for each block of Shares tendered and
purchased pursuant to the Offer or converted in the Merger.
8
<PAGE> 11
The foregoing may not be applicable to a stockholder who acquired Shares
pursuant to the exercise of employee stock options or otherwise as compensation,
or to an individual stockholder who is not a citizen or resident of the United
States or to other categories of stockholders subject to special treatment under
federal income tax laws, such as dealers in securities, banks, insurance
companies and tax-exempt entities. Moreover, the tax treatment applicable to the
transactions described herein will vary depending on whether the subject
stockholder is an individual, regular corporation, "S" corporation, partnership,
estate, trust or otherwise.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE OFFER AND THE MERGER,
INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND STATE,
LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are traded on The Nasdaq
National Market ("NNM") under the symbol "TRDT". The following table sets forth,
for the calendar periods indicated, the high and low sales prices per Shares on
the NNM, based on the Company's Form 10-K reports filed with the Commission or
in published financial sources. According to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1998, the Company has not paid any
dividends on its common stock.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1997:
First Quarter............................................. $24.00 $14.88
Second Quarter............................................ 24.75 17.25
Third Quarter............................................. 18.00 14.13
Fourth Quarter............................................ 17.38 11.75
1998:
First Quarter............................................. $16.75 $12.13
Second Quarter............................................ 18.38 14.50
Third Quarter............................................. 17.50 8.38
Fourth Quarter............................................ 11.25 8.00
1999:
First Quarter (through January 12, 1999).................. 16.88 8.75
</TABLE>
On January 6, 1999 ,the last full day of trading prior to the first public
announcement of the Offer, the closing sale price per Share reported on the NNM
was $9.25. On January 12, 1999, the last full trading day before commencement of
the Offer, the closing sale price per Share reported on the NNM was $16.19.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or based upon publicly available documents and
records on file with the Commission and other public sources. The summary
information concerning the Company in this Section 7 and elsewhere in this Offer
to Purchase is derived from the Company's Annual Report on Form 10-K for its
fiscal year ended September 30, 1998 (the "Company's 1998 Annual Report") and
other publicly available information. The summary information set forth below is
qualified in its entirety by reference to such reports (which may be obtained
and inspected as described below) and should be considered in conjunction with
the more comprehensive financial and other information in such reports and other
publicly available reports and documents filed by the Company with the
Commission and other publicly available information. Although the Purchaser and
Parent do not have any knowledge that would indicate that any statements
contained herein based upon such reports are untrue, neither the Purchaser nor
Parent assumes any responsibility for the accuracy or completeness of the
information contained therein, or for any failure by the Company to disclose
events that may have occurred
9
<PAGE> 12
and may affect the significance or accuracy of any such information but which
are unknown to the Purchaser and Parent.
General. The Company is a Delaware corporation with its principal executive
offices located at 1114 Federal Road, Brookfield, Connecticut 06804. The
Company, through a predecessor, was founded in 1989 and completed its initial
public offering in February 1996. The Company designs, manufactures and markets
piezoelectric impulse ink jet subsystems including printheads, inks and other
consumables, and related components for the industrial market. The Company's
proprietary products are used for a variety of printing applications which
require high speed, good print quality, durable equipment and the ability to
change the printed text or pattern frequently. The Company's printing subsystems
are marketed worldwide, primarily through original equipment manufacturer (OEM)
customers that integrate them into computer-controlled, application-specific
products which are then sold to end-users. The Company's contracts with its OEM
customers also provide for ongoing sales by the Company of consumables,
consisting principally of inks and printing subsystem components. The largest
application in which the Company's products are used is carton coding, which
involves printing directly onto shipping cartons. Other current industrial
applications for the Company's products include check coding, addressing and
business forms imprinting, postal bar coding and stamp cancellation and garment
pattern plotting. The Company also has products for use in printing date and
batch codes onto items and primary packages.
Financial Information. Set forth below is certain summary financial
information for the Company with respect to the last three fiscal years, which
is excerpted or derived from the Company's audited financial statements
contained in the Company's 1998 Annual Report. More comprehensive financial
information is included in reports and other documents filed by the Company with
the Commission, and the financial information that follows is qualified in its
entirety by reference to such reports and other documents and all the financial
information and related notes contained therein.
10
<PAGE> 13
TRIDENT INTERNATIONAL, INC.
AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
---------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales................................................... $ 25,925 $ 30,283 $ 32,832
COST OF SALES............................................... 9,392 10,818 11,914
--------- --------- ---------
Gross profit.............................................. 16,533 19,465 20,918
--------- --------- ---------
OPERATING EXPENSES:
Marketing and selling..................................... 1,415 2,358 2,865
Research and development.................................. 2,326 3,027 4,142
Write-off of purchased in-process research and
development............................................. 3,052 -- --
General and administrative................................ 2,405 2,134 2,973
Amortization of excess of purchase price over the fair
value of net assets acquired and other intangibles...... 800 802 751
Amortization of deferred compensation..................... 443 -- --
--------- --------- ---------
Total operating expenses................................ 10,441 8,321 10,731
--------- --------- ---------
Operating income........................................ 6,092 11,144 10,187
OTHER (INCOME) EXPENSE:
Interest (income) expense, net............................ 241 (1,072) (1,138)
Other expense, net........................................ -- -- 207
Redeemable warrant interest charge........................ 1,710 -- --
--------- --------- ---------
Income before income taxes and extraordinary item....... 4,141 12,216 11,118
PROVISION FOR INCOME TAXES.................................. 2,752 4,703 4,052
--------- --------- ---------
Net income before extraordinary item...................... 1,389 7,513 7,066
EXTRAORDINARY ITEM, net of income tax benefit of $1,253..... (1,803) -- --
--------- --------- ---------
NET INCOME (LOSS)........................................... (414) 7,513 7,066
INCREASE IN REDEMPTION VALUE OF PREFERRED
STOCK................................................... (83) -- --
--------- --------- ---------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS......... $ (497) $ 7,513 $ 7,066
========= ========= =========
BASIC EARNINGS (LOSS) PER COMMON SHARE:
Net income before extraordinary item...................... $ 0.28 $ 1.07 $ 1.06
--------- --------- ---------
Extraordinary item, net of tax............................ (0.38) -- --
--------- --------- ---------
Net income (loss)......................................... $ (0.10) $ 1.07 $ 1.06
========= ========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING FOR BASIC
EARNINGS PER SHARE........................................ 4,770,743 7,039,157 6,636,313
========= ========= =========
DILUTED EARNINGS (LOSS) PER COMMON SHARE:
Net income before extraordinary item...................... $ 0.26 $ 1.05 $ 1.05
Extraordinary item, net of tax............................ (0.36) -- --
--------- --------- ---------
Net income (loss)......................................... $ (0.10) $ 1.05 $ 1.05
========= ========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING FOR DILUTED
EARNINGS PER SHARE........................................ 5,030,112 7,151,722 6,742,586
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
-----------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
BALANCE SHEET DATA:
Current Assets.............................................. $23,425 $26,536 $29,354
Current Liabilities......................................... 2,369 3,018 2,751
Working Capital............................................. 21,056 23,518 26,603
Total Assets................................................ 38,331 40,907 43,340
Stockholders' Equity........................................ 35,962 37,889 40,589
</TABLE>
11
<PAGE> 14
Other Financial Information. During the course of the discussions between
Parent and the Company that led to the execution of the Merger Agreement, the
Company provided Parent or its representatives with certain information about
the Company which is not publicly available. The information provided included
financial projections for the Company as an independent company. The following
is a summary of selected projected financial information provided to Parent by
the Company and, with respect to fiscal year ended September 30, 1998, has not
been updated to reflect actual results:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
SEPTEMBER 30
PROJECTED
-----------------------------
1998 1999 2000
---- ---- ----
<S> <C> <C> <C>
Net Sales................................................... $32,740 $41,089 $54,243
Cost of Sales............................................... 12,001 14,640 20,036
------- ------- -------
Gross Profit................................................ 20,739 26,449 34,207
Pretax Income............................................... 11,242 16,565 21,984
Net Income.................................................. $ 7,106 $10,602 $14,070
Net Income per share........................................ $1.05 $1.57 $2.06
</TABLE>
The Company has advised the Purchaser and Parent that it does not as a
matter of course make public any projections as to future performance or
earnings, and the projections set forth above are included in this Offer to
Purchase only because the information was provided to Parent. The projections
were not prepared with a view to public disclosure or compliance with the
published guidelines of the Commission or the guidelines established by the
American Institute of Certified Public Accountants regarding projections or
forecasts. The Company has advised Parent and the Purchaser that the projections
were prepared solely for internal use and management decisions and are
subjective in many respects. Thus, the Company projections are susceptible to
various interpretations and periodic revision based on actual experience and
business developments. Neither the Company, Parent nor the Purchaser intends to
update, revise or correct such projections.
The projections were based on a number of assumptions some of which are
beyond the control of the Company, the Purchaser or Parent and some of which
inevitably will prove to be incorrect. The projections were developed by the
Company's management and were predicated on management's assumptions with
respect to certain macroeconomic conditions and operating expenses for fiscal
years 1998, 1999 and 2000, without giving effect to the Offer, the Merger or to
any action to be taken by Parent or the Company, as the surviving corporation of
the Merger, after the Effective Time. Such assumptions include, but are not
limited to: (i) significant increases in sales over the periods covered by the
projections, (ii) operating expenses as a percentage of sales decreasing over
the period covered by the projections, (iii) the Company's gross profit margin
remaining substantially consistent over the periods covered by the projections,
and (iv) an effective tax rate of approximately 36% through fiscal 2000.
Although the Company has advised Parent and the Purchaser that it believes the
assumptions used in preparing this information were reasonable when made, no
prediction can be made as to whether such assumptions were or will be accurate.
Accordingly, there can be no assurance, and no representation or warranty is
made, that actual results will not vary materially from those described above.
The foregoing information is forward-looking in nature and inherently
subject to significant uncertainties and contingencies, many of which are beyond
the control of the Company, including industry performance, general business and
economic conditions, customer requirements, competition and other matters. The
inclusion of this information should not be regarded as an indication that
Parent, the Purchaser, the Company or anyone who received this information then
considered, or now considers, it a reliable prediction of future events, and
this information should not be relied on as such. Neither Parent nor the
Purchaser assumes any responsibility for the validity, reasonableness,
12
<PAGE> 15
accuracy or completeness of the projections, and the Company has made no
representation to Parent or the Purchaser regarding the projections described
above.
The Company is subject to the reporting requirements of the Exchange Act
and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning the Company's operating results, financial condition, directors and
officers, their remuneration, options granted to them, the principal holders of
the Company's securities, any material interest of such persons in transactions
with the Company and other matters is required to be disclosed in proxy
statements and annual reports distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
should be available for inspection at the public reference facilities maintained
by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. The material filed by the Company should also be available for inspection
and copying at prescribed rates at the regional offices of the Commission
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Such reports, proxy statements and other information may also be obtained at the
Web site that the Commission maintains at http://www.sec.gov. Copies of such
material may also be obtained by mail, upon payment of the Commission's
prescribed fees, from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Such information should also be
available for inspection at the offices of the National Association of
Securities Dealers, Reports Section, 1735 K Street, N.W., Washington, DC 20006.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The Purchaser
is a newly formed Delaware corporation organized for the sole purpose of
effecting the Offer and the Merger. The Purchaser will not have any assets or
liabilities (other than those arising in connection with the Offer and the
Merger) or engage in any activities other than those incident to its formation
and capitalization, the Offer and the Merger and the financing thereof. All the
issued and outstanding shares of common stock of the Purchaser are owned by
Parent. For certain information concerning the executive officers and directors
of the Purchaser, see Schedule I to this Offer to Purchase. The Purchaser has no
subsidiaries.
Parent is a Delaware corporation, with its principal executive offices (as
well as those of the Purchaser) located at 3600 West Lake Avenue, Glenview,
Illinois 60025.
Parent develops and manufactures a wide range of products and systems
designed to reduce its customers' manufacturing and assembly costs and improve
product quality. Parent's products include engineered components and industrial
systems and consumables. The engineered components include short lead-time
components and fasteners primarily for automotive, construction and general
industrial application, and specialty products such as adhesives and
static-control equipment. The industrial system and consumables products include
longer lead-time machinery and related consumables primarily for food and
beverage, construction, automotive and general industrial markets, and specialty
products for applications such as industrial spray coating and quality
measurement. In addition, Parent makes investments that utilize part of its cash
flow. For certain information concerning the executive officers and directors of
Parent, see Schedule I to this Offer to Purchase.
Parent is subject to the reporting requirements of the Exchange Act and, in
accordance therewith, is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
Parent's operating results, financial condition, directors and officers, their
remuneration, options granted to them, the principal holders of Parent
securities, any material interest of such persons in transactions with Parent
and other matters is required to be disclosed in proxy statements and annual
reports distributed to the Parent stockholders and filed with the Commission.
Such reports, proxy statements and other information may be examined at, and
copies
13
<PAGE> 16
may be obtained from, the Commission in the same manner as set forth with
respect to the Company in Section 7. In addition, such information should also
be available for inspection at The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
Set forth below is certain summary financial information for Parent and its
subsidiaries with respect to the last three years, which is excerpted or derived
from Parent's audited financial statements and certain unaudited summary
financial information for Parent and its subsidiaries with respect to the nine
months ended September 30, 1997 and 1998. More comprehensive financial
information is included in such reports and other documents filed by Parent with
the Commission, and the financial information that follows is qualified in its
entirety by reference to such reports and other documents and all the financial
information and related notes contained therein.
ILLINOIS TOOL WORKS INC.
AND SUBSIDIARIES
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 SEPTEMBER 30
-------------------------------------- ------------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues........... $4,178,080 $4,996,681 $5,220,433 $3,871,530 $4,138,664
Operating Income............. 645,981 800,586 927,223 678,015 782,601
Net income................... 387,608 486,315 586,951 426,779 488,507
Net income per share:
Basic...................... $1.64 $1.96 $2.35 $1.71 $1.96
Diluted.................... $1.63 $1.95 $2.33 $1.70 $1.94
BALANCE SHEET DATA:
Working capital.............. $ 681,558 $ 481,767 $ 700,762 $ 654,290 $ 658,633
Total assets................. 3,591,318 4,806,162 5,394,756 4,889,141 5,966,385
Total debt................... 791,745 1,209,372 1,152,606 1,025,147 1,354,129
Stockholders' equity......... 1,924,237 2,396,025 2,806,454 2,665,975 3,160,077
</TABLE>
Except as set forth in the Introduction and Sections 10, 11 and 12 of this
Offer to Purchase: (i) none of Parent, the Purchaser or, to their best
knowledge, any of the persons listed in Schedule I hereto or any associate or
majority-owned subsidiary of any of the foregoing or any pension, profit-
sharing or similar plan of Parent or the Purchaser, beneficially owns or has a
right to acquire any Shares or any other equity securities of the Company; (ii)
none of Parent, the Purchaser or, to their best knowledge, any of the persons or
entities referred to in clause (i) above or any of their executive officers,
directors or subsidiaries has effected any transaction in the Shares or any
other equity securities of the Company during the past 60 days; (iii) none of
Parent, the Purchaser or, to their best knowledge, any of the persons listed in
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, the transfer or voting thereof, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against loss
or the giving or withholding of proxies, consents or authorizations; (iv) since
October 1, 1995, there have been no transactions which would require reporting
under the rules and regulations of the Commission between Parent, the Purchaser
or, to the best knowledge of Parent and the Purchaser, any of the persons listed
in Schedule I hereto, on the one hand, and the Company or any of its executive
officers, directors or affiliates, on the other hand; and (v) since October 1,
1995, there have been no contacts, negotiations or transactions between Parent,
the Purchaser or any of its subsidiaries or, to the best knowledge of Parent or
the Purchaser, any of the persons listed in Schedule I hereto, on the one
14
<PAGE> 17
hand, and the Company or its subsidiaries or affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets of the Company.
9. SOURCE AND AMOUNT OF FUNDS. Parent and the Purchaser expect that
approximately $115.75 million will be required to purchase all Shares (assuming
exercise of all outstanding employee and non-employee stock options and all
warrants) that may be tendered pursuant to the Offer, to complete the Merger and
to pay related fees and expenses. Parent and the Purchaser expect to fund the
acquisition from Parent's available cash, credit facilities currently existing
or to be obtained from one or more commercial banks or other financial
institutions on terms and conditions to be determined hereafter and/or the
issuance of commercial paper. Parent and the Purchaser are confident that the
funds will be readily available. Financing is not a condition to the Offer.
Parent currently has a revolving credit agreement with The First National
Bank of Chicago, as agent for certain institutional lenders, that provides
borrowings up to an aggregate amount of $350,000,000 and has a commitment
termination date of September 30, 2003. The credit agreement provides for
borrowings on an unsecured basis under a number of options and at various
interest rates. It may be reduced or canceled at any time at Parent's option.
The agreement contains financial covenants establishing a maximum total debt to
total capitalization percentage and a minimum consolidated tangible net worth.
At December 31, 1998, Parent had unused borrowing capacity under the credit
agreement of $21,500,000.
Borrowings under the revolving credit facility carry interest at one of the
following rates selected by Parent: (i) Alternate Base Rate; (ii) Eurodollar
Rate plus a pricing margin based on Parent's debt rating; or (iii) Competitive
Bid, at an absolute rate or at the Eurodollar Rate plus or minus a margin, set
by a competitive bid process among the lenders.
Parent also has a short-term line of credit agreement with The First
National Bank of Chicago, that provides borrowings up to an aggregate amount of
$350,000,000 and has a maturity date of March 31, 1999. The agreement requires
Parent to perform and comply with the same financial covenants and provisions as
set forth in the revolving credit facility. At December 31, 1998, Parent had
unused borrowing capacity under the line of credit of $350,000,000.
Loans under the short-term line of credit bear interest, at Parent's
option, at one of the following rates: (i) the lender's corporate base rate of
interest; (ii) at a fixed rate equal to the sum of a pricing margin plus the
Eurodollar rate, where the Eurodollar rate is the rate at which deposits in U.S.
dollars for the same loan maturity are offered by the lender in the offshore
interbank market at 10:00 a.m. (Chicago time) two business days prior to the
date of loan, adjusted for maximum statutory reserve requirements; or (iii) such
other fixed rate as Parent and lender may mutually agree upon, subject to
availability and for a maturity to be agreed upon.
It is anticipated that any indebtedness incurred by Parent under its credit
facilities or commercial paper program will be repaid from funds generated
internally by Parent and its subsidiaries (including, after the Merger, if
consummated, dividends or other funds provided to Parent by the Company and its
subsidiaries), through additional borrowings, through application of proceeds of
dispositions, if any, or through a combination of two or more such sources. No
final decisions have been made concerning the method Parent will employ to repay
such indebtedness. Such decisions when made will be based on Parent's review
from time to time of the advisability of particular actions, as well as on
prevailing interest rates and financial and other economic conditions.
10. BACKGROUND OF THE OFFER AND THE MERGER. On February 19, 1998, a meeting
attended by Hugh Zentmyer, an Executive Vice President of Parent, Valerie A.
Lapinski, President of ITW Dynatec (a Parent company), Norman L. Norris, a
director of, and patent counsel to, the Company and other parties, was held at
Parent's corporate office for purposes unrelated to the Offer and the Merger.
During the course of this meeting, Mr. Norris mentioned that he was a director
of the
15
<PAGE> 18
Company and suggested that Parent consider initiating discussions with the
Company regarding a possible acquisition.
During March and April of 1998, Mr. Zentmyer and Mr. Norris remained in
periodic contact through voice messages. In April, in response to an expression
of interest by Mr. Zentmyer in the Company, Mr. Norris left a message with Mr.
Zentmyer suggesting that he contact Elaine A. Pullen, the Company's President
and Chief Executive Officer, if Parent was interested in conducting a further
investigation into the potential acquisition of the Company.
In early May, Ms. Lapinski contacted Ms. Pullen by telephone and expressed
Parent's interest in exploring a possible acquisition of the Company. Subsequent
to this conversation, the Company and Parent had preliminary discussions
regarding a potential acquisition transaction and Parent and the Company entered
into a confidentiality agreement.
In June 1998, Ms. Lapinski contacted Ms. Pullen in an attempt to arrange a
meeting. During these conversations, Ms. Lapinski was informed that
Robinson-Humphrey had been engaged by the Company to act as the Company's
financial advisor. Subsequently, Ms. Lapinski had a telephone conversation with
Joseph H. Estes of Robinson-Humphrey and received from Robinson-Humphrey certain
public information regarding the Company, including copies of the Company's then
most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, proxy
statement and product brochures and a research analyst's report on the Company
by Robinson-Humphrey.
On July 13, 1998, Ms. Lapinski and Kristie Ochampaugh, controller for the
business units of Parent reporting to Mr. Zentmyer, met at the Company's
headquarters office in Brookfield, Connecticut with Ms. Pullen, J. Leo Gagne,
Vice President and Chief Financial Officer of the Company and Douglas J.
McCartney of Robinson-Humphrey. The parties discussed the Company's business and
Ms. Lapinski and Ms. Ochampaugh were given a tour of the Company's production
facilities. The parties also discussed the possible acquisition of the Company
by Parent and the alternative structures that could be used to effect an
acquisition. During this visit, Mr. McCartney commented to Ms. Lapinski that the
Company would seek a purchase price significantly in excess of its then current
market price.
Throughout July and during early August, the parties continued to hold
periodic discussions regarding a possible business combination between the
parties and the amount of consideration to be paid in such a transaction. On
August 7, 1998, Ms. Lapinski informed Mr. Estes by telephone that, based on
Parent's evaluation of the Company's business to date, Parent was interested in
a purchase price in the low to mid teens.
The discussions between the parties slowed during August and the early part
of September. On September 14, Ms. Lapinski called Mr. Estes to inquire as to
whether continued exploratory discussions between the parties would be
worthwhile. Mr. Estes indicated that the Company would be interested in
entertaining further proposals and conducting further discussions.
During October 1998, as part of Parent's investigation of the Company,
Parent was provided with certain information regarding a patent infringement
lawsuit brought by the Company as well as a copy of the Company's strategic
plan. The Company's strategic business plan contained, among other information,
a business and industry overview, the Company's goals for fiscal years 1999 and
2000 and certain financial projections. The plan set a strategic goal of 35%
annual compounded revenue growth and stated that the Company would need at least
one major acquisition to achieve that goal. For information on projections in
the plan, see Section 7 "Certain Information Concerning the Company -- Other
Financial Information."
On October 14, 1998, Parent sent to Robinson-Humphrey a letter expressing
Parent's interest in a possible acquisition for cash consideration of
approximately $14 per Share (subject to further due diligence and the
requirement that any transaction would need the approval of Parent's Board of
Directors).
16
<PAGE> 19
On November 12, 1998, Mr. Norris, Ms. Pullen and Mr. McCartney met at
Parent's headquarter offices in Glenview, Illinois with Mr. Zentmyer, Ms.
Ochampaugh and Ms. Lapinski to further discuss the Company's business. At this
meeting on November 12, the Company's representatives indicated that the Company
considered the proposed $14 per Share price to be too low, but that it would be
willing to further discuss the transaction if the offered price were increased
to approximately $18 per Share.
On November 16, 1998, Ms. Lapinski, during a telephone conversation with
Mr. McCartney, indicated that Parent was not inclined to raise its proposed
price to $18 per Share but would be willing to discuss raising it above the $14
per Share previously discussed. Ms. Lapinski also indicated at this time that
Parent would also consider raising its price higher in the event that the
Company would be willing to accept Parent's stock as consideration in a
transaction which would be accounted for as a pooling of interests.
On or about November 19, 1998, further discussions were held between Mr.
Zentmyer and Ms. Lapinski on behalf of Parent and Messrs. Estes and McCartney on
behalf of the Company regarding the price range for a potential acquisition of
the Company. Further discussions were held between the parties in late November
regarding the price and structure of the transaction. At that time Parent
indicated that, subject to satisfactory completion of its due diligence review
and appropriate legal documentation, Parent might be interested in a transaction
at a per Share price in excess of $16 per Share.
On November 24, 1998, Ms. Lapinski sent to Mr. Estes a customary due
diligence acquisition checklist. During the period from December 1, 1998 through
December 15, 1998, Parent through its representatives, conducted due diligence
inquiry by phone with representatives of the Company and by on-site visits at
the office of the Company's independent accounting firm in Hartford, Connecticut
and at the office of the Company's patent counsel in Philadelphia, Pennsylvania.
On December 15, 1998, Parent's legal counsel sent to the Company's legal
counsel the first draft of the Merger Agreement. During the period from December
21, 1998 to January 6, 1999, legal counsel for Parent and legal counsel for the
Company engaged in negotiations on the terms of the Merger.
In late December, representatives of Parent and representatives of the
Company had several discussions regarding creating incentives for the Company's
employees to remain with the Company following the potential acquisition by
Parent. After various discussions regarding the appropriate types of incentives
packages, the parties ultimately agreed during a conference call on December 30,
1998 that the Company would establish an employee retention plan. See Section 11
"The Merger Agreement -- Employee Benefits" for a statement as to Parent's
obligation to honor the employee retention plan.
Also, in late December and in early January 1999, Parent and the Company
through their representatives had further negotiations on the terms of the
Merger Agreement. On the evening of January 6, 1999, Parent, the Purchaser and
the Company reached agreement on the final terms of the acquisition and signed
the Merger Agreement. On the morning of January 7, 1999, Parent and the Company
jointly announced the Merger Agreement.
11. THE MERGER AGREEMENT. The following is a summary of the Merger
Agreement. The summary is qualified in its entirety by reference to the Merger
Agreement, which is filed as an exhibit to the Purchaser and Parent's Tender
Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") and incorporated herein
by reference.
The Offer. The obligations of the Purchaser to accept for payment and pay
for any and all shares validly tendered on or prior to the expiration of the
Offer and not withdrawn are subject to the satisfaction of the Minimum Share
Condition and the other Offer conditions set forth in Section 15, any of which
conditions may be waived by the Purchaser in its sole discretion. The Purchaser
expressly reserves the right, in its sole discretion, at any time and from time
to time, and regardless
17
<PAGE> 20
of whether or not any of the events set forth in Section 15 shall have occurred
or shall have been determined by the Purchaser to have occurred, to (i) extend
the period of time during which the Offer is open and thereby delay acceptance
for payment of, and the payment for, any Shares, by giving oral or written
notice of such extension to the Depositary, and (ii) amend the Offer in any
respect by giving oral or written notice of such amendment to the Depositary.
The rights reserved by the Purchaser in this paragraph are in addition to the
Purchaser's rights to terminate the Offer upon the failure of the conditions in
Section 15 to be satisfied on the Expiration Date. However, under the terms of
the Merger Agreement, the Purchaser will not, without the consent of the
Company,
(i) amend the Offer to decrease the Per Share Amount payable in the
Offer or change the form of consideration to be paid in the Offer or
(ii) except as required by law or any rule, regulation or
interpretation in the opinion of counsel to Parent, or required by any
position of the SEC or the staff thereof, extend the expiration date of the
Offer; provided that if the Offer Conditions have not been satisfied, the
Purchaser, in its discretion, may extend the Offer from time to time for up
to an aggregate 10 business days; also, if immediately before the
expiration of the Offer (as it may be extended) the Shares tendered and not
withdrawn represent less than 90% of the outstanding Shares (on a fully
diluted basis), the Purchaser, in its discretion, may extend the Offer even
if at that time all Offer Conditions are then satisfied, but the extension,
when added to any prior discretionary extensions, may not exceed an
aggregate of 10 business days.
Subject to the terms of the Offer, including the Offer Conditions, and except to
the extent the Offer is extended, the Purchaser will accept for payment,
purchase and pay for all Shares validly tendered and not withdrawn as soon as it
is permitted to do so under applicable law.
The Minimum Share Condition requires that at least that number of Shares
that constitutes at least a majority of the total issued and outstanding Shares
(determined on a fully-diluted basis) on the date such Shares are purchased
shall have been validly tendered and not withdrawn prior to the expiration of
the Offer.
The Merger. The Merger Agreement provides that, at the Effective Time and
subject to the conditions set forth therein (and including those described in
Section 15 hereof) and the provisions of the DGCL, the Purchaser will be merged
into the Company. Following the Merger, the Company will be the surviving
corporation (the "Surviving Corporation").
The Merger Agreement provides that, at the Effective Time, each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares owned by the Company or any direct or indirect subsidiary of the Company,
including Shares held in the treasury of the Company, Shares owned by Parent or
the Purchaser, or by any direct or indirect wholly owned subsidiary of any of
them, and Shares for which dissenters' rights have been exercised in accordance
with the DGCL ("Dissenting Shares"), shall be converted into the right to
receive the Per Share Amount, without interest, less any withholding taxes
required under applicable law. Further, at the Effective Time, each share of
capital stock of the Purchaser will be converted into one share of common stock
of the Surviving Corporation. Consequently, upon the Merger becoming effective,
the Company, as the Surviving Corporation, will become a wholly owned subsidiary
of Parent.
Treatment of Stock Options and Warrants. Immediately prior to the
consummation of the Offer, all employee stock options, non-employee director
stock options and non-employee consultant stock options (collectively, "Stock
Options") will be canceled. Each holder of a Stock Option will be entitled to
receive a cash payment from the Company equal to the product of (i) the excess,
if any, of the Per Share Amount over the common share exercise price of the
Stock Option and (ii) the number of common shares subject to the Stock Option.
The cash payment will be treated as compensation and will be net of any
applicable federal or state withholding tax.
At the Effective Time, each outstanding warrant of the Company to acquire
Shares shall no longer entitle the holder thereof to purchase Shares, but
instead the warrant holder will be entitled
18
<PAGE> 21
upon exercise of the warrant to receive the Per Share Amount which the warrant
holder would have been entitled to receive if the warrant had been exercised
immediately prior to the Effective Time.
Termination of Employee Stock Purchase Plan. The Merger Agreement provides
that (i) the offering period then pending under the Company's Employee Stock
Purchase Plan (the "Stock Purchase Plan") was terminated as of January 6, 1999,
(ii) each participant in the Stock Purchase Plan on January 6, 1999 was deemed
to have exercised his or her Option (as defined in the Stock Purchase Plan) on
such date and acquired from the Company (A) such number of whole Shares as his
or her accumulated payroll deductions on such date could purchase at the Option
Price (as defined in the Stock Purchase Plan) (treating January 5, 1999 as the
"Exercise Date") for all purposes of the Stock Purchase Plan) and (B) cash in
the amount of any remaining balance in such participant's account without
interest, and (iii) the Stock Purchase Plan was then terminated.
Dissenting Shares. The Merger Agreement provides that, unless otherwise
stipulated, Dissenting Shares shall not be converted into the right to receive
the Per Share Amount applicable to such Shares at or after the Effective Time
but shall be entitled to receive such amount as shall be determined pursuant to
Section 262 of the DGCL, unless and until the holder of such Dissenting Shares
shall have failed to perfect or withdrawn or lost such right to appraisal and
payment under the DGCL. If a holder of Dissenting Shares shall have so failed to
perfect or shall have effectively withdrawn or lost such right to appraisal and
payment, or if it is determined that such holder does not have appraisal rights
in accordance with the DGCL, then such holder's Dissenting Shares shall be
treated as if they had been converted as of the Effective Time into the right to
receive the Per Share Amount applicable to such Shares, without any interest
thereon.
Certificate of Incorporation, By-Laws; Directors and Officers. The Merger
Agreement also provides that at the Effective Time and without any further
action on the part of the Company or the Purchaser, the certificate of
incorporation of the Company, as in effect immediately prior to the Effective
Time, will be the certificate of incorporation of the Surviving Corporation. At
the Effective Time and without any further action on the part of the Company or
the Purchaser, the By-Laws of the Company, as in effect immediately prior to the
Effective Time, will be the By-Laws of the Surviving Corporation. The Merger
Agreement provides that the directors and officers of the Purchaser, immediately
prior to the Effective Time, will be the initial directors and officers,
respectively, of the Surviving Corporation, each to hold office in accordance
with the applicable provisions of the certificate of incorporation and By-Laws
of the Surviving Corporation, until their successors shall be duly elected or
appointed and qualified. Parent and the Purchaser plan to take action to elect,
effective as of the Effective Time, Elaine A. Pullen as the President and Chief
Executive Officer of the Surviving Corporation and J. Leo Gagne as the Vice
President and Chief Financial Officer of the Surviving Corporation.
Stockholders Meeting. The Merger Agreement provides that to the extent
necessary to consummate the Merger, as soon as practicable following
consummation of the Offer, the Company is required to, in accordance with
applicable law, its certificate of incorporation and by-laws, convene and hold a
meeting of its stockholders for the purpose of approving and adopting the Merger
Agreement and the transactions contemplated thereby (the "Stockholders'
Meeting"). Subject to fiduciary duties of the Board of Directors of the Company
and other requirements of applicable law, the Board of Directors of the Company
is required to recommend that the holders of the Shares approve the Merger
Agreement and the other transactions contemplated thereby, including the Merger,
and to take all lawful action to solicit such approval.
At the Stockholders' Meeting, Parent will vote, or cause to be voted, all
Shares then owned by it or the Purchaser or any of Parent's other subsidiaries
or affiliates in favor of the Merger and the adoption of the Merger Agreement.
Notwithstanding the foregoing, in the event that the Purchaser owns at
least 90% of the outstanding Shares following expiration of the Offer, the
Company will not be required to call the Stockholders' Meeting or file and mail
a proxy statement, and appropriate action will be taken to
19
<PAGE> 22
cause the Merger to become effective as soon as practicable after such
expiration without a meeting of the Company's stockholders in accordance with
Section 253 of the DGCL.
Designation of Directors. The Merger Agreement provides that, promptly upon
acquiring a majority of the outstanding Shares pursuant to the Offer, or
otherwise, so long as Parent directly or indirectly owns a majority of the
outstanding Shares, Parent will be entitled, upon written request to the
Company, to designate such number of members of the Company Board, rounded down
to the next whole number, equal to that number of directors which equals the
product of the total number of directors on the Company Board (after giving
effect to the directors elected pursuant to this sentence) multiplied by the
percentage that such number of Shares owned in the aggregate by the Purchaser or
Parent bears to the number of Shares outstanding. The Company is obligated upon
such request promptly to use its best efforts to cause Parent's designees to be
so elected. Notwithstanding the foregoing, until the Effective Time there shall
be at least three directors who are directors of the Company as of the date of
the Merger Agreement. Between the time Shares are purchased in the Offer and the
Effective Time a majority vote of these three directors (or their successor
designees) is required to approve (i) amending or terminating the Merger
Agreement by the Company, (ii) exercising or waiving any of the Company's
rights, benefits or remedies under the Merger Agreement or (iii) extending the
time for performance of Parent's or the Purchaser's obligations under the Merger
Agreement.
Access to Information; Confidentiality. Pursuant to the Merger Agreement
and subject to the terms thereof, throughout the period prior to the Effective
Time, the Company will, and will cause its subsidiaries to afford Parent's
officers, employees, legal counsel, accountants, financing sources and other
authorized representatives reasonable access during normal business hours to all
properties, books, contracts, commitments and records of the Company, except
where such access to a contract or agreement would cause the Company to be in
breach of such contract or agreement. During such period, the Company will, and
will cause its subsidiaries, to furnish Parent (i) a copy of each report,
schedule and other document filed or received by it pursuant to the requirements
of federal or state securities laws and (ii) all other information concerning
its business, properties and personnel as Parent or any of its financing sources
may reasonably request.
The Merger Agreement further provides that the Confidentiality Agreement
entered in May 1998 between Parent and the Company is superseded by the Merger
Agreement and is of no further force and effect.
No Solicitation of Transactions. The Merger Agreement requires that,
immediately following the execution thereof, the Company, its affiliates and
their respective officers, directors, employees, representatives and agents
immediately cease any existing discussions or negotiations, if any, with any
third party regarding a Third Party Acquisition (as defined). The Company, its
subsidiaries, directors, employees, representatives and agents may, directly or
indirectly, furnish information and access (in each case only in response to a
request for such information or access made after the date of the Merger
Agreement and with respect to confidential information, only pursuant to an
appropriate confidentiality agreement) only if, and may participate in
discussions and negotiate with a third party concerning a Third Party
Acquisition, only if, (a) the third party has submitted a bona fide proposal to
the Company's Board relating to any such transaction and (b) a majority of the
Board of Directors of the Company determines, in its good faith judgment, after
receiving advice from its outside counsel, that failing to take such action
could reasonably be expected to constitute a breach of the Board's fiduciary
duties under applicable law.
The Company must promptly notify Parent if any Third Party Acquisition
proposal or offer or any inquiry or contact with any person with respect
thereto, is made and shall, in any such notice to Parent, indicate in reasonable
detail the identity of the offeror and the terms and conditions of any proposal
or offer, or any such inquiry or contact. The Company is obligated to keep
Parent promptly advised of all developments which could reasonably be expected
to culminate in the Board of
20
<PAGE> 23
Directors withdrawing, modifying or amending its recommendation of the Offer,
the Merger and other transactions contemplated by the Merger Agreement, unless
with respect to a specific development the Board of Directors of the Company by
a majority vote determines in its good faith judgment, after receiving advice
from outside counsel, that notifying Parent of such development could reasonably
be expected to be a breach of the Board's fiduciary duties under applicable law.
Except as set forth above, neither the Company nor any of its affiliates,
nor any of its or their respective officers, directors, employees,
representatives or agents, may, directly or indirectly, knowingly encourage,
solicit, participate in or initiate discussions or negotiations with, or provide
any information to, any third party. The foregoing restrictions do not prevent
the Company or the Company's Board from taking, and disclosing to the Company's
stockholders, a position contemplated by Rules 14d-9 and 14e-2 promulgated under
the Exchange Act with regard to any tender offer or from making such disclosure
to the Company's stockholders which, as advised by outside counsel, is required
under applicable law. However, the Company's Board may not recommend that the
stockholders of the Company tender their Shares in connection with any such
tender offer unless the Board by a majority vote determines in its good faith
judgment, after receiving advice from outside counsel, that failing to take such
action would constitute a breach of the Board's fiduciary duties under
applicable law.
Directors and Officers Indemnification and Insurance. The Merger Agreement
requires Parent to cause the Surviving Corporation to indemnify any person who
on or before the date of the Merger Agreement was a director or officer of the
Company or one of its subsidiaries against any losses, claims, damages,
judgments, settlements, liabilities, costs or expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred in connection with
any threatened or actual claim, action, suit, proceeding or investigation
arising out of or pertaining to acts or omissions, or alleged acts or omissions
(including, without limitation, in connection with the transactions contemplated
by the Merger Agreement) to the fullest extent that the Company or such
subsidiaries would have been permitted under the DGCL or the charter or by-laws
of the Company or of such subsidiaries to provide such indemnification.
The Merger Agreement also provides that, unless otherwise required by law,
(i) at the Effective Time, the certificate of incorporation and bylaws of the
surviving corporation shall contain provisions providing for exculpation of
director and officer liability and indemnification by the surviving corporation
of the Indemnified Parties (as defined) not less favorable to the Indemnified
Parties than those provisions providing for exculpation of director and officer
liability and indemnification by the Company of the Indemnified Parties
contained in the certificate of incorporation and bylaws of the Company as in
effect on the date of the Merger Agreement, and (ii) for a period of six years
from the Effective Time, the surviving corporation and its subsidiaries shall
not amend, repeal or modify any such provisions contained in their respective
certificates of incorporation and bylaws, or other organizational documents of
such subsidiaries, to reduce or adversely affect the rights of the Indemnified
Parties thereunder in respect of actions or omissions by them occurring at or
prior to the Effective Time.
Also, Parent is obligated to cause the Surviving Corporation to purchase,
if prior to the Effective Time the Company has not purchased, a six-year
extended reporting period endorsement ("reporting tail coverage") under the
Company's existing directors' and officers' liability insurance coverage (or as
much coverage as can be obtained for a total not in excess of 175% of the
Company's current premium), provided that such reporting tail coverage shall
extend the director and officer liability coverage in force as of the date of
the Merger Agreement from the Effective Time on terms, that in all material
respects, are no less advantageous to the intended beneficiaries thereof than
the existing officers' and directors' liability insurance.
Employee Benefits. Pursuant to the Merger Agreement, for the period from
the consummation of the Offer until December 31, 1999, Parent agrees to cause
the Surviving Corporation to provide to employees, as a whole, Employee Benefits
(as defined) which, in the aggregate, are no less
21
<PAGE> 24
favorable than the Employee Benefits provided to the employees as of the date of
the Merger Agreement. The Merger Agreement contains Parent's agreement that, for
all employee benefit plans of Parent and its affiliates after the Effective
Time, all service with the Company or any of its subsidiaries prior to the
Effective Time of employees shall be treated as service with Parent and its
affiliates for eligibility and vesting purposes and for benefit accruals for
purposes of severance and vacation pay to the same extent that such service is
taken into account by the Company and its subsidiaries as of the date of the
Merger Agreement, except to the extent such treatment will result in duplication
of benefits. The Merger Agreement also provides that from and after the
Effective Time, Parent shall, and shall cause the surviving corporation to,
cause any pre-existing condition or limitation and any eligibility waiting
periods (to the extent such conditions, limitations or waiting periods did not
apply to the employees of the Company under the Company's employee benefit plans
in existence as of the date of the Merger Agreement) under any group health
plans of Parent or any of its subsidiaries to be waived with respect to
employees of the Company and their eligible dependents. Parent also agrees that
the Surviving Corporation will honor certain individual employment agreements
listed on, and an employee retention plan included in, a Company disclosure
schedule.
Filings; Reasonable Best Efforts. The Merger Agreement provides, subject to
the terms and conditions thereof, that the Company, Parent and Purchaser shall
promptly make any required submissions or filings with any governmental entity,
including without limitation, preparation and filing of the Merger Proxy
Statement with the Commission. Further, each of the parties is required to use
its reasonable best 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, rules and regulations and otherwise to consummate and make effective the
transactions contemplated by the Merger Agreement and to use its reasonable best
efforts to obtain all necessary actions or non-actions, extensions, waivers,
permits, consents and approvals and to effect all registrations, filings and
notices with or to third parties or governmental or public bodies or authorities
that are necessary or desirable in connection with the transactions contemplated
by the Merger Agreement, except in each such case to the extent the Board may
determine in good faith, after receiving advice from its outside counsel, that
any such action could reasonably be expected to be a breach of the directors'
fiduciary duties under applicable law. The Company is required to cooperate with
Parent and the Purchaser in supplying all information reasonably requested in
connection with any due diligence investigation by Parent or its lenders.
The foregoing provisions do not require Parent, the Purchaser or the
Company, in connection with the receipt of any regulatory approval, to proffer
or agree (i) to sell or hold separate or agree to sell, divert or discontinue or
to limit, before or after the Effective Time any assets, businesses or interest
in any assets or businesses of Parent, the Company or any of their respective
affiliates (or to consent to any sale or agreement to sell or discontinuance or
limitation by Parent or the Company, as the case may be, of any of its assets or
business) or (ii) to agree to any conditions relating to, or changes or
restriction in, the operations of any such asset or business which, in either
case, is reasonably likely to materially and adversely impact the economic or
business benefits to such party of the transactions contemplated by the Merger
Agreement.
If any administrative or judicial action or proceeding, including any
proceeding by a private party, is instituted (or threatened to be instituted)
challenging any transaction contemplated by the Merger Agreement as violative of
any antitrust law, each of Parent, the Purchaser and the Company is obligated to
cooperate in all respects with each other and use its reasonable best efforts to
contest and resist any such action or proceeding, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts, and to resolve any challenge or objection raised by any
governmental authority or private party.
Interim Operations of the Company. The Company has agreed that during the
period from the date of the Merger Agreement to the earlier of the Effective
Time or the date on which a majority of
22
<PAGE> 25
the members of the Board of Directors of the Company consists of designees of
Parent (the "New Board Date"), the Company will, and will cause its subsidiaries
to, conduct business only in the ordinary course, will make no material changes
in the operations of the Company or its subsidiaries and will use its reasonable
efforts to preserve intact the business organization of the Company and its
subsidiaries, to keep available the services of its and their present officers
and key employees, and to preserve the good will of those having business
relationships with the Company and its subsidiaries.
The Company and its subsidiaries will also refrain from taking various
actions without the consent of Parent or the Purchaser during the period from
the date of the Merger Agreement to the earlier of the New Board Date or the
Effective Time. These restrictions prohibit, among other things, amending the
Company's certificate of incorporation or by-laws, issuing additional
securities, declaring dividends by the Company, acquiring its capital stock,
selling or encumbering any material assets, engaging in any material corporate
transaction, including acquisitions or mergers, incurring debt for borrowed
money except in the ordinary course and consistent with past practice, granting
any severance or termination pay other than pursuant to policies or agreements
in effect on the date of the Merger Agreement, making any loans or investments
(other than intercompany accounts and short-term investments pursuant to
customary cash management systems of the Company in the ordinary course and
consistent with past practices) in any other person other than a subsidiary of
the Company and, except for salary increases or other employee benefit
arrangements made in the ordinary course of business consistent with past
practice, adopting or amending any bonus, profit sharing, compensation,
retirement or other employee benefit plan or arrangement for the benefit of any
employee.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto, including
representations and warranties by the Company concerning the Company Board's
approval of the Merger Agreement and the transactions contemplated thereby
(including approvals so as to render inapplicable thereto the limitation on
business combinations contained in Section 203 of the DGCL), the Company's
capitalization, the receipt of an opinion as to the fairness from a financial
point of view to the stockholders of the Company (other than those holders of
Shares that are affiliates of Parent) of the consideration to be received
pursuant to the Offer and the Merger Agreement, Commission filings and financial
statements, absence of certain liabilities, absence of certain changes or
events, required filings and consents, compliance with law, absence of
litigation, employee benefit plans, tax matters, health, safety and
environmental matters, contracts, labor relations, intellectual property,
brokers, Year 2000 compliance, affiliate transactions and the required
stockholder vote to approve the Merger Agreement. Some of the representations
are qualified by a "Material Adverse Effect" clause. "Material Adverse Effect,"
solely for purposes of the representations and warranties (and not for purposes
of determining whether any condition to the Offer has been satisfied), means an
adverse effect of $250,000 or more on the business, assets, financial condition
or results of operations of the Company and its subsidiaries taken as a whole.
Postponement of Annual Meeting. Under the Merger Agreement, the Company has
agreed to postpone indefinitely the Company's 1999 annual meeting of
stockholders and to take no action (unless compelled by legal process) to
reschedule the annual meeting or to call a special meeting of stockholders of
the Company except in accordance with the Merger Agreement and until the Merger
Agreement has terminated.
Conditions of the Merger. Under the Merger Agreement, the respective
obligations of Parent and the Purchaser, on the one hand, and the Company, on
the other hand, to consummate the Merger are subject to the fulfillment of the
following conditions: (a) the Merger Agreement shall have been approved by the
affirmative vote of the holders of a majority of the outstanding Shares (unless
the Purchaser shall have acquired 90% or more of the outstanding Shares and
merger action is taken pursuant to Section 253 of the DGCL); (b) all required
governmental approvals have been obtained, except where the failure to obtain
any such consent would not reasonably be
23
<PAGE> 26
expected to have a material adverse effect on Parent (assuming the Merger had
taken place), and any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired; (c) the Purchaser shall have accepted for
payment and purchased Shares pursuant to the Offer; provided that this condition
is not a condition to the obligations of Parent on the Purchaser if the
Purchaser shall have failed to purchase Shares in violation of the terms of the
Merger Agreement or Offer; and (d) no preliminary or permanent injunction or
other order prohibiting the consummation of the Merger is in effect.
Termination Events. The Merger Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval thereof by the stockholders of the Company):
(a) by mutual consent of the Board of Directors of Parent and the Board of
Directors of the Company;
(b) by action of the Board of Directors of Parent or action of the Board of
Directors of the Company if at least that number of Shares required by the
Minimum Share Condition shall not have been purchased in the Offer on or before
April 30, 1999, provided, however, that the Board of Directors of Parent has no
right to terminate the Merger Agreement after the purchase of Shares pursuant to
the Offer; and provided, further, that this right to terminate the Merger
Agreement is not available to any party whose failure to fulfill any obligation
under the Merger Agreement has been the cause of, or resulted in, the failure of
the Offer to occur on or before such date;
(c) by either Parent or the Company if the Offer shall expire or terminate
in accordance with its terms without any Shares having been purchased thereunder
and, in the case of termination by Parent, if the Purchaser under the Offer
shall not have been required by the terms of the Offer or the Merger Agreement
to purchase any Shares pursuant to the Offer;
(d) by the Company if Parent or the Purchaser shall fail to comply in any
material respect with any of its covenants or agreements required to be
performed by it before the date of such termination and such failure to comply
shall not be cured within seven business days following receipt by Parent from
the Company of written notice of such failure and demand for cure; or by Parent
or the Purchaser if the Company shall fail to comply in any material respect
with any of its covenants or agreements required to be performed by it before
the date of such termination, and such failure to comply shall not be cured
within seven business days following receipt by the Company from Parent or the
Purchaser of written notice of such failure and demand for cure;
(e) by either Parent, the Purchaser or the Company, if any court of
competent jurisdiction in the United States or other governmental agency of
competent jurisdiction shall have issued an order, decree or ruling or taken any
other action restraining, permanently enjoining or otherwise prohibiting the
consummation of the Offer or the Merger, and such order, decree, ruling or other
action shall have become final and non-appealable; or
(f) by the Company if the Company is prepared to enter into a binding
agreement to effect a transaction on the terms specified in a Superior Proposal
(defined below) and has given Parent written notice to that effect; provided,
however, that the right of termination under this clause (f) shall not be
effective until the Company has paid Parent $3,455,000.00 (the "Termination
Fee") plus $750,000 for all out-of-pocket expenses and fees of Parent relating
to the transaction contemplated by the Merger Agreement ("Expenses"). (Parent is
obligated to refund any excess of such $750,000 over actual Expenses.)
If the Merger Agreement is terminated as described above, no party will
have any liability or further obligation to any other party, but any termination
will be without prejudice to the rights of any party arising out of breach by
any other party of any covenant or agreement contained in the Merger Agreement,
and the obligations under "Termination Fee and Expenses" will survive any
termination.
24
<PAGE> 27
Termination Fee and Expenses. The Merger Agreement provides that if:
(i) any person (including, without limitation, the Company or any
affiliate thereof) or group, other than Parent or any affiliate of Parent,
shall have become the beneficial owner of more than 20% of the then
outstanding Shares and thereafter the Merger Agreement shall have been
terminated pursuant to clause (b) or clause (c) described under
"Termination Events" above and within 12 months of such termination a Third
Party Acquisition (as hereinafter defined) for a per Share consideration
having a value greater than $16.50 shall occur with such person or group,
or affiliate of any of them; or
(ii) any person or group shall have commenced, publicly proposed or
communicated to the Company a proposal that is publicly disclosed for a
tender or exchange offer for more than 20% (or which, assuming the maximum
amount of securities which could be purchased, would result in any person
or group beneficially owning more than 20%) of the then outstanding Shares
or otherwise for the direct or indirect acquisition of the Company or all
or substantially all of its assets for per Share consideration having a
value greater than $16.50 and (A) the Offer shall have remained open for at
least 20 business days, (B) the Minimum Share Condition shall not have been
satisfied and (C) the Merger Agreement shall have been terminated pursuant
to clause (b) or clause (c) described under "Termination Events" above; or
(iii) the Merger Agreement is terminated pursuant to clause (f) under
"Termination Events",
the Company shall pay Parent promptly (but in no event later than one business
day after the first of such events shall have occurred) the Termination Fee,
plus Expenses; provided that, in the case described in clause (ii) above, if the
Board of Directors of the Company (A) shall not have withdrawn or modified in a
manner adverse to the Purchaser or Parent its approval or recommendation of the
Offer, the Merger Agreement or the Merger, (B) shall not have approved or
recommended the proposal of the person or group referred to in clause (ii) and
(C) shall not have resolved to do any of the foregoing, the Company shall pay to
Parent on such termination all Expenses and shall pay the Termination Fee only
if, within 12 months of such termination, a Third Party Acquisition with any
person or group referred to in clause (ii), or an affiliate of any of them,
shall occur.
"Third Party Acquisition" means the occurrence of any of the following
events: (i) the acquisition of the Company by merger, consolidation or other
business combination transaction by any person other than Parent, the Purchaser
or any affiliate of either of them (a "Third Party"); (ii) the acquisition by
any Third Party of, or any divestiture or other transaction resulting in the
Company owning less than, 50% or more (in book value or market value) of the
total assets of the Company and its subsidiaries, taken as a whole; (iii) the
acquisition by a Third Party of 50% or more of the outstanding Shares whether by
tender offer, exchange offer or otherwise; (iv) the adoption by the Company of a
plan of liquidation or a plan of recapitalization or the declaration or payment
of an extraordinary dividend; (v) the repurchase by the Company or any of its
subsidiaries of 50% or more of the outstanding Shares; or (vi) a letter of
intent or similar instrument or other agreement between the Company and a Third
Party, or the public announcement by the Company of the Company's intention or
plans, to effect any of the events referred to in clauses (i), (ii), (iii), (iv)
or (v) of this paragraph.
"Superior Proposal" means a bona fide proposal made by a Third Party to
acquire a majority or more of the outstanding Shares pursuant to a tender offer
or a merger, or to purchase all or substantially all of the assets of the
Company, on terms which a majority of the Board of Directors of the Company
determines in its good faith judgment (based on advice from its financial and
legal advisors) to be more favorable to the Company and its stockholders from a
financial point of view than the transactions contemplated by the Merger
Agreement.
25
<PAGE> 28
12. PURPOSE OF THE OFFER AND THE MERGER. The purpose of the Offer is to
acquire control of, and the entire equity interest in, the Company. The Offer is
being made pursuant to the Merger Agreement. As promptly as practicable
following consummation of the Offer and after satisfaction or waiver of all
conditions to the Merger set forth in the Merger Agreement, the Purchaser
intends to acquire the remaining equity interest in the Company not acquired in
the Offer by consummating the Merger.
Vote Required to Approve the Merger; Stockholder Approval. The Company
Board has approved and adopted the Merger and the Merger Agreement in accordance
with the DGCL. The Company Board will be required to submit the Merger Agreement
to the Company's stockholders for approval at a stockholders' meeting convened
for that purpose in accordance with the DGCL. However, if the Purchaser acquires
more than 90% of the outstanding Shares, the Purchaser intends to effect the
Merger without a meeting of the Company's stockholders under Section 253 of the
DGCL. In the event the conditions described in the foregoing sentence are not
met and stockholder approval is required, the DGCL requires that unless
otherwise provided by the Company's certificate of incorporation, the Merger
Agreement must be approved by the vote of the holders of a majority of the
outstanding Shares ("Majority Vote"). The Amended and Restated Certificate of
Incorporation of the Company does not require a greater vote than the Majority
Vote. If the Minimum Share Condition is satisfied, the Purchaser will have the
power, which it intends to exercise, to approve the Merger Agreement without the
affirmative vote or written consent of any other stockholder.
THIS OFFER TO PURCHASE DOES NOT CONSTITUTE A SOLICITATION OF A PROXY,
CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL MEETING OR ANY
SPECIAL MEETING OF THE COMPANY'S STOCKHOLDERS OR ANY ACTION IN LIEU THEREOF. ANY
SUCH SOLICITATION, IF REQUIRED, WHICH THE PURCHASER MAY MAKE WILL BE MADE ONLY
PURSUANT TO SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF
SECTION 14(A) OF THE EXCHANGE ACT.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company at the
time of the Merger who do not vote in favor of the Merger will have certain
rights under Section 262 of the DGCL to dissent and demand appraisal of, and
payment in cash of the fair value of, their Shares ("Dissenters' Shares"). Such
rights, if the statutory procedures were complied with, could lead to a judicial
determination of the fair value (excluding any element of value arising from the
accomplishment or expectation of the Merger) required to be paid in cash to such
dissenting holders for their Shares. Any such judicial determination of the fair
value of Dissenters' Shares could be based upon consideration other than, or in
addition to, the price paid in the Offer and the market value of the Shares,
including asset values and the investment value of the Shares. In Weinberger v.
UOP, Inc., the Delaware Supreme Court stated, among other things, that "proof of
value by any techniques or methods which are generally considered acceptable in
the financial community and otherwise admissible in court" should be considered
in an appraisal proceeding. The value so determined could be more or less than
the purchase price per Share pursuant to the Offer or the consideration per
Share to be paid in the Merger.
In addition, several decisions by Delaware courts have held that, in
certain instances, a controlling stockholder of a corporation involved in a
merger has a fiduciary duty to the other stockholders that requires the merger
to be fair to such other stockholders. In determining whether a merger is fair
to minority stockholders, the Delaware courts have considered, among other
things, the type and amount of consideration to be received by the stockholders
and whether there were fair dealings among the parties. The Delaware Supreme
Court has stated in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that
the remedy ordinarily available to minority stockholders in a cash-out merger is
the right to appraisal described above. However, a damages remedy or injunctive
relief may be available if a merger is found to be the product of procedural
unfairness, including fraud, misrepresentation or other misconduct.
26
<PAGE> 29
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may, under
certain circumstances, be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Purchaser seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per Share price paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby stockholders of the Company receive
consideration less than that paid pursuant to the Offer, in either case at a
time when the Shares are still registered under the Exchange Act, the Purchaser
may be required to comply with Rule 13e-3 under the Exchange Act. If applicable,
Rule 13e-3 would require, among other things, that certain financial information
concerning the Company, and certain information relating to the fairness of the
Merger or such alternative transaction and the consideration offered to minority
stockholders in the Merger or such alternative transaction, be filed with the
Commission and disclosed to stockholders prior to consummation of the Merger or
such alternative transaction. The purchase of a substantial number of Shares
pursuant to the Offer may result in the Company being able to terminate its
Exchange Act registration. See Section 14. If such registration were terminated,
Rule 13e-3 would be inapplicable to the Merger or any such future alternative
transaction.
Plans for the Company. It is currently expected that initially following
the purchase of the Shares and the consummation of the Offer, the business and
operations of the Company will continue as they currently are conducted without
substantial change. Parent will continue to evaluate all aspects of the
business, operations and management of the Company during the pendency of the
Offer and after the consummation of the Offer and will take such further actions
as it deems appropriate under the circumstances then existing. Parent expects to
focus on implementing steps to apply its strategies to sales growth and cost
reduction, including through the reduction of administrative overhead.
Except as described in this Offer to Purchase, none of the Purchaser,
Parent or, to the best knowledge of the Purchaser and Parent, any of the persons
listed on Schedule I have any present plans or proposals that would relate to or
result in an extraordinary corporate transaction such as a merger, a sale or
other transfer of a material amount of assets of the Company or any of its
subsidiaries, any material change in the capitalization or dividend policy of
the Company or any other material change in the Company's corporate structure or
business or the composition of its Board of Directors or management.
13. DIVIDENDS AND DISTRIBUTIONS. If, on or after the date of the Merger
Agreement, the Company should split, combine or otherwise change the Shares or
its capitalization or shall disclose that it has taken any such action, then,
without prejudice to the Purchaser's rights described in Section 15, the
Purchaser may, in its sole discretion, make such adjustments to the purchase
price and other terms of the Offer, including without limitation, the number or
type of securities offered to be purchased, as it deems appropriate to reflect
such split, combination or other change.
If, on or after the date of the Merger Agreement, the Company should
declare or pay any cash or stock dividend or other distribution on, or issue any
rights with respect to, the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of the
Purchaser or the nominee or transferee of the Purchaser on the Company's stock
transfer records of such Shares that are purchased pursuant to the Offer, then,
without prejudice to the Purchaser's rights described in Section 15, (i) the
purchase price per Share payable by the Purchaser pursuant to the Offer will be
reduced to the extent any such dividend or distribution is payable in cash and
(ii) any non-cash dividend, distribution (including additional Shares) or right
received and held by a tendering stockholder shall be required to be promptly
remitted and transferred by the tendering stockholder to the Depositary for the
account of the Purchaser, accompanied by appropriate documentation of transfer.
Pending such remittance or appropriate assurance thereof, the
27
<PAGE> 30
Purchaser will be, subject to applicable law, entitled to all rights and
privileges as owner of any such non-cash dividend, distribution or right and may
withhold the entire purchase price or deduct from the purchase price the amount
or value thereof, as determined by the Purchaser in its sole discretion.
14. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES, THE NASDAQ
NATIONAL MARKET LISTING AND EXCHANGE ACT REGISTRATION. The purchase of Shares
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and will reduce the number of holders of Shares. This could
adversely affect the liquidity and market value of the remaining Shares held by
the public.
The Nasdaq National Market Listing. The Common Stock of the Company is
currently listed on The Nasdaq National Market ("NNM"). Depending upon the
aggregate market value and the number of Shares not purchased pursuant to the
Offer, as well as the identity of the holders of such Shares, the Shares may no
longer meet the requirements for continued listing on the NNM. According to the
published guidelines for listings on the NNM, an issuer, to maintain its listing
on the NNM, must have, among other things, at least 750,000 publicly held shares
(i.e., shares that are not held directly or indirectly by any officer or
director of the issuer and by any other person who is the beneficial owner of
more than 10 percent of the total shares outstanding), held by at least 400
stockholders of round lots, and with a market value of at least $5 million. If,
as a result of the purchase of Shares pursuant to the Offer, the Shares no
longer meet the requirements of the NNM for continued listing and the listing of
Shares is discontinued, the market for the Shares could be adversely affected.
If the Shares were delisted (which the Purchaser intends the Company to
seek if the Purchaser acquires control of the Company and the Company no longer
meets the listing requirements), it is possible that the Shares would continue
to trade in the over-the-counter market and that price or other quotations might
still be available from other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon such
factors as the number of holders and/or the aggregate market value of such
Shares remaining at such time, the interest in maintaining a market in such
Shares on the part of securities firms, the possible termination of registration
of such Shares under the Exchange Act, as described below, and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of Shares pursuant to the Offer or following
consummation of the Offer may result in the Shares becoming eligible for
removing from registration under the Exchange Act. Such registration may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300
holders of record of outstanding Shares. Termination of registration of the
Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to its stockholders and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with stockholders' meetings pursuant
to Section 14(a), and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Company. In
addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company might be deprived of the ability to dispose of Shares
pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended.
Furthermore, Shares would no longer be "margin securities" or be eligible for
NNM quotation. The Purchaser intends to seek to cause the Company to make such
application for termination of registration of the Shares as soon after the
consummation of the Offer as the requirements for termination of registration
are met.
Margin Regulations. The Shares are currently "margin securities" under the
rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such Shares for the
28
<PAGE> 31
purpose of buying, carrying, or trading in securities ("purpose loans").
Depending upon factors such as the number of record holders of the Shares and
the number and market value of publicly held Shares, following the purchase of
Shares pursuant to the Offer or following consummation of the Offer, the Shares
might no longer constitute "margin securities" for purposes of the Federal
Reserve Board's margin regulations and therefore could no longer be used as
collateral for purpose loans made by brokers. In addition, if registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities".
15. CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer and subject to the terms of the Merger Agreement, and in addition to the
conditions that (i) Shares constituting not less than a majority of all Shares
outstanding on a fully diluted basis are validly tendered (and not withdrawn)
prior to the Expiration Date (the "Minimum Share Condition") and (ii) all
applicable waiting periods under the HSR Act having expired or been terminated,
Parent and the Purchaser shall not be required to accept for payment, purchase,
or, subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) (relating to the Purchaser's obligation to pay for or return tendered
Shares after termination of the Offer), to pay for any Shares tendered, and may
postpone the purchase of, or, subject to the restriction set forth above,
payment for Shares tendered and to be purchased by it, if at any time prior to
the time of acceptance for payment of any such Shares, any of the following
events shall occur:
(a) there shall be any statute, rule, regulation or order promulgated,
enacted, entered or enforced that is applicable to the Offer or the Merger
by any United States federal or state court, legislative body or
governmental agency or other regulatory administrative agency or commission
of competent jurisdiction (each a "Governmental Authority"), (i)
restraining or prohibiting the making or consummation of the Offer or the
transactions contemplated by the Merger Agreement; (ii) prohibiting or
restricting Parent or the Purchaser's (or any of its affiliates) ownership
or operation of all or any material portion of the Company's business or
assets; (iii) imposing material limitations on the ability of Parent or the
Purchaser effectively to acquire or to hold or to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
the Shares purchased by the Purchaser on all matters properly presented to
the stockholders of the Company; (iv) requiring divestiture by Parent or
the Purchaser of any assets or of any Shares; or (v) making the acceptance
for payment or payment for the Shares or consummation of the Merger illegal
or prohibiting consummation of the Offer or the Merger; or
(b) any action or proceeding instituted and pending by a Governmental
Authority seeking to effect any of the activity in clause (a) above; or
(c) there shall have occurred any change concerning the Company and
its subsidiaries taken as a whole which, in the good faith judgment of the
Purchaser, has had, or is reasonably expected to have prior to December 31,
1999, a material adverse effect on the business, financial condition or
results of operation ("Condition") of the Company and its subsidiaries
taken as a whole (other than any changes generally affecting the industries
in which the Company operates, including changes due to actual or proposed
changes in law or regulations, or changes relating to or arising from the
transactions contemplated by the Merger Agreement, including the change in
control contemplated by the Merger Agreement); the term "material adverse
effect" for purposes of the Offer Conditions shall mean a material adverse
effect on the Condition of the Company and its subsidiaries, taken as a
whole, with the parties expressly intending that the term "material adverse
effect" for purposes of the Offer Conditions be construed as an effect
which is greater than the definition of "Material Adverse Effect' as set
forth in Section 5.2(a) of the Merger Agreement, based on the applicable
facts and circumstances; or
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange,
the Nasdaq Stock Market, the American
29
<PAGE> 32
Stock Exchange or in the United States over-the-counter market which shall
continue for at least three business days; or (ii) the declaration of a
banking moratorium or any suspension of payments by United States
governmental authorities in respect of banks in the United States which
shall continue for at least three business days; or
(e) there shall have occurred the commencement or escalation of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, and having a material adverse
effect on the Offer or the Merger or the Condition of the Company and its
subsidiaries taken as a whole; or
(f) any representation or warranty of the Company in the Merger
Agreement shall have been untrue as of the date of the Merger Agreement or
shall have become untrue prior to acceptance for payment or payment for
Shares which untrue representations or warranties, if accurately stated,
would have revealed matters materially adverse to the Condition of the
Company and its subsidiaries, taken as a whole, or the Company shall have
failed to perform or breached any of its covenants or agreements contained
in the Merger Agreement, which failure, breach or breaches, would
materially impair or delay the ability of the Purchaser to consummate the
Offer or the ability of Parent, the Purchaser and the Company to effect the
Merger; or
(g) one or more of the following events shall have occurred after the
date of the Merger Agreement or the Purchaser shall have for the first time
become aware after the date of the Merger Agreement of the occurrence of
any of the following on or prior to the date of the Merger Agreement:
(1) any person, corporation, partnership or other entity or group
(a "Person"), other than the Purchaser or its affiliates, acquires or
becomes the beneficial owner of more than 20% of the outstanding Shares
(other than acquisitions for bona fide arbitrage purposes and
acquisitions by Persons who are parties to any agreement with the
Purchaser with respect to their Shares);
(2) any Person (other than the Purchaser or its affiliates) shall
have commenced a tender or exchange offer for more than 20% of the
outstanding Shares or publicly proposed any Third Party Acquisition;
(3) the Company enters into, or announces that it proposes to enter
into, an agreement, including, without limitation, an agreement in
principle, providing for a merger or other business combination
involving the Company or a material portion of the assets, business or
operations of the Company and its subsidiaries taken as a whole (other
than the transactions contemplated by the Merger Agreement), and the
Company withdraws its recommendation of the Offer or Merger;
(4) any Person (other than the Purchaser or its affiliates) is
granted any option or right, conditional or otherwise, to acquire or
otherwise become the beneficial owner of Shares which, together with all
Shares beneficially owned by such Person, results or would result in
such Person being the beneficial owner of more than 20% of the
outstanding Shares; or
(5) subsequent to the commencement of the Offer there is a public
announcement with respect to a plan or intention by the Company or any
Person, other than the Purchaser or its affiliates, to effect any of the
foregoing transactions; or
(h) the Merger Agreement shall have been terminated in accordance with
its terms.
For purposes of subparagraph (g) above, the terms "group" and "beneficial owner'
are defined by reference to Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder.
30
<PAGE> 33
The foregoing conditions, other than the Minimum Share Condition, are for
the sole benefit of the Purchaser and may be asserted by the Purchaser or may be
waived by the Purchaser in whole or in part at any time and from time to time in
its sole discretion. The failure by the Purchaser 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 and may be asserted at any time and
from time to time. If the Offer is terminated due to any of the foregoing
conditions not being satisfied or waived, all tendered Shares not theretofore
accepted for payment will be returned to the tendering stockholders.
16. CERTAIN LEGAL MATTERS.
General. Based upon its examination of publicly available filings by the
Company with the Commission and other publicly available information, neither
the Purchaser nor Parent is aware of any license or other regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of Shares
by the Purchaser pursuant to the Offer, or, except as set forth below, of any
approval or other action by any domestic (federal or state) or foreign
governmental, administrative or regulatory agency that would be required prior
to acquisition of Shares by the Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is presently contemplated that such
approval or action would be sought by the Purchaser. While the Purchaser does
not currently intend to delay the acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the business of the Company, Parent or the Purchaser or that certain parts of
the business of the Company, Parent or the Purchaser might not have to be
disposed of or other substantial conditions complied with in order to obtain
such approval or other action or in the event that such approval were not
obtained or such other action were not taken. If certain types of adverse action
are taken with respect to matters discussed below, the Purchaser could decline
to accept for payment, or pay for, any Shares tendered. See Section 15 for
certain conditions to the Offer, including conditions with respect to
governmental actions.
State Takeover Laws. Except for approval by the Company Board of the Merger
Agreement (including the Offer and the Merger) which renders inapplicable the
limitations on business combinations contained in Section 203 of the DGCL, the
Purchaser has not attempted to comply with any state takeover statute or
regulation in connection with the Offer. The Purchaser reserves the right to
challenge the validity or applicability of any state law allegedly applicable to
the Offer, and nothing in this Offer to Purchase nor any action taken in
connection herewith is intended as a waiver of that right. In the event that any
state takeover statute is found applicable to the Offer, the Purchaser might be
unable to accept for payment or purchase Shares tendered pursuant to the Offer
or be delayed in continuing or consummating the Offer. In such case, the
Purchaser may not be obligated to accept for purchase or pay for, any Shares
tendered. See Section 15.
Antitrust. The Offer is subject to the provisions of the HSR Act, which
provides that certain acquisition transactions, including certain tender offers,
may not be consummated until certain information has been furnished to the FTC
and the Antitrust Division and certain waiting period requirements have been
satisfied.
The Purchaser filed on January 13, 1999 with the Antitrust Division and the
FTC a Notification and Report Form with respect to the acquisition of Shares
pursuant to the Offer. Under the provisions of the HSR Act applicable to the
purchase of Shares pursuant to the Offer, such purchases may not be made until
the expiration of a 15-calendar day waiting period following the filing by the
Purchaser. Accordingly, assuming that the filing is in substantial compliance
with the HSR Act, the waiting period under the HSR Act will expire at 11:59
P.M., New York City time, on January 27, 1999, unless the Purchaser receives a
request for additional information or documentary material prior thereto.
Pursuant to the HSR Act, the Purchaser will request early termination of
31
<PAGE> 34
the waiting period applicable to the Offer. There can be no assurances given,
however, that the 15-day HSR Act waiting period will be terminated early. If
either the FTC or the Antitrust Division were to request additional information
or documentary material from the Purchaser, the waiting period would expire at
11:59 P.M., New York City time, on the tenth calendar day after the date of
substantial compliance by the Purchaser with such request. Thereafter, the
waiting period could be extended only by court order or with the Purchaser's
consent. If the acquisition of Shares is delayed because of a request by the FTC
or the Antitrust Division for additional information or documentary material
pursuant to the HSR Act, the Offer may, but need not, be extended and, in any
event, the purchase of and payment for Shares will be deferred until ten days
after the request is substantially complied with, unless the ten-day extended
period expires on or before the date when the initial 15-day period would
otherwise have expired or unless the waiting period is sooner terminated by the
FTC or the Antitrust Division. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the rules
promulgated under the HSR Act, except by court order or with the Purchaser's
consent. Any such extension of the waiting period will not give rise to any
withdrawal rights not otherwise provided for by applicable law. See Section 4.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares pursuant to
the Offer. At any time before or after the Purchaser's purchase of Shares,
either the Antitrust Division or the FTC could take such action under the
antitrust laws as either deems necessary or desirable in the public interest, or
any other person could take action under the antitrust laws, including seeking
to enjoin the Purchaser's acquisition of Shares pursuant to the Offer or seeking
divestiture of Shares purchased thereunder, or the divestiture of substantial
assets of the Company or the Purchaser. Based upon an examination of publicly
available information relating to the business in which Parent and its
subsidiaries and the Company and its subsidiaries are engaged, Parent and the
Purchaser believe that the Purchaser's acquisition of Shares would not violate
the antitrust laws. However, there can be no assurance that a challenge to the
Offer on antitrust grounds will not be made or, if such a challenge is made,
what the result will be.
The Purchaser will not accept for payment Shares tendered pursuant to the
Offer unless and until the waiting period requirements imposed by the HSR Act
with respect to the Offer have been satisfied. See Section 15 for conditions of
the Offer, including conditions with respect to litigation and certain
governmental actions.
Margin Credit Regulations. Federal Reserve Board Regulations G, T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock, and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender, in good faith, has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
See Section 14 for a discussion as to possible effects of the Offer on margin
securities.
17. FEES AND EXPENSES. The Purchaser has retained MacKenzie Partners, Inc.
to act as the Information Agent and First Chicago Trust Company of New York to
act as the Depositary in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telegraph and personal interview
and may request brokers, dealers and other nominee stockholders to forward
materials related to the Offer to beneficial owners. The Information Agent and
the Depositary will receive reasonable and customary compensation for services
relating to the Offer and will be reimbursed for certain out-of-pocket expenses.
The Purchaser and Parent have also agreed to indemnify the Information Agreement
and the Depositary against certain liabilities and expenses in connection with
the Offer, including liabilities under the federal securities laws.
32
<PAGE> 35
The Purchaser will not pay any fees or commissions to brokers or dealers or
to other persons (other than the Information Agent) in connection with the
solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies will be reimbursed by the Purchaser for
customary mailing and handling expenses incurred by them in forwarding material
to their customers.
18. MISCELLANEOUS. The Offer is being made solely by this Offer to Purchase
and the related Letter of Transmittal and is being made to all holders of
Shares. The Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute.
If, after such good faith effort, the Purchaser cannot comply with such state
statute, the Offer will not be made to, nor will tenders be accepted from or on
behalf of the holders of Shares in such state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by one or more registered brokers or dealers that are licensed under
the laws of such jurisdiction.
The Purchaser and Parent have filed with the Commission pursuant to Rule
14d-3 of the General Rules and Regulations under the Exchange Act a Tender Offer
Statement on Schedule 14D-1, together with exhibits, with respect to the Offer.
The Schedule, including exhibits and any amendments to such Schedule, which
furnish certain additional information with respect to the Offer, may be
examined and copies may be obtained at the same places and in the same manner as
set forth with respect to information concerning Parent in Section 8 of this
Offer to Purchase (except that they will not be available at the regional
offices of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THE OFFER
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED.
ITW ACQUISITION INC.
January 13, 1999
33
<PAGE> 36
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND PARENT
The following table sets forth the name, business address, principal
occupation or employment at the present time and during the last five years, and
the name, principal business and address of any corporation or other
organization in which such occupation or employment is or was conducted, of the
executive officers and directors of the Purchaser and Parent, all of whom are
citizens of the United States. The business address of such persons is in care
of Illinois Tool Works Inc., 3600 West Lake Avenue, Glenview, Illinois
60025-5811. Each person has had the principal occupation or employment listed
for more than the past five years, except as otherwise noted or, with respect to
an officer of Parent, prior to the position indicated may have held some other
executive position with Parent during the five year period. Directors of Parent
are indicated with an asterisk. Directors of the Purchaser are indicated with a
cross; unless otherwise indicated, the office is that of Parent.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME (AGE) FIVE-YEAR EMPLOYMENT HISTORY
---------- ----------------------------------------------
<S> <C>
William F. Aldinger III* (51)........ Chairman and Chief Executive Officer of Household
International, Inc. since 1994. Mr. Aldinger served in
senior officer positions at Wells Fargo Bank during the
period from 1986 to 1994. Mr. Aldinger is a director of
Household International, Inc., SunAmerica, Inc. and
MasterCard International, Inc.
Michael J. Birck* (60)............... Founder, and President and Chief Executive Officer since
1975, of Tellabs, Inc. Mr. Birck is a director of USF&G
Corporation and Molex, Inc.
Marvin D. Brailsford* (60)........... Vice President of Kaiser Hill Company LLC since 1996;
founder and President of the Brailsford Group from 1995 to
1996; and President of Metters Industries from 1992 to 1995.
Thomas W. Buckman (61)............... Vice President Patents and Technology. Mr. Buckman is a Vice
President of Purchaser.
Susan Crown* (40).................... Vice President, Henry Crown and Company since 1984. Henry
Crown and Company is a family owned and operated company
with investments in securities, real estate, resort
properties and manufacturing operations. Ms. Crown is a
director of Baxter International Inc. and Northern Trust
Corporation and its subsidiary, The Northern Trust Company.
H. Richard Crowther* (66)............ Former Vice Chairman. He is a director of Applied Power Inc.
W. James Farrell* (56)............... Chairman since 1996 and Chief Executive Officer since 1995.
Mr. Farrell served as President from 1994 until 1996 and as
Executive Vice President from 1983 to 1994. Mr. Farrell is a
director of Morton International, Inc., Premark
International, Inc. and the Quaker Oats Company.
Russell M. Flaum (48)................ Executive Vice President.
L. Richard Flury* (51)............... Executive Vice President, Amoco Corporation (energy and
chemicals) since 1996, formerly Senior Vice President for
Shared Services from 1994 through 1995 and Executive Vice
President, Amoco Chemical Co., from 1991 to 1994.
Thomas J. Hansen (50)................ Executive Vice President.
Stewart S. Hudnut+ (59).............. Senior Vice President, General Counsel and Secretary. Mr.
Hudnut is a director, a Vice President and the Secretary of
the Purchaser.
</TABLE>
i
<PAGE> 37
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME (AGE) FIVE-YEAR EMPLOYMENT HISTORY
---------- ----------------------------------------------
<S> <C>
John Karpan (58)..................... Senior Vice President, Human Resources.
Jon C. Kinney (56)................... Senior Vice President and Chief Financial Officer.
Valerie Lapinski (44)................ President of ITW Dynatec (a Parent company) and a Vice
President of Purchaser.
Dennis J. Martin (48)................ Executive Vice President.
Robert C. McCormack* (59)............ Partner, Trident Capital LP (venture capital) since January
1993; Assistant Secretary of the Navy from 1990 to 1993.
Robert V. McGrath (58)............... Vice President, Tax. Mr. McGrath is Vice President, Tax of
Purchaser.
Frank S. Ptak (55)................... Vice Chairman since 1998 and Executive Vice President prior
thereto.
Michael J. Robinson+ (52)............ Vice President and Treasurer. Mr. Robinson is a director, a
Vice President and the Treasurer of the Purchaser.
Philip B. Rooney* (54)............... Vice Chairman of The ServiceMaster Company (a network of
quality service companies). Former President of WMX
Technologies, Inc. (waste management) from 1985 until 1997.
Mr. Rooney is a director of The ServiceMaster Company, Urban
Shopping Centers, Inc., and Stone Container Corporation and
a Trustee of the Van Kampen American Capital Open-End Funds.
F. Ronald Seager (58)................ Executive Vice President.
Harold B. Smith* (65)................ Chairman of the Executive Committee. Mr. Smith is a director
of W.W. Grainger, Inc. and Northern Trust Corporation and
its subsidiary, The Northern Trust Company, and a trustee of
The Northwestern Mutual Life Insurance Company.
David B. Speer (47).................. Executive Vice President.
Allan C. Sutherland (35)............. Senior Vice President, Leasing and Investments. Mr.
Sutherland is a Vice President of Purchaser.
Ormond J. Wade* (59)................. Former Vice Chairman, Ameritech Corp. (telecommunications
products and services) from 1987 to 1993 and President and
Chief Executive Officer, Illinois Bell Telephone Company
from 1982 through 1986. Mr. Wade is a director of Andrew
Corporation and Westall Inc.
Hugh J. Zentmyer+ (52)............... Executive Vice President. Mr. Zentmyer is a director and
President of Purchaser.
</TABLE>
ii
<PAGE> 38
Originally signed facsimile copies of the Letters of Transmittal, properly
completed and duly executed, will be accepted. The Letters of Transmittal,
certificates for Shares and any other required documents should be sent or
delivered by each stockholder or such stockholder's broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of the addresses
set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
- ----------------------------- ----------------------------- -----------------------------
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Corporate Actions Attention: Corporate Actions Attention: Corporate Actions
P.O. Box 2569, Suite 4660 Suite 4680-Trident c/o Securities Transfer &
Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor Reporting Services Inc.
New York, NY 10005 100 William Street, Galleria
New York, NY 10038
By Facsimile Transmission:
-----------------------------
(201)222-4720
or
(201) 222-4721
Confirm Facsimile
Transmissions Only By
Telephone:
-----------------------------
(201) 222-4707
</TABLE>
The Information Agent for the Offer is:
LOGO
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll Free: 1-800-322-2885
<PAGE> 1
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
TRIDENT INTERNATIONAL, INC.
Pursuant to the Offer to Purchase
Dated January 13, 1999
by
ITW ACQUISITION INC.
a wholly owned subsidiary of
ILLINOIS TOOL WORKS INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, FEBRUARY 10, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
-------- --------------------- --------
<S> <C> <C>
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Corporate Actions Attention: Corporate Actions Attention: Corporate Actions
P.O. Box 2569, Suite 4660 Suite 4680-Trident c/o Securities Transfer &
Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor Reporting Services Inc.
New York, NY 10005 100 William Street, Galleria
New York, NY 10038
</TABLE>
------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Trident
International, Inc., a Delaware corporation (the "Company"), if certificates for
Shares (as defined below) are to be forwarded herewith or, unless an Agent's
Message (as defined in the Offer to Purchase dated January 13, 1999 (the "Offer
to Purchase")) is utilized, if tenders of Shares are to be made by book-entry
transfer to an account maintained by First Chicago Trust Company of New York
(the "Depositary") at The Depository Trust Company (the "DTC") (or the
"Book-Entry Transfer Facility"), pursuant to the procedures set forth in Section
3 of the Offer to Purchase. Stockholders who tender Shares by book-entry
transfer are referred to herein as "Book-Entry Stockholders".
Stockholders whose certificates for such Shares (the "Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other required documents to the Depositary on or prior to the Expiration
Date (as defined in the Offer to Purchase) or who cannot complete the procedures
for book-entry transfer on a timely basis, must tender their Shares according to
the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER
FACILITY BY ITSELF DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED
CERTIFICATE BY SHARE NUMBER OF
NUMBER(S)* CERTIFICATE(S)* SHARES TENDERED**
<S> <C> <C> <C>
TOTAL SHARES
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, it will be assumed that all Shares represented by certificates delivered to the
Depositary are being tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
[ ] CHECK HERE IF THE SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE
BOOK-ENTRY TRANSFER FACILITY MAY DELIVER THE SHARES BY BOOK-ENTRY
TRANSFER):
Name of Tendering Institution
--------------------------------------------
Name of Book-Entry Transfer Facility
-------------------------------------
Account Number Transaction Code Number
-------------------- ----------------
[ ] CHECK HERE IF THE SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s):
-----------------------------------------
Window Ticket Number (if any):
------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------
Name of Institution which Guaranteed Delivery:
--------------------------
If delivered by Book-Entry Transfer:
Name of Tendering Institution
-------------------------------------------
Name of Book-Entry Transfer Facility
------------------------------------
Account Number Transaction Code Number
-------------------- ----------------
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to ITW Acquisition Inc. (the "Purchaser"), a
Delaware corporation and a wholly owned subsidiary of Illinois Tool Works Inc.,
a Delaware corporation ("Parent"), the above described shares of Common Stock,
par value $.01 per share (the "Shares"), of Trident International, Inc., a
Delaware corporation (the "Company"), at a purchase price of $16.50 per Share,
net to the seller in cash, without interest thereon, less applicable federal
withholding taxes, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated January 13, 1999 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
with the Offer to Purchase constitute the "Offer"). The undersigned understands
that the Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates, the right to purchase
all or any portion of the Shares tendered pursuant to the Offer, receipt of
which is hereby acknowledged.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby and any and all dividends, or
rights declared, paid or issued with respect to the tendered Shares on or after
January 6, 1999 (collectively, a "Distribution"), and appoints the Depositary
the true and lawful agent, attorney-in-fact and proxy of the undersigned to the
full extent of the undersigned's rights with respect to such Shares (and any
Distribution) with full power of substitution (such power of attorney and proxy
being deemed to be an irrevocable power coupled with an interest), to (a)
deliver Share Certificates (as defined herein) (and any Distribution), or
transfer ownership of such Shares (and any Distribution) on the account books
maintained by the Book-Entry Transfer Facility, together in any case with
appropriate evidences of transfer and authenticity, to the Depositary for the
account of the Purchaser, (b) present such Shares (and any Distribution) for
transfer on the books of the Company and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares (and any
Distribution), all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints designees of the Purchaser and
each of them, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to the full extent of the undersigned's rights with
respect to the Shares tendered by the undersigned and accepted for payment by
the Purchaser (and with respect to any and all other Shares or other securities
issued or issuable in respect of such Shares on or after January 6, 1999). This
power of attorney and proxy is coupled with an interest in the tendered Shares
and is irrevocable. Such appointment will be effective when, and only to the
extent that the Purchaser accepts such Shares for payment. Upon such acceptance
for payment, all prior proxies or consents given by the undersigned with respect
to such Shares (and such other Shares and securities) will, without further
action, be revoked and no subsequent proxies or consents may be given by the
undersigned and, if given, will not be effective. The designees of the Purchaser
will, with respect to such Shares (and such other shares and securities) be
empowered, among other things, to exercise all voting and other rights of such
stockholder as they in their sole discretion may deem proper at any annual,
special or adjourned or postponed meeting of the Company's stockholders, or by
written consent in lieu of any such meeting or otherwise. The undersigned
understands that the Purchaser reserves the right to require that, in order for
the Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser is able to exercise full
voting rights with respect to such Shares and other securities, including voting
at any meeting of stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distribution) tendered hereby and that, when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto (and any Distribution), free and clear of all liens,
restrictions, charges and encumbrances and the same will not be subject to any
adverse claim. The
<PAGE> 4
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares (and any Distribution)
tendered hereby. In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all other
Distribution in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be, subject to applicable
law, entitled to all rights and privileges as owner of any such Distributions,
and may withhold the entire purchase price of Shares tendered hereby or deduct
from the purchase price of Shares tendered hereby the amount or value thereof,
as determined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date (as defined in the Offer to Purchase) and, unless
theretofore accepted for payment pursuant to the Offer, may also be withdrawn at
any time after March 13, 1999. See Section 4 of the Offer to Purchase.
The undersigned understands that tenders of the Shares pursuant to any one
of the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer,
including the undersigned representation that the undersigned owns the Shares
being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificate(s)
for Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificate(s) for Shares not tendered
or accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both the "Special Delivery Instructions" and the
"Special Payment Instructions" are completed, please issue the check for the
purchase price and/or return any certificate(s) for Shares not tendered or
accepted for payment in the name(s) of, and deliver said check and/or return
certificate(s) to, the person(s) so indicated. Stockholders tendering the Shares
by book-entry transfer may request that any Shares not accepted for payment be
returned by crediting such account maintained at such Book-Entry Transfer
Facility as such stockholder may designate by making an appropriate entry under
"Special Payment Instructions." The undersigned recognizes that the Purchaser
has no obligation pursuant to the "Special Payment Instructions" to transfer any
Shares from the name(s) of the registered holder(s) thereof if the Purchaser
does not accept for payment any such Shares.
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment and/or the check for the purchase price of the Shares purchased are
to be issued in the name of someone other than the undersigned, or if the Shares
tendered by book-entry transfer which are not purchased are to be returned by
credit to an account maintained at the Book-Entry Transfer Facility other than
that designated on the front cover:
Issue: [ ] Check [ ] Certificate to:
Name(s):
- -------------------------------------------
(Please Print)
- -------------------------------------------------------
(Please Print)
Address:
- --------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Include Zip Code)
- -------------------------------------------------------
(Taxpayer Identification or Social Security No.)
(See Substitute Form W-9 on Back Cover)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment and/or the check for the purchase price of the Shares purchased are
to be sent to someone other than the undersigned, or to the undersigned at an
address other than that shown on the front cover:
Mail: [ ] Check [ ] Certificate to:
Name:
- -----------------------------------------------
(Please Print)
Address:
- --------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Include Zip Code)
<PAGE> 6
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 AT THE END OF THIS DOCUMENT)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Signature(s) of Owner(s)
Dated:
----------------------------------
(Must be signed by the registered holder(s) exactly as name(s)
appear(s) on the Share Certificate(s) or on a security position listing or
by person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide
the necessary information. See Instruction 5.)
Name(s):
---------------------------------------------------------------------
-----------------------------------------------------------------------------
(Please Print)
Capacity (Full Title):
------------------------------------------------------
Address:
---------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Include Zip Code)
Daytime Area Code and Telephone Number:
--------------------------------------
Tax Identification or Social Security No.:
-----------------------------------
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
--------------------------------------------------------
Name:
------------------------------------------------------------------------
Name of Firm:
----------------------------------------------------------------
Address:
---------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
---------------------------------------------
Dated:
-----------------------------------------------------------------------
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in a Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of the Shares) tendered
herewith, unless such holder(s) has completed the box entitled "Special Payment
Instructions" or (ii) if such Shares are tendered for the account of a firm that
is a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of the Securities Transfer Agents Medallion
Program (an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if the certificate(s) for Shares are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if tenders are to be made pursuant to the procedures for
tender by book-entry transfer set forth in Section 3 of the Offer to Purchase.
Share Certificates, or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility, as well as this Letter of Transmittal (or an
originally signed facsimile copy thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in the case of a
book-entry transfer, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on this Letter of Transmittal on or prior to the Expiration Date.
Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedures
for delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser,
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer together with a properly completed and duly
executed Letter of Transmittal (or an originally signed facsimile copy thereof),
with any required signature guarantees (or, in the case of a book-entry
delivery, an Agent's Message) and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three Nasdaq National
Market ("NNM") trading days after the date of execution of such Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER.) If fewer than all the Shares evidenced by any Share Certificate
submitted are to be tendered, fill in
<PAGE> 8
the number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered". In such cases, new Share Certificates for the Shares that were
evidenced by your old Share Certificates, but were not tendered by you, will be
sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by Share Certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or purchased are to be issued in the name
of, a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holder(s) appear(s) on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder(s), or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such person) payable on account of
the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificate(s) listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for unpurchased Shares are to be returned to, a
person other than the signer of this Letter of Transmittal or if a check is to
be sent and/or such certificates are to be returned to someone other than the
signer of this Letter of Transmittal or to an address other than that shown in
the Letter of Transmittal, the appropriate boxes on this Letter of Transmittal
should be completed.
8. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time and from time to time in its sole
discretion.
<PAGE> 9
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to penalties. In addition, payments that are made to
such stockholder or other payee with respect to Shares purchased to the Offer
may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of Shares
or of the last transferee appearing on the transfers attached to, or endorsed
on, the Shares. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its address set forth below.
Requests for additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing the Shares has been lost, destroyed or stolen, the stockholder
should promptly notify the Transfer Agent at 1-800-730-4001. The stockholder
will then be instructed as to the steps that must be taken in order to replace
the certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed and a new certificate has been issued.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR AN ORIGINALLY SIGNED FACSIMILE
COPY THEREOF) OR AN AGENT'S MESSAGE TOGETHER WITH CERTIFICATES OR CONFIRMATION
OF BOOK-ENTRY TRANSFER OR THE NOTICE OF GUARANTEED DELIVERY AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE
EXPIRATION DATE.
<PAGE> 10
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C>
PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN
FORMW-9 THE BOX AT RIGHT AND CERTIFY BY SOCIAL SECURITY
DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW. NUMBER OR
INTERNAL REVENUE SERVICE EMPLOYER ID NUMBER
PAYER'S REQUEST FOR TAXPAYER ------------------------------
IDENTIFICATION NUMBER ("TIN")
</TABLE>
<TABLE>
<S> <C> <C>
PART 2--CERTIFICATES--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be
issued to me) and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are
currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding you received another notification from the
IRS that you are no longer subject to backup withholding, do not cross out such item (2).
</TABLE>
<TABLE>
<S> <C> <C>
SIGNATURE Date: PART 3 AWAITING TIN [ ]
--------------------------------------- ---------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.
<TABLE>
<S> <C>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION
I certify under penalties of perjury that a taxpayer identification number has not been issued
to me, and either (1) I have mailed or delivered an application to receive a taxpayer
identification number to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld until I provide a Taxpayer Identification
Number.
Signature
--------------------------------------------------------
Date:
----------------------------------------------------------
</TABLE>
<PAGE> 11
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone numbers listed below. Additional copies of
the Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below, and
will be furnished promptly at the Purchaser's expense. You may also contact your
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll Free: 1-800-322-2885
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
TRIDENT INTERNATIONAL, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent thereto
must be used to accept the Offer (as defined below) of certificates representing
shares of Common Stock, par value $.01 per share (the "Shares"), of Trident
International, Inc., a Delaware corporation (the "Company"), or if time will not
permit all required documents to reach First Chicago Trust Company of New York
(the "Depositary") on or prior to the Expiration Date (as defined in the Offer
to Purchase), or, the procedures for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be delivered
by hand or sent by facsimile transmission or mail to the Depositary. See Section
3 of the Offer to Purchase.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
-------- --------------------- --------
<S> <C> <C>
First Chicago Trust Company of First Chicago Trust Company of First Chicago Trust Company of
New York New York New York
Attention: Corporate Actions Attention: Corporate Actions Attention: Corporate Actions
P.O. Box 2569, Suite 4660 Suite 4680-Trident c/o Securities Transfer &
Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor Reporting Services Inc.
New York, NY 10005 100 William Street, Galleria
New York, NY 10038
By Facsimile Transmission:
------------------------------
(201) 222-4720
or
(201 222-4721
Confirm Facsimile
Transmissions Only By
Telephone:
------------------------------
(201) 222-4707
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to ITW Acquisition Inc., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated January 13, 1999 (the "Offer to Purchase") and in the related
Letter of Transmittal (which together constitute the "Offer"), receipt of each
of which is hereby acknowledged, the number of Shares indicated below pursuant
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase.
Signature(s):
------------------------------------
------------------------------------
Name(s) of Record Holder(s):
-----------------------------------------------------
(Please Type or Print)
-----------------------------------------------------
Number of Shares tendered:
-----------------------------------------------------
Certificate No(s) (if available):
-----------------------------------------------------
-----------------------------------------------------
Dated:
--------------------------------------, 1999
Address(es):
- -------------------------------------
- -----------------------------------------------------
(Zip Code)
Daytime Area Code and Tel. No(s):
- -----------------------------------------------------
(Check the box below if Shares will be by book-entry transfer)
[ ] The Depository Trust Company
Account Number:
- --------------------------------
- -----------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, (a) represents that the above
named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"),
(b) represents that such tender of Shares complies with Rule 14e-4, and (c)
guarantees to deliver to the Depositary either the certificates evidencing all
tendered Shares, in proper form for transfer, or to deliver Shares pursuant to
the procedure for book-entry transfer into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility"), in either case
together with the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees or an
Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry delivery, and any other required documents, all within three Nasdaq
National Market trading days after the date hereof.
Name of Firm:
------------------------------------
Address:
------------------------------------------
-----------------------------------------------------
(Zip Code)
Area Code and Tel. No.:
----------------
- -----------------------------------------------------
(Authorized Signature)
Name:
- ---------------------------------------------
(Please Type or Print)
Title:
- -----------------------------------------------
Dated:
- --------------------------------------, 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRIDENT INTERNATIONAL, INC.
at
$16.50 PER SHARE NET
by
ITW ACQUISITION INC.
a wholly owned subsidiary of
ILLINOIS TOOL WORKS INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, FEBRUARY 10, 1999, UNLESS THE OFFER IS EXTENDED.
January 13, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees:
We are enclosing herewith the material listed below pursuant to the offer
by ITW Acquisition Inc., a Delaware corporation ("Purchaser") and a wholly owned
subsidiary of Illinois Tool Works Inc., a Delaware corporation ("Parent") to
purchase all outstanding shares of Common Stock, $.01 par value per share (the
"Shares"), of Trident International, Inc., a Delaware corporation (the
"Company"), for $16.50 per Share, net to the seller in cash, without interest
thereon, less applicable federal withholding taxes, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated January 13, 1999 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer").
For your information and for forwarding to your clients, we are enclosing
the following documents:
(1) The Offer to Purchase, dated January 13, 1999;
(2) Letter of Transmittal to tender Shares for your use and for the
information of your clients. Originally signed facsimile copies of the
Letter of Transmittal may be used to tender Shares;
(3) The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if certificates for Shares are not immediately available or if
the procedure for book-entry transfer cannot be completed on a timely basis
or if time will not permit all required documents to reach First Chicago
Trust Company of New York (the "Depositary") prior to the Expiration Date
(as defined in the Offer to Purchase) of the Offer;
(4) Letter which may be sent to your clients for whose accounts you
hold Shares registered in your name (or in the name of your nominee), with
space provided for obtaining such clients' instructions with regard to the
Offer;
(5) The Letter to Stockholders of the Company from Elaine A. Pullen,
President and Chief Executive Officer of the Company, accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9;
(6) Guidelines of the Internal Revenue Service for certification of
Taxpayer Identification Number on Substitute Form W-9; and
<PAGE> 2
(7) Return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
PROMPTLY. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, FEBRUARY 10, 1999, UNLESS THE OFFER
IS EXTENDED.
In order for Shares to be validly tendered pursuant to the Offer, (i) a
duly executed and properly completed Letter of Transmittal (or an originally
signed facsimile copy thereof) together with any required signature guarantees,
or an Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and other documents required by the Letter of
Transmittal must be received by the Depositary on or prior to the Expiration
Date, and (ii) either certificates representing tendered Shares along with the
Letter of Transmittal (or an originally signed facsimile copy thereof) must be
received by the Depositary, or such Shares must be tendered by book-entry
transfer into the Depositary's account maintained at the Book-Entry Transfer
Facility (as described in the Offer to Purchase), and Book-Entry Confirmation
must be received by the Depositary, all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impractical for them to
forward their certificates for Shares, or if the procedure for book-entry
transfer cannot be completed on a timely basis, or if time will not permit all
required documents to reach the Depositary prior to the Expiration Date of the
Offer, a tender may be effected by following the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Information Agent, as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse you for customary clerical and mailing
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Purchaser will pay or cause to be paid any stock transfer taxes
payable on the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed material may be obtained from, the
Information Agent at its address and telephone number set forth on the back
cover of the Offer to Purchase.
Very truly yours,
ITW ACQUISITION INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, ANY AFFILIATE OF THE PURCHASER,
THE INFORMATION AGENT OR THE DEPOSITARY OR AUTHORIZE YOU OR ANY OTHER PERSON TO
MAKE STATEMENTS OR USE ANY MATERIAL ON THEIR BEHALF WITH RESPECT TO THE OFFER,
OTHER THAN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY SET
FORTH IN SUCH MATERIAL.
Enclosures
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRIDENT INTERNATIONAL, INC.
at
$16.50 PER SHARE NET
by
ITW ACQUISITION INC.
a wholly owned subsidiary of
ILLINOIS TOOL WORKS INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, FEBRUARY 10, 1999, UNLESS THE OFFER IS EXTENDED.
January 13, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated January 13,
1999 (the "Offer to Purchase") and a related Letter of Transmittal, pursuant to
an offer by ITW Acquisition Inc., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Illinois Tool Works Inc., a Delaware corporation (
"Parent"), to purchase all outstanding shares of Common Stock, $.01 par value
per share (the "Shares"), of Trident International, Inc., a Delaware corporation
(the "Company"), at a purchase price of $16.50 per Share, net to the seller in
cash, without interest thereon, less applicable federal withholding taxes, and
subject to the conditions set forth in the Offer to Purchase dated January 13,
1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer").
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $16.50 per Share, net to the seller in cash
(without interest thereon and less any withholding taxes required under
applicable law).
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has determined that the
Merger Agreement (as defined below) and the transactions contemplated
thereby, including each of the Offer and the Merger (as defined below), are
advisable and fair to and in the best interests of the stockholders of the
Company and recommends that holders of the Shares accept the Offer and
tender their Shares to the Purchaser.
4. The Offer is being made pursuant to the Agreement and Plan of
Merger, dated as of January 6, 1999 (the "Merger Agreement"), which
provides that subsequent to the consummation of the Offer, the Purchaser
will merge with and into the Company (the "Merger"). At the
<PAGE> 2
effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held
in the treasury of the Company and Shares, if any, owned by Parent, the
Purchaser or any direct or indirect wholly owned subsidiary of Parent or
the Company, which shall be canceled and retired without payment of any
consideration therefor, and other than Shares, if any, held by stockholders
who shall have properly demanded appraisal of their Shares in accordance
with Section 262 of the Delaware General Corporation Law) shall be
converted into the right to receive $16.50 in cash, without interest, less
any withholding taxes required under applicable law.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Wednesday, February 10, 1999, unless the Offer is
extended.
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer.
7. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer, a
number of Shares which constitutes more than 50% of the issued and
outstanding Shares (determined on a fully diluted basis) and (ii) the
expiration or termination of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and any ancillary documents thereto and is being made to
all holders of Shares. The Purchaser is not aware of any state where the making
of the Offer is prohibited by administrative or judicial action pursuant to a
state statute. If the Purchaser becomes aware of any state where the making of
the Offer is prohibited, the Purchaser will make a good faith effort to comply
with any such state statute or seek to have such statute declared inapplicable
to the Offer. If, after such good faith effort, the Purchaser cannot comply with
any applicable statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state. In those
jurisdictions where the securities, "blue sky" or other laws require the Offer
to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of the Purchaser by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO
PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRIDENT INTERNATIONAL, INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase, dated January 13, 1999 (the "Offer to Purchase"), and a Letter of
Transmittal, relating to the offer by ITW Acquisition Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Illinois Tool
Works Inc., a Delaware corporation ("Parent"), to purchase all outstanding
Shares of Common Stock, $.01 par value per share (the "Shares"), of Trident
International, Inc., a Delaware corporation (the "Company").
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are held
by you for the account of the undersigned upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related specimen Letter
of Transmittal furnished to the undersigned.
<TABLE>
<S> <C> <C> <C>
- ---
NUMBER OF SHARES TO BE TENDERED:*
-------------------------------------------- Shares
DATED:
----------------------------------------------, 1999
- --------------------------------------------------------------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be
tendered.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ---
SIGN HERE
Signature(s) -----------------------------------------------
---------------------------------------------
(Print Name(s)) ------------------------------------------
---------------------------------------------
(Print Address(es)) --------------------------------------
---------------------------------------------
(Area Code and
Telephone Number(s)) ----------------------------------
---------------------------------------------
(Taxpayer Identification
or Social Security Number(s)) --------------------------
---------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
RETURN THIS FORM TO THE BROKERAGE
FIRM MAINTAINING YOUR ACCOUNT.
3
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the Payer.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE NAME AND
SOCIAL SECURITY
NUMBER OF--
- ----------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more The actual owner of the
individuals account or, if combined
(joint account) funds, the first
individual on the
account(1)
3. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
4. a. The usual The grantor-trustee(1)
revocable savings
trust (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
State law
5. Sole proprietorship The owner(3)
6. Sole proprietorship The owner(3)
account
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE NAME AND
EMPLOYER
IDENTIFICATION
NUMBER OF--
<S> <C>
7. A valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(4)
8. Corporate The corporation
9. Association, club, The organization
religious,
charitable,
educational, or other
tax-exempt
organization
10. Partnership The partnership
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments.
</TABLE>
- ------------------------------------------------------------
- ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employment identification number (if you have one).
(4) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Card, or Form SS-4,
Application for Employer Identification Number (for businesses and all other
entities), or Form W-7 for Individual Taxpayer Identification Number (for alien
individuals required to file U.S. tax returns), at an office of the Social
Security Administration or the Internal Revenue Service.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7), if the
account satisfies the requirements of Section 401(f)(2).
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- - An international organization or any agency or instrumentality thereof.
Payees that may be exempt from backup withholding, including, among others:
- - A corporation.
- - A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- - A foreign central bank of issue.
- - A financial institution.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include
the following:
- - Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
- - Mortgage interest paid to you.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and their regulations.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest
or other payments to give taxpayer identification numbers to payers who must
report the payments to the IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividend and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell these securities. The Offer is made only by the Offer to Purchase and
the related Letter of Transmittal and is not being made to (nor will tenders be
accepted from ) holders of Shares in any jurisdiction in which the Offer or the
acceptance thereof would not be in compliance with the securities laws of such
jurisdiction. In those jurisdictions where securities laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Offeror by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF
COMMON STOCK OF
TRIDENT INTERNATIONAL, INC.
AT
$16.50 NET PER SHARE
BY
ITW ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
ILLINOIS TOOL WORKS INC.
ITW Acquisition Inc., a Delaware corporation (the "Purchaser"), a wholly
owned subsidiary of Illinois Tool Works Inc., a Delaware corporation ("Parent"),
is offering to purchase all of the shares of common stock, par value $.01 per
share (the "Shares"), of Trident International, Inc., a Delaware corporation
(the "Company"), for $16.50 net to the seller in cash without interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
January 13, 1999 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, FEBRUARY 10, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
SHARES THAT WOULD CONSTITUTE AT LEAST A MAJORITY OF THE SHARES THAT ARE
OUTSTANDING DETERMINED ON A FULLY DILUTED BASIS, (II) ANY WAITING PERIOD UNDER
THE HSR ACT (AS DEFINED IN THE OFFER TO PURCHASE) APPLICABLE TO THE PURCHASE OF
SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO
THE EXPIRATION OF THE OFFER, AND (III) THE SATISFACTION OF CERTAIN OTHER TERMS
AND CONDITIONS.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of January 6, 1999 (the "Merger Agreement") among Parent, the Purchaser and
the Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with relevant provisions of the Delaware General Corporation Law (the
"DGCL"), the Purchaser will be merged with and
<PAGE> 2
into the Company (the "Merger"). At the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding immediately prior to the
Effective Time (other than Shares held in the treasury of the Company, Shares
held by Parent, the Purchaser or any direct or indirect subsidiary of Parent, or
the Company, which shall be canceled and retired without payment of any
consideration therefor, and other than Shares, if any (collectively "Dissenting
Shares"), held by stockholders who have not voted in favor of the Merger
Agreement or consented thereto in writing and who have properly demanded
appraisal of their Shares in accordance with Section 262 of the DGCL) will be
converted into the right to receive $16.50 in cash, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY ADOPTED THE MERGER
AGREEMENT AND APPROVED THE OFFER AND THE MERGER, HAS DETERMINED THAT THE TERMS
OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT
THE OFFER AND TENDER ALL THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased Shares validly tendered and not withdrawn, if
and when the Purchaser gives oral or written notice to First Chicago Trust
Company of New York (the "Depositary") of the Purchaser's acceptance of such
Shares for payment. In all cases, payment for Shares purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares or timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in the Offer to Purchase) pursuant to the procedures set forth in
the Offer to Purchase, (ii) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message (as defined in the
Offer to Purchase) and (iii) any other documents required by the Letter of
Transmittal.
If any of the conditions set forth in the Offer to Purchase that relate to
the Purchaser's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Wednesday, February 10, 1999 (or any later time
then set as the Expiration Date), the Purchaser may, subject to the terms of the
Merger Agreement, (i) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered shares until the expiration of the Offer as so
extended, (ii) subject to complying with applicable rules and regulations of the
Securities and Exchange Commission, accept for payment all Shares so tendered
and not extend the Offer, or (iii) terminate the Offer and not accept for
payment any Shares and return all tendered Shares to tendering shareholders. If
immediately before the expiration of the Offer the Shares tendered and not
withdrawn are less than 90% of the Shares then outstanding (on a fully diluted
basis), the Purchaser, subject to the terms of the Merger Agreement, may extend
the Offer even if at that time all Offer conditions are then satisfied. The term
"Expiration Date" shall mean 12:00 Midnight, New York City time, on Wednesday,
February 10, 1999, unless the Purchaser shall have extended the period of time
for which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire.
Subject to the limitations set forth in the Offer and the Merger Agreement,
the Purchaser reserves the right (but will not be obligated), at any time or
from time to time in its sole discretion, to extend the period during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension. There can be
no assurance that the Purchaser will exercise its right to extend the Offer. Any
extension of the period during which the Offer is open will be followed, as
promptly as practicable, by public announcement thereof, such announcement to be
issued not later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to the rights of a tendering stockholder to withdraw such stockholder's
Shares.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders
of Shares made pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date, and, unless theretofore accepted for payment, may also be
withdrawn at any time after March 13, 1999. For a withdrawal to be effective, a
written or facsimile transmission notice of withdrawal
-2-
<PAGE> 3
must be timely received by the Depositary at one of its addresses set forth on
the back cover of the Offer to Purchase. Any such notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder if
different from the name of the person who tendered the Shares. If certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered for the account of an Eligible Institution
(as defined in the Offer to Purchase), the signature on the notice of withdrawal
must be guaranteed by an Eligible Institution. If shares have been tendered
pursuant to the procedures for book-entry transfer set forth in Section 3 of the
Offer to Purchase, the notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares, in which case a notice of withdrawal will be effective if
delivered to the Depositary by any method of delivery described in this
paragraph. All questions as to the form and validity (including time of receipt)
of a notice of withdrawal will be determined by the Purchaser, in its sole
discretion, and its determination shall be final and binding on all parties.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided to the Purchaser its list of stockholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
materials are being mailed to record holders of Shares and will be mailed to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Any questions or requests for assistance or for copies of the Offer to
Purchase and the related Letter of Transmittal and other tender offer materials
may be directed to the Information Agent as set forth below, and copies will be
furnished promptly at Purchaser's expense. No fees or commissions will be
payable to brokers, dealers or other persons for soliciting tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
MACKENZIE
PARTNERS, INC.
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (CALL COLLECT)
OR
CALL TOLL FREE: 1-800-322-2885
January 13, 1999
-3-
<PAGE> 1
PRESS RELEASE
ILLINOIS TOOL WORKS COMMENCES $16.50 CASH TENDER FOR TRIDENT
Glenview, IL -- January 13, 1999. Illinois Tool Works Inc. (NYSE: ITW)
announced that it has commenced, through its wholly owned subsidiary, ITW
Acquisition Inc., a tender offer for all of the outstanding shares of common
stock of Trident International, Inc. (NASDAQ: TRDT) at a price of $16.50 per
share, net to the seller in cash, without interest thereon. The Board of
Directors of Trident has unanimously approved the offer and recommended that
Trident stockholders tender their shares pursuant to the offer.
The offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on Wednesday, February 10, 1999, unless the offer is extended. The
offer is conditioned upon, among other things, ITW acquiring at least a majority
of the outstanding Trident shares on a fully diluted basis and the ending of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The tender offer is pursuant to the previously announced merger agreement
between ITW and Trident. In the merger to occur following the consummation of
the tender offer, each share of Trident common stock which is outstanding and
not purchased in the tender offer will be converted into the right to receive
$16.50 in cash.
The offer is made only by the Offer to Purchase and the related Letter of
Transmittal which are being mailed to Trident stockholders. Copies of the
documents may also be obtained from MacKenzie Partners, Inc. (1-800-322-2885)
who is the Information Agent for the offer.
Trident designs, manufactures and markets proprietary impulse ink jet
technology to industrial original equipment manufacturers worldwide. Trident's
product line includes patented impulse ink jet printheads, ink delivery systems,
a range of inks and electronic interface circuits.
ITW is a multinational manufacturer of highly engineered components and
industrial systems. The company has approximately 365 operations in 34 countries
and 25,700 employees.
<PAGE> 1
EXHIBIT (b)(1)
EXECUTION COPY
- --------------------------------------------------------------------------------
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of September 30, 1998
among
ILLINOIS TOOL WORKS INC.,
THE LENDERS
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I
DEFINITIONS....................................................................Page 2
1.1. Definitions..................................................Page 2
1.2. Accounting Terms and Determinations.........................Page 16
ARTICLE II
THE FACILITY..................................................................Page 16
2.1. The Facility................................................Page 16
2.1.1. Description of Facility...........................Page 16
2.1.2. Availability of Facility; Required Payments.......Page 17
2.2. Committed Advances..........................................Page 17
2.2.1. Committed Advances................................Page 17
2.2.2. Types of Committed Advances.......................Page 17
2.2.3. Method of Selecting Types and Interest Periods for New
Committed Advances................................Page 17
2.2.4. Conversion and Continuation of Outstanding
Advances........................................Page 18
2.3. Competitive Bid Advances....................................Page 18
2.3.1. Competitive Bid Option; Repayment of
Competitive Bid Advances........................Page 18
2.3.2. Competitive Bid Quote Request.....................Page 19
2.3.3. Invitation for Competitive Bid Quotes.............Page 20
2.3.4. Submission and Contents of Competitive
Bid Quotes......................................Page 20
2.3.5. Notice to the Company.............................Page 21
2.3.6. Acceptance and Notice by the Borrowers............Page 22
2.3.7. Allocation by the Agent...........................Page 22
2.4. Fees........................................................Page 23
2.4.1. Facility Fee......................................Page 23
2.4.2. Agency and Administration Fees....................Page 23
2.5. General Facility Terms......................................Page 23
2.5.1. Method of Borrowing. .............................Page 23
2.5.2. Minimum Amount of Each Committed Advance..........Page 23
2.5.3. Optional Principal Payments.......................Page 23
2.5.4. Interest Rates; Interest Periods..................Page 24
2.5.5. Rate after Maturity...............................Page 24
2.5.6. Interest Payment Dates; Interest Basis............Page 25
2.5.7. Method of Payment.................................Page 25
2.5.8. Notes; Telephonic Notices.........................Page 26
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
2.5.9. Notification of Advances, Interest Rates
and Prepayments.................................Page 26
2.5.10. Non-Receipt of Funds by the Agent.................Page 26
2.5.11. Termination, Reduction or Increase
in the Aggregate Commitments.....................Page 27
2.5.12. Market Disruption. ...............................Page 30
2.5.13. Lending Installations.............................Page 30
2.5.14. Borrowing Subsidiaries............................Page 30
2.5.15. Withholding Tax Exemption.........................Page 31
2.5.16. Judgment Currency.................................Page 31
2.5.17. Extension of Termination Date.....................Page 32
ARTICLE III
CHANGE IN CIRCUMSTANCES.......................................................Page 33
3.1. Taxes.........................................................Page 33
3.1.1. Payments to be Free and Clear.......................Page 33
3.1.2. Grossing-up of Payments.............................Page 33
3.2. Increased Costs. ...........................................Page 34
3.3. Changes in Capital Adequacy Regulations.....................Page 34
3.4. Availability of Types of Advances...........................Page 35
3.5. Funding Indemnification.....................................Page 35
3.6. Mitigation of Additional Costs or Adverse Circumstances.....Page 35
3.7. Lender Statements; Survival of Indemnity....................Page 36
ARTICLE IV
CONDITIONS PRECEDENT..........................................................Page 37
4.1. Initial Advance.............................................Page 37
4.2. Initial Advance to Each Borrowing Subsidiary. ..............Page 38
4.3. Each Advance................................................Page 38
ARTICLE V
REPRESENTATIONS AND WARRANTIES................................................Page 39
5.1. Corporate Existence and Standing............................Page 39
5.2. Authorization and Validity. ................................Page 39
5.3. No Conflict; Government Consent.............................Page 39
5.4. Financial Statements........................................Page 39
5.5. Material Adverse Change.....................................Page 40
5.6. Taxes. .....................................................Page 40
5.7. Litigation..................................................Page 40
5.8. Material Subsidiaries.......................................Page 40
5.9. ERISA.......................................................Page 40
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
5.10. Full Disclosure.............................................Page 40
5.11. Title to Properties.........................................Page 40
5.12. Patents and Trademarks......................................Page 41
5.13. No Defaults.................................................Page 41
5.14. Investment Company Act. ....................................Page 41
5.15. Compliance with Environmental Laws. ........................Page 41
5.16. Regulations U and X.........................................Page 41
ARTICLE VI
COVENANTS.....................................................................Page 42
6.1. Financial Reporting.........................................Page 42
6.2. Use of Proceeds. ...........................................Page 43
6.3. Notice of Default...........................................Page 43
6.4. Corporate Existence.........................................Page 43
6.5. Taxes.......................................................Page 43
6.6. Insurance...................................................Page 44
6.7. Compliance with Laws........................................Page 44
6.8. Inspection..................................................Page 44
6.9. Sale of Assets; Merger and Consolidation....................Page 44
6.10. Liens. .....................................................Page 45
6.11. Consolidated Indebtedness to Consolidated Total Capital.....Page 46
6.12. Consolidated Net Worth......................................Page 46
ARTICLE VII
DEFAULTS......................................................................Page 46
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES................................Page 48
8.1. Acceleration................................................Page 48
8.2. Amendments..................................................Page 48
8.3. Preservation of Rights......................................Page 49
ARTICLE IX
GUARANTY......................................................................Page 49
9.1. Guaranty....................................................Page 49
9.2. Waivers.....................................................Page 50
9.3. Guaranty Absolute. .........................................Page 50
9.4. Waiver of Subrogation.......................................Page 51
9.5. Acceleration. ..............................................Page 51
9.6. Termination Date............................................Page 51
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE X
GENERAL PROVISIONS............................................................Page 52
10.1. Governmental Regulation.....................................Page 52
10.2. Taxes. .....................................................Page 52
10.3. Headings....................................................Page 52
10.4. Entire Agreement............................................Page 52
10.5. Several Obligations.........................................Page 52
10.6. Expenses; Indemnification...................................Page 52
10.7. Numbers of Documents........................................Page 53
10.8. Severability of Provisions..................................Page 53
10.9. Nonliability of Lenders. ...................................Page 53
10.10. CHOICE OF LAW...............................................Page 53
10.11. CONSENT TO JURISDICTION.....................................Page 53
10.12. WAIVER OF JURY TRIAL........................................Page 54
10.13. Confidentiality.............................................Page 54
10.14. Restructuring Date..........................................Page 54
10.15. Euro........................................................Page 55
ARTICLE XI
THE AGENT.....................................................................Page 55
11.1. Appointment.................................................Page 55
11.2. Powers......................................................Page 55
11.3. General Immunity............................................Page 55
11.4. No Responsibility for Loans, Recitals, etc..................Page 55
11.5. Action on Instructions of Lenders...........................Page 56
11.6. Employment of Agents and Counsel............................Page 56
11.7. Reliance on Documents; Counsel..............................Page 56
11.8. Agent's Reimbursement and Indemnification...................Page 56
11.9. Rights as a Lender. ........................................Page 57
11.10. Lender Credit Decision......................................Page 57
11.11. Successor Agent. ...........................................Page 57
ARTICLE XII
SETOFF; RATABLE PAYMENTS......................................................Page 58
12.1. Setoff......................................................Page 58
12.2. Ratable Payments............................................Page 58
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE XIII
BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS.............................Page 58
13.1. Successors and Assigns......................................Page 58
13.2. Participations..............................................Page 59
13.2.1. Permitted Participants; Effect. ..................Page 59
13.2.2. Voting Rights. ...................................Page 59
13.2.3. Benefit of Setoff.................................Page 59
13.3. Assignments.................................................Page 59
13.3.1. Permitted Assignments.............................Page 60
13.3.2. Effect; Effective Date............................Page 60
13.4. Dissemination of Information................................Page 60
13.5. Tax Treatment. .............................................Page 60
ARTICLE XIV
NOTICES.......................................................................Page 61
14.1. Giving Notice. .............................................Page 61
14.2. Change of Address. .........................................Page 61
ARTICLE XV
COUNTERPARTS..................................................................Page 61
SCHEDULE I
Euro-Currency Payment Offices of the Agent..........................................I
SCHEDULE II................................................................................II
Material Subsidiaries..............................................................II
EXHIBIT "A-1"
COMMITTED NOTE....................................................................E-1
EXHIBIT "A-2"
COMPETITIVE BID NOTE..............................................................E-3
EXHIBIT "B-1".............................................................................E-5
FORM OF COMPANY OPINION...........................................................E-5
</TABLE>
v
<PAGE> 7
<TABLE>
<S> <C>
EXHIBIT "B-2".............................................................................E-7
FORM OF SUBSIDIARY OPINION........................................................E-7
EXHIBIT "C"
COMPETITIVE BID QUOTE REQUEST.....................................................E-9
EXHIBIT "D"
INVITATION FOR COMPETITIVE BID QUOTES............................................E-10
EXHIBIT "E"
COMPETITIVE BID QUOTE............................................................E-11
EXHIBIT "F"
ASSIGNMENT AGREEMENT.............................................................E-13
EXHIBIT "G"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION...................................E-23
EXHIBIT "H"
FORM OF ASSUMPTION LETTER........................................................E-24
EXHIBIT "I"
COMPLIANCE CERTIFICATE...........................................................E-26
EXHIBIT "J"
LENDER ASSUMPTION AGREEMENT......................................................E-29
</TABLE>
vi
<PAGE> 8
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amended and Restated Credit Agreement (this "Agreement"), dated
as of September 30, 1998, is among Illinois Tool Works Inc. (the "Company"), any
Borrowing Subsidiaries which may become a party hereto from time to time, the
Lenders and The First National Bank of Chicago, as Agent.
RECITALS
WHEREAS, the Company, certain lenders and The First National Bank of
Chicago, as agent for such lenders, entered into that certain Amended and
Restated Credit Agreement dated as of May 30, 1996 (the "Original Credit
Agreement"), in which such lenders agreed to make available to the Company and
any Borrowing Subsidiaries from time to time party thereto loans in an aggregate
principal amount of up to $250,000,000 (herein called the "Original Credit
Facility");
WHEREAS, the parties hereto wish to continue the existing credit
relationship among them by amending and restating the Original Credit Agreement
rather than entering into a new and unrelated credit agreement;
WHEREAS, the Company, the Lenders and the Agent desire to restructure the
Original Credit Facility so as to (i) extend the term of the Original Credit
Facility, (ii) increase the aggregate commitments thereunder to the Aggregate
Commitment (as defined herein) and (iii) amend various other provisions in the
Original Credit Agreement; and
WHEREAS, pursuant to the terms of this Second Amended and Restated Credit
Agreement, on the Restructuring Date, (i) the aggregate of the commitments under
the Original Credit Facility shall be increased to the Aggregate Commitment (the
credit facility in such amount set forth herein the "New Credit Facility"), (ii)
all Obligations of the Borrower outstanding as of the Restructuring Date under
the Original Credit Facility shall be paid in full on the Restructuring Date and
(iii) all provisions of this Second Amended and Restated Credit Agreement not
theretofore in effect shall become effective;
NOW, THEREFORE, in consideration of the undertakings set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
<PAGE> 9
ARTICLE I
DEFINITIONS
1.1.Definitions.
As used in this Agreement:
"Absolute Rate" means, with respect to a Loan made by a given Lender for
the relevant Absolute Rate Interest Period, the rate of interest per annum
(rounded to the nearest 1/100 of 1%) offered by such Lender and accepted by the
applicable Borrower pursuant to Section 2.3.6(iii).
"Absolute Rate Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Absolute Rate Loans made by some or all of the
Lenders to the applicable Borrower at the same time and for the same Absolute
Rate Interest Period.
"Absolute Rate Auction" means a solicitation of Competitive Bid Quotes
setting forth Absolute Rates pursuant to Section 2.3.
"Absolute Rate Interest Period" means, with respect to an Absolute Rate
Advance or an Absolute Rate Loan, a period of not less than 30 and not more than
270 days commencing on a Business Day selected by the applicable Borrower
pursuant to this Agreement. If such Absolute Rate Interest Period would end on a
day which is not a Business Day, such Absolute Rate Interest Period shall end on
the next succeeding Business Day.
"Absolute Rate Loan" means a Loan which bears interest at an Absolute Rate.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Company or any
Subsidiary (a) acquires any going business or all or substantially all of the
assets of any firm, corporation or division thereof, whether through purchase of
assets, merger or otherwise, or (b) directly or indirectly acquires (in one
transaction or in a series of transactions) at least 25% (in number of votes) of
the equity securities of a corporation which have ordinary voting power for the
election of directors (other than securities having such power only by reason of
the happening of a contingency).
"Advance" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by some or all of the Lenders to the Borrowers of the
same Type (or on the same interest basis in the case of Competitive Bid
Advances) and, in the case of Fixed Rate Advances, for the same Interest Period
and includes a Competitive Bid Advance.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or
Page 2
<PAGE> 10
other ownership interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means The First National Bank of Chicago in its capacity as agent
for the Lenders pursuant to Article XI, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article XI.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders hereunder, as increased or reduced from time to time pursuant to the
terms hereof.
"Agreed Currency" shall mean Dollars, Australian dollars, Canadian dollars,
Deutsche marks, Dutch guilders, French francs, Japanese yen, pounds sterling,
the Euro (upon and after the Euro Implementation Date), and any other currency
which is freely transferable and convertible into Dollars, as available and if
available, in which deposits are customarily offered to banks in the London
interbank market, which the applicable Borrower requests the Agent to include as
an Agreed Currency hereunder and which is acceptable to each Lender; provided
that the Agent shall promptly notify each Lender of each such request and each
Lender shall be deemed to have agreed to each such request if its objection
thereto has not been received by the Agent within five Business Days from the
date of such notification by the Agent to such Lender.
"Agreement" means this Second Amended and Restated Credit Agreement, as it
may be amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Alternate Base Rate" means, on any date and with respect to all Floating
Rate Advances, a fluctuating rate of interest per annum equal to the higher of
(i) the Federal Funds Effective Rate most recently determined by the Agent plus
1/2% per annum and (ii) the Corporate Base Rate. Changes in the rate of interest
on each Floating Rate Advance will take effect simultaneously with each change
in the Alternate Base Rate. The Agent will give notice promptly to the Company
and the Lenders of changes in the Alternate Base Rate, provided, however, that
the Agent's failure to give any such notice will not affect the Company's
obligation to pay interest to the Lenders on Floating Rate Advances at the then
effective Alternate Base Rate.
"Applicable Facility Fee Rate" means a percentage rate per annum equal to
(i) during any Level 1 Rating Period, 0.065%, (ii) during any Level 2 Rating
Period, 0.075% and (iii) during any Level 3 Rating Period, 0.10%. Any change in
the Applicable Facility Fee Rate shall become effective immediately upon a
public announcement by Moody's or S&P which would change the Rating Period then
applicable to the Company. At any time at which S&P's rating of the Company's
senior unsecured long-term debt differs from Moody's rating thereof by more than
one
Page 3
<PAGE> 11
level (including each modifier as a separate level), then the Applicable
Facility Fee Rate shall be determined by reference to the rating which is one
level below the higher of the two ratings.
"Applicable Margin" means, with respect to each Eurocurrency Committed
Advance, a percentage rate per annum equal to (i) during any Level 1 Rating
Period, 0.13%, (ii) during any Level 2 Rating Period, 0.15% and (iii) during any
Level 3 Rating Period, 0.20%. Any change in the Applicable Margin shall become
effective immediately upon a public announcement by Moody's or S&P which would
change the Rating Period then applicable to the Company, and shall apply to all
Eurocurrency Committed Advances outstanding on the date of such announcement as
well as all Eurocurrency Committed Advances made thereafter (until any
subsequent public announcement which would further change the Rating Period
applicable to the Company). At any time at which S&P's rating of the Company's
senior unsecured long-term debt differs from Moody's rating thereof by more than
one level (including each modifier as a separate level), then the Applicable
Margin shall be determined by reference to the rating which is one level below
the higher of the two ratings.
"Approximate Equivalent Amount" of any currency with respect to any amount
of Dollars shall mean the Equivalent Amount of such currency with respect to
such amount of Dollars at such date (i) if such currency is Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, French francs, Japanese yen or
pounds sterling, rounded up to the nearest 1,000,000 of such currency and (ii)
if such currency is any other Agreed Currency, rounded up to the nearest amount
of such currency as determined by the Agent from time to time.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assuming Lender" is defined in Section 2.5.11.
"Assumption Letter" means a letter of a Subsidiary of the Company addressed
to the Lenders in substantially the form of Exhibit H hereto pursuant to which
such Subsidiary agrees to become a "Borrowing Subsidiary" and agrees to be bound
by the terms and conditions hereof.
"Borrower" means the Company or any Borrowing Subsidiary and "Borrowers"
means, collectively, the Company and each Borrowing Subsidiary.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Subsidiary" means any Subsidiary duly designated by the Company
pursuant to Section 2.5.14 hereof to request Advances hereunder, which
Subsidiary shall have delivered to the Agent an Assumption Letter in accordance
with Section 2.5.14.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurocurrency Committed Advances or Eurocurrency Bid Rate Advances
and to any currency
Page 4
<PAGE> 12
conversion (other than those denominated in Euro) a day other than Saturday or
Sunday on which banks are open for business in Chicago and New York City, on
which dealings in United States dollars are carried on in the London interbank
market and, where funds are to be paid or made available a currency other than
Dollars, on which commercial banks are open for domestic and international
business (including dealings in deposits in such currency) in both London and
the place where such funds are to be paid or made available, (ii) with respect
to any borrowing, payment or rate selection denominated in Euro, a day (other
than a Saturday or Sunday) on which a suitable clearing system for the Euro is
open for business, as determined by the Agent, and (iii) for all other purposes,
a day other than Saturday or Sunday on which banks are open for business in
Chicago and New York City.
"Capitalized Lease" means any lease the obligation for Rentals with respect
to which is required to be capitalized on a balance sheet of the lessee in
accordance with Agreement Accounting Principles.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of the Lender to make
Loans to the Borrowers not exceeding the amount set forth opposite its signature
below or as set forth in an applicable Assignment Agreement in the form of
Exhibit "F" hereto or Lender Assumption Agreement in the form of Exhibit "J"
hereto received by the Agent under the terms of Section 12.3, as such amount may
be modified from time to time pursuant to the terms of this Agreement.
"Commitment Date" is defined in Section 2.5.11.
"Commitment Increase" is defined in Section 2.5.11.
"Committed Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Committed Loans made by the Lenders to the Borrowers at
the same time, of the same Type and, in the case of Fixed Rate Advances, for the
same Interest Period.
"Committed Borrowing Notice" is defined in Section 2.2.3.
"Committed Loan" means a Loan made by a Lender pursuant to Section 2.2.
"Committed Note" means a promissory note in substantially the form of
Exhibit "A-1" hereto, with appropriate insertions, duly executed and delivered
to the Agent by the applicable Borrower for the account of a Lender and payable
to the order of such Lender in the amount of its Commitment, including any
amendment, modification, renewal or replacement of such promissory note.
Page 5
<PAGE> 13
"Company" means Illinois Tool Works Inc., a Delaware corporation, and its
successors and assigns.
"Competitive Bid Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Competitive Bid Loans made by some or all of the
Lenders to the applicable Borrower at the same time, at the same interest basis,
and for the same Interest Period.
"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
"Competitive Bid Loan" means a Eurocurrency Bid Rate Loan or an Absolute
Rate Loan, as the case may be.
"Competitive Bid Margin" means the margin above or below the applicable
Eurocurrency Base Rate offered for a Eurocurrency Bid Rate Loan, expressed as a
percentage (rounded to the nearest 1/100 of 1%) to be added or subtracted from
such Eurocurrency Base Rate.
"Competitive Bid Note" means a promissory note in substantially the form of
Exhibit "A-2" hereto, with appropriate insertions, duly executed and delivered
to the Agent by the applicable Borrower for the account of a Lender and payable
to the order of such Lender, including any amendment, modification, renewal or
replacement of such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote substantially in the
form of Exhibit "E" hereto completed and delivered by a Lender to the Agent in
accordance with Section 2.3.4.
"Competitive Bid Quote Request" means a Competitive Bid Quote Request
substantially in the form of Exhibit "C" hereto completed and delivered by the
Company to the Agent in accordance with Section 2.3.2.
"Consolidated Indebtedness" means, at any date as of which the same is to
be determined, the Indebtedness of the Company and its Consolidated
Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Net Income" means for any period the amount of net income (or
deficit) of the Company and its Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with Agreement Accounting
Principles, excluding any net income (or net loss) of a Consolidated Subsidiary
for any period during which it was not a Consolidated Subsidiary, or any net
income (or net loss) of any business, properties or assets acquired (by way of
merger, consolidation, purchase or otherwise) by the Company or any Consolidated
Subsidiary for any period prior to the date of acquisition thereof.
Page 6
<PAGE> 14
"Consolidated Net Worth" means, at any date as of which the same is to be
determined, the consolidated stockholders' equity (exclusive of foreign currency
translation adjustments) of the Company and its Consolidated Subsidiaries,
determined in accordance with Agreement Accounting Principles.
"Consolidated Subsidiary" means, at any date as of which the same is to be
determined, any Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated financial statements
if such statements were prepared as of such date in accordance with Agreement
Accounting Principles.
"Consolidated Tangible Net Worth" means, at any date as of which the same
is to be determined, Consolidated Net Worth less consolidated Intangible Assets,
determined in accordance with Agreement Accounting Principles. For purposes of
this definition "Intangible Assets" means the amount (to the extent reflected in
determining Consolidated Net Worth) of (i) any surplus resulting from any
write-up (other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within twelve months after
the acquisition of such business) subsequent to December 31, 1997 in the book
value of any asset owned by the Company or a Consolidated Subsidiary, and (ii)
all unamortized debt discount and expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible items.
"Consolidated Total Capital" means, at any date as of which the same is to
be determined, Consolidated Indebtedness plus consolidated stockholders' equity
(exclusive of foreign currency translation adjustments) of the Company and its
Consolidated Subsidiaries, all determined as of such date in accordance with
Agreement Accounting Principles.
"Conversion/Continuation Notice" is defined in Section 2.2.4.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes.
"Default" means an event described in Article VII.
"Dollar Amount" of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the equivalent amount of
Dollars if such currency is any currency other than Dollars, calculated on the
basis of the arithmetical mean of the buy and sell
Page 7
<PAGE> 15
spot rates of exchange of the Agent for such currency on the London market at
11:00 a.m., London time, two Business Days prior to the date on which such
amount is to be determined.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Eligible Bank" means, for purposes of Article XIII, a commercial bank,
which may be an Affiliate of a Lender, or any other entity regularly engaged in
the making of loans or other extensions of credit, whose long-term senior
unsecured credit rating is at least A- according to S&P or A3 according to
Moody's and to which the Company and the Agent shall have consented, such
consent not to be unreasonably withheld.
"Equivalent Amount" of any currency with respect to any amount of Dollars
at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of the Agent for such other currency at 11:00 a.m.,
London time, two Business Days prior to the date on which such amount is to be
determined.
"ERISA" means the Employee Retirement Income Security Act of l974, as
amended from time to time.
"Euro" means the euro referred to in Council Regulation (EC) No 1103/97
dated 17 June 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of the Economic and Monetary Union.
"Euro Implementation Date" means the first date (currently expected to be
January 1, 1999) on which the Euro becomes the currency of some or all of the
member states of the European Union.
"Eurocurrency Auction" means a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins pursuant to Section 2.3.
"Eurocurrency Base Rate" means, with respect to a Eurocurrency Committed
Advance, a Eurocurrency Committed Loan, a Eurocurrency Bid Rate Advance or a
Eurocurrency Bid Rate Loan for the relevant Eurocurrency Interest Period, the
applicable London interbank offered rate for deposits in the Agreed Currency
appearing on Telerate Page 3750 as of 11 a.m. (London time) two Business Days
prior to the first day of such Eurocurrency Interest Period, and having a
maturity equal to such Eurocurrency Interest Period. If no London interbank
offered rate of such maturity then appears on Telerate Page 3750, then the
Eurocurrency Base Rate shall be equal to the London interbank offered rate for
deposits in the Agreed Currency maturing immediately before or immediately after
such maturity, whichever is higher, as determined by the Agent from Telerate
Page 3750.
Page 8
<PAGE> 16
"Eurocurrency Bid Rate" means, with respect to a Loan made by a given
Lender for the relevant Eurocurrency Interest Period, the sum of (i) the
Eurocurrency Base Rate and (ii) the Competitive Bid Margin offered by such
Lender and accepted by the applicable Borrower pursuant to Section 2.3.6(i).
"Eurocurrency Bid Rate Advance" means a Competitive Bid Advance which bears
interest at a Eurocurrency Bid Rate.
"Eurocurrency Bid Rate Loan" means a Competitive Bid Loan which bears
interest at a Eurocurrency Bid Rate.
"Eurocurrency Committed Advance" means an Advance which bears interest at a
Eurocurrency Rate requested by the applicable Borrower pursuant to Section 2.2.
"Eurocurrency Committed Loan" means a Loan which bears interest at a
Eurocurrency Rate requested by the applicable Borrower pursuant to Section 2.2.
"Eurocurrency Interest Period" means, with respect to a Eurocurrency
Committed Advance, a Eurocurrency Committed Loan, a Eurocurrency Bid Rate
Advance or a Eurocurrency Bid Rate Loan, a period of one, two, three or six
months commencing on a Business Day selected by the Company pursuant to this
Agreement. Such Eurocurrency Interest Period shall end on (but exclude) the day
which corresponds numerically to such date of commencement one, two, three or
six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Eurocurrency Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If a Eurocurrency Interest Period would
otherwise end on a day which is not a Business Day, such Eurocurrency Interest
Period shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new month, such Eurocurrency
Interest Period shall end on the immediately preceding Business Day.
"Eurocurrency Loan" means a Eurocurrency Committed Loan or a Eurocurrency
Bid Rate Loan, as applicable.
"Euro-Currency Payment Office" of the Agent shall mean, for each of the
Agreed Currencies, the office, branch or affiliate of the Agent specified as the
"Euro-Currency Payment Office" for such currency in Schedule I hereto or such
other office, branch, affiliate or correspondent bank of the Agent as it may
from time to time specify to each Borrower and each Lender as its Euro-Currency
Payment Office.
"Eurocurrency Rate" means, with respect to a Eurocurrency Committed Advance
or a Eurocurrency Committed Loan for the relevant Eurocurrency Interest Period,
the sum of (i) the quotient of (a) the Eurocurrency Base Rate applicable to such
Eurocurrency Interest Period, divided by (b) one minus the Reserve Requirement
(expressed as a decimal) applicable to such
Page 9
<PAGE> 17
Eurocurrency Interest Period plus (ii) the Applicable Margin. The Eurocurrency
Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
"Extension Date" is defined in Section 2.5.17.
"Extension Request" is defined in Section 2.5.17.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to (i) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York or (ii) if such rate is
not so published for any day which is a Business Day, the average of the
quotations at approximately 10 a.m. (Chicago time) for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
"Financial Officer" means the Senior Vice President and Chief Financial
Officer, the Vice President and Treasurer or such other officer of the Company
as may be designated by the Company from time to time.
"Financial Subsidiary" means any Subsidiary the primary business of which
is investing in financial assets, including, without limitation, each of Champs
Investments, Cumberland Leasing Co., Elleyse Financing, ITW Finance II LLC, ITW
International Finance SAS, ITW Investments Inc., ITW Leasing & Investments Inc.,
ITW Mortgage Investments I, Inc., ITW Mortgage Investments III, Inc., ITW
Mortgage Investments IV, Inc., ITW Real Estate Investments Inc., ITW Mortgage
Investments II, Inc., ITW Real Estate L.L.C., ITW Residuals Inc. and ITW Tech
Co.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors and assigns.
"Fixed Rate" means the Eurocurrency Rate, the Eurocurrency Bid Rate or the
Absolute Rate.
"Fixed Rate Advance" means an Advance which bears interest at a Fixed Rate.
"Fixed Rate Loan" means a Loan which bears interest at a Fixed Rate.
"Floating Rate" means, for any day, a rate per annum equal to the Alternate
Base Rate.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
Page 10
<PAGE> 18
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Friendly Acquisition" means an Acquisition which has been either (a) not
disapproved by the board of directors of the corporation, or the managing body
of the firm, which is the subject of such Acquisition after such board or
managing body has been given the opportunity to consider such Acquisition or (b)
recommended by such board to the shareholders of such corporation and, if
required by applicable law, approved by such shareholders, and excluding in any
event any Acquisition involving an "unfriendly" or contested tender offer.
"Guaranty" of any Person means any agreement by which such person assumes,
guarantees, endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes liable upon, the obligation of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any creditor of
such other Person against loss, and shall include, without limitation, the
contingent liability of such Person under or in relation to any Letter of
Credit, but shall exclude endorsements for collection or deposit in the ordinary
course of business.
"Increase Date" is defined in Section 2.5.11.
"Increasing Lender" is defined in Section 2.5.11.
"Indebtedness" means, with respect to the Company and each Subsidiary, such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than accounts payable
arising in the ordinary course of such Person's business payable on terms
customary in the trade), (iii) obligations, whether or not assumed, secured by
Liens or payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person, (iv) obligations which are evidenced
by notes, acceptances, or other instruments, (v) Capitalized Lease Obligations,
and (vi) obligations for which such person is obligated pursuant to a Guaranty
(excluding any Guaranties of obligations included in (i) through (v) above).
"Interest Period" means a Eurocurrency Interest Period or an Absolute Rate
Interest Period.
"Invitation for Competitive Bid Quotes" means an Invitation for Competitive
Bid Quotes substantially in the form of Exhibit "D" hereto, completed and
delivered by the Agent to the Lenders in accordance with Section 2.3.3.
"Lender Assumption Agreement" is defined in Section 2.5.11.
"Lenders" means the financial institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
Page 11
<PAGE> 19
"Lending Installation" means any office, branch, subsidiary or affiliate of
any Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Level 1 Rating Period" means any period during which (i) the Company's
senior unsecured long-term debt is rated AA- or higher by S&P or Aa3 or higher
by Moody's (with the higher rating applying) or, (ii) if the Company has no
senior unsecured long-term debt outstanding, any period during which the
Company's commercial paper is rated A1+ or higher by S&P and P1 or higher by
Moody's.
"Level 2 Rating Period" means any period which does not qualify as a Level
1 Rating Period during which (i) the Company's senior unsecured long-term debt
is rated A or higher by S&P or A2 or higher by Moody's (with the higher rating
applying) or, (ii) if the Company has no senior unsecured long-term debt
outstanding, any period during which the Company's commercial paper is rated A1
or higher by S&P and P1 or higher by Moody's.
"Level 3 Rating Period" means any period which does not qualify as a Level
1 or Level 2 Rating Period.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion, if any, of
any Advance.
"Loan Documents" means this Agreement and the Notes.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries taken as a whole, (ii) the ability of the
Borrowers to perform their obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent or the Lenders thereunder.
"Material Subsidiary" means, at any time, any Subsidiary which as of such
time has assets in excess of $50,000,000.
"Moody's" means Moody's Investors Service, Inc or any rating agency which
is generally recognized as a successor thereto.
Page 12
<PAGE> 20
"National Currency Unit" means the unit of currency (other than a Euro
unit) of each member state of the European Union that participates in the third
stage of Economic and Monetary Union.
"Notes" means, collectively, the Competitive Bid Notes and the Committed
Notes; and "Note" means any one of the Notes.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, all accrued and unpaid fees and all other reimbursements,
indemnities or other obligations of the Borrowers to the Lenders or to any
Lender or the Agent arising under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Payment Date" means the last Business Day of each calendar quarter.
"Person" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, enterprise, government or any
department or agency of any government.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Company or any member of the Controlled Group may have any
liability.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Rating Period" means either a Level 1 Rating Period, a Level 2 Rating
Period or a Level 3 Rating Period.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to reserve requirements applicable to member banks of the Federal Reserve
System.
"Regulations U and X" means Regulations U and X of the Board of Governors
of the Federal Reserve System from time to time in effect and shall include any
successor or other regulations or official interpretations of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Rentals" means and includes all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the property)
Page 13
<PAGE> 21
payable by the Company or a Subsidiary, as lessee or sublessee under a lease of
real or personal property, but shall be exclusive of any amounts required to be
paid by the Company or a Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called, "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event.
"Required Lenders" means Lenders in the aggregate having at least 66-2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66-2/3% of the aggregate unpaid
principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to a Eurocurrency Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurocurrency Committed Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office of
such Lender to United States residents). The Reserve Requirement shall be
adjusted automatically on and as of the effective date of any change in the
applicable reserve requirement.
"Restructuring Date" means the date upon which the Agent shall have
reasonably determined that the conditions set forth in Section 4.1 have been
fulfilled or waived.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any rating agency which is generally recognized
as a successor thereto.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Security" shall have the same meaning as in Section 2(1) of the Securities
Act of 1933, as amended.
"Single Employer Plan" means a Plan maintained by the Company or any member
of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly
Page 14
<PAGE> 22
or indirectly, by such Person or by one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Company.
"Substantial Portion" means, with respect to the Property of the Company
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Company and its Subsidiaries as would be shown in the
consolidated financial statements of the Company and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made.
"Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for deposits in the Agreed Currencies).
"Termination Date" means September 30, 2003 or any later date as may be
specified by the Agent as the Termination Date in accordance with Section 2.5.17
or any other date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Type" means, with respect to any Loan or Advance, its nature as a Floating
Rate Advance or Loan, Eurocurrency Committed Advance or Loan, Eurocurrency Bid
Rate Advance or Loan or Absolute Rate Advance or Loan.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all currently accrued vested nonforfeitable benefits under all Single
Employer Plans exceeds the fair market value of all such Plan assets allocable
to such benefits, all determined on an ongoing Plan basis as set forth in the
then most recent actuarial valuation for such Plans.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned," when used in connection with any Subsidiary, means (i) any
Subsidiary all of the outstanding voting securities of which shall at the time
be owned or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
Page 15
<PAGE> 23
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and its
Subsidiaries and of the Borrower's and its Subsidiaries' material customers,
suppliers and vendors.
"Year 2000 Program" is defined in Section 5.18.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
1.2. Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with Agreement Accounting
Principles.
ARTICLE II
THE FACILITY
2.1. The Facility.
2.1.1. Description of Facility. The Lenders grant to the Borrowers a
revolving credit facility pursuant to which, and upon the terms and subject to
the conditions herein set out:
(i) each Lender severally agrees to make Committed Loans in Agreed
Currencies to the Borrowers in accordance with Section 2.2;
provided that, after giving effect to such Loans, the
Committed Loans shall be denominated in not more than eight
Agreed Currencies (including Dollars); provided further
that, if any Advance made (or to be made) on or after the
Euro Implementation Date would, but for this provision, be
capable of being made either in the Euro or in the
applicable National Currency Unit, such Advance shall be
made in the Euro.
(ii) each Lender may, in its sole discretion, make bids to make
Competitive Bid Loans in the Agreed Currencies to the
Borrowers in accordance with Section 2.3; and
(iii) in no event may the Dollar Amount of the sum of the aggregate
principal amount of all outstanding Advances to the
Borrowers (including both the Committed Advances and the
Competitive Bid Advances) exceed the Aggregate Commitment.
Page 16
<PAGE> 24
The Dollar Amount of each Advance shall be established for the entire Interest
Period applicable thereto as of the first day of such Interest Period. Floating
Rate Loans may only be in Dollars.
2.1.2. Availability of Facility; Required Payments. Subject to the terms
and conditions set forth in this Agreement, the facility is available from the
date of this Agreement to the Termination Date, and a Borrower may borrow, repay
and reborrow at any time prior to the Termination Date. The Commitments to lend
hereunder shall expire on the Termination Date. All outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrowers on the
Termination Date.
2.2. Committed Advances.
2.2.1. Committed Advances. From and including the date of this Agreement
and prior to the Termination Date, each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make Committed Loans to the
Borrowers from time to time in amounts the Dollar Amount of which shall not
exceed in the aggregate at any one time outstanding the amount of its
Commitment. Each Committed Advance hereunder shall consist of borrowings made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment. The Committed Advances
shall be evidenced by the Committed Notes and shall be repaid as provided by the
terms of Section 2.1.2.
2.2.2. Types of Committed Advances. The Committed Advances may be Floating
Rate Advances or Eurocurrency Committed Advances, or a combination thereof,
selected by the Company in accordance with Sections 2.2.3 and 2.2.4.
2.2.3. Method of Selecting Types and Interest Periods for New Committed
Advances. The Company shall select the Type of Advance and, in the case of each
Fixed Rate Advance, the Interest Period applicable to each Committed Advance
from time to time. The Company shall give the Agent irrevocable notice (a
"Committed Borrowing Notice"), or, if such Borrower is a Borrowing Subsidiary,
the Company shall on behalf of such Borrowing Subsidiary give a Committed
Borrowing Notice, not later than 11:00 a.m. (Chicago time) on the Borrowing Date
of each Floating Rate Advance, three Business Days before the Borrowing Date for
each Eurocurrency Committed Advance in Dollars, and four Business Days before
the Borrowing Date for each Eurocurrency Committed Advance in an Agreed Currency
other than Dollars. A Committed Borrowing Notice shall specify:
(i) the Borrowing Date, which shall be a Business Day, of such
Committed Advance;
(ii) the aggregate amount of such Committed Advance;
(iii) the Type of Committed Advance selected and the currency
thereof in accordance with Section 2.1.1.(i);
Page 17
<PAGE> 25
(iv) in the case of each Eurocurrency Committed Advance, the
Interest Period applicable thereto; and
(v) whether such Committed Advance is to be made to the Company or
to a specified Borrowing Subsidiary.
2.2.4. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Fixed Rate Advances. Each Fixed Rate Advance of
any Type shall continue as a Fixed Rate Advance of such Type until the end of
the then applicable Interest Period therefor, at which time such Fixed Rate
Advance shall be automatically converted into a Floating Rate Advance unless the
applicable Borrower shall have given the Agent an irrevocable notice (a
"Conversion/Continuation Notice") requesting that, at the end of such Interest
Period, such Fixed Rate Advance either continue as a Fixed Rate Advance of such
Type for the same or another Interest Period or be converted into an Advance of
another Type. Subject to the terms of Sections 2.3.2 and 2.5.2, such Borrower
may elect from time to time to convert all or any part of an Advance of any Type
into any other Type or Types of Advances; provided that any conversion of any
Fixed Rate Advance shall be made on, and only on, the last day of the Interest
Period applicable thereto. The applicable Borrower shall give the Agent the
Conversion/Continuation Notice of each conversion of an Advance or continuation
of a Fixed Rate Advance not later than 10:00 a.m. (Chicago time) at least one
Business Day, in the case of a conversion into a Floating Rate Advance, or three
Business Days, in the case of a conversion into or continuation of a
Eurocurrency Advance, prior to the date of the requested conversion or
continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance
is to be converted or continued and, in the case of a
conversion into or continuation of a Fixed Rate Advance, the
duration of the Interest Period applicable thereto.
2.3. Competitive Bid Advances.
2.3.1. Competitive Bid Option; Repayment of Competitive Bid Advances. In
addition to Committed Advances pursuant to Section 2.2, but subject to the terms
and conditions set forth in this Agreement (including, without limitation, the
limitation set forth in Section 2.1.1(iii) as to the maximum aggregate principal
amount of all outstanding Advances hereunder), the Company may, as set forth in
this Section 2.3, request the Lenders, prior to the Termination Date, to make
offers to make Competitive Bid Advances to the Company or any Borrowing
Subsidiary. Each Lender
Page 18
<PAGE> 26
may, but shall have no obligation to, make such offers and the Company may, but
shall have no obligation to, accept any such offers in the manner set forth in
this Section 2.3. Competitive Bid Advances shall be evidenced by the Competitive
Bid Notes. Each Competitive Bid Advance shall be repaid in full by the
applicable Borrower on the last day of the Interest Period applicable thereto.
2.3.2. Competitive Bid Quote Request. When the Company or a Borrowing
Subsidiary wishes to request offers to make Competitive Bid Loans under Section
2.3, the Company shall, on its behalf or on behalf of a Borrowing Subsidiary,
transmit to the Agent by telex or telecopy a Competitive Bid Quote Request so as
to be received no later than (x) 3:00 p.m., London time, at least five Business
Days prior to the Borrowing Date proposed therein, in the case of a Eurocurrency
Auction in an Agreed Currency other than Dollars, (y) 10:00 a.m., Chicago time,
at least five Business Days prior to the Borrowing Date proposed therein, in the
case of a Eurocurrency Auction in Dollars or (z) 9:00 a.m., Chicago time, at
least one Business Day prior to the Borrowing Date proposed therein, in the case
of an Absolute Rate Auction, specifying:
(i) the proposed Borrowing Date for the proposed Competitive Bid
Advance;
(ii) the proposed currency of such Competitive Bid Advance, which
shall be an Agreed Currency in the case of a Eurocurrency
Auction or Dollars in the case of an Absolute Rate Auction;
provided that after giving effect to such Competitive Bid
Advance, the outstanding Advances shall be denominated in
not more than eight Agreed Currencies (including Dollars);
(iii) the aggregate principal amount of such Competitive Bid
Advance;
(iv) whether the Competitive Bid Quotes requested are to set
forth a Competitive Bid Margin or an Absolute Rate, or both;
(v) the Interest Period applicable thereto (which must end on or
prior to the Termination Date); and
(vi) whether such Competitive Bid Advance is to be made to the
Company or to a Borrowing Subsidiary.
The Company may request offers to make Competitive Bid Loans for more than one
Interest Period and for a Eurocurrency Auction and an Absolute Rate Auction but
for not more than one currency in a single Competitive Bid Quote Request. No
Competitive Bid Quote Request shall be given within five Business Days (or upon
reasonable prior notice to the Lenders, such other number of days as such
Borrower and the Agent may agree) of any other Competitive Bid Quote Request.
Each Competitive Bid Quote Request shall be in a minimum amount of $5,000,000 or
a larger multiple of $1,000,000 (or the Approximate Equivalent Amount if
denominated in an Agreed Currency other than Dollars); provided that upon giving
effect to such Competitive Bid
Page 19
<PAGE> 27
Advance, the then aggregate outstanding principal Dollar Amount of all Advances
shall not exceed the aggregate amount of the Commitments then in effect. A
Competitive Bid Quote Request that does not conform substantially to the format
of Exhibit "C" hereto shall be rejected, and the Agent shall promptly notify the
Company of such rejection by telex or telecopy.
2.3.3. Invitation for Competitive Bid Quotes. Promptly upon receipt of a
Competitive Bid Quote Request that is not rejected pursuant to Section 2.3.2,
the Agent shall send to each of the Lenders by telex or telecopy an Invitation
for Competitive Bid Quotes which shall constitute an invitation by the Company
to each Lender to submit Competitive Bid Quotes offering to make the Competitive
Bid Loans to which such Competitive Bid Quote Request relates in accordance with
Section 2.3.
2.3.4. Submission and Contents of Competitive Bid Quotes.
(i) Each Lender may, in its sole discretion, submit a Competitive Bid Quote
containing an offer or offers to make Competitive Bid Loans in response to
any Invitation for Competitive Bid Quotes. Each Competitive Bid Quote must
comply with the requirements of this Section 2.3.4 and must be submitted to
the Agent by telex or telecopy at its offices specified in or pursuant to
Article XIII not later than (a) (I) 2:45 p.m., London time, in the case of
First Chicago and (II) 3:00 p.m., London time, in the case of each other
Lender, at least four Business Days prior to the proposed Borrowing Date in
the case of a Eurocurrency Auction in an Agreed Currency other than
Dollars, or (b) (I) 12:45 p.m., Chicago time, in the case of First Chicago
and (II) 1:00 p.m., Chicago time, in the case of each other Lender, at
least four Business Days prior to the proposed Borrowing Date in the case
of a Eurocurrency Auction in Dollars, or (c) (I) 8:45 a.m., Chicago time,
in the case of First Chicago and (II) 9:00 a.m., Chicago time, in the case
of each other Lender, on the proposed Borrowing Date in the case of an
Absolute Rate Auction (or, in any such case upon reasonable prior notice to
the Lenders, such other time and date as the applicable Borrower and the
Agent may agree, provided that First Chicago shall always be required to
submit its Competitive Bid Quotes not less than fifteen minutes prior to
the other Lenders). Subject to Articles IV and VIII, any Competitive Bid
Quote so made shall be irrevocable except with the written consent of the
Agent given on the instructions of the applicable Borrower.
(ii) Each Competitive Bid Quote shall in any case specify:
(a) the proposed Borrowing Date, which shall be the same as that set
forth in the applicable Invitation for Competitive Bid Quotes, and, in the
case of a Eurocurrency Auction, the proposed currency of such Competitive
Bid Advance;
(b) the principal amount of the Competitive Bid Loan for which each
such offer is being made, (1) the Dollar Amount of which principal amount
may be greater than, less than or equal to the Commitment of the quoting
Lender, but in no case greater than the
Page 20
<PAGE> 28
Aggregate Commitment, (2) which principal amount must be at least
$5,000,000 and an integral multiple of $1,000,000 (or the Approximate
Equivalent Amount if denominated in an Agreed Currency other than Dollars),
and (3) which principal amount may not exceed the principal amount of
Competitive Bid Loans for which offers were requested;
(c) in the case of a Eurocurrency Auction, the Competitive Bid Margin
offered for each such Competitive Bid Loan;
(d) the minimum or maximum amount, if any, of the Competitive Bid Loan
which may be accepted by the applicable Borrower and/or the limit, if any,
as to the aggregate principal amount of the Competitive Bid Loans from such
Lender which may be accepted by the applicable Borrower;
(e) in the case of an Absolute Rate Auction, the Absolute Rate offered
for each such Competitive Bid Loan;
(f) the applicable Interest Period; and
(g) the identity of the quoting Lender.
(iii) The Agent shall reject any Competitive Bid Quote that:
(a) is not substantially in the form of Exhibit "E" hereto or does not
specify all of the information required by Section 2.3.4(ii);
(b) contains qualifying, conditional or similar language, other than
any such language contained in Exhibit "E" hereto;
(c) proposes terms other than or in addition to those set forth in the
applicable Invitation for Competitive Bid Quotes; or
(d) arrives after the time set forth in Section 2.3.4(i).
If any Competitive Bid Quote shall be rejected pursuant to this Section
2.3.4(iii), then the Agent shall notify the relevant Lender of such
rejection as soon as practicable.
2.3.5. Notice to the Company. The Agent shall promptly notify the Company,
either on behalf of the Company or on behalf of any Borrowing Subsidiary, of the
terms (i) of any Competitive Bid Quote submitted by a Lender that is in
accordance with Section 2.3.4 and (ii) of any Competitive Bid Quote that is in
accordance with Section 2.3.4 and amends, modifies or is otherwise inconsistent
with a previous Competitive Bid Quote submitted by such Lender with respect to
the same Competitive Bid Quote Request. Any such subsequent Competitive Bid
Quote shall be disregarded by the Agent unless such subsequent Competitive Bid
Quote specifically states
Page 21
<PAGE> 29
that it is submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Agent's notice to the Company shall specify the
aggregate principal amount and currency of Competitive Bid Loans for which
offers have been received for each Interest Period specified in the related
Competitive Bid Quote Request and the respective principal amounts and
Competitive Bid Margins or Absolute Rates, as the case may be, so offered.
2.3.6. Acceptance and Notice by the Borrowers. Subject to the receipt of
the notice from the Agent referred to in Section 2.3.5, not later than (i) 5:00
p.m., London time, at least four Business Days prior to the proposed Borrowing
Date in the case of a Eurocurrency Auction in a Agreed Currency other than
Dollars, (ii) 2:00 p.m. (Chicago time) at least three Business Days prior to the
proposed Borrowing Date, in the case of a Eurocurrency Auction in Dollars or
(iii) 10:00 a.m. (Chicago time) on the proposed Borrowing Date, in the case of
an Absolute Rate Auction, the Company shall notify the Agent, either on its own
behalf or on behalf of a Borrowing Subsidiary, of such Borrower's acceptance or
rejection of the offers so notified to it pursuant to Section 2.3.5; provided,
however, that the failure by the Company to give such notice to the Agent shall
be deemed to be a rejection of all such offers. In the case of acceptance, such
notice (a "Competitive Bid Borrowing Notice") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
applicable Borrower may accept or reject any Competitive Bid Quote in whole or
in part (subject to the terms of Section 2.3.4(ii)(d)); provided that:
(a) the aggregate principal amount of each Competitive Bid Advance
may not exceed the applicable amount set forth in the related Competitive
Bid Quote Request;
(b) acceptance of offers may only be made on the basis of
ascending Competitive Bid Margins or Absolute Rates, as the case may be;
and
(c) the applicable Borrower may not accept any offer of the type
described in Section 2.3.4(iii) or that otherwise fails to comply with the
requirements of this Agreement for the purpose of obtaining a Competitive
Bid Loan under this Agreement.
2.3.7. Allocation by the Agent. If offers are made by two or more Lenders
with the same Competitive Bid Margins or Absolute Rates, as the case may be, for
a greater aggregate principal amount than the amount in respect of which offers
are permitted to be accepted for the related Interest Period, the principal
amount of Competitive Bid Loans in respect of which such offers are accepted
shall be allocated by the Agent among such Lenders as nearly as possible (in
such multiples, not greater than $1,000,000 (or the Equivalent Amount if
denominated in an Agreed Currency other than Dollars), as the Agent may deem
appropriate) in proportion to the aggregate principal amount of such offers;
provided, however, that no Lender shall be allocated a portion of any
Competitive Bid Advance which is less than the minimum amount which such Lender
has indicated that it is willing to accept. Allocations by the Agent of the
amounts of Competitive Bid Loans shall be conclusive in the absence of manifest
error. The Agent shall promptly, but in any event on the same Business Day in
the case of Eurocurrency Bid Rate Advances, and by 11:00
Page 22
<PAGE> 30
a.m. (Chicago time) in the case of Absolute Rate Advances, notify each Lender of
its receipt of a Competitive Bid Borrowing Notice and the aggregate principal
amount of such Competitive Bid Advance allocated to each participating Lender.
2.4. Fees.
2.4.1. Facility Fee. The Company and the Borrowing Subsidiaries hereby
jointly and severally agree to pay to the Agent for the account of the Lenders,
ratably in proportion to their Commitments, a facility fee at a rate per annum
equal to the Applicable Facility Fee Rate on the daily average amount of the
Commitments (without regard to the outstanding principal amount of the Loans),
which fee shall be payable quarterly in arrears on each Payment Date commencing
on December 31, 1998 and with a final payment due and payable on the Termination
Date.
2.4.2. Agency and Administration Fees. The Company and the Borrowing
Subsidiaries hereby jointly and severally agree to pay to the Agent for its sole
account such agency and administration fees as are heretofore and hereafter
agreed upon by the Company in writing.
2.5. General Facility Terms.
2.5.1. Method of Borrowing. On the Borrowing Date, each Lender shall make
available its Loan or Loans, if any, (i) if such Loan is denominated in Dollars,
not later than 2:00 p.m., Chicago time, in Federal or other funds immediately
available to the Agent, in Chicago, Illinois at its address specified in or
pursuant to Article XIII and, (ii) if such Loan is denominated in another
currency, not later than 12:00 noon, local time in the city of the Agent's
Euro-Currency Payment Office for such currency, in such funds as may then be
customary for the settlement of international transactions in such currency in
the city of and at the address of the Agent's Euro-Currency Payment Office for
such currency. Unless the Agent determines that any applicable condition
specified in Article IV has not been satisfied, the Agent will make the funds so
received from the Lenders available to the applicable Borrower at the Agent's
aforesaid address. Notwithstanding the foregoing provisions of this Section
2.5.1, to the extent that a Loan made by a Lender matures on the Borrowing Date
of a requested Loan, such Lender shall apply the proceeds of the Loan it is then
making to the repayment of principal of the maturing Loan.
2.5.2. Minimum Amount of Each Committed Advance. Each Committed Advance
shall be in the minimum amount of $5,000,000 and in integral multiples of
$1,000,000 if in excess thereof (or the Approximate Equivalent Amount if
denominated in an Agreed Currency other than Dollars); provided, however, that
any Floating Rate Advance may be in the aggregate amount of the unused Aggregate
Commitment.
2.5.3. Optional Principal Payments. The Company may from time to time pay
all of its outstanding Floating Rate Advances, or, in a minimum aggregate amount
of $5,000,000 (and in integral multiples of $1,000,000 if in excess thereof),
any portion of the outstanding Floating Rate
Page 23
<PAGE> 31
Advances upon one Business Day's prior notice to the Agent. All such payments
shall be made in immediately available funds to the Agent at the Agent's address
specified in Article XIII or at any other Lending Installation of the Agent
specified by the Agent in accordance with Section 2.5.7 by noon (Chicago time)
on the date of payment. A Fixed Rate Advance may not be prepaid prior to the
last day of its applicable Interest Period without the prior consent of each
Lender which originally made such Loan, which consent may be given or withheld
at the Lender's sole and absolute discretion. Any prepayment of a Fixed Rate
Advance prior to the end of its applicable Interest Period shall be subject to
the indemnity provisions of Section 3.5.
2.5.4. Interest Rates; Interest Periods. Each Floating Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from the
date such loan is made until it becomes due at a rate per annum equal to the
Floating Rate for such day. Each Eurocurrency Committed Loan shall bear interest
on the outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Eurocurrency Rate applicable thereto.
Each Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Absolute Rate applicable thereto. Each Eurocurrency Bid Rate Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Eurocurrency Bid
Rate applicable thereto. Provided, that for each day on which the Dollar Amount
of the outstanding principal amount of Advances (including Competitive Bid
Advances) exceeds 50% of the Aggregate Commitment, the Company and each
Borrowing Subsidiary hereby agree that (a) the Alternate Base Rate of all
Floating Rate Loans outstanding on such day, (b) the Applicable Margin of all
Eurocurrency Committed Loans outstanding on such day, (c) the Absolute Rate of
all Absolute Rate Loans outstanding on such day, and (d) the Competitive Bid
Margin for all Eurocurrency Bid Rate Loans outstanding on such day each shall be
increased by a per annum percentage amount equal to 0.10%. The Agent shall
maintain a record of the daily outstanding principal amount of Advances. Subject
to the provisions of Section 2.5.5, each Advance shall bear interest from and
including the first day of the Interest Period applicable thereto to (but not
including) the earlier of (i) the last day of such Interest Period or (ii) the
date of any earlier prepayment as permitted by Section 2.5.3, at the interest
rate determined as applicable to such Advance.
2.5.5. Rate after Maturity. Except as provided in the next sentence, any
Dollar-denominated Advance not paid at maturity, whether by acceleration or
otherwise, shall bear interest until paid in full at a rate per annum equal to
the Alternate Base Rate plus 2% per annum, payable upon demand. Any Advance
denominated in an Agreed Currency other than Dollars that is not paid at
maturity, whether by acceleration or otherwise, shall bear interest until paid
at the rate applicable thereto plus 2% per annum, payable upon demand. In the
case of a Dollar-denominated Fixed Rate Advance the maturity of which is
accelerated, such Fixed Rate Advance shall bear interest for the remainder of
the applicable Interest Period (or until paid if paid prior to the end of such
Interest Period), at the higher of the rate otherwise applicable to such Fixed
Rate Advance for such Interest Period plus 2% per annum or the Alternate Base
Rate plus 2% per annum. In the case of a Fixed Rate Advance denominated in an
Agreed Currency other
Page 24
<PAGE> 32
than Dollars the maturity of which is accelerated, such Fixed Rate Advance shall
bear interest for the remainder of the applicable Interest Period (or until paid
if paid prior to the end of such Interest Period) at the rate otherwise
applicable to such Fixed Advance for such Interest Period plus 2% per annum.
2.5.6. Interest Payment Dates; Interest Basis. Interest accrued on each
Floating Rate Advance shall be payable on each Payment Date, on any date on
which such Floating Rate Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Fixed Rate Advance shall be
payable on the last day of its applicable Interest Period, on any date on which
such Fixed Rate Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Fixed Rate Advance having an Interest Period
longer than three months shall also be payable on the last day of each 90 day
interval (in the case of Absolute Rate Advances) or three-month interval (in the
case of Eurocurrency Committed Advances or Eurocurrency Bid Rate Advances)
during such Interest Period. Interest on Fixed Rate Loans and fees hereunder
shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest on Floating Rate Loans and Loans denominated in pounds sterling shall
be calculated for actual days elapsed on the basis of a 365-, or, when
applicable, 366-day year. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.5.7. Method of Payment. Each Advance shall be repaid or prepaid in the
currency in which it was made in the amount borrowed and interest payable
thereon shall be paid in such currency. Notwithstanding the foregoing, with
effect on and from the Euro Implementation Date, Advances and interest payable
thereon formerly denominated in a National Currency Unit shall be paid in Euro
in immediately available, freely transferable, cleared funds to such account
with such bank in such principal financial center as the Agent shall have
specified for this purpose. Subject to the last sentence of Section 2.5.1, all
payments of principal, interest, and fees in Dollars hereunder shall be made by
noon (Chicago time) on the date when due in immediately available funds to the
Agent at the Agent's address specified pursuant to Article XIII, or at any other
Lending Installation of the Agent specified in writing by the Agent to the
Company and shall be made ratably among all Lenders in the case of fees and
payments in respect of Committed Advances and ratably among the applicable
Lenders in respect of Competitive Bid Advances. After the occurrence of a
Default, all payments of principal shall be applied ratably among all
outstanding Advances. Each payment delivered to the Agent for the account of any
Lender shall be delivered promptly by the Agent to such Lender in the same type
of funds which the Agent received at its address specified pursuant to Article
XIII or at any Lending Installation specified in a notice received by the Agent
from such Lender. All payments to be made by the Borrowers hereunder or under
the Notes in any currency other than Dollars shall be made in such currency on
the date due in such funds as may then be customary for the settlement of
international transactions in such currency for the account of the Agent, at its
Euro-Currency Payment Office
Page 25
<PAGE> 33
for such currency. The Agent will promptly cause such payments to be distributed
to each Lender in like funds and currency. Notwithstanding the foregoing
provisions of this Section, if, after the making of any Advance in any currency
other than Dollars, currency control or exchange regulations are imposed in the
country which issues such currency with the result that different types of such
currency (the "New Currency") are introduced and the type of currency in which
the Advance was made (the "Original Currency") no longer exists or the
applicable Borrower is not able to make payment to the Agent for the account of
the Lenders in such Original Currency, then all payments to be made by the
applicable Borrower hereunder or under the Notes in such currency shall be made
in such amount and such type of the New Currency as shall be equivalent to the
amount of such payment otherwise due hereunder or under the Notes in the
Original Currency, it being the intention of the parties hereto that the
Borrowers take all risks of the imposition of any such currency control or
exchange regulations. In addition, notwithstanding the foregoing provisions of
this Section, if, after the making of any Advance in any currency other than
Dollars, the applicable Borrower is not able to make payment to the Agent for
the account of the Lenders in the type of currency in which such Advance was
made because of the imposition of any such currency control or exchange
regulation, then such Advance shall instead be repaid when due in Dollars in a
principal amount equal to the Dollar Amount (as of the date of repayment) of
such Advance.
2.5.8. Notes; Telephonic Notices. Each Lender is hereby authorized to
record on the schedule attached to each of its Notes, or otherwise record in
accordance with its usual practice, the date, the currency, the amount and the
maturity of each of its Loans of the type evidenced by such Note; provided,
however, that any failure to so record shall not affect the Company's
obligations under any Loan Document. The Company hereby authorizes the Lenders
and the Agent to extend or continue Advances, effect selections of Types of
Advances, transfer funds and submit Competitive Bid Quotes based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be a Financial Officer or an officer, employee or agent of the
Company designated by a Financial Officer. The Company agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice given by
the Company, signed by a Financial Officer. If the written confirmation differs
in any material respect from the action taken by the Agent and the Lenders, the
records of the Agent and the Lenders shall govern absent manifest error.
2.5.9. Notification of Advances, Interest Rates and Prepayments. Promptly
after receipt thereof, the Agent will notify each Lender of the contents of each
Aggregate Commitment reduction notice, Committed Borrowing Notice,
Conversion/Continuation Notice, Competitive Bid Borrowing Notice, and repayment
notice received by it hereunder. The Agent will notify each Lender of the
interest rate applicable to each Fixed Rate Advance promptly upon determination
of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.
2.5.10. Non-Receipt of Funds by the Agent. Unless the Company or a
Borrowing Subsidiary or a Lender, as the case may be, notifies the Agent prior
to the date on which it is
Page 26
<PAGE> 34
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Company or a Borrowing Subsidiary,
a payment of principal, interest or fees to the Agent for the account of the
Lenders, that it does not intend to make such scheduled payment, the Agent may
assume that such scheduled payment has been made. The Agent may, but shall not
be obligated to, make the amount of such scheduled payment available to the
intended recipient in reliance upon such assumption. If such Lender or the
Company, as the case may be, has not in fact made such scheduled payment to the
Agent, the recipient of such scheduled payment shall, on demand by the Agent,
repay to the Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such amount at
a rate per annum equal to (x) in the case of scheduled payment by a Lender, the
Federal Funds Effective Rate for such day or (y) in the case of scheduled
payment by the Company or a Borrowing Subsidiary, the interest rate applicable
to the relevant Loan.
2.5.11. Termination, Reduction or Increase in the Aggregate Commitments.
(i) Termination or Reduction. The Company may at any time after the date
hereof cancel the Aggregate Commitment, in whole, or in a minimum aggregate
amount of $25,000,000 and in integral multiples of $1,000,000 if in excess
thereof, ratably among the Lenders upon at least three Business Days' prior
written notice to the Agent, which notice shall specify the amount of such
reduction; provided, however, no such notice of cancellation shall be effective
to the extent that it would reduce the Aggregate Commitment to an amount which
would be less than the outstanding principal amount of Loans outstanding at the
time such cancellation is to take effect. The Aggregate Commitment once reduced
as provided in this Section 2.5.11(i) may only be reinstated as specifically
provided in Section 2.5.11(ii) below. If (x) any Lender notifies the Company in
accordance with Section 2.5.15, (y) a Borrower reasonably determines that it is
or will be required to make any additional payment to any Lender under Section
3.1, 3.2 or 3.3 or (z) any Lender refuses a Borrower's request pursuant to
Section 6.2 to consent to fund an Acquisition other than a Friendly Acquisition,
then the Company may, at any time thereafter (provided that no Default or
Unmatured Default then exists and no satisfactory solution has been reached
pursuant to Section 3.6) and by not less than five Business Days' prior written
notice to the Agent, cancel such Lender's Commitment, whereupon such Lender
shall cease to be obliged to make further Loans hereunder and its Commitment
shall be reduced to zero. Upon termination of such Lender's Commitment, each
applicable Borrower shall, subject to the last sentence of this subparagraph
(i), pay all outstanding Obligations owing to such Lender. Any notice of
cancellation given pursuant to this Section 2.5.11 shall be irrevocable and
shall specify the date upon which such cancellation is to take effect.
Notwithstanding any such cancellation, the obligations of the Company under
Sections 3.1, 3.2, 3.3 and 10.6 shall survive any such cancellation and be
enforceable by such Lender. In any case described in clauses (i)(x) through
(i)(z) above in which the Company has the right to cancel a Lender's Commitment,
the Company may, in connection with such cancellation, either (1) arrange for a
sale (at par) of such Commitment and all outstanding Loans held by such Lender
pursuant to the terms of Section 13.3 and such Lender will promptly enter into
any such sale arranged by the Company or (2) offer such Commitment and all
outstanding Loans held by
Page 27
<PAGE> 35
such Lender to all of the other Lenders pursuant to the procedure set forth in
Section 2.5.11(ii) below.
(ii) Increase in the Aggregate Commitment. (a) The Company may at any
time, by notice to the Agent, propose that the Aggregate Commitment be increased
(the amount of such increase being a "Commitment Increase"), effective as at a
date prior to the Termination Date (an "Increase Date") as to which agreement is
to be reached by an earlier date specified in such notice (a "Commitment Date");
provided, however, that (A) the Company may not propose more than two Commitment
Increases in any calendar year, (B) the minimum proposed Commitment Increase per
notice shall be $10,000,000, (C) in no event shall the Aggregate Commitment at
any time exceed $800,000,000, and (D) no Default or Unmatured Default shall have
occurred and be continuing on such Increase Date. The Agent shall notify the
Lenders thereof promptly upon its receipt of any such notice. The Agent agrees
that it will cooperate with the Company in discussions with the Lenders and
other Eligible Banks with a view to arranging the proposed Commitment Increase
through the increase of the Commitments of, first, one or more of the Lenders
(each such Lender that is willing to increase its Commitment hereunder being an
"Increasing Lender") and, if the existing Lenders are not willing, in the
aggregate, to increase their Commitments by the amount of the requested
Commitment Increase, then by the addition of one or more other Eligible Banks
(each an "Assuming Lender"), with the consent of the Agent (which consent shall
not be unreasonably withheld), as Lenders and as parties to this Agreement;
provided, however, that it shall be in each Lender's sole discretion whether to
increase its Commitment hereunder in connection with the proposed Commitment
Increase; and provided further that the minimum Commitment of each Assuming
Lender that becomes a party to this Agreement pursuant to this Section
2.5.11(ii) shall be at least equal to $10,000,000. If the Increasing Lenders
agree to increase their respective Commitments by an aggregate amount in excess
of the proposed Commitment Increase, the proposed Commitment Increase shall be
allocated among such Increasing Lenders in proportion to their respective
Commitments immediately prior to the Increase Date. If agreement is reached on
or prior to the applicable Commitment Date with any Increasing Lenders and
Assuming Lenders as to a Commitment Increase (which may be less than but not
greater than specified in the applicable notice from the Company), such
agreement to be evidenced by a notice in reasonable detail from the Company to
the Agent on or prior to the applicable Commitment Date, such Assuming Lenders,
if any, shall become Lenders hereunder as of the applicable Increase Date and
the Commitments of such Increasing Lenders and such Assuming Lenders shall
become or be, as the case may be, as of the Increase Date, the amounts specified
in such notice; provided that:
(x) the Agent shall have received (with copies for each Lender,
including each such Assuming Lender) by no later than 10:00 A.M. (Chicago
time) on the applicable Increase Date a certificate of a Financial
Officer, (1) stating that the Board of Directors of the Company has
adopted resolutions authorizing the Company to borrow money pursuant to
this Agreement from time to time in an aggregate principal amount at any
one time outstanding in an amount at least equal to the Aggregate
Commitment, after giving effect to the pending Commitment Increase, and
that such resolutions remain in full force and
Page 28
<PAGE> 36
effect and have not been modified or rescinded or attaching and
certifying, if applicable, any amendments to such resolutions or
supplemental borrowing resolutions (together with a similar certificate
from an authorized officer of each Borrowing Subsidiary, if any are then
parties to this Agreement);
(y) each such Assuming Lender shall have delivered to the Agent,
by no later than 10:00 A.M. (Chicago time) on such Increase Date, an
appropriate Lender Assumption Agreement in substantially the form of
Exhibit "J" hereto, duly executed by such Assuming Lender and the
Company; and
(z) each such Increasing Lender shall have delivered to the Agent
by, no later than 10:00 A.M. (Chicago time) on such Increase Date, (A)
its existing Committed Note and (B) confirmation in writing satisfactory
to the Agent as to its increased Commitment.
(b) In the event that the Agent shall have received notice from
the Company as to its agreement to a Commitment Increase on or prior to the
applicable Commitment Date and each of the actions provided for in clauses
(a)(x) through (a)(z) above shall have occurred prior to 10:00 A.M. (Chicago
time) on the applicable Increase Date to the satisfaction of the Agent, the
Agent shall promptly notify the Lenders (including any Assuming Lenders) and the
Company of the occurrence of such Commitment Increase and shall record in its
records the relevant information with respect to each Increasing Lender and
Assuming Lender. Each Increasing Lender and each Assuming Lender shall, before
2:00 P.M. (Chicago time) on the applicable Increase Date, make available to the
Agent in accordance with the provisions of Section 2.5.1, in same day funds, in
the case of such Assuming Lender, an amount equal to such Assuming Lender's
ratable portion of the Committed Advances then outstanding (calculated based on
its Commitment as a percentage of the Aggregate Commitment after giving effect
to the relevant Commitment Increase) and, in the case of such Increasing Lender,
an amount equal to the excess of (i) such Increasing Lender's ratable portion of
the Committed Advances then outstanding after giving effect to the relevant
Commitment Increase over (ii) such Increasing Lender's ratable portion of the
Committed Advances then outstanding before giving effect to the relevant
Commitment Increase. After the Agent's receipt of such funds from each such
Increasing Lender and each such Assuming Lender, the Agent will, if necessary,
promptly thereafter cause to be distributed like funds to the other Lenders for
the account of their respective applicable Lending Installations in an amount to
each other Lender such that the aggregate amount of the outstanding Committed
Advances owing to each Lender after giving effect to such distribution equals
such Lender's ratable portion of the Committed Advances then outstanding after
giving effect to the relevant Commitment Increase. After the Company receives
notice from the Agent, the Company, at its own expense, shall execute and
deliver to the Agent (1) Committed Notes payable to the order of each Assuming
Lender, if any, and each Increasing Lender, dated as of the applicable Increase
Date, in a principal amount equal to such Lender's Commitment after giving
effect to the relevant Commitment Increase, and substantially in the form of
Exhibit "A-1" and (2) Competitive Bid Notes payable to the order of each
Assuming Lender, if any, dated as of the applicable Increase Date, and
substantially in the form of Exhibit "A-2". The Agent, upon receipt of such
Page 29
<PAGE> 37
Notes, shall promptly deliver such Notes to the respective Assuming Lenders and
Increasing Lenders.
(c) In the event that the Agent shall not have received notice
from the Company as to such agreement on or prior to the applicable Commitment
Date or the Company shall, by notice to the Agent prior to the applicable
Increase Date, withdraw its proposal for a Commitment Increase or any of the
actions provided for above in clauses (a)(x) through (a)(z) shall not have
occurred by 10:00 A.M. (Chicago time) on the such Increase Date, such proposal
by the Company shall be deemed not to have been made. In such event, any actions
theretofore taken under clauses (a)(x) through (a)(z) above shall be deemed to
be of no effect and all the rights and obligations of the parties shall continue
as if no such proposal had been made.
2.5.12. Market Disruption. Notwithstanding the satisfaction of all
conditions referred to in Article II with respect to any Advance in any currency
other than Dollars, if there shall occur on or prior to the date of such Advance
any change in national or international financial, political or economic
conditions or currency exchange rates or exchange controls which would in the
reasonable opinion of the Agent or the Required Lenders make it impracticable
for the Eurocurrency Committed Loans or Eurocurrency Bid Rate Loans comprising
such Advance to be denominated in the currency specified by the applicable
Borrower, then the Agent shall forthwith give notice thereof to the Company and
the Lenders, and such Loans shall not be denominated in such currency but shall
be made on the such Borrowing Date in Dollars, in an aggregate principal amount
equal to the Dollar Amount of the aggregate principal amount specified in the
related Committed Borrowing Notice or Competitive Bid Quote Request, as the case
may be, as Floating Rate Loans, unless the applicable Borrower notifies the
Agent at least one Business Day before such date that (i) it elects not to
borrow on such date or (ii) it elects to borrow on such date in a different
Agreed Currency, as the case may be, in which the denomination of such Loans
would in the opinion of the Agent and the Required Lenders be practicable and in
an aggregate principal amount equal to the Dollar Amount of the aggregate
principal amount specified in the related Committed Borrowing Notice or
Competitive Bid Quote Request, as the case may be.
2.5.13. Lending Installations. Subject to Section 3.6, each Lender may,
by written, telex or telecopy notice to the Agent and the Company, book its
Loans at any Lending Installation selected by such Lender and may from time to
time, change its Lending Installation and for whose account Loan payments are to
be made. Each Lender will notify the Agent and the Company on or prior to the
date of this Agreement of the Lending Installation which it intends to utilize
for each type of Loan hereunder.
2.5.14. Borrowing Subsidiaries. The Company may at any time or from time
to time, with the consent of the Agent, which consent shall not be unreasonably
withheld, add as a party to this Agreement any Subsidiary to be a "Borrowing
Subsidiary" hereunder by the execution and delivery to the Agent of a duly
completed Assumption Letter by such Subsidiary, with the written consent of the
Company at the foot thereof. Upon such execution, delivery and consent such
Subsidiary shall for all purposes be a party hereto as a Borrowing Subsidiary as
fully as if it had
Page 30
<PAGE> 38
executed and delivered this Agreement. So long as the principal of and interest
on any Advances made to any Borrowing Subsidiary under this Agreement shall have
been repaid or paid in full and all other obligations of such Borrowing
Subsidiary under this Agreement shall have been fully performed, the Company
may, by not less than five Business Days' prior notice to the Agent (which shall
promptly notify the Lenders thereof), terminate such Borrowing Subsidiary's
status as a "Borrowing Subsidiary".
2.5.15. Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to the
Company and the Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes. Each Lender
which so delivers a Form 1001 or 4224 further undertakes to deliver to the
Company and the Agent two additional copies of such form (or a successor form)
on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Company or the Agent, in
each case certifying that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender promptly advises the Company and the
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax. If any Lender so advises the
Company and the Agent of such fact, the Company shall be entitled to exercise
its rights under Section 2.5.11.
2.5.16. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from a Borrower hereunder or
under any of the Notes in the currency expressed to be payable herein or under
the Notes (the "specified currency") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the specified currency with such other
currency at the Agent's main Chicago office on the Business Day preceding that
on which final, non-appealable judgment is given. The obligations of the
applicable Borrower in respect of any sum due to any Lender or the Agent
hereunder or under any Note shall, notwithstanding any judgment in a currency
other than the specified currency, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Agent (as the case may be)
of any sum adjudged to be so due in such other currency such Lender or the Agent
(as the case may be) may in accordance with normal, reasonable banking
procedures purchase the specified currency with such other currency. If the
amount of the specified currency so purchased is less than the sum originally
due to such Lender
Page 31
<PAGE> 39
or the Agent, as the case may be, in the specified currency, the applicable
Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Agent, as the case may be, against such loss, and if the amount of
the specified currency so purchased exceeds (a) the sum originally due to any
Lender or the Agent, as the case may be, in the specified currency and (b) any
amounts shared with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 12.2, such Lender or the
Agent, as the case may be, agrees to remit such excess to the applicable
Borrower.
2.5.17. Extension of Termination Date. The Company may request an
extension of the then current Termination Date for a period of one year by
submitting a request for an extension to the Agent (an "Extension Request") not
more than 60 days, but not less than 30 days, prior to each yearly anniversary
of the Restructuring Date. Promptly upon receipt of an Extension Request, the
Agent shall deliver a copy thereof to the Lenders. Each Lender may, by an
irrevocable notice (a "Consent Notice") to the Company and the Agent given
within 30 days after receipt of the Extension Request by the Agent, consent to
such Extension Request by the Company, which consent may be given or withheld by
each Lender in its sole discretion. Failure by any Lender to give its consent in
writing within such 30 day period shall be deemed a refusal by such Lender of
such Extension Request. If such Extension Request is consented to by all of the
Lenders, the Termination Date shall be extended as requested by the Company. If
such Extension Request is not consented to by Lenders holding at least 66-2/3%
of the Aggregate Commitment, the Company's request shall be denied and the
Termination Date shall remain unchanged. If the Company's request is consented
to by Lenders holding at least 66-2/3% but less than 100% of the Aggregate
Commitment, (a) the Termination Date shall be extended with respect to those
Lenders who have consented to such Extension Request and (b) the Termination
Date with respect to each non-consenting Lender shall remain unchanged, provided
that the Company may (x) arrange for a sale (at par) of the Commitment and all
outstanding Loans held by any such nonconsenting Lender pursuant to the terms of
Section 13.3 and any such non-consenting Lender will promptly enter into any
such sale arranged by the Company or (y) offer such Commitment and all
outstanding Loans held by such Lender to all of the other Lenders pursuant to
the procedure set forth in Section 2.5.11(ii) for an increase in the Aggregate
Commitment. The Agent will promptly notify the Lenders of any extension of the
Termination Date pursuant to the provisions of this Section 2.5.17.
Page 32
<PAGE> 40
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Taxes.
3.1.1. Payments to be Free and Clear. All sums payable by each Borrower
under the Loan Documents, whether in respect of principal, interest, fees or
otherwise, shall be paid without deduction for any present and future taxes,
levies, imposts, deductions, charges or withholdings imposed by any government
or any political subdivision or taxing authority thereof (but excluding any tax
on or measured by the net income, profits or gains of any Lender) and all
interest, penalties or similar liabilities with respect thereto (collectively,
"taxes"), which amounts shall be paid by the applicable Borrower as provided in
Section 3.1.2. below. The applicable Borrower will pay each Lender the amounts
necessary such that the net amount of the principal, interest, fees or other
sums received and retained by each Lender is not less than the amount payable
under this Agreement.
3.1.2. Grossing-up of Payments. If: (a) any Borrower or any other Person
is required by law to make any deduction or withholding on account of any such
tax or other amount from any sum paid or expressed to be payable by the
applicable Borrower to any Lender under this Agreement; or (b) any party to this
Agreement (or any Person on its behalf) other than any Borrower is required by
law to make any deduction or withholding from, or (other than on account of tax
on the overall net income of that party) any payment on or calculated by
reference to the amount of, any such sum received or receivable by any Lender
under this Agreement:
(i) the applicable party shall notify the Agent and, if such party
is not the applicable Borrower, the Agent will notify the applicable
Borrower of any such requirement or any change in any such requirement as
soon as such party becomes aware of it;
(ii) the applicable Borrower shall pay any such tax or other amount
before the date on which penalties attached thereto become due and
payable, such payment to be made (if the liability to pay is imposed on
such Borrower) for its own account or (if that liability is imposed on
any party to this Agreement) on behalf of and in the name of that party;
(iii) the sum payable by the applicable Borrower in respect of which
the relevant deduction, withholding or payment is required shall (except,
in the case of any such payment, to the extent that the amount thereof is
not ascertainable when that sum is paid) be increased to the extent
necessary to ensure that, after the making of that deduction, withholding
or payment, that party receives on the due date and retains (free from
any liability in respect of any such deduction, withholding or payment) a
sum equal to that
Page 33
<PAGE> 41
which it would have received and so retained had no such deduction,
withholding or payment been required or made; and
(iv) within thirty (30) days after payment of any sum from which the
applicable Borrower is required by law to make any deduction or
withholding, and within thirty (30) days after the due date of payment of
any tax or other amount which it is required by paragraph (ii) to pay, it
shall deliver to the Agent all such certified documents and other
evidence as to the making of such deduction, withholding or payment as
(a) are satisfactory to the affected parties as proof of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority and (b) are required by any such party to
enable it to claim a tax credit with respect to such deduction,
withholding or payment.
3.2. Increased Costs. If, at any time after the date of this Agreement,
the adoption of any law or the application of any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any change therein, or any change in the
interpretation or administration thereof, or the compliance of any Lender
therewith,
(i) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Committed Advances bearing interest at a
Fixed Rate), or
(ii) imposes any other condition (not being a tax imposed, levied,
collected, withheld or assessed by any taxing authority), the result of
which is to increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining such Loans or reduces any
amount receivable by any Lender or any applicable Lending Installation in
connection with such Loans, or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference to the
amount of such Loans held or interest received by it, by an amount deemed
material by such Lender,
then, within 15 days of demand by such Lender, the applicable Borrower shall pay
such Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making, funding
and maintaining its Loans and its Commitment.
3.3. Changes in Capital Adequacy Regulations. If a Lender reasonably
determines that the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation
controlling such Lender attributable to this Agreement, the Loans or its
obligation to make Loans hereunder is increased as a result of a Change (as
hereafter defined), then, within 15 days of demand by such Lender (with a copy
of such demand to the Agent), the Company shall pay such Lender the amount which
such Lender
Page 34
<PAGE> 42
determines is necessary to compensate it for any reduction in the rate of return
on capital to an amount below that which such Lender could have achieved but for
such Change and is attributable to this Agreement, the Loans or its obligation
to make Loans hereunder. "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (as hereafter defined) or (ii)
any adoption of or change in any other law, governmental or quasi-governmental
rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "Risk-Based
Capital Guidelines" means (i) the risk-based capital guidelines in effect in the
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.4. Availability of Types of Advances. If the Required Lenders
reasonably determine that (i) deposits of a type and maturity appropriate to
match fund Committed Advances bearing interest at a Fixed Rate are not available
or (ii) the interest applicable to a Type of Committed Advance does not
accurately reflect the cost of making or maintaining such Committed Advance,
then the Agent shall suspend the availability of the affected Type of Committed
Advance. If any Lender determines that maintenance of its Eurocurrency Loans
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, then such Lender may by notice to the applicable
Borrower, through the Agent, require that any of its Eurocurrency Loans be
promptly converted to an unaffected Type of Loan until such illegality shall
cease; and thereafter, any request for a Eurocurrency Committed Loan shall, with
respect to such Lender, be deemed a request for a Floating Rate Loan.
3.5. Funding Indemnification. If any payment of a Fixed Rate Loan occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise (including, without limitation,
any receipt by a Lender of all or a portion of the principal of a Loan prior to
the last day of the applicable Interest Period as a result of a sale arranged by
the Company pursuant to Sections 2.5.11, 2.5.17 or 6.2) or a Fixed Rate Advance
is not made on the date specified by the applicable Borrower for any reason
other than default by the Lenders, such Borrower will indemnify each Lender for
any loss or cost incurred by it resulting therefrom, including, without
limitation, any loss or cost in liquidating or employing deposits acquired to
fund or maintain the Fixed Rate Advance.
3.6. Mitigation of Additional Costs or Adverse Circumstances. If, in
respect of any Lender, circumstances arise which would or would upon the giving
of notice result in:
(a) an increase in the liability of a Borrower to such Lender
under Section 3.1, 3.2 or 3.3 or
Page 35
<PAGE> 43
(b) the unavailability of a Type of Committed Loan under Section
3.4;
then, without in any way limiting, reducing or otherwise qualifying the
applicable Borrower's obligations under any of the clauses referred to above in
this Section 3.6, such Lender shall promptly upon becoming aware of the same
notify the Agent thereof and shall, in consultation with the Agent and the
Company and to the extent that it can do so without prejudice to its own
position, take such reasonable steps as may be reasonably open to it to mitigate
the effects of such circumstances (including, without limitation, (i) the
transfer of its Loans to a Lending Installation in another jurisdiction, (ii)
the assignment of its rights and obligations hereunder to an Eligible Bank
willing to participate in this facility or (iii) the restructure of its
participation in this facility in a manner which will avoid the event in
question and on terms mutually acceptable to such Lender, the Agent and the
Company). If and so long as a Lender has been unable to take, or has not taken,
steps acceptable to the Company to mitigate the effect of the circumstances in
question, such Lender shall be obliged, at the request of the Company, to assign
all its rights and obligations hereunder to an Eligible Bank nominated by the
Company with the approval of the Agent and willing to participate in the
facility in place of such Lender; provided that such Eligible Bank satisfies all
of the requirements of this Agreement including, but not limited to, providing
the forms required by Sections 2.5.15 and 13.3.2. Notwithstanding any such
assignment, the obligations of the Company under Sections 3.1, 3.2, 3.3 and 10.6
shall survive any such assignment and be enforceable by such Lender.
3.7. Lender Statements; Survival of Indemnity. Each Lender shall deliver
a written statement of such Lender as to the amount due, if any, under Section
3.1, 3.2, 3.3 or 3.5. Such written statement shall set forth in reasonable
detail the event by reason of which such Lender is entitled to make a claim for
such amount and the calculations upon which such Lender determined such amount,
which shall be final, conclusive and binding on the applicable Borrower in the
absence of manifest error. Determination of amounts payable under such Sections
in connection with a Fixed Rate Loan shall be calculated as though each Lender
funded its Fixed Rate Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Fixed Rate applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable on demand after receipt by the applicable Borrower of the
written statement. Notwithstanding any contrary provision of this Article III,
no Borrower shall be required to make any payments to any Lender pursuant to
Sections 3.2 or 3.3 with respect to periods of time more than 60 days prior to
date upon which such Lender's written statement in accordance with the terms of
this Section 3.7 is first delivered to the applicable Borrower. The obligations
of such Borrower under Sections 3.1, 3.2, 3.3 and 3.5 shall survive payment of
any other of such Borrower's Obligations and the termination of this Agreement.
Page 36
<PAGE> 44
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. No Lender shall be required to make the initial
Advance hereunder unless (x) the Borrowers have paid in full all Obligations
under (and as defined in) the Original Credit Facility which would be due and
payable upon termination of such Original Credit Facility, and the Aggregate
Commitment (as defined in the Original Credit Facility) of the lenders
thereunder shall have been terminated and (y) the Company has furnished or
caused to be furnished to the Agent with sufficient copies for the Lenders:
(i) Copies of the certificate of incorporation of the Company,
together with all amendments, and a certificate of good
standing, both certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary
of the Company, of its by-laws and of its Board of
Directors' resolutions (and resolutions of other bodies, if
any are deemed necessary by counsel for any Lender)
authorizing the execution of the Loan Documents.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Company, which shall identify by
name and title and bear the signature of the officers of
the Company authorized to sign the Loan Documents and to
make borrowings hereunder, upon which certificate the Agent
and the Lenders shall be entitled to rely until informed of
any change in writing by the Company.
(iv) A certificate, signed by the Financial Officer of the
Company, stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is
continuing.
(v) A certificate, signed by the Financial Officer of the
Company, stating that on the initial Borrowing Date the
representations and warranties contained in the Loan
Documents are true and correct in all material respects.
(vi) A written opinion of the Company counsel, addressed to each
of the Lenders, in substantially the form of Exhibit "B-1"
hereto.
(vii) The Committed Notes payable to the order of each of the
Lenders.
(viii) Such other documents as any Lender or its counsel may have
reasonably requested.
Page 37
<PAGE> 45
4.2. Initial Advance to Each Borrowing Subsidiary. No Lender shall be
required to make an Advance hereunder to a Borrowing Subsidiary unless the
Company has furnished or caused to be furnished to the Agent with sufficient
copies for the Lenders:
(i) The Assumption Letter executed and delivered by such
Borrowing Subsidiary and containing the written consent of
the Company at the foot thereof, as contemplated by Section
2.5.14.
(ii) Copies, certified by the Secretary or Assistant Secretary
of the Borrowing Subsidiary, of its Board of Directors'
resolutions (and resolutions of other bodies, if any are
deemed necessary by counsel for any Lender) approving the
Assumption Letter.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrowing Subsidiary, which
shall identify by name and title and bear the signature of
the officers of such Borrowing Subsidiary authorized to
sign the Assumption Letter and the other documents to be
executed and delivered by such Borrowing Subsidiary
hereunder, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in
writing by the Company.
(iv) An opinion of counsel to such Borrowing Subsidiary,
substantially in the form of Exhibit "B-2" hereto.
(v) The Committed Notes payable to the order of each of the
Lenders.
4.3. Each Advance. No Lender shall be required to make any Advance
(including, without limitation, the initial Advance hereunder), unless on the
applicable Borrowing Date:
(i) Prior to and after giving effect to such Advance there exists no
Default or Unmatured Default.
(ii) The representations and warranties contained in the Loan Documents
are true and correct in all material respects as of such Borrowing
Date (except Sections 5.5 and 5.7 and such other representations
and warranties which expressly relate solely to, and were true and
correct in all material respects as of, an earlier date).
(iii) All legal matters incident to the making of such Advance shall be
reasonably satisfactory to the Lenders and their counsel.
Each borrowing of a Committed Advance or a Competitive Bid Advance shall
constitute a representation and warranty by the applicable Borrower that the
conditions contained in Section 4.3(i) and (ii) have been satisfied.
Page 38
<PAGE> 46
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
5.1. Corporate Existence and Standing. Each of the Company and its
Material Subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
5.2. Authorization and Validity. The Company has the corporate power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Company of
the Loan Documents and the performance of its obligations thereunder have been
duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Company enforceable
against it in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and delivery
by the Company of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Company or any of its Material Subsidiaries or the Company's or
any Material Subsidiary's articles of incorporation or by-laws or the provisions
of any indenture, instrument or agreement to which the Company or any of its
Material Subsidiaries is a party or is subject, or by which it, or its Property,
is bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of the Company or a
Material Subsidiary pursuant to the terms of any such indenture, instrument or
agreement, in any such case which violation, conflict, default, creation or
imposition could reasonably be expected to have a Material Adverse Effect. No
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents.
5.4. Financial Statements. The December 31, 1997 financial statements of
the Company and its Consolidated Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the financial condition of the Company and its Consolidated Subsidiaries
at such date and the results of their operations for the period then ended.
Page 39
<PAGE> 47
5.5. Material Adverse Change. Since December 31, 1997, there has been no
change in the business, Property, condition (financial or otherwise) or results
of operations of the Company and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
5.6. Taxes. The Company and its Material Subsidiaries have filed all
United States federal income tax returns and all other material tax returns
which are required to be filed and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by the Company or any of its
Material Subsidiaries, except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. The United States
consolidated income tax returns of the Company and its Material Subsidiaries
have been audited by the Internal Revenue Service through the fiscal year ended
December 31, 1993. The charges, accruals and reserves on the books of the
Company and its Material Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.7. Litigation. There is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Material
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
5.8. Material Subsidiaries. An accurate listing of all of the
Subsidiaries of the Company is set forth on the Company's most recent annual
report filed with the United States Securities and Exchange Commission on Form
10-K/A. Schedule II hereto contains an accurate list of all of the presently
existing Material Subsidiaries of the Company, setting forth their respective
jurisdictions of incorporation and the percentage of their respective capital
stock owned by the Company or other Subsidiaries. All of the issued and
outstanding shares of capital stock of the Material Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
5.9. ERISA. Each Plan complies in all material respects with all
applicable requirements of law and regulations. On an aggregate basis, there are
no Unfunded Liabilities. No Reportable Event has occurred with respect to any
Plan, neither the Company nor any other members of the Controlled Group has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan, in any such case which could
reasonably be expected to have a Material Adverse Effect.
5.10. Full Disclosure. The financial statements referred to in Section
5.4 do not, nor do any other written statements furnished by the Company to the
Agent or the Lenders in connection with the negotiation of the Loan Documents
taken as a whole, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein, in
light of the circumstances in which they were made, not misleading as of the
dates thereof.
5.11. Title to Properties. The Company and each Material Subsidiary has
good and marketable title in fee simple (or its equivalent under applicable law)
to, or leasehold interest in, all the real property and has good title to all
the other property it purports to own or lease,
Page 40
<PAGE> 48
including that reflected in the most recent balance sheet referred to in Section
5.4 except as sold or otherwise disposed of in the ordinary course of business
and except for Liens disclosed in notes to the financial statements referred to
in Section 5.4 or otherwise permitted by this Agreement.
5.12. Patents and Trademarks. The Company and each Material Subsidiary
owns or possesses all material patents, trademarks, trade names, service marks,
copyright, licenses and rights with respect to the foregoing necessary for the
present and planned future conduct of its business, without any known material
conflict with the rights of others.
5.13. No Defaults. No Default or Unmatured Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Indebtedness in excess of $25,000,000 (or the Equivalent Amount
of Indebtedness if denominated in a currency other than Dollars) in the
aggregate, is not in default under any instrument or instruments or agreements
under and subject to which such Indebtedness has been issued, no event has
occurred and is continuing under the provisions of any such instrument or
agreement which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder and the Company is not in violation of
any term of its articles of incorporation.
5.14. Investment Company Act. Neither the Company nor any Subsidiary is
an "investment company" or an "affiliated person" thereof or an "affiliated
person" of such affiliated person as such terms are defined in the Investment
Company Act of 1940, as amended.
5.15. Compliance with Environmental Laws. Neither the Company nor any
Subsidiary has notice or knowledge of any violation of any applicable Federal,
state, or local laws, statutes, rules, regulations or ordinances relating to
public health, safety or the environment, including, without limitation,
relating to releases, discharges, emissions or disposals to air, water, land or
ground water, to the withdrawal or use of ground water, to the use, handling or
disposal of polychlorinated biphenyls (PCB's), asbestos or urea formaldehyde, to
the treatment, storage, disposal or management of hazardous substances
(including, without limitation, petroleum, crude oil or any fraction thereof, or
other hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous
or other controlled, prohibited or regulated substances which violation could
reasonably be expected to have a Material Adverse Effect. The total liability
arising out of any environmental matters, if adversely determined, would not
reasonably be expected to exceed a Substantial Portion.
5.16. Regulations U and X. Margin stock (as defined in Regulations U and
X) constitutes less than 25% of those assets of the Company and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.17. Contingent Obligations. Other than any liability incident to any
pending litigation, arbitration or proceedings, neither the Company nor any
Consolidated Subsidiary has material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.
Page 41
<PAGE> 49
5.18. Year 2000. The Borrower has made a full and complete assessment of
the Year 2000 Issues and has a realistic and achievable program for remediating
the Year 2000 Issues on a timely basis (the "Year 2000 Program"). Based on such
assessment and on the Year 2000 Program the Borrower does not reasonably
anticipate that Year 2000 Issues will have a Material Adverse Effect.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Company will maintain, for itself and each
Consolidated Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Agent, for distribution to the Lenders:
(i) Within 90 days after the close of each of its fiscal years,
an unqualified audit report certified by independent
certified public accountants, acceptable to the Lenders,
prepared in accordance with Agreement Accounting Principles
on a consolidated basis for itself and the Consolidated
Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of
surplus statements, and a statement of cash flows,
accompanied by a certificate of said accountants that, in
the course of their examination necessary for their
certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in
the opinion of such accountants, any Default or Unmatured
Default shall exist, stating the nature and status thereof.
(ii) Within 60 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and the
Consolidated Subsidiaries, unaudited balance sheets as at
the close of each such period and consolidated and
consolidating profit and loss and reconciliation of surplus
statements and a statement of cash flows for the period
from the beginning of such fiscal year to the end of such
quarter, all certified by its Financial Officer.
(iii) Together with the financial statements required hereunder,
a compliance certificate in substantially the form of
Exhibit "I" hereto signed by its Financial Officer showing
the calculations necessary to determine compliance with
this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
Page 42
<PAGE> 50
(iv) Promptly upon the furnishing thereof to the shareholders of
the Company, copies of all financial statements, reports
and proxy statements so furnished.
(v) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or
other regular reports which the Company or any of its
Subsidiaries files with the Securities and Exchange
Commission.
(vi) Such other information (including non-financial
information) as the Agent or any Lender may from time to
time reasonably request.
6.2. Use of Proceeds. The Borrowers will use the proceeds of the
Advances made under this Agreement only for general corporate purposes
(including, without limitation, to provide liquidity in connection with the
issuance of commercial paper by the Company), to repay outstanding Advances or
Notes and for Acquisitions, provided that proceeds of Advances may not be used
for any Acquisition other than a Friendly Acquisition unless (i) in the case of
Committed Advances, all of the Lenders have given their prior written consent
and (ii) in the case of a Competitive Bid Advance, the Lender making such
Competitive Bid Advance has given its prior written consent. If any Lender does
not consent to a request by a Borrower to fund an Acquisition other than a
Friendly Acquisition with a Committed Advance, the Company may (x) arrange for a
sale (at par) of the Commitment and all outstanding Loans held by any such
non-consenting Lender pursuant to the terms of Section 13.3 and any such
non-consenting Lender will promptly enter into any such sale arranged by the
Company or (y) offer such Commitment and all outstanding Loans held by such
Lender to all of the other Lenders pursuant to the procedure set forth in
Section 2.5.11(ii) for an increase in the Aggregate Commitment. None of the
proceeds of the Advances shall be used in any manner which would violate or
cause any Lender to be in violation of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
6.3. Notice of Default. The Company will, and will cause each of its
Material Subsidiaries to, give prompt notice in writing to the Agent of the
occurrence of any Default or Unmatured Default.
6.4. Corporate Existence. The Company will, and will cause each Material
Subsidiary to, do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.
6.5. Taxes. The Company will, and will cause each Material Subsidiary
to, pay when due all material taxes, assessments and governmental charges and
levies upon it or its income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
Page 43
<PAGE> 51
6.6. Insurance. The Company will, and will cause each Material
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as is
consistent with sound business practice.
6.7. Compliance with Laws. The Company will, and will cause each
Material Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, which, if
violated, could reasonably be expected to have a Material Adverse Effect.
6.8. Inspection. The Company will, and will cause each Material and
Borrowing Subsidiary to, permit the Lenders, by their respective representatives
and agents, to inspect any of the Properties, corporate books and financial
records of the Company and each such Subsidiary, to examine and make copies of
the books of accounts and other financial records of the Company and each such
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each such Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Lenders may designate,
provided that, after the occurrence and during the continuance of a Default, the
preceding references to "each Material and Borrowing Subsidiary" and "such
Subsidiary" shall be deemed to refer to each Subsidiary of the Company, whether
or not such Subsidiary is a Borrowing Subsidiary or a Material Subsidiary.
6.9. Sale of Assets; Merger and Consolidation. The Company will not, nor
will it permit any Consolidated Subsidiary to, (a) sell, lease or otherwise
transfer, directly or indirectly, assets which, when aggregated with all other
such transfers during the term of this Agreement, would constitute more than 50%
of the consolidated assets of the Company and its Consolidated Subsidiaries as
of the date of this Agreement or (b) merge or consolidate with or into or enter
into any analogous reorganization or transaction with any other person, except:
(i) Any Consolidated Subsidiary or other corporation may merge
or consolidate with the Company, provided that after giving
effect to any such merger or consolidation, (x) the Company
shall be the continuing or surviving corporation and (y) no
Default or Unmatured Default shall exist,
(ii) Any Consolidated Subsidiary may merge or consolidate with
any other Consolidated Subsidiary,
(iii) Any other corporation may merge or consolidate with any
Consolidated Subsidiary, provided that after giving effect
to any such merger or consolidation, (x) the continuing or
surviving corporation shall be a Consolidated Subsidiary
and (y) no Default or Unmatured Default shall exist, and
Page 44
<PAGE> 52
(iv) Sales, leases, transfers or other dispositions of assets by
Financial Subsidiaries shall not be restricted by the
provisions of this Section 6.9 and shall not count against
the 50% limit set forth herein.
6.10. Liens. The Company will not, nor will it permit any Consolidated
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Company or any Consolidated Subsidiary, except:
(i) Liens existing on the date of this Agreement securing
Indebtedness outstanding on the date of this Agreement;
(ii) any Lien existing on any Property of any corporation at the
time such corporation becomes a Consolidated Subsidiary and
not created in contemplation of such event, provided that
such Lien does not extend to or cover any Property of the
Company or any other Consolidated Subsidiary;
(iii) any Lien on any Property securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the
cost of acquiring such Property, provided that such Lien
attaches to such Property concurrently with or within 120
days after the acquisition thereof and such Lien does not
extend to or cover any Property of the Company or any
Consolidated Subsidiary other than the Property then being
acquired;
(iv) any Lien on any Property of any other corporation existing
at the time such corporation is merged or consolidated with
or into the Company or a Consolidated Subsidiary and not
created in contemplation of such event, provided that such
Lien does not extend to or cover any Property of the
Company or any Consolidated Subsidiary other than the
Property of such other corporation;
(v) any Lien existing on any Property prior to the acquisition
thereof by the Company or a Consolidated Subsidiary and not
created in contemplation of such acquisition, provided that
such Lien does not extend to or cover any Property of the
Company or any Consolidated Subsidiary other than the
Property then being acquired;
(vi) any Lien arising out of the refinancing, extension, renewal
or refunding of any Indebtedness secured by any Lien
permitted by any of the foregoing clauses of this Section,
provided that such Indebtedness is not increased and is not
secured by any additional Property;
(vii) Liens incidental to the conduct of its business or the
ownership of its Property which (i) do not secure
Indebtedness and (ii) do not in the
Page 45
<PAGE> 53
aggregate materially detract from the value of its Property
or materially impair the use thereof in the operation of
its business;
(viii) Liens incurred in connection with the sale by the Company
or any of its Subsidiaries of accounts receivable, provided
that such Liens do not encumber any Property other than
such accounts receivable sold; and
(ix) Liens not otherwise permitted by the foregoing clauses of
this Section securing Indebtedness in an aggregate
principal amount at any time outstanding not to exceed 10%
of Consolidated Tangible Net Worth.
6.11. Consolidated Indebtedness to Consolidated Total Capital. The
Company shall maintain, as of the end of each fiscal quarter, Consolidated
Indebtedness of no more than 50% of Consolidated Total Capital.
6.12. Consolidated Net Worth. The Company shall maintain, as of the end
of each fiscal quarter, Consolidated Net Worth of not less than $1,528,913,600.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made under Article V
by the Company or any Subsidiary to the Lenders or the Agent under or in
connection with this Agreement or any certificate or other document delivered in
connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made or deemed made.
7.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any facility fee or other obligations under any of
the Loan Documents within five days after the same becomes due.
7.3. The breach by the Company of any of the terms or provisions of
Sections 6.2, 6.9, 6.10, 6.11 and 6.12.
7.4. The breach by the Company (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this
Agreement which is not remedied within thirty days after written notice from the
Agent or any Lender.
7.5. Failure of the Company or any of its Subsidiaries to pay
Indebtedness in an aggregate amount equal to or greater than $25,000,000 (or the
Equivalent Amount of Indebtedness
Page 46
<PAGE> 54
denominated in a currency other than Dollars) when due; or the default by the
Company or any of its Subsidiaries in the performance of any term, provision or
condition contained in any agreement under which any such Indebtedness was
created or is governed, or any other event shall occur or condition exist, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, Indebtedness in such aggregate amount to become due prior
to its stated maturity; or Indebtedness in such aggregate amount of the Company
or any of its Subsidiaries shall be declared to be due and payable or required
to be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof.
7.6. Any Borrower or any Material Subsidiary shall (i) have an order for
relief entered with respect to it under any bankruptcy, insolvency or other
similar law as now or hereafter in effect, (ii) make an assignment for the
benefit of creditors, (iii) fail to pay, or admit in writing its inability to
pay, its debts generally as they become due, (iv) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion of its
Property, (v) institute any proceeding seeking an order for relief under any
bankruptcy, insolvency or other similar law as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (vi)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.6 or (vii) fail to contest in good faith any
appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of any Borrower or any
Material Subsidiary, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for any Borrower or any Material Subsidiary or any
Substantial Portion of the Property of any such Person, or a proceeding
described in Section 7.6(iv) shall be instituted against any Borrower or any
Material Subsidiary and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 30 consecutive
days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of any Borrower or any Material Subsidiary
which, when taken together with all other Property of any Borrower and the
Material Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in which any
such Condemnation occurs, constitutes a Substantial Portion.
7.9. The Company or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge any judgment or order for the payment of money
in excess of $25,000,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
Page 47
<PAGE> 55
7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate $25,000,000, or any Reportable Event shall occur in connection
with any Plan which could reasonably be expected to have a Material Adverse
Effect.
7.11. The Company or any of its Subsidiaries shall be the subject of any
proceeding or proceedings pertaining to the release by the Company or any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or substance
into the environment, or to any violation of any federal, state or local
environmental, health or safety law or regulation, which if adversely determined
could reasonably be expected to result in total liability to the Company or any
of its Subsidiaries, in the aggregate, in excess of a Substantial Portion.
7.12. The obligations of the Company under Article IX hereof shall fail
to remain in full force or effect or any action shall be taken to discontinue or
to assert the invalidity or unenforceability of any of such obligations, or the
Company shall deny that it has any further liability under such Article IX, or
shall give notice to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7 occurs
with respect to the Company or any of its Material Subsidiaries, the obligations
of the Lenders to make Loans hereunder shall automatically terminate and the
Obligations of the Company and each Borrowing Subsidiary shall immediately
become due and payable without presentment, demand, protest or notice of any
kind (all of which the Company hereby expressly waives) or any other election or
action on the part of the Agent or any Lender. If any other Default occurs, the
Required Lenders may terminate or suspend the obligations of the Lenders to make
Loans hereunder, or declare the Obligations of the Company and each Borrowing
Subsidiary to be due and payable, or both, in either case upon written notice to
the Company and the applicable Borrower, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which each Borrower hereby expressly waives.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Company may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Company hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
Page 48
<PAGE> 56
(i) Extend the maturity of any Loan or Note or reduce the
principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Termination Date or increase the amount of the
Commitment of any Lender hereunder, or permit the Company
to assign its rights under this Agreement.
(iv) Amend or modify Section 8.1 or this Section 8.2.
(v) Amend, modify or waive Article IX or release the Company
from its obligations thereunder.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 13.3.2 without obtaining the consent of any of
the Lenders. The consent of a Borrowing Subsidiary shall not be required for any
amendment to the Agreement or the Notes, including without limitation one
increasing the rate of interest on its Note or decreasing the maturity thereof.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Company or a Borrowing Subsidiary to satisfy the conditions precedent to
such Loan shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required pursuant to Section 8.2,
and then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the Obligations have been
paid in full.
ARTICLE IX
GUARANTY
9.1. Guaranty. For valuable consideration, the receipt of which is
hereby acknowledged, and to induce the Lenders to make advances to each
Borrowing Subsidiary, the Company hereby absolutely and unconditionally
guarantees prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of any and all
Page 49
<PAGE> 57
existing and future obligations of each Borrowing Subsidiary to the Agent, the
Lenders and any holder of a Note, or any of them, under or with respect to the
Loan Documents, whether for principal, interest, fees, expenses or otherwise
(collectively, the "Guaranteed Obligations").
9.2. Waivers. The Company waives notice of the acceptance of this
guaranty and of the extension or continuation of the Guaranteed Obligations or
any part thereof. The Company further waives presentment, protest, notice of
notices delivered or demand made on any Borrowing Subsidiary or action or
delinquency in respect of the Guaranteed Obligations or any part thereof,
including any right to require the Agent and the Lenders to sue the Borrowing
Subsidiary, any other guarantor or any other Person obligated with respect to
the Guaranteed Obligations or any part thereof, or otherwise to enforce payment
thereof against any collateral securing the Guaranteed Obligations or any part
thereof, and provided further that if at any time any payment of any portion of
the Guaranteed Obligations is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of any of the
Borrowing Subsidiaries or otherwise, the Company's obligations hereunder with
respect to such payment shall be reinstated at such time as though such payment
had not been made and whether or not the Agent or the Lenders are in possession
of this guaranty. The Agent and the Lenders shall have no obligation to disclose
or discuss with the Company their assessments of the financial condition of the
Borrowing Subsidiaries.
9.3. Guaranty Absolute. This guaranty is a guaranty of payment and not
of collection, is a primary obligation of the Company and not one of surety, and
the validity and enforceability of this guaranty shall be absolute and
unconditional irrespective of, and shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or any collateral; (c) any
waiver of any right, power or remedy or of any default with respect to the
Guaranteed Obligations or any part thereof or any agreement relating thereto or
with respect to any collateral; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral, any other guaranties with respect to the
Guaranteed Obligations or any part thereof, or any other obligation of any
Person with respect to the Guaranteed Obligations or any part thereof; (e) the
enforceability or validity of the Guaranteed Obligations or any part thereof or
the genuineness, enforceability or validity of any agreement relating thereto or
with respect to any collateral; (f) the application of payments received from
any source to the payment of obligations other than the Guaranteed Obligations,
any part thereof or amounts which are not covered by this guaranty even though
the Agent and the Lenders might lawfully have elected to apply such payments to
any part or all of the Guaranteed Obligations or to amounts which are not
covered by this guaranty; (g) any change in the ownership of any Borrowing
Subsidiary or the insolvency, bankruptcy or any other change in the legal status
of any Borrowing Subsidiary; (h) the change in or the imposition of any law,
decree, regulation or other governmental act which does or might impair, delay
or in any way affect the validity, enforceability or the payment when due of the
Guaranteed Obligations; (i) the failure of the
Page 50
<PAGE> 58
Company or any Borrowing Subsidiary to maintain in full force, validity or
effect or to obtain or renew when required all governmental and other approvals,
licenses or consents required in connection with the Guaranteed Obligations or
this guaranty, or to take any other action required in connection with the
performance of all obligations pursuant to the Guaranteed Obligations or this
guaranty; (j) the existence of any claim, setoff or other rights which the
Company may have at any time against any Borrowing Subsidiary, or any other
Person in connection herewith or an unrelated transaction; or (k) any other
circumstances, whether or not similar to any of the foregoing, which could
constitute a defense to a guarantor; all whether or not the Company shall have
had notice or knowledge of any act or omission referred to in the foregoing
clauses (a) through (k) of this paragraph. It is agreed that the Company's
liability hereunder is several and independent of any other guaranties or other
obligations at any time in effect with respect to the Guaranteed Obligations or
any part thereof and that the Company's liability hereunder may be enforced
regardless of the existence, validity, enforcement or non-enforcement of any
such other guaranties or other obligations or any provision of any applicable
law or regulation purporting to prohibit payment by any Borrowing Subsidiary of
the Guaranteed Obligations in the manner agreed upon between the Borrowing
Subsidiary and the Agent and the Lenders.
9.4. Waiver of Subrogation. The Company waives any claim, as that term
is defined in the federal Bankruptcy Code, which the Company might now have or
hereafter acquire against any Borrowing Subsidiary that arises from the
existence or performance of the Company's obligations under this guaranty.
9.5. Acceleration. The Company agrees that, as between the Company on
the one hand, and the Lenders and the Agent, on the other hand, the obligations
of each Borrowing Subsidiary guaranteed under this Article IX may be declared to
be forthwith due and payable, or may be deemed automatically to have been
accelerated, as provided in Section 8.1 hereof for purposes of this Article IX,
notwithstanding any stay, injunction or other prohibition (whether in a
bankruptcy proceeding affecting such Borrowing Subsidiary or otherwise)
preventing such declaration as against such Borrowing Subsidiary and that, in
the event of such declaration or automatic acceleration, such obligations
(whether or not due and payable by such Borrowing Subsidiary) shall forthwith
become due and payable by the Company for purposes of this Article IX.
9.6. Termination Date. This guaranty shall continue in effect until the
date the Aggregate Commitment shall have been terminated or otherwise expired in
accordance with its terms and all of the Guaranteed Obligations have been paid
in full.
Page 51
<PAGE> 59
ARTICLE X
GENERAL PROVISIONS
10.1. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Company or a Borrowing Subsidiary in violation of any limitation or
prohibition provided by any applicable statute or regulation.
10.2. Taxes. Any taxes (excluding income taxes) or other similar
assessments or charges payable or ruled payable by any governmental authority in
respect of the Loan Documents shall be paid by the Company, together with
interest and penalties, if any.
10.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
10.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrowers, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrowers, the Agent and the
Lenders relating to the subject matter thereof except as contemplated in Section
2.4.2.
10.5. Several Obligations. The respective obligations of the Lenders
hereunder are several and not joint and no Lender shall be the partner or agent
of any other (except to the extent to which the Agent is authorized to act as
such). The failure of any Lender to perform any of its obligations hereunder
shall not relieve any other Lender from any of its obligations hereunder. No
Lender shall have any liability for the failure of any other Lender to perform
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.6. Expenses; Indemnification. The Company shall reimburse (i) the
Agent for any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and, in connection with the preparation, execution
and delivery of the Loan Documents, time charges of attorneys for the Agent,
which attorneys may be employees of the Agent) paid or incurred by the Agent in
connection with the preparation, review, execution, delivery, amendment,
modification and administration of the Loan Documents provided, however, that
such time charges of attorneys for the Agent in connection with the preparation,
execution and delivery of the Loan Documents shall be limited as heretofore
agreed to in writing by the Agent and the Company, and (ii) the Agent and the
Lenders for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent and the Lenders)
paid or incurred by the Agent or any Lender in connection with the collection
and enforcement of the Loan Documents (except to the extent that a court of
competent jurisdiction rules against the Agent and the Lenders
Page 52
<PAGE> 60
in a final judgment in any such collection or enforcement action), any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or any insolvency or bankruptcy
proceedings in respect of the Company. The Company further agrees to indemnify
the Agent and each Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Agent or any Lender is a party thereto)
(collectively, the "Indemnified Amounts") which any of them may pay or incur
arising out of or relating to the direct or indirect application or proposed
application of the proceeds of any Loan hereunder; provided, however, that the
Company shall not be liable to any Lender for any Indemnified Amounts resulting
from any Lender's gross negligence or willful misconduct. The obligations of the
Company under this Section 10.6 shall survive the termination of this Agreement.
10.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.8. Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.9. Nonliability of Lenders. The relationship between the Borrowers and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrowers. Neither the Agent nor any Lender undertakes any responsibility to the
Borrowers to review or inform the Borrowers of any matter in connection with any
phase of the Borrowers' business or operations.
10.10. CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS,
BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
10.11. CONSENT TO JURISDICTION. EACH BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES TO THE EXTENT ALLOWED BY LAW ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
Page 53
<PAGE> 61
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS
AGAINST A BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
10.12. WAIVER OF JURY TRIAL. THE BORROWERS, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
10.13. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Company or any Subsidiary pursuant to
this Agreement in confidence, except for disclosure (i) to other Lenders and
their respective affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Lender, (iii) to regulatory officials, (iv) as
requested pursuant to or as required by law, regulation, or legal process, (v)
in connection with any legal proceeding to which that Lender is a party, and
(vi) permitted by Section 13.4. The restrictions in this Section 10.13 shall not
apply to any information which is or becomes generally available to the public
other than as a result of disclosure by a Lender or a Lender's representatives.
10.14. Restructuring Date. The Company, each Lender and the Agent agree
that on the Restructuring Date the following transactions shall be deemed to
occur automatically, without further action by any party hereto:
(a) The Original Credit Facility shall be superseded by the New Credit
Facility and the Original Credit Agreement shall be deemed to be amended and
restated in its entirety in the form of this Agreement.
(b) The Agent shall, promptly after receipt of the Notes reflecting the
amendments to the Original Credit Agreement effected hereunder, cancel and
return to the Company (upon receipt from the Lenders) the promissory notes being
replaced by such Notes.
The Company, each Lender and the Agent agree that (i) the restructuring
transactions provided in the foregoing sentence shall not be effective until the
execution of this Agreement by all of the parties hereto and the satisfaction of
the conditions precedent set forth in Section 4.1 hereof; (ii) all terms and
conditions of the Original Credit Agreement which are amended and restated by
this Agreement shall remain effective until such amendment and restatement
becomes effective hereunder, and thereafter shall continue to be effective only
as amended and restated by this Agreement and (iii) the representations,
warranties and covenants set forth herein shall become effective concurrently
with execution of this Agreement by all of the parties hereto.
Page 54
<PAGE> 62
10.15. Euro. With effect on and from the Euro Implementation Date, (i)
without prejudice to any method of conversion or rounding prescribed by any
legislative measures of the Council of the European Union, each reference in
this Agreement to a fixed amount or to fixed amounts in a National Currency Unit
to be paid to or by the Agent shall be replaced by a reference to such
comparable and convenient fixed amount or fixed amounts in Euro as the Agent may
from time to time specify; and (ii) the Agent may notify the other parties to
this Agreement of any amendments to this Agreement which the Agent (acting
reasonably and after consultation with the other parties to this Agreement)
determined to be necessary as a result of the commencement of the third stage of
European Economic and Monetary Union and the occurrence of the Euro
Implementation Date. Notwithstanding any other provision of this Agreement, any
amendments so notified shall take effect in accordance with the terms of the
relevant notification. So far as possible, the amendments shall be such as to
put the parties in the same position as if the Euro Implementation Date had not
occurred. However, if and to the extent the Agent determines it is not possible
to put all parties into that position, the Agent may give priority to putting
the Agent and the Lenders into that position.
ARTICLE XI
THE AGENT
11.1. Appointment. The First National Bank of Chicago is hereby appointed
Agent hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the agent of such Lender. The Agent
agrees to act as such upon the express conditions contained in this Article XI.
The Agent shall not have a fiduciary relationship in respect of any Lender by
reason of this Agreement.
11.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
11.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to any Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them under or in
connection with this Agreement except for its or their own gross negligence or
willful misconduct.
11.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (i) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document; (iii) the satisfaction of any
Page 55
<PAGE> 63
condition specified in Article IV, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith, except for the authority of the Agent's signatory to this Agreement.
11.5. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders or all the Lenders, as applicable, and such instructions and
any action taken or failure to act pursuant thereto shall be binding on all of
the Lenders and on all holders of Notes. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action, provided that, such
indemnity need not include liability, costs and expenses arising solely from the
gross negligence or willful misconduct of the Agent.
11.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
11.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
11.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Company or any Borrowing
Subsidiary for which the Agent is entitled to reimbursement by the Company or
any Borrowing Subsidiary under the Loan Documents, (ii) for any other expenses
not reimbursed by the Company incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever and not reimbursed by the
Company which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent.
Page 56
<PAGE> 64
11.9. Rights as a Lender. With respect to its Commitment, Loans made by
it and the Notes issued to it, the Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as though it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Company or any of its Subsidiaries.
11.10. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
11.11. Successor Agent. The Agent may resign at any time by giving at
least 30 days' prior written notice thereof to the Lenders and the Company and
such resignation shall be effective at the end of such 30-day period or upon the
earlier appointment of a successor agent, and the Agent may be removed at any
time with or without cause by written notice received by the Agent from the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Company and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Agent's removal or giving notice of resignation, then the
retiring Agent may appoint, on behalf of the Company and the Lenders, a
successor Agent. Such successor Agent shall be a commercial bank having capital
and retained earnings of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent. The retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents upon the
effectiveness of its removal or resignation hereunder. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Article XI shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent hereunder
and under the other Loan Documents.
Page 57
<PAGE> 65
ARTICLE XII
SETOFF; RATABLE PAYMENTS
12.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Company or a Borrowing Subsidiary
becomes insolvent, however evidenced, or any Default occurs, any indebtedness
from any Lender to any Borrower (including all account balances, whether
provisional or final and whether or not collected or available) may be offset
and applied toward the payment of the Obligations owing to such Lender, whether
or not the Obligations, or any part thereof, shall then be due.
12.2. Ratable Payments. If, after the occurrence of a Default, any
Lender, whether by setoff or otherwise, has payment made to it upon its share of
any Advance (other than payments received pursuant to Article III) in a greater
proportion than that received by any other Lender, such Lender agrees, promptly
upon demand, to purchase a portion of the Loans comprising that Advance held by
the other Lenders so that after such purchase each Lender will hold its ratable
proportion of Loans comprising that Advance. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their Loans. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
ARTICLE XIII
BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS
13.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrowers and
the Lenders and their respective successors and assigns, except that (i) no
Borrower shall have the right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by any Lender must be made in compliance with
Section 13.3. Notwithstanding clause (ii) of this Section, any Lender may at any
time, without the consent of any Borrower or the Agent, assign all or any
portion of its rights under this Agreement and its Notes to a Federal Reserve
Bank; provided, however, that no such assignment shall release the transferor
Lender from its obligations hereunder. The Agent may treat the payee of any Note
as the owner thereof for all purposes hereof unless and until such payee
complies with Section 13.3 in the case of an assignment thereof or, in the case
of any other transfer, a written notice of the transfer is filed with the Agent.
Any assignee or transferee of a Note agrees by acceptance thereof to be bound by
all the terms and provisions of the Loan
Page 58
<PAGE> 66
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
13.2. Participations.
13.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more Eligible Banks ("Participants") participating interests in any
Loan owing to such Lender, any Note held by such Lender, the Commitment of such
Lender, or any other interest of such Lender under the Loan Documents, provided
that the aggregate of such participating interests equals or exceeds $10,000,000
(or the Equivalent Amount thereof if denominated in an Agreed Currency other
than Dollars). In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrowers under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrowers and the
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
13.2.2. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan or Commitment, releases any
guarantor of any such Loan, if any, or releases any substantial portion of
collateral, if any, securing any such Loan.
13.2.3. Benefit of Setoff. The Borrowers agree that each Participant
shall be deemed to have the right of setoff provided in Section 12.1 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 12.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 12.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.2 as if each Participant were a Lender.
Page 59
<PAGE> 67
13.3. Assignments.
13.3.1. Permitted Assignments. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to one or
more Eligible Banks ("Purchasers") all or a portion of its rights and
obligations under the Loan Documents, which assignment shall be in amounts equal
to or greater than $10,000,000 (or the Equivalent Amount thereof if denominated
in an Agreed Currency other than Dollars). Such assignment shall be
substantially in the form of Exhibit "F" hereto.
13.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of a
notice of assignment, substantially in the form attached as Exhibit "I" to
Exhibit "F" hereto (a "Notice of Assignment"), together with any consent
required by Section 13.3.1, and (ii) payment of a $3,000 fee to the Agent by the
assigning Lender for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of Assignment. On and
after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by any Borrower, the Lenders or
the Agent shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Loans assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
13.3.2, the transferor Lender, the Agent and the Borrowers shall make
appropriate arrangements so that replacement Notes are issued to such transferor
Lender and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
13.4. Dissemination of Information. Each Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Company and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
10.13 of this Agreement.
13.5. Tax Treatment. If any interest in any Loan Document is transferred
to any Purchaser which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Purchaser, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.5.15.
Page 60
<PAGE> 68
ARTICLE XIV
NOTICES
14.1. Giving Notice. Except as otherwise permitted by Section 2.5.8, all
notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing or by telex or by
facsimile and addressed or delivered to such party at its address set forth
below its signature hereto or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes).
14.2. Change of Address. The Company, each Borrowing Subsidiary, the
Agent and each Lender may change the address for service of notice upon it by a
notice in writing to the other parties hereto.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Company, the Agent
and the Lenders and each party has notified the Agent by telex or telephone,
that it has taken such action.
Page 61
<PAGE> 69
IN WITNESS WHEREOF, the Company, the Lenders and the Agent have
executed this Agreement as of the date first above written.
ILLINOIS TOOL WORKS INC.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title: Senior vice Pfresident & CFO
By: /s/ MICHAEL J. ROBINSON
-------------------------------------
Title: Vice President & Treasurer
----------------------------------
Address: 3600 West Lake Avenue
Glenview, IL 60025-5811
Attention: Michael J. Robinson
Title: Vice President and Treasurer
Telephone: (847) 657-4245
Facsimile: (847) 657-4415
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-1
<PAGE> 70
Commitment
$50,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Agent
By: /s/ DEBORAH E. STEVENS
--------------------------------------
Title: Authorized Agent
------------------------------------
Address: One First National Plaza
Suite 0088
Chicago, IL 60670
Attention: Deborah E. Stevens
Title: Vice President
Telephone: (312) 732-2532
Facsimile: (312) 732-5161
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-2
<PAGE> 71
$38,000,000 BANK OF MONTREAL
By: /s/ SHARRON P. WALSH
-------------------------------------------
Title: Director
----------------------------------------
Address: 115 South LaSalle Street, 12W
Chicago, Illinois 60603
Attention: Sharron P. Walsh
Title: Director
Telephone: (312) 750-3743
Facsimile: (312) 750-3783
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-3
<PAGE> 72
$38,000,000 COMMERZBANK AKTIENGESELLSCHAFT, GRAND
CAYMAN BRANCH
By: /s/ ALBERT B. MORROW
----------------------------------------
Title: Assistant Treasurer
-------------------------------------
By: /s/ MARK MONSON
---------------------------------------
Title: Vice President
------------------------------------
Address: 311 South Wacker Drive
Chicago, IL 60606
Attention: Mark Monson
Title: Vice President
Telephone: (312) 408-6910
Facsimile: (312) 435-1486
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-4
<PAGE> 73
$38,000,000 REVOLVING COMMITMENT VEHICLE
CORPORATION
By: Morgan Guaranty Trust Company of New York,
as Attorney-in-fact for Revolving Commitment
Vehicle Corporation
By: /s/ ANDREW D. BROWN
-----------------------------------------------
Title: Vice President
-------------------------------------------
Address: 60 Wall Street
Third Floor
New York, New York 10260-0060
Attention: Penelope Cox
Title: Vice President
Telephone: (212) 648-0405
Facsimile: (212) 648-5939
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-5
<PAGE> 74
$38,000,000 NATIONAL AUSTRALIA BANK LIMITED
ACN # 004 044 937
By: /s/ [ILLEGIBLE]
-------------------------------------------
Title: Vice President
----------------------------------------
Address: 200 Park Avenue
34th Floor
New York, NY 10166
Attention: Jeff White
Title: Vice President
Telephone: (212) 916-9509
Facsimile: (212) 983-1969
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-6
<PAGE> 75
$38,000,000 THE NORTHERN TRUST COMPANY
By: /s/ JOSEPH A. WEMHOFF
--------------------------------------------
Title: Vice President
----------------------------------------
Address: 50 South LaSalle Street, B-11
Chicago, IL 60675
Attention: Joseph A. Wemhoff
Title: Vice President
Telephone: (312) 444-3757
Facsimile: (312) 444-5055
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-7
<PAGE> 76
$19,000,000 BANCA COMMERCIALE ITALIANA
By: /s/ [ILLEGIBLE]
-------------------------------------------
Title: Senior Vice President & Branch Manager
By: /s/ [ILLEGIBLE]
-------------------------------------------
Title: Vice President
----------------------------------------
Address: 150 North Michigan Avenue
Suite 1500
Chicago, IL 60601
Attention: Miriam Bommarito
Title: Corporate Banking Officer
Telephone: (312) 346-1112
Facsimile: (312) 346-5758
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-8
<PAGE> 77
$19,000,000 THE DAI-ICHI KANGYO BANK, LTD.
CHICAGO BRANCH
By: /s/ [ILLEGIBLE]
-------------------------------------------
Title: Vice President
----------------------------------------
Address: 10 South Wacker Drive
26th Floor
Chicago, IL 60606
Attention: John Sneed
Title: Vice President
Telephone: (312) 715-6362
Facsimile: (312) 876-2011
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-9
<PAGE> 78
$19,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED,
CHICAGO BRANCH
By: /s/ WALTER R. WOLFF
-------------------------------------------
Title: Joint General Manager
----------------------------------------
Address: 227 West Monroe Street
Suite 2600
Chicago, IL 60606
Attention: Walter R. Wolff
Title: Joint General Manager
Telephone: (312) 855-1111
Facsimile: (312) 855-8200
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-10
<PAGE> 79
$19,000,000 SOCIETE GENERALE, CHICAGO BRANCH
By: /s/ JOSE A. MORENO
-------------------------------------------
Title: Director
----------------------------------------
Address: 181 West Madison Street
Suite 3400
Chicago, IL 60602
Attention: Jose A. Moreno
Title: Vice President & Team Leader
Telephone: (312) 578-5050
Facsimile: (312) 578-5099
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-11
<PAGE> 80
$19,000,000 WACHOVIA BANK, N.A.
By: /s/ TODD J. EIGLE
------------------------------------
Title: Vice President
---------------------------------
Address: 70 West Madison Street
Suite 2440
Chicago, IL 60602
Attention: Neil Mesch
Title: Assistant Vice President
Telephone: (312) 853-0404
Facsimile: (312) 853-0693
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-12
<PAGE> 81
$15,000,000 MARINE MIDLAND BANK
By: /s/ M. C. CUTLIP
-------------------------------------------
Title: Officer #9135
----------------------------------------
Address: 190 South LaSalle Street
Suite 1100
Chicago, IL 60603-3410
Attention: Steven Trepiccione
Title: Vice President-Officer #9435
Telephone: (312) 853-6420
Facsimile: (312) 853-3855
- -------------
$350,000,000
Signature Page to Illinois Tool Works Inc.
Second Amended and Restated Credit Agreement
S-13
<PAGE> 82
SCHEDULE I
Euro-Currency Payment Offices of the Agent*
Currency Euro-Currency Payment Office
- -------- ----------------------------
Dollars The First National Bank of Chicago
Cayman
Deutsche Marks To: Swiss Bank Corp.
Frankfurt, Germany
For: The First National Bank of Chicago
Chicago Office
Dutch Guilders To: ING Bank
Amsterdam, Netherlands
For: The First National Bank of Chicago
Cayman
French Francs To: Credit Commercial De France
Paris, France
For: The First National Bank of Chicago
Cayman
Japanese Yen To: The First National Bank of Chicago
Tokyo
For: The First National Bank of Chicago
Cayman
Pounds Sterling To: Midland Bank, PLC
London, England
For: The First National Bank of Chicago
Cayman
Euro To be determined
*Accounts to be provided before payments made
I
<PAGE> 83
SCHEDULE II
ILLINOIS TOOL WORKS INC.
Material Subsidiaries
<TABLE>
<CAPTION>
Jurisdiction of Percentage
Name Incorporation/Organization Ownership
---- -------------------------- ----------
<S> <C> <C>
Azon Pty Australia 100
Buell Industries, Inc. Delaware 100
Champs Investments France 100
Cumberland Leasing Co. Illinois 100
Elleyse Financing France 100
Hobart Brothers Company Ohio 100
ITW (Deutschland) GmbH Germany 100
ITW Ateco Germany 100
ITW Canada L.P. Canada 100
ITW Fastex Italia Italy 100
ITW Finance II LLC Delaware 100
ITW Finishing LLC Delaware 100
ITW Holding France France 100
ITW Holdings GmbH Germany 100
ITW Holdings U.K United Kingdom 100
ITW Holdings Pty Australia 100
ITW Industrie GmbH Germany 100
ITW International Holdings Inc. Delaware 100
ITW International Finance SAS France 100
ITW Investments Inc. Delaware 100
ITW Leasing & Investments Inc. Delaware 100
ITW Limited United Kingdom 100
ITW Mortgage Investments I, Inc. Delaware 100
ITW Mortgage Investments II, Inc. Delaware 100
ITW Mortgage Investments III, Inc. Delaware 100
ITW Mortgage Investments IV, Inc. Delaware 100
ITW Real Estate Investments Inc. Delaware 100
ITW Real Estate L.L.C Delaware 100
ITW Residuals Inc. Delaware 100
ITW Signode Australasia Pty Australia 100
ITW Tech Co. Delaware 100
Loveshaw Corp. Delaware 100
LSPS Inc. Delaware 100
Miller Electric Mfg. Co. Wisconsin 100
Mima Films Belgium Belgium 74
Orgapack GmbH Switzerland 100
Signode Systems GmbH Germany 100
Spit France France 100
W. A. Deutsher Pty. Ltd. Australia 100
</TABLE>
II
<PAGE> 84
EXHIBIT "A-1"
COMMITTED NOTE
September 30, 1998
___________________
____________________________________ , a __________________________
corporation, (the "Company") promises to pay to the order of __________________
(the "Lender") the lesser of the principal sum of _________________ Dollars or
the aggregate unpaid principal amount of all Committed Loans made by the Lender
to the Company pursuant to Section 2.2 of the Second Amended and Restated Credit
Agreement dated as of September 30, 1998, among the Company, The First National
Bank of Chicago, individually and as Agent, and the Lenders named therein,
including the Lender, (as the same may be amended or modified, hereinafter
referred to as the "Agreement"), in the currency in which each such Committed
Loan is denominated in immediately available funds at the main office of The
First National Bank of Chicago in Chicago, Illinois, as Agent or as otherwise
directed by the Agent pursuant to the terms of the Agreement, together with
interest, in like money and funds, on the unpaid principal amount hereof at the
rates and on the dates set forth in the Agreement. The Company shall pay each
Committed Loan in full on the last day of such Committed Loan's applicable
Interest Period.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Committed Loan and the date and amount of each
principal payment hereunder provided, however, that any failure to so record
shall not affect the Company's obligations under any Loan Document.
This Committed Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Agreement, to which reference is hereby made
for a statement of the terms and conditions under which this Committed Note may
be prepaid or its maturity date accelerated. Capitalized terms used herein and
not otherwise defined herein are used with the meanings attributed to them in
the Agreement.
------------------------------
By:
---------------------------
Title:
------------------------
By:
---------------------------
Title:
------------------------
E-1
<PAGE> 85
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
COMMITTED NOTE OF _______________________________
DATED SEPTEMBER 30, 1998
Principal Maturity Principal
Amount and of Interest Amount Unpaid
Date Currency of Loan Period Paid Balance
- ---- ---------------- ----------- --------- -------
E-2
<PAGE> 86
EXHIBIT "A-2"
COMPETITIVE BID NOTE
_______________ [________ ___ _____]
________________________________, a ________ corporation (the
"Company"), promises to pay to the order of _________________ (the "Lender") the
aggregate unpaid principal amount of all Competitive Bid Loans made by the
Lender to the Company pursuant to Section 2.3 of the Second Amended and Restated
Credit Agreement dated as of September 30, 1998, among the Company, The First
National Bank of Chicago, individually and as Agent, and the Lenders named
therein, including the Lender, (as the same may be amended or modified,
hereinafter referred to as the "Agreement"), in the currency in which each such
Competitive Bid Loan is denominated in immediately available funds at the main
office of The First National Bank of Chicago, as Agent, in Chicago, Illinois or
as otherwise directed by the Agent pursuant to the terms of the Agreement,
together with interest, in like money and funds, on the unpaid principal amount
hereof at the rates and on the dates determined in accordance with the
Agreement. The Company shall pay each Competitive Bid Loan in full on the last
day of such Competitive Bid Loan's applicable Interest Period.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual practice, the
date and amount of each Competitive Bid Loan and the date and amount of each
principal payment hereunder, provided, however, that any failure to so record
shall not affect the Company's obligations under any Loan Document.
This Competitive Bid Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Agreement, to which reference is hereby made
for a statement of the terms and conditions under which this Competitive Bid
Note may be prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Agreement.
------------------------------
By:
---------------------------
Title:
------------------------
By:
---------------------------
Title:
------------------------
E-3
<PAGE> 87
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
COMPETITIVE BID NOTE OF
__________________________
DATED SEPTEMBER 30, 1998
Principal Maturity Principal
Amount and of Interest Amount Unpaid
Date Currency of Loan Period Paid Balance
- ---- ---------------- ----------- --------- -------
E-4
<PAGE> 88
EXHIBIT "B-1"
FORM OF COMPANY OPINION
September 30, 1998
The Agent and the Lenders who are parties to the
Agreement described below.
Gentlemen/Ladies:
I am counsel for Illinois Tool Works Inc. (the "Company"), and have
represented the Company in connection with its execution and delivery of a
Second Amended and Restated Credit Agreement among the Company, The First
National Bank of Chicago, individually and as Agent, and the Lenders named
therein, providing for Advances in an aggregate principal amount not exceeding,
as of the date hereof, $350,000,000 at any one time outstanding (with provisions
therein allowing for an increase in the maximum amount of Advances thereunder to
$800,000,000, subject to all of the terms and conditions set forth therein) and
dated as of September 30, 1998 (the "Agreement"). All capitalized terms used in
this opinion and not otherwise defined shall have the meanings attributed to
them in the Agreement.
I have examined the Company's and each domestic Material Subsidiary's
articles of incorporation, by-laws, resolutions, the Loan Documents and such
other matters of fact and law which I deem necessary in order to render this
opinion. Based upon the foregoing, it is my opinion that:
l. The Company and each domestic Material Subsidiary are corporations
duly incorporated, validly existing and in good standing under the laws of their
states of incorporation and have all requisite authority to conduct their
business in each jurisdiction in which their business is conducted.
2. The execution and delivery of the Loan Documents by the Company and
the performance by the Company of the Obligations have been duly authorized by
all necessary corporate action and proceedings on the part of the Company and
will not:
(a) require any consent of the Company's shareholders;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Company or the Company's
articles of incorporation or by-laws or, to my knowledge, any indenture,
instrument or agreement binding upon the Company; or
E-5
<PAGE> 89
(c) result in, or require, the creation or imposition of any Lien
pursuant to the provisions of any indenture, instrument or agreement
known to me and binding upon the Company which could reasonably be
expected to have a Material Adverse Effect.
3. The Loan Documents have been duly executed and delivered by the
Company and constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms except to the extent the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting the enforcement of creditors' rights
generally and subject also to the availability of equitable remedies, regardless
of whether enforcement is sought at equity or at law.
4. There is no litigation or proceeding against the Company which, to my
knowledge, if adversely determined, could reasonably be expected to have a
Material Adverse Effect.
5. No approval, authorization, consent, adjudication or order of any
governmental authority, which has not been obtained by the Company or any of its
Material Subsidiaries, is required to be obtained by the Company or any of its
Material Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement or in connection with the payment
by the Company of the Obligations.
This opinion may be relied upon by the Agent, the Lenders and their
participants, assignees and other transferees.
Very truly yours,
____________________________________
E-6
<PAGE> 90
EXHIBIT "B-2"
FORM OF SUBSIDIARY OPINION
[-------------]
The Agent and the Lenders who are parties to the Agreement described below.
Gentlemen/Ladies:
I refer to the Second Amended and Restated Credit Agreement among
Illinois Tool Works Inc. (the "Company"), The First National Bank of Chicago,
individually and as Agent, and the Lenders named therein, providing for Advances
in an aggregate principal amount not exceeding, as of the date hereof,
$350,000,000 at any one time outstanding (with provisions therein allowing for
an increase in the maximum amount of Advances thereunder to $800,000,000,
subject to all of the terms and conditions set forth therein) and dated as of
September 30, 1998 (as the same has been or may be amended, modified or
supplemented, the "Agreement"). I have acted as counsel for _____, a _____
corporation and subsidiary of the Company (the "Borrowing Subsidiary"), in
connection with its execution and delivery of the Assumption Letter dated _____,
199__ (the "Assumption Letter"). Capitalized terms not defined herein are used
as defined in the Agreement.
Pursuant to Section 4.2(iv) of the Agreement, I advise you that in my
opinion:
l. The Borrowing Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of _____.
2. The Borrowing Subsidiary has full corporate power and authority to own
its properties and to carry on its business as now conducted.
3. The execution, delivery and performance of the Assumption Letter are
within the corporate power and authority of the Borrowing Subsidiary, have been
duly authorized by proper corporate proceedings on behalf of the Borrowing
Subsidiary, do not and will not contravene any provision of applicable law or of
the [Articles/Certificate] of Incorporation or the By-laws of the Borrowing
Subsidiary or any agreement or instrument binding on the Borrowing Subsidiary of
which we have knowledge and do not and will not result in the creation of any
Lien upon any of its property or assets pursuant to any such agreement or
instrument of which we have knowledge, which contravention or result could
reasonably be expected to have a Material Adverse Effect.
E-7
<PAGE> 91
4. The Assumption Letter delivered to the Agent on the date hereof by the
Borrowing Subsidiary has been duly executed and delivered by the Borrowing
Subsidiary and the Assumption Letter and the Agreement constitute the legal,
valid and binding obligations of the Borrowing Subsidiary enforceable against
the Borrowing Subsidiary in accordance with its respective terms except to the
extent the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights generally and subject also to the availability
of equitable remedies, regardless of whether enforcement is sought at equity or
at law.
5. No approval, consent or authorization of, or filing or registration
with, any governmental department, agency or instrumentality is necessary for
the execution or delivery by the Borrowing Subsidiary of the Assumption Letter
or the performance by the Borrowing Subsidiary of any of the terms or conditions
thereof.
In rendering the opinions expressed above, I have examined originals, or
copies of originals certified to my satisfaction, of such agreements, documents,
certificates and other statements of government officials and corporate officers
and such other papers and evidence as I have deemed relevant and necessary as a
basis for this opinion. I have assumed the authenticity of all documents
submitted to me as originals and the conformity with the original documents of
any copies thereof submitted to me for my examination.
Very truly yours,
E-8
<PAGE> 92
EXHIBIT "C"
COMPETITIVE BID QUOTE REQUEST
(Section 2.3.2)
___________ , 199____
To: The First National Bank of Chicago,
as agent (the "Agent")
From: Illinois Tool Works Inc. (the "Company")
Re: Second Amended and Restated Credit Agreement (the "Agreement")
dated as of September 30, 1998, among the Company, The First
National Bank of Chicago, individually and as Agent, and the
Lenders listed on the signature pages thereof
We hereby give notice pursuant to Section 2.3.2 of the Agreement that we
request, on **[our own behalf/behalf of [Name of Borrowing Subsidiary]]**,
Competitive Bid Quotes for the following proposed Competitive Bid Advance(s):
Borrowing Date:______________, 199___
Currency Principal Amount(1) Interest Period(2)
- -------- ----------------- ----------------
Such Competitive Bid Quotes should offer [a Competitive Bid Margin] [an
Absolute Rate].
Upon acceptance by the undersigned of any or all of the Competitive Bid
Advances offered by Lenders in response to this request, the undersigned shall
be deemed to affirm as of the Borrowing Date thereof the representations and
warranties made in the Agreement to the extent specified in Article IV thereof.
Capitalized terms used herein have the meanings assigned to them in the
Agreement.
ILLINOIS TOOL WORKS INC.
By:
-----------------------------
Title:
----------------------------
(1) Amount must be at least $5,000,000 and an integral multiple of
$1,000,000 (or the Approximate Equivalent Amount thereof).
(2) One, two, three or six months (Eurocurrency Auction) or at least 30 and
up to 270 days (Absolute Rate Auction), subject to the provisions of the
definitions of Eurocurrency Interest Period and Absolute Rate Interest
Period.
E-9
<PAGE> 93
EXHIBIT "D"
INVITATION FOR COMPETITIVE BID QUOTES
(Section 2.3.3)
______________, 199___
To: [Name of Lender]
Re: Invitation for Competitive Bid Quotes to
Illinois Tool Works Inc. (the "Company")
Pursuant to Section 2.3.3 of the Second Amended and Restated Credit
Agreement dated as of September 30, 1998 (the "Agreement") among the Company,
the Lenders parties thereto and the undersigned, as Agent, we are pleased on
behalf of the Company to invite you to submit Competitive Bid Quotes to the
Company for the following proposed Competitive Bid Advance(s):
Borrowing Date: __________________, 19____
Borrower Currency Principal Amount Interest Period
- -------- -------- ---------------- ---------------
Such Competitive Bid Quotes should offer [a Competitive Bid Margin] [an
Absolute Rate]. Your Competitive Bid Quote must comply with Section 2.3.4 of the
Agreement and the foregoing. Capitalized terms used herein have the meanings
assigned to them in the Agreement.
Please respond to this invitation by no later than [3:00 p.m.] [1:00
p.m.] [9:00 a.m.] [(London time)] [(Chicago time)] on ______, 199__.
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
-----------------------------------
Authorized Officer
E-10
<PAGE> 94
EXHIBIT "E"
COMPETITIVE BID QUOTE
(Section 2.3.4)
____________________ , 199__
To: The First National Bank of Chicago, as Agent
Attn: __________________
Re: Competitive Bid Quote to Illinois Tool Works Inc. (the "Company")
In response to your invitation on behalf of the Company dated _____, 199__, we
hereby make the following Competitive Bid Quote pursuant to Section 2.3.4 of the
Second Amended and Restated Credit Agreement hereinafter referred to and on the
following terms:
1. Quoting Lender:____________________________________________
2. Person to contact at Quoting Lender:_______________________
3. Borrowing Date:_____________, 199__(1)
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest [Competitive [Absolute Minimum
Currency Amount(2) Period(3) Bid Margin(4)] Rate(5)] Amount(6)
- -------- --------- --------- -------------- -------- ---------
- ------------------------------
(1) As specified in the related Invitation For Competitive Bid Quotes.
(2) Principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $5,000,000
and an integral multiple of $1,000,000 (or the Approximate Equivalent
Amount thereof).
(3) One, two, three or six months or at least 30 and up to 270 days, as
specified in the related Invitation For Competitive Bid Quotes.
(4) Competitive Bid Margin over or under the Eurocurrency Base Rate
determined for the applicable Interest Period. Specify percentage
(rounded to the nearest 1/100 of 1%) and specify whether "PLUS" or
"MINUS".
(5) Specify rate of interest per annum (rounded to the nearest 1/100 of 1%).
(6) Specify minimum or maximum amount, if any, which the Company may accept
and/or the limit, if any, as to the aggregate principal amount of the
Competitive Bid Loans of the quoting Lender which the Company may accept
(see Section 2.3.4(ii)(d)).
E-11
<PAGE> 95
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Second Amended and
Restated Credit Agreement dated as of September 30, 1998, among the Company, the
Lenders listed on the signature pages thereof and yourselves, as Agent (the
"Credit Agreement"), irrevocably obligates us to make the Competitive Bid
Loan(s) for which any offer(s) are accepted, in whole or in part. Capitalized
terms used herein and not otherwise defined herein shall have their meanings as
defined in the Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated: ____________, 19 ______ By:
------------------------------------
Authorized Officer
E-12
<PAGE> 96
EXHIBIT "F"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
___________________ (the "Assignor") and ________________________ (the
"Assignee") is dated as of _________________ , 19_____. The parties hereto
agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Second Amended and
Restated Credit Agreement (which, as it may be amended, modified, renewed or
extended from time to time is herein called the "Credit Agreement") described in
Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1 and the other Loan Documents. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit "I" attached hereto
has been delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent by Section 13.3.1 of the Credit
Agreement. In no event will the Effective Date occur if the payments required to
be made by the Assignee to the Assignor on the Effective Date under Sections 4
and 5 hereof are not made on the proposed Effective Date. The Assignor will
notify the Assignee of the proposed Effective Date no later than the Business
Day prior to the proposed Effective Date. As of the Effective Date, (i) the
Assignee shall have the rights and obligations of a Lender under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. [In consideration for the sale and assignment of Loans
hereunder, (i) the Assignee shall pay the Assignor, on the Effective Date, an
amount equal to the principal amount of the portion of all Floating Rate Loans
assigned to the Assignee hereunder and (ii) with respect
E-13
<PAGE> 97
to each Fixed Rate Loan made by the Assignor and assigned to the Assignee
hereunder which is outstanding on the Effective Date, (a) on the last day of the
Interest Period therefor or (b) on such earlier date agreed to by the Assignor
and the Assignee or (c) on the date on which any such Fixed Rate Loan either
becomes due (by acceleration or otherwise) or is prepaid (the date as described
in the foregoing clauses (a), (b) or (c) being hereinafter referred to as the
"Payment Date"), the Assignee shall pay the Assignor an amount equal to the
principal amount of the portion of such Fixed Rate Loan assigned to the Assignee
which is outstanding on the Payment Date. If the Assignor and the Assignee agree
that the Payment Date for such Fixed Rate Loan shall be the Effective Date, they
shall agree to the interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the existing
Interest Period applicable to such Fixed Rate Loan (the "Agreed Interest Rate")
and any interest received by the Assignee in excess of the Agreed Interest Rate
shall be remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the Company
with respect to any Fixed Rate Loan sold by the Assignor to the Assignee
hereunder, the Assignee shall pay to the Assignor interest for such period on
the portion of such Fixed Rate Loan sold by the Assignor to the Assignee
hereunder at the applicable rate provided by the Credit Agreement. In the event
a prepayment of any Fixed Rate Loan which is existing on the Payment Date and
assigned by the Assignor to the Assignee hereunder occurs after the Payment Date
but before the end of the Interest Period applicable to such Fixed Rate Loan,
the Assignee shall remit to the Assignor the excess of the prepayment penalty
paid with respect to the portion of such Fixed Rate Loan assigned to the
Assignee hereunder over the amount which would have been paid if such prepayment
penalty was calculated based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (i) any principal payments received from the
Agent with respect to Fixed Rate Loans prior to the Payment Date and (ii) any
amounts of interest on Loans and fees received from the Agent which relate to
the portion of the Loans assigned to the Assignee hereunder for periods prior to
the Effective Date, in the case of Floating Rate Loans, or the Payment Date, in
the case of Fixed Rate Loans, and not previously paid by the Assignee to the
Assignor.]* In the event that either party hereto receives any payment to which
the other party hereto is entitled under this Assignment Agreement, then the
party receiving such amount shall promptly remit it to the other party hereto.
*Each Assignor may insert its standard payment provisions in lieu of the payment
terms included in this Exhibit.
E-14
<PAGE> 98
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a
fee on each day on which a payment of interest or [commitment] fees is made
under the Credit Agreement with respect to the amounts assigned to the Assignee
hereunder (other than a payment of interest or commitment fees for the period
prior to the Effective Date or, in the case of Fixed Rate Loans, the Payment
Date, which the Assignee is obligated to deliver to the Assignor pursuant to
Section 4 hereof). The amount of such fee shall be the difference between (i)
the interest or fee, as applicable, paid with respect to the amounts assigned to
the Assignee hereunder and (ii) the interest or fee, as applicable, which would
have been paid with respect to the amounts assigned to the Assignee hereunder if
each interest rate was of 1% less than the interest rate paid by the Company
or if the commitment fee was of 1% less than the commitment fee paid by the
Company, as applicable. In addition, the Assignee agrees to pay % of the
recordation fee required to be paid to the Agent in connection with this
Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim. It is understood and agreed
that the assignment and assumption hereunder are made without recourse to the
Assignor and that the Assignor makes no other representation or warranty of any
kind to the Assignee. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) the due execution,
legality, validity, enforceability, genuineness, sufficiency or collectability
of any Loan Document, including without limitation, documents granting the
Assignor and the other Lenders a security interest in assets of the Company, any
Subsidiary or any guarantor, (ii) any representation, warranty or statement made
in or in connection with any of the Loan Documents, (iii) the financial
condition or creditworthiness of the Company, any Subsidiary or any guarantor,
(iv) the performance of or compliance with any of the terms or provisions of any
of the Loan Documents, (v) inspecting any of the Property, books or records of
the Company, any Subsidiary, (vi) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements requested by the Assignee and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement, (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information at it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, (iii) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender, (v) agrees that
its payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vi) confirms that it is an Eligible
E-15
<PAGE> 99
Bank, [and (vii) attaches the forms prescribed by the Internal Revenue Service
of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any United
States federal income taxes].**
**to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 13.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any Eligible Bank,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under [Sections 4, 5 and 8] hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Commitment occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of Schedule 1 shall
remain the same, but the dollar amount purchased shall be recalculated based on
the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
E-16
<PAGE> 100
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
------------------------------------
Title:
--------------------------------
--------------------------------
--------------------------------
[NAME OF ASSIGNEE]
By:
------------------------------------
Title:
--------------------------------
--------------------------------
--------------------------------
E-17
<PAGE> 101
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: ____________, 19_____
3. Amounts (As of Date of Item 2 above):
Facility 1*
a. Total of
Commitments (Loans)**
under Credit
Agreement $_____
b. Assignee's
Percentage
of each Facility
purchased under
the Assignment
Agreement*** _____%
c. Amount of
Assigned Share
in each Facility
purchased under
the Assignment
Agreement $_____
4. Assignee's Aggregate
(Loan Amount)** Commitment
Amount Purchased Hereunder: $_____
5. Proposed Effective Date:
Accepted and Agreed: ----------------------
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
-------------------- -------------------
Title: Title:
----------------- ----------------
* Insert specific facility names per Credit Agreement
** If a Commitment has been terminated, insert outstanding Loans in place
of Commitment
*** Percentage taken to 10 decimal places
E-18
<PAGE> 102
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
E-19
<PAGE> 103
EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
_______________ , 19___
To: [NAME OF BORROWER]*
--------------------------------
--------------------------------
[NAME OF AGENT]
--------------------------------
--------------------------------
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Second Amended and Restated Credit Agreement
(the "Credit Agreement") described in Item 1 of Schedule 1 attached hereto
("Schedule 1"). Capitalized terms used herein and not otherwise defined herein
or in such consent shall have the meanings attributed to them in the Credit
Agreement.
2. This Notice of Assignment (this "Notice") is given and
delivered to the Agent pursuant to Section 13.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of _____, 19__ (the "Assignment"), pursuant to which, among
other things, the Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from the Assignor
the percentage interest specified in Item 3 of Schedule 1 of all outstandings,
rights and obligations under the Credit Agreement relating to the facilities
listed in Item 3 of Schedule 1, including, without limitation, such interest in
the Assignor's Commitment (if applicable) and the Loans owing to the Assignor
relating to such facilities. The Effective Date of the Assignment shall be the
later of the date specified in Item 5 of Schedule 1 to the Assignment ("Schedule
1") or two Business Days (or such shorter period as agreed to by the Agent)
after this Notice of Assignment and any consents and fees required by Sections
13.3.1 and
E-20
<PAGE> 104
13.3.2 of the Credit Agreement have been delivered to the Agent, provided that
the Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Company and
the Agent notice of the assignment and delegation referred to herein. The
Assignor will confer with the Agent before the date specified in Item 5 of
Schedule 1 to determine if the Assignment Agreement will become effective on
such date pursuant to Section 3 hereof, and will confer with the Agent to
determine the Effective Date pursuant to Section 3 hereof if it occurs
thereafter. The Assignor shall notify the Agent if the Assignment Agreement does
not become effective on any proposed Effective Date as a result of the failure
to satisfy the conditions precedent agreed to by the Assignor and the Assignee.
At the request of the Agent, the Assignor will give the Agent written
confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or
before the Effective Date the processing fee of $3,000 required by Section
13.3.2 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor
and the Assignee request and direct that the Agent prepare and cause the
Borrowers to execute and deliver new Notes or, as appropriate, replacement
notes, to the Assignor and the Assignee. The Assignor and, if applicable, the
Assignee each agree to deliver to the Agent the original Note(s) received by it
from the Borrower(s) upon its receipt of new Notes in the appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. Each party consenting to the Assignment in the space indicated
below hereby releases the Assignor from any obligations to it which have been
assigned to the Assignee.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
-------------------------------- --------------------------
Title: Title:
----------------------------- -----------------------
E-21
<PAGE> 105
ACKNOWLEDGED [AND CONSENTED TO] ACKNOWLEDGED [AND CONSENTED TO]
BY [NAME OF AGENT] BY [NAME OF BORROWER]
By: By:
-------------------------------- ---------------------------
Title: Title:
----------------------------- ------------------------
[Attach photocopy of Schedule 1 to Assignment]
E-22
<PAGE> 106
EXHIBIT "G"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement
Described Below.
Re: Second Amended and Restated Credit Agreement, dated as of September 30,
1998 (as the same may be amended or modified, the "Credit Agreement"),
among Illinois Tool Works Inc. (the "Company"), the Agent, and the
Lenders named therein.
Terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the
following standing money transfer instructions with respect to the proceeds of
Advances or other extensions of credit from time to time until receipt by the
Agent of a specific written revocation of such instructions by the Company,
provided, however, that the Agent may otherwise transfer funds as hereafter
directed in writing by the Company in accordance with Section 14.1 of the Credit
Agreement or based on any telephonic notice made in accordance with Section
2.5.8 of the Credit Agreement.
Facility Identification Number(s)
----------------------------------------------
Customer/Account Name
----------------------------------------------------------
Transfer Funds To
--------------------------------------------------------------
--------------------------------------------------------------
For Account No.
----------------------------------------------------------------
Reference/Attention To
---------------------------------------------------------
Authorized Officer (Customer
Representative) Date
-------------------------
- -------------------------------------- ------------------------------
(Please Print) Signature
Bank Officer Name Date
-------------------------
- -------------------------------------- ------------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate
Processing)
E-23
<PAGE> 107
EXHIBIT "H"
FORM OF ASSUMPTION LETTER
______________ , 199__
To the Banks party to the
Credit Agreement referred
to below
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 30, 1998 initially among Illinois Tool Works Inc., the
Lenders and The First National Bank of Chicago, as Agent (as amended and in
effect from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement and used herein are used herein as defined therein.
The undersigned, _______________ (the "Subsidiary"), a _______________
corporation, wishes to become a "Borrowing Subsidiary" under the Credit
Agreement, and accordingly hereby agrees that from the date hereof it shall
become a "Borrowing Subsidiary" under the Credit Agreement and agrees that from
the date hereof and until the payment in full of the principal of and interest
on all Advances made to it under the Credit Agreement and performance of all of
its other obligations thereunder, and termination hereunder of its status as a
"Borrowing Subsidiary" as provided below, it shall perform, comply with and be
bound by each of the provisions of the Credit Agreement which are stated to
apply to the "Company" or a "Borrowing Subsidiary." Without limiting the
generality of the foregoing, the Subsidiary hereby represents and warrants that:
(i) each of the representations and warranties set forth in Sections 5.1, 5.2,
and 5.3 of the Credit Agreement is hereby made by such Subsidiary on and as of
the date hereof as if made on and as of the date hereof and as if such
Subsidiary is the "Company" and this Assumption Letter is the "Agreement"
referenced therein, and (ii) it has heretofore received a true and correct copy
of the Credit Agreement (including any modifications thereof or supplements or
waivers thereto) as in effect on the date hereof. In addition, the Subsidiary
hereby authorizes the Company to act on its behalf as and to the extent provided
for in Article II of the Credit Agreement in connection with the selection of
Types and Interest Periods for Advances, the conversion and continuation of
Advances and the solicitation of and acceptance or rejection of bids for
Competitive Bid Advances.
So long as the principal of and interest on all Advances made to the
Subsidiary under the Credit Agreement shall have been paid in full and all other
obligations of the Subsidiary under the Credit Agreement shall have been fully
performed, the Company may by not less than five Business Days' prior notice to
the Lenders terminate its status as a "Borrowing Subsidiary."
E-24
<PAGE> 108
[If the Borrowing Subsidiary is a non-U.S. entity, include the following
provisions:
The Subsidiary hereby irrevocably submits to the non-exclusive
jurisdiction or any Illinois State or Federal court sitting in Chicago,
Illinois, U.S.A., and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Assumption Letter, the Credit
Agreement or the Notes, and the Subsidiary hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such Illinois State or Federal court. The Subsidiary hereby irrevocably waives,
to the fullest extent it may effectively do so, any objection based on venue or
inconvenient forum to the maintenance of such action or proceeding in any such
court. Nothing herein shall in any way be deemed to limit the ability of the
Lenders to serve any such writs, process, or summonses in any other manner
permitted by applicable law or to obtain jurisdiction over the Subsidiary in
such other jurisdictions, and in such manner, as may be permitted by applicable
law.]
This Assumption Letter shall be governed by, and construed in accordance
with, the laws of the State of Illinois, United States of America.
IN WITNESS WHEREOF, the Subsidiary has duly executed and delivered this
Assumption Letter as of the date and year first above written.
[Name of Borrowing Subsidiary]
By
----------------------------------
Title:
-------------------------------
Address for Notices under
the Credit Agreement
Consented to:
ILLINOIS TOOL WORKS INC.
By
--------------------------------
Title:
-----------------------------
E-25
<PAGE> 109
EXHIBIT "I"
COMPLIANCE CERTIFICATE
To: The Lenders party to the
Credit Agreement described below
This Compliance Certificate is furnished pursuant to that certain Second
Amended and Restated Credit Agreement dated as of September 30, 1998 among
Illinois Tool Works Inc., the Lenders and The First National Bank of Chicago, as
Agent (as the same may be amended and in effect from time to time, the
"Agreement"). Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected or appointed ________________ of the Company;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Company and its Consolidated Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Company's compliance with Sections 6.11 and 6.12 of the
Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
E-26
<PAGE> 110
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this
___ day of ______________, 19___.
-------------------------------
E-27
<PAGE> 111
[SAMPLE]
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with
Provisions of ______ and ______ of
the Agreement
E-28
<PAGE> 112
EXHIBIT "J"
LENDER ASSUMPTION AGREEMENT
Dated: ________________
Illinois Tool Works Inc.
3600 West Lake Avenue
Glenview, Illinois 60025-5811
Attention: Michael J. Robinson, Vice President and Treasurer
The First National Bank of Chicago, as agent
One First National Plaza
Suite 0088
Chicago, Illinois 60670
Attention: Deborah E. Stevens, Managing Director
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement
dated as of September 30, 1998 among Illinois Tool Works Inc. (the "Company"),
any Borrowing Subsidiaries from time to time party thereto, The First National
Bank of Chicago, individually and as Agent, and the Lenders named therein (the
"Credit Agreement"), terms defined therein being used herein as therein
defined).
The undersigned (the "Assuming Lender") proposes to become an Assuming
Lender pursuant to Section 2.5.11(ii) of the Credit Agreement and, in that
connection, hereby agrees that it shall become a Lender for purposes of the
Credit Agreement on [applicable Increase Date] and that its Commitment shall as
of such date be $________________.
The undersigned (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 5.4 thereof, the most recent financial statements referred to in Section
6.1(i) and (ii) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Lender Assumption Agreement; (ii) agrees that it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement are
required to be performed
E-29
<PAGE> 113
by it as a Lender; (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1; (vi) confirms
that it is an Eligible Bank; and (vii) attaches, if it is not incorporated under
the laws of the United States of America or a state thereof, the forms
prescribed by the Internal Revenue Services of the United States required under
Section 2.5.15 of the Credit Agreement.
The Assuming Lender requests that the Company deliver to the Agent (to
be promptly delivered to the Assuming Lender) a Committed Note and a Competitive
Bid Note payable to the order of the Assuming Lender, dated as of the [Increase
Date].
The effective date for this Lender Assumption Agreement shall be
[applicable Increase Date]. Upon delivery of this Lender Assumption Agreement to
the Company and the Agent, and satisfaction of all conditions imposed under
Section 2.5.11(ii) as of [date specified above], the undersigned shall be a
party to the Credit Agreement and have the rights and obligations of a Lender
thereunder. As of [date specified above], the Agent shall make all payments
under the Credit Agreement in respect of the interest assumed hereby (including,
without limitation, all payments of principal, interest and commitment fees) to
the Assuming Lender.
This Lender Assumption Agreement may be executed in counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart by
telecopier shall be effective as delivery of a manually executed counterpart of
this Lender Assumption Agreement.
This Lender Assumption Agreement shall be governed by, and construed in
accordance with, the internal laws (and not the conflict of laws provisions) of
the State of Illinois.
Very truly yours,
[NAME OF ASSUMING LENDER]
By:
---------------------------
Title:
------------------------
Acknowledged and Agreed to:
ILLINOIS TOOL WORKS INC.
By:
----------------------------------------
Title:
-------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By:
----------------------------------------
Title:
-------------------------------------
E-30
<PAGE> 1
EXHIBIT (b)(2)
Mail Suite 0088
One First National Plaza
Chicago, Illinois 60670-0088
Telephone: (312) 732-2532
Fax: (312) 732-1117
DEBORAH E. STEVENS
Managing Director
November 1, 1998
Illinois Tool Works Inc.
3600 W. Lake Avenue
Glenview, Illinois 60025-5811
Attention: Michael J. Robinson
Dear Mike:
The First National Bank of Chicago (the "Lender") is pleased to establish a line
of credit in favor of Illinois Tool Works Inc. (the "Borrower") in the amount of
$350,000,000 which shall continue from November 1, 1998 through January 30, 1999
(the "Maturity Date") unless the line of credit is terminated on an earlier date
as set forth below.
(a) Loans under this line of credit will be evidenced and governed by the
Lender's standard form of master note (the "Note"), a copy of which is
attached hereto, and will bear interest, at the Borrower's option, at:
(i) a rate equal to the sum of the Lender's corporate base rate of interest
announced by the Lender from time to time changing when and as the
corporate base rate changes, with interest payable on the last day of
each month, on the Maturity Date, and on demand thereafter; or
(ii) subject to availability and for a maturity to be agreed upon, at a
fixed rate equal to the sum of .30% per annum plus the Eurodollar rate,
where the Eurodollar rate is the rate at which deposits in U.S. dollars
in the amount and for a maturity corresponding to that of the loan are
offered by the Lender in the offshore interbank market at approximately
10 a.m. (Chicago time) two business days prior to the date on which
such loan is made, adjusted for maximum statutory reserve requirements;
or
(iii) subject to availability and for a maturity to be agreed upon, at such
other fixed rate as we may mutually agree upon from time to time.
(b) The Borrower will pay a fee of .04% per annum on the average daily
unborrowed amount of this line of credit, the fee to accrue from and
including the date of this letter until the line of credit expires or is
terminated. The fee shall be payable on the last day of each month
hereafter, on the Maturity Date and on demand thereafter.
<PAGE> 2
(c) No interest period for or maturity of a loan hereunder shall extend beyond
the Maturity Date. Interest and fees will be computed on the basis of
actual days elapsed on a 360-day year basis.
(d) The Borrower will use the proceeds of the loans hereunder for general
corporate purposes, commercial paper back-up, "Friendly Acquisitions" and
other Acquisitions specifically consented to by the Lender.
"Friendly Acquisition" means an Acquisition which has been either (a) not
disapproved by the board of directors of the corporation, or the managing
body of the firm, which is the subject of such Acquisition after such board
or managing body has been given the opportunity to consider such
Acquisition or (b) recommended by such board to the shareholders of such
corporation and, if required by applicable law, approved by such
shareholders, and excluding in any event any Acquisition involving an
"unfriendly" or contested tender offer.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower
or any Subsidiary (a) acquires any going business or all or substantially
all of the assets of any firm, corporation or division thereof, whether
through purchase of assets, merger or otherwise, or (b) directly or
indirectly acquires (in one transaction or in a series of transactions) at
least 25% (in number of votes) of the equity securities of a corporation
which have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a
contingency).
(e) The Borrower will provide the Lender with appropriate resolutions,
incumbency certificates, and an opinion of counsel before borrowing.
(f) The Borrower will perform, comply with and observe for the Lender's benefit
the agreements set forth in the Credit Agreement dated as of September 30,
1998, by and between the Borrower, the Lenders party thereto, and The First
National Bank of Chicago, as Agent, (the "Agreement"). For purposes
hereof, the provisions of the Agreement, together with related definitions
and ancillary provisions, are hereby incorporated herein by reference,
mutatis mutandis, and shall be deemed to continue in effect for the
Lender's benefit as in effect on the date hereof, whether or not the
Agreement remains in effect or is amended, waived or otherwise modified by
the parties thereto. A Default under and as defined in the Agreement or
the note issued thereunder shall constitute an event of default under the
Note, which shall entitle the Lender to accelerate the Note and to exercise
any and all of the remedies set forth in the Note. The Borrower may not
borrow under this line of credit if there exists any Default under and as
defined in the Agreement or the note issued thereunder or if there exists
any event which, with giving of notice, or lapse of time, or both, would be
a Default, or if the Borrower is unable to satisfy any conditions to
lending set forth in the Agreement.
(g) The Lender shall have no obligation to make a loan hereunder (and all
outstanding loans and accrued and unpaid interest, at the option of the
Lender, may be declared immediately due and payable without notice) if (i)
there is any failure by the Borrower to pay principal, interest, fees, or
other obligations when due under this letter, the Note, or any other
agreement or arrangement with the Lender, (ii) there exists any default
under the Note, or any violation or failure to comply with any provision of
the Note, or this letter, (iii) any litigation is pending or threatened
against the Borrower or any Subsidiary which might have a material adverse
2
<PAGE> 3
effect on the financial condition or results of operations of the Borrower
and its Subsidiaries, taken as a whole, (iv) there is a default under any
agreement governing indebtedness of the Borrower or any Subsidiary, (v) any
petition is filed by or against the Borrower or any Subsidiary under the
Federal Bankruptcy Code or similar state law, or (vi) the Borrower or any
Subsidiary becomes insolvent, howsoever evidenced.
"Subsidiary" means (i) any corporation if more than 50% of the outstanding
securities having ordinary voting power owned or controlled, directly or
indirectly, by the Borrower or by one or more of its Subsidiaries, or (ii)
any partnership, association, joint venture or similar business
organization if more than 50% of the ownership interests having ordinary
voting power are so owned or controlled. The Lender may require a
certificate of compliance with these conditions from the Borrower's Chief
Financial Officer or Treasurer as a condition to making any loan hereunder.
(h) The Lender may, with the Borrower's consent (which will not unreasonably be
withheld), make assignments and sell participations in this line of credit,
the Note and the loans made hereunder, and may disclose information
pertaining to the Borrower to prospective assignees and participants. Any
assignment will release the Lender of its funding obligation with respect
to the amount assigned.
(i) This line of credit shall be effective as of the date of this letter when
the Borrower has signed and returned to the Lender a copy of this letter.
(j) THIS LETTER AND THE NOTE SHALL BE GOVERNED BY THE INTERNAL LAW (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, GIVING EFFECT, HOWEVER, TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THE BORROWER AND THE BANK EACH
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE)
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LETTER OR THE
NOTE OR THE RELATIONSHIP ESTABLISHED HEREUNDER.OR THEREUNDER.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: ___________________________________________
Title: ________________________________________
Accepted and agreed:
ILLINOIS TOOL WORKS INC.
By: ___________________________________________
Title: ________________________________________
Date: _________________________________________
3
<PAGE> 4
MASTER NOTE
(FIXED AND FLOATING RATES)
Chicago, Illinois
November 1, 1998
$350,000,000
FOR VALUE RECEIVED, Illinois Tool Works Inc. (the "Borrower") promises to
pay to the order of THE FIRST NATIONAL BANK OF CHICAGO (the "Bank"), in lawful
money of the United States at the office of the Bank at One First National
Plaza, Chicago, Illinois, or as the Bank may otherwise direct, the lesser of
Three Hundred Fifty Million Dollars ($350,000,000) or the aggregate outstanding
unpaid principal amount of loans evidenced hereby ("Loans"), together with
interest as provided below.
Any person authorized to borrow on behalf of the Borrower (an "Authorized
Person") may request a Loan by telephone or telex. The Borrower agrees that the
Bank is authorized to honor requests which it believes, in good faith, to
emanate from an Authorized Person, whether in fact that be the case or not.
Loans may bear interest at either a fixed rate ("Fixed Rate Loans") or a
floating rate ("Floating Rate Loans"). Loans shall be Floating Rate Loans
unless the Bank and the Borrower agree to a fixed rate for a specific maturity
at or before the time of borrowing. Fixed Rate Loans shall be payable at
maturity and Floating Rate Loans shall be payable on demand. Interest on each
Fixed Rate Loan shall be payable upon the maturity of such Fixed Rate Loan and,
in the case of a Fixed Rate Loan with an original maturity in excess of three
months, interest shall also be payable on the last day of each three-month
interval while such Fixed Rate Loan is outstanding. Floating Rate Loans shall
bear interest at a rate equal to the corporate base rate of interest announced
by the Bank from time to time, changing when and as the corporate base rate
changes. Interest on Floating Rate Loans shall be payable on the last day of
each month and on demand. A Fixed Rate Loan not paid at maturity (whether by
acceleration or otherwise) and a Floating Rate Loan not paid on demand shall
bear interest at a rate equal to the sum of the corporate base rate of interest
announced by the Bank from time to time, plus 2% per annum, changing when and as
the corporate base rate changes.
Each payment of principal or interest hereunder shall be made in
immediately available funds. If any payment shall become due and payable on a
Saturday, Sunday or legal holiday under the laws of Illinois, such payment shall
be made on the next succeeding business day in Illinois and any such extended
time of the payment of principal or interest shall be included in computing
interest. All interest hereunder shall be computed for the actual number of
days elapsed on a 360-day year basis. The Borrower hereby authorizes the Bank to
deposit the proceeds of Loans to, and to charge payments of principal and
interest against, the Borrower's deposit account with the Bank.
A Fixed Rate Loan may not be prepaid prior to the agreed maturity of the
Loan without the written consent of the Bank. If, for any reason, any payment
of a Fixed Rate Loan occurs prior to maturity of such Loan, the Borrower will
indemnify the Bank for any loss or cost which the Bank
<PAGE> 5
determines is attributable to such payment, including, without limitation, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
such Fixed Rate Loan. Loans bearing interest at a rate related to the corporate
base rate may be prepaid by the Borrower, without premium or penalty.
The Borrower hereby authorizes the Bank to record Loans, maturities,
repayments, interest rates and payment dates on the schedule attached to this
note or otherwise in accordance with the Bank's usual practice. The obligation
of the Borrower to repay each Loan made hereunder shall be absolute and
unconditional notwithstanding any failure of the Bank to enter such amounts on
such schedule or to receive written confirmation of the transaction from the
Borrower. If the Bank requests a written confirmation of a requested Loan, the
Borrower will confirm the terms of each Loan by mailing a confirmation letter to
the Bank signed by any authorized person. If the Bank elects to confirm the
terms of a Loan to the Borrower, the Borrower will notify the Bank in writing
within 10 days after the Borrower's receipt of such confirmation if it believes
such confirmation to be inaccurate, and the Borrower hereby waives any right to
contest the accuracy of such confirmation after such 10-day period. In the
event of disagreement as to the terms of a transaction, the Bank's records shall
govern, absent manifest error.
If any change in any law, rule, regulation or directive (including, without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) imposes any condition the result of which is to increase the cost to the
Bank of making, funding or maintaining any Fixed Rate Loan or reduces any amount
receivable by the Bank hereunder in connection with a Fixed Rate Loan, the
Borrower shall pay the Bank the amount of such increased expense incurred or the
reduction in any amount received which the Bank determines is attributable to
making, funding and maintaining the Fixed Rate Loans.
The Bank may, with the consent of the Borrower (which shall not be
unreasonably withheld), elect to sell participations in or assign its rights
under Loans. The Borrower agrees that if it fails to pay any Loan when due, any
purchaser of an interest in such Loan shall be entitled to seek enforcement of
this note if the purchaser is permitted to do so pursuant to the terms of the
participation agreement between the Bank and such purchaser.
The Borrower hereby authorizes the Bank and any other holder of an interest
in this note (a "Holder") to disclose confidential information relating to the
financial condition or operations of the Borrower (i) to any affiliate of the
Bank or any Holder, (ii) to any purchaser or prospective purchaser of an
interest in any Loan, (iii) to legal counsel, accountants, and other
professional advisors to the Bank or any Holder, (iv) to regulatory officials,
(v) as requested or required by law, regulation, or legal process or (vi) in
connection with any legal proceeding to which the Bank or any other holder is a
party.
-2-
<PAGE> 6
Nothing in this note shall constitute a commitment to make loans to the
Borrower. In addition to, and without limitation of, any rights of the Bank
under applicable law, if any amount payable hereunder is not paid when due,
there is any material adverse change in the Borrower's or any guarantor's
financial condition, there is a default under any agreement governing
indebtedness of the Borrower or any guarantor, any petition is filed by or
against the Borrower or any guarantor under the Federal Bankruptcy Code or
similar state law or if the Borrower or any guarantor becomes insolvent,
howsoever evidenced, the Bank may declare all unpaid principal and interest on
Fixed Rate Loans and unpaid fees immediately due and payable. If any amount
payable hereunder is not paid when due or upon demand, as applicable, then any
indebtedness from the Bank to the Borrower may be offset and applied toward the
payment of all unpaid principal, interest and fees payable hereunder, whether or
not such amounts, or any part thereof, shall then be due. The Borrower
expressly waives any presentment, demand, protest or notice in connection with
this note now, or hereafter, required by applicable law and agrees to pay all
costs and expenses of collection.
THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAW (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS, GIVING EFFECT, HOWEVER, TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS. THE BORROWER AND THE BANK EACH HEREBY WAIVE TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS NOTE OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.
ILLINOIS TOOL WORKS INC.
By:
Title:
-3-
<PAGE> 7
SCHEDULE
to be attached and become a part of
the Master Note dated November 1, 1998,
executed by Illinois Tool Works Inc.
and payable to
The First National Bank of Chicago
<TABLE>
<CAPTION>
If Fixed Rate Loan
Indicate
<S> <C> <C> <C> <C> <C> <C>
If Demand Unpaid
Date Floating Rate Principal Balance Initials of Person
of Transaction Amount of Loan Loan, Check Here Maturity Interest Rate of Note Making Notation
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-4-
<PAGE> 8
One First National Plaza
Mail Suite 0088
Chicago, IL 60670-0088
Telephone: (312) 732-4137
Fax: (312) 732-1117
NOREEN ST. LAWRENCE
Assistant Vice President
December 28, 1998
Illinois Tool Works Inc.
3600 W. Lake Avenue
Glenview, Illinois 60025
Attention: Michael J. Robinson
RE: EXTENSION LETTER - ILLINOIS TOOL WORKS INC.
Dear Mr. Robinson:
Pursuant to the Line of Credit Agreement dated November 1, 1998 by and between
ILLINOIS TOOL WORKS INC. (the "Borrower") and The First National Bank of Chicago
(the "Lender") this writing is intended to notify you of an extension from
January 30, 1999 (the "Maturity Date") to March 31, 1999.
Please execute this Extension Letter by signing and returning it to my
attention.
Sincerely,
ILLINOIS TOOL WORKS INC THE FIRST NATIONAL BANK OF CHICAGO
BY:_______________________________ BY: _____________________________________
ITS:______________________________ ITS: ____________________________________
<PAGE> 1
AGREEMENT AND PLAN OF MERGER
TRIDENT INTERNATIONAL, INC.
ILLINOIS TOOL WORKS INC.
AND
ITW ACQUISITION INC.
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I.
The Offer..........................................................................................-2-
Section 1.1 The Offer.............................................................................-2-
Section 1.2 Company Actions.......................................................................-4-
Section 1.3 Stockholder Mailings..................................................................-6-
ARTICLE II.
The Merger.........................................................................................-7-
Section 2.1 The Merger............................................................................-7-
Section 2.2 Closing...............................................................................-7-
Section 2.3 Effective Time........................................................................-8-
Section 2.4 Further Assurances....................................................................-8-
ARTICLE III.
Certificate of Incorporation and By-Laws; Officers and Directors
of the Surviving Corporation...................................................................-9-
Section 3.1 Certificate of Incorporation..........................................................-9-
Section 3.2 By-Laws...............................................................................-9-
Section 3.3 Officers and Directors................................................................-9-
ARTICLE IV.
Conversion of Common Shares in the Merger..........................................................-9-
Section 4.1 Conversion............................................................................-9-
(a) Common Shares Generally..........................................................-9-
(b) Common Shares Held by the Parent Companies
or the Company..................................................................-10-
(c) Subsidiary Stock................................................................-10-
Section 4.2 Payment..............................................................................-11-
Section 4.3 Dissenting Shares....................................................................-13-
Section 4.4 Closing of Transfer Records..........................................................-15-
Section 4.5 Employee and Other Stock Options.....................................................-15-
Section 4.6 Warrants..............................................................................-16-
Section 4.7 Employee Stock Purchase Plan..........................................................-17-
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE V.
Representations and Warranties....................................................................-17-
Section 5.1 Representations and Warranties of Parent and Subsidiary..............................-17-
(a) Corporate Organization..........................................................-18-
(b) Corporate Authorization.........................................................-18-
(c) No Conflicts....................................................................-19-
(d) Financing.......................................................................-20-
(e) Filings and Consents............................................................-20-
(f) Litigation......................................................................-21-
(g) Offer Documents.................................................................-21-
(h) Merger Proxy Statement..........................................................-22-
(j) Common Shares...................................................................-22-
Section 5.2 Representations and Warranties of the Company........................................-22-
(a) Corporate Organization..........................................................-23-
(b) Capitalization..................................................................-23-
(c) Corporate Authorization and Certain Corporate Action............................-25-
(d) Financial Statements and Reports................................................-26-
(e) Absence of Other Liabilities....................................................-27-
(f) Absence of Certain Changes or Events............................................-27-
(g) Offer Documents.................................................................-28-
(h) Schedule 14D-9..................................................................-29-
(i) Merger Proxy Statement..........................................................-29-
(j) Certain Agreements..............................................................-30-
(k) No Conflicts....................................................................-31-
(l) Filings and Consents............................................................-31-
(m) Compliance With Laws............................................................-32-
(n) Litigation......................................................................-32-
(o) Employee Benefit Plans..........................................................-32-
(p) Taxes...........................................................................-33-
(q) Health, Safety and Environmental Laws and Regulations...........................-34-
(r) Intellectual Property...........................................................-36-
(s) Brokers and Finders.............................................................-36-
(t) Year 2000 Compliance............................................................-37-
(u) Contracts.......................................................................-37-
(v) Labor Relations.................................................................-38-
(w) Affiliate Transactions..........................................................-38-
(x) Vote Required...................................................................-39-
(y) Knowledge Definition............................................................-39-
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE VI.
Covenants.........................................................................................-39-
Section 6.1 No Solicitation of Transactions......................................................-39-
Section 6.2 Postponement of Annual Meeting.......................................................-41-
Section 6.3 Interim Operations of the Company....................................................-42-
Section 6.4 Meetings of the Company's Stockholders...............................................-44-
Section 6.5 Filings; Other Action................................................................-45-
Section 6.6 Reasonable Best Efforts...............................................................-45-
Section 6.7 Access...............................................................................-46-
Section 6.8 Publicity............................................................................-47-
Section 6.9 Directors' and Officers' Indemnification; Insurance..................................-47-
Section 6.10 Registration Rights Agreement........................................................-52-
Section 6.11 Fair Price Statute..................................................................-52-
Section 6.12 Directors...........................................................................-53-
Section 6.13 Employee Benefits Matters...........................................................-54-
ARTICLE VII.
Conditions........................................................................................-56-
Section 7.1 Conditions to each Party's Obligations to Effect the Merger..........................-56-
(a) Stockholder Approval............................................................-57-
(b) Governmental Filings and Consents...............................................-57-
(c) Purchase of Common Shares.......................................................-57-
(d) Injunction......................................................................-57-
ARTICLE VIII.
Termination and Abandonment.......................................................................-58-
Section 8.1 Termination..........................................................................-58-
Section 8.2. Procedure and Effect of Termination.................................................-60-
Section 8.3. Fees and Expenses...................................................................-60-
ARTICLE IX.
Miscellaneous.....................................................................................-64-
Section 9.1 Amendment............................................................................-64-
Section 9.2 Waiver...............................................................................-65-
Section 9.3 Special Fees of the Company..........................................................-65-
Section 9.4 Counterparts.........................................................................-65-
Section 9.5 Governing Law........................................................................-66-
Section 9.6 Notices..............................................................................-66-
Section 9.7 Entire Agreement, etc................................................................-67-
Section 9.8 Definition of "Subsidiary"...........................................................-67-
Section 9.9 Obligation of Parent.................................................................-67-
Section 9.10 Captions............................................................................-68-
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C>
Section 9.11 Survival............................................................................-68-
Section 9.12 Parties in Interest; Assignment.....................................................-68-
Section 9.13 Enforcement of the Agreement........................................................-69-
Section 9.14 Severability........................................................................-69-
</TABLE>
-iv-
<PAGE> 6
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT is made as of January 6, 1999 among Trident
International, Inc., a Delaware corporation (the "Company"), Illinois Tool Works
Inc., a Delaware corporation ("Parent"), and ITW Acquisition Inc., a Delaware
corporation and a direct wholly-owned subsidiary of Parent ("Subsidiary").
WHEREAS, the Company and Subsidiary (the Company and
Subsidiary being referred to in this Agreement as the "Constituent
Corporations") desire for Parent to acquire the Company through a merger of
Subsidiary with and into the Company (the "Surviving Corporation") upon the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of the acquisition contemplated by
this Agreement, Subsidiary will make an offer to purchase for cash all of the
Company's issued and outstanding shares of common stock, par value $.01 per
share ("Common Shares"), on the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, the Company, Parent and Subsidiary desire to make
certain representations, warranties and agreements in connection with the merger
of the Company and Subsidiary;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 7
ARTICLE I.
The Offer
Section 1.1 The Offer.
(a) As promptly as practicable (but in no event later than
five business days from and including the date of the initial public
announcement of the Offer or this Agreement), Parent shall cause Subsidiary to
commence (within the meaning of Rule 14d- 2(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) an offer to purchase for cash (the
"Offer") all of the Company's issued and outstanding Common Shares at a purchase
price of $16.50 per Common Share net to the tendering stockholder in cash (the
"Per Share Amount") (without interest and less any withholding taxes required
under applicable law). The obligation of Subsidiary to accept for payment and to
pay for any Common Shares tendered shall be subject only to the conditions set
forth in Exhibit A hereto (the "Offer Conditions"), including without
limitation, the condition that the number of Common Shares validly tendered and
not withdrawn prior to the expiration date provided in the Offer (the
"Expiration Date") will represent not less than a majority of the Common Shares
outstanding on a fully diluted basis (the "Minimum Share Condition"). Any such
condition may be waived by Parent and Subsidiary.
(b) As soon as practicable on the date of commencement of the
Offer, Parent and Subsidiary shall file with the Securities and Exchange
Commission (the "SEC") a Schedule 14D-1 (the "Schedule 14D-1") with respect to
the Offer, which Schedule 14D-1 shall include an offer to purchase and related
letter of transmittal and summary advertisement (which letter of transmittal and
summary advertisement and offer to purchase, together with
-2-
<PAGE> 8
any amendments or supplements thereto are referred to collectively herein as the
"Offer Documents"). The Company and its counsel shall be given a reasonable
opportunity to review and comment upon the Offer Documents and all amendments
and supplements thereto prior to the filing thereof with the SEC or the
dissemination thereof to the holders of Common Shares. The Company hereby
consents to the inclusion or reference in the Offer Documents of the
recommendations and other actions of the Company's Board of Directors described
in Section 1.2.
(c) Neither Parent nor Subsidiary will, without the consent
of the Company, (i) amend the Offer to decrease the Per Share Amount or change
the form of consideration to be paid in the Offer or (ii) except as required by
law or any rule, regulation or interpretation in the opinion of counsel to
Parent, or required by any position of the SEC or the staff thereof, extend the
expiration date of the Offer (which shall initially be 20 business days after
the date the Offer is commenced); provided that if the Offer Conditions have not
been satisfied, Subsidiary, without the consent of the Company, may extend the
Offer, from time to time for up to an aggregate of 10 additional business days.
Notwithstanding the foregoing, if, immediately prior to the Expiration Date of
the Offer (as it may be extended), the Common Shares tendered and not withdrawn
pursuant to the Offer equal less than 90% of the Common Shares then outstanding
on a fully diluted basis, Subsidiary may, in its sole discretion, extend the
Offer notwithstanding that all conditions to the Offer are satisfied as of such
Expiration Date of the Offer; provided, however, that under no circumstances
shall any such extension, when aggregated with any extensions made
-3-
<PAGE> 9
pursuant to the immediately preceding sentence, exceed 10 business days without
the approval of the Company.
(d) Subject to the terms and conditions of this Agreement,
Subsidiary shall, and Parent shall cause Subsidiary to, accept for payment, and
pay for, all Common Shares validly tendered and not withdrawn pursuant to the
Offer as soon as practicable after the expiration of the Offer. Immediately
following Parent's acceptance for payment of Common Shares pursuant to the
Offer, Parent or Subsidiary will provide to the depositary for the Offer amounts
sufficient in the aggregate to provide all funds necessary for such depositary
to make payments pursuant to this Section 1.1 to all tendering stockholders.
Section 1.2 Company Actions.
(a) The Company represents and warrants that:
(i) its Board of Directors (at a meeting duly called
and held) has, in light of and subject to the terms and conditions set
forth herein, unanimously approved this Agreement, the Offer and the
Merger (as defined in Section 2.1) and has resolved to recommend
acceptance of the Offer and approval and adoption of this Agreement
and the Merger by the holders of Common Shares;
(ii) the transactions contemplated by this
Agreement, including without limitation, the Offer, the Merger and the
acquisition of Common Shares by Parent and/or Subsidiary, have been
duly approved by appropriate action of the Company's Board of
Directors with the result that (A) Section 203 DGCL does not require
that any "business combination" (as that term is defined in said
Section 203) involving the Company and Parent or Subsidiary be delayed
for the three-year period
-4-
<PAGE> 10
specified therein, and (B) no right of the Company's stockholders to
acquire securities pursuant to any rights agreement will be triggered,
created or otherwise arise as a result of the Offer, the Merger or
transactions contemplated by this Agreement; and
(iii) The Robinson-Humphrey Company, LLC
("Robinson-Humphrey") has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by the
Company's stockholders pursuant to the Offer and the Merger is fair
from a financial point of view to the public stockholders (other than
Parent and Subsidiary) of the Company (the "Fairness Opinion").
(b) The Company hereby agrees to file, as soon as practicable
after the commencement of the Offer, with the SEC a solicitation/recommendation
statement on Schedule 14D-9 (the "Schedule 14D-9") containing the recommendation
of the Company's Board of Directors that the stockholders of the Company accept
the Offer and containing a copy of the Fairness Opinion. Parent and Subsidiary
and their counsel shall be given a reasonable opportunity to review and comment
upon the Schedule 14D-9 and all amendments and supplements thereto prior to the
filing thereof with the SEC or the dissemination thereof to the holders of
Common Shares. Promptly after filing the Schedule 14D-9 with the SEC, the
Company shall deliver to Parent a copy of the Fairness Opinion, which Parent may
provide to Parent's lenders. The Company has been authorized by
Robinson-Humphrey to permit the inclusion of the Fairness Opinion (or any
reference thereto that is reasonably acceptable to Robinson-Humphrey) in the
Offer Documents, the Schedule 14D-9 and in any proxy statement relating to the
Merger.
-5-
<PAGE> 11
(c) Notwithstanding anything contained in this Section 1.2 or
elsewhere in this Agreement, if the Company's Board of Directors shall have
determined, in good faith, to withdraw, modify or amend its recommendations to
stockholders of the Company, after receiving advice from its outside counsel
that the failure to do so could reasonably be expected to be a breach of the
directors' fiduciary duties under applicable law, such withdrawal, modification
or amendment shall not constitute a breach of this Agreement.
Section 1.3 Stockholder Mailings. In connection with the
Offer, the Company (i) shall cause its transfer agent as promptly as possible to
furnish Parent and Subsidiary with mailing labels, security position listings
and any available listings or computer tapes or files containing the names and
addresses of record holders of the Common Shares as of the most recent
practicable date, (ii) shall furnish Subsidiary with such additional information
(including, but not limited to, updated lists of holders of Common Shares and
their addresses, mailing labels and lists of security positions and
non-objecting beneficial owner lists) and such other assistance as Subsidiary or
its agents may reasonably request in communicating the Offer to the Company's
record and beneficial stockholders, and (iii) shall furnish Parent and
Subsidiary with such other assistance as Parent and Subsidiary or their agents
may reasonably request in connection with the dissemination of the Offer
Documents to participants in the Company's employee benefit plans, if any, which
permit or require the participants to make a determination as to the Offer.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent, Subsidiary and their affiliates, associates,
agents and advisors, shall use the information
-6-
<PAGE> 12
contained in any such labels, listings and files only in connection with the
Offer and the Merger and, if this Agreement is terminated for any reason, shall
return to the Company, or destroy, the originals and all copies in their
possession.
ARTICLE II.
The Merger
Section 2.1 The Merger. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined in Section 2.3),
Subsidiary shall be merged with and into the Company, and the separate corporate
existence of Subsidiary shall thereupon cease (the "Merger"). The Company shall
be the Surviving Corporation in the Merger and shall continue to be governed by
the laws of the State of Delaware, and the separate corporate existence of the
Company with all its rights, privileges, powers and franchises shall continue
unaffected by the Merger. The Merger shall have the effects specified in the
DGCL.
Section 2.2 Closing. The closing of the Merger (the
"Closing") shall take place (a) at the offices of Jenner & Block, One IBM Plaza,
Chicago, Illinois 60611, at 10:00 A.M., local time, as soon as practicable
following the later to occur of (i) the day of the receipt of approval of the
Merger by the Company's stockholders if such approval is required, or as soon as
practicable after completion of the Offer if such approval by stockholders is
not required, and (ii) the day on which the last of the conditions set forth in
Article VII hereof is satisfied or duly waived, or (b) at such other time and
place and/or on such other date as the Company and Parent may agree. The date on
which the Closing occurs is hereinafter referred to as the "Closing Date."
-7-
<PAGE> 13
Section 2.3 Effective Time. If all the conditions to the
Merger set forth in Article VII shall have been fulfilled or waived in
accordance herewith and this Agreement shall not have been terminated in
accordance with Article VIII, the parties hereto shall, on the Closing Date,
file and record an appropriate agreement of merger, certificate of merger or
certificate of ownership and merger meeting the requirements of and executed in
accordance with the DGCL. The Merger shall become effective at the time (the
"Effective Time") at which such agreement or certificate is filed with the
Secretary of State of Delaware.
Section 2.4 Further Assurances. If, at any time after the
Effective Time, the Surviving Corporation shall 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 Constituent Corporations acquired
or to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out and effectuate the purposes of this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of the Constituent 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 and effectuate the purposes of
this Agreement.
-8-
<PAGE> 14
ARTICLE III.
Certificate of Incorporation and By-Laws;
Officers and Directors
of the Surviving Corporation
Section 3.1 Certificate of Incorporation. The certificate of
incorporation of the Company as amended and in effect immediately prior to the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation, until duly amended in accordance with its terms and the DGCL.
Section 3.2 By-Laws. The by-laws of the Company in effect
immediately prior to the Effective Time shall be the by-laws of the Surviving
Corporation from and after the Effective Time, until duly amended in accordance
with their terms and the DGCL.
Section 3.3 Officers and Directors. The directors and
officers of Subsidiary immediately prior to the Effective Time shall, from and
after the Effective Time, be directors and officers, respectively, of the
Surviving Corporation until their respective successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Surviving Corporation's certificate of incorporation and
by-laws.
ARTICLE IV.
Conversion of Common Shares in the Merger
Section 4.1 Conversion. The manner of converting shares of
the Company and Subsidiary in the Merger shall be as follows:
(a) Common Shares Generally. At the Effective Time, each
Common Share issued and outstanding immediately prior to the Effective
Time (other than Dissenting Shares (as defined in Section 4.3), Common
Shares owned by the
-9-
<PAGE> 15
Company or any direct or indirect subsidiary of the Company (including
treasury shares), and Common Shares owned by Parent, Subsidiary or any
other direct or indirect subsidiary of Parent (collectively, the
"Parent Companies")) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right
to receive $16.50 in cash, or such higher price, if any, as may be
offered and paid in the Offer (the "Merger Consideration"). All Common
Shares, by virtue of the Merger and without any action on the part of
the holders thereof, shall no longer be outstanding and shall be
canceled and retired and shall cease to exist, and each holder of a
certificate representing any Common Shares shall thereafter cease to
have any rights with respect to the Common Shares other than the right
to receive the Merger Consideration, except for Dissenting Shares.
(b) Common Shares Held by the Parent Companies or the
Company. At the Effective Time, each Common Share issued and
outstanding immediately prior to the Effective Time and owned by any
of the Parent Companies, and each Common Share issued and held in the
Company's treasury or held by any direct or indirect subsidiary of the
Company immediately prior to the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, shall
no longer be outstanding, shall be canceled and retired without
payment of any consideration therefor and shall cease to exist.
(c) Subsidiary Stock. At the Effective Time, each share of
capital stock of Subsidiary issued and outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without any
action on the part of Subsidiary or the
-10-
<PAGE> 16
holders of such shares, be converted into one share of common stock of
the Surviving Corporation.
Section 4.2 Payment. Prior to the Effective Time, Subsidiary
shall authorize the depositary for the Offer (or one or more commercial banks
organized under the laws of the United States or any state thereof each with
capital, surplus and undivided profits of at least $100,000,000) to act as
Paying Agent hereunder with respect to the Merger (the "Paying Agent").
Immediately prior to the Effective Time, Parent will provide to the Paying Agent
amounts sufficient in the aggregate to provide all funds necessary for the
Paying Agent to make payments pursuant to Section 4.1(a) to holders (other than
any of the Parent Companies, the Company or any direct or indirect subsidiary of
the Company or holders of Dissenting Shares) of Common Shares issued and
outstanding immediately prior to the Effective Time. Pending payment of such
funds to the holders of certificates for Common Shares, such funds will be held
and may be invested by the Paying Agent as Parent directs (so long as such
directions do not impair the rights of holders of Common Shares) in direct
obligations of the United States, obligations for which the full faith and
credit of the United States is pledged to provide for the payment of principal
and interest or commercial paper rated of the highest quality by Moody's
Investors Services, Inc. or Standard & Poor's Corporation. Any net profit
resulting from, or interest or income produced by, such investments will be
payable to the Surviving Corporation or Parent, as Parent directs. Parent will
promptly replace any monies lost through any investment made pursuant to this
Section 4.2. Promptly after the Effective Time, the Parent shall mail or cause
to be mailed, and shall make available at the offices of the Paying Agent, to
each person who was, immediately prior
-11-
<PAGE> 17
to the Effective Time, a holder of record (other than any of the Parent
Companies, the Company or any direct or indirect subsidiary of the Company or
holders of Dissenting Shares) of issued and outstanding Common Shares a letter
of transmittal and related instructions for use in effecting the surrender of
the certificates which, immediately prior to the Effective Time, represented any
of such Common Shares in exchange for the cash payment set forth in Section
4.1(a). Upon surrender to the Paying Agent of such certificates, together with
such letter of transmittal, duly executed and completed in accordance with the
instructions thereto, the Paying Agent shall promptly pay to the persons
entitled thereto the amount in cash to which such persons are entitled pursuant
to Section 4.1(a). No interest will be paid or will accrue on the cash payable
upon the surrender of any such certificate. If payment is to be made to a person
other than the registered holder of the certificate surrendered, it shall be a
condition of such payment that the certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the certificate
surrendered or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. One hundred eighty (180) days
following the Effective Time, Parent shall be entitled to require the Surviving
Corporation or the Paying Agent to deliver to it any funds (including any
interest received with respect thereto) which it has made available to the
Surviving Corporation or the Paying Agent and which have not been disbursed to
holders of certificates representing Common Shares outstanding immediately prior
to the Effective Time, and thereafter such holders shall be entitled to look to
the Surviving Corporation (subject to
-12-
<PAGE> 18
abandoned property, escheat and other similar laws) only as general creditors
thereof with respect to the cash payable (without interest thereon) upon due
surrender of their certificates; provided that the Surviving Corporation shall
be obligated to pay, and Parent shall cause the Surviving Corporation to be
provided with, such cash to the extent the Surviving Corporation is required by
law and this Agreement to pay such cash. The Surviving Corporation shall pay all
charges and expenses, including those of the Paying Agent, in connection with
the exchange of cash for Common Shares, and Parent shall reimburse the Surviving
Corporation for such charges and expenses. In the event that any certificate
representing Common Shares shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or destroyed and, if required by Parent or the Surviving
Corporation, upon the posting by such person of a bond in such amount as Parent
or the Surviving Corporation may reasonably direct as indemnity against any
claim that may be made against it with respect to such certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed certificate the
cash representing the Merger Consideration deliverable in respect thereof
pursuant to this Agreement.
Section 4.3 Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary but only to the extent required by the DGCL,
Common Shares that are issued and outstanding immediately prior to the Effective
Time and are held by holders who comply with all the provisions of Delaware law
concerning the right of holders of Common Shares to dissent from the Merger and
require appraisal of their Common Shares ("Dissenting Stockholders") shall not
be converted into the right to receive the Merger Consideration but
-13-
<PAGE> 19
shall be entitled to receive such consideration as may be determined to be due
such Dissenting Stockholder pursuant to the law of the State of Delaware;
provided, however, that (i) if any Dissenting Stockholder shall subsequently
deliver a written withdrawal of the holder's demand for appraisal (with the
written approval of the Surviving Corporation, if such withdrawal is not
tendered within 60 days after the Effective Time), or (ii) if any Dissenting
Stockholder fails to establish and perfect the holder's entitlement to appraisal
rights as provided by applicable law, or (iii) if within 120 days of the
Effective Time neither any Dissenting Stockholder nor the Surviving Corporation
has filed a petition demanding a determination of the value of all Common Shares
outstanding at the Effective Time and held by Dissenting Stockholders in
accordance with applicable law, then such Dissenting Stockholder or
Stockholders, as the case may be, shall forfeit the right to appraisal of such
shares and such shares shall thereupon be deemed to have been converted into the
right to receive, as of the Effective Time, the Merger Consideration, without
interest. The Company shall give Parent and Subsidiary (A) prompt notice of any
written demands for appraisal, withdrawals of demands for appraisal and any
other related instruments received by the Company, and (B) the opportunity to
direct all negotiations and proceedings with respect to demands for appraisal.
The Company will not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for appraisal or settle
or offer to settle any demand. The Common Shares described in this Section 4.3
held by Dissenting Stockholders who exercise and perfect their rights to
appraisal under applicable Delaware law and shall not have withdrawn, waived or
otherwise forfeited such appraisal rights are referred to herein as Dissenting
Shares.
-14-
<PAGE> 20
Section 4.4 Closing of Transfer Records. At and after the
Effective Time, the stock transfer books of the Surviving Corporation and the
stock ledger of the Company shall be closed with respect to Common Shares of the
Company. If, after the Effective Time certificates representing Common Shares
are presented to the Surviving Corporation, they shall be canceled and exchanged
for cash as provided in this Article IV.
Section 4.5 Employee and Other Stock Options. Prior to the
signing hereof, the Company has delivered to Parent Schedule 4.5 hereto
containing a list of each employee stock option and each other stock option
outstanding on the date hereof, whether or not fully exercisable ("Stock
Options"), to purchase Common Shares heretofore granted under any Company option
plan or agreement, in each case as amended to the date of this Agreement
(collectively, the "Stock Option Plans"). The Company represents and warrants
that all such Stock Options are subject to the Company's Third Amended and
Restated 1994 Stock Option and Grant Plan (the "Company's Amended and Restated
Stock Option Plan") and consist of (i) non-qualified options granted to
non-employee directors of the Company to purchase Common Shares ("Non-Employee
Director Options"), (ii) non-qualified and incentive stock options granted to
employees of the Company ("Employee Stock Options"), and (iii) non-qualified
stock options for non-employee consultants ("Consultant Stock Options"). The
Company further represents and warrants that each of such Stock Options was
granted pursuant to either (i) the form of Incentive Stock Option Agreement for
Employees appended to Schedule 4.5; (ii) the form of Non-Qualified Stock Option
Agreement for Non-Employee Directors appended to Schedule 4.5; or (iii) the form
of Non-Qualified Stock Option Agreement for Non-Employee Consultants appended to
Schedule 4.5. The Company has
-15-
<PAGE> 21
taken appropriate action to provide that, immediately prior to the acceptance of
Common Shares pursuant to the Offer, each outstanding Stock Option, whether or
not then exercisable, shall become fully exercisable and vested, and each Stock
Option shall be canceled and each holder of a Stock Option shall be entitled to
receive a cash payment from the Company equal to the product of (a) the excess,
if any, of the Per Share Amount over the per Common Share exercise price of such
Stock Option and (b) the number of Common Shares subject to such Stock Option,
which cash payment shall be treated as compensation and shall be net of any
applicable federal or state withholding tax. All Stock Options shall thereafter
be deemed canceled and of no force or effect. After the date hereof, the Company
shall not grant any additional stock options or other rights to acquire capital
stock of the Company.
Section 4.6 Warrants. Prior to the signing hereof, the
Company delivered to Parent Schedule 4.6 hereto containing a list of each
warrant outstanding on the date hereof, whether or not fully exercisable
("Warrants"), to purchase Common Shares heretofore granted by the Company. At
the Effective Time, each Warrant shall no longer entitle the holder thereof to
purchase Common Shares, but instead shall entitle the holder thereof to
purchase, upon exercise of the Warrant, the Merger Consideration which the
holder of the Warrant would have been entitled to receive pursuant to the Merger
if the Warrant had been exercised immediately prior to the Effective Time.
Promptly following the consummation of the Merger, the Surviving Corporation
shall execute and deliver to each holder of a Warrant and to the Warrant Agency,
if any, with respect to the Warrants an agreement as to the rights of the holder
in accordance with this Section 4.6. After the date
-16-
<PAGE> 22
hereof, the Company shall not grant any additional warrants or other rights to
acquire capital stock of the Company.
Section 4.7 Employee Stock Purchase Plan. The Company has
taken appropriate action to provide that, (i) the offering period pending on the
last business day prior to the date hereof under the Company's Employee Stock
Purchase Plan (the "Stock Purchase Plan") shall be terminated as of the date
hereof, (ii) each participant in the Stock Purchase Plan on the date hereof
shall be deemed to have exercised his or her Option (as defined in the Stock
Purchase Plan) on such date and shall acquire from the Company (A) such number
of whole Common Shares as his or her accumulated payroll deductions on such date
will purchase at the Option Price (as defined in the Stock Purchase Plan)
(treating the last business day prior to the date hereof as the "Exercise Date"
for all purposes of the Stock Purchase Plan) and (B) cash in the amount of any
remaining balance in such participant's account without interest, and (iii) the
Stock Purchase Plan shall be terminated effective as of the date hereof.
ARTICLE V.
Representations and Warranties
Section 5.1 Representations and Warranties of Parent and
Subsidiary. Parent and Subsidiary (which term, for purposes of this Article V,
includes Subsidiary and any other direct or indirect wholly-owned subsidiary or
subsidiaries of Parent that may, in accordance with this Agreement, participate
as a purchaser of Common Shares in the Offer or as a Constituent Corporation in
the Merger or that is otherwise an assignee of any rights or
-17-
<PAGE> 23
obligations of Parent or Subsidiary hereunder), jointly and severally, represent
and warrant to and agree with the Company that:
(a) Corporate Organization. Each of Parent and Subsidiary is
a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation with
all requisite corporate power and authority to own, lease, license and
use its properties and assets and to carry on the business in which it
is now engaged. Parent beneficially owns all of the outstanding
capital stock of Subsidiary.
(b) Corporate Authorization. Parent and Subsidiary each have
all requisite corporate power and authority to execute, deliver, and
perform the transactions contemplated by this Agreement. The execution
and delivery of this agreement and the consummation by Parent and
Subsidiary of the transactions contemplated hereby have been duly and
validly authorized by requisite corporate action of Parent and
Subsidiary, and no other corporate proceedings on the part of Parent
and Subsidiary are necessary to authorize this agreement or to
consummate the transactions contemplated hereby. This Agreement has
been duly authorized, executed, and delivered by Parent and
Subsidiary, is the legal, valid, and binding obligation of Parent and
Subsidiary, and is enforceable as to them in accordance with its terms
except as enforcement may be limited by applicable bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights and remedies generally, and except that the
availability of equitable remedies, including specific performance,
-18-
<PAGE> 24
is subject to the discretion of the court before which any proceeding
therefor may be brought.
(c) No Conflicts. The execution and delivery of this
Agreement by Parent and Subsidiary do not, and the consummation of the
transactions contemplated hereby by Parent and Subsidiary will not (i)
violate or conflict with the certificate of incorporation or by-laws
of Parent or Subsidiary or (ii) constitute a breach or violation of,
or a default under, any law, rule or regulation or any judgment,
decree, order, governmental permit or license to which Parent or any
of its subsidiaries is subject, assuming compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), the Exchange Act and the DGCL, or (iii) constitute a
breach or violation of, a default (or an event or condition which,
with notice or lapse of time, or both, would constitute a default)
under, or permit the termination of, or cause or permit the
acceleration of the maturity of, any agreement, indenture, mortgage,
bond, note or instrument to which Parent or any of its subsidiaries is
a party or by which Parent or any of its subsidiaries is bound, which
conflict, breach, violation, default, termination or acceleration
would have a material adverse effect on the assets, financial
condition or business of Parent, and its subsidiaries, taken as a
whole. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not require
the consent or approval of any other party to any agreement,
indenture, mortgage, bond, note or instrument to which Parent or any
of Parent's subsidiaries is a party or by which Parent or any of
Parent's subsidiaries is bound where the failure to obtain any
-19-
<PAGE> 25
such consent or approval would result in a material adverse effect on
the assets, financial condition or business of Parent and its
subsidiaries, taken as a whole, or would prevent the consummation of
the transactions contemplated hereby. Subsidiary has not, since its
inception, and, prior to the Effective Time, Subsidiary shall not,
directly or indirectly, (i) conduct or engage in any business
activities of any kind or nature, (ii) incur any liability or
obligation, (iii) enter into or become bound by any mortgage, bond,
agreement, indenture, note or other instrument, or any arrangement
with any person or entity, or (iv) become subject to or bound by any
obligation or undertaking, except in connection with the negotiation,
execution, delivery and performance of this Agreement and the
transactions contemplated hereby and any financings in connection with
such transactions.
(d) Financing. Parent or Subsidiary (i) have available cash,
undrawn lines of credit and other resources sufficient to provide all
funds necessary for the purchase of Common Shares pursuant to the
Offer and the Merger in accordance with the terms of this Agreement
and to consummate the transactions contemplated hereby and (ii) will
have on the Expiration Date and the Effective Date sufficient funds to
purchase and pay for the Common Shares pursuant to the Offer and the
Merger, respectively.
(e) Filings and Consents. Other than the filings provided for
in Section 2.3 and filings pursuant to the HSR Act, the Exchange Act,
and under any applicable state, environmental, takeover, or securities
laws, there are no filings required to be made by Parent or Subsidiary
with, and there are no consents, approvals, permits
-20-
<PAGE> 26
or authorizations required to be obtained by Parent or Subsidiary from
federal or state governmental and regulatory authorities in connection
with the execution and delivery of this Agreement by Parent or
Subsidiary and the consummation of the transactions contemplated
hereby by Parent and Subsidiary, other than such which the failure to
make or obtain would not, in the aggregate, have a material adverse
effect on the assets, financial condition or business of Parent, and
its subsidiaries, taken as a whole, or would prevent the consummation
of the transactions contemplated hereby.
(f) Litigation. No litigation is pending or threatened
against Parent or Subsidiary which in the reasonable opinion of Parent
would materially adversely affect their properties or business so as
to prevent them from consummating the transactions contemplated
hereby.
(g) Offer Documents. The Offer Documents pursuant to which
the Offer will be made, including the Schedule 14D-1, will comply as
to form in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder. The information
contained in the Offer Documents (other than information supplied in
writing by the Company expressly for inclusion in the Offer Documents)
will not, at the respective times the Schedule 14D-1 or any amendments
or supplements thereto are filed with the Commission, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which
they were made, not misleading. Parent and Subsidiary will promptly
correct any statements in the Schedule 14D-1 and the Offer Documents
that have
-21-
<PAGE> 27
become false or misleading and take all steps necessary to cause such
Schedule 14D-1 as so corrected to be filed with the SEC and such Offer
Documents as so corrected to be disseminated to holders of Common
Shares, in each case as and to the extent required by applicable law.
(h) Merger Proxy Statement. None of the information to be
supplied by Parent or Subsidiary expressly for inclusion in a proxy or
information statement of the Company required to be mailed to the
Company's stockholders in connection with the Merger (the "Merger
Proxy Statement"), or in any amendments or supplements thereto will,
at the respective times of (a) the mailing thereof and (b) the
meeting, if any, of stockholders to be held in connection with the
Merger, 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 were made, not misleading.
(i) Brokers and Finders. Parent has not employed any
investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement which
would be entitled to any investment banking, brokerage, finder or
similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
(j) Common Shares. Neither Parent nor Subsidiary nor any of
their respective affiliates owns any Common Shares.
Section 5.2 Representations and Warranties of the Company.
The Company hereby represents and warrants to Parent and Subsidiary that:
-22-
<PAGE> 28
(a) Corporate Organization. Except as set forth in Schedule
5.2(a), each of the Company and its operating subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation with
all requisite corporate power and authority to own, lease, license and
use its properties and assets and to carry on the business in which it
is now engaged. Each of the Company and its operating subsidiaries is
in good standing as a foreign corporation in each jurisdiction where
the properties owned, leased or operated, or the business conducted by
it require such qualification and where failure to so qualify or be in
good standing would, either singly or in the aggregate, have a
Material Adverse Effect (for purposes of Section 5.2 of this Agreement
"Material Adverse Effect" shall mean an adverse effect of $250,000 or
more on the business, assets, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole).
The Company has heretofore delivered to Parent complete and correct
copies of the Company's Certificate of Incorporation and By-Laws, each
as amended and in effect as of the date of this Agreement, and a list
of the Company's subsidiaries, each of which is wholly-owned directly
or indirectly by the Company, except as otherwise set forth therein.
All shares of capital stock of the Company's subsidiaries beneficially
owned by the Company have been validly issued and are fully paid and
nonassessable.
(b) Capitalization. The authorized capital stock of the
Company consists of 35,000,000 shares of capital stock, of which
30,000,000 shares are common stock, having a par value of $0.01 per
share (and which are herein referred to as the
-23-
<PAGE> 29
Common Shares) and of which 5,000,000 shares are preferred stock, par
value $0.01 per share. As of the date hereof there are 6,466,692
Common Shares outstanding, 718,800 Common Shares held as treasury
shares and no shares of preferred stock issued and outstanding. All of
the outstanding Common Shares have been validly issued and are fully
paid and nonassessable. As of the date hereof, the Company has no
Common Shares reserved for issuance, except that (i) an aggregate of
265,135 Common Shares (at a weighted aggregate average exercise price
of $10.79) and an additional 82,000 Common Shares (at exercise prices
in excess of $16.50) are subject to, and are reserved for issuance
upon, the exercise of Employee Stock Options; (ii) an aggregate of
133,796 Common Shares are subject to Non-Employee Director Options (at
a weighted aggregate average exercise price of $11.21); (iii) an
aggregate of 5,000 Shares are subject to, and reserved for, issuance
upon the exercise of Consultant Stock Options (at a weighted aggregate
average exercise price of $8.50); (iv) 442 Common Shares are subject
to, and reserved for, issuance pursuant to the Stock Purchase Plan;
and (v) 23,820 Common Shares are reserved for issuance under the
Warrants, at an exercise price of $1.00 per share. There are no
subscriptions, options, warrants, rights, convertible securities or
other agreements or commitments of any character obligating the
Company or any operating subsidiary to issue, sell, or purchase
capital stock, warrants, convertible securities or other rights with
respect to capital stock, except for the obligations under the Stock
Option Plans, the Stock Purchase Plan and the Warrants. There are no
voting trusts or other agreements or understandings to which the
Company or any subsidiary of the
-24-
<PAGE> 30
Company is a party with respect to the voting of the capital stock of
the Company or any of its subsidiaries. From and after the date
hereof, the Company shall not grant or award, as the case may be, any
stock options and shall not issue any additional capital stock other
than issuances pursuant to the exercise of stock options under
presently outstanding Stock Options or the exercise of presently
outstanding rights under the Stock Purchase Plan or under the
Warrants.
(c) Corporate Authorization and Certain Corporate Action. The
Company has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby and, subject only to approval of this Agreement by the holders
of a majority of the Common Shares outstanding and entitled to vote if
such approval is required, no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has
been duly authorized, executed, and delivered by the Company, is the
legal, valid and binding obligation of the Company, and is enforceable
as to it in accordance with its terms except as enforcement may be
limited by applicable bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights and remedies generally,
and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before
which any proceeding therefor may be brought. The Company has taken
appropriate corporate action to satisfy the provisions of Section 203
of the DGCL so that the provisions thereof are not applicable to the
transactions contemplated by this Agreement.
-25-
<PAGE> 31
(d) Financial Statements and Reports. The Company has
previously furnished Parent true and complete copies (with exhibits)
of its (i) Annual Report on Form 10-K for the fiscal year ended
September 30, 1998 (the "1998 Annual Report"), as filed with the SEC,
(ii) proxy statements relating to all meetings of its stockholders
(whether annual or special) since January 1, 1998, and (iii) all other
schedules, reports and registration statements filed by the Company
with the SEC since September 30, 1998 (collectively, the "SEC
Filings"). As of their respective dates, the SEC Filings were prepared
and filed in accordance with the applicable rules and regulations of
the SEC and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since
September 30, 1998, the Company has filed with the SEC all reports and
registration statements and all other filings required to be filed
with the SEC under the rules and regulations of the SEC. The audited
financial statements and unaudited interim financial statements of the
Company, together with the notes thereto, included or incorporated by
reference in the 1998 Annual Report and any other SEC Filings,
respectively, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto and subject, in the case of
unaudited financial statements, to normal year-end audit adjustments)
and fairly present the financial position of the Company and its
subsidiaries as at the dates thereof and the results of their
operations and changes in financial position for the periods then
ended.
-26-
<PAGE> 32
(e) Absence of Other Liabilities. Except as set forth in
Schedule 5.2(e) hereto and as and to the extent set forth on the
consolidated balance sheet of the Company and its subsidiaries at
September 30, 1998, including the notes thereto, contained in the 1998
Annual Report, neither the Company nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which would be required to be reflected on a
balance sheet or in the notes thereto prepared in accordance with
generally accepted accounting principles, except for liabilities or
obligations incurred in the ordinary course of business since
September 30, 1998, which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(f) Absence of Certain Changes or Events. Except as and to
the extent set forth in the SEC Filings or in Schedule 5.2(f) hereto,
since September 30, 1998, (i) there has not been any Material Adverse
Effect, (ii) the businesses of the Company and each of its
subsidiaries have been conducted only in the ordinary course and in a
manner consistent with past practices, (iii) neither the Company nor
any of its subsidiaries has incurred any material liabilities (direct,
contingent or otherwise) or engaged in any material transaction or
entered into any agreement, in each case, outside the ordinary course
of business, (iv) there has not been any damage, destruction or loss
(whether or not covered by insurance) with respect to any assets of
the Company or any of its subsidiaries which would reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect, (v) there has not been any revaluation by the Company of any
of its material assets, including but not
-27-
<PAGE> 33
limited to writing down the value of inventory or writing off notes or
accounts receivable other than in the ordinary course of business,
(vi) there has been no change by the Company in accounting principles,
practices or methods, (vii) there has been no declaration, setting
aside or payment of any dividend or other distribution in respect of
the shares or any direct or indirect redemption, purchase or other
acquisition by the Company of any of its shares of capital stock;
(viii) except for salary increases or other employee benefit
arrangements made in the ordinary course of business consistent with
past practice, or heretofore described in writing to Parent, there has
not been any increase in the compensation payable or to become payable
by the Company or its subsidiaries to any of their respective
officers, or any significant increase in the compensation payable to
other employees or agents of the Company or any of its subsidiaries or
any adoption of any bonus, pension, retirement, profit sharing, or
stock option plan, arrangement or agreement made to or with any of
such officers of employees; and (ix) there has not been any labor
strike or threat thereof or labor trouble or other business event or
condition which is likely to have a Material Adverse Effect.
(g) Offer Documents. None of the information supplied in
writing by the Company or its subsidiaries expressly for inclusion in
the Offer Documents, or in any amendments or supplements thereto will,
at the time supplied or upon the expiration of the Offer, 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
-28-
<PAGE> 34
statements therein, in light of the circumstances under which they
were made, not misleading.
(h) Schedule 14D-9. The Schedule 14D-9 will comply as to form
in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations thereunder and the
information contained therein (other than information supplied in
writing by Parent or Subsidiary expressly for inclusion in the
Schedule 14D-9) will not at the respective times the Schedule 14D-9 or
any amendments or supplements thereto are filed with the SEC, contain
any untrue statement of a material fact or omit to state any material
fact either required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company will promptly correct any
statements in the Schedule 14D-9 that have become false or misleading
and take all steps necessary to cause such Schedule 14D-9 as so
corrected to be filed with the SEC and to be disseminated to holders
of Common Shares, in each case as and to the extent required by
applicable law.
(i) Merger Proxy Statement. The Merger Proxy Statement and
all amendments and supplements thereto will comply as to form in all
material respects with the applicable requirements of the Exchange Act
and the rules and regulations thereunder and will not, at the time of
(a) the mailing thereof and (b) the meeting, if any, of stockholders
to be held in connection with the Merger, together with any amendments
and supplements thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order
-29-
<PAGE> 35
to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied in writing by
Parent or any affiliates of Parent expressly for inclusion in the
Merger Proxy Statement.
(j) Certain Agreements. Except for the agreements disclosed
in the SEC Filings prior to the date hereof or as set forth in
Schedule 5.2(j) hereto, neither the Company nor any of its
subsidiaries is party to any (i) agreements with any executive officer
or other key employee of the Company or any of its subsidiaries (A)
the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the
Company or any of its subsidiaries of the nature of any of the
transactions contemplated by this Agreement, (B) providing any term of
employment or compensation guarantee extending for a period longer
than one year, or (C) providing severance benefits or other benefits
(which are conditioned upon a change of control) after the termination
of employment of such employee regardless of the reason for such
termination of employment or (ii) agreement or plan, including,
without limitation, any incentive or bonus plan, stock option plan,
stock appreciation right plan or stock purchase plan, any of the
benefits of which will be materially increased, or the vesting of
benefits of which will be materially accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of
any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement.
-30-
<PAGE> 36
(k) No Conflicts. The execution and delivery of this
Agreement by the Company do not, and the consummation of the
transactions contemplated hereby by the Company will not, (i) violate
or conflict with the amended certificate of incorporation or by-laws
of the Company, or (ii) assuming compliance with the HSR Act, the
Exchange Act and the DGCL, constitute a breach or violation of, or a
default under, any United States law, rule or regulation or any
judgment, decree, order, governmental permit or license, to which the
Company or any of its subsidiaries is subject, or (iii) constitute a
breach or violation of, a default (or an event or condition which,
with notice or lapse of time, or both, would constitute a default)
under, permit the termination of, or cause or permit the acceleration
of the maturity of, any agreement, indenture, mortgage, bond, note or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound, which
conflict, breach, violation, default, termination or acceleration
would have a Material Adverse Effect.
(l) Filings and Consents. Other than the filings provided for
in Section 2.3 and filings pursuant to the HSR Act, the Exchange Act,
and under any applicable state takeover or securities laws, there are
no filings required to be made by the Company with, and there are no
consents, approvals, permits or authorizations required to be obtained
by the Company from, federal or state governmental and regulatory
authorities in connection with the execution and delivery of this
Agreement by the Company and the consummation of the transactions
contemplated hereby by the Company, other than such which the failure
to make or obtain would not, in the
-31-
<PAGE> 37
aggregate, have a Material Adverse Effect, or would prevent the
consummation of the transactions contemplated hereby.
(m) Compliance With Laws. Except as disclosed in the SEC
Filings or in Schedule 5.2(m) hereto, the Company and its subsidiaries
are in compliance with all applicable laws, regulations, orders,
judgments and decrees except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect.
(n) Litigation. Except as disclosed in the SEC Filings or in
Schedule 5.2(n), there is no action, suit, proceeding at law or in
equity, or any arbitration or any adversarial administrative or other
adversarial proceeding by or before (or to the best knowledge of the
Company any investigation by) any governmental or other
instrumentality or agency, pending, or, to the best knowledge of the
Company, threatened, against or affecting the Company or any of its
subsidiaries, or any of their properties or rights. Except as
disclosed in the SEC Filings or in Schedule 5.2(n), neither the
Company nor any of its subsidiaries is subject to any judgment, order,
award or decree entered in any lawsuit or proceeding which has, or is
reasonably expected to have, a Material Adverse Effect.
(o) Employee Benefit Plans. All "employee benefit plans"
("Employee Plans") as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
maintained or contributed to by the Company and its subsidiaries are
in compliance with the applicable provisions of ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"), except for instances of
-32-
<PAGE> 38
non-compliance that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. All Employee
Plans are included in the exhibits to or incorporated by reference in
the 1998 Annual Report.
(p) Taxes. The Company and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for tax purposes of
which the Company or any of its subsidiaries is a member, has filed or
caused to be filed, or will file or cause to be filed on or prior to
the Closing Date (as defined in Section 2.2), all Tax returns and Tax
reports which are required to be filed by, or with respect to, it on
or prior to the Closing Date (taking into account any extension of
time to file granted to or on behalf of the Company or any subsidiary)
(collectively, the "Returns"). Such Returns reflect accurately all
liability for Taxes for the periods covered thereby. All Taxes payable
by, or due from, the Company or any of its subsidiaries have been
fully paid or adequately disclosed and provided for on the financial
statements of the Company and its subsidiaries in accordance with
generally accepted accounting principles. All Taxes (as defined below)
shown to be due and payable on the Returns by or with respect to the
Company or any of its subsidiaries have been, or prior to the Closing
Date will be, paid. Without limiting the generality of the foregoing,
(i) no claim for unpaid Taxes (x) to the best knowledge of the
Company, has become a lien or encumbrance of any kind against the
property of the Company or any of its subsidiaries or (y) is being
asserted against the Company or any of its subsidiaries; (ii) no audit
of any Return of the Company or any of its subsidiaries is being
conducted by a Tax authority; (iii) no extension of time is in
-33-
<PAGE> 39
effect with respect to the filing of any Return, the payment of taxes
by the Company or any of its subsidiaries or any limitations period on
the assessment of any Taxes of the Company or any of its subsidiaries;
(iv) there is no Tax deficiency or to the knowledge of the Company any
substantive basis on which any Tax deficiency might be asserted
against the Company or any of its subsidiaries in excess of the
reserve for Taxes set forth in the financial statements of the Company
and its subsidiaries as of the respective dates thereof, except for
amounts, if any, which in the aggregate would not reasonably be
expected to have a Material Adverse Effect; and (v) there are no
claims for refunds of Taxes of the Company or any of its subsidiaries
pending. As used herein, "Taxes" shall mean any taxes of any kind,
including but not limited to those on or measured by or referred to as
income, gross receipts, capital, sales, ad valorem, franchise,
profits, license, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, value added, property or windfall profits
taxes, customs, duties or similar fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts with respect to such taxes,
imposed by any governmental authority, domestic or foreign.
(q) Health, Safety and Environmental Laws and Regulations.
Except as disclosed in Schedule 5.2(q) hereto, the Company and its
subsidiaries are in material compliance with all applicable foreign,
federal and state laws and regulations, as in effect on the date
hereof, relating to the protection of health, safety and the
environment (collectively, "Environmental Laws"), except for
violations of
-34-
<PAGE> 40
Environmental Laws that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing sentence, except as set forth
on Schedule 5.2(q) hereto, to the best of the Company's knowledge (i)
the Company and each of its subsidiaries have obtained all applicable
permits, licenses and other authorizations which are required to be
obtained under all applicable Environmental Laws by the Company or its
subsidiaries, except where the failure to obtain such permits,
licenses and other authorizations in the aggregate would not
reasonably be expected to have a Material Adverse Effect; (ii) the
Company and each of its subsidiaries are in compliance with all terms
and conditions of such required permits, licenses and authorizations
and with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in applicable Environmental Laws, except where noncompliance
in the aggregate would not reasonably be expected to have a Material
Adverse Effect; (iii) there is no event which is reasonably likely to
prevent continued compliance with such Environmental Laws, or which
would give rise to any common law environmental liability, or which
would otherwise form the basis of any claim, action, suit or
proceeding against the Company or any of its subsidiaries based on or
resulting from the manufacture, processing, use, treatment, storage,
disposal, transport, or handling, or the emission, discharge or
release into the environment, of any hazardous material, except where
such events in the aggregate would not reasonably be expected to have
a Material
-35-
<PAGE> 41
Adverse Effect, and (iv) the Company and its subsidiaries have no
reason to believe that any of the items listed above will be
forth-coming.
(r) Intellectual Property. To the best knowledge of the
Company, the Company or a subsidiary of the Company is the owner of,
or a licensee under a valid license for, all items of intangible
property which are material to the business of the Company and its
subsidiaries as currently conducted, taken as a whole, including,
without limitation, trade names, unregistered trademarks and service
marks, brand names, software, patents and copyrights. As of the date
of this Agreement, except as disclosed in the SEC Filings or Schedule
5.2(r), there are no claims pending or, to the Company's knowledge,
threatened, that the Company or any subsidiary is in violation of any
such intellectual property right of any third party which is
reasonably likely to have a Material Adverse Effect, and, to the
Company's best knowledge no third party is in violation of any
intellectual property rights of the Company or any subsidiary which is
reasonably likely to have a Material Adverse Effect.
(s) Brokers and Finders. Except for the fees and expenses
payable to Robinson-Humphrey, which fees and expenses are reflected in
their agreements with the Company, true and complete copies of which
have been furnished to Parent, the Company has not employed any
investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement which
would be entitled to any investment banking, brokerage, finder's or
similar fee or commission in connection with this Agreement or the
transactions contemplated hereby.
-36-
<PAGE> 42
(t) Year 2000 Compliance. To the Company's best knowledge,
there is no impediment to the Company being year 2000 compliant by
June 30, 1999 (i.e., that products, hardware, software and other
date-sensitive equipment manufactured, sold, owned, licensed or used
by the Company will be capable of correctly processing date data
(including, but not limited to, calculating, comparing and sequencing)
accurately prior to, during and after the calendar year 2000 when
used, assuming that all third party products, hardware, software and
other date-sensitive equipment used in combination therewith are
capable of properly exchanging date data). The Company has submitted
inquiries to its vendors who supply products or services to the
Company in the amount of $100,000 or more on an annual basis and to
the best of the Company's knowledge such vendors are or will be 2000
compliant no later than December 31, 1999.
(u) Contracts. Schedule 5.2(u) sets forth a list of each
contract (other than contracts listed on other schedules to this
Agreement or in the SEC Filings) of the Company providing for payments
aggregating One Hundred Thousand ($100,000) or more during the term of
the respective contract (which contracts so listed on Schedule 5.2(u)
and other schedules to this Agreement are collectively referred to as
the "Company Contracts" or individually as "Company Contract"). Each
Company Contract is valid, binding and enforceable and in full force
and effect, and such Company Contracts will continue to be valid,
binding and enforceable and in full force and effect immediately
following the consummation of the transactions contemplated hereby,
except where failure to be valid, binding and enforceable and
-37-
<PAGE> 43
in full force and effect would not have a Material Adverse Effect, and
there are no material defaults thereunder by the Company or its
subsidiaries or, to the best knowledge of the Company, by any other
party thereto. No event has occurred which either entitles, or would,
on notice or lapse of time or both, entitle the holder of any
indebtedness for borrowed money of the Company or any of its
subsidiaries to accelerate such indebtedness except as set forth in
Section 5.2(u).
(v) Labor Relations. Neither the Company nor any of its
subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by the
Company or its subsidiaries. There is no labor strike, slowdown or
work stoppage or lockout pending or, to the best knowledge of the
Company, threatened against the Company or any of its subsidiaries.
There is no unfair labor practice charge or other employment related
complaint pending or, to the best knowledge of the Company, threatened
against the Company or any of its subsidiaries which if decided
adversely would be reasonably likely to have a Material Adverse
Effect. To the Company's best knowledge, there is no representation
claim or petition pending before the National Labor Relations Board
and no question concerning representation exists with respect to the
employees of the Company or its subsidiaries.
(w) Affiliate Transactions. Except as set forth in the SEC
Filings and as set forth in Schedule 5.2(w) hereto, from September 30,
1998, through the date of this Agreement there have been no
transactions, agreements, arrangements or understandings between the
Company or any of its subsidiaries, on the one hand, and
-38-
<PAGE> 44
any affiliates (other than wholly-owned subsidiaries) of the Company
or other persons, on the other hand, that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act of
1933, as amended.
(x) Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Common Stock of the Company
entitled to vote thereon is the only vote of the holders of any class
or series of the Company's capital stock necessary to approve the
Merger.
(y) Knowledge Definition. As used in this Agreement, the
phrase "to the Company's best knowledge" or any similar phrase when
modifying any representation and warranty of the Company means the
actual knowledge of those individuals identified in Schedule 5.2(y)
hereto and that (i) such person has made appropriate inquiries of the
Company's officers and responsible employees; and (ii) nothing has
come to the person's attention in the course of such investigation and
review or otherwise which would cause such person, in the exercise of
due diligence, to believe that such representation and warranty is not
true and correct in all material respects.
ARTICLE VI.
Covenants
Section 6.1 No Solicitation of Transactions. The Company, its
affiliates and their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or negotiations, if
any, with any parties conducted heretofore with respect to any Third Party
Acquisition (as defined in Section 8.3). The Company, its
-39-
<PAGE> 45
subsidiaries and affiliates and their respective officers, directors, employees,
representatives and agents may, directly or indirectly, furnish information and
access to any Third Party (as defined in Section 8.3) (in each case only in
response to a request for such information or access made after the date hereof
and with respect to confidential information, only pursuant to an appropriate
confidentiality agreement) only if, and may participate in discussions and
negotiate with such Third Party concerning any Third Party Acquisition, only if
(i) such Third Party has submitted a bona fide
proposal to the Board relating to any such transaction, and
(ii) a majority of the Board of Directors of the
Company determines, in its good faith judgment after receiving advice
from its outside counsel, that failing to take such action could
reasonably be expected to be a breach of the directors' fiduciary
duties under applicable law.
The Company shall promptly notify Parent, if any proposal or offer, or any
inquiry or contact with any person with respect thereto, is made and shall, in
any such notice to Parent, indicate in reasonable detail the identity of the
offeror and the terms and conditions of any proposal or offer, or any such
inquiry or contact. The Company shall keep Parent promptly advised of all
developments which could reasonably be expected to culminate in the Board of
Directors withdrawing, modifying or amending its recommendation of the Offer,
the Merger and the other transactions contemplated by this Agreement, unless
with respect to a specific development the Board of Directors of the Company by
a majority vote determines in its good faith judgment, after receiving advice
from outside counsel, that notifying Parent
-40-
<PAGE> 46
of such development could reasonably be expected to be a breach of the Board's
fiduciary duties under applicable law. Except as set forth in this Section 6.1,
neither the Company or any of its affiliates, nor any of its or their respective
officers, directors, employees, representatives or agents, shall, directly or
indirectly, knowingly encourage, solicit, participate in or initiate discussions
or negotiations with, or provide any information to, any Third Party concerning
any Third Party Acquisition; provided, that nothing in this Section 6.1 shall
prevent the Company or the Board from taking, and disclosing to the Company's
stockholders, a position contemplated by Rules 14d-9 and 14e-2 promulgated under
the Exchange Act with regard to any tender offer or from making such disclosure
to the Company's stockholders which, in the good faith judgment of its Board of
Directors after receiving advice from outside counsel, is required under
applicable law; provided further, that the Board shall not recommend that the
stockholders of the Company tender their Common Shares in connection with any
such tender offer unless the Board by a majority vote determines in its good
faith judgment, after receiving advice from outside counsel, that failing to
take such action could reasonably be expected to be a breach of the Board's
fiduciary duties under applicable law.
Section 6.2 Postponement of Annual Meeting. The Company shall
as soon as possible indefinitely postpone its 1999 annual meeting of
stockholders, and shall take no action unless compelled by legal process to
reschedule such annual meeting or to call a special meeting of stockholders of
the Company except in accordance with this Agreement unless and until this
Agreement has been terminated in accordance with its terms.
-41-
<PAGE> 47
Section 6.3 Interim Operations of the Company. Except as set
forth in Schedule 6.3 hereto, contemplated hereby or with the written consent of
Parent or Subsidiary, during the period from the date of this Agreement to the
earlier of the New Board Date (as defined in Section 6.12) or the Effective
Time, the Company shall, and shall cause its subsidiaries to, conduct (except as
otherwise permitted by Section 6.1) its and their business only in the ordinary
course, will make no material changes in the operations of the Company or its
subsidiaries and shall use its reasonable efforts to (i) preserve intact the
business organization of the Company and its subsidiaries, (ii) keep available
the services of its and their present officers and key employees, and (iii)
preserve the good will of those having business relationships with the Company
and its subsidiaries. Except as set forth in Schedule 6.3 hereto, contemplated
hereby or with the consent of Parent or Subsidiary, during the period from the
date of this Agreement to the earlier of the New Board Date or the Effective
Time, neither the Company nor any of its subsidiaries will: (a) amend or
otherwise change its certificate of incorporation or by-laws, as each such
document is in effect on the date hereof; (b) issue or sell, or authorize for
issuance or sale, additional shares of any class of capital stock, including
Common Shares or any securities convertible into capital stock, or grant any
warrants, options, or other rights to acquire, or incur any obligation or make
any commitment for issuance of, capital stock or any securities convertible into
capital stock; (c) in the case of the Company, declare, set aside, make or pay
any dividend or other distribution with respect to its capital stock other than
if requested by Parent; (d) redeem, purchase or otherwise acquire, or agree to
redeem, purchase or otherwise acquire, directly or indirectly, any of its
capital stock, other than if requested by Parent; (e) except in the
-42-
<PAGE> 48
ordinary course of business, sell, pledge, dispose of or encumber, or agree to
sell, pledge, dispose of or encumber, any material assets of the Company or any
of its subsidiaries other than in connection with discontinued operations; (f)
acquire (by merger, consolidation, or acquisition of stock or assets) any
significant corporation, partnership or other business organization or division
thereof for a cash consideration of $100,000 or more with respect to an
acquisition, merge or consolidate with any corporation, or enter into or modify
any contract, agreement, commitment or arrangement with respect to any of the
foregoing; (g) other than in connection with the refinancing of outstanding
indebtedness, incur any indebtedness for borrowed money or issue any debt
securities except in the ordinary course of business and consistent with past
practice or enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the foregoing; (h) take any action with
respect to the grant of any severance or termination pay other than pursuant to
policies or agreements of the Company or any of its subsidiaries in effect on
the date hereof; (i) make any loans, advances or capital contributions to, or
investments (other than intercompany accounts and short-term investments
pursuant to customary cash management systems of the Company in the ordinary
course and consistent with past practices) in, any other person other than such
of the foregoing as are made by the Company to or in a subsidiary of the
Company; (j) except for salary increases or other employee benefit arrangements
made in the ordinary course of business consistent with past practice, or
heretofore described in writing to the Parent, adopt or (except as provided in
Sections 4.5 and 4.7 hereof) amend any bonus, profit sharing, compensation,
incentive, stock option, restricted stock, pension, retirement, deferred
compensation, employment or other employee benefit plan, agreement,
-43-
<PAGE> 49
trust, fund or arrangement for the benefit or welfare of any employee; or (k)
enter into any agreement to do any of the foregoing.
Section 6.4 Meetings of the Company's Stockholders. If the
Minimum Share Condition has been satisfied and Subsidiary has purchased and paid
for all duly tendered Common Shares pursuant to the Offer and the terms and
conditions of this Agreement and if necessary to effect the Merger, the Company
will take all action necessary in accordance with applicable law and the
Company's certificate of incorporation and by-laws to convene a meeting of
holders of Common Shares as promptly as practicable after consummation of the
Offer to consider and vote upon the approval and adoption of this Agreement.
Parent and Subsidiary will provide to the Company the information with respect
to Parent and Subsidiary required by the Exchange Act to be set forth in the
proxy statement required with respect to such meeting. The Board of Directors of
the Company shall recommend such approval and adoption, and the Company shall
take all lawful action to solicit such approval and adoption. At any such
meeting of holders of Common Shares, all of the Common Shares then owned by the
Parent Companies will be voted in favor of approval and adoption of this
Agreement. Notwithstanding this Section 6.4, in the event that Parent or
Subsidiary shall acquire at least 90% of the outstanding Common Shares, pursuant
to the Offer or otherwise, the parties hereto shall, subject to Article VII
hereof, take all necessary and appropriate action to cause the Merger to become
effective as soon as possible after such acquisition, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
-44-
<PAGE> 50
Section 6.5 Filings; Other Action. Subject to the terms and
conditions herein provided, the Company, Parent and Subsidiary shall promptly
make any required submissions or filings with any governmental entity, including
without limitation, preparation and filing of the Merger Proxy Statement with
the SEC.
Section 6.6 Reasonable Best Efforts. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable best 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, rules and regulations and otherwise to consummate and make effective the
transactions contemplated by this Agreement and shall use its reasonable best
efforts to obtain all necessary actions or non-actions, extensions, waivers,
permits, consents and approvals and to effect all registrations, filings and
notices with or to third parties or governmental or public bodies or authorities
that are necessary or desirable in connection with the transactions contemplated
by this Agreement except in each such case to the extent that the applicable
Board may determine in good faith, after receiving advice from its outside
counsel, that any such action could reasonably be expected to be a breach of the
directors' fiduciary duties under applicable law. The Company will cooperate
with Parent and Subsidiary in supplying all information reasonably requested in
connection with any due diligence investigation by Parent or its lenders.
Notwithstanding the foregoing, nothing in this Section 6.6 shall require, or be
construed to require, Parent, Subsidiary or the Company, in connection with the
receipt of any regulatory approval, to proffer or agree (i) to sell or hold
separate or agree to sell, divert or discontinue or to limit, before or after
the Effective Time any assets, businesses or interest in any assets or
businesses of Parent,
-45-
<PAGE> 51
the Company or any of their respective affiliates (or to consent to any sale or
agreement to sell or discontinuance or limitation by Parent or the Company, as
the case may be, of any of its assets or business) or (ii) to agree to any
conditions relating to, or changes or restriction in, the operations of any such
asset or business which, in either case, is reasonably likely to materially and
adversely impact the economic or business benefits to such party of the
transactions contemplated by this Agreement. In furtherance and not in
limitation of the covenants of the parties contained in this Section 6.6, if any
administrative or judicial action or proceeding, including any proceeding by a
private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as violative of any antitrust law,
each of the parties shall cooperate in all respects with each other and use its
reasonable best efforts to contest and resist any such action or proceeding, and
to have vacated, lifted, reversed or overturned any decree, judgment, injunction
or other order, whether temporary, preliminary or permanent, that is in effect
and that prohibits, prevents or restricts any transaction contemplated by this
Agreement, and to resolve any challenge or objection raised by any governmental
authority or private party.
Section 6.7 Access. Upon reasonable notice and subject to
restrictions contained in confidentiality agreements by which the Company is
bound and except where such access to a contract or agreement would cause the
Company to be in breach of such contract or agreement, the Company shall (and
shall cause each of its subsidiaries to) afford reasonable access to Parent's
officers, employees, legal counsel, accountants, financing sources and other
authorized representatives, during normal business hours throughout the period
prior to the Effective Time, to all of its properties, books, contracts,
commitments
-46-
<PAGE> 52
and records and, during such period, the Company shall (and shall cause each of
its subsidiaries to) furnish promptly to Parent (a) a copy of each report,
schedule and other document filed or received by it pursuant to the requirements
of federal or state securities laws and (b) all other information concerning its
business, properties and personnel as Parent or any of its financing sources may
reasonably request. The rights and obligations of each of Parent, Subsidiary and
the Company pursuant to the Confidentiality Agreement dated May 14, 1998 as to
the Company and May 27, 1998 as to Parent (the "Confidentiality Agreement"),
between Parent and the Company, is superseded by this Agreement and is of no
further force and effect. In the event of the termination of this Agreement for
any reason Parent and Subsidiary (i) shall promptly return to the Company, or
destroy, all originals, copies, reports and analyses of such information in
their possession, and (ii) shall not use any such information for any purposes
that would be competitive with or cause material harm to the Company.
Section 6.8 Publicity. The initial press release with respect
to the execution of this Agreement shall be a joint press release, and
thereafter the Company and Parent shall consult with each other in issuing any
press releases or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with any federal or
state governmental or regulatory agency or with any national securities exchange
with respect thereto, provided that nothing herein shall prevent any party
hereto from making any public statements or any filings deemed by such party in
good faith to be required by law based on the advice of counsel to the
respective party.
Section 6.9 Directors' and Officers' Indemnification;
Insurance.
-47-
<PAGE> 53
(a) From and after the Effective Time, Parent shall cause the
Surviving Corporation (the Parent and the Surviving Corporation individually, as
"Indemnifying Party" and collectively, the "Indemnifying Parties") to indemnify
and hold harmless each person who is now, or has been at any time prior to the
date hereof, an officer or director of the Company or any of its subsidiaries
(the "Indemnified Parties") against any losses, claims, damages, judgments,
settlements, liabilities, costs or expenses (including, without limitation,
reasonable attorneys' fees and out-of-pocket expenses) incurred in connection
with any threatened or actual claim, action, suit, proceeding or investigation
("Action") arising out of or pertaining to acts or omissions, or alleged acts or
omissions, (including, without limitation, in connection with the Offer, the
Merger and the other transactions contemplated by this Agreement), to the
fullest extent that the Company or such subsidiaries would have been permitted,
under applicable provisions of the DGCL and the certificate of incorporation or
by-laws of the Company or the charter or by-laws of such subsidiaries as in
effect as of the date of this Agreement, to provide such indemnification. The
Indemnifying Parties and the Indemnified Parties each agree to render to each
other such assistance as may reasonably be requested in order to insure the
proper and adequate defense of any Action.
(b) In connection with the foregoing provisions of Section
6.9(a), Parent shall cause the Surviving Corporation to advance expenses as
incurred to the fullest extent permitted under applicable law upon receipt from
the Indemnified Party to whom expenses are advanced of a written undertaking to
repay such advances as contemplated by Section 145(e) of the DGCL.
-48-
<PAGE> 54
(c) In the event of any Action;
(i) any Indemnified Party wishing to claim
indemnification under this Section 6.9 shall, upon becoming aware of
any such Action, promptly notify the Surviving Corporation and Parent
thereof (provided that the failure to provide such notice shall not
relieve the Parent or the Surviving Corporation of any liability or
obligation it may have to such Indemnified Party under this Section
6.9 unless such failure materially prejudices Parent or the Surviving
Corporation), and shall deliver to Parent and the Surviving
Corporation the undertaking contemplated by Section 145(e) of the
DGCL; and
(ii) Subject to receipt of the undertaking
contemplated by Section 145(e) of the DGCL, Parent shall cause the
Surviving Corporation to pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be
reasonably acceptable to Parent and the Surviving Corporation.
(d) Notwithstanding anything herein to the contrary, (A)
neither Parent nor the Surviving Corporation shall be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld); (B) neither Parent nor the Surviving Corporation shall
be liable under this Section 6.9 for the fees and expenses of more than one
counsel for all Indemnified Parties in any Action, except to the extent that, in
the opinion of counsel for the Indemnified Parties (a copy of which opinion
shall be delivered to Parent), two or more of such Indemnified Parties have
conflicting interests in the outcome of such Action such that additional counsel
is required to be retained by such Indemnified Parties under applicable
standards of professional conduct; (C) after notice from
-49-
<PAGE> 55
the Indemnifying Parties (or either of them) to the Indemnified Party of the
election by the Indemnifying Parties (or either of them) to assume the defense
of an Action, the Indemnifying Parties shall not be liable for any expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof; and (D) the Indemnifying Parties shall have the right to select their
own counsel with respect to any Action and shall have full control over the
defense of any Action the defense of which has been assumed by the Indemnifying
Parties (or either of them).
(e) Unless otherwise required by law, (i) at the Effective
Time, the certificate of incorporation and bylaws of the Surviving Corporation
shall contain provisions providing for exculpation of director and officer
liability and indemnification by the Surviving Corporation of the Indemnified
Parties not less favorable to the Indemnified Parties than those provisions
providing for exculpation of director and officer liability and indemnification
by the Company of the Indemnified Parties contained in the certificate of
incorporation and bylaws of the Company as in effect on the date of this
Agreement, and (ii) for a period of six years from the Effective Time, the
Surviving Corporation and its subsidiaries shall not amend, repeal or modify any
such provisions contained in their respective certificates of incorporation and
bylaws, or other organizational documents of such subsidiaries, to reduce or
adversely affect the rights of the Indemnified Parties thereunder in respect of
actions or omissions by them occurring at or prior to the Effective Time;
(f) The Company may purchase prior to the Effective Time, and
if not so purchased then after the Effective Time Parent shall cause the
Surviving Corporation to purchase, a six-year extended reporting period
endorsement ("reporting tail coverage") under
-50-
<PAGE> 56
the Company's existing directors' and officers' liability insurance coverage (or
as much coverage as can be obtained for a total not in excess of 175% of the
Current Premium), provided that such reporting tail coverage shall extend the
director and officer liability coverage in force as of the date hereof from the
Effective Time on terms, that in all material respects, are no less advantageous
to the intended beneficiaries thereof than the existing officers' and directors'
liability insurance. "Current Premium" shall mean the last annual premium paid
prior to the date hereof for the existing officers' and directors' liability
insurance, which the Company represents and warrants to be $162,500.
(g) Notwithstanding anything to the contrary set forth above,
with respect to Indemnified Parties who are officers and/or directors of former
subsidiaries or business units of the Company, (A) the provisions of this
Section 6.9 shall not apply to such officers and/or directors for any losses
incurred by any of them in any way arising out of, pertaining to or incurred in
connection with acts or omissions (or alleged acts or omissions) which acts or
omissions occurred after the date any such subsidiary or business unit was
disposed of by the Company and (B) in connection with actions arising out of,
pertaining to or incurred in connection with acts or omissions (or alleged acts
or omissions) which occurred prior to the date of any such subsidiary or
business unit was disposed of by the Company, any such Indemnified Party shall
first seek and exhaust all indemnification rights and remedies from the
subsidiary or the purchaser of such subsidiary or business unit (or any parent
of any of the foregoing) before such Indemnified Party may seek indemnification
from the Surviving Corporation under this Section 6.9; and
-51-
<PAGE> 57
(h) If during the six year period from and after the
Effective Time the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other entity and shall not be the
continuing or surviving entity of such consolidation or merger or (ii) transfers
or conveys all or substantially all of its properties and assets to any entity,
then, and in each such case, to the extent necessary, proper provision shall be
made so that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this Section 6.9. The parties acknowledge and agree
that to the extent that the Surviving Corporation fails to comply with its
indemnification obligations pursuant to this Section 6.9, Parent shall indemnify
and hold harmless each of the Indemnified Parties to the same extent as the
Surviving Corporation was required to indemnify such indemnified Parties
hereunder.
(i) This covenant is intended to be for the benefit of, and
shall be enforceable by, each of the Indemnified Parties and their respective
heirs and legal representatives.
Section 6.10 Registration Rights Agreement. The Company
represents and warrants that there is no outstanding request for registration of
Common Shares pursuant to the Registration Rights Agreement filed or
incorporated by reference as Exhibit 4.3 to the 1998 Annual Report, or any other
agreement. In the event of receipt of any such request, the Company will
immediately notify Parent of such request.
Section 6.11 Fair Price Statute. If any "fair price" or
"control share acquisition" statute or other similar statute, regulation or
provision shall become applicable to the transactions contemplated hereby, the
Company and the members of the Board of
-52-
<PAGE> 58
Directors of the Company shall use their reasonable efforts to grant such
approvals and take such actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to minimize the effects of such statute,
regulation or provision on the transactions contemplated hereby unless the Board
of Directors of the Company shall have determined in good faith, after receiving
advice from its outside counsel, that any such action could reasonably be
expected to be a breach of the directors' fiduciary duties under applicable law.
Section 6.12 Directors. Promptly upon the acquisition of a
majority of the outstanding Common Shares pursuant to the Offer, or otherwise,
so long as Parent owns a majority of the outstanding Common Shares Parent shall
be entitled upon written request to the Company, subject to applicable law, to
designate such number of directors, rounded down to the nearest whole number, to
the Board of Directors of the Company as will give Parent (or its affiliates)
representation on such Board of Directors equal to at least that number of
directors which equals the product of the total number of directors on the
Company's Board of Directors (giving effect to the directors elected pursuant to
this sentence) multiplied by the percentage that the sum of the number of Common
Shares so owned by Parent and Subsidiary bears to the number of such Common
Shares outstanding, and the Company shall, at such time, promptly use its best
efforts to cause the designees of Parent to be so elected, subject in all cases
to Section 14(f) of the Exchange Act, it being understood that the Company shall
have no obligation to comply with Section 14(f) until after the Offer is
completed. These efforts shall, if necessary, include efforts to obtain any
amendments to the by-laws of the Company regarding the number of directors, or
securing
-53-
<PAGE> 59
the resignation of directors, or both. The date, if any, on which a majority of
the Board of Directors consist of directors designated by Parent pursuant to
this Section 6.12 shall be hereinafter referred to as the "New Board Date." In
the event that Parent's designees are elected to the Company's Board of
Directors, until the Effective Time, the Company's Board of Directors shall have
at least three directors who are directors on the date hereof (the "Independent
Directors"), provided that, in such event, if the number of Independent
Directors shall be reduced below three for any reason whatsoever, any remaining
Independent Directors (or Independent Director, if there be only one remaining)
shall be entitled to designate persons to fill such vacancies who shall be
deemed to be Independent Directors for purposes of this Agreement or, if no
Independent Director then remains, the other directors shall designate three
persons to fill such vacancies who shall not be stockholders, affiliates or
associates of Parent or Subsidiary 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 are
elected to the Company's Board of Directors, after the acceptance for payment of
Common 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
(a) amend or terminate this Agreement by the Company, (b) exercise or waive any
of the Company's rights, benefits or remedies hereunder, or (c) extend the time
for performance of Parent's and Subsidiary's respective obligations hereunder.
-54-
<PAGE> 60
Section 6.13 Employee Benefits Matters.
(a) Commencing on the consummation of the Offer and
continuing until December 31, 1999, Parent shall cause the Company and the
Surviving Corporation to continue to provide to employees of the Company and its
subsidiaries (excluding employees, if any, covered by collective bargaining
agreements), as a whole, Employee Benefits (defined below) which, in the
aggregate, are no less favorable to such employees than the Employee Benefits
provided to such employees as of the date hereof.
(b) Parent and the Company agree that the Company and the
Surviving Corporation shall pay promptly or provide when due all compensation
and benefits required to be paid pursuant to (i) the terms of the individual
employment agreements listed on Schedule 6.13(b)(i) hereto and (ii) the terms of
the employee retention plan set forth in Schedule 6.13(b)(ii) hereto.
(c) For all Employee Benefits and the employee benefit plans
of Parent and its affiliates after the Effective Time, all service with the
Company or any of its subsidiaries prior to the Effective Time of employees
(excluding employees, if any, covered by collective bargaining agreements) shall
be treated as service with Parent and its affiliates for eligibility and vesting
purposes and for benefit accruals for purposes of severance and vacation pay to
the same extent that such service is taken into account by the Company and its
subsidiaries as of the date hereof, except to the extent such treatment will
result in duplication of benefits.
(d) From and after the Effective Time, Parent shall, and
shall cause the Surviving Corporation to, cause any pre-existing condition or
limitation and any eligibility waiting periods (to the extent such conditions,
limitations or waiting periods did not apply
-55-
<PAGE> 61
to the employees of the Company under the Employee Plans in existence as of the
date hereof) under any group health plans of Parent or any of its subsidiaries
to be waived with respect to employees of the Company and their eligible
dependents.
(e) "Employee Benefits" shall mean Employee Plans plus the
following benefits: severance policy for involuntary termination (other than for
cause) and vacation policy in effect on the date hereof with respect to
employees of the Company set forth in Schedule 6.13(e) hereto. Employee Benefits
shall not include Stock Option Plans, the Stock Purchase Plan and any other
plans or program not specifically included in the definition in the preceding
sentence.
(f) Nothing herein shall require the continued employment of
any person or prevent the Company or any of its subsidiaries and/or the
Surviving Corporation from taking any action or refraining from taking any
action which the Company or any of its subsidiaries could take or refrain from
taking prior to or after the Effective Time, including, without limitation, any
action the Company or any of its subsidiaries or the Surviving Corporation could
take to terminate any plan or Employee Benefits under its terms as in effect as
of the date hereof; provided, however, that it is understood by the parties that
this subsection 6.13(f) shall not relieve Parent of its obligations under
subsection 6.13(a).
ARTICLE VII.
Conditions
Section 7.1 Conditions to each Party's Obligations to Effect
the Merger. The respective obligations of Parent and Subsidiary on the one hand,
and the Company on the
-56-
<PAGE> 62
other, to effect the Merger are subject to the fulfillment, at or before the
Effective Time, of each of the following conditions:
(a) Stockholder Approval. If necessary to effect the Merger,
this Agreement and the Merger shall have been duly approved by the
holders of Common Shares in accordance with applicable law and the
certificate of incorporation and by-laws of the Company.
(b) Governmental Filings and Consents. All governmental
consents, orders and approvals legally required for the consummation
of the Merger and the transactions contemplated hereby shall have been
obtained and be in effect at the Effective Time, except where the
failure to obtain any such consent would not reasonably be expected to
have a material adverse effect on Parent (assuming the Merger had
taken place), and the waiting periods under the HSR Act shall have
expired or been terminated.
(c) Purchase of Common Shares. Subsidiary shall have accepted
for payment and purchased Common Shares pursuant to the Offer;
provided that this condition shall not be a condition to the
obligations of Parent or Subsidiary if Subsidiary shall have failed to
purchase Common Shares in violation of the terms hereof or of the
Offer.
(d) Injunction. No preliminary injunction or permanent
injunction or other order issued by any federal or state court of
competent jurisdiction in the United States prohibiting the
consummation of the Merger shall be in effect.
-57-
<PAGE> 63
ARTICLE VIII.
Termination and Abandonment
Section 8.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval by the
stockholders of the Company:
(a) by mutual consent of the Board of Directors of the Parent
and the Board of Directors of the Company;
(b) by action of the Board of Directors of the Parent or
action of the Board of Directors of the Company if at least that number
of Common Shares required by the Minimum Share Condition shall not have
been purchased in the Offer on or before April 30, 1999; provided,
however, that the Board of Directors of the Parent shall have no right
pursuant to this Section 8.1(b) to terminate this Agreement after the
purchase of Common Shares pursuant to the Offer; and provided, further,
that the right to terminate this Agreement pursuant to this Section
8.1(b) 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 the Offer to occur on or before the aforesaid date;
(c) by the Company if Subsidiary shall not have commenced the
Offer within five business days of the date of the initial public
announcement of the Offer or this Agreement;
(d) by either Parent or the Company if the Offer shall expire
or terminate in accordance with its terms without any Common Shares
having been purchased
-58-
<PAGE> 64
thereunder and, in the case of termination by the Parent, the
Purchaser under the Offer shall not have been required by the terms of
the Offer or this Agreement to purchase any Common Shares pursuant to
the Offer;
(e) by the Company if Parent or Subsidiary shall fail to
comply in any material respect with any of its covenants or agreements
required to be performed by it before the date of such termination and
such failure to comply shall not be cured within seven business days
following receipt by Parent from the Company of written notice of such
failure and demand for cure; or by Parent or Subsidiary if the Company
shall fail to comply in any material respect with any of its covenants
or agreements required to be performed by it before the date of such
termination, and such failure to comply shall not be cured within
seven business days following receipt by the Company from Parent or
Subsidiary of written notice of such failure and demand for cure;
(f) by either Parent, Subsidiary or the Company, if any court
of competent jurisdiction in the United States or other governmental
agency of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action restraining, permanently enjoining or
otherwise prohibiting the consummation of the Offer or the Merger, and
such order, decree, ruling or other action shall have become final and
non-appealable; or
(g) by the Company if the Company is prepared to enter into a
binding agreement to effect a transaction on the terms specified in a
Superior Proposal (defined below) and has given Parent written notice
to that effect; provided, however,
-59-
<PAGE> 65
that such termination under this Section 8.1(g) shall not be effective
until the Company has made payment to Parent of the Fee (as defined in
Section 8.3(a)) required to be paid pursuant to Section 8.3(a) and has
paid to Parent $750,000 for Expenses (as defined in Section 8.3(b)).
Parent hereby agrees to refund any excess of such $750,000 over actual
Expenses.
Section 8.2. Procedure and Effect of Termination. In the
event of termination and abandonment of the Merger by Parent, Subsidiary or the
Company pursuant to Section 8.1, written notice thereof shall forthwith be given
to the others, and this Agreement shall terminate and the Merger shall be
abandoned, without further action by any of the parties hereto. Subsidiary
agrees that any termination by Parent shall be conclusively binding upon
Subsidiary, whether given expressly on its behalf or not. If this Agreement is
terminated as provided herein, no party hereto shall have any liability or
further obligation to any other party to this Agreement, provided that any
termination shall be without prejudice to the rights of any party hereto arising
out of breach by any other party of any covenant or agreement contained in this
Agreement, and provided, further, that the obligations set forth in Section 8.3
shall in any event survive any termination.
Section 8.3. Fees and Expenses.
(a) In the event that:
(i) any person (including, without limitation, the
Company or any affiliate thereof) or group, other than the
Parent or any affiliate of the Parent, shall have become the
beneficial owner of more than 20% of the then outstanding
Common Shares and thereafter this Agreement shall have been
-60-
<PAGE> 66
terminated pursuant to Section 8.1(b) or 8.1(d) and within 12
months of such termination a Third Party Acquisition (as
hereinafter defined) for a per Common Share consideration
having a value greater than $16.50 shall occur with such
person or group, or an affiliate of any of them; or
(ii) any person or group shall have commenced,
publicly proposed or communicated to the Company a proposal
that is publicly disclosed for a tender or exchange offer for
more than 20% (or which, assuming the maximum amount of
securities which could be purchased, would result in any
person or group beneficially owning more than 20%) of the
then outstanding Common Shares or otherwise for the direct or
indirect acquisition of the Company or all or substantially
all of its assets for per Common Share consideration having a
value greater than $16.50 and (A) the Offer shall have
remained open for at least 20 business days, (B) the Minimum
Condition shall not have been satisfied and (C) this
Agreement shall have been terminated pursuant to Section
8.1(b) or 8.1(d); or
(iii) this Agreement is terminated pursuant to
Section 8.1(g); then the Company shall pay Parent promptly
(but in no event later than one business day after the first
of such events shall have occurred) a fee of $3,455,000 (the
"Fee"), which amount shall be payable in immediately
available funds, plus all Expenses; provided that, in the
case described in clause (ii) of this Section 8.3(a), if the
Board of Directors of the Company (A) shall not have
withdrawn or modified in a manner adverse to the Subsidiary
or the Parent its approval or recommendation
-61-
<PAGE> 67
of the Offer, this Agreement or the Merger, (B) shall not have
approved or recommended the proposal of the person or group referred
to in clause (ii) and (C) shall not have resolved to do any of the
foregoing, the Company shall pay to Parent on such termination all
Expenses and shall pay the Fee only if, within 12 months of such
termination, a Third Party Acquisition with such person or group
referred to in clause (ii), or an affiliate of any of them, shall
occur.
(b) "Expenses" means all out-of-pocket expenses and fees up
to a maximum of $750,000 in the aggregate (including, without
limitation, fees and expenses payable to all banks, investment banking
firms, other financial institutions and other persons and their
respective agents and counsel for arranging, committing to provide or
providing any financing or services for the Offer, the Merger and any
transactions contemplated thereby or structuring the transactions and
all fees of counsel, accountants, experts, consultants and soliciting
or information firms to Parent and Subsidiary, and all printing and
advertising expenses) actually incurred or accrued by either of them
or on their behalf in connection with the transactions, including,
without limitation, litigation related thereto and the financing
thereof, and actually incurred or accrued by banks, investment banking
firms, other financial institutions and other persons and assumed by
Parent or Subsidiary in connection with the negotiation, preparation,
execution and performance of this Agreement, the structuring and
financing of the Offer, the Merger and any transactions contemplated
thereby and any litigation and any financing commitments or agreements
relating thereto.
-62-
<PAGE> 68
(c) Except as set forth in this Section 8.3, all costs and
expenses incurred in connection with this Agreement and the Offer, the
Merger and any transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not any transaction is
consummated.
(d) In the event that the Company shall fail to pay the Fee
or any Expenses when due, the term "Expenses" shall be deemed to
include the costs and expenses actually incurred or accrued by Parent
and Subsidiary (including, without limitation, fees and expenses of
counsel) in connection with the collection under and enforcement of
this Section 8.3, together with interest on such unpaid Fee and
Expenses, commencing on the date that the Fee or such Expenses became
due, at a rate equal to the rate of interest publicly announced by The
First National Bank of Chicago, from time to time, in the City of
Chicago, as such bank's Prime Rate plus 1.00%.
(e) "Third Party Acquisition" means the occurrence of any of
the following events: (i) the acquisition of the Company by merger,
consolidation or other business combination transaction by any person
other than Parent, Subsidiary or any affiliate of either of them (a
"Third Party"); (ii) the acquisition by any Third Party of, or any
divestiture or other transaction resulting in the Company owning less
than, 50% or more (in book value or market value) of the total assets
of the Company and its subsidiaries, taken as a whole; (iii) the
acquisition by a Third Party of 50% or more of the outstanding Common
Shares whether by tender offer, exchange offer or otherwise; (iv) the
adoption by the Company of a plan of liquidation or a plan of
-63-
<PAGE> 69
recapitalization or the declaration or payment of an extraordinary
dividend; (v) the repurchase by the Company or any of its subsidiaries
of 50% or more of the outstanding Common Shares; or (vi) a letter of
intent or similar instrument or other agreement between the Company
and a Third Party, or the public announcement by the Company of the
Company's intention or plans, to effect any of the events referred to
in clauses (i), (ii), (iii), (iv) or (v).
(f) "Superior Proposal" shall mean a bona fide proposal made
by a Third Party to acquire a majority or more of the outstanding
Common Shares pursuant to a tender offer or a merger, or to purchase
all or substantially all of the assets of the Company, on terms which
a majority of the Board of Directors of the Company determines in its
good faith judgment (based on its financial and legal advisors) to be
more favorable to the Company and its stockholders from a financial
point of view than the transactions contemplated by this Agreement.
ARTICLE IX.
Miscellaneous
Section 9.1 Amendment. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto; provided, however, that after approval of the Merger by the stockholders
of the Company no amendment may be made which decreases the amount per Common
Share to be received pursuant to the Merger or otherwise adversely affects the
stockholders of the Company without the further approval of such stockholders.
-64-
<PAGE> 70
Section 9.2 Waiver. At any time prior to the Effective Time,
whether before or after any meeting of the Company's stockholders as referred to
herein, any party hereto may (a) in the case of Parent, extend the time for the
performance of any of the obligations or other acts of the Company or, subject
to the provisions contained in Section 9.1, waive compliance with any of the
agreements of the Company or with any conditions to the obligations of Parent,
or (b) in the case of the Company, extend the time for the performance of any of
the obligations or other acts of Parent or Subsidiary, or, subject to the
provisions contained in Section 9.1, waive compliance with any of the agreements
of Parent or Subsidiary or with any conditions to its own obligations. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party by a duly authorized officer.
Section 9.3 Special Fees of the Company. The Company's fee
arrangement with its investment bankers, in the form delivered previously to
Parent, shall not be modified or amended prior to the Effective Time, without
the consent of Parent. The Company represents and warrants that no potential
purchaser (other than Parent and Subsidiary) is entitled to expenses or any
"break-up," "topping" or other similar fee as a result of the execution and
delivery of this Agreement or the transactions contemplated hereby.
Section 9.4 Counterparts. For the convenience of the parties
hereto, this Agreement may be executed in any number of counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
shall together constitute the same agreement.
-65-
<PAGE> 71
Section 9.5 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware without
regard to its rules of conflict of laws. Each of the Company, Parent and
Subsidiary hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Delaware and the United
States of America located in the State of Delaware (the "Delaware Courts") for
any litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any litigation relating thereto
except in such courts), waives any objection to the laying of venue of any such
litigation in the Delaware Courts and agrees not to plead or claim in any
Delaware Court that such litigation brought therein has been brought in an
inconvenient forum. Each of the parties hereto agrees, (a) to the extent such
party is not otherwise subject to service of process in the State of Delaware,
to appoint and maintain an agent in the State of Delaware as such party's agent
for acceptance of legal process, and (b) that service of process may also be
made on such party by prepaid certified mail with a proof of mailing receipt
validated by the United States Postal Service constituting evidence of valid
service. Service made pursuant to (a) or (b) above shall have the same legal
force and effect as if served upon such party personally within the State of
Delaware. For purposes of implementing the parties' agreement to appoint and
maintain an agent for service of process in the State of Delaware, each such
party does hereby appoint The Corporation Trust Company, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801, as such agent.
Section 9.6 Notices. Any notice, request, instruction or
other document to be given hereunder by any party to the others shall be in
writing and delivered personally
-66-
<PAGE> 72
or sent by telecopier or telefax or overnight courier or registered or certified
mail, postage and charges prepaid, (and deemed given on receipt) if to Parent or
Subsidiary, addressed to Parent or Subsidiary, as the case may be, at Illinois
Tool Works Inc., 3600 West Lake Avenue, Glenview, Illinois 60025-5811,
Attention: Corporate Secretary (with a copy to Jenner & Block, One IBM Plaza,
Chicago, Illinois 60611, Attention: Charles J. McCarthy, Ltd.), and if to the
Company, addressed to the Company at Trident International, Inc., Attention:
Elaine A. Pullen, President and Chief Executive Officer (with a copy to Goodwin,
Procter & Hoar LLP, Exchange Place, Boston, MA 02109, Attention: John J. Egan
III, P.C.), or to such other persons or addresses as may be designated in
writing by the party to receive such notice.
Section 9.7 Entire Agreement, etc. This Agreement constitutes
the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties, with respect to the
subject matter hereof.
Section 9.8 Definition of "Subsidiary". When a reference is
made in this Agreement to a subsidiary of a party, the word "subsidiary" means
any corporation more than 50% of the outstanding voting securities of which are
directly or indirectly owned by such party or any joint venture or partnership
in which such party owns a 50% or more equity interest.
Section 9.9 Obligation of Parent. Whenever this Agreement
requires Subsidiary to take any action, such requirement shall be deemed to
include the undertaking on the part of Parent to cause Subsidiary to take such
action.
-67-
<PAGE> 73
Section 9.10 Captions. The Article, section and paragraph
captions herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to modify or otherwise affect any of the
provisions hereof.
Section 9.11 Survival. The representations and warranties and
agreements in this Agreement will terminate at the Effective Time or the earlier
termination of this Agreement pursuant to Section 8.1, as the case may be,
provided that if the Merger is consummated, the agreements of the Company,
Parent and Subsidiary contained in Sections 2.4, 4.2 (but only to the extent
that such section expressly relates to action to be taken after the Effective
Time), 4.3, 4.4, 4.6, 6.9, 6.12, 6.13 and 8.2 shall survive the consummation of
the Merger, and the provisions of Section 8.3 will in all events survive any
termination of this Agreement.
Section 9.12 Parties in Interest; Assignment. Except for
Section 6.9 (which is intended to be for the benefit of directors and officers
to the extent contemplated thereby), this Agreement is not intended to nor will
it confer upon any other person (other than the parties hereto) any rights or
remedies. Except as otherwise expressly provided herein, this Agreement is
binding upon and is solely for the benefit of the parties hereto and their
respective successors, legal representatives and assigns. Subsidiary shall have
the right (a) to assign to Parent or any direct or indirect wholly-owned
subsidiary of Parent any and all rights and obligations of Subsidiary under this
Agreement, including without limitation the right to substitute in its place
Parent or such a subsidiary as one of the constituent corporations in the Merger
(such subsidiary assuming all of the obligations of Subsidiary in connection
with the Merger), provided that any such assignment will not relieve Parent
-68-
<PAGE> 74
or Subsidiary from any of its obligations hereunder and (b) to transfer to
Parent or to any direct or indirect wholly-owned subsidiary of Parent the right
to purchase Common Shares tendered pursuant to the Offer, provided that any such
transfer will not relieve Parent or Subsidiary from any of its obligations
hereunder.
Section 9.13 Enforcement of the Agreement. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties hereto will
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
Section 9.14 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party hereto. Upon any such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will 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 to
the end that the transactions contemplated by this Agreement are consummated to
the extent possible.
-69-
<PAGE> 75
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by a duly authorized officer of each of the parties hereto on the date
first hereinabove written.
TRIDENT INTERNATIONAL, INC.
By
-------------------------------
Its
------------------------------
ILLINOIS TOOL WORKS INC.
By
-------------------------------
Its
------------------------------
ITW ACQUISITION INC.
By
-------------------------------
Its
------------------------------
-70-
<PAGE> 76
EXHIBIT A
TENDER OFFER CONDITIONS
The terms with initial capitals not otherwise defined in this
Exhibit A shall have the meanings set forth in the attached Agreement and Plan
of Merger (the "Agreement").
Notwithstanding any other provision of the Offer and subject
to the terms of the Agreement, and in addition to the conditions that (i) Common
Shares constituting not less than a majority of all Common Shares outstanding on
a fully diluted basis are validly tendered (and not withdrawn) prior to the
Expiration Date (the "Minimum Share Condition") and (ii) all applicable waiting
periods under the HSR Act having expired or been terminated, Parent and
Subsidiary (collectively referred to herein as the "Purchaser") shall not be
required to accept for payment, purchase, or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) (relating to the Purchaser's
obligation to pay for or return tendered Common Shares after termination of the
offer), to pay for any Common Shares tendered, and may postpone the purchase of,
or, subject to the restriction set forth above, payment for Common Shares
tendered and to be purchased by it, if at any time prior to the time of
acceptance for payment of any such Common Shares, any of the following events
shall occur:
(a) there shall be any statute, rule, regulation or order
promulgated, enacted, entered or enforced that is applicable to the
Offer or the Merger by any United States federal or state court,
legislative body or governmental agency or other regulatory
administrative agency or commission of competent jurisdiction (each a
A-1-
<PAGE> 77
"Governmental Authority"), (i) restraining or prohibiting the making
or consummation of the Offer or the transactions contemplated by the
Agreement; (ii) prohibiting or restricting Purchaser's (or any of its
affiliates) ownership or operation of all or any material portion of
the Company's business or assets; (iii) imposing material limitations
on the ability of Purchaser effectively to acquire or to hold or to
exercise full rights of ownership of the Common Shares, including,
without limitation, the right to vote the Common Shares purchased by
Purchaser on all matters properly presented to the stockholders of the
Company; (iv) requiring divestiture by Purchaser of any assets or of
any Common Shares; or (v) making the acceptance for payment or payment
for the Common Shares or consummation of the Merger illegal or
prohibiting consummation of the Offer or the Merger.
(b) any action or proceeding instituted and pending by a
Governmental Authority seeking to effect any of the activity in clause
(a) above; or
(c) there shall have occurred any change concerning the
Company and its subsidiaries taken as a whole which, in the good faith
judgment of the Purchaser, has had, or is reasonably expected to have
prior to December 31, 1999, a material adverse effect on the business,
financial condition or results of operation ("Condition") of the
Company and its subsidiaries taken as a whole (other than any changes
generally affecting the industries in which the Company operates,
including changes due to actual or proposed changes in law or
regulations, or changes relating to or arising from the transactions
contemplated by this Agreement, including the change in control
contemplated hereby), it being expressly understood that the term
A-2-
<PAGE> 78
"material adverse effect" for purposes of the Offer Conditions shall
mean a material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, with the parties expressly intending that the term "material
adverse effect" for purposes of the Offer Conditions be construed as
an effect which is greater than the definition of "Material Adverse
Effect" as set forth in Section 5.2(a) of the Agreement, based on the
applicable facts and circumstances; or
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York
Stock Exchange, the Nasdaq Stock Market, the American Stock Exchange
or in the United States over-the-counter market which shall continue
for at least three business days; or (ii) the declaration of a banking
moratorium or any suspension of payments by United States governmen
tal authorities in respect of banks in the United States which shall
continue for at least three business days; or
(e) there shall have occurred the commencement or escalation
of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, and
having a material adverse effect on the Offer or the Merger or the
Condition of the Company and its subsidiaries taken as a whole; or
(f) any representation or warranty of the Company in the
Agreement shall have been untrue as of the date of the Agreement or
shall have become untrue prior to acceptance for payment or payment
for Common Shares which untrue representations or warranties, if
accurately stated, would have revealed matters
A-3-
<PAGE> 79
materially adverse to the Condition of the Company and its
subsidiaries, taken as a whole, or the Company shall have failed to
perform or breached any of its covenants or agreements contained in
the Agreement, which failure, breach or breaches, would materially
impair or delay the ability of Subsidiary to consummate the Offer or
the ability of Parent, Subsidiary and the Company to effect the
Merger; or
(g) one or more of the following events shall have occurred
after the date of the Agreement or the Purchaser shall have for the
first time become aware after the date of the Agreement of the
occurrence of any of the following on or prior to the date of the
Agreement: (1) any person, corporation, partnership or other entity or
group (a "Person"), other than the Purchaser or its affiliates,
acquires or becomes the beneficial owner of more than 20% of the
outstanding Common Shares (other than acquisitions for bona fide
arbitrage purposes and acquisitions by Persons who are parties to any
agreement with the Purchaser with respect to their Common Shares); (2)
any Person (other than the Purchaser or its affiliates) shall have
commenced a tender or exchange offer for more than 20% of the
outstanding Common Shares or publicly proposed a Third Party
Acquisition; (3) the Company enters into, or announces that it
proposes to enter into, an agreement, including, without limitation,
an agreement in principle, providing for a merger or other business
combination involving the Company or a material portion of the assets,
business or operations of the Company and its subsidiaries taken as a
whole (other than the transactions contemplated by the Agreement), and
the Company withdraws its recommendation of the Offer or Merger; (4)
any Person (other than the Purchaser
A-4-
<PAGE> 80
or its affiliates) is granted any option or right, conditional or
otherwise, to acquire or otherwise become the beneficial owner of
Common Shares which, together with all Common Shares beneficially
owned by such Person, results or would result in such Person being the
beneficial owner of more than 20% of the outstanding Common Shares; or
(5) subsequent to the commencement of the Offer there is a public
announcement with respect to a plan or intention by the Company or any
Person, other than the Purchaser or its affiliates, to effect any of
the foregoing transactions. For purposes of this subparagraph (g), the
terms "group" and "beneficial owner" shall be defined by reference to
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder; or
(h) the Agreement shall have been terminated in accordance
with its terms.
The foregoing conditions other than the Minimum Share
Condition are for the sole benefit of the Purchaser and may be asserted by the
Purchaser or may be waived by the Purchaser in whole or in part at any time and
from time to time in its sole discretion. The failure by the Purchaser 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 and may be
asserted at any time and from time to time. Should the Offer be terminated due
to any of the foregoing provisions, all tendered Common Shares not theretofore
accepted for payment shall forthwith be returned to the tendering stockholders.
A-5-
