<PAGE> 1
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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
----------
O'SULLIVAN CORPORATION
(Name of Subject Company [Issuer])
TGC ACQUISITION CORPORATION
THE GEON COMPANY
(Bidders)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
688605104
(CUSIP Number of Class of Securities)
----------
Gregory L. Rutman, Esq.
TGC Acquisition Corporation
c/o The Geon Company
One Geon Center
Avon Lake, Ohio 44012-0122
Telephone: (440) 930-1000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
copies to:
Roy L. Turnell, Esq.
Thompson Hine & Flory LLP
3900 Key Center
127 Public Square
Cleveland, Ohio 44114-1216
Telephone: (216) 566-5500
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
$194,725,130.25 $38,945.03
================================================================================
* For purposes of calculating fee only. This amount assumes the purchase at a
purchase price of $12.25 per share of an aggregate of 15,895,929 shares
of common stock. The amount of the filing fee, calculated in accordance
with Rule 0-11(d) promulgated under the Securities Exchange Act of 1934, as
amended, equals 1/50th of one percent of the aggregate of the cash offered
by the bidders for the shares of the issuer.
[ ] Check box if any part of the fee is offset as provided 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: NONE Filing party: N/A
Form or registration no: N/A Date filed: N/A
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<PAGE> 2
This Schedule 14D-1 Tender Offer Statement (this "Statement") relates
to the offer by TGC Acquisition Corporation, a Virginia corporation (the
"Purchaser") and a wholly owned subsidiary of The Geon Company, a Delaware
corporation ("Geon"), to purchase all of the outstanding shares of common stock,
par value $1.00 per share (the "Shares"), of O'Sullivan Corporation, a Virginia
corporation ("O'Sullivan"), at a price of $12.25 per Share, net to the seller
in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated June 8,
1999 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"). Copies
of the Offer to Purchase and the Letter of Transmittal are annexed hereto as
Exhibits (a)(2) and (a)(3), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is O'Sullivan Corporation, a
Virginia corporation with its principal executive offices located at 1944 Valley
Avenue, Winchester, Virginia 22601.
(b) The information set forth in the section of the Offer to Purchase
entitled "To the Shareholders of O'Sullivan Corporation" is incorporated herein
by reference.
(c) The information set forth in Section 6 of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a-d, g) This Statement is being filed on behalf of Geon and the
Purchaser for purposes of Schedule 14D-1. The information set forth in the
section of the Offer to Purchase entitled "To the Shareholders of O'Sullivan
Corporation" and Section 9 and Schedule I of the Offer to Purchase is
incorporated herein by reference.
(e-f) During the last five years, neither Geon nor the Purchaser, nor,
to the best knowledge of Geon and the Purchaser, the persons listed in Schedule
I of the Offer to Purchase, has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
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-b) The information set forth in the section of the Offer to Purchase
entitled "To the Shareholders of O'Sullivan Corporation" and Sections 9, 11, 13
and 14 and Schedule I 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 10 of the Offer to Purchase
is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a-b) The information set forth in the section of the Offer to Purchase
entitled "To the Shareholders of O'Sullivan Corporation" and Sections 11, 12,
13, 14 and 15 of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Sections 11, 12, 13, 14 and 15 of the
Offer to Purchase is incorporated herein by reference.
(d-e) The information set forth in Sections 6, 7, 12, 13 and 15 of the
Offer to Purchase is incorporated herein by reference.
(f-g) The information set forth in Sections 7, 12, 13 and 15 of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the section of the Offer to Purchase
entitled "To the Shareholders of O'Sullivan Corporation" and Section 9 and
Schedule I of the Offer to Purchase is incorporated herein by reference.
(b) The information set forth in the section of the Offer to Purchase
entitled "To the Shareholders of O'Sullivan Corporation" and Section 9 and
Schedule I of the Offer to Purchase is incorporated herein by reference.
<PAGE> 3
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the section of the Offer to Purchase
entitled "To the Shareholders of O'Sullivan Corporation" and Sections 9, 11, 12,
13, 14 and 15 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 section of the Offer to Purchase
entitled "To the Shareholders of O'Sullivan Corporation" and Sections 11 and 18
of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 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 shareholder of O'Sullivan whether to sell, tender or hold
Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Sections 9, 11, 12, 13, 14 and 15
of the Offer to Purchase is incorporated herein by reference.
(b-c) The information set forth in Sections 15, 16 and 17 of the
Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Sections 7, 12 and 15 of the Offer to
Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter
of Transmittal is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Press Release, dated June 2, 1999.
(a)(2) Offer to Purchase, dated June 8, 1999.
(a)(3) Letter of Transmittal, dated June 8, 1999.
(a)(4) Notice of Guaranteed Delivery.
(a)(5) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees, dated June 8, 1999.
(a)(6) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees, dated June 8, 1999.
(a)(7) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8) Summary Advertisement, dated June 8, 1999.
(b)(1) Credit Agreement, dated as of August 16, 1994, by and among The
Geon Company, Citibank, N.A., as agent, NationsBank of North
Carolina, N.A., as co-agent, and various other financial
institutions (incorporated by reference to Exhibit 10.8 of The
Geon Company's Annual Report on Form 10-K for the year ended
December 31, 1996).
(b)(2) Amendment No. 1 to Credit Agreement, dated as of December 8, 1994,
by and among The Geon Company, Citibank, N.A., as agent,
NationsBank of North Carolina, N.A., as co-agent, and various
other financial institutions (incorporated by reference to Exhibit
10.8a of The Geon Company's Annual Report on Form 10-K for the
year ended December 31, 1996).
(b)(3) Amendment No. 2 to Credit Agreement, dated as of November 9, 1995,
by and among The Geon Company, Citibank, N.A., as agent,
NationsBank of North Carolina, N.A., as co-agent, and various
other financial institutions (incorporated by reference to Exhibit
10.8b of The Geon Company's Annual Report on Form 10-K for the
year ended December 31, 1996).
(b)(4) Amendment No. 3 to Credit Agreement, dated as of December 19,
1996, by and among The Geon Company, Citibank, N.A., as agent,
NationsBank of North Carolina, N.A., as co-agent, and various
other financial institutions (incorporated by reference to Exhibit
10.8c of The Geon Company's Annual Report on Form 10-K for the
year ended December 31, 1996).
(b)(5) Amended and Restated 364-Day Credit Agreement, dated as of May
27, 1999, by and among The Geon Company, Geon Canada Inc.,
Citibank, N.A., as administrative agent, NationsBank, N.A.,
as documentation agent, and various other financial institutions.
(c)(1) Confidentiality Agreement, dated December 16, 1998, by and
between The Geon Company and O'Sullivan Corporation.
(c)(2) Agreement and Plan of Merger, dated June 2, 1999, by and among
The Geon Company, TGC Acquisition Corporation and O'Sullivan
Corporation.
(c)(3) Share Tender Agreement, dated June 2, 1999, by and among The Geon
Company, TGC Acquisition Corporation and Arthur H. Bryant II.
(c)(4) Share Tender Agreement, dated June 2, 1999, by and among The Geon
Company, TGC Acquisition Corporation and Magalen O. Bryant.
(c)(5) Share Tender Agreement, dated June 2, 1999, by and among The Geon
Company, TGC Acquisition Corporation and John C. O. Bryant.
(d) None.
(e) Not applicable.
(f) None.
<PAGE> 4
SIGNATURES
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.
Dated: June 8, 1999 TGC ACQUISITION CORPORATION
By: /s/ GREGORY L. RUTMAN
-----------------------------------
Name: Gregory L. Rutman
Title: Vice President, General Counsel,
Secretary and Treasurer
THE GEON COMPANY
By: /s/ GREGORY L. RUTMAN
--------------------------------
Name: Gregory L. Rutman
Title: Vice President, General Counsel,
Secretary and Assistant Treasurer
<PAGE> 5
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT NAME
- ------ ------------
(a)(1) Press Release, dated June 2, 1999.
(a)(2) Offer to Purchase, dated June 8, 1999.
(a)(3) Letter of Transmittal, dated June 8, 1999.
(a)(4) Notice of Guaranteed Delivery.
(a)(5) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees, dated June 8, 1999.
(a)(6) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees, dated June 8, 1999.
(a)(7) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(8) Summary Advertisement, dated June 8, 1999.
(b)(1) Credit Agreement, dated as of August 16, 1994, by and among
The Geon Company, Citibank, N.A., as agent, NationsBank of
North Carolina, N.A., as co-agent, and various other financial
institutions (incorporated by reference to Exhibit 10.8 of The
Geon Company's Annual Report on Form 10-K for the year ended
December 31, 1996).
(b)(2) Amendment No. 1 to Credit Agreement, dated as of December 8,
1994, by and among The Geon Company, Citibank, N.A., as agent,
NationsBank of North Carolina, N.A., as co-agent, and various
other financial institutions (incorporated by reference to
Exhibit 10.8a of The Geon Company's Annual Report on Form 10-K
for the year ended December 31, 1996).
(b)(3) Amendment No. 2 to Credit Agreement, dated as of November 9,
1995, by and among The Geon Company, Citibank, N.A., as agent,
NationsBank of North Carolina, N.A., as co-agent, and various
other financial institutions (incorporated by reference to
Exhibit 10.8b of The Geon Company's Annual Report on Form 10-K
for the year ended December 31, 1996).
(b)(4) Amendment No. 3 to Credit Agreement, dated as of December 19,
1996, by and among The Geon Company, Citibank, N.A., as agent,
NationsBank of North Carolina, N.A., as co-agent, and various
other financial institutions (incorporated by reference to
Exhibit 10.8c of The Geon Company's Annual Report on Form 10-K
for the year ended December 31, 1996).
(b)(5) Amended and Restated 364-Day Credit Agreement, dated as of
May 27, 1999, by and among The Geon Company, Geon Canada
Inc., Citibank, N.A., as administrative agent, NationsBank,
N.A., as documentation agent, and various other financial
institutions.
(c)(1) Confidentiality Agreement, dated December 16, 1998, by and
between The Geon Company and O'Sullivan Corporation.
(c)(2) Agreement and Plan of Merger, dated June 2, 1999, by and
among The Geon Company, TGC Acquisition Corporation and
O'Sullivan Corporation.
(c)(3) Share Tender Agreement, dated June 2, 1999, by and among The
Geon Company, TGC Acquisition Corporation and Arthur H. Bryant
II.
(c)(4) Share Tender Agreement, dated June 2, 1999, by and among The
Geon Company, TGC Acquisition Corporation and Magalen O.
Bryant.
(c)(5) Share Tender Agreement, dated June 2, 1999, by and among The
Geon Company, TGC Acquisition Corporation and John C. O.
Bryant.
<PAGE> 1
Exhibit (a)(1)
[The Geon Company Letterhead]
CONTACT: Media & Investor Contact: Dennis Cocco, Vice President, Corporate &
Investor Affairs of the Geon Company, ###-##-####; or Bryant Nickerson,
Treasurer, CFO and Secretary of O'Sullivan Corporation, 540-667-6666
GEON ESTABLISHES NEW GROWTH PLATFORM WITH ACQUISITION OF O'SULLIVAN CORPORATION
CLEVELAND, and WINCHESTER, Va., June 2 -- The Geon Company (NYSE:GON) and
O'Sullivan Corporation (Amex:OSL) jointly announced today an agreement by Geon
to acquire O'Sullivan, a leading producer of engineered polymer films for the
automotive and industrial markets. The two companies have signed a definitive
merger agreement under which Geon will commence a cash tender offer to acquire
all of the outstanding shares of O'Sullivan for $12.25 per share. The merger
agreement has been unanimously approved by the boards of directors of both
companies. In addition, members of the Bryant family who control more than 26
percent of the O'Sullivan shares have committed themselves to tender their
shares to Geon as contemplated by the definitive agreement.
The tender offer of $12.25 in cash for each O'Sullivan share represents a total
transaction value of approximately $191 million. The objective of both
companies is to complete the acquisition of shares by Geon by the middle of
July. The tender offer is subject to normal regulatory review and satisfaction
of customary closing conditions, including the acquisition by Geon of at least
70 percent of the outstanding O'Sullivan stock. The tender offer is not
conditioned upon financing.
Geon plans to fund the purchase initially through existing lines of credit and
available cash. Geon expects this acquisition to be immediately accretive to
earnings by approximately $0.20 per share annually, before synergies and after
goodwill. O'Sullivan's cash balance of approximately $30 million will be used
to reduce the cost of the transaction.
O'Sullivan, with 1998 sales totaling $163 million, has developed particular
strength in vinyl film products and is recognized as the technology and quality
leader in the markets it serves.
"Our strategy is to become the leader in the value-added polymer services and
technology industry," said Thomas A. Waltermire, Geon president and chief
executive officer. "Acquiring O'Sullivan marks a milestone in positioning Geon
as a key player in the engineered film market and establishes a new growth
platform for us. The combination will create earnings leverage through raw
material, operating, and sales and marketing synergies."
Geon projects revenues in excess of $1 billion in 1999, before acquisitions, and
is committed to doubling its size during the next two years through a
combination of organic growth and acquisition.
"We have made it quite clear that we intend to create a multi-billion-dollar,
closely linked network of performance polymer businesses," Waltermire said.
"O'Sullivan is an excellent fit with Geon's recently acquired Burlington, New
Jersey, calendered film business. The two businesses, which serve complementary
markets, together will rank as the North American leader in value-added,
flexible vinyl films. Combining O'Sullivan's strengths in film technology with
Geon's strengths in polymer compounding and operations will create a stronger
company with enhanced value and growth opportunities."
The agreement by O'Sullivan corporation to enter into the transaction with Geon
is the culmination of detailed process, started by O'Sullivan's board of
directors in August 1998, to explore the full range of strategic alternatives
to enhance shareholder value. An independent financial advisor provided
O'Sullivan's board with a fairness opinion in conjunction with the transaction.
<PAGE> 2
"O'Sullivan's board believes that the transaction is in the best interest of
its stockholders, as it provides them with an attractive value and immediate
liquidity for their shares, while positioning our company with a strong base
for future growth," said J. Shep Campbell, O'Sullivan president and chief
executive officer. "Geon has been one of our most valued raw material suppliers
over the years. Its technology has enabled us to provide our customers
world-class products for their markets. Combining Geon's and O'Sullivan's
technical and operating strengths will create unique opportunities that will
benefit our customers."
Headquartered in Winchester, Virginia, O'Sullivan has approximately 940
employees and four manufacturing sites, located in Lebanon, Pennsylvania;
Newton Upper falls, Massachusetts; Winchester; and Yerington, Nevada.
O'Sullivan has averaged 9.3 percent operating income to sales in the
three-year period from 1996 through 1998. The company had sales of $163.2
million and net income of $11.6 million in 1998. Last month, O'Sullivan
reported first-quarter net sales of $42.9 million and net income of $3.1
million.
Calendering, the heart of O'Sullivan's business, is the process for creating
thin-gauge films. O'Sullivan uses the calendering process in conjunction with
painting and laminating to provide premium-quality sheeting that covers
dashboards and door panels on many of today's best-selling passenger cars,
light trucks, sport utility vehicles and minivans. O'Sullivan ranks as North
America's leading supplier to the automotive industry of single-ply vinyl
sheeting for vacuum-formed instrument panels. Customers include Ford, Chrysler,
General Motors, Honda, Toyota, Mazda and Saturn.
In the industrial and consumer segments, O'Sullivan serves a wide range of
markets including stationery/office products, home furnishings, geomembrane,
medical bags and pouches, pool liners, vinyl flooring and many others.
The Geon Company is leading North American-based polymer services and
technology company with operations in vinyl compounds, specialty vinyl resins
and formulations and other value-added products and services. Headquartered in
Avon Lake, Ohio, The Geon Company and its subsidiaries employ nearly 2,000
people and have 19 manufacturing plants in the United States, Canada, England
and Australia, and joint ventures in the United States, Canada, England,
Australia and Singapore. Information on the Company's products and services, as
well as news releases, EDGAR filings, Form 10-K, 10-Q, etc. is available on the
Internet at http://www.geon.com.
Private Securities Litigation Reform Act of 1995
This press release contains statements concerning trends and other
forward-looking information affecting or relating to Geon and O'Sullivan and
their industry that are intended to qualify for the protections afforded
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. There are many important factors that could cause actual results to
differ materially from those in the forward-looking statements. Many of these
important factors are outside the control of Geon and O'Sullivan. Changes in
market conditions, including competitive factors, and changes in government
regulations, could cause actual results to differ materially from the
expectations of Geon and O'Sullivan. No assurance can be provided as to any
future financial results. Among the potentially negative factors that could
cause actual results to differ materially from those in the forward-looking
statements are (a) unanticipated costs or difficulties and delays related to
completion of the proposed transaction, and (b) inability to complete the
proposed transaction.
<PAGE> 1
EXHIBIT (a)(2)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
O'SULLIVAN CORPORATION
BY
TGC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
THE GEON COMPANY
AT
$12.25 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN
DAYLIGHT SAVING TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF O'SULLIVAN HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF O'SULLIVAN'S SHAREHOLDERS, AND RECOMMENDS THAT THE
SHAREHOLDERS OF O'SULLIVAN ACCEPT THE OFFER AND TENDER THEIR SHARES.
The Offer is conditioned upon (a) there being validly tendered and not
withdrawn a number of Shares which represents at least seventy percent (70%) of
the Shares outstanding on a fully diluted basis on the date of purchase, (b) the
expiration or termination of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder, and (c) the satisfaction of the other conditions to the
Offer set forth in Section 16. The Offer is not conditioned on the receipt of
financing.
------------------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either:
- complete and sign the Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of
Transmittal, have such shareholder's signature thereon
guaranteed if required by Instruction 1 to the Letter of
Transmittal, mail or deliver the Letter of Transmittal (or such
facsimile) and any other required documents to the Depositary
and either deliver the certificates for such Shares to the
Depositary along with the Letter of Transmittal (or facsimile)
or deliver such Shares pursuant to the procedure for book-entry
transfer set forth in Section 2; or
- request such shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for
such shareholder.
A shareholder having Shares 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 such shareholder
desires to tender such Shares.
If a shareholder desires to tender Shares and such shareholder's
certificates for Shares are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such shareholder's tender may be effected by following the procedure for
guaranteed delivery set forth in Section 2.
Questions and requests for assistance may be directed to Morrow & Co.,
Inc., 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, the Letter of Transmittal, the Notice of Guaranteed Delivery and other
related materials may be obtained from the Information Agent or from brokers,
dealers, commercial banks and trust companies.
------------------------------------
The Dealer Manager for the Offer is:
McDonald Investments Inc.
A KEYCORP COMPANY
June 8, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 1. Terms of the Offer.......................................... 2
Section 2. Procedures for Tendering Shares............................. 3
Section 3. Withdrawal Rights........................................... 6
Section 4. Acceptance of Shares for Payment and Payment to
Shareholders................................................ 6
Section 5. Federal Income Tax Consequences............................. 7
Section 6. Historical Price and Dividend Information on the Shares..... 8
Section 7. Effect of the Offer on the Market for the Shares............ 8
Section 8. Information Concerning O'Sullivan........................... 9
Section 9. Information Concerning Geon and the Purchaser............... 10
Section 10. Geon's Source and Amount of Funds to Complete the Offer..... 13
Section 11. Background of the Offer..................................... 13
Section 12. Purpose of the Offer; Geon's Plans for O'Sullivan........... 15
Section 13. The Merger Agreement........................................ 16
Section 14. The Share Tender Agreements................................. 23
Section 15. The Merger.................................................. 24
Section 16. Conditions to the Completion of the Offer by Geon and the
Purchaser................................................... 25
Section 17. Governmental Permits and Approvals; State Anti-takeover
Laws........................................................ 27
Section 18. Fees and Expenses........................................... 28
Section 19. Certain Legal Matters....................................... 29
SCHEDULE I
Directors and Executive Officers of Geon and the Purchaser............... 30
</TABLE>
i
<PAGE> 3
TO THE SHAREHOLDERS OF O'SULLIVAN CORPORATION:
TGC Acquisition Corporation, a Virginia corporation (the "Purchaser") and a
wholly owned subsidiary of The Geon Company, a Delaware corporation ("Geon"),
hereby offers to purchase all outstanding shares of common stock, par value
$1.00 per share (the "Shares"), of O'Sullivan Corporation, a Virginia
corporation ("O'Sullivan"), at a price of $12.25 per Share, net to the seller in
cash, without interest thereon (the "Offer Price"), upon the terms and subject
to the conditions set forth in this Offer to Purchase and in the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer").
Tendering shareholders 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 pursuant to the
Offer. The Purchaser will pay all charges and expenses of McDonald Investments
Inc., A KeyCorp Company, as Dealer Manager (the "Dealer Manager"), The Bank of
New York, as Depositary (the "Depositary"), and Morrow & Co., Inc., as
Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 18.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
June 2, 1999 (the "Merger Agreement"), among Geon, the Purchaser and O'Sullivan.
The Merger Agreement provides, among other things, for the merger of the
Purchaser with and into O'Sullivan (the "Merger") following the purchase of
Shares pursuant to the Offer. In the Merger, each then outstanding Share (other
than Shares owned by Geon or any of its subsidiaries, Shares held as treasury
shares or otherwise by O'Sullivan, and Shares owned by shareholders who perfect
dissenters' rights, if available under Virginia law) will be converted into the
right to receive $12.25 per Share net in cash. See Section 15.
THE BOARD OF DIRECTORS OF O'SULLIVAN HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF O'SULLIVAN'S SHAREHOLDERS, AND RECOMMENDS THAT THE
SHAREHOLDERS OF O'SULLIVAN ACCEPT THE OFFER AND TENDER THEIR SHARES.
The Offer is subject to the fulfillment of a number of conditions (the
"Offer Conditions"), including, among other things, there being validly tendered
and not withdrawn prior to the Expiration Date a number of Shares which
represents at least seventy percent (70%) of the Shares outstanding on a fully
diluted basis on the date of purchase (the "Minimum Condition"). For purposes of
this Offer, "on a fully diluted basis" means, as of any date, the number of
Shares outstanding, together with Shares that O'Sullivan is then required to
issue upon exercise of outstanding stock options (assuming all such options are
then exercisable) or pursuant to any other obligation.
In connection with the execution of the Merger Agreement, Geon and the
Purchaser entered into agreements with Arthur H. Bryant II, Magalen O. Bryant
and John C. O. Bryant, who together control approximately 26% of the Shares,
pursuant to which these shareholders have agreed to, among other things, tender
all of the Shares controlled by them into the Offer (the "Share Tender
Agreements"). See Section 14.
According to representations made by O'Sullivan in the Merger Agreement, as
of June 2, 1999, 15,594,687 Shares were issued and outstanding and 301,242
Shares were reserved for future issuance upon exercise of outstanding employee
stock options. As of the date of the Offer, Geon owns no Shares.
Certain other Offer Conditions are described in Section 16. The Purchaser
expressly reserves the right, in its sole discretion, to waive any one or more
of the Offer Conditions (except that the Purchaser may not, without the consent
of O'Sullivan, waive the Minimum Condition). See Sections 13 and 16. The Offer
is not conditioned on the receipt of financing.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1
<PAGE> 4
SECTION 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), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date. The term "Expiration Date" means 12:00
midnight, Eastern Daylight Saving Time, on Wednesday, July 7, 1999, unless the
Purchaser extends 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, will expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION, THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED
BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT") AND THE SATISFACTION OF THE OTHER OFFER
CONDITIONS SET FORTH IN SECTION 16. THE OFFER IS NOT CONDITIONED ON THE RECEIPT
OF FINANCING.
The Merger Agreement provides that the Purchaser may, in its discretion,
extend the Expiration Date (a) if the Minimum Condition or any of the other
Offer Conditions are not satisfied, or (b) if the Offer Conditions have been
satisfied, for an additional five business days, so long as at the time of such
extension all conditions to the Purchaser's obligation to purchase Shares
pursuant to the Offer are irrevocably waived. The Purchaser may not extend the
Expiration Date beyond September 8, 1999 without the consent of O'Sullivan, even
if the conditions to the Offer have not been satisfied. Extension of the
Expiration Date would delay the acceptance for payment of and the payment for
any Shares. During any such extension, all Shares previously tendered and not
properly withdrawn will remain subject to the Offer and subject to the right of
a tendering shareholder to withdraw such shareholder's Shares. See Section 3.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED
SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
If, by the Expiration Date (including any extension permitted by the Merger
Agreement), any or all of the Offer Conditions have not been satisfied or
waived, the Purchaser reserves the right (but will not be obligated), subject to
the applicable rules and regulations of the Securities and Exchange Commission
(the "SEC"), to (a) terminate the Offer and not accept for payment or pay for
any Shares and return all tendered Shares to tendering shareholders, (b) waive
all the unsatisfied Offer Conditions and accept for payment and pay for all
Shares validly tendered prior to the Expiration Date (except that the Purchaser
may not, without the consent of O'Sullivan, accept for payment any Shares so
tendered unless the Minimum Condition has been satisfied), (c) extend the Offer
and, subject to the right of shareholders to withdraw Shares until the
Expiration Date, retain the Shares that have been tendered during the period or
periods for which the Offer is extended, or (d) amend the Offer. The Merger
Agreement provides that the Purchaser may not reduce the number of Shares to be
purchased in the Offer, reduce the price payable in the Offer, modify or add to
the conditions in the Offer or change the form of consideration payable in the
Offer, except that the Purchaser may extend the Expiration Date as described in
the immediately preceding paragraph.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 16. There can be no
assurance that the Purchaser will exercise its right to extend the Offer beyond
the period that the Merger Agreement requires the Offer to remain open. Any
extension, amendment or termination will be followed as promptly as practicable
by public announcement. In the case of an extension, Rule 14e-l(d) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires that
the announcement be issued no later than 9:00 a.m., Eastern time, on the next
business day after the previously scheduled Expiration Date, or the first
opening of the American Stock Exchange on the next business day after the
previously scheduled Expiration Date, in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
shareholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
2
<PAGE> 5
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance for
payment of Shares) for Shares or it is unable to pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser
and such Shares may not be withdrawn except to the extent tendering shareholders
are entitled to withdrawal rights as described in Section 3. However, the
ability of the Purchaser to delay the payment for Shares that the Purchaser has
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
tendered by or on behalf of holders of securities promptly after the termination
or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of 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 the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities sought,
a minimum period of 10 business days is generally required to allow for adequate
dissemination to shareholders and investor response.
O'Sullivan has provided its shareholder lists and security position
listings to the Purchaser for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the shareholder
lists or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
SECTION 2. PROCEDURES FOR TENDERING SHARES
Valid Tender. For a shareholder to validly tender Shares pursuant to the
Offer, either:
- a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature
guarantees, or, in the case of a book-entry transfer, an
Agent's Message (as defined below), and any other required
documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase
prior to the Expiration Date and either certificates for
tendered Shares ("Share Certificates") must be received by the
Depositary at one of such addresses or such Shares must be
delivered pursuant to the procedures for book-entry transfer
set forth below (and a Book-Entry Confirmation (as defined
below) received by the Depositary), in each case prior to the
Expiration Date; or
- the tendering shareholder must comply with the guaranteed
delivery procedures set forth below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company ("DTC") 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 DTC's system may make book-entry delivery
of Shares by causing DTC to transfer such Shares into the Depositary's account
in accordance with DTC's procedures for such transfer. The confirmation of a
book-entry transfer of Shares into the Depositary's account at DTC is referred
to herein as a "Book-Entry Confirmation." Although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at DTC, the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined below), 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 prior to the Expiration Date, or the
tendering shareholder must comply with the guaranteed delivery procedures
described below. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of a Book-Entry Confirmation,
which states that DTC has received from the participant in DTC
3
<PAGE> 6
tendering the Shares an express acknowledgment 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.
THE METHOD OF DELIVERY OF SHARES CERTIFICATES, THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE
ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARE CERTIFICATES, THE LETTER
OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS WILL BE DEEMED DELIVERED ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A 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.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (a) the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in DTC's
system whose name appears on a security position listing as the owner of the
Shares) of Shares tendered therewith and such registered holder has not
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (b)
such Shares are tendered for the account of a financial institution (including
most commercial banks, savings and loan associations and brokerage houses) that
is a participant in the Securities Transfer Agents Medallion Program, the New
York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If Share
Certificates are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made or Share Certificates for
Shares not tendered or not accepted for payment are to be returned to a person
other than the registered holder of the Share Certificates surrendered, the
tendered Share Certificates must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name or names of the registered
holders appear on the Share Certificates, with the signatures on the Share
Certificates or stock powers guaranteed as described above. See Instructions 1
and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share Certificates are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
- the tender is made by or through an Eligible Institution;
- 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
- the Share Certificates, representing all tendered Shares, in
proper form for transfer (or a Book-Entry Confirmation with
respect to all such Shares), together with 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, and any other required
documents, are received by the Depositary within five New York
Stock Exchange, Inc. trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such 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 a timely Book-Entry Confirmation
with respect to) such Shares;
- a Letter of Transmittal (or facsimile 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.
4
<PAGE> 7
Accordingly, tendering shareholders may be paid at different times depending
upon when Share Certificates or Book-Entry Confirmations with respect to Shares
are actually received by the Depositary.
The Purchaser's acceptance for payment of Shares validly tendered pursuant
to the Offer will constitute a binding agreement between the tendering
shareholder and the Purchaser upon the terms and subject to the conditions of
the Offer. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of the Purchaser
as such shareholder's attorneys-in-fact and proxies in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by such
shareholder 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 June 8, 1999, other than the regular quarterly
dividend in the amount of $0.08 per Share with a record date of June 7, 1999.
All such proxies will be irrevocable and considered 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 pursuant to the
Offer. Upon such acceptance for payment, all prior powers of attorney, proxies
and consents given by such shareholder with respect to such Shares or other
securities or rights will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given (and, if
given, will not be deemed effective). The designees of the Purchaser will
thereby be empowered to exercise all voting and other rights with respect to
such Shares and other securities or rights in respect of any annual, special,
adjourned or postponed meeting of O'Sullivan's shareholders, actions by written
consent in lieu of any such meeting or otherwise, as they in their sole
discretion deem proper. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser must be able to exercise
full voting, consent and other rights with respect to such Shares and other
securities or rights, including voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance for payment of or payment for 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 any Shares
of any particular shareholder whether or not similar defects or irregularities
are waived in the case of other shareholders. No tender of Shares will be deemed
to have been validly made until all defects or irregularities relating thereto
have been cured or waived. None of the Purchaser, Geon, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in tenders or subject to
any liability for failure to give any such notification. 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 on all
parties.
Backup Withholding. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a shareholder tendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct taxpayer identification number on a Substitute
Form W-9 (included as part of the Letter of Transmittal) and certify under
penalties of perjury that such taxpayer identification number is correct and
that such shareholder is not subject to backup withholding. If a shareholder
does not provide such shareholder's correct taxpayer identification number or
fails to provide the certifications described above, the Internal Revenue
Service (the "IRS") may impose a penalty on such shareholder, and the payment of
cash to such shareholder pursuant to the Offer may be subject to backup
withholding of 31% of the amount of such payment. All shareholders surrendering
Shares pursuant to the Offer should complete and sign the main signature form
and the Substitute Form W-9 included as part of 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 Purchaser and the Depositary). Noncorporate foreign shareholders should
complete and sign the main signature form and 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 10 and "Important Tax Information" in the
Letter of Transmittal.
5
<PAGE> 8
SECTION 3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after August 7, 1999.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of this Offer to Purchase and must
specify the name of the person having 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 the name of the person who tendered
the Shares. If Share Certificates have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedure
for book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at DTC to be credited with the
withdrawn Shares and otherwise comply with DTC's procedures.
Withdrawals of tenders of Shares 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 retendered by again following one
of the procedures described in Section 2 at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of the Purchaser, Geon, the Depositary, the Information Agent, the Dealer
Manager or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or subject to any
liability for failure to give any such notification.
SECTION 4. ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT TO SHAREHOLDERS
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 promptly after the Expiration Date. All questions as to the
satisfaction of such terms and conditions will be determined by the Purchaser,
in its sole discretion, whose determination will be final and binding on all
parties. See Sections 1 and 16. The Purchaser expressly reserves the right, in
its sole discretion, to delay acceptance for payment of or payment for Shares in
order to comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. See Section 16. Any such delays will be effected in
compliance with Rule 14e-l(c) under the Exchange Act (relating to a bidder's
obligation to pay for or return tendered securities promptly after the
termination or withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of:
- Share Certificates for (or a timely Book-Entry Confirmation
with respect to) such Shares;
- a Letter of Transmittal (or facsimile 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.
The per Share consideration paid to any shareholder pursuant to the Offer will
be the highest per Share consideration paid to any other shareholder 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 to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance for payment of such Shares. Payment for Shares accepted
for
6
<PAGE> 9
payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for validly tendering
shareholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering shareholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. Upon the deposit of
funds with the Depositary for the purpose of making payments to tendering
shareholders, the Purchaser's obligation to make such payment shall be satisfied
and tendering shareholders must thereafter look solely to the Depositary for
payment of amounts owed to them by reason of the acceptance for payment of
Shares pursuant to the Offer. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal, as
well as any charges and expenses of the Depositary, the Dealer Manager and the
Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act),
the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent tendering
shareholders are entitled to exercise, and duly exercise, withdrawal rights as
described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, Share Certificates for any such unpurchased Shares will be returned,
without expense to the tendering shareholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account at
DTC pursuant to the procedure set forth in Section 2, such Shares will be
credited to an account maintained at DTC), as promptly as practicable after the
expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Geon, or to one or more direct or indirect wholly owned
subsidiaries of Geon, the right to purchase Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
SECTION 5. FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local or foreign income or other tax laws. Generally, for federal income tax
purposes, a tendering shareholder will recognize gain or loss equal to the
difference between the amount of cash received by the shareholder pursuant to
the Offer or the Merger and the aggregate tax basis in the Shares tendered by
the shareholder and purchased pursuant to the Offer or converted in the Merger,
as the case may be. Gain or loss will be calculated separately for each block of
Shares tendered and purchased pursuant to the Offer or converted in the Merger,
as the case may be.
If Shares are held by a shareholder as capital assets, gain or loss
recognized by the shareholder will be capital gain or loss, which will be
long-term capital gain or loss if the shareholder's holding period for the
Shares exceeds one year. Long-term capital gain on the sale of Shares by an
individual is subject to a maximum tax rate of 20%, while long-term capital gain
on the sale of Shares by a corporation is generally subject to a maximum tax
rate of 35%.
The foregoing discussion is included for general information only and may
not be applicable with respect to Shares received as compensation or with
respect to holders of Shares who are subject to special tax treatment under the
Internal Revenue Code, such as non-U.S. persons, life insurance companies,
tax-exempt organizations and financial institutions, and may not apply to a
holder of Shares in light of individual circumstances. SHAREHOLDERS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO
THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME
OR OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
7
<PAGE> 10
SECTION 6. HISTORICAL PRICE AND DIVIDEND INFORMATION ON THE SHARES
The Shares are listed on the American Stock Exchange under the symbol OSL.
The following table sets forth the high and low closing sales prices per Share
for each quarter of 1997 and 1998 and the first quarter of 1999 as reported on
the American Stock Exchange, together with the per Share dividends paid by
O'Sullivan during the same period of time as reported in publicly available
sources.
<TABLE>
<CAPTION>
HIGH LOW DIVIDEND
------- ------ --------
<S> <C> <C> <C>
Year Ended
December 31, 1997:
First quarter......................................... $ 10.75 $ 8.00 $ 0.08
Second quarter........................................ 9.69 7.94 0.08
Third quarter......................................... 11.00 8.38 0.08
Fourth quarter........................................ 11.00 9.88 0.08
Year Ended
December 31, 1998:
First quarter......................................... $ 10.88 $ 8.75 $ 0.08
Second quarter........................................ 10.25 9.25 0.08
Third quarter......................................... 10.13 8.25 0.08
Fourth quarter........................................ 10.38 7.38 0.08
Year Ending
December 31, 1999
First quarter......................................... $ 10.00 $ 8.06 $ 0.08
</TABLE>
On June 1, 1999, the last full trading day prior to the public announcement
of the execution of the Merger Agreement and the Purchaser's intention to
commence the Offer, the closing sale price for the Shares was $9.38 per Share.
On June 7, 1999, the last full trading day before commencement of the Offer, the
closing sale price for the Shares was $12.13 per Share. Shareholders are urged
to obtain current market quotations for the Shares.
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Depending on the number of Shares purchased in the Offer, the Shares may no
longer meet the requirements of the American Stock Exchange for continued
listing. According to the published policies of the American Stock Exchange, it
would consider delisting the Shares if any one or more of the following
conditions should exist: (a) the number of Shares publicly held is less than
200,000; (b) the total number of public shareholders is less than 300; or (c)
the aggregate market value of publicly held Shares is less than $1 million.
According to representations made by O'Sullivan in the Merger Agreement, as of
June 2, 1999, there were 15,594,687 Shares issued and outstanding. Based upon
information available to Geon, as of the date of the Offer there are
approximately 3,700 record and beneficial holders of Shares.
If the American Stock Exchange were to delist the Shares, it is possible
that the Shares would trade on another securities exchange or in the
over-the-counter market and that price quotations for the Shares would be
reported by such exchange or market or through other sources. The extent of the
public market for the Shares and availability of such quotations would, however,
depend upon such factors as the number of holders of Shares, the aggregate
market value of the publicly held Shares at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act and other
factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application by O'Sullivan to the SEC if the Shares are neither
listed on a national securities exchange nor held by 300 or more holders of
record. Termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be
8
<PAGE> 11
furnished by O'Sullivan to its shareholders and to the SEC and would make
certain provisions of the Exchange Act no longer applicable to O'Sullivan, such
as the short-swing profit recovery provisions of Section 16(b) of the Exchange
Act, the requirement of furnishing a proxy statement pursuant to Section 14(a)
of the Exchange Act in connection with shareholders meetings and the related
requirement of furnishing an annual report to shareholders, and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of O'Sullivan and persons
holding "restricted securities" of O'Sullivan to dispose of such securities
pursuant to Rule 144 or 144A promulgated under the Securities Act of 1933, as
amended, may be impaired or eliminated. Geon may cause O'Sullivan to apply for
termination of registration of the Shares under the Exchange Act as soon after
the completion of the Offer as the requirements for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers and other lenders to extend credit on the collateral of the Shares.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin regulations
of the Federal Reserve Board and this could affect whether or the extent to
which the Shares could continue to be used as collateral for loans made by
brokers and other lenders.
SECTION 8. INFORMATION CONCERNING O'SULLIVAN
O'Sullivan Corporation is a Virginia corporation with its principal
executive offices located at 1944 Valley Avenue, Winchester, Virginia 22601.
O'Sullivan was originally organized in 1896 as O'Sullivan Rubber Company. In
1970 the corporate name was changed from O'Sullivan Rubber Company to O'Sullivan
Corporation to acknowledge the increasing importance of plastics manufacturing
to O'Sullivan's operations.
Subsequent to its name change and through the early 1990's, O'Sullivan
concentrated on the expansion of its plastics manufacturing operations, both
calendering and injection-molding. The expansion was accomplished by adding
additional capacity within the corporation and the acquisition or creation of
several subsidiaries to gain facilities in other regions of the United States.
In 1986, O'Sullivan divested itself of its rubber operations. In 1994,
O'Sullivan sold the injection-molding operations portion of its plastics
products segment. In 1992, O'Sullivan created a subsidiary, Melnor Inc., to
acquire substantially all the assets of a corporation engaged in the water
sprinkler and lawn and garden business. O'Sullivan sold this business in July
1997.
O'Sullivan's activities are now conducted in a single business segment:
calendered plastics products. O'Sullivan manufactures calendered plastics
products for the automotive and specialty plastics manufacturing industries.
Calendered plastics products manufactured by O'Sullivan include vinyl sheeting
for vehicular dashboard pads, swimming pool liners and covers, notebook binders,
luggage, upholstered furniture, golf bags, floor tile, pond liners, protective
clothing, mine curtains, boat and automobile windows and medical grade
materials.
Set forth below is a summary of certain consolidated financial information
with respect to O'Sullivan and its subsidiaries excerpted or derived from the
information contained in its Annual Report on Form 10-K for the year ended
December 31, 1998 and its Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999. More comprehensive financial information is included in
O'Sullivan's Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other
documents filed by it with the SEC, and the following summary is qualified in
its entirety by reference to such information. O'Sullivan's Annual Report on
Form 10-K, Quarterly Report on Form 10-Q and such other documents should be
available for inspection and copies thereof should be obtainable in the manner
set forth below under "Available Information."
9
<PAGE> 12
O'SULLIVAN CORPORATION
SELECTED FINANCIAL INFORMATION
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
------------------ -----------------------------
1999 1998 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.............................. $ 42.9 $ 41.9 $ 163.2 $ 163.6 $ 171.2
Income before extraordinary items...... 3.1 3.0 11.6 4.5 10.7
Net income............................. 3.1 3.0 11.6 4.5 10.7
BALANCE SHEET DATA:
Working capital........................ $ 72.8 $ 71.1 $ 71.1 $ 70.1 $ 70.0
Total assets........................... 145.9 140.6 142.9 138.0 140.8
Long-term debt......................... 0 0 0 0 0
Shareholders' equity................... 119.4 114.4 117.6 112.7 114.0
PER COMMON SHARE:
Net earnings before extraordinary
items............................... $ 0.20 $ 0.19 $ 0.74 $ 0.29 $ 0.66
Net earnings........................... 0.20 0.19 0.74 0.29 0.66
Net earnings -- assuming full
dilution............................ 0.20 0.19 0.74 0.29 0.66
</TABLE>
Available Information. O'Sullivan is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning O'Sullivan's directors and
officers, their remuneration, stock options and other matters, the principal
holders of O'Sullivan's securities and any material interest of such persons in
transactions with O'Sullivan is required to be disclosed in proxy statements
distributed to O'Sullivan's shareholders and filed with the SEC. Such reports,
proxy statements and other information should be available for inspection at the
public reference facilities of the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the SEC:
Midwest Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and Northeast Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such information should be
obtainable, by mail, upon payment of the SEC's customary charges, by writing to
the SEC's principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material should also be available on-line through
EDGAR, which is located on the SEC's public access site at http://www.sec.gov.
O'Sullivan Information. The information concerning O'Sullivan contained in
this Offer to Purchase has been supplied by O'Sullivan for inclusion herein or
has been taken from or based upon publicly available documents on file with the
SEC and other publicly available information. Although Geon and the Purchaser do
not have any knowledge that any such information is incorrect, neither Geon nor
the Purchaser takes any responsibility for the accuracy or completeness of such
information or for any failure by O'Sullivan to disclose events that may have
occurred and may affect the significance or accuracy of any such information.
SECTION 9. INFORMATION CONCERNING GEON AND THE PURCHASER
The Purchaser is a newly incorporated Virginia corporation and a wholly
owned subsidiary of Geon which to date has not conducted any business other than
in connection with the Offer and the Merger. Geon is a Delaware corporation. The
principal executive offices of Geon and the Purchaser are located at One Geon
Center, Avon Lake, Ohio 44012-0122.
Geon is a leading North American-based polymer services and technology
company with operations in vinyl compounds, specialty vinyl resins and
formulations and other value-added products and services. Geon and its
subsidiaries employ nearly 2,000 people and have 19 manufacturing plants in the
United States, Canada, England and Australia, and joint ventures in the United
States, Canada, England, Australia and Singapore.
Geon's operations are conducted primarily in two business segments. Geon's
"Performance Polymers and Services" segment includes polyvinyl chloride ("PVC")
compounds, three compounding joint ventures, specialty resins, plastisol
formulators and analytical testing services. During 1998, Geon acquired three
plastisol formulator businesses, Plast-o-meric, Inc., the Wilflex Division of
Flexible Products Company and Adchem, Inc.
10
<PAGE> 13
These acquisitions added a total of approximately 300 employees at five
locations. Geon is the only specialty resin producer with downstream integration
into plastisol formulators. The "Performance Polymers and Services" segment also
includes the newly formed "Decillion" joint venture with Owens Corning that will
market and manufacture material systems based on a unique technology for
reinforced thermoplastic polymers. Geon owns 40% of the joint venture.
Geon's "Resin and Intermediates" segment includes its 24% ownership in Oxy
Vinyls, L.P. ("Oxy Vinyls"). Oxy Vinyls was formed on April 30, 1999 between
Geon and Occidental Chemical Corporation, creating the largest North American
producer of PVC suspension and mass resins. Oxy Vinyls also produces vinyl
chloride monomer ("VCM") and chlorine (a principal feedstock for VCM which is an
intermediate precursor to PVC). In addition to the 24% ownership in Oxy Vinyls,
the "Resin and Intermediates" segment includes Geon's 50% equity holding in the
Sunbelt chlor-alkali joint venture and Geon's 37.4% holding in Australian Vinyls
Corporation, an Australian PVC operation.
Geon has historically sold mass suspension PVC resin and dispersion PVC
resin to O'Sullivan. During its past three fiscal years, Geon has sold between
approximately $11-13 million of such resins per year to O'Sullivan. As of April
30, 1999, more than 95% of such sales, consisting solely of mass suspension PVC
resin sales, will be made to O'Sullivan by the Oxy Vinyls joint venture.
Set forth below is a summary of certain consolidated financial information
with respect to Geon and its subsidiaries excerpted or derived from the
information contained in its Annual Report on Form 10-K for the year ended
December 31, 1998 and its Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999. More comprehensive financial information is included in
Geon's Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other
documents filed by it with the SEC, and the following summary is qualified it
its entirety by reference to such information. Geon's Annual Report on Form
10-K, Quarterly Report on Form 10-Q and such other documents should be available
for inspection and copies thereof should be obtainable in the manner set forth
below under "Available Information."
THE GEON COMPANY
SELECTED FINANCIAL INFORMATION
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
------------------ --------------------------------
1999 1998 1998 1997 1996
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................. $ 325.8 $ 324.5 $1,284.4 $1,250.0 $1,144.4
Net income............................ 9.6 5.8 13.8 22.5 12.2
BALANCE SHEET DATA:
Commercial operating working capital
(1)................................ $ 101.3 $ 93.9 $ 55.6 $ 74.1 $ 51.4
Total assets.......................... 838.3 846.7 802.0 872.9 736.9
Long-term debt........................ 133.8 136.1 135.4 136.4 137.2
Shareholders' equity.................. 224.4 227.8 214.1 223.8 222.4
PER COMMON SHARE:
Net income -- basic................... $ 0.42 $ 0.25 $ 0.60 $ 0.98 $ 0.51
Net income -- diluted................. 0.40 0.25 0.58 0.95 0.50
Special charges (after tax) included in
diluted net income per share:
Cumulative effect of change in
accounting for start-up costs...... $ 0.06
Compound consolidation and
restructuring...................... 0.04 $ 0.38
Employee separation costs............. $ 0.39
------- ------- -------- -------- --------
0.10 0.38 0.39
Net income per diluted share before
special charges.................... $ 0.50 $ 0.25 $ 0.96 $ 1.34 $ 0.50
</TABLE>
- ---------------
(1) Commercial operating working capital is comprised of accounts receivable
plus inventory less accounts payable.
11
<PAGE> 14
Available Information. Geon is subject to the informational requirements of
the Exchange Act and, in accordance therewith, is required to file reports
relating to its business, financial condition and other matters. Information as
of particular dates concerning Geon's directors and officers, their
remuneration, stock options and other matters, the principal holders of Geon's
securities and any material interest of such persons in transactions with Geon
is required to be disclosed in proxy statements distributed to Geon's
shareholders and filed with the SEC. Such reports, proxy statements and other
information should be available for inspection at the SEC and copies thereof
should be obtainable from the SEC (and on-line through EDGAR) as set forth under
the heading "Available Information" in Section 8.
Forward-Looking Statements. Certain statements contained in this Offer to
Purchase that are not historical facts are forward-looking statements that are
subject to certain risks and uncertainties. When used herein, the terms
"anticipates," "plans," "expects," "believes" and similar expressions as they
relate to Geon, the Purchaser or their respective managements are intended to
identify such forward looking statements. The actual results, performance or
achievements of Geon or the Purchaser may materially differ from those expressed
or implied in the forward-looking statements. Risks and uncertainties that could
cause or contribute to such material differences include, but are not limited
to: (1) unanticipated changes in world, regional or U.S. PVC consumption growth
rates affecting Geon's markets; (2) unanticipated changes in global industry
capacity or in the rate at which anticipated changes in industry capacity come
online in the PVC, VCM and chlor-alkali industries; (3) fluctuations in raw
material prices and supply, in particular fluctuations outside the normal range
of industry cycles; (4) unanticipated delays in achieving or inability to
achieve cost reduction and employee productivity goals; (5) inability to achieve
or delays in achieving savings related to business consolidation and
restructuring programs; (6) unanticipated production outages or material costs
associated with scheduled or unscheduled maintenance programs; (7) the impact on
the North American vinyl markets and supply/demand balance resulting from the
economic situation in the Far East; (8) lack of direct control over the
reliability of delivery and quality of the primary raw materials (PVC & VCM)
utilized in Geon's products; (9) the ability to obtain financing at anticipated
rates; (10) unanticipated expenditures required in conjunction with "Year 2000"
compliance; (11) unanticipated costs or difficulties related to the operation of
the joint venture entities; (12) unanticipated costs, difficulties or delays
related to completion of the Offer or the Merger; and (13) inability to complete
the Offer or the Merger.
Beneficial Ownership of O'Sullivan Securities; Transactions with
O'Sullivan. As of the date of the Offer, Geon owns no Shares. Except as set
forth in this Offer to Purchase, none of Geon, the Purchaser or, to the best
knowledge of Geon and the Purchaser, any of the persons listed in Schedule I
hereto, or any associate or majority owned subsidiary of such persons,
beneficially owns any equity security of O'Sullivan, and none of Geon, the
Purchaser or, to the best knowledge of Geon and the Purchaser, any of the
persons listed in Schedule I hereto, any associate or majority owned subsidiary
of such persons, or any of their respective directors, executive officers or
subsidiaries, has effected any transaction in any equity security of O'Sullivan
during the past 60 days.
Except as set forth in this Offer to Purchase, none of Geon, the Purchaser
or, to the best knowledge of Geon and the Purchaser, any of the persons listed
in Schedule I hereto, or any associate or majority owned subsidiary of such
persons, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of O'Sullivan (including, without
limitation, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any securities of O'Sullivan, joint ventures, loan
or option arrangements, puts or calls, guaranties of loans, guaranties against
loss or the giving or withholding of proxies). Except as set forth in this Offer
to Purchase, none of Geon, the Purchaser or, to the best knowledge of Geon and
the Purchaser, any of the persons listed in Schedule I hereto has had any
transactions with O'Sullivan or any of its executive officers, directors or
affiliates that would require reporting under the rules of the SEC.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between Geon, the Purchaser or, to the best
knowledge of Geon or the Purchaser, any of the persons listed in Schedule I
hereto, or any associate or majority owned subsidiary of such persons, on the
one hand, and O'Sullivan or its executive officers, directors or affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, election of directors or a sale or other
transfer of a material amount of assets that would require reporting under the
rules of the SEC.
12
<PAGE> 15
SECTION 10. GEON'S SOURCE AND AMOUNT OF FUNDS TO COMPLETE THE OFFER
The total amount of funds required by the Purchaser to purchase all of the
Shares pursuant to the Offer and to pay fees and expenses related to the Offer
and the Merger is estimated to be approximately $195 million. The Purchaser
plans to obtain all funds needed for the Offer and the Merger through a capital
contribution from Geon.
Geon plans to obtain funds for such capital contribution through a
combination of cash on hand and borrowings under its existing revolving credit
facilities which are provided under two separate Credit Agreements, dated August
16, 1994, as amended, and May 27, 1999, with Citibank, N.A., as an agent,
NationsBank, N.A. or an affiliate, as an agent, and various other financial
institutions (the "Credit Facilities"). The Credit Facilities, which are
unsecured, provide for revolving credit of up to $250 million for general
corporate purposes until May 2000, with respect to the $150 million facility,
and December 2001, with respect to the $100 million facility. As of the date of
the Offer, there is approximately $35 million of indebtedness outstanding under
the $100 million facility. Interest on borrowings under the Credit Facilities
are payable, at the option of Geon, according to a fluctuating base rate, an
applicable margin over LIBOR or a competitive bid rate. The Credit Facilities
contain financial covenants which require Geon to maintain an interest coverage
ratio, an EBITDA to debt coverage ratio and a minimum retained earnings or net
loss amount. As of the date of the Offer, borrowings under the $100 million
facility bear interest at less than 6.5% per year. Interest on the $150 million
facility would currently bear interest at less than 6.5% per year.
Although no definitive plan or arrangement for the repayment of borrowings
under the Credit Facilities has been made, Geon anticipates that such borrowings
will be repaid with internally generated funds (including, if the Merger is
accomplished, those of O'Sullivan) and from other sources which may include the
proceeds of future refinancings. No decision has been made concerning the method
Geon will use to repay the borrowings under the Credit Facilities. Such decision
will be made based on Geon's review from time to time of the advisability of
particular actions, as well as prevailing interest rates, financial and other
economic conditions and such other factors as Geon may deem appropriate.
After completion of the Merger, Geon may use O'Sullivan's cash balance of
approximately $30 million to fund a portion of the costs incurred by Geon and
the Purchaser in connection with the Offer and the Merger.
SECTION 11. BACKGROUND OF THE OFFER
On November 6, 1998, William F. Patient, then Chairman of the Board and
Chief Executive Officer and current Chairman of the Board, Thomas A. Waltermire,
then President and Chief Operating Officer and current President and Chief
Executive Officer, and Donald P. Knechtges, Senior Vice President, Business and
Technology Development, of Geon had discussions with representatives of
O'Sullivan, including Arthur H. Bryant II, its Chairman of the Board, and John
S. Campbell, its President and Chief Executive Officer, regarding Geon's
business strategy and the potential fit of O'Sullivan into that strategy. Geon's
management described its strategy to build a flexible film business through
internal growth of its Burlington, New Jersey film business and acquisitions of
complementary businesses in North America. Geon initiated these discussions
based upon its long-term relationship as a supplier to O'Sullivan and its belief
that the shareholders of O'Sullivan might desire to have increased liquidity in
their shareholdings. These discussions focused on Geon's business strategy.
Neither Geon nor O'Sullivan proposed a transaction during these discussions.
On December 14, 1998, Mr. Knechtges and John L. Rastetter, Director of
Planning and Business Development, and other representatives of Geon had general
discussions with representatives of O'Sullivan, including Arthur H. Bryant II
and Mr. Campbell, about Geon's potential interest in acquiring O'Sullivan.
Geon's management again discussed its business strategy and how O'Sullivan could
fit into that strategy. Representatives of O'Sullivan stated that O'Sullivan's
shareholders were considering strategic alternatives and that they would
consider an acquisition that was fully valued. Representatives of O'Sullivan
disclosed that the services of an investment banker, Bowles Hollowell Conner, a
division of First Union Capital Markets Corp. ("BHC"), had been engaged by
O'Sullivan to assist the Board of Directors in investigating strategic
alternatives. Geon and O'Sullivan agreed to enter into a confidentiality
agreement and O'Sullivan agreed that, upon execution of the confidentiality
agreement, it would instruct BHC to send a copy of its confidential information
memorandum regarding O'Sullivan to Geon. Geon did not present an offer during
this meeting.
13
<PAGE> 16
On December 16, 1998, Geon entered into a confidentiality agreement with
O'Sullivan. On December 17, 1998, BHC sent a copy of O'Sullivan's confidential
information memorandum to Geon. The memorandum indicated that any further
contact by Geon with O'Sullivan should be made through BHC.
On January 8, 1999, Geon presented a non-binding indication of interest to
acquire 100% of the shares of O'Sullivan. The indication of interest was made in
writing by Mr. Knechtges to Brian McDonagh, Managing Director of BHC.
On January 12, 1999, Mr. McDonagh discussed Geon's indication of interest
with Messrs. Knechtges and Rastetter. On January 18, 1999, Mr. Knechtges sent a
follow-up letter to Mr. McDonagh to clarify the terms of Geon's indication of
interest.
On January 22, 1999, Mr. McDonagh discussed with Messrs. Knechtges and
Rastetter Geon's indication of interest expressed in Geon's January 8 letter.
Mr. McDonagh stated that the indication of interest had been discussed with
O'Sullivan and that a meeting of O'Sullivan's Board of Directors was anticipated
to occur during the following weekend.
On or about January 26, 1999, Mr. McDonagh discussed with Mr. Knechtges
that O'Sullivan's Board of Directors thought it necessary to broaden the search
for a potential buyer beyond the current discussions with Geon. Mr. McDonagh
indicated that the primary reason for extending O'Sullivan's search was that the
Board did not believe that Geon's indicative offer was sufficiently financially
compelling to provide Geon with an exclusive position. However, Mr. McDonagh
indicated that O'Sullivan desired for Geon to remain in the process. Mr.
Knechtges expressed to Mr. McDonagh Geon's strong desire to remain in the
process.
On March 3, 1999, Anthony Armstrong of BHC sent updated financial
information of O'Sullivan to Geon via facsimile. In that correspondence, Mr.
Armstrong requested that Geon re-confirm its interest in a potential transaction
with O'Sullivan by no later than March 10, 1999.
On March 8, 1999, Geon sent to Mr. McDonagh an indication of interest to
acquire 100% of the shares of O'Sullivan. Following this indication of interest
by Geon, Mr. McDonagh informed Mr. Knechtges that Geon was one of several
interested parties with which O'Sullivan had decided to continue discussions.
Mr. McDonagh informed Mr. Knechtges that, as part of the process going forward,
BHC would set up a data-room and organize a presentation by the management of
O'Sullivan for each of the interested parties.
On April 9, 1999, O'Sullivan's data-room in Winchester, Virginia was made
available to employees of Geon and representatives of Geon's public accountants,
Ernst & Young LLP ("E&Y"), and legal counsel, Thompson Hine & Flory LLP
("TH&F"). O'Sullivan's management presentation was made to senior employees of
Geon on April 14, 1999. Representatives of Geon, E&Y and TH&F conducted
financial and legal due diligence at the data-room in Winchester, Virginia, at
each of O'Sullivan's plants and through numerous teleconferences with
representatives of O'Sullivan.
On April 20, 1999, Mr. McDonagh sent a letter to Mr. Knechtges which
invited Geon to submit a formal, definitive proposal to acquire O'Sullivan. On
April 22, 1999, BHC provided Geon with a form of merger agreement, providing for
the acquisition of O'Sullivan by tender offer and follow-up merger, which it
proposed be used in the transaction.
On May 7, 1999, Geon sent to Mr. McDonagh a formal offer to purchase 100%
of the outstanding shares of O'Sullivan at a price of $11.00 per Share. Geon's
proposed offer included a revised copy of the form of merger agreement proposed
by BHC, as well as a form of share tender agreement which Geon proposed be
executed by Arthur H. Bryant II, Magalen O. Bryant and John C.O. Bryant in
connection with the Offer.
On May 21, 1999, Messrs. Waltermire, Knechtges and Rastetter of Geon met
with Arthur H. Bryant II, Mr. Campbell, Mr. McDonagh and Robert L. Burrus, Jr.,
in his capacity as a member of O'Sullivan's executive committee, at the offices
of O'Sullivan's legal counsel, McGuire Woods Battle & Booth LLP, to discuss
Geon's proposed offer. Geon indicated that, subject to various conditions,
including approvals of both Boards of Directors, it would increase the value of
its proposal to $12.25 per Share.
14
<PAGE> 17
On May 24, 1999, Mr. Knechtges discussed with Mr. McDonagh Geon's position
on its offer to O'Sullivan. After discussions with O'Sullivan, Mr. McDonagh
contacted Mr. Knechtges and indicated that O'Sullivan's executive committee
would recommend Geon's proposal of $12.25 per Share to the full Board of
Directors.
On May 25, 1999, negotiations of the Merger Agreement commenced. On the
same date, as a follow-up to Geon's due diligence review, senior employees of
Geon met with senior management and other representatives of O'Sullivan to
clarify operating policies and practices on several outstanding issues.
On June 1, 1999, O'Sullivan's Board of Directors met to consider Geon's
offer. At the meeting, representatives of BHC provided its opinion to the Board
that the consideration proposed by Geon to be paid in the acquisition, based on
several analyses, was fair to O'Sullivan's shareholders from a financial point
of view, which opinion BHC confirmed in writing on June 2, 1999. O'Sullivan's
Board determined by unanimous vote that the proposed acquisition by Geon was
fair to and in the best interests of O'Sullivan and its shareholders, authorized
and approved the Merger Agreement, the Offer, the Merger and the Share Tender
Agreements, and recommended that the shareholders of O'Sullivan accept the Offer
and tender their Shares.
On June 2, 1999, Geon's Board of Directors met, prior to the opening of the
stock markets, to consider the proposed acquisition. Geon's Board by unanimous
vote authorized and approved the proposed acquisition of O'Sullivan, the Merger
Agreement, the Offer, the Merger and the transactions contemplated by the Merger
Agreement.
On June 2, 1999, Geon and O'Sullivan executed the Merger Agreement and
Arthur H. Bryant II, Magalen O. Bryant and John C.O. Bryant entered into the
Share Tender Agreements. On the same date and prior to the opening of the stock
markets, Geon and O'Sullivan issued a joint press release announcing the
acquisition.
SECTION 12. PURPOSE OF THE OFFER; GEON'S PLANS FOR O'SULLIVAN
Purpose. The purpose of the Offer and the Merger is to enable Geon to
acquire control of, and the entire equity interest in, O'Sullivan. The Offer, as
the first step in the acquisition of O'Sullivan, is intended to facilitate the
acquisition of all the Shares. The purpose of the Merger is to acquire all
Shares not purchased pursuant to the Offer or otherwise. Pursuant to the Merger,
each then outstanding Share (other than Shares owned by Geon or any of its
subsidiaries, Shares held as treasury shares or otherwise by O'Sullivan, and
Shares owned by shareholders who perfect dissenters' rights, if available under
Virginia law) will be converted into the right to receive an amount in cash
equal to the price per Share paid by the Purchaser pursuant to the Offer.
Although it is the Purchaser's intention to consummate the Merger as promptly as
practicable, there can be no assurance that the Merger will be consummated or,
if consummated, of the timing thereof. In addition to approval by O'Sullivan's
Board of Directors, which occurred on June 1, 1999, consummation of the Merger
will require the affirmative vote of the holders of at least seventy percent
(70%) of the Shares. See Section 15.
Plans for O'Sullivan. In connection with the Offer and the Merger, Geon and
the Purchaser have reviewed and will continue to analyze, on the basis of
available information, various possible business strategies that they might
pursue in the event that the Purchaser acquires O'Sullivan pursuant to the Offer
and the Merger.
Geon is required by the terms of the Merger Agreement to provide the
employees of O'Sullivan and its subsidiaries with benefits no less favorable
than those in the aggregate provided by Geon and its subsidiaries as of the date
of the Merger. Geon has also agreed, as provided in the Merger Agreement, to
honor the salary continuation agreements between O'Sullivan and a number of its
employees. See Section 13. Following completion of the Offer, Geon may change
the dividend policy of O'Sullivan in order to meet the cash requirements of Geon
and its subsidiaries, as well as those of O'Sullivan. In addition, after
completion of the Merger, Geon may use O'Sullivan's cash balance of
approximately $30 million to fund a portion of the costs incurred by Geon and
the Purchaser in connection with the Offer and the Merger.
Except as described in this Offer to Purchase, Geon and the Purchaser have
no present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, consolidation, reorganization, liquidation or
sale or transfer of a material amount of assets, involving O'Sullivan, or any
material changes in O'Sullivan's present capitalization, employee benefit plans,
corporate structure or business or any material changes or reductions in the
composition of its management or personnel. Except as so described, Geon and the
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Purchaser have no present plans or proposals to establish, terminate, convert or
amend employee benefit plans, close any facility of O'Sullivan, change or reduce
the workforce of O'Sullivan or make any other major changes in its business or
policies of employment.
SECTION 13. 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 has been
filed as an exhibit to the Schedule 14D-1 and is incorporated herein by
reference.
The Tender Offer. Pursuant to the terms of the Merger Agreement and so long
as none of the Offer Conditions shall have occurred and are continuing, the
Purchaser has agreed to commence the Offer as promptly as practicable but within
five business days after the public announcement of the execution of the Merger
Agreement. The obligations of the Purchaser to consummate the Offer and to
accept for payment and promptly to pay for the Shares tendered in the Offer is
subject only to the Offer Conditions, any of which may be waived by Geon and the
Purchaser, except that, without the consent of O'Sullivan, the Purchaser may not
waive the Minimum Condition. The Offer Conditions are for the sole benefit of
Geon and the Purchaser and may be asserted by Geon and the Purchaser regardless
of the circumstances giving rise to any such Offer Condition and, subject to the
preceding sentence, may be waived by Geon and the Purchaser in whole or in part.
The Purchaser expressly reserves the right to modify the terms of the Offer,
including, without limitation, to extend the Offer beyond any scheduled
expiration date; provided, however, that without the consent of O'Sullivan, the
Purchaser shall not reduce the number of Shares to be purchased in the Offer,
reduce the Offer Price, modify or add to the Offer Conditions or change the form
of consideration payable in the Offer. Notwithstanding the foregoing, the Offer
may not be extended beyond any scheduled expiration date unless any of the Offer
Conditions shall not have been satisfied; provided, however, that (a) even if
the Offer Conditions have not been satisfied, the Offer may not be extended
beyond the three month anniversary of the date of commencement of the Offer and
(b) if the Offer Conditions have been satisfied, then the Offer may be extended
for an additional five business days, so long as at the time of such extension
all conditions to the Purchaser's obligations to purchase Shares pursuant to the
Offer are irrevocably waived.
In the Merger Agreement, O'Sullivan consents to the Offer and the Merger
and represents that (a) its Board of Directors (at a meeting duly called and
held) (i) determined by the unanimous vote of the directors that each of the
Offer and the Merger is fair to and in the best interests of the holders of
Shares, (ii) approved the Offer, the Merger, the Merger Agreement and the Share
Tender Agreements, (iii) recommended acceptance of the Offer and approval and
adoption of the Merger Agreement by the shareholders of O'Sullivan, and (iv)
took all other action necessary to render Articles 14 and 14.1 of the Virginia
Stock Corporation Act inapplicable to the Offer and the Merger; and (b) BHC
delivered to the Board of Directors of O'Sullivan its opinion that the
consideration to be received by the holders of Shares pursuant to the Offer and
the Merger is fair to the holders of Shares from a financial point of view,
subject to the usual and customary assumptions and qualifications contained in
such opinion. O'Sullivan has agreed to file with the SEC, as soon as practicable
on the date of the commencement of the Offer, a Solicitation/Recommendation
Statement on Schedule 14D-9 containing the recommendations referred to in clause
(a) of the preceding sentence; provided, however, that such recommendation may
be withdrawn, modified or amended in accordance with the terms of the Merger
Agreement governing Acquisition Proposals.
Board Designees. The Merger Agreement provides that promptly upon the
acceptance for payment of and payment by the Purchaser in accordance with the
Offer for at least 70% of the outstanding Shares pursuant to the Offer (the
"Offer Closing"), the Purchaser shall be entitled to designate such number of
directors on the Board of Directors of O'Sullivan, rounded up to the next whole
number, as will give the Purchaser, subject to compliance with Section 14(f) of
the Exchange Act, 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 Board of Directors (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that such number of
Shares so accepted for payment and paid for or otherwise acquired or owned by
the Purchaser or Geon bears to the number of Shares outstanding. O'Sullivan and
its Board of Directors shall, at such time, take any and all actions needed to
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cause the Purchaser's designees to be appointed to O'Sullivan's Board of
Directors (including causing directors to resign).
At all times before the Effective Time, Geon, the Purchaser and O'Sullivan
shall use their reasonable efforts to ensure that at least two members of
O'Sullivan's Board of Directors, as constituted on the date of the Merger
Agreement, remain on O'Sullivan's Board of Directors, except to the extent that
no such individuals or their appointees agree to serve as directors (the
"Continuing Directors"). In the event that one or more Continuing Directors
resigns from O'Sullivan's Board of Directors, Geon, the Purchaser and O'Sullivan
shall permit the remaining, or in the case of the resignation of all Continuing
Directors, the resigning, Continuing Director or Continuing Directors to appoint
his or their successors in his or their reasonable discretion. O'Sullivan shall
take all action requested by Geon which is reasonably necessary to effect any
such election. In furtherance thereof, O'Sullivan will increase the size of its
Board of Directors, or use its reasonable efforts to secure the resignation of
directors, or both, as is necessary to permit the Purchaser's designees to be
elected to the Board of Directors. As of the Offer Closing, O'Sullivan, if so
requested by Geon or the Purchaser, will use its reasonable efforts to cause
persons designated by the Purchaser to constitute the same percentage of each
committee of such board, each board of directors of each subsidiary of
O'Sullivan and each committee of each such board (in each case to the extent of
O'Sullivan's ability to elect such persons).
Following the election or appointment of the Purchaser's designees to
O'Sullivan's Board of Directors and prior to the Effective Time, and so long as
there shall be at least one Continuing Director, the approval of a majority of
the Continuing Directors shall be required to authorize any termination of the
Merger Agreement by O'Sullivan, any amendment of the Merger Agreement requiring
action by O'Sullivan's Board of Directors, any extension of time for the
performance of any of the obligations or other acts of Geon or the Purchaser
under the Merger Agreement and any waiver of compliance with any of the
covenants, agreements or conditions under the Merger Agreement for the benefit
of O'Sullivan.
The Merger. Pursuant to the terms of the Merger Agreement, the Purchaser
will be merged with and into O'Sullivan in accordance with the Virginia Stock
Corporation Act. As a result of the Merger, the separate existence of the
Purchaser will cease and O'Sullivan will continue as the surviving corporation
under the name of "O'Sullivan Corporation" (the "Surviving Corporation"). After
satisfaction or waiver of all conditions to the Merger set forth in the Merger
Agreement, Articles of Merger shall be filed with the Virginia State Corporation
Commission. The Merger will become effective upon the issuance of a Certificate
of Merger by the Virginia State Corporation Commission (the "Effective Time").
By virtue of the Merger, at the Effective Time: (a) each share of common
stock of the Purchaser then issued and outstanding will be converted into one
share of common stock of the Surviving Corporation; and (b) each Share then
issued and outstanding (other than any Shares which are held by O'Sullivan as
treasury shares or otherwise or, directly or indirectly, by Geon or any direct
or indirect subsidiary of Geon, including the Purchaser, all of which shall be
canceled and none of which shall receive any payment with respect thereto), will
be converted, by virtue of the Merger and without any action on the part of the
holder thereof, into the right to receive an amount in cash, without interest,
equal to the price per Share paid pursuant to the Offer (the "Merger
Consideration"). After the Effective Time, each holder of a certificate
representing any Shares shall cease to have any rights as a shareholder of
O'Sullivan, except for the right to receive the Merger Consideration therefor,
and no transfer of Shares shall be made on the stock transfer books of the
Surviving Corporation. The articles of incorporation and by-laws of the
Purchaser in effect immediately prior to the Effective Time shall be the
articles of incorporation and by-laws of the Surviving Corporation after the
consummation of the Merger, until amended in accordance with applicable law. The
directors and officers of the Purchaser immediately prior to the Effective Time
shall be the directors and officers of the Surviving Corporation after the
consummation of the Merger, until their successors are duly elected or appointed
and qualified in accordance with applicable law.
Stock Option and Other Plans. The Merger Agreement provides that each
outstanding stock option to purchase Shares (an "Option") heretofore granted
under O'Sullivan's 1995 Stock Option Plan, 1995 Outside Directors Stock Option
Plan or 1985 Incentive Stock Option Plan or any other employee, director or
other stock option plan now or formerly maintained by O'Sullivan (collectively,
the "Option Plans"), whether or not vested or exercisable, shall be deemed to be
canceled immediately prior to the Effective Time and shall no longer be
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exercisable for the purchase of Shares. The holder of each Option shall receive
a payment in cash (subject to any applicable withholding taxes) at the Effective
Time (the "Cash Payment") equal to the product of (x) the total number of Shares
subject to such Option, whether or not then vested or exercisable, and (y) the
excess, if any, of the Merger Consideration over the exercise price per Share
subject to such Option. The Option Plans and any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of O'Sullivan or any subsidiary shall be terminated by
O'Sullivan effective as of the Effective Time. O'Sullivan will take all steps to
ensure that neither O'Sullivan nor any of its subsidiaries is or will be bound
by any Options or other options, warrants, rights or agreements which would
entitle any person or entity, other than Geon or its affiliates, to own any
capital stock of the Surviving Corporation or any of its subsidiaries or to
receive any payment in respect thereof.
Representations and Warranties of O'Sullivan. In the Merger Agreement,
O'Sullivan has made customary representations and warranties to Geon and the
Purchaser, including, but not limited to, representations and warranties
relating to the following: the organization, good standing and corporate power
of O'Sullivan and its subsidiaries; the authority of O'Sullivan to enter into
and perform its obligations under the Merger Agreement; the capitalization of
O'Sullivan; consents and approvals required in connection with the Merger
Agreement; filings made by O'Sullivan with the SEC; the accuracy of O'Sullivan's
financial statements; the absence of material changes or developments since
December 31, 1998; O'Sullivan's possession of and compliance with all material
permits required by its business; pending and threatened litigation; labor and
employee benefit matters; filing of tax returns and payment of taxes; material
liabilities; broker's and finder's fees; compliance with environmental laws and
regulations; state anti-takeover statutes and O'Sullivan's lack of a shareholder
rights plan; opinion of a financial advisor; material contracts; vote required
for the Merger; real and personal property; intellectual property rights;
insurance; inventory; and computer software and databases and "Year 2000"
compliance.
Representations and Warranties of Geon and the Purchaser. Geon and the
Purchaser have also made customary representations and warranties in the Merger
Agreement, including, but not limited to, representations and warranties
relating to the following: the organization, good standing and corporate power
of Geon and the Purchaser; the authority of Geon and the Purchaser to enter into
and perform their obligations under the Merger Agreement; consents and approvals
required in connection with the Merger Agreement; broker's and finder's fees;
availability of sufficient funds to consummate the Offer and the Merger; lack of
ownership of any Shares as of the date of the Merger Agreement; and the
formation of the Purchaser solely to consummate the Offer and the Merger.
Conduct of O'Sullivan Pending the Effective Time. O'Sullivan has agreed
that, except as contemplated or permitted by the Merger Agreement or otherwise
approved in writing in advance by Geon, from the date of the Merger Agreement
until the Effective Time, O'Sullivan and each of its subsidiaries will conduct
their respective operations in the ordinary and usual course of business
consistent with past practice and will use their reasonable best efforts to
preserve intact their respective business organizations, keep available the
services of their officers and employees and maintain satisfactory relationships
with licensors, suppliers, distributors, clients and others having business
relationships with them.
O'Sullivan has agreed that neither it nor any of its subsidiaries will,
from the date of the Merger Agreement until the Effective Time (a) make any
change in its articles of incorporation or by-laws; (b) issue or sell any shares
of its capital stock (other than in connection with the exercise of Options
outstanding on the date hereof) or any of its other securities, or issue any
securities convertible into, or options, warrants or rights to purchase or
subscribe to, or enter into any arrangement or contract with respect to the
issuance or sale of, any shares of its capital stock or any of its other
securities, or make any other changes in its capital structure; (c) sell or
pledge or agree to sell or pledge any stock owned by it in any of its
subsidiaries; (d) except for regular quarterly dividends, declare, pay, set
aside or make any dividend or other distribution or payment with respect to, or
split, combine, redeem or reclassify, any shares of its capital stock; (e) enter
into any contract or commitment with respect to capital expenditures in excess
of $1 million or enter into any other material contract except contracts in the
ordinary course of business, it being understood that O'Sullivan shall be
permitted to make all capital expenditures contemplated in its 1999 capital
expenditure budget; (f) release or relinquish any material contract rights other
than in the ordinary course of business; (g) adopt, enter into or amend in any
material respect
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any employee benefit plan or non-employee benefit plan or program, employment
agreement, severance agreement, stay-in-place bonus agreement, license agreement
or retirement agreement or, except in the ordinary course of business and
consistent with past practice or as required under any employee benefit plan,
contract, agreement or arrangement listed in the schedules to the Merger
Agreement, pay or commit to pay any bonus or contingent or other extraordinary
compensation to any employee or director or increase in any manner the
compensation or fringe benefits payable to any employee or director; (h) merge,
consolidate or enter into a share exchange with any person or entity, acquire a
material amount of capital stock or assets of any person or entity, or sell,
lease, license, mortgage, pledge or otherwise dispose of a material amount of
assets to any person or entity, except for the purchase or sale of inventory in
the ordinary course of business consistent, in all material respects, with past
practice; (i) other than in the ordinary course of business, transfer, lease,
license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to
any lien any assets or incur or modify any indebtedness or other liability or
issue any debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for the obligations of any person or entity;
(j) agree to the settlement of any material claim or litigation; (k) make any
material tax election or settle or compromise any material tax liability; (l)
make any material change in its method of accounting; (m) agree, in writing or
otherwise, to take any of the foregoing actions; (n) take any action, engage in
any transaction or enter into any agreement which would cause any of
O'Sullivan's representations or warranties set forth in the Merger Agreement to
be untrue as of the Closing Date; or (o) purchase or acquire, or offer to
purchase or acquire, any Shares.
Reasonable Best Efforts. O'Sullivan, Geon and the Purchaser have agreed
that they will, and will cause each of their subsidiaries to, subject to the
terms and conditions of the Merger Agreement, cooperate and use their respective
reasonable best efforts to take, or cause to be taken, all appropriate action
and to make, or cause to be made, all filings necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by the Merger Agreement, including, without
limitation, their respective reasonable best efforts to obtain, prior to the
Effective Time, all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to contracts
with O'Sullivan and its subsidiaries as are necessary for consummation of the
transactions contemplated by the Merger Agreement and to fulfill the conditions
to the Offer and the Merger. O'Sullivan, Geon and the Purchaser shall use their
reasonable efforts to consummate the Merger as promptly as practicable after the
closing of the Offer.
Special Meeting of Shareholders; Proxy Statement. O'Sullivan has agreed,
promptly after the expiration or termination of the Offer, if required to
consummate the Merger, to call a special meeting of the holders of Shares, in
accordance with applicable law, for the purpose of voting upon the Merger
Agreement and the Merger. O'Sullivan has agreed to use its reasonable efforts to
solicit from its shareholders proxies, and shall take all other action necessary
and advisable, to secure the vote of shareholders required by applicable law or
its Amended and Restated Articles of Incorporation, as amended, to obtain the
approval for the Merger Agreement and the Merger. O'Sullivan has agreed that it
will, subject to the provisions of the Merger Agreement governing Acquisition
Proposals, include in the proxy or information statement prepared in connection
with the special meeting of shareholders the recommendation of its Board of
Directors that holders of Shares approve and adopt the Merger Agreement and
approve the Merger. Geon will cause all Shares owned by Geon and its
subsidiaries to be voted in favor of the Merger.
No Solicitation of Other Offers. O'Sullivan has agreed that, from the date
of the Merger Agreement until the Effective Time or the earlier termination of
the Merger Agreement, neither O'Sullivan nor any of its subsidiaries shall,
directly or indirectly, take (and O'Sullivan shall not authorize or permit the
officers, directors, employees, representatives, consultants, investment
bankers, attorneys, accountants or other agents or affiliates of O'Sullivan or
its subsidiaries to so take) any action to (a) solicit, initiate, encourage or
take any other action to facilitate the submission of any Acquisition Proposal,
or (b) participate in any way in discussions or negotiations with or furnish any
information (whether public or nonpublic) to any person or entity (other than
Geon or the Purchaser) in connection with an Acquisition Proposal; provided,
however, that O'Sullivan may take any action described in clause (b) above, if
(i) such action is taken in connection with an unsolicited Acquisition Proposal,
(ii) the Board of Directors believes in its good faith judgment (based on the
advice of its financial and legal advisors) that failing to take such action
would constitute a breach of its fiduciary duties, and (iii) in the case of the
disclosure of nonpublic information relating to O'Sullivan in connection with an
Acquisition Proposal, the
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disclosure of such information is covered by a confidentiality agreement that
provides substantially the same protection to O'Sullivan as is afforded by the
confidentiality agreement entered into between Geon and O'Sullivan in connection
with the transactions contemplated by the Merger Agreement.
In addition, neither the Board of Directors of O'Sullivan nor any committee
thereof shall withdraw or modify in a manner adverse to Geon or the Purchaser
the approval and recommendation of the Offer and the Merger Agreement or approve
or recommend any Acquisition Proposal, provided that the Board of Directors (or
a committee thereof) may, prior to the acceptance for payment of Shares pursuant
to the Offer, recommend to its shareholders an unsolicited Acquisition Proposal
and in connection therewith withdraw or modify its approval or recommendation of
the Offer or the Merger if (a) the Board of Directors of O'Sullivan has
determined in its good faith judgment (based on the advice of its financial and
legal advisors) that the unsolicited Acquisition Proposal is a Superior
Proposal, and (b) simultaneously with such withdrawal, modification or
recommendation, O'Sullivan terminates the Merger Agreement and pays to Geon the
Break-up Fee (as defined below). Any actions taken by O'Sullivan or its
subsidiaries or their officers, directors, employees, representatives,
consultants, investment bankers, attorneys, accountants or other agents or
affiliates prior to the date of the Merger Agreement in soliciting, encouraging,
initiating, facilitating or participating in any discussions relating to any
Acquisition Proposal shall not be construed to render an Acquisition Proposed
received after the date hereof a solicited Acquisition Proposal.
O'Sullivan has agreed that it will promptly notify Geon orally and in
writing of any Acquisition Proposal or any inquiries with respect thereto. Any
such written notification will include the identity of the person or entity
making such inquiry or Acquisition Proposal and a description of the material
terms of such Acquisition Proposal (or the nature of the inquiry) and will
indicate whether O'Sullivan is providing or intends to provide the person or
entity making the Acquisition Proposal with access to nonpublic information
relating to O'Sullivan or any of its subsidiaries. O'Sullivan will, to the
extent reasonably practicable, also promptly inform Geon of any material change
in the details (including amendments or proposed amendments) of any such request
or Acquisition Proposal. In the event that the Board of Directors of O'Sullivan
determines that an Acquisition Proposal is a Superior Proposal and desires to
terminate the Merger Agreement, it will give Geon written notice of its
intention to terminate the Merger Agreement no later than three business days in
advance of any date that it intends to terminate the Merger Agreement. During
that three business day period, Geon will have the right, by giving written
notice to O'Sullivan, to match the terms of such Superior Proposal. If Geon
notifies O'Sullivan within such three business day period that it agrees to
match the terms of the Superior Proposal, O'Sullivan will forthwith cease any
discussion with the person or entity making the Superior Proposal, and Geon and
O'Sullivan will promptly incorporate the terms of the Superior Proposal into the
Merger Agreement, which except for such amendments will remain in full force and
effect.
"Acquisition Proposal" means any proposal or offer from any person or
entity relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of O'Sullivan or any of its subsidiaries (other
than investors in the ordinary course of business) or of over 20% of any class
of equity securities of O'Sullivan or any of its subsidiaries or any tender
offer or exchange offer that if consummated would result in any person or entity
beneficially owning more than 20% of any class of equity securities of
O'Sullivan or any of its subsidiaries, or any merger, consolidation, business
combination, sale of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving O'Sullivan and taken as a whole its
subsidiaries other than the transactions contemplated by the Merger Agreement.
"Superior Proposal" means a bona fide Acquisition Proposal on terms which a
majority of the members of the Board of Directors of O'Sullivan determines in
its good faith judgment (based on the advice of its financial and legal
advisors) to be more favorable to O'Sullivan and its shareholders than the
transactions contemplated by the Merger Agreement.
The parties have agreed that nothing contained in the Merger Agreement
shall prohibit O'Sullivan from taking and disclosing to its shareholders a
position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to O'Sullivan's shareholders if, in the opinion of
the Board of Directors of O'Sullivan, after consultation with counsel, failure
to so disclose would be inconsistent with its fiduciary duties to O'Sullivan's
shareholders under applicable law; provided that O'Sullivan does not, except as
permitted above, withdraw or modify, or propose to withdraw or modify, its
position with respect to the Offer or the Merger or approve or recommend, or
propose to approve or recommend, any Acquisition Proposal.
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Indemnification of O'Sullivan's Directors and Officers. The parties have
agreed in the Merger Agreement that the articles of incorporation and by-laws of
the Surviving Corporation shall contain the provisions with respect to
indemnification and exculpation from liability set forth in O'Sullivan's Amended
and Restated Articles of Incorporation, as amended, and By-Laws on the date of
the Merger Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who on
or prior to the Effective Time were directors, officers, employees or agents of
O'Sullivan, unless such modification is required by law.
Geon has agreed to, for a period of six years from the Effective Time,
either (a) maintain in effect O'Sullivan's current directors' and officers'
liability insurance covering those persons who are currently covered on the date
of the Merger Agreement by O'Sullivan's directors' and officers' liability
insurance policy (the "Indemnified Parties"); provided that Geon will not be
required to expend in any one year an amount in excess of 200% of the annual
premiums currently paid by O'Sullivan for such insurance (in which case Geon
shall be obligated to obtain a policy with the greatest coverage available for a
cost not exceeding such amount); and provided further that Geon may substitute
for such policies, policies with at least the same coverage containing terms and
conditions which are no less advantageous, if said substitution does not result
in any gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time, or (b) cause Geon's directors' and officers' liability insurance
to cover those persons who are covered on the date of the Merger Agreement by
O'Sullivan's directors' and officers' liability insurance policy with respect to
those matters covered by O'Sullivan's directors' and officers' liability policy.
Geon has also agreed to, from and after the date of purchase of Shares
pursuant to the Offer, indemnify all Indemnified Parties to the fullest extent
permitted by applicable law with respect to all acts and omissions arising out
of such individuals' services as officers, directors, employees or agents of
O'Sullivan or any of its subsidiaries or as trustees or fiduciaries of any plan
for the benefit of employees, or otherwise on behalf of O'Sullivan or any of its
subsidiaries, occurring prior to the Effective Time, including, without
limitation, the transactions contemplated by the Merger Agreement. Without
limitation of the foregoing, in the event that any such Indemnified Party is or
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter, including, without limitation, the transactions
contemplated by the Merger Agreement, occurring prior to, and including, the
Effective Time, Geon, from and after the date of purchase of Shares pursuant to
the Offer, will pay as incurred such Indemnified Party's legal and other
expenses (including the cost of any investigation and preparation) incurred in
connection therewith.
HSR Act. O'Sullivan and Geon have agreed that they will, within five
business days from the date of the Merger Agreement, file Notification and
Report Forms under the HSR Act with the Federal Trade Commission (the "FTC") and
the Antitrust Division of the Department of Justice (the "Antitrust Division")
and shall use their best efforts to respond as promptly as practicable to all
inquiries received from the FTC or the Antitrust Division for additional
information or documentation.
Employee Benefits. Geon has agreed that, during the period commencing at
the Effective Time and ending on the second anniversary thereof, the employees
(and former employees) of O'Sullivan and its subsidiaries will continue to be
provided with employee benefits and benefit plans no less favorable in the
aggregate than those provided by O'Sullivan and its subsidiaries as of the
Effective Time. Geon will, and will cause the Surviving Corporation to, honor
employee (or former employee) benefit obligations and contractual rights
existing as of the Effective Time and all employment, incentive and deferred
compensation or severance agreements, plans or policies adopted by the Board of
Directors of O'Sullivan (or any committee or subcommittee thereof) prior to the
date of the Merger Agreement in accordance with their terms, in each case to the
extent disclosed in the schedules to the Merger Agreement. Geon will provide
employees of O'Sullivan and its subsidiaries with credit for service with
O'Sullivan or any of its subsidiaries or predecessors prior to the Effective
Time for purposes of determining eligibility to participate, vesting, benefits
and benefit accrual under any employee benefit plans of Geon or its
subsidiaries. Employees of O'Sullivan and its subsidiaries shall not be subject
to pre-existing condition limitations, proof of insurability requirements or any
similar conditions or requirements under health benefit plans maintained by Geon
or its subsidiaries that would delay commencement of an employee's participation
in, or limit an employee's level of coverage under, any of the health benefit
plans of Geon or its subsidiaries.
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The Merger Agreement also states that, provided that the Board of Directors
of O'Sullivan has taken action to eliminate the requirement that the Trust
Agreement for O'Sullivan Corporation Salary Continuation Agreements, with First
Union National Bank as trustee and dated as of November 18, 1997 (the "Salary
Continuation Agreements Trust"), be fully funded for all current benefit
obligations upon a change of control of O'Sullivan, the Surviving Corporation
shall, from and after the Effective Time, assume and fully discharge, and Geon
shall guarantee the performance of, all obligations of O'Sullivan (and the
Surviving Corporation) under the salary continuation agreements listed on
Appendix A of the Salary Continuation Agreements Trust or on the schedules to
the Merger Agreement. Geon, O'Sullivan and their subsidiaries (including the
Surviving Corporation) shall not amend or terminate any of such salary
continuation agreements at any time, shall continue to make sufficient cash
deposits into the Salary Continuation Agreements Trust to permit the trustee to
pay all premiums required to be paid pursuant to life insurance contracts held
in the Salary Continuation Agreements Trust and shall not directly or indirectly
take any action that would in any way diminish or reduce the cash surrender
value of such life insurance contracts (including, but not limited to, borrowing
against the cash surrender value of the life insurance contracts).
Conditions to the Merger. The parties have agreed that the respective
obligations of Geon and the Purchaser, on the one hand, and O'Sullivan, on the
other hand, to effect the Merger are subject to the satisfaction or waiver
(subject to applicable law) at or prior to the Effective Time of each of the
following conditions: (a) to the extent required by applicable law or
O'Sullivan's Amended and Restated Articles of Incorporation, as amended, the
Merger Agreement and the Merger shall have been approved and adopted by holders
of at least seventy percent (70%) of the Shares; (b) any waiting period (and any
extension thereof) under the HSR Act applicable to the Merger shall have expired
or been terminated; (c) no preliminary or permanent injunction or other order
shall have been issued by any court or by any governmental or regulatory agency,
body or authority which prohibits the consummation of the Offer or the Merger
and the transactions contemplated by the Merger Agreement; provided, however,
that in the case of a decree, injunction or other order, each of the parties
shall have used reasonable efforts to prevent the entry of any such injunction
or other order and to appeal as promptly as possible any decree, injunction or
other order that may be entered; (d) the Purchaser shall have accepted for
payment and paid for the Shares tendered pursuant to the Offer; and (e) no
statute, rule, regulation, executive order, decree or order of any kind shall
have been enacted, entered, promulgated or enforced by any court or governmental
authority which prohibits the consummation of the Offer or the Merger or has the
effect of making the purchase of Shares illegal.
Termination. The Merger Agreement may be terminated and the transactions
contemplated thereby may be abandoned at any time prior to the Effective Time,
whether before or after approval of the Merger by O'Sullivan's shareholders: (a)
by mutual written consent of O'Sullivan, on the one hand, and of Geon and the
Purchaser, on the other hand; (b) by either Geon or O'Sullivan if any
governmental or regulatory agency shall have issued an order, decree or ruling
or taken any other action permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, Shares pursuant to
the Offer or the Merger and such order, decree or ruling or other action shall
have become final and nonappealable; (c) by either Geon or O'Sullivan if the
Effective Time shall not have occurred within six months after commencement of
the Offer unless the Effective Time shall not have occurred because of a
material breach of any representation, warranty, obligation, covenant, agreement
or condition set forth in the Merger Agreement on the part of the party seeking
to terminate the Merger Agreement; (d) by Geon or O'Sullivan if the Offer is
terminated or expires in accordance with its terms without the Purchaser having
purchased any Shares thereunder due to a failure of any of the Offer Conditions
to be satisfied, unless such termination or expiration has been caused by or
results from the failure of the party seeking to terminate the Merger Agreement
to perform in any material respect any of its respective covenants or agreements
contained in the Merger Agreement; (e) subject to the payment of the Break-up
Fee (as defined below), by either Geon or O'Sullivan if the Board of Directors
of O'Sullivan determines that an Acquisition Proposal will result in a Superior
Proposal and the Board believes (and has been advised by counsel) that a failure
to terminate the Merger Agreement and enter into an agreement to effect the
Superior Proposal would constitute a breach of its fiduciary duties; (f) prior
to the consummation of the Offer, by O'Sullivan, if any of the representations
and warranties of Geon or the Purchaser contained in the Merger Agreement were
untrue or incorrect in any material respect when made or have since become, and
at the time of termination remain, incorrect in any material respect, or Geon or
the Purchaser shall have breached or failed to comply in any material
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respect with any of their respective obligations, covenants or agreements under
the Merger Agreement, including, without limitation, their obligation to
commence the Offer within the time period required by the Merger Agreement; and
(g) by O'Sullivan, if Geon or the Purchaser shall have terminated the Offer
prior to the closing of the Offer, the Offer is terminated or expires without
the Purchaser having purchased any Shares, or the Purchaser or Geon fails to
purchase validly tendered Shares in violation of the terms and conditions of the
Offer or the Merger Agreement.
In the event of the termination of the Merger Agreement by O'Sullivan, Geon
or the Purchaser in accordance with the immediately preceding paragraph, written
notice of such termination shall forthwith be given to the other party or
parties specifying the provision of the Merger Agreement pursuant to which such
termination is made, and the Merger Agreement shall become void and have no
effect, and there shall be no liability thereunder on the part of Geon, the
Purchaser or O'Sullivan, except that the provisions of the Merger Agreement
relating to confidentiality, the Break-up Fee (as defined below), fees and
expenses, and termination shall survive any termination of the Merger Agreement.
Fees and Expenses. The Merger Agreement provides that all costs and
expenses incurred in connection with the Merger Agreement and the consummation
of the transactions contemplated by the Merger Agreement will be paid by the
party incurring the costs and expenses.
Break-up Fee. The parties have agreed that if (a) the Merger Agreement is
terminated by O'Sullivan because the Board of Directors of O'Sullivan has
determined that an Acquisition Proposal will result in a Superior Proposal and
the Board of Directors believes (and has been advised by counsel) that a failure
to terminate the Merger Agreement and enter into an agreement to effect the
Superior Proposal would constitute a breach of its fiduciary duties, (b) the
Board of Directors of O'Sullivan fails to recommend, withdraws, modifies or
changes its recommendation of the Offer or the Merger in any respect adverse to
Geon or the Purchaser, or has resolved to do so, for any reason other than a
breach by Geon or the Purchaser in any material respect of its representations
or warranties contained in the Merger Agreement or a failure by Geon or the
Purchaser to perform in any material respect any of its covenants or agreements
contained in the Merger Agreement, or (c) prior to the purchase of Shares by the
Purchaser, O'Sullivan violates its obligations with respect to Acquisition
Proposals in any material respect and thereafter enters into an agreement to
effect a Superior Proposal, then O'Sullivan shall pay Geon a fee of $5 million.
Payment of the $5 million by O'Sullivan shall be the exclusive remedy of Geon
and the Purchaser for any of the matters referred to in clauses (a), (b) or (c)
of this paragraph.
Waiver. The parties have agreed in the Merger Agreement that they may,
subject to the provisions of the Merger Agreement relating to the timing of the
Offer, at any time prior to the Effective Time, by action taken in writing by or
on behalf of their respective Boards of Directors (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained in
the Merger Agreement by any other applicable party or in any document,
certificate or writing delivered pursuant to the Merger Agreement by any other
applicable party, or (c) waive compliance with any of the agreements or
conditions contained herein.
SECTION 14. THE SHARE TENDER AGREEMENTS
In connection with the execution of the Merger Agreement, Geon and the
Purchaser entered into the Share Tender Agreements with Arthur H. Bryant II,
Magalen O. Bryant and John C. O. Bryant (the "Bryants"), who together control
approximately 26% of the Shares, pursuant to which the Bryants have agreed to,
among other things, tender all of the Shares controlled by them into the Offer.
The following is a summary of the material terms of the Share Tender Agreements
and is qualified in its entirety by reference to the copies of the Share Tender
Agreements filed as exhibits to the Schedule 14D-1 and incorporated herein by
reference.
Tender of Shares. The Bryants have agreed to validly tender (and not
withdraw), or cause the record owner of such Shares to validly tender (and not
withdraw), and sell pursuant to and in accordance with the terms of the Offer
all of the Shares controlled by them, subject to the terms and conditions of the
Merger Agreement.
Transfer of Shares. The Bryants have agreed that, during the term of the
Share Tender Agreements, they will not (a) tender into any tender or exchange
offer (other than the Offer) or otherwise sell, transfer, pledge, assign,
hypothecate or otherwise dispose of, or encumber with any encumbrance, any of
the Shares controlled by
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them, (b) exercise any of the options to acquire Shares held by them (except to
the extent permitted under the Merger Agreement), (c) deposit the Shares
controlled by them into a voting trust, enter into a voting agreement or
arrangement with respect to such Shares or grant any proxy or power of attorney
with respect to such Shares, or (d) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect acquisition,
sale, transfer, pledge, assignment, hypothecation or other disposition of any
interest in or the voting of any Shares or any other securities of O'Sullivan.
Voting of Shares. The Bryants have agreed, so long as the Share Tender
Agreements remain in effect, to vote all of the Shares controlled by them (a) in
favor of the approval and adoption of the Merger Agreement and the approval of
the transactions contemplated thereby and (b) against any action or agreement
that would result in a breach of any representation, warranty, covenant or
agreement of O'Sullivan contained in the Merger Agreement or would impede,
interfere with, delay or prevent the consummation of the Merger or the purchase
of Shares pursuant to the Offer; provided that this provision shall not prevent
Arthur H. Bryant II or John C. O. Bryant from exercising their fiduciary duties
as directors of O'Sullivan, including with respect to the provisions of the
Merger Agreement governing Acquisition Proposals.
No Solicitation. The Bryants have agreed that they will not, directly or
indirectly, through any agent, financial advisor, attorney, accountant or other
representative or otherwise, (a) solicit, initiate or take any other action to
facilitate any inquiries or the making of any proposal which constitutes an
Acquisition Proposal, (b) participate in any discussions or negotiations
regarding any Acquisition Proposal, (c) in connection with an Acquisition
Proposal, disclose any nonpublic information relating to O'Sullivan or afford
access to the properties, books or records of O'Sullivan to any person, or (d)
otherwise cooperate in any way with, assist, participate in, facilitate or
encourage any effort or attempt by any other person or entity to make an
Acquisition Proposal; provided that this provision shall not prevent Arthur H.
Bryant II or John C. O. Bryant from exercising their fiduciary duties as
directors of O'Sullivan, including with respect to the provisions of the Merger
Agreement governing Acquisition Proposals.
Termination. The Share Tender Agreements will automatically, without any
notice to or action by any party, terminate (a) upon the earlier to occur of (i)
the purchase of all of the Shares controlled by the Bryants pursuant to the
Offer or (ii) the termination of the Merger Agreement in accordance with its
terms, or (b) by the mutual written consent of the Bryants and Geon.
SECTION 15. THE MERGER
Vote Required to Approve the Merger. Under the Virginia Stock Corporation
Act and O'Sullivan's Amended and Restated Articles of Incorporation, as amended,
the Merger requires the approval of O'Sullivan's Board of Directors. The
Virginia Stock Corporation Act also provides that any merger of a corporation,
subject to certain exceptions not applicable to the Merger, must be approved by
a vote of more than two-thirds of the corporation's voting shares, unless the
corporation's board of directors or articles of incorporation specify a higher
vote or the corporation's articles of incorporation specify a lower vote not
less than a majority. O'Sullivan's Amended and Restated Articles of
Incorporation, as amended, provide that any merger of the corporation with an
interested shareholder, which includes any entity that owns more than ten
percent (10%) of the corporation's outstanding voting shares, requires the
affirmative vote of at least seventy percent (70%) of the corporation's
outstanding voting shares, regardless of whether any vote of the shareholders or
a lower vote of the shareholders is required by law.
Accordingly, if the Purchaser acquires at least seventy percent (70%) of
the Shares pursuant to the Offer, the Purchaser would have the voting power to
approve the Merger without the vote of any other shareholder and could effect
the Merger by so voting and by action of the Board of Directors of the
Purchaser, O'Sullivan's Board of Directors having already approved the Merger on
June 1, 1999. This will be the case if the Minimum Condition is satisfied.
Pursuant to and subject to the terms of the Share Tender Agreements, Arthur H.
Bryant II, Magalen O. Bryant and John C. O. Bryant, who together control
approximately 26% of the Shares, have agreed to 'tender all of the Shares
controlled by them into the Offer. In addition, Geon has agreed in the Merger
Agreement to cause the Purchaser to vote in favor of the Merger all of the
Shares purchased by the Purchaser pursuant to the Offer.
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Dividends and Distributions. O'Sullivan has agreed that, from the date of
the Merger Agreement until the Effective Time, O'Sullivan will not declare, pay,
set aside or make any dividend or make any other distribution or payment with
respect to the Shares, other than regular quarterly dividends. See Section 13.
Dissenters' Rights. Shareholders do not have dissenters' rights as a result
of the Offer. However, if the Merger is consummated, shareholders of O'Sullivan
who comply with all of the requirements of the Virginia Stock Corporation Act
and do not vote in favor of the Merger may have the right to dissent from the
Merger and demand payment of the "fair value" of their Shares outstanding
immediately prior to the Effective Time.
Under Section 13.1-730 of the Virginia Stock Corporation Act, dissenter's
rights are not available with respect to the shares of a corporation which, as
of the record date fixed to determine the shareholders entitled to receive
notice of and to vote at the shareholders meeting to act upon the agreement or
plan of merger, were either (a) listed on a national securities exchange or the
Nasdaq National Market or (b) held of record by at least 2,000 shareholders,
unless in either case (i) the corporation's articles of incorporation provide
otherwise, (ii) the holders of such shares are required by the terms of such
agreement or plan to accept for such shares anything except cash and/or shares
of the surviving or acquiring corporation or another corporation that is listed
on a national securities exchange or the Nasdaq National Market or the shares of
which are held of record by at least 2,000 shareholders, or (iii) the
transaction to be voted on is an "affiliated transaction" that has not been
approved by a majority of the corporation's disinterested directors. See Section
17.
If the conditions of Section 13.1-730 of the Virginia Stock Corporation Act
are not met and the Merger is consummated, the holders of Shares not purchased
pursuant to the Offer will have the right to dissent from the Merger and demand
payment of the "fair value" of their Shares outstanding immediately prior to the
Effective Time. Dissenting shareholders must comply with the applicable
statutory procedures and must not vote in favor of the Merger in order to
dissent. The "fair value" of the Shares means the value of the Shares
immediately prior to the Effective Time, excluding any appreciation or
depreciation in anticipation of the Merger unless such exclusion would be
inequitable.
The "fair value" estimation is first made by the corporation. Dissenters
who are dissatisfied with the corporation's "fair value" estimation may then
notify the corporation of their own "fair value" estimation. If the corporation
and a dissatisfied shareholder cannot settle on the amount owed, the shareholder
will ultimately be entitled to a judicial determination of "fair value." Any
such judicial determination of the "fair value" of the Shares could be based
upon considerations other than or in addition to the price paid in the Offer and
the market value of the Shares, including asset values, the investment value of
the Shares and any other valuation considerations generally accepted in the
investment community. The "fair value" of the Shares so determined could be more
or less than the price per Share to be paid pursuant to the Offer and the
Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF SHAREHOLDERS DOES NOT PURPORT TO BE
A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY SHAREHOLDERS DESIRING
TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. THE PRESERVATION AND EXERCISE OF
DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF
VIRGINIA LAW.
"Going Private" Transactions. The SEC 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. However, Rule
13e-3 would be inapplicable if (a) the Shares are deregistered under the
Exchange Act prior to the Merger or other business combination or (b) the Merger
or other substantially similar business combination is consummated within one
year after the termination of the Offer and the amount paid per Share in the
Merger or other substantially similar business combination is at least equal to
the amount paid per Share in the Offer. If applicable, Rule 13e-3 requires,
among other things, that certain financial information concerning the fairness
of the proposed transaction and the consideration offered to minority
shareholders in such transaction be filed with the SEC and disclosed to
shareholders prior to the consummation of the transaction.
SECTION 16. CONDITIONS TO THE COMPLETION OF THE OFFER BY GEON AND THE PURCHASER
Notwithstanding any other provision of the Offer, the Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1c under the Exchange Act (relating
to a bidder's obligation to pay for or return tendered shares promptly after the
termination or withdrawal
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of the Offer), pay for any Shares tendered and may terminate or amend the Offer
in accordance with the Merger Agreement and may postpone the acceptance of and
payment for Shares if (a) the Minimum Condition has not been satisfied, (b) any
applicable waiting period under the HSR Act shall not have expired or been
terminated, or (c) at any time on or after the date of the Merger Agreement and
at or before the Expiration Date (as the same may be extended from time to time)
any of the following shall occur:
- any court or domestic government or governmental authority or
agency shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree
or injunction or other order or the Antitrust Division or the
FTC has indicated to Geon and O'Sullivan that it may seek to
obtain a decree, injunction or other order which (a) makes
illegal, materially delays or otherwise directly or indirectly
materially restrains or prohibits the Offer or the Merger, (b)
prohibits or materially limits the ownership or operation by
Geon or the Purchaser of all or any material portion of the
business or assets of O'Sullivan or compels Geon or the
Purchaser to dispose of all or any material portion of the
business or assets of Geon or the Purchaser or O'Sullivan, or
imposes any limitations on the ability of Geon or the
Purchaser to conduct its business or own such assets, (c)
imposes limitations on the ability of Geon or the Purchaser
effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any
Shares acquired or owned by Geon or the Purchaser on all
matters properly presented to O'Sullivan's shareholders, (d)
requires divestiture by Geon or the Purchaser of any Shares,
or (e) otherwise materially adversely affects the business,
properties, assets, liabilities, operations, results of
operations, condition (financial or otherwise) or prospects
(the "Condition") of O'Sullivan and its subsidiaries taken as
a whole;
- there shall have occurred (a) any general suspension greater
than 24 hours of trading in, or limitation on prices for,
securities on any national securities exchange or in the
over-the-counter market, (b) any material change in United
States or any other currency exchange rates or a suspension
of, or limitation on, the markets therefor, (c) a declaration
of a banking moratorium or any suspension of payments in
respect of banks in the United States, (d) a declaration of
war by the United States having a material adverse effect on
O'Sullivan or materially adversely affecting (or materially
delaying) the consummation of the Offer, or (e) in the case of
any of the situations described in clauses (a) through (c)
inclusive existing at the date of commencement of the Offer, a
material acceleration or worsening thereof;
- all consents, registrations, approvals, permits,
authorizations, notices, reports or other filings required to
be obtained or made by O'Sullivan, Geon or the Purchaser with
or from any governmental or regulatory entity in connection
with the execution, delivery and performance of the Merger
Agreement, the Offer and the consummation of the transactions
contemplated by the Merger Agreement shall not have been made
or obtained and such failure could reasonably be expected to
have a material adverse effect on the Condition of O'Sullivan
and its subsidiaries taken as a whole or could be reasonably
likely to prevent or materially delay consummation of the
transactions contemplated by the Merger Agreement;
- any representation or warranty made by O'Sullivan in the
Merger Agreement (a) was untrue or incorrect in any material
respect when made or has become untrue or incorrect in any
material respect and (b) at the time of termination or
amendment remains untrue or incorrect in any material respect;
- there shall have been a breach by O'Sullivan of any of its
covenants or agreements contained in the Merger Agreement in
any material respect;
- O'Sullivan's Board of Directors shall have withdrawn, modified
or amended in any respect adverse to Geon or the Purchaser its
recommendation of the Offer or the Merger, or shall have
resolved to do so; or
- the Merger Agreement shall have been terminated in accordance
with its terms;
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which, in the reasonable judgment of the Purchaser, in any such case and
regardless of the circumstances giving rise to any such condition, would make it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions 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; provided,
however, that without the consent of O'Sullivan, Geon and the Purchaser shall
not waive the Minimum Condition.
SECTION 17. GOVERNMENTAL PERMITS AND APPROVALS; STATE ANTI-TAKEOVER LAWS
Governmental Permits and Approvals. Except as otherwise disclosed in this
Offer to Purchase, based on information furnished by O'Sullivan or filed by
O'Sullivan with the SEC, neither Geon nor the Purchaser is aware of (a) any
license or regulatory permit that appears to be material to the business of
O'Sullivan, taken as a whole, that might be adversely affected by the
acquisition of Shares by the Purchaser pursuant to the Offer or the Merger or
(b) any approval or other action, by any governmental, administrative or
regulatory agency or authority, domestic, foreign or supranational, that would
be required for the acquisition or ownership of Shares by the Purchaser as
contemplated in this Offer to Purchase. Should any such approval or other action
be required, the Purchaser currently contemplates that such approval or action
would be sought. Although 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
action, if needed, would be obtained or would be obtained without substantial
conditions or that adverse consequences might not result to the business of
O'Sullivan, Geon or the Purchaser or that certain parts of the businesses of
O'Sullivan, Geon or the Purchaser might not have to be disposed of in the event
that such approvals were not obtained or any other actions were not taken. The
Purchaser's obligation under the Offer to accept for payment and pay for Shares
is subject to certain conditions. See Section 16.
Antitrust. Under the HSR Act, certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division and the FTC and certain waiting period requirements have been
satisfied. Geon filed a Notification and Report Form with respect to the Offer
on June 3, 1999, and O'Sullivan filed a Notification and Report Form with
respect to the Offer on June 4, 1999.
Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Geon. Accordingly,
because Geon made the filing on June 3, 1999, the waiting period with respect to
the Offer will expire at 11:59 p.m., Eastern time, on June 18, 1999 unless Geon
or O'Sullivan receives a request for additional information or material, or the
Antitrust Division and the FTC terminate the waiting period prior thereto. If,
within such 15-day period, either the Antitrust Division or the FTC requests
additional information or material from Geon or O'Sullivan concerning the Offer,
the waiting period will be extended and would expire at 11:59 p.m., Eastern
time, on the tenth calendar day after the date of substantial compliance by Geon
or O'Sullivan with such request. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the HSR Act.
Thereafter, the waiting period may be extended only by court order or with the
consent of Geon. 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 16.
Private parties and state attorneys general may also bring action under the
antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Geon and
O'Sullivan are engaged, Geon and the Purchaser believe that the acquisition of
Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there
can be no assurance that a challenge to the Offer or other acquisition of Shares
by the Purchaser on antitrust grounds will not be made or, if such a challenge
is made, of the result.
State Anti-takeover Laws. Article 14 of the Virginia Stock Corporation Act
(the "Affiliated Transactions Statute") prohibits a publicly held Virginia
corporation from merging with an "interested shareholder," which includes any
entity that owns ten percent (10%) or more of the corporation's outstanding
voting shares, for a period of three years after the date of the transaction in
which the shareholder became an interested shareholder,
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unless (a) a majority of disinterested directors approved in advance the
transaction in which the shareholder became an interested shareholder or (b) the
affiliated transaction is approved by the affirmative vote of a majority of the
disinterested directors and the holders of two-thirds of the voting shares other
than the shares beneficially owned by the interested shareholder. A corporation
may engage in an affiliated transaction with an interested shareholder beginning
three years after the date of the transaction in which the person became an
interested shareholder, if the transaction is approved by a majority of the
disinterested directors or by two-thirds of the disinterested shareholders or if
the transaction complies with certain fair price provisions. Since the Board of
Directors of O'Sullivan on June 1, 1999 approved the acquisition of Shares by
the Purchaser pursuant to the Offer, the Affiliated Transactions Statute will
not be applicable to the Offer or the Merger.
Article 14.1 of the Virginia Stock Corporation Act (the "Control Share
Acquisitions Statute") provides that shares of a publicly held Virginia
corporation that are acquired in a "control share acquisition" will have no
voting rights unless such rights are conferred on the acquired shares by the
vote of a majority of all the outstanding shares other than interested shares. A
"control share acquisition" includes the acquisition of such number of voting
shares which would allow the acquirer to have voting power within the following
ranges or to move upward from one range into another: (a) one-fifth or more but
less than one-third; (b) one-third or more but less than a majority; or (c) more
than a majority. The Control Share Acquisitions Statute does not apply to the
acquisition of voting shares in a tender offer that is made pursuant to an
agreement to which the publicly held Virginia corporation is a party. Since the
Offer is being made by the Purchaser pursuant to the Merger Agreement, the
Control Share Acquisitions Statute will not apply to the Purchaser's acquisition
of Shares in the Offer.
In 1995, in WLR Foods, Inc. v. Tyson Foods Inc., the United States Court of
Appeals for the Fourth Circuit held that the Affiliated Transactions Statute and
the Control Share Acquisitions Statute are not preempted by applicable federal
securities law, are constitutional and, even though the statutes favor incumbent
management over bidders, do not impermissibly restrict the ability of a bidder
to take over a Virginia corporation.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, shareholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, the Supreme Court of the United
States in Edgar v. MITE Corp. invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987, the Supreme Court in CTS Corp. v. Dynamics Corp. of America held that
the Indiana Control Share Acquisition Act was constitutional. Such Act, by its
terms, is applicable only to corporations that have a substantial number of
shareholders in Indiana and are incorporated there. Subsequently, a number of
federal courts ruled that various state anti-takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside the
state of enactment.
O'Sullivan conducts business in a number of states throughout the United
States, some of which have enacted anti-takeover laws. The Purchaser does not
know whether any of these laws will, by their terms, apply to the Offer and has
not complied with any such laws. Should any person seek to apply any state
anti-takeover law, the Purchaser will take such action as then appears
desirable, which may include challenging the validity or applicability of any
such statute in appropriate court proceedings. In the event it is asserted that
one or more state anti-takeover law is applicable to the Offer or the Merger,
and an appropriate court does not determine that it is inapplicable or invalid
as applied to the Offer or the Merger, the Purchaser might be required to file
certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any 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 payment any Shares tendered. See Section 16.
SECTION 18. FEES AND EXPENSES
McDonald Investments Inc., A KeyCorp Company ("McDonald") is acting as
Dealer Manager in connection with the Offer. Geon has agreed to pay McDonald a
fee of $50,000 in connection with the Offer. In addition, Geon has agreed to
reimburse McDonald for its reasonable out-of-pocket expenses, including, without
28
<PAGE> 31
limitation, reasonable fees and expenses of its legal counsel, incurred in
connection with the Offer or otherwise arising out of McDonald's engagement, and
has also agreed to indemnify McDonald and certain related parties against
certain liabilities and expenses, including, without limitation, certain
liabilities under the federal securities laws, arising out of McDonald's
engagement.
Morrow & Co., Inc. has been retained by Geon as Information Agent in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee shareholders to forward material relating to
the Offer to beneficial owners of Shares. Geon will pay the Information Agent
reasonable and customary compensation for all such services in addition to
reimbursing the Information Agent for reasonable out-of-pocket expenses in
connection therewith. Geon has agreed to indemnify the Information Agent against
certain liabilities and expenses in connection with the Offer, including,
without limitation, certain liabilities under the federal securities laws.
The Bank of New York has been retained by Geon as the Depositary in
connection with the Offer. Geon will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
Except as set forth above, neither Geon nor the Purchaser will pay any fees
or commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks, trust
companies and other nominees will, upon request, be reimbursed by Geon or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
SECTION 19. CERTAIN LEGAL MATTERS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. Neither Geon nor the Purchaser is
aware of any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. To the
extent Geon or the Purchaser becomes aware of any state law that would limit the
class of offerees in the Offer, the Purchaser will amend the Offer and,
depending on the timing of such amendment, if any, will extend the Offer to
provide adequate dissemination of such information to such holders of Shares
prior to the expiration of the Offer. In any jurisdiction the securities, blue
sky or other laws of which require the Offer to be made by a licensed broker or
dealer, the Offer is being made on behalf of the Purchaser by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF GEON OR THE PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
GEON AND THE PURCHASER HAVE FILED WITH THE SEC A TENDER OFFER STATEMENT ON
SCHEDULE 14D-1 PURSUANT TO RULE 14d-3 UNDER THE EXCHANGE ACT, TOGETHER WITH
EXHIBITS, FURNISHING CERTAIN ADDITIONAL INFORMATION WITH RESPECT TO THE OFFER,
AND MAY FILE AMENDMENTS THERETO. COPIES OF SUCH SCHEDULE 14D-1 AND ANY
AMENDMENTS THERETO, INCLUDING EXHIBITS, MAY BE OBTAINED FROM THE SEC IN THE
MANNER SET FORTH UNDER THE HEADING "AVAILABLE INFORMATION" IN SECTION 8 (EXCEPT
THAT SUCH MATERIAL WILL NOT BE AVAILABLE AT THE REGIONAL OFFICES OF THE SEC).
TGC ACQUISITION CORPORATION
June 8, 1999
29
<PAGE> 32
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF GEON AND THE PURCHASER
Geon. Set forth below are the names, business addresses and present
principal occupations or employment, and material occupations, positions,
offices or employments for the past five years, of each director and executive
officer of Geon. The business address of each such person is One Geon Center,
Avon Lake, Ohio 44012-0122, and each such person is a United States citizen.
Directors of Geon are indicated by an asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME 5-YEAR EMPLOYMENT HISTORY
---- -----------------------------------
<S> <C>
William F. Patient*............... Mr. Patient (age 64) is Chairman of the Board of Geon, and
has served in this capacity since Geon's initial public
offering in April 1993. Mr. Patient served as Chief
Executive Officer of Geon from April 1993 to May 1999, as
President of Geon from April 1993 to February 1998 and as
Senior Vice President of The B.F. Goodrich Company and as
President of its Geon Vinyl Division from May 1989 to
April 1993. Prior to joining The B.F. Goodrich Company,
Mr. Patient held various positions with Borg-Warner
Chemicals from 1962 to 1989. He serves on the Boards of
Directors of National City Bank and Navistar International
Corporation.
Thomas A. Waltermire*............. Mr. Waltermire (age 49) is President, since February 1998,
and Chief Executive Officer, since May 1999, of Geon. From
May 1997 to February 1998, Mr. Waltermire served as
Executive Vice President and Chief Operating Officer and,
from October 1993 until May 1997, as Chief Financial
Officer of Geon. Mr. Waltermire joined Geon as Senior Vice
President and Treasurer in March 1993 just prior to Geon's
initial public offering in April 1993. Prior to joining
Geon, Mr. Waltermire held various positions with The B.F.
Goodrich Company.
Donald P. Knechtges............... Mr. Knechtges (age 57) is Senior Vice President, Business
and Technology Development of Geon, and has served in this
capacity since August 1995. Mr. Knechtges joined The B.F.
Goodrich Company as an engineer in June 1965 and became
Senior Vice President, Commercial in December 1991.
V. Lance Mitchell................. Mr. Mitchell (age 39) is Vice President and General Manager,
Compounds of Geon, and has served in this capacity since May
1997. Mr. Mitchell joined The B.F. Goodrich Company as a
Product Manager in 1989. Since then he has served as a
Market Development Manager, Regional Sales Manager,
Extrusion Business Director and Compound Business
Director.
Clarence J. Nosal................. Mr. Nosal (age 61) is Vice President and General Manager,
Resin and Intermediates of Geon, and has served in this
capacity since Geon's initial public offering in April
1993. Mr. Nosal joined The B.F. Goodrich Company in 1967
as a Project Manager. In 1987, he was named Vice President
of Operations for the Geon Vinyl Division of The B.F.
Goodrich Company.
Gregory L. Rutman................. Mr. Rutman (age 56) is Vice President, General Counsel,
Secretary and Assistant Treasurer of Geon, and has served in
this capacity since Geon's initial public offering in
April 1993. Mr. Rutman joined The B.F. Goodrich Company in
October 1974. From 1985 until Geon's initial public
offering in April 1993, he functioned as Staff Vice
President of The B.F. Goodrich Company and Counsel to its
Geon Vinyl Division.
</TABLE>
30
<PAGE> 33
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME 5-YEAR EMPLOYMENT HISTORY
---- -----------------------------------
<S> <C>
W. David Wilson................... Mr. Wilson (age 45) is Vice President and Chief Financial
Officer of Geon, and has served in this capacity since May
1997. Mr. Wilson joined The B.F. Goodrich Company in 1978
and served in a variety of financial management positions
within its Chemical Group. He was named Controller of the
Geon Vinyl Division in 1985 and later became Director of
Marketing. He served as General Manager for Auseon
Limited, Geon's wholly-owned Australian subsidiary, and
Director of Business Management for Geon's Resin Division
before being named Vice President and Chief Financial
Officer in May 1997.
James K. Baker*................... Mr. Baker (age 67) served as Vice Chairman of Arvin
Industries, Inc., an auto parts supplier to the original
equipment and replacement markets, until his retirement in
April 1998. Mr. Baker served as Chief Executive Officer of
Arvin Industries, Inc. from 1981 to 1993 and as Chairman
from 1986 to February 1996. Mr. Baker serves on the Boards
of Directors of Cinergy Corp., Tokheim Corp., Amcast
Industrial Corp. and Veridian Corp., and served as
Chairman of the United States Chamber of Commerce.
Gale Duff-Bloom*.................. Ms. Bloom (age 59) is President of Marketing and Company
Communications of J.C. Penney Company, Inc., a major
retailer. Ms. Bloom has served in her current position
since February 1996. Ms. Bloom joined J.C. Penney in 1969
and was elected Vice President and Director of Investor
Relations in 1988. In 1990, Ms. Bloom was appointed to the
positions of Senior Vice President and Associate Director
of Merchandising. In 1993, she was appointed Executive
Vice President and Director of Administration and, in
1995, Senior Executive Vice President and Director of
Personnel and Company Communications. Ms. Bloom serves on
the Boards of Directors of Chase Bank of Texas and several
professional and civic organizations. She is the most
recent past Chair of The National Council of the Better
Business Bureau.
J. Douglas Campbell*.............. Mr. Campbell (age 57) served as President and Chief
Executive Officer and a Director of Arcadian Corporation, a
nitrogen chemicals and fertilizer manufacturer, until his
retirement in 1997. Mr. Campbell joined Arcadian
Corporation as President and Chief Executive Officer in
December 1992. Prior to joining Arcadian Corporation, he
held various positions with Standard Oil (Ohio) and
British Petroleum since 1966, most recently as Deputy
Chief Executive Officer of BP Chemicals.
D. Larry Moore*................... Mr. Moore (age 62) served as President and Chief Operating
Officer of Honeywell, Inc., a multinational manufacturer of
controls for use in homes, buildings, industry, and space
and aviation, until his retirement in 1997. In 1987, Mr.
Moore became Vice President of Honeywell's Commercial
Flight Systems Group, and in 1989 he became President of
Honeywell's Space and Aviation business. In 1990, he
became Executive Vice President and Chief Operating
Officer of Honeywell's Industrial and Space and Aviation
businesses. In April 1993, he was elected President and
Chief Operating Officer. Mr. Moore serves on the Boards of
Directors of Reynolds Metals Company, Cordant Technologies
Inc. and Howmet Corporation.
</TABLE>
31
<PAGE> 34
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME 5-YEAR EMPLOYMENT HISTORY
---- -----------------------------------
<S> <C>
R. Geoffrey P. Styles*............ Mr. Styles (age 68) served as Vice Chairman of the Royal
Bank of Canada until his retirement in December 1987. He is
currently Chairman and a Director of Grosvenor
International Holdings Ltd. Mr. Styles is also a Director
of several Canadian corporations, including The Royal
Trust Company, Echo Bay Mines Ltd. and Onex Corporation.
Farah M. Walters*................. Ms. Walters (age 54) is President and Chief Executive
Officer of University Hospitals and has served in this
capacity since 1992. Ms. Walters joined University
Hospitals in 1986. She held positions of increasing
responsibility until her appointment as Chief Executive
Officer in 1992. In 1993, she was appointed to Hillary
Rodham Clinton's National Health Care Reform Task Force.
Ms. Walters is a Director of LTV Corporation, Kerr-McGee
Corporation, University HealthSystem Consortium in
Chicago, Illinois, Cleveland Tomorrow, the Greater
Cleveland Hospital Association and University Circle,
Inc., and is also on the visiting committee of Case
Western Reserve University's Weatherhead School of
Management.
</TABLE>
The Purchaser. The name and position with the Purchaser of each director
and executive officer of the Purchaser are set forth below. The business address
of each such person is One Geon Center, Avon Lake, Ohio 44012-0122, and each
such person is a United States citizen.
<TABLE>
<CAPTION>
POSITION WITH THE PURCHASER
(PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME 5-YEAR EMPLOYMENT HISTORY)
---- ------------------------------------
<S> <C>
Donald P. Knechtges............... Chairman, President, Chief Executive Officer and Director.
See biography above.
John L. Rastetter................. Mr. Rastetter (age 52) is Vice President, Chief Financial
Officer and a Director of the Purchaser. Mr. Rastetter is
Director, Planning and Business Development of Geon, and
has served in this capacity since June 1997. Mr. Rastetter
joined The B.F. Goodrich Company in September 1970, and
held a variety of financial management positions with its
Tire Division before joining the Geon Vinyl Division in
1989. Prior to his present position with Geon, Mr.
Rastetter served as Operations Controller, BFG
Intermediates of Geon.
Gregory L. Rutman................. Vice President, General Counsel, Secretary, Treasurer and
Director. See biography above.
</TABLE>
32
<PAGE> 35
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of O'Sullivan
or such shareholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, NY 10286-1248 New York, NY 10286
</TABLE>
Facsimile Transmission:
(212) 815-6213
For Confirmation Telephone:
(212) 815-6173
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and all other tender offer
materials may be obtained from the Information Agent 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:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Banks and brokerage firms call: (800) 662-5200
Shareholders please call: (800) 566-9061
The Dealer Manager for the Offer is:
MCDONALD INVESTMENTS INC.
A KEYCORP COMPANY
McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2603
<PAGE> 1
EXHIBIT (a)(3)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
O'SULLIVAN CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED JUNE 8, 1999
BY
TGC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
THE GEON COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN
DAYLIGHT SAVING TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, NY 10286-1248 New York, NY 10286
</TABLE>
Facsimile Transmission:
(212) 815-6213
For Confirmation Telephone:
(212) 815-6173
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
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 shareholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC") pursuant to the
book-entry transfer procedure described in Section 2 of the Offer to Purchase
(as defined below). Delivery of documents to DTC does not constitute delivery to
the Depositary.
Shareholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section l of the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who wish
to tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase. See Instruction 2.
<PAGE> 2
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of Tendering
Institution --------------------------------------------------------------------
Account Number --------------- Transaction Code Number ---------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered
Holder(s) ----------------------------------------------------------------------
Window Ticket No. (if
any) ---------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed
Delivery -----------------------------------------------------------------------
Name of Institution which Guaranteed
Delivery -----------------------------------------------------------------------
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- --------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARE SHARES EVIDENCED NUMBER
CERTIFICATE BY SHARE OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL SHARES
- --------------------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to
the Depositary are being tendered hereby. See Instruction 4.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to TGC Acquisition Corporation, a Virginia
corporation (the "Purchaser") and a wholly owned subsidiary of The Geon Company,
a Delaware corporation ("Geon"), the above-described shares of common stock, par
value $1.00 per share (the "Shares"), of O'Sullivan Corporation, a Virginia
corporation ("O'Sullivan"), pursuant to the Purchaser's offer to purchase all
outstanding Shares, at $12.25 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 8, 1999 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as amended from time to time, together 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. Any such transfer or assignment by the Purchaser would
require the Purchaser to comply with the terms of the Merger Agreement, dated
June 2, 1999, among Geon, the Purchaser and O'Sullivan.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby and all dividends, distributions (including,
without limitation, distributions of additional Shares and other securities) and
rights declared, paid or distributed in respect of such Shares on or after June
8, 1999, other than the regular quarterly dividend in the amount of $0.08 per
Share with a record date of June 7, 1999 (collectively, "Distributions"), and
irrevocably appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
Share Certificates evidencing such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by DTC, together, in either case, with all accompanying evidences of transfer
and authenticity, to or upon the order of the Purchaser, (b) present such Shares
and all Distributions for transfer on the books of O'Sullivan, and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares and all Distributions, all in accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Donald P. Knechtges, John L. Rastetter and Gregory L. Rutman of the
Purchaser as 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 any
and all Distributions). All such proxies shall be considered coupled with an
interest in the tendered Shares. This appointment will be effective if, when and
only to the extent that the Purchaser accepts such Shares for payment pursuant
to the Offer. Upon such acceptance for payment, all prior proxies given by the
undersigned with respect to such Shares (and any such other Shares and
securities) will, without further action, be revoked, and no subsequent proxies
may be given nor any subsequent written consent executed by the undersigned with
respect thereto (and, if given or executed, will not be deemed to be effective).
The designees of the Purchaser named above will, with respect to the Shares and
other securities for which the appointment is effective, be empowered to
exercise all voting and other rights of the undersigned as they in their sole
discretion may deem proper at any annual or special meeting of the shareholders
of O'Sullivan or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise, and the Purchaser reserves the right to
require that, in order for Shares or other securities to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser must be able to exercise full voting rights with respect
to such Shares or other securities.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of the Purchaser all Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer, and,
pending such remittance and transfer or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price the amount or value of such
Distribution, as determined by the Purchaser in its sole discretion.
<PAGE> 4
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as otherwise stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. The Purchaser's acceptance of such Shares for
payment will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions of the Offer, including,
without limitation, the undersigned's representation and warranty that the
undersigned owns the Shares being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. The undersigned recognizes that the Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any Shares
from the name of the registered holder(s) thereof if the Purchaser does not
purchase any of the Shares tendered hereby.
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificate(s) evidencing Shares not tendered or not
purchased are to be issued in the name of someone other than the
undersigned.
Issue [ ] Check [ ] Share Certificate(s) to:
Name: -------------------------------------------------------
(PRINT)
Address: ----------------------------------------------------
-------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificate(s) evidencing Shares not tendered or not
purchased are to be mailed to someone other than the undersigned or to the
undersigned at an address other than that shown under "Description of
Shares Tendered."
Mail [ ] Check [ ] Share Certificate(s) to:
Name: -------------------------------------------------------
(PRINT)
Address: ----------------------------------------------------
-------------------------------------------------------------
(ZIP CODE)
- --------------------------------------------------------------------------------
<PAGE> 5
IMPORTANT
SHAREHOLDER(S): SIGN HERE
(ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated:
- ------------------------1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or on a security position listing or by a person authorized
to become a registered holder by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide the following information. See
Instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security No.:
- ---------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or by a financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (an
"Eligible Institution"), unless (a) 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 DTC whose name appears on a security position
listing as the owner of Shares) tendered hereby and such holder(s) has (have)
completed neither the box entitled "Special Payment Instructions" nor the box
entitled "Special Delivery Instructions" or (b) such Shares are tendered for the
account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in Section 2 of the Offer to Purchase. Share Certificates
evidencing all physically tendered Shares, or a confirmation of a book-entry
transfer into the Depositary's account at DTC of all Shares delivered by
book-entry transfer, in each case together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth at the front hereof prior to the Expiration Date
(as defined in Section l of the Offer to Purchase). If Share Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Shareholders whose Share Certificates are not immediately available, who
cannot deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Shares
pursuant to the guaranteed delivery procedure described in Section 2 of the
Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by
or through an Eligible Institution; (b) 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
(c) the Share Certificates evidencing all physically delivered Shares in proper
form for transfer by delivery, or a confirmation of a book-entry transfer into
the Depositary's account at DTC of all Shares delivered by book-entry transfer,
in each case together with a Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, or an Agent's Message (as defined in
Section 2 of the Offer to Purchase), with any required signature guarantees and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within five New York Stock Exchange, Inc. trading days after the
date of execution of such Notice of Guaranteed Delivery, all as described in
Section 2 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE
OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND 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.
PLEASE DO NOT ENDORSE YOUR SHARE CERTIFICATES.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering shareholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such cases, new Share Certificate(s) evidencing the remainder of
the Shares that were evidenced by the Share Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions," as soon as practicable after the expiration or termination of the
Offer. All Shares evidenced by Share Certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
<PAGE> 7
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 with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to the Purchaser 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 SHARE CERTIFICATES
EVIDENCING THE SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered," the appropriate boxes included in
this Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. Except as described in the Offer to Purchase, the
conditions to 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.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to Information Agent at its address
and telephone numbers set forth below. Additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be obtained from the Information Agent or from brokers, dealers, commercial
banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering shareholder has been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding, such shareholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
shareholder has since been notified by the Internal Revenue Service that such
shareholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the
<PAGE> 8
tendering shareholder to 31% federal income tax withholding on the payment of
the purchase price of all Shares purchased from such shareholder. If the
tendering shareholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such shareholder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute Form
W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% on all payments of the purchase price to such
shareholder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED WITH ANY REQUIRED SIGNATURE GUARANTEES, AND SHARE
CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, OR A PROPERLY COMPLETED AND
DULY EXECUTED NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS
MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under the federal income tax laws, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is generally such shareholder's social
security number. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect to
Shares purchased pursuant to the Offer may be subject to backup withholding of
31%.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) generally are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such individual must submit a statement, signed under
penalties of perjury, attesting to such individual's exempt status. Forms of
such statements can be obtained from the Depositary. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 (the
"Guidelines") for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the shareholder. 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.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (1) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN) and (2) that
the shareholder is not subject to backup withholding because (a) such
shareholder is exempt from backup withholding, (b) such shareholder has not been
notified by the Internal Revenue Service that such shareholder is subject to
backup withholding as a result of a failure to report all interest or dividends,
or (c) the Internal Revenue Service has notified such shareholder that such
shareholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for additional guidance on
which number to report. If the tendering shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
shareholder.
<PAGE> 9
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PAYER'S NAME: THE BANK OF NEW YORK
- ---------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- Taxpayer Identification Number -- For all -------------------------------
FORM W-9 accounts, enter taxpayer identification number in Social Security Number(s)
DEPARTMENT OF THE TREASURY the box at right. (For most individuals, this is OR
INTERNAL REVENUE SERVICE your social security number. If you do not have a -------------------------------
number, see Obtaining a Number in the enclosed Employer Identification Number
Guidelines.) Certify by signing and dating below. (If awaiting TIN write
Note: If the account is in more than one name, see "Applied For")
the chart in the enclosed Guidelines to determine
which number to give the payer.
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
PAYER'S REQUEST FOR TAXPAYER PART II -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines
IDENTIFICATION NUMBER and complete as instructed therein.
("TIN") CERTIFICATION -- 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.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are 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 item (2). (Also see instructions in the enclosed
Guidelines.)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Signature ---------------------------------------- Date --------------- 1999
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------
</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 ADDITIONAL DETAILS.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Banks and brokerage firms call: (800) 662-5200
Shareholders please call: (800) 566-9061
The Dealer Manager for the Offer is:
MCDONALD INVESTMENTS INC.
A KEYCORP COMPANY
McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2603
June 8, 1999
<PAGE> 1
EXHIBIT (a)(4)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
O'SULLIVAN CORPORATION
TO
TGC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
THE GEON COMPANY
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if (a) certificates
("Share Certificates") evidencing shares of common stock, par value $1.00 per
share (the "Shares"), of O'Sullivan Corporation, a Virginia corporation
("O'Sullivan"), are not immediately available, (b) time will not permit all
required documents to reach The Bank of New York, as the Depositary (the
"Depositary"), prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase (as defined below)), or (c) the procedure for book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or transmitted by telegram, facsimile
transmission or mail to the Depositary. See Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, NY 10286-1248 New York, NY 10286
</TABLE>
Facsimile Transmission:
(212) 815-6213
For Confirmation Telephone:
(212) 815-6173
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
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 TGC Acquisition Corporation, a Virginia
corporation and a wholly owned subsidiary of The Geon Company, a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated June 8, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, as amended from time to time, together constitute
the "Offer"), receipt of each of which is hereby acknowledged, the number of
Shares specified below pursuant to the guaranteed delivery procedures described
in Section 2 of the Offer to Purchase.
Number of Shares:
- --------------------------------------------------------------------------------
Certificate No(s). (if available):
- ------------------------------------------------------------------------------
Check box if Shares will be tendered by book-entry transfer: [ ]
Account Number:
- --------------------------------------------------------------------------------
Name(s) of Record Holder(s):
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Company Area Code and Tel. No.:
- ---------------------------------------------------------------------------
Area Code and Tel. No.:
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: ________________ , 1999
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a commercial bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
hereby (a) represents that the tender of Shares effected hereby complies with
Rule 14e-4 of the Securities Exchange Act of 1934, as amended, and (b)
guarantees delivery to the Depositary, at one of its addresses set forth above,
of Share Certificates evidencing the Shares tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's accounts at The Depository Trust Company, in each case with
delivery of a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) with any required signature guarantees, or an Agent's Message
(as defined in Section 2 of the Offer to Purchase), and any other documents
required by the Letter of Transmittal, within five New York Stock Exchange, Inc.
trading days after the date of execution of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period shown herein. Failure to
do so could result in financial loss to such Eligible Institution.
Name of Firm:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
AUTHORIZED SIGNATURE:
- ------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Title:
- --------------------------------------------------------------------------------
Area Code and Tel. No.:
- -----------------------------------------------------------------------------
Dated:
- ------------------ , 1999
NOTE: DO NOT SEND SHARE CERTIFICATE(S) WITH THIS NOTICE OF GUARANTEED
DELIVERY. SHARE CERTIFICATE(S) SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
3
<PAGE> 1
EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
O'SULLIVAN CORPORATION
BY
TGC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
THE GEON COMPANY
AT
$12.25 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN
DAYLIGHT SAVING TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED.
June 8, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by TGC Acquisition Corporation, a Virginia
corporation (the "Purchaser") and a wholly owned subsidiary of The Geon Company,
a Delaware corporation ("Geon"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of common stock, par value
$1.00 per share (the "Shares"), of O'Sullivan Corporation, a Virginia
corporation ("O'Sullivan"), at a price of $12.25 per Share, net to the seller in
cash, without interest thereon (the "Offer Price"), upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated June 8, 1999 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") enclosed herewith.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN A NUMBER OF SHARES WHICH REPRESENTS AT LEAST SEVENTY
PERCENT (70%)OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Offer to Purchase, dated June 8, 1999;
2. The Letter of Transmittal to be used by holders of Shares in
accepting the Offer and tendering Shares;
3. The Notice of Guaranteed Delivery to be used to tender Shares
pursuant to the Offer if none of the procedures for tendering Shares set
forth in the Offer to Purchase can be completed on a timely basis;
4. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominees, with space provided for obtaining such clients' instructions
with regard to the Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. A return envelope addressed to The Bank of New York, as the
Depositary.
<PAGE> 2
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 purchase, by accepting for payment, and will
pay for the Shares validly tendered prior to the Expiration Date (as defined in
the Offer to Purchase) promptly after the Expiration Date. For purposes of the
Offer, the Purchaser will be deemed to have accepted for payment, and thereby
purchased, tendered Shares as, if and when the Purchaser gives oral or written
notice to the Depositary of the Purchaser's acceptance of such Shares for
payment pursuant to the Offer. In all cases, payment for Shares purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of (a) Share Certificates or timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company
pursuant to the procedures set forth in Section 2 of the Offer to Purchase, (b)
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 Section 2 of the Offer to Purchase), and (c) any other documents
required by the Letter of Transmittal.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person (other than the Dealer Manager, the Information Agent and
the Depositary) in connection with the solicitation of tenders of Shares
pursuant to the Offer. The Purchaser will, however, upon request, reimburse you
for customary mailing and handling expenses incurred by you in forwarding the
enclosed materials to your clients.
The Purchaser will pay any stock transfer taxes incident to the transfer to
it of validly tendered Shares, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, EASTERN DAYLIGHT SAVING TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE
OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be delivered
or such Shares should be tendered by book-entry transfer, 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 Shares, but it is impracticable for
them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer on a timely basis, a tender may be effected by following the
guaranteed delivery procedures specified under Section 2 of the Offer to
Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
Morrow & Co., Inc., the Information Agent, at the address and telephone number
set forth on the back cover page of the Offer to Purchase. Additional copies of
the enclosed materials may be obtained by calling Morrow & Co., Inc., the
Information Agent, at (800) 662-5200 or from brokers, dealers, commercial banks
or trust companies.
Very truly yours,
MCDONALD INVESTMENTS INC.,
A KEYCORP COMPANY
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF GEON, THE PURCHASER, O'SULLIVAN, THE
DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY
OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR
MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
EXHIBIT (a)(6)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
O'SULLIVAN CORPORATION
BY
TGC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
THE GEON COMPANY
AT
$12.25 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN
DAYLIGHT SAVING TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED.
June 8, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated June 8, 1999
(the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") in connection with
the Offer by TGC Acquisition Corporation, a Virginia corporation (the
"Purchaser") and a wholly owned subsidiary of The Geon Company, a Delaware
corporation ("Geon"), to purchase all outstanding shares of common stock, par
value $1.00 per share (the "Shares"), of O'Sullivan Corporation, a Virginia
corporation ("O'Sullivan"), at a price of $12.25 per Share, net to the seller in
cash, without interest thereon (the "Offer Price"), upon the terms and subject
to the conditions set forth in the Offer to Purchase.
Shareholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required by the Letter of Transmittal to the Depositary
prior to the Expiration Date (as defined in the Offer to Purchase) or who cannot
complete the procedure for delivery by book-entry transfer to the Depositary's
account at The Depository Trust Company ("DTC") on a timely basis and who wish
to tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase. See Instruction 2 of the Letter
of Transmittal. Delivery of documents to DTC in accordance with DTC's procedures
does not constitute delivery to the Depositary.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY
US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. 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 the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer to Purchase.
<PAGE> 2
Your attention is invited to the following:
1. The tender price is $12.25 per Share, net to the seller in cash,
without interest thereon;
2. The Offer and withdrawal rights will expire at 12:00 midnight,
Eastern Daylight Saving Time, on Wednesday, July 7, 1999, unless the Offer
is extended;
3. The Offer is being made for all outstanding Shares;
4. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn a number of Shares which represents at
least seventy percent (70%) of the Shares outstanding on a fully diluted
basis on the date of purchase (See Section 16 of the Offer to Purchase);
and
5. The Offer is not conditioned on the receipt of financing.
Tendering shareholders 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.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal. The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Shares in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. Neither the Purchaser
nor Geon is aware of any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser or Geon becomes aware of any state law
that would limit the class of offerees in the Offer, the Purchaser will amend
the Offer and, depending on the timing of such amendment, if any, will extend
the Offer to provide adequate dissemination of such information to such holders
of Shares prior to the expiration of the Offer. In any jurisdiction the
securities, blue sky or other laws of which require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of the Purchaser by
the Dealer Manager or 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 your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified on the instruction form contained in this
letter. 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
O'SULLIVAN CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated June 8, 1999, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"), in
connection with the Offer by TGC Acquisition Corporation, a Virginia corporation
(the "Purchaser") and a wholly owned subsidiary of The Geon Company, a Delaware
corporation, to purchase all outstanding shares of common stock, par value $1.00
per share (the "Shares"), of O'Sullivan Corporation, a Virginia corporation, at
a price equal to $12.25 per Share, net to the seller in cash.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) held by you
for the account of the undersigned, upon the terms and subject to the conditions
set forth in the Offer to Purchase.
Number of Shares to be Tendered*: ---------------------------------------------
Dated:
- ------------------, 1999
SIGN HERE
Signature(s):
- --------------------------------------------------------------------------------
Print or Type Name(s):
- --------------------------------------------------------------------------------
Print or Type Address(es): -----------------------------------------------------
-----------------------------------------------------
Area Code and Telephone Number(s): ---------------------------------------------
Taxpayer Identification or Social Security
Number(s): ---------------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
EXHIBIT (a)(7)
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 and IRS individual taxpayer identification
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>
- ----------------------------------------------------------
GIVE THE NAME
AND SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ----------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
5. Sole proprietorship account The owner(3)
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
GIVE THE NAME AND
EMPLOYER IDENTIFI-
FOR THIS TYPE OF ACCOUNT: CATION NUMBER OF --
- ----------------------------------------------------------
<C> <S> <C>
6. A valid trust, estate, or The legal entity
pension trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(4)
7. Corporate account The corporation
8. Association, club, religious, The organization
charitable, educational or other
tax-exempt organization
9. Partnership account The partnership
10. A broker or registered nominee The broker or
nominee
11. Account with the Department of The public entity
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 social security number, 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
your employer 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 more than one name is listed, 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
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Card, Form W-7,
Application for IRS Individual Taxpayer Identification Number, or Form SS-4,
Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on interest and dividend
payments and payments received in broker transactions include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
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.
- A registered dealer in securities or commodities registered in the U.S., the
District of Columbia, 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 under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends that generally are exempt from
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.
- Section 404(k) payments made by an ESOP
Payments of interest that generally are exempt from 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 Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER IN PART I, WRITE "EXEMPT" IN PART II, SIGN AND DATE THE
FORM, AND RETURN IT TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN
ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, GIVE THE PAYER A COMPLETED FORM W-8
(CERTIFICATE OF FOREIGN STATUS) OR FORM W-8BEN (CERTIFICATE OF FOREIGN STATUS OF
BENEFICIAL OWNER FOR UNITED STATES TAX WITHHOLDING).
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 the regulations under sections 6041, 6041A, 6045,
6050A and 6050N.
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. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividends, 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 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)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase, dated June 8,
1999, and the related Letter of Transmittal and any amendments or supplements
thereto, and is being made to all holders of Shares. The Offer is not being made
to (nor will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the securities, blue sky or other laws of such
jurisdiction. Neither Geon nor the Purchaser is aware of any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. To the extent Geon or the
Purchaser becomes aware of any state law that would limit the class of offerees
in the Offer, the Purchaser will amend the Offer and, depending on the timing of
such amendment, if any, will extend the Offer to provide adequate dissemination
of such information to such holders of Shares prior to the expiration of the
Offer. In any jurisdiction the securities, blue sky or other laws of which
require the Offer to be made by a licensed broker or dealer, the Offer is being
made on behalf of the Purchaser by the Dealer Manager or 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
O'SULLIVAN CORPORATION
BY
TGC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
THE GEON COMPANY
AT
$12.25 NET PER SHARE
TGC Acquisition Corporation, a Virginia corporation (the "Purchaser") and a
wholly owned subsidiary of The Geon Company, a Delaware corporation ("Geon"), is
offering to purchase all outstanding shares of common stock, par value $1.00 per
share (the "Shares"), of O'Sullivan Corporation, a Virginia corporation
("O'Sullivan"), at a price of $12.25 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase, dated June 8, 1999, 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, EASTERN
DAYLIGHT SAVING TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
June 2, 1999 (the "Merger Agreement"), among Geon, the Purchaser and O'Sullivan.
The Merger Agreement provides, among other things, for the merger of the
Purchaser with and into O'Sullivan (the "Merger") following the purchase of
Shares pursuant to the Offer. In the Merger, each outstanding Share (other than
Shares owned by Geon or any of its subsidiaries, Shares held as treasury shares
or otherwise by O'Sullivan, and Shares owned by shareholders who perfect
dissenters' rights under Virginia law) will be converted into the right to
receive $12.25 per Share net in cash.
THE BOARD OF DIRECTORS OF O'SULLIVAN HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO AND IN THE
BEST INTERESTS OF O'SULLIVAN'S SHAREHOLDERS, AND RECOMMENDS THAT THE
SHAREHOLDERS OF O'SULLIVAN ACCEPT THE OFFER AND TENDER THEIR SHARES.
The Offer is conditioned upon, among other things, (i) there being validly
tendered a number of Shares which represents at least seventy percent (70%) of
the Shares outstanding on a fully diluted basis on the date of purchase (the
"Minimum Condition"), and (ii) the expiration or termination of all waiting
periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder. The Offer is not conditioned on the
receipt of financing. If, by the Expiration Date (including any extension
permitted by the Merger Agreement), any or all of the conditions to the Offer
have not been satisfied or waived, the Purchaser reserves the right (but will
not be obligated), subject to the applicable rules and regulations of the
Securities and Exchange Commission, to (a) terminate the Offer and not accept
for payment or pay for any Shares and return all tendered Shares to tendering
shareholders, (b) waive all the unsatisfied conditions (except that the
Purchaser may not waive the Minimum Condition without the consent of O'Sullivan)
and accept for
<PAGE> 2
payment and pay for all Shares validly tendered prior to the Expiration Date,
(c) extend the Offer and, subject to the right of shareholders to withdraw
Shares until the Expiration Date, retain the Shares that have been tendered
during the period or periods for which the Offer is extended, or (d) amend the
Offer. The Merger Agreement provides that the Purchaser may not reduce the
number of Shares to be purchased in the Offer, reduce the price payable in the
Offer, modify or add to the conditions in the Offer or change the form of
consideration payable in the Offer, except that the Purchaser may extend the
Expiration Date as provided in the next paragraph.
The Purchaser may extend the Expiration Date (i) if any of the conditions
to the Offer have not been satisfied or (ii) if the conditions to the Offer have
been satisfied, for an additional five business days, so long as at the time of
such extension all conditions to the Purchaser's obligation to purchase Shares
pursuant to the Offer are irrevocably waived. The Purchaser may not extend the
Expiration Date beyond the three month anniversary of the date of commencement
of the Offer without the consent of O'Sullivan, even if the conditions to the
Offer have not been satisfied.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-l(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the announcement be issued no later than 9:00
a.m., Eastern time, on the next business day after the previously scheduled
Expiration Date, or the first opening of the American Stock Exchange on the next
business day after the previously scheduled Expiration Date, in accordance with
the public announcement requirements of Rule 14d-4(c) under the Exchange Act.
Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that any material change in the information
published, sent or given to shareholders in connection with the Offer be
promptly disseminated to shareholders in a manner reasonably designed to inform
shareholders of such change), and without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser will not
have any obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
The term "Expiration Date" means 12:00 midnight, Eastern Daylight Saving
Time, on Wednesday, July 7, 1999, unless the Purchaser extends 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, will expire.
For purposes of this Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance for payment of such Shares. Payment for Shares accepted
for payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for validly tendering
shareholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering shareholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT. In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates evidencing such Shares ("Share Certificates") or confirmation of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company ("DTC"); (ii) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) 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. Accordingly, payment
may be made to tendering shareholders at different times if delivery of the
Shares and other required documents occurs at different times.
Except as otherwise provided below, tenders of Shares pursuant to the Offer
are irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant
to the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment by the Purchaser pursuant to the Offer,
may also be withdrawn at any time after August 7, 1999. For a withdrawal to be
effective, a written, telegraphic 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 the Offer to Purchase and must specify the name of the person
having 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 the name of the person who tendered the Shares. If Share
Certificates have been delivered or otherwise identified to the Depositary,
then, prior to the physical release of such Share Certificates, the serial
numbers shown on such Share Certificates must be submitted to the Depositary
and, unless such Shares have been tendered by an Eligible Institution (as
defined in the Offer to Purchase), the signatures on the notice of withdrawal
must be guaranteed by an Eligible Institution. If Shares have been delivered
pursuant to the procedure for book-entry transfer as set forth in Section 2 of
the Offer to Purchase, any notice of withdrawal must also specify the name and
number of the account at DTC to be credited with the withdrawn Shares and
otherwise comply with DTC's procedures. Withdrawals of tenders of Shares 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
retendered by again following one of the procedures described in Section 2 of
the Offer to Purchase at any time prior to the Expiration Date. All questions as
to the form and validity (including time of receipt) of notices of withdrawal
will be determined by the Purchaser, in its sole discretion, whose determination
will be final and binding on all parties.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
Exchange Act is contained in the Offer to Purchase and is incorporated herein by
reference.
O'Sullivan has provided the Purchaser with O'Sullivan's shareholder list
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 relevant materials will be mailed 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 shareholder
lists 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 LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent at the address and telephone
numbers set forth below, and copies will be furnished promptly at the
Purchaser's expense. No fees or commissions will be paid to brokers, dealers or
other persons (other than the Dealer Manager and the Information Agent) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Banks and Brokerage Firms call: (800) 662-5200
Shareholders Please Call: (800) 566-9061
The Dealer Manager for the Offer is:
MCDONALD INVESTMENTS INC.
A KEYCORP COMPANY
McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2603
June 8, 1999
<PAGE> 1
Exhhibit (b)(5)
EXECUTION COPY
US$150,000,000
AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT
Dated as of May 27, 1999
Among
THE GEON COMPANY
and
GEON CANADA INC.
AS BORROWERS
and
THE INITIAL LENDERS NAMED HEREIN
As Initial Lenders
-- ------- -------
and
CITIBANK, N.A.
As Administrative Agent
-- -------------- -----
<PAGE> 2
<TABLE>
<CAPTION>
T A B L E O F C O N T E N T S
---------------------------------
ARTICLE I
<S> <C> <C>
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS...............................................1
SECTION 1.02. COMPUTATION OF TIME PERIODS........................................16
SECTION 1.03. ACCOUNTING TERMS...................................................16
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE REVOLVING CREDIT ADVANCES......................................16
SECTION 2.02. MAKING THE REVOLVING CREDIT ADVANCES...............................17
SECTION 2.03. THE COMPETITIVE BID ADVANCES.......................................19
SECTION 2.04. FEES ..............................................................24
SECTION 2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS........................24
SECTION 2.06. REPAYMENT OF REVOLVING CREDIT ADVANCES; TERM LOAN
ELECTION......................................................25
SECTION 2.07. INTEREST ON REVOLVING CREDIT ADVANCES..............................25
SECTION 2.08. INTEREST RATE DETERMINATION........................................26
SECTION 2.09. OPTIONAL CONVERSION OF REVOLVING CREDIT ADVANCES...................27
SECTION 2.10. PREPAYMENTS OF REVOLVING CREDIT ADVANCES...........................28
SECTION 2.11. INCREASED COSTS....................................................28
SECTION 2.12. ILLEGALITY.........................................................29
SECTION 2.13. PAYMENTS AND COMPUTATIONS..........................................29
SECTION 2.14. TAXES..............................................................31
SECTION 2.15. SHARING OF PAYMENTS, ETC...........................................33
SECTION 2.16. USE OF PROCEEDS....................................................33
SECTION 2.17. EXTENSION OF TERMINATION DATE......................................33
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTIONS 2.01
AND 2.03......................................................36
SECTION 3.02. CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT
BORROWING.....................................................38
SECTION 3.03. CONDITIONS PRECEDENT TO EACH COMPETITIVE BID BORROWING
.........................................38
SECTION 3.04. DETERMINATIONS UNDER SECTION 3.01..................................39
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................39
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE V
COVENANTS OF THE COMPANY
<S> <C> <C>
SECTION 5.01. AFFIRMATIVE COVENANTS..............................................43
SECTION 5.02. NEGATIVE COVENANTS.................................................47
SECTION 5.03. FINANCIAL COVENANTS................................................48
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT..................................................49
ARTICLE VII
COMPANY GUARANTY
SECTION 7.01. GUARANTY...........................................................52
SECTION 7.02. GUARANTY ABSOLUTE..................................................52
SECTION 7.03. WAIVER.............................................................53
SECTION 7.04. CONTINUING GUARANTY; ASSIGNMENTS...................................53
SECTION 7.05. SUBROGATION........................................................54
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION...........................................54
SECTION 8.02. ADMINISTRATIVE AGENT'S RELIANCE, ETC...............................55
SECTION 8.03. CITIBANK AND AFFILIATES............................................55
SECTION 8.04. LENDER CREDIT DECISION.............................................56
SECTION 8.05. INDEMNIFICATION....................................................56
SECTION 8.06. SUCCESSOR ADMINISTRATIVE AGENT.....................................56
SECTION 8.07. LOCAL AGENT........................................................57
SECTION 8.08. OTHER AGENTS.......................................................57
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC....................................................57
SECTION 9.02. NOTICES, ETC.......................................................58
SECTION 9.03. NO WAIVER; REMEDIES................................................58
SECTION 9.04. COSTS AND EXPENSES.................................................58
SECTION 9.05. RIGHT OF SET-OFF...................................................60
SECTION 9.06. BINDING EFFECT.....................................................61
SECTION 9.07. ASSIGNMENTS, DESIGNATIONS AND PARTICIPATIONS......................61
SECTION 9.08. CONFIDENTIALITY....................................................65
SECTION 9.09. GOVERNING LAW......................................................66
SECTION 9.10. EXECUTION IN COUNTERPARTS..........................................66
SECTION 9.11. CURRENCY CONVERSION FOR JUDGMENTS..................................66
SECTION 9.12. JURISDICTION, ETC..................................................67
SECTION 9.13. WAIVER OF JURY TRIAL..............................................68
</TABLE>
Schedules
<PAGE> 4
Schedule I - Pricing Grid
Schedule 3.01(b) - Disclosed Litigation
Schedule 4.01(m) - Environmental Disclosure
Schedule 5.02(a) - Existing Liens
Exhibits
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Designation Agreement
Exhibit E - Form of Opinion of Counsel for the Borrowers
Exhibit F - Form of Acceptance Agreement
<PAGE> 5
AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT
Dated as of May 27, 1999
THE GEON COMPANY, a Delaware corporation (the "COMPANY") and GEON
CANADA INC., a federal Canadian corporation (the "SUBSIDIARY BORROWER"), the
banks, financial institutions and other institutional lenders (the "INITIAL
LENDERS") listed on the signature pages hereof, and CITIBANK, N.A. ("CITIBANK"),
as administrative agent (the "ADMINISTRATIVE AGENT") for the Lenders (as
hereinafter defined), and NATIONSBANK, N.A., as documentation agent agree as
follows:
PRELIMINARY STATEMENTS:
1. The Company, the Subsidiary Borrower and Synergistics Industries
Limited, an Ontario corporation, are parties to a 364-Day Credit Agreement dated
as of May 29, 1998 (the "EXISTING CREDIT AGREEMENT") with the banks, financial
institutions and other institutional lenders party thereto, Citibank, as
administrative agent, CIBC, Inc., as syndication agent, and NationsBank, N.A.,
as documentation agent for the such lenders.
2. The parties to this Agreement desire to amend the Existing Credit
Agreement as set forth herein and to restate the Existing Credit agreement in
its entirety to read as hereinafter set forth.
NOW, THEREFORE, the parties hereto agree to amend and restate the
Existing Credit Agreement as set forth below:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACCEPTANCE" means a bankers' acceptance issued as part of a
Competitive Bid Advance.
"ADMINISTRATIVE AGENT'S ACCOUNT" means (a) in the case of Advances
denominated in US Dollars, the account of the Administrative Agent
maintained by the Administrative Agent at Citibank with its office at 399
Park Avenue, New York, New York 10043, Account No. 3685 2248, Attention:
NAIB Agency/MTF Reference: Geon, (b) in the case of Advances denominated in
any Foreign Currency, the account
<PAGE> 6
of the Administrative Agent or Local Agent designated in writing from time
to time by the Administrative Agent to the Borrowers and the Lenders for
such purpose and (c) in any such case, such other account of the
Administrative Agent as is designated in writing from time to time by the
Administrative Agent to the Borrowers and the Lenders for such purpose.
"ADVANCE" means a Revolving Credit Advance or a Competitive Bid
Advance.
"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "CONTROL" (including the terms "CONTROLLING",
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") of a Person means the
possession, direct or indirect, of the power to vote 5% or, if such Person
is a Borrower, 15%, or more of the Voting Stock of such Person or to direct
or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"APPLICABLE FACILITY FEE" means, as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on such
date as set forth on Schedule I hereto.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Administrative Agent as its
Applicable Lending Office with respect to such Competitive Bid Advance.
"APPLICABLE MARGIN" means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date
and the Usage on such date as set forth on Schedule I hereto.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C hereto.
"ASSUMING LENDER" has the meaning specified in Section 2.17(c).
"ASSUMPTION AGREEMENT" has the meaning specified in Section 2.17(c).
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:
<PAGE> 7
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, PLUS (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other
liabilities) three-month US Dollar non-personal time deposits in the
United States, PLUS (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring US
Dollar deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"BASE RATE ADVANCE" means a Revolving Credit Advance denominated in US
Dollars that bears interest as provided in Section 2.07(a)(i).
"BORROWED DEBT" means Debt described in clauses (a) through (e)
of the definition thereof.
"BORROWED DEBT/EBITDA RATIO" means, as of any date, the ratio
computed by dividing (a) Borrowed Debt of the Company and its
Subsidiaries, on a Consolidated basis as of such date by (b) EBITDA of
the Company and its Subsidiaries, including their pro rata share of
Sunbelt, on a Consolidated basis for the four consecutive fiscal
quarters of the Company most recently ended as of such date; PROVIDED
that clause (b) of this definition shall be calculated to include the
EBITDA for such period of four consecutive fiscal quarters of any
business acquired by the Company or its Subsidiaries
<PAGE> 8
during such period.
"BORROWER" means the Company or the Subsidiary Borrower, as the
context requires.
"BORROWING" means a Revolving Credit Borrowing or a Competitive
Bid Borrowing.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market and, if
the applicable Business Day relates to any Local Rate Advances, on
which banks are open for business in the principal financial center of
the country of issue of the currency of such Local Rate Advance.
"CASH INTEREST EXPENSE" means, for any fiscal period of the
Company, interest expense on all Debt of the Company and its
Subsidiaries, net of interest income, in accordance with GAAP and
including, without limitation, to the extent not otherwise included in
accordance with GAAP, (a) interest expense in respect of Debt
resulting from Advances, (b) the interest component of obligations
under leases that have or should have been or should be, in accordance
with GAAP, recorded as capital leases, (c) commissions, discounts and
other fees and charges payable in connection with letters of credit
issued for the account of the Company or any of its Subsidiaries, (d)
the net payment, if any, payable in connection with Hedge Agreements
and (e) fees paid pursuant to Section 2.04(a), but excluding, in each
case, (w) any amounts accrued or payable in connection with the
Receivables Financing, (x) amortization of original issue discount,
(y) the interest portion of any deferred payment obligation and (z)
other interest not payable in cash.
"COMMITMENT" has the meaning specified in Section 2.01.
"COMPETITIVE BID ADVANCE" means an advance by a Lender to any
Borrower as part of a Competitive Bid Borrowing resulting from the
auction bidding procedure described in Section 2.03 and refers to an
issue of Acceptances, a Fixed Rate Advance, a LIBO Rate Advance or a
Local Rate Advance.
"COMPETITIVE BID BORROWING" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose
offer to make one or more Competitive Bid Advances as part of such
borrowing has been accepted under the auction bidding procedure
described in Section 2.03.
"COMPETITIVE BID NOTE" means the promissory note of any Borrower
payable to the order of any Lender, in substantially the Form of
Exhibit A-2 hereto, evidencing
<PAGE> 9
the indebtedness of such Borrower to such Lender resulting from the
Competitive Bid Advance made by such Lender to such Borrower.
"COMPETITIVE BID REDUCTION" has the meaning specified in Section
2.01.
"COMPETITIVE BID REGISTER" has the meaning specified in Section
2.03(s)(vii).
"CONFIDENTIAL INFORMATION" means information that any Borrower
furnishes to the Administrative Agent, the Local Agent or any Lender
in a writing designated as confidential or otherwise on a confidential
basis if such information otherwise furnished is reduced to a writing
designated as confidential within 30 days of the initial disclosure
thereof to the Administrative Agent, the Local Agent or any Lender,
but does not include any such information that is or becomes generally
available to the public other than a result of a breach by any of the
Administrative Agent, the Local Agent or any Lender of its obligations
hereunder or that is or becomes available to the Administrative Agent,
the Local Agent or such Lender from a source other than a Borrower or
any consultant employed by the Administrative Agent to provide
technical advice that is not, to the best of the Administrative
Agent's, the Local Agent's or such Lender's knowledge, acting in
violation of a confidentiality agreement with any Borrower.
"CONSENTING LENDER" has the meaning specified in Section 2.17(b).
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a
conversion of Revolving Credit Advances of one Type into Revolving
Credit Advances of the other Type pursuant to Section 2.08 or 2.09.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services
(other than trade payables not overdue by more than 60 days incurred
in the ordinary course of such Person's business), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (e)
all obligations of such Person as lessee under leases that have been
or should be, in accordance with GAAP, recorded as capital leases, (f)
all obligations, contingent or otherwise, of such Person in respect of
acceptances, letters of credit or similar extensions of credit and (g)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to in effect guaranty any Debt
of others of the kinds referred to in clauses
<PAGE> 10
(a) through (f) above through an agreement (1) to pay or purchase such
Debt or to advance or supply funds for the payment or purchase of such
Debt, (2) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered) primarily for the purpose of enabling the debtor to make
payment of such Debt or to assure the holder of such Debt against loss
or (3) otherwise to assure a creditor against loss; PROVIDED, that the
term "Debt" shall not include obligations under the Receivables
Financing.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DESIGNATED BIDDER" means (a) an Eligible Assignee or (b) a
special purpose corporation that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and that issues (or the parent of which issues) commercial
paper rated at least "Prime-1" (or the then equivalent grade) by
Moody's or "A-1" (or the then equivalent grade) by S&P that, in the
case of either clause (a) or (b), (i) shall have become a party hereto
pursuant to Section 9.07(d), (e) and (f) and (ii) is not otherwise a
Lender.
"DESIGNATION AGREEMENT " means a designation agreement entered
into by a Lender (other than a Designated Bidder) and a Designated
Bidder, and accepted by the Administrative Agent, in substantially the
form of Exhibit D hereto.
"DISCLOSED LITIGATION" has the meaning specified in Section
3.01(b).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" from
time to time to the Company and the Administrative Agent.
"EBITDA" means, for any period, net income (or net loss) PLUS the
sum of (a) interest expense, (b) income tax expense, (c) depreciation
expense and (d) amortization expense, in each case determined in
accordance with GAAP for such period.
"EFFECTIVE DATE" has the meaning specified in Section 3.01.
"ELIGIBLE ASSIGNEE" means (i) an Affiliate of a Lender; (ii) a
Lender; (iii) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
US$5,000,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof,
and having total assets in excess of US$3,000,000,000; (v) a
commercial bank organized under the laws of any other country that is
a member of the Organization for Economic Cooperation and Development
or has concluded special lending arrangements
<PAGE> 11
with the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
US$5,000,000,000, so long as such bank is acting through a branch or
agency located in the country in which it is organized or another
country that is described in this clause (v); (vi) a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
US$3,000,000,000; PROVIDED, HOWEVER, that each Person described in
clauses (ii) through (vi) shall be approved by the Administrative
Agent and the Company, such approval not to be unreasonably withheld
or delayed; and (vii) any other Person approved by the Administrative
Agent and the Company, such approval not to be unreasonably withheld
or delayed; PROVIDED FURTHER, HOWEVER, that neither the Company nor an
Affiliate of the Company shall qualify as an Eligible Assignee.
"ENVIRONMENTAL ACTION" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent
agreement arising under any Environmental Law or Environmental Permit
or relating to Hazardous Materials or arising from alleged injury or
threat of injury to health, safety or the environment, including,
without limitation, (a) by any governmental or regulatory authority
for enforcement, cleanup, removal, response, remedial or other actions
or damages and (b) by any governmental or regulatory authority or any
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment,
decree or judicial or agency interpretation, policy or guidance
relating to the environment or Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any
Environmental Law.
"EQUIVALENT" in US Dollars of any Foreign Currency on any date
means the equivalent in US Dollars of such Foreign Currency determined
by using the quoted spot rate at which the Administrative Agent's
principal office in New York offers to exchange US Dollars for such
Foreign Currency in New York prior to 4:00 P.M. (New York time)
(unless otherwise indicated by the terms of this Agreement) on such
date as is required pursuant to the terms of this Agreement, and the
"Equivalent" in any Foreign Currency of US Dollars means the
equivalent in such Foreign Currency of US Dollars determined by using
the quoted spot rate at which the Administrative Agent's principal
office in New York offers to exchange such Foreign Currency for US
Dollars in New York prior to 4:00 P.M. (New York time) (unless
otherwise indicated by the
<PAGE> 12
terms of this Agreement) on such date as is required pursuant to the
terms of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV
of ERISA is a member of the Company's controlled group, or under
common control with the Company, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA EVENT" means (a) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has
been waived by the PBGC; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator
of any Plan of a notice of intent to terminate such Plan pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to
a plan amendment referred to in Section 4041(e) of ERISA); (d) the
cessation of operations at a facility of the Company or any of its
ERISA Affiliates in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by the Company or any of its ERISA
Affiliates from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (f) the failure by the Company or any of its ERISA Affiliates
to make a payment to a Plan if the conditions for the imposition of a
lien under Section 302(f)(1) of ERISA are satisfied; (g) the adoption
of an amendment to a Plan requiring the provision of security to such
Plan, pursuant to Section 307 of ERISA; or (h) the institution by the
PBGC of proceedings to terminate a Plan, pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that could reasonably be expected to constitute
grounds for the termination of, or the appointment of a trustee to
administer, a Plan.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
from time to time to the Company and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit
Borrowing, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is not
<PAGE> 13
such a multiple) of the rate per annum at which deposits in US Dollars
are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such Reference
Bank's Eurodollar Rate Advance comprising part of such Revolving
Credit Borrowing to be outstanding during such Interest Period and for
a period equal to such Interest Period by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period. The Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit
Borrowing shall be determined by the Administrative Agent on the basis
of applicable rates furnished to and received by the Administrative
Agent from the Reference Banks two Business Days before the first day
of such Interest Period, SUBJECT, HOWEVER, to the provisions of
Section 2.08.
"EURODOLLAR RATE ADVANCE" means a Revolving Credit Advance
denominated in US Dollars that bears interest as provided in Section
2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXTENSION DATE" has the meaning specified in Section 2.17(b).
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to 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 next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is
a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
<PAGE> 14
"FIXED RATE ADVANCES" has the meaning specified in Section
2.03(a)(i), which Advances shall be denominated in US Dollars or in
any Foreign Currency.
"FOREIGN CURRENCY" means the lawful currency of Canada.
"GAAP" has the meaning specified in Section 1.03.
"HAZARDOUS MATERIALS" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, radon gas and any other chemicals,
materials or substances designated, classified or regulated as being
"hazardous" or "toxic", or words of similar import, under any federal,
state, local or foreign statute, law, ordinance, rule, regulation,
code, order, judgment, decree or judicial or agency interpretation,
policy or guidance.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INTEREST COVERAGE RATIO" means, with respect to any fiscal
quarter, the ratio of (a) EBITDA of the Company and its Subsidiaries,
including their pro rata share of Sunbelt, on a Consolidated basis to
(b) Cash Interest Expense of the Company and its Subsidiaries,
including their pro rata share of Sunbelt, on a Consolidated basis, in
each case in the aggregate for the period of four consecutive fiscal
quarters ended at the end of such fiscal quarter; PROVIDED that clause
(a) of this definition shall be calculated to include the EBITDA for
such period of four consecutive fiscal quarters of any business
acquired by the Company or its Subsidiaries during such period.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or the date of
the Conversion of any Base Rate Advance into such Eurodollar Rate
Advance and ending on the last day of the period selected by the
Company pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period
selected by the Company pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three or six months,
as the Company may, upon notice received by the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select; PROVIDED,
HOWEVER, that:
(i) the Company may not select any Interest Period that ends
after
<PAGE> 15
the Revolver Termination Date or, if the Revolving Credit
Advances have been converted to a term loan pursuant to Section
2.06 prior to such selection, which ends after the Maturity Date;
(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Revolving
Credit Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, PROVIDED, HOWEVER, that, if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day;
and
(iv) whenever the first day of any Interest Period occurs on
a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds
such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar
month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"LENDERS" means the Initial Lenders, each Assuming Lender that
shall become a party hereto pursuant to Section 2.17 and each Person
that shall become a party hereto pursuant to Section 9.07(a), (b) and
(c) and, except when used in reference to a Revolving Credit Advance,
a Revolving Credit Borrowing, a Revolving Credit Note, a Commitment or
a related term, each Designated Bidder.
"LIBO RATE" means, for any Interest Period for all LIBO Rate
Advances comprising part of the same Competitive Bid Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the average (rounded upward to the nearest whole multiple
of 1/16 of 1% per annum, if such average is not such a multiple) of
the rate per annum at which deposits in US Dollars are offered by the
principal office of each of the Reference Banks in London, England to
prime banks in the London interbank market at 11:00 A.M. (London time)
two Business Days before the first day of such Interest Period in an
amount substantially equal to the amount that would be the Reference
Banks' respective ratable shares of such Borrowing if such Borrowing
were to be a Revolving Credit Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period by (b)
a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period. The LIBO Rate for any Interest
Period for each LIBO Rate Advance comprising part of the
<PAGE> 16
same Competitive Bid Borrowing shall be determined by the
Administrative Agent on the basis of applicable rates furnished to and
received by the Administrative Agent from the Reference Banks two
Business Days before the first day of such Interest Period, SUBJECT,
HOWEVER, to the provisions of Section 2.08.
"LIBO RATE ADVANCES" means a Competitive Bid Advance denominated
in US Dollars and bearing interest based on the LIBO Rate.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of way
or other encumbrance on title to real property.
"LOCAL AGENT" means Citibank Canada or any successor local agent
that is a Canadian chartered bank so designated by the Administrative
Agent.
"LOCAL RATE ADVANCES" means a Competitive Bid Advance denominated
in any Foreign Currency sourced from the jurisdiction of issuance of
such Foreign Currency.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance or properties of the Company or the Company and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the business, condition (financial or otherwise), operations,
performance or properties of the Company or the Company and its
Subsidiaries taken as a whole, (b) the rights and remedies of the
Administrative Agent or any Lender under this Agreement or any Note or
(c) the ability of any Borrower to perform its obligations under this
Agreement or any Note.
"MATURITY DATE" means the earlier of (a) the second anniversary
of the Term Loan Conversion Date and (b) the date of termination in
whole of the aggregate Commitments pursuant to Section 2.05 or 6.01.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Company or any of
<PAGE> 17
its ERISA Affiliates is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of the Company or any of its ERISA Affiliates and at least one Person
other than the Company and its ERISA Affiliates or (b) was so
maintained and in respect of which the Company or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"NOTE" means a Revolving Credit Note or the Competitive Bid Note.
"NOTICE OF COMPETITIVE BID BORROWING" has the meaning specified
in Section 2.03(a).
"NOTICE OF REVOLVING CREDIT BORROWING" has the meaning specified
in Section 2.02(a).
"PAYMENT OFFICE" means, for any Foreign Currency, such office of
the Local Agent as shall be from time to time be notified by the
Administrative Agent to the Company and the Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERSON" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity,
or a government or any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PUBLIC DEBT RATING" means, as of any date, the rating most
recently announced by each of S&P or Moody's, as the case may be, for
any class of long-term senior unsecured debt issued by the Company.
For purposes of the foregoing, (a) if only one of S&P and Moody's
shall have in effect a Public Debt Rating, the Applicable Margin and
the Applicable Facility Fee shall be determined by reference to the
available rating; (b) if the ratings established by S&P and Moody's
shall fall within different levels and the differential is one level,
the Applicable Margin and the Applicable Facility Fee shall be
established by the higher rating; (c) if the ratings established by
S&P and Moody's shall fall within different levels and the
differential is two levels or more, the Applicable Margin and the
Applicable Facility Fee shall be established by the level that is one
level higher than the lower rating; (d) if any rating established by
S&P or Moody's shall be changed, such change shall be effective as of
the date on which such change is first announced publicly by the
rating agency making such change; and (e) if S&P or Moody's shall
change the basis on which ratings are established, each reference to
the Public Debt Rating announced by S&P or Moody's, as the case may
be, shall refer to the then equivalent rating by S&P or Moody's, as
the case may be.
<PAGE> 18
"RECEIVABLES FINANCING" means, collectively, the transactions
contemplated by (i) the Trade Receivables Purchase and Sale Agreement
dated as of August 16, 1994 among the Company, Corporate Receivables
Corporation and Citicorp North America, Inc., as Agent, and (ii) the
Parallel Purchase Commitment dated as of August 16, 1994 among the
Company, the banks named therein and Citicorp North America, Inc., as
Agent.
"REFERENCE BANKS" means Citibank and NationsBank, N.A.
"REGISTER" has the meaning specified in Section 9.07(g).
"REQUIRED LENDERS" means at any time Lenders owed at least
66-2/3% of the then aggregate unpaid principal amount of the Revolving
Credit Advances owing to Lenders, or, if no such principal amount is
then outstanding, Lenders having at least 66-2/3% of the Commitments.
"REVOLVER TERMINATION DATE" means the earlier of May 26, 2000 and
the date of termination in whole of the Commitments pursuant to
Section 2.05 or 6.01.
"REVOLVING CREDIT ADVANCE" means an advance by a Lender to the
Company as part of a Revolving Credit Borrowing and, if the Company
has made the Term Loan Election in accordance with Section 2.06,
includes each such advance that remains outstanding after the Term
Loan Conversion Date, and refers to a Base Rate Advance or a
Eurodollar Rate Advance (each of which shall be a "TYPE" of Revolving
Credit Advance).
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each
of the Lenders pursuant to Section 2.01.
"REVOLVING CREDIT NOTE" means a promissory note of the Company
payable to the order of any Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate indebtedness of the
Company to such Lender resulting from the Revolving Credit Advances
made by such Lender.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of the Company or any of its ERISA Affiliates and no Person other than
the Company and its ERISA Affiliates or (b) was so maintained and in
respect of which the Company or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan has
<PAGE> 19
been or were to be terminated.
"SUBSIDIARY" means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock or the
equivalent ownership or controlling interest, in either case having
ordinary voting power to elect a majority of the board of directors,
managers or trustees thereof (irrespective of whether at the time
capital stock (or other evidence of ownership) of any other class or
classes of such entity shall or might have the voting power upon the
occurrence of any contingency) or (b) the beneficial interest in such
trust or estate, is at the time owned or controlled, directly or
indirectly, by the Company, by the Company and one or more of its
other Subsidiaries or by one or more of the Company's other
Subsidiaries.
"SPC" has the meaning specified in Section 9.07(i) hereto.
"SUBSIDIARY BORROWER" has the meaning specified in the recital of
parties to this Agreement.
"SUNBELT" means Sunbelt Chlor Alkali Partnership, a joint venture
between the Company and The Olin Corp. to construct and operate a new
chlor alkali plant in McIntosh, Alabama.
"TERM LOAN CONVERSION DATE" has the meaning specified in Section
2.06.
"TERM LOAN ELECTION" has the meaning specified in Section 2.06.
"TYPE" refers to the distinction between Base Rate Advances and
Eurodollar Rate Advances.
"US DOLLAR AMOUNT" means, with respect to any outstanding Advance
on any day (a) the outstanding principal amount of such Advance if it
is an Advance denominated in US Dollars and (b) the Equivalent in US
Dollars (determined on the third Business Day prior to such day) of
(i) the outstanding principal amount of such Advance if it is an
Advance denominated in any Foreign Currency or (ii) the aggregate face
amount of such Advance if it is an issue of Acceptances.
"US DOLLARS" and the "US$" sign each means lawful currency of the
United States of America.
"USAGE" means, as of any date of determination, the ratio
(expressed as a percentage) computed by dividing the aggregate
principal amount of Advances outstanding by the aggregate Commitments
of the Lenders.
<PAGE> 20
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of
such Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements dated as of December 31, 1998 ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE REVOLVING CREDIT ADVANCES. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make Revolving
Credit Advances to the Company from time to time on any Business Day during the
period from the Effective Date until the earlier of the Revolver Termination
Date and the Term Loan Conversion Date in an aggregate amount not to exceed at
any time outstanding the US Dollar amount set forth opposite such Lender's name
on the signature pages hereof or, if such Lender has become a lender hereunder
pursuant to an Assumption Agreement, the US Dollar amount set forth in such
Assignment Agreement or, if such Lender has entered into any Assignment and
Acceptance, set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d), as such amount may be reduced
pursuant to Section 2.05 (such Lender's "COMMITMENT"), PROVIDED that the
aggregate amount of the Commitments of the Lenders shall be deemed used from
time to time to the extent of the aggregate US Dollar Amount of the Competitive
Bid Advances then outstanding and such deemed use of the aggregate amount of the
Commitments shall be allocated among the Lenders ratably according to their
respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "COMPETITIVE BID REDUCTION"). Each Revolving Credit
Borrowing shall be in an aggregate amount of US$10,000,000 or an integral
multiple of US$1,000,000 in excess thereof (or, if less, an aggregate amount
equal to the amount by which the aggregate US Dollar Amount of a proposed
Competitive Bid Borrowing requested by the Company exceeds the aggregate US
Dollar Amount of Competitive Bid Advances offered to be made by the
<PAGE> 21
Lenders and accepted by the Company in respect of such Competitive Bid
Borrowing, if such Competitive Bid Borrowing is made on the same date as such
Revolving Credit Borrowing) and shall consist of Revolving Credit Advances of
the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, the
Company may borrow under this Section 2.01, prepay pursuant to Section 2.10 and
reborrow under this Section 2.01.
SECTION 2.02. MAKING THE REVOLVING CREDIT ADVANCES. (a) Each Revolving
Credit Borrowing shall be made on notice, given not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurodollar Rate Advances, or the first Business Day prior to the
date of the proposed Revolving Credit Borrowing in the case of a Revolving
Credit Borrowing consisting of Base Rate Advances, by the Company to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier or telex. Each such notice of a Revolving Credit Borrowing (a "NOTICE
OF REVOLVING CREDIT BORROWING") shall be by telecopier or telex, confirmed
immediately in writing, in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Revolving Credit Borrowing,
(ii) Type of Advances comprising such Revolving Credit Borrowing, (iii)
aggregate amount of such Revolving Credit Borrowing, and (iv) in the case of an
Revolving Credit Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Revolving Credit Advance. Each Lender shall,
before 11:00 A.M. (New York City time) on the date of such Revolving Credit
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of such Revolving Credit Borrowing. After
the Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Company by depositing such funds into an
account of the Company maintained with the Administrative Agent at the
Administrative Agent's address referred to in Section 9.02 or to such other
account as the Company may from time to time direct.
(b) Anything in subsection (a) above to the contrary notwithstanding,
the Company may not select Eurodollar Rate Advances for any Revolving Credit
Borrowing if the aggregate amount of such Revolving Credit Borrowing is less
than US$10,000,000 or if the obligation of the Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.08 or 2.12.
(c) Each Notice of Revolving Credit Borrowing shall be binding on the
Company. In the case of any Revolving Credit Borrowing that the related Notice
of Revolving Credit Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Company shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any revocation of such Notice of
Revolving Credit Borrowing by the Company or any failure to fulfill on or before
the date specified in such Notice of Revolving Credit Borrowing for such
Revolving Credit Borrowing the applicable conditions set forth in Article III,
<PAGE> 22
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Revolving Credit Advance to be made by such Lender as part of
such Revolving Credit Borrowing when such Revolving Credit Advance, as a result
of such revocation or failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Revolving Credit Borrowing that such Lender will
not make available to the Administrative Agent such Lender's ratable portion of
such Revolving Credit Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the date
of such Revolving Credit Borrowing in accordance with subsection (a) of this
Section 2.02 and the Administrative Agent may, in reliance upon such assumption,
make available to the Company on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available to
the Administrative Agent, such Lender and the Company severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Company until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Company, the interest rate
applicable at the time to Revolving Credit Advances comprising such Revolving
Credit Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount so repaid shall constitute such Lender's Revolving Credit Advance as
part of such Revolving Credit Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Revolving Credit Advance to
be made by it as part of any Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Revolving Credit Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender on the date of any Revolving Credit
Borrowing.
SECTION 2.03. THE COMPETITIVE BID ADVANCES. (a) Each Lender severally
agrees that any Borrower may make Competitive Bid Borrowings under this Section
2.03 from time to time on any Business Day during the period from the date
hereof until the date occurring seven days prior to the earlier of the Revolver
Termination Date and the Term Loan Conversion Date in the manner set forth
below; PROVIDED that, following the making of each Competitive Bid Borrowing,
the aggregate US Dollar Amount of the Advances then outstanding shall not exceed
the aggregate amount of the Commitments of the Lenders (computed without regard
to any Competitive Bid Reduction).
(i) Any Borrower may request a Competitive Bid Borrowing under
this Section 2.03 by delivering to the Administrative Agent, by
telecopier or telex, a notice of a Competitive Bid Borrowing (a
"NOTICE OF COMPETITIVE BID BORROWING"), in substantially the form of
Exhibit B-2 hereto, specifying therein the requested (A) date of such
proposed Competitive Bid Borrowing, (B) aggregate amount of such
proposed
<PAGE> 23
Competitive Bid Borrowing, (C) interest rate basis and day count
convention to be offered by the Lenders, (D) currency of such proposed
Competitive Bid Borrowing, (E) in the case of a Competitive Bid
Borrowing consisting of LIBO Rate Advances, Interest Period, or in the
case of a Competitive Bid Borrowing consisting of Fixed Rate Advances
or Local Rate Advances, maturity date for repayment of each Fixed Rate
Advance or Local Rate Advance to be made as part of such Competitive
Bid Borrowing (which maturity date may not be earlier than the date
occurring seven days after the date of such Competitive Bid Borrowing
or later than the earliest of (I) 180 days after the date of such
Competitive Bid Borrowing, (II) the Termination Date and (III) the
Term Loan Conversion Date), (F) interest payment date or dates
relating thereto, (G) location of such Borrower's account to which
funds are to be advanced and (H) other terms (if any) to be applicable
to such Competitive Bid Borrowing, not later than (w) 9:00 A.M. (New
York City time) at least one Business Day prior to the date of the
proposed Competitive Bid Borrowing, if such Borrower shall specify in
the Notice of Competitive Bid Borrowing that the rates of interest to
be offered by the Lenders shall be fixed rates per annum (the Advances
comprising any such Competitive Bid Borrowing being referred to herein
as "FIXED RATE ADVANCES") and that the Advances comprising such
proposed Competitive Bid Advances shall be denominated in US Dollars,
(x) 10:00 A.M. (New York City time) at least four Business Days prior
to the date of the proposed Competitive Bid Borrowing, if such
Borrower shall specify in the Notice of Competitive Bid Borrowing that
the Competitive Bid Borrowing shall be LIBO Rate Advances denominated
in US Dollars and (y) 10:00 A.M. (New York time) at least two Business
Days prior to the date of the proposed Competitive Bid Borrowing, if
such Borrower shall specify in the Notice of Competitive Bid Borrowing
that the Advances comprising such proposed Competitive Bid Advances
shall be either Fixed Rate Advances denominated in any Foreign
Currency or Local Rate Advances denominated in any Foreign Currency.
Each Notice of Competitive Bid Borrowing shall be irrevocable and
binding on the Borrower giving the applicable Notice of Competitive
Bid Borrowing. The Administrative Agent shall in turn promptly notify
each Lender of each request for a Competitive Bid Borrowing received
by it from a Borrower by sending such Lender a copy of the related
Notice of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do
so, irrevocably offer to make one or more Competitive Bid Advances to
the Borrower proposing the Competitive Bid Borrowing as part of such
proposed Competitive Bid Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion, by notifying the
Administrative Agent (which shall give prompt notice thereof to such
Borrower), before 10:00 A.M. (New York City time) (A) on the date of
such proposed Competitive Bid Borrowing, in the case of a Competitive
Bid Borrowing consisting of Fixed Rate Advances denominated in US
Dollars, (B) three Business Days before the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing
consisting of LIBO Rate Advances denominated in US Dollars and (C) on
the Business
<PAGE> 24
Day prior to the date of such proposed Competitive Bid Borrowing, in
the case of a Competitive Bid Borrowing consisting of either Fixed
Rate Advances denominated in any Foreign Currency or Local Rate
Advances denominated in any Foreign Currency, of the minimum amount
and maximum amount of each Competitive Bid Advance which such Lender
would be willing to make as part of such proposed Competitive Bid
Borrowing (which amounts or the Equivalent thereof in US Dollars, as
the case may be, of such proposed Competitive Bid Borrowing may,
subject to the proviso to the first sentence of this Section 2.03(a),
exceed such Lender's Commitment, if any), the rate or rates of
interest therefor and such Lender's Applicable Lending Office with
respect to such Competitive Bid Advance; PROVIDED that if the
Administrative Agent in its capacity as a Lender shall, in its sole
discretion, elect to make any such offer, it shall notify such
Borrower of such offer before 9:00 A.M. (New York City time) on the
date on which notice of such election is to be given to the
Administrative Agent by the other Lenders. If any Lender shall elect
not to make such an offer, such Lender shall so notify the
Administrative Agent, before 10:00 A.M. (New York City time) on the
date on which notice of such election is to be given to the
Administrative Agent by the other Lenders, and such Lender shall not
be obligated to, and shall not, make any Competitive Bid Advance as
part of such Competitive Bid Borrowing; PROVIDED that the failure by
any Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Bid Advance as part of such proposed
Competitive Bid Borrowing. Each Lender that offers to make a
Competitive Bid Advance to the Subsidiary Borrower shall (x) be deemed
to have represented and warranted to the Subsidiary Borrower that it
is, and for so long as such Competitive Bid Advance shall remain
outstanding it will not become, a non-resident of Canada within the
meaning of the Income Tax Act (Canada) and (y) have entered into an
Acceptance Agreement in the form of Exhibit F hereto.
(iii) The Borrower proposing the Competitive Bid Borrowing shall,
in turn (A) before 11:00 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances denominated in US Dollars,
(B) before 1:00 P.M. (New York City time) three Business Days before
the date of such proposed Competitive Bid Borrowing, in the case of a
Competitive Bid Borrowing consisting of LIBO Rate Advances denominated
in US Dollars and (C) before 11:00 A.M. (New York City time) on the
Business Day prior to the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of
either Fixed Rate Advances denominated in any Foreign Currency or
Local Rate Advances denominated in any Foreign Currency, either:
(x) cancel such Competitive Bid Borrowing by giving the
Administrative Agent notice to that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, by giving notice to the
Administrative Agent
<PAGE> 25
of the amount of each Competitive Bid Advance (which amount shall
be equal to or greater than the minimum amount, and equal to or
less than the maximum amount, notified to such Borrower by the
Administrative Agent on behalf of such Lender for such
Competitive Bid Advance pursuant to paragraph (ii) above) to be
made by each Lender as part of such Competitive Bid Borrowing,
and reject any remaining offers made by Lenders pursuant to
paragraph (ii) above by giving the Administrative Agent notice to
that effect. If the Borrower proposing the Competitive Bid
Advance accepts any offers made by Lenders pursuant to paragraph
(ii) above, such offers shall be accepted in the order of the
lowest to highest interest rates or, if two or more Lenders offer
to make Competitive Bid Advances at the same interest rate, such
offers, if any, shall be accepted in proportion to the amount
offered by each such Lender at such interest rate.
(iv) If the Borrower proposing the Competitive Bid Borrowing
notifies the Administrative Agent that such Competitive Bid Borrowing
is canceled pursuant to paragraph (iii)(x) above, the Administrative
Agent shall give prompt notice thereof to the Lenders and such
Competitive Bid Borrowing shall not be made.
(v) If the Borrower proposing the Competitive Bid Borrowing
accepts one or more of the offers made by any Lender or Lenders
pursuant to paragraph (iii)(y) above, the Administrative Agent shall
in turn promptly notify (A) each Lender that has made an offer as
described in paragraph (ii) above, of the date and aggregate amount of
such Competitive Bid Borrowing and whether or not any offer or offers
made by such Lender pursuant to paragraph (ii) above have been
accepted by such Borrower and (B) each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing, of
the amount of each Competitive Bid Advance to be made by such Lender
as part of such Competitive Bid Borrowing. Each Lender that is to make
a Competitive Bid Advance as part of such Competitive Bid Borrowing
shall, before 12:00 noon (New York City time) on the date of such
Competitive Bid Borrowing specified in the notice received from the
Administrative Agent pursuant to clause (A) of the preceding sentence,
make available for the account of its Applicable Lending Office to (x)
the Administrative Agent at the applicable Administrative Agent's
Account, in same day funds, in the case of a Competitive Bid Advance
denominated in US Dollars, or (y) the Local Agent at the applicable
Payment Office, in same day funds, in the case of a Competitive Bid
Advance denominated in any Foreign Currency, such Lender's portion of
such Competitive Bid Borrowing. Upon fulfillment of the applicable
conditions set forth in Article III and after receipt by the
Administrative Agent of such funds, the Administrative Agent will make
such funds available to the applicable Borrower at the Administrative
Agent's address referred to in Section 9.02. Promptly after each
Competitive Bid Borrowing the Administrative Agent will notify each
Lender of the amount of the Competitive Bid Borrowing, the consequent
Competitive Bid Reduction and the dates upon which such Competitive
Bid Reduction commenced and will
<PAGE> 26
terminate.
(vi) If the Borrower proposing the Competitive Bid Borrowing
notifies the Administrative Agent that it accepts one or more of the
offers made by any Lender or Lenders pursuant to paragraph (iii)(y)
above, such notice of acceptance shall be irrevocable and binding on
such Borrower. The Borrower proposing the Competitive Bid Borrowing
shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill on or before the
date specified in the related Notice of Competitive Bid Borrowing for
such Competitive Bid Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Competitive Bid
Advance to be made by such Lender as part of such Competitive Bid
Borrowing when such Competitive Bid Advance, as a result of such
failure, is not made on such date.
(vii) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Notice of Competitive Bid
Borrowing delivered pursuant to subsection (a)(i) above and a register
for the recordation of the date, amount, maturity, interest rate,
interest dates, other terms and Lender of each Competitive Bid Advance
accepted by any Borrower from time to time pursuant to this subsection
(a) (the "Competitive Bid Register"). The entries in the Competitive
Bid Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Administrative Agent and the
Lenders may treat the entries recorded in the Competitive Bid Register
as evidence of Competitive Bid Advances made pursuant to this Section
2.03. The Competitive Bid Register shall be available for inspection
by the Borrowers, or by any Lender as to its Competitive Bid Advances,
at any reasonable time and from time to time upon reasonable prior
notice.
(b) Each Competitive Bid Borrowing shall be in a minimum aggregate
US Dollar Amount of US$10,000,000 and, following the making of each Competitive
Bid Borrowing, the Borrowers shall be in compliance with the limitation set
forth in the proviso to the first sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in this
Section 2.03, any Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (d) below, and reborrow under this
Section 2.03, PROVIDED that a Competitive Bid Borrowing shall not be made within
three Business Days of the date of any other Competitive Bid Borrowing.
(d) Each Borrower that has borrowed through a Competitive Bid
Borrowing shall repay to the Administrative Agent or the Local Agent, as the
case may be, for the account of each Lender that has made a Competitive Bid
Advance, on the maturity date of each Competitive Bid Advance (such maturity
date being that specified by such Borrower for
<PAGE> 27
repayment of such Competitive Bid Advance in the related Notice of Competitive
Bid Borrowing delivered pursuant to subsection (a)(i) above and recorded in the
Competitive Bid Register with respect to such Competitive Bid Advance), the then
unpaid principal amount of such Competitive Bid Advance. Except as required by
Section 2.10(b) and then only to the extent no Revolving Credit Advances are
then outstanding, no Borrower shall have any right to prepay any principal
amount of any Competitive Bid Advance unless, and then only on the terms,
specified by such Borrower for such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i)
above and set forth in the Competitive Bid Register with respect to such
Competitive Bid Advance.
(e) Each Borrower that has borrowed through a Competitive Bid
Borrowing (other than by the issuance of Acceptances) shall pay interest on the
unpaid principal amount of each Competitive Bid Advance from the date of such
Competitive Bid Advance to the date the principal amount of such Competitive Bid
Advance is repaid in full, at the rate of interest for such Competitive Bid
Advance specified by the Lender making such Competitive Bid Advance in its
notice with respect thereto delivered pursuant to subsection (a)(ii) above,
payable on the interest payment date or dates specified by such Borrower for
such Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above, as recorded in the Competitive
Bid Register with respect to such Competitive Bid Advance. Upon the occurrence
and during the continuance of an Event of Default under Section 6.01(a), each
Borrower shall pay interest on the amount of unpaid principal of and interest on
each Competitive Bid Advance made to it owing to a Lender, payable in arrears on
the date or dates interest is payable thereon, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on such
Competitive Bid Advance as recorded in the Competitive Bid Register with respect
to such Competitive Bid Advance unless otherwise agreed by the applicable
Borrower and the Lender making such Competitive Bid Advance.
(f) The indebtedness of any Borrower resulting from each
Competitive Bid Advance made to such Borrower as part of a Competitive Bid
Borrowing shall be evidenced by a master Competitive Bid Note of the Borrowers
payable to the order of the Administrative Agent for the benefit of the Lender
making such Competitive Bid Advance.
SECTION 2.04. FEES. (a) FACILITY FEE. The Company agrees to pay to
the Administrative Agent for the account of each Lender (other than the
Designated Bidders) a facility fee on the aggregate amount of such Lender's
Commitment from the date hereof in the case of each Initial Lender and from the
effective date specified in the Assumption Agreement or the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender
until the earlier of the Revolver Termination Date and the Term Loan Conversion
Date at a rate per annum equal to the Applicable Facility Fee in effect from
time to time, payable in arrears quarterly on the last day of each March, June,
September and December, commencing June 30, 1999, and on the Revolver
Termination Date or the Term Loan Conversion Date, as the case may be.
<PAGE> 28
(b) ADMINISTRATIVE AGENT'S FEES. The Company shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Company and the Administrative Agent.
SECTION 2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS. (a)
OPTIONAL. The Company shall have the right, upon at least three Business Days'
notice to the Administrative Agent, to terminate in whole or reduce ratably in
part the unused portions of the respective Commitments of the Lenders, PROVIDED
that each partial reduction shall be in the aggregate amount of US$10,000,000 or
an integral multiple of US$1,000,000 in excess thereof and PROVIDED FURTHER that
the aggregate amount of the Commitments of the Lenders shall not be reduced to
an amount that is less than the aggregate US Dollar Amount of the Competitive
Bid Advances then outstanding.
(b) MANDATORY. If the Company has not made the Term Loan Election
in accordance with Section 2.06(b) on or prior to the Revolver Termination Date,
the Commitments shall be automatically terminated on the Revolver Termination
Date. If the Company has made the Term Loan Election in accordance with Section
2.06, from time to time after the Term Loan Conversion Date upon each prepayment
of the Revolving Credit Advances, the aggregate Commitments of the Lenders under
this Agreement shall be automatically and permanently reduced on a pro rata
basis by an amount equal to the amount by which the aggregate Commitments of the
Lenders under this Agreement immediately prior to such reduction EXCEEDS the
aggregate unpaid principal amount of the Revolving Credit Advances outstanding
at such time.
SECTION 2.06. REPAYMENT OF REVOLVING CREDIT ADVANCES; TERM LOAN
ELECTION. (a) TERMINATION. The Company shall, subject to subsection (b) below,
repay to the Administrative Agent for the ratable account of the Lenders on the
Revolver Termination Date the aggregate principal amount of the Revolving Credit
Advances then outstanding.
(b) TERM LOAN ELECTION. The Company may, at any time prior to the
Revolver Termination Date and upon not less than 15 days' notice to the
Administrative Agent, elect (the "TERM LOAN ELECTION") to convert all of the
Revolving Credit Advances outstanding on the date specified in such notice (the
"TERM LOAN CONVERSION DATE") into a term loan which the Company shall repay in
full ratably to the Administrative Agent for the account of the Lenders on the
Maturity Date; PROVIDED that no Default has occurred and is continuing on the
date of notice of the Term Loan Election or on the Term Loan Conversion Date.
SECTION 2.07. INTEREST ON REVOLVING CREDIT ADVANCES. (a) SCHEDULED
INTEREST. The Company shall pay interest on the unpaid principal amount of each
Revolving Credit Advance owing to each Lender from the date of such Revolving
Credit Advance until such principal amount shall be paid in full, at the
following rates per annum:
<PAGE> 29
(i) BASE RATE ADVANCES. During such periods as such Revolving
Credit Advance is a Base Rate Advance, a rate per annum equal at all
times to the Base Rate in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December
during such periods and on the date such Base Rate Advance shall be
Converted or paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Revolving Credit Advance is a Eurodollar Rate Advance, a rate per
annum equal at all times during each Interest Period for such
Revolving Credit Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Revolving Credit Advance PLUS (y) the
Applicable Margin in effect from time to time, payable in arrears on
the last day of such Interest Period and, if such Interest Period has
a duration of more than three months, on each day that occurs during
such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the
continuance of an Event of Default under Section 6.01(a), the Company shall pay
interest on (i) the unpaid principal amount of each Revolving Credit Advance
owing to each Lender, payable in arrears on the dates referred to in clause
(a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid on such Revolving Credit Advance
pursuant to clause (a)(i) or (a)(ii) above and (ii) the amount of any interest,
fee or other amount payable hereunder that is not paid when due, from the date
such amount shall be due until such amount shall be paid in full, payable in
arrears on the date such amount shall be paid in full and on demand, at a rate
per annum equal at all times to 2% per annum above the rate per annum required
to be paid on Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.08. INTEREST RATE DETERMINATION. (a) Each Reference Bank
agrees to furnish to the Administrative Agent timely information for the purpose
of determining each Eurodollar Rate. If any one or more of the Reference Banks
shall not furnish such timely information to the Administrative Agent for the
purpose of determining any such interest rate, the Administrative Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks. The Administrative Agent shall give prompt notice to
the Company and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.07(a)(i) or (ii) and the rate, if
any, furnished by each Reference Bank for the purpose of determining the
interest rate under Section 2.07(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Required Lenders of making, funding or maintaining their respective Eurodollar
Rate Advances for such Interest Period, the Administrative Agent shall forthwith
so notify the Company and the Lenders, whereupon (i)
<PAGE> 30
each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance, and (ii)
the obligation of the Lenders to make, or to Convert Revolving Credit Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Company and the Lenders that the circumstances causing such
suspension no longer exist.
(c) If the Company shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Company and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than US$10,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default under Section 6.01(a), (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
(f) If fewer than two Reference Banks furnish timely information
to the Administrative Agent for determining the Eurodollar Rate for any
Eurodollar Rate Advances,
(i) the Administrative Agent shall forthwith notify the Company
and the Lenders that the interest rate cannot be determined for such
Eurodollar Rate Advances,
(ii) each such Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate
Advance (or if such Advance is then a Base Rate Advance, will continue
as a Base Rate Advance), and
(iii) the obligation of the Lenders to make, or to Convert
Revolving Credit Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Company and
the Lenders that the circumstances causing such suspension no longer
exist.
(g) For the purposes of the Interest Act (Canada) (i) the yearly
rate of interest to which any rate of interest payable under this Agreement
which is calculated on any basis that is less than a full calendar year is
equivalent may be determined by multiplying such rate of interest by a fraction
the numerator of which is the actual number of days in the relevant year and the
denominator of which is the number of days comprising such other basis
<PAGE> 31
of calculation, (ii) the principle of deemed reinvestment of interest shall not
apply to any interest calculation under this Agreement and (iii) the rates of
interest stipulated in this Agreement are intended to be nominal rates and not
effective rates or yields.
SECTION 2.09. OPTIONAL CONVERSION OF REVOLVING CREDIT ADVANCES.
The Company may on any Business Day, upon notice given to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Conversion and subject to the provisions of
Sections 2.08 and 2.12, Convert all Revolving Credit Advances of one Type
comprising the same Borrowing into Revolving Credit Advances of the other Type;
PROVIDED, HOWEVER, that any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than the minimum amount specified
in Section 2.02(b). Each such notice of a Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
Revolving Credit Advances to be Converted, and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest Period for each
such Advance. Each notice of Conversion shall be binding on the Company. In the
case of any Conversion of Base Rate Advances into Eurodollar Rate Advances, the
Company shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any revocation of such notice of Conversion,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the revolving Credit Advance to be Converted by such Lender as a
result of such revocation.
SECTION 2.10. PREPAYMENTS OF REVOLVING CREDIT ADVANCES. (a)
OPTIONAL. The Company may, upon at least one Business Day's notice, in the case
of Base Rate Advances, or three Business Days' notice, in the case of Eurodollar
Rate Advances, to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Company shall, prepay the outstanding principal amount of the Revolving Credit
Advances comprising part of the same Revolving Credit Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; PROVIDED, HOWEVER, that (x) each partial
prepayment shall be in an aggregate principal amount of US$10,000,000 or an
integral multiple of US$1,000,000 in excess thereof and (y) in the event of any
such prepayment of a Eurodollar Rate Advance, the Company shall be obligated to
reimburse the Lenders in respect thereof pursuant to Section 9.04(c).
(b) MANDATORY PREPAYMENTS. (i) If the Administrative Agent
notifies the Company that, on any interest payment date, the US Dollar Amount of
all Advances then outstanding exceeds 105% of the aggregate Commitments of the
Lenders on such date, the Borrowers shall, within two Business Days after
receipt of such notice, prepay the outstanding principal amount of any Advances
owing by the Borrowers in an aggregate amount sufficient to reduce such US
Dollar Amount to an amount not to exceed 100% of the aggregate
<PAGE> 32
Commitments of the Lenders on such date.
(ii) Each prepayment made pursuant to this Section 2.10(b) shall
be made together with any interest accrued to the date of such prepayment on the
principal amounts prepaid and, in the case of any prepayment of a Eurocurrency
Rate Advance, a LIBO Rate Advance or a Local Rate Advance on a date other than
the last day of an Interest Period or at its maturity, any additional amounts
that the applicable Borrower shall be obligated to reimburse to the Lenders in
respect thereof pursuant to Section 9.04(c). The Administrative Agent shall give
prompt notice of any prepayment required under this Section 2.10(b) to the
Borrowers and the Lenders.
SECTION 2.11. INCREASED COSTS. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law)
which becomes effective after the date hereof, there shall be any increase in
the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances or LIBO Rate Advances, then the Company shall from time
to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost setting
forth the basis thereof in reasonable detail and submitted to the Company and
the Administrative Agent by such Lender shall be conclusive and binding for all
purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or
in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) which becomes effective after the date
hereof, there shall be any increase in the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender as a result of or based upon the existence of such Lender's commitment to
lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), the Company
shall pay to the Administrative Agent for the account of such Lender, from time
to time as specified by such Lender, additional amounts sufficient to compensate
such Lender or such corporation in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts setting forth the basis thereof in reasonable
detail and submitted to the Company and the Administrative Agent by such Lender
shall be conclusive and binding for all purposes, absent manifest error.
Notwithstanding the foregoing and except in the case of any such law,
regulation, guideline or request having retroactive effect, the Company shall
not be required to pay to the Administrative Agent or any Lender such additional
amounts to the extent such amounts relate to periods prior to six months before
the Company's receipt of such notice.
<PAGE> 33
SECTION 2.12. ILLEGALITY. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
LIBO Rate Advances or to fund or maintain Eurodollar Rate Advances or LIBO Rate
Advances hereunder, (i) each Eurodollar Rate Advance or LIBO Rate Advance, as
the case may be, will automatically, upon such demand, Convert into a Base Rate
Advance or an Advance that bears interest at the rate set forth in Section
2.07(a)(i), as the case may be, and (ii) the obligation of the Lenders to make,
or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Company and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 2.13. PAYMENTS AND COMPUTATIONS. (a) Each Borrower shall
make each payment hereunder and under the Notes hereunder, except with respect
to principal of, interest on, and other amounts relating to, Advances
denominated in a Foreign Currency, not later than 11:00 A.M. (New York City
time) on the day when due in US Dollars to the Administrative Agent at the
applicable Administrative Agent's Account in same day funds. Each Borrower shall
make each payment hereunder with respect to principal of, interest on, and other
amounts relating to, Advances denominated in a Foreign Currency, not later than
11:00 A.M. (at the Payment Office for such Foreign Currency) on the day when due
in such Foreign Currency to the Local Agent in same day funds, by deposit of
such funds to the applicable Administrative Agent's Account in same day funds.
The Administrative Agent or Local Agent, as the case may be, will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than amounts payable
pursuant to Section 2.03, 2.11, 2.14 or 9.04(c)) to the Lenders for the account
of their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon any Assuming Lender becoming a Lender
hereunder as a result of an extension of the Termination Date pursuant to
Section 2.17, and upon the Administrative Agent's receipt of such Lender's
Assumption Agreement and recording of the information contained therein in the
Register, from and after the applicable Extension Date, the Administrative Agent
or the Local Agent, as the case may be, shall make all payments hereunder and
under the Notes issued in connection therewith in respect of the interest
assumed thereby to the Assuming Lender. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 9.07(d), from and after the effective date specified in such
Assignment and Acceptance, the Administrative Agent or the Local Agent, as the
case may be, shall make all payments hereunder and under the Notes in respect of
the interest assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
<PAGE> 34
(b) Each Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made to the Administrative Agent or
the Local Agent, as the case may be, when due hereunder or under the Note held
by such Lender, to charge from time to time against any or all of such
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Administrative Agent on the basis of a year of 365 or 366 days, as
the case may be, and all computations of interest based on the Eurodollar Rate
or the Federal Funds Rate and of facility fees shall be made by the
Administrative Agent on the basis of a year of 360 days and computations in
respect of Competitive Bid Advances shall be made by the Administrative Agent as
specified in the applicable Notice of Competitive Bid Notice (or, in each case
of Advances denominated in Foreign Currencies for which market practice differs,
in accordance with market practice), in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or facility fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or facility fee, as
the case may be; PROVIDED, HOWEVER, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances or LIBO Rate Advances to
be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(e) Unless the Administrative Agent or the Local Agent, as the
case may be, shall have received notice from the applicable Borrower prior to
the date on which any payment is due to the Lenders hereunder that such Borrower
will not make such payment in full, the Administrative Agent or the Local Agent,
as the case may be, may assume that such Borrower has made such payment in full
to the Administrative Agent or the Local Agent, as the case may be, on such date
and the Administrative Agent or the Local Agent, as the case may be, may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent such Borrower shall not have so made such payment in full to the
Administrative Agent or the Local Agent, as the case may be, each Lender shall
repay to the Administrative Agent or the Local Agent, as the case may be,
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative Agent
or the Local Agent, as the case may be, at (i) the Federal Funds Rate in the
case of Advances denominated in US Dollars or (ii) the cost of funds incurred by
the Administrative Agent or the Local Agent, as the case may be, in respect of
such amount in the case of Advances denominated in
<PAGE> 35
Foreign Currencies.
SECTION 2.14. TAXES. (a) Any and all payments by any Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, EXCLUDING, in the case of each Lender and the Administrative
Agent, taxes imposed on its income, and franchise taxes imposed on it in lieu of
income taxes, by the jurisdiction under the laws of which such Lender or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, taxes imposed on its
income, and franchise taxes imposed on it in lieu of income taxes, by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "TAXES").
If any Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.14) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrower shall
make such deductions and (iii) such Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(c) Each Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.14) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor in
reasonable detail.
(d) Within 30 days after the date of any payment of Taxes, each
Borrower will furnish to the Administrative Agent, at its address referred to in
Section 9.02, the original or a certified copy of a receipt evidencing payment
thereof. In the case of any payment hereunder or under the Notes by or on behalf
of the Company through an account or branch outside the United States or on
behalf of the Company by a payor that is not a United States person, if the
Company determines that no Taxes are payable in respect thereof, the Company
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such
<PAGE> 36
address, an opinion of counsel acceptable to the Administrative Agent stating
that such payment is exempt from Taxes. For purposes of this subsection (d) and
subsection (e), the terms "UNITED STATES" and "UNITED STATES PERSON" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by any Borrower
(but only so long as such Lender remains lawfully able to do so), shall provide
each Borrower with Internal Revenue Service form 1001 or 4224, as appropriate,
or any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender is exempt from or entitled to a reduced rate of
United States withholding tax on payments of interest pursuant to this Agreement
or the Notes. If the form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from "Taxes" as defined in Section 2.14(a). If any form or document
referred to in this subsection (e) requires the disclosure of information, other
than information necessary to compute the tax payable and information required
on the date hereof by Internal Revenue Service form 1001 or 4224, that the
Lender reasonably considers to be confidential, the Lender shall give notice
thereof to the Borrowers and shall not be obligated to include in such form or
document such confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrowers with the appropriate form described in Section 2.14(e)
(OTHER THAN if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under the first sentence of subsection (e) above),
such Lender shall not be entitled to indemnification under Section 2.14(a) with
respect to Taxes imposed by the United States; PROVIDED, HOWEVER, that should a
Lender become subject to Taxes because of its failure to deliver a form required
hereunder, each Borrower shall take such steps as the Lender shall reasonably
request to assist the Lender to recover such Taxes.
SECTION 2.15. SHARING OF PAYMENTS, ETC. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Revolving Credit Advances owing to
it (other than pursuant to Section 2.11, 2.14 or 9.04(c)) in excess of its
ratable share of payments on account of the Revolving Credit Advances obtained
by all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in the Revolving Credit Advances owing to them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; PROVIDED, HOWEVER, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such
<PAGE> 37
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.15 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of such Borrower in the amount of such
participation.
SECTION 2.16. USE OF PROCEEDS. The proceeds of the Advances shall
be available (and each Borrower agrees that it shall use such proceeds) solely
for general corporate purposes of the Company and its Subsidiaries.
SECTION 2.17. EXTENSION OF TERMINATION DATE. (a) At least 30 days
but not more than 45 days prior to the Revolver Termination Date, the Company,
by written notice to the Administrative Agent, may request an extension of the
Revolver Termination Date in effect at such time for a period of 364 days from
its then scheduled expiration. The Administrative Agent shall promptly notify
each Lender of such request, and each Lender shall in turn, in its sole
discretion, not earlier than 30 days but at least 20 days prior to the Revolver
Termination Date, notify the Company and the Administrative Agent in writing as
to whether such Lender will consent to such extension. If any Lender shall fail
to notify the Administrative Agent and the Company in writing of its consent to
any such request for extension of such Revolver Termination Date at least 20
days prior to the scheduled occurrence thereof at such time, such Lender shall
be deemed to be a Non-Consenting Lender with respect to such request. The
Administrative Agent shall notify the Company not later than 15 days prior to
the scheduled Revolver Termination Date of the decision of the Lenders regarding
the Company's request for an extension of the Revolver Termination Date.
(b) If all the Lenders consent in writing to any such request in
accordance with subsection (a) of this Section 2.17, the Revolver Termination
Date in effect at such time shall, effective as at the Revolver Termination Date
(the "EXTENSION DATE"), be extended for period of 364 days from such Extension
Date; PROVIDED that on each Extension Date, no Default shall have occurred and
be continuing, or shall occur as a consequence thereof and the giving of a
request for extension shall constitute a representation and warranty by the
Company that the representations and warranties contained in Section 4.01 are
correct on and as of the date of such notice and on such Extension Date, as
though made on such dates. If less than all of the Lenders consent in writing to
any such request in accordance with subsection (a) of this Section 2.17, the
Revolver Termination Date in effect at such time shall, effective as at the
applicable Extension Date, be extended as to those Lenders that so consented
(each a "CONSENTING LENDER") but shall not be extended as to any other Lender
(each a "NON-CONSENTING LENDER"). To the extent that the Revolver Termination
Date is not extended as to any Lender pursuant to this Section 2.17 and the
Commitment of such Lender is not assumed in accordance with subsection (c) of
this Section 2.17 on or prior to the applicable
<PAGE> 38
Extension Date, the Commitment of such Non-Consenting Lender shall automatically
terminate in whole on such unextended Revolver Termination Date without any
further notice or other action by the Company, such Lender or any other Person;
PROVIDED that such Non-Consenting Lender's rights under Sections 2.11, 2.14 and
9.04, and its obligations under Section 8.05, shall survive the Revolver
Termination Date for such Lender as to matters occurring prior to such date. It
is understood and agreed that no Lender shall have any obligation whatsoever to
agree to any request made by the Company for any requested extension of the
Revolver Termination Date.
(c) If less than all of the Lenders consent to any such request
pursuant to subsection (a) of this Section 2.17, the Company may arrange for one
or more Consenting Lenders or other Eligible Assignees (each an "ASSUMING
LENDER") to assume, effective as of the Extension Date, any Non-Consenting
Lender's Commitment and all of the obligations of such NonConsenting Lender
under this Agreement thereafter arising, without recourse to or warranty by, or
expense to, such Non-Consenting Lender; PROVIDED, HOWEVER, that the amount of
the Commitment of any such Assuming Lender as a result of such substitution
shall in no event be less than US$5,000,000 unless the amount of the Commitment
of such Non-Consenting Lender is less than US$5,000,000, in which case such
Assuming Lender shall assume all of such lesser amount; and PROVIDED FURTHER
that:
(i) such Non-Consenting Lender shall have been paid (A) the
aggregate principal amount of, and any interest accrued and unpaid to
the effective date of the assignment on, the outstanding Advances, if
any, of such Non-Consenting Lender PLUS (B) any accrued but unpaid
facility fees owing to such Non-Consenting Lender as of the effective
date of such assignment;
(ii) all additional costs reimbursements, expense reimbursements
and indemnities payable to such Non-Consenting Lender, and all other
accrued and unpaid amounts owing to such Non-Consenting Lender
hereunder, as of the effective date of such assignment shall have been
paid to such Non-Consenting Lender; and
(iii) with respect to any such Assuming Lender, the applicable
processing and recordation fee required under Section 9.07(a) for such
assignment shall have been paid;
PROVIDED FURTHER that such Non-Consenting Lender's rights under Sections 2.11,
2.14 and 9.04, and its obligations under Section 8.05, shall survive such
substitution as to matters occurring prior to the date of substitution. At least
three Business Days prior to any Extension Date, (A) each such Assuming Lender,
if any, shall have delivered to the Company and the Administrative Agent an
assumption agreement in form and substance satisfactory to the Company and the
Administrative Agent (an "ASSUMPTION AGREEMENT"), duly executed by such Assuming
Lender, such Non-Consenting Lender, the Company and the Administrative Agent,
(B) any such Consenting Lender shall have delivered confirmation in writing
satisfactory to the
<PAGE> 39
Company and the Administrative Agent as to the increase in the amount of its
Commitment and (C) each NonConsenting Lender being replaced pursuant to this
Section 2.17 shall have delivered to the Administrative Agent the Note or Notes
held by such Non-Consenting Lender. Upon the payment or prepayment of all
amounts referred to in clauses (i), (ii) and (iii) of the immediately preceding
sentence, each such Consenting Lender or Assuming Lender, as of the Extension
Date, will be substituted for such Non-Consenting Lender under this Agreement
and shall be a Lender for all purposes of this Agreement, without any further
acknowledgment by or the consent of the other Lenders, and the obligations of
each such Non-Consenting Lender hereunder shall, by the provisions hereof, be
released and discharged.
(d) If all of the Lenders (after giving effect to any assignments
pursuant to subsection (b) of this Section 2.17) consent in writing to a
requested extension (whether by execution or delivery of an Assumption Agreement
or otherwise) not later than one Business Day prior to such Extension Date, the
Administrative Agent shall so notify the Company, and, so long as no Default
shall have occurred and be continuing as of such Extension Date, or shall occur
as a consequence thereof, the Revolver Termination Date then in effect shall be
extended for the additional 364 day period as described in subsection (a) of
this Section 2.17, and all references in this Agreement, and in the Notes, to
the "REVOLVER TERMINATION DATE" shall, with respect to each Consenting Lender
and each Assuming Lender for such Extension Date, refer to the Revolver
Termination Date as so extended. Promptly following each Extension Date, the
Agent shall notify the Lenders (including, without limitation, each Assuming
Lender) of the extension of the scheduled Termination Date in effect immediately
prior thereto and shall thereupon record in the Register the relevant
information with respect to each such Consenting Lender and each such Assuming
Lender.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTIONS
2.01 AND 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective
on and as of the first date (the "EFFECTIVE DATE") on which the following
conditions precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change since
December 31, 1998.
(b) There shall exist no action, suit, investigation, litigation
or proceeding affecting the Company or any of its Subsidiaries pending
or threatened before any court, governmental agency or arbitrator that
(i) could be reasonably likely to have a Material Adverse Effect other
than the matters described on Schedule 3.01(b) hereto (the "DISCLOSED
LITIGATION") or (ii) purports to affect the legality, validity or
enforceability of this Agreement or any Note or the consummation of
the transactions contemplated hereby, and there shall have been no
adverse change in the status, or
<PAGE> 40
financial effect on the Company or any of its Subsidiaries, of the
Disclosed Litigation from that described on Schedule 3.01(b) hereto
that could reasonably be expected to have a Material Adverse Effect.
(c) The Lenders shall have been given such access to the
management, records, books of account, contracts and properties of the
Company and its Subsidiaries as they shall have reasonably requested.
(d) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby
shall have been obtained (without the imposition of any conditions
that are not acceptable to the Lenders) and shall remain in effect,
and no law or regulation shall be applicable in the reasonable
judgment of the Lenders that restrains, prevents or imposes materially
adverse conditions upon the transactions contemplated hereby.
(e) The Company shall have notified each Lender and the
Administrative Agent in writing as to the proposed Effective Date.
(f) The Company shall have paid all accrued fees and expenses of
the Administrative Agent and the Lenders (including the accrued fees
and expenses of counsel to the Administrative Agent).
(g) On the Effective Date, the following statements shall be true
and the Administrative Agent shall have received for the account of
each Lender a certificate signed by a duly authorized officer of the
Company, dated the Effective Date, stating that:
(i) The representations and warranties contained in Section
4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
(h) The Administrative Agent shall have received on or before the
Effective Date the following, each dated such day, in form and
substance satisfactory to the Administrative Agent and (except for the
Notes) in sufficient copies for each Lender:
(i) The Revolving Credit Notes to the order of the Lenders,
respectively, and the Competitive Bid Note to the order of the
Administrative Agent.
(ii) Certified copies of the resolutions of the Board of
Directors of each Borrower approving this Agreement and the
Notes, and of all documents evidencing other necessary corporate
action and governmental approvals, if any,
<PAGE> 41
with respect to this Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant
Secretary of each Borrower certifying the names and true
signatures of the officers of such Borrower authorized to sign
this Agreement and the Notes and the other documents to be
delivered hereunder.
(iv) A favorable opinion of Woodrow W. Ban, Senior Corporate
Counsel and Assistant Secretary of the Company, and a favorable
opinion of Fasken Campbell Godfrey, special Canadian counsel to
the Subsidiary Borrower, substantially in the form of Exhibits
E-1 and E-2 hereto, respectively, and as to such other matters as
any Lender through the Administrative Agent may reasonably
request.
(v) A favorable opinion of Shearman & Sterling, counsel for
the Administrative Agent, in form and substance satisfactory to
the Administrative Agent.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT
BORROWING. The obligation of each Lender to make a Revolving Credit Advance on
the occasion of each Revolving Credit Borrowing shall be subject to the
conditions precedent that the Effective Date shall have occurred and on the date
of such Revolving Credit Borrowing (a) the following statements shall be true
(and each of the giving of the applicable Notice of Revolving Credit Borrowing
and the acceptance by the Company of the proceeds of such Revolving Credit
Borrowing shall constitute a representation and warranty by the Company that on
the date of such Borrowing such statements are true):
(i) The representations and warranties contained in Section 4.01
are correct on and as of the date of such Revolving Credit Borrowing,
before and after giving effect to such Revolving Credit Borrowing and
to the application of the proceeds therefrom, as though made on and as
of such date, and
(ii) No event has occurred and is continuing, or would result
from such Revolving Credit Borrowing or from the application of the
proceeds therefrom, that constitutes a Default;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.
SECTION 3.03. CONDITIONS PRECEDENT TO EACH COMPETITIVE BID
BORROWING. The obligation of each Lender that is to make a Competitive Bid
Advance on the occasion of a Competitive Bid Borrowing to make such Competitive
Bid Advance as part of such Competitive Bid Borrowing is subject to the
conditions precedent that (a) the Administrative
<PAGE> 42
Agent shall have received the written confirmatory Notice of Competitive Bid
Borrowing with respect thereto, (b) on or before the date of such Competitive
Bid Borrowing, but prior to such Competitive Bid Borrowing, the Administrative
Agent shall have received for recordation in the Competitive Bid Register
information as to each of the one or more Competitive Bid Advances to be made by
the Lenders as part of such Competitive Bid Borrowing, the principal amount of
each such Competitive Bid Advance and such other terms as were agreed to for
each such Competitive Bid Advance in accordance with Section 2.03 and (c) on the
date of such Competitive Bid Borrowing the following statements shall be true
(and each of the giving of the applicable Notice of Competitive Bid Borrowing
and the acceptance by the Borrower proposing the applicable Competitive Bid
Borrowing of the proceeds of such Competitive Bid Borrowing shall constitute a
representation and warranty by the Company that on the date of such Competitive
Bid Borrowing such statements are true):
(i) The representations and warranties contained in Section 4.01
are correct on and as of the date of such Competitive Bid Borrowing,
before and after giving effect to such Competitive Bid Borrowing and
to the application of the proceeds therefrom, as though made on and as
of such date,
(ii) No event has occurred and is continuing, or would result
from such Competitive Bid Borrowing or from the application of the
proceeds therefrom, that constitutes a Default, and
(iii) No event has occurred and no circumstance exists as a
result of which the information concerning the Company that has been
provided to the Administrative Agent and each Lender by the Company in
connection herewith would include an untrue statement of a material
fact or omit to state any material fact or any fact necessary to make
the statements contained therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 3.04. DETERMINATIONS UNDER SECTION 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by
this Agreement shall have received notice from such Lender prior to the proposed
Effective Date, as notified by the Company to the Lenders, specifying its
objection thereto. The Administrative Agent shall promptly notify the Lenders of
the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
<PAGE> 43
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as follows:
(a) Each Borrower is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation.
(b) The execution, delivery and performance by each Borrower of
this Agreement and the Notes executed by it, and the consummation of
the transactions contemplated hereby, are within such Borrower's
corporate powers, have been duly authorized by all necessary corporate
action, and do not contravene (i) such Borrower's charter or by-laws
or (ii) law or any contractual restriction binding on or affecting
such Borrower.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or any other third party is required for the due execution,
delivery and performance by any Borrower of this Agreement or the
Notes executed by it.
(d) This Agreement has been, and each of the Notes when delivered
hereunder will have been, duly executed and delivered by each Borrower
party thereto. This Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of each
Borrower party thereto enforceable against such Borrower in accordance
with their respective terms.
(e) The Consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 1998, and the related Consolidated
statements of income and cash flows of the Company and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion
of Ernst & Young, independent public accountants, and the Consolidated
balance sheet of the Company and its Subsidiaries as at March 31, 1999
and the related Consolidated statements of income and cash flows of
the Company and its Subsidiaries for the three months then ended, duly
certified by the chief financial officer of the Company, copies of
which have been furnished to each Lender, fairly present, subject, in
the case of said balance sheet as at March 31, 1999 and said
statements of income and cash flows for the three months then ended,
to year-end audit adjustments, the Consolidated financial condition of
the Company and its Subsidiaries as at such dates and the Consolidated
results of the operations of the Company and its Subsidiaries for the
periods ended on such dates, all in accordance with generally accepted
accounting principles consistently applied. Except as disclosed to the
Lenders in writing prior to the date hereof, since December 31, 1998,
there has been no Material Adverse Change.
(f) To the best of the Company's knowledge, there is no pending
or threatened action, suit, investigation, litigation or proceeding,
including, without limitation, any Environmental Action, affecting the
Company or any of its Subsidiaries
<PAGE> 44
before any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect (other than the
Disclosed Litigation described on Schedule 3.01(b)) or (ii) purports
to affect the legality, validity or enforceability of this Agreement
or any Note or the consummation of the transactions contemplated
hereby, and there has been no adverse change in the status, or
financial effect on the Company or any of its Subsidiaries, of the
Disclosed Litigation from that described on Schedule 3.01(b) hereto.
(g) No Borrower is engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System).
(h) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
(i) Neither the Company nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability
to any Multiemployer Plan.
(j) Neither the Company nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and no such Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated,
within the meaning of Title IV of ERISA.
(k) Except as set forth in the financial statements referred to
in Section 4.01(e), the Company and its Subsidiaries have no material
liability with respect to "expected post retirement benefit
obligations" within the meaning of Statement of Financial Accounting
Standards No. 106.
(l) The operations and properties of the Company and each of its
Subsidiaries comply in all material respects with all Environmental
Laws, all necessary Environmental Permits have been obtained and are
in effect for the operations and properties of the Company and its
Subsidiaries, the Company and its Subsidiaries are in compliance in
all material respects with all such Environmental Permits, and no
circumstances exist that could be reasonably likely to (i) form the
basis of an Environmental Action against the Company or any of its
Subsidiaries or any of their properties that could have a Material
Adverse Effect or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that could have a Material Adverse Effect.
(m) None of the properties currently or formerly owned or
operated by the Company or any of its Subsidiaries is listed or
proposed for listing on the National Priorities List under the
Comprehensive Environmental Response, Compensation and
<PAGE> 45
Liability Act of 1980 ("NPL") or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by
the U.S. Environmental Protection Agency ("CERCLIS") or any analogous
state list of sites requiring investigation or cleanup, the listing,
or proposed listing of which would be reasonably likely to have a
Material Adverse Effect, except as described in the registration
statement filed on Form 10-K with the Securities and Exchange
Commission, for the period ending December 31, 1998 and the materials
set forth on Schedule 4.01(m) hereto or, to the best knowledge of the
Company, is adjacent to any such property.
(n) Except where noncompliance would not individually or in the
aggregate have a Material Adverse Effect (i) neither the Company nor
any of its Subsidiaries has transported or arranged for the
transportation of any Hazardous Materials to any location that is
listed or proposed for listing on the NPL or on the CERCLIS or any
analogous state list, and (ii) all Hazardous Materials generated,
used, treated, handled or stored at or transported to or from any
property currently or formerly owned or operated by the Company or any
of its Subsidiaries have been disposed of in compliance with all
Environmental Laws and Environmental Permits,
(o) Following application of the proceeds of each Advance, not
more than 25 percent of the value of the assets (either of the Company
only or of the Company and its Subsidiaries on a Consolidated basis)
subject to the provisions of Section 5.02(a) or subject to any
restriction contained in any agreement or instrument between any
Borrower and any Lender or any Affiliate of any Lender relating to
Debt and within the scope of Section 6.01(d) will be margin stock
(within the meaning of Regulation U issued by the Board of Governors
of the Federal Reserve System).
(p) The Borrower has (i) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that
could be adversely affected by the risk that computer applications
used by the Borrower or any of its Subsidiaries (or suppliers, vendors
and customers) may be unable to recognize and perform properly date
sensitive functions involving certain dates prior to and any date
after December 31, 1999 (the "YEAR 2000 PROBLEM"), (ii) developed a
plan and timetable for addressing the Year 2000 Problem on a timely
basis and (iii) to date, implemented that plan in accordance with such
timetable. Based on the foregoing, the Borrower believes that its
computer applications that are material to its or any of its
Subsidiaries' business and operations are reasonably expected on a
timely basis to be able to perform properly date-sensitive functions
for all dates before, on and after January 1, 2000, except to the
extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect and has no present reason to believe
that a failure of a computer application at a supplier, vendor or
customer for reasons related to the Year 2000 Problem would have a
Material Adverse Effect.
<PAGE> 46
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Company
will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and Environmental Laws as
provided in Section 5.01(j).
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property;
PROVIDED, HOWEVER, that neither the Company nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors.
(c) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Company or such Subsidiary operates; PROVIDED, HOWEVER, that the
Company and its Subsidiaries may self-insure to the same extent as is
consistent with its past practice and to the extent consistent with
prudent business practice.
(d) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and
franchises; PROVIDED, HOWEVER, that the Company and its Subsidiaries
may consummate any merger or consolidation permitted under Section
5.02(b) and PROVIDED FURTHER that neither the Company nor any of its
Subsidiaries shall be required to preserve any right or franchise if
the Board of Directors of the Company or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any
material respect to the Company, such Subsidiary or the Lenders.
(e) VISITATION RIGHTS. At any reasonable time and from time to
time, permit
<PAGE> 47
the Administrative Agent or any of the Lenders or any agents or
representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,
the Company and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and any of its Subsidiaries with
any of their officers or directors and with their independent
certified public accountants.
(f) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Company and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(h) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under
this Agreement with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate.
(i) REPORTING REQUIREMENTS. Furnish to the Lenders:
(i) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal
year of the Company, Consolidated balance sheets of the Company
and its Subsidiaries as of the end of such quarter and
Consolidated statements of income and cash flows of the Company
and its Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
duly certified (subject to year-end audit adjustments) by the
chief financial officer or the controller of the Company as
having been prepared in accordance with GAAP, it being agreed
that delivery of the Company's Quarterly Report on Form 10-Q will
satisfy this requirement, together with a certificate of said
officer stating the Interest Coverage Ratio as of the end of such
quarter;
(ii) as soon as available and in any event within 120 days
after the end of each fiscal year of the Company, a copy of the
annual audit report for such year for the Company and its
Subsidiaries, containing Consolidated balance sheets of the
Company and its Subsidiaries as of the end of such fiscal year
and Consolidated statements of income and cash flows of the
Company and its
<PAGE> 48
Subsidiaries for such fiscal year, in each case accompanied by an
opinion acceptable to the Required Lenders by Ernst & Young or
other independent public accountants acceptable to the Required
Lenders, together with a certificate of the chief financial
officer of the Company stating the Interest Coverage Ratio as of
the end of such fiscal year;
(iii) as soon as possible and in any event within five
Business Days after the occurrence of each Default continuing on
the date of such statement, a statement of an officer of the
Company having knowledge of or responsibility for such matters
setting forth details of such Default and the action that the
Company has taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies of
all reports that the Company sends to any of its securityholders,
and copies of all reports and registration statements that the
Company or any Subsidiary files with the Securities and Exchange
Commission or any national securities exchange;
(v) promptly after the commencement thereof, notice of the
commencement and nature of all actions and proceedings before any
court, governmental agency or arbitrator affecting the Company or
any of its Subsidiaries of the type described in Section 4.01(f);
(vi) promptly and in any event within 10 days after the
Company or any of its ERISA Affiliates knows or has reason to
know that any ERISA Event has occurred, a statement of an officer
of the Company having knowledge of or responsibility for such
matters describing such ERISA Event and the action, if any, that
the Company or such ERISA Affiliate has taken and proposes to
take with respect thereto;
(vii) promptly and in any event within seven Business Days
after receipt thereof by the Company or any of its ERISA
Affiliates, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed to
administer any such Plan;
(viii) promptly and in any event within 30 days after the
receipt thereof by the Company or any of its ERISA Affiliates, a
copy of the latest annual actuarial report for each Plan if the
ratio of the fair market value of the assets of such Plan to its
current liability (as defined in Section 412 of the Internal
Revenue Code) is less than 60%;
(ix) promptly and in any event within five Business Days
after receipt thereof by the Company or any of its ERISA
Affiliates from the sponsor of a Multiemployer Plan, copies of
each notice concerning (A) the imposition of
<PAGE> 49
Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of
ERISA, of any such Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by the Company or
any of its ERISA Affiliates in connection with any event
described in clause (A) or (B); and
(x) such other information respecting the condition or
operations, financial or otherwise, of the Company or any of its
Subsidiaries as any Lender through the Administrative Agent may
from time to time reasonably request.
(j) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause each of
its Subsidiaries to obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its Subsidiaries to
conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties pursuant to the order of any
regulatory authority and generally in accordance with the requirements of all
Environmental Laws; PROVIDED, HOWEVER, that neither the Company nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(k) PREPARATION OF ENVIRONMENTAL REPORTS. If an Event of Default
shall have occurred and be continuing, at the request of the Administrative
Agent with respect to any Environmental Action, condition or occurrence that the
Administrative Agent or the Required Lenders reasonably deem to be material,
provide to the Lenders within 90 days after such request, at the expense of the
Company, an environmental site assessment report for the properties described in
such request, prepared by an environmental consulting firm acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous Materials
and the estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; without limiting the
generality of the foregoing, if the Administrative Agent determines at any time
that a material risk exists that any such report will not be provided within the
time referred to above, the Administrative Agent may retain an environmental
consulting firm to prepare such report at the expense of the Company, and the
Company hereby grants and agrees to cause any Subsidiary that owns any property
described in such request to grant at the time of such request, to the
Administrative Agent, the Lenders, such firm and any agents or representatives
thereof an irrevocable non-exclusive license, subject to the rights of tenants,
to enter onto their respective properties to undertake such an assessment.
<PAGE> 50
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Company
will not:
(a) LIENS, ETC. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien on or with respect
to any of its properties, whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any right to
receive income, other than:
(i) (A) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under
Section 5.01(b) hereof (including contracts entered into in
connection with major construction projects); (B) Liens imposed
by law, such as materialmen's, mechanics', carriers', workmen's
and repairmen's Liens and other similar Liens arising in the
ordinary course of business securing obligations; (C) pledges or
deposits to secure obligations under workers' compensation laws
or similar legislation or to secure public or statutory
obligations; and (D) easements, rights of way and other
encumbrances on title to real property that do not materially
adversely affect the use of such property for its present
purposes, PROVIDED in each case, that no enforcement, execution,
levy or foreclosure proceeding shall have been commenced that is
not being contested in good faith and by proper proceedings with
appropriate reserves being maintained,
(ii) purchase money Liens upon or in any property acquired
or held by the Company or any Subsidiary in the ordinary course
of business to secure the purchase price of such property or to
secure Debt incurred solely for the purpose of financing the
acquisition of such property, or Liens existing on such property
at the time of its acquisition (other than any such Lien created
in contemplation of such acquisition) or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount, PROVIDED, HOWEVER, that no such Lien shall extend to or
cover any property other than the property being acquired, and no
such extension, renewal or replacement shall extend to or cover
any property not theretofore subject to the Lien being extended,
renewed or replaced, PROVIDED FURTHER that the aggregate
principal amount of the indebtedness secured by the Liens
referred to in this clause (ii) shall not exceed US$10,000,000 at
any time outstanding,
(iii) the Liens existing on the Effective Date and described
on Schedule 5.02(a) hereto,
(iv) other Liens securing Debt in an aggregate principal
amount not to exceed US$20,000,000 at any time outstanding,
(v) the replacement, extension or renewal of any Lien
permitted by
<PAGE> 51
clauses (ii) and (iii) above upon or in the same property
theretofore subject thereto or the replacement, extension or
renewal (without increase in the amount or change in any direct
or contingent obligor) of the Debt secured thereby, and
(vi) Liens, if any, resulting from the documents evidencing
the Receivables Financing.
(b) MERGERS, ETC. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to, any Person, or permit
any of its Subsidiaries to do so, except that any Subsidiary of the
Company may merge or consolidate with or into, or dispose of assets
to, any other Subsidiary of the Company, and except that any
Subsidiary of the Company may merge into or dispose of assets to the
Company and the Company may merge with any other Person so long as the
Company is the surviving corporation, PROVIDED, in each case, that no
Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom.
(c) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by generally
accepted accounting principles.
SECTION 5.03. FINANCIAL COVENANTS. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Company
will:
(a) INTEREST COVERAGE RATIO. Maintain an Interest Coverage Ratio
of at least 6.0:1.0.
(b) BORROWED DEBT/EBITDA RATIO. Maintain a Borrowed Debt/EBITDA
Ratio of not more than 3.5:1.0.
(c) MINIMUM RETAINED EARNINGS. Either (i) for each fiscal
quarter, maintain retained earnings equal to or exceeding
US$250,000,000 or (ii) for any period of four consecutive fiscal
quarters, not incur net losses in excess of US$50,000,000.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Advance
when the
<PAGE> 52
same becomes due and payable or any Borrower shall fail to pay any
interest on any Advance or make any other payment under this Agreement
or any Note within five Business Days after the same becomes due and
payable; or
(b) Any representation or warranty made by any Borrower herein or
by any Borrower (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(c) (i) The Company shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d) or (i)(iii), 5.02
or 5.03, or (ii) the Company shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement on its
part to be performed or observed if such failure shall remain
unremedied for 30 days after written notice thereof shall have been
given to the Company by the Administrative Agent or any Lender; or
(d) The Company or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in
a principal or notional amount of at least US$10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of the Company or
such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to
any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be
due and payable, or required to be prepaid or redeemed (other than by
a regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated
maturity thereof; or
(e) The Company or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Company or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the
<PAGE> 53
entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or the Company or
any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
US$10,000,000 shall be rendered against the Company or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or
(g) Any non-monetary judgment or order shall be rendered against
the Company or any of its Subsidiaries that could be reasonably
expected to have a Material Adverse Effect, and there shall be any
period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(h) (i) Any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of Voting Stock of the
Company (or other securities convertible into such Voting Stock)
representing 33-1/3% or more of the combined voting power of all
Voting Stock of the Company; or (ii) during any period of up to 24
consecutive months, commencing after the date of this Agreement,
individuals who at the beginning of such 24-month period were
directors of the Company shall cease for any reason (other than due to
death, disability or voluntary retirement) to constitute a majority of
the board of directors of the Company (except to the extent that
individuals who at the beginning of such 24-month period were replaced
by individuals (x) elected by 50% of the remaining members of the
nominating committee of the board of directors of the Company or (y)
nominated for election by a majority of the remaining members of the
nominating committee of the board of directors of the Company and
thereafter elected as directors by the shareholders of the Company);
or (iii) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation prior to the
Termination Date, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of the Company; or (iv) except as otherwise
permitted by Section 5.02(b), the Company shall cease to own a
majority of the Voting Stock of the Subsidiary Borrower; or
(i) Any ERISA Event shall have occurred and the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency
of the Plan with respect to which such ERISA Event shall have occurred
and the Insufficiency of any and all
<PAGE> 54
other Plans with respect to which an ERISA Event shall have occurred
and then exist (or the liability of the Company and its ERISA
Affiliates related to any such ERISA Event) has, or is reasonably
likely to have, a Material Adverse Effect; or
(j) The Company or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Company and its ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification),
exceeds US$25,000,000 or requires payments exceeding US$5,000,000 per
annum; or
(k) The Company or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of
the Company and its ERISA Affiliates to all Multiemployer Plans that
are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for
the plan years of such Multiemployer Plans immediately preceding the
plan year in which such reorganization or termination occurs by an
amount exceeding US$10,000,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by each Borrower; PROVIDED, HOWEVER, that in the
event of an actual or deemed entry of an order for relief with respect to any
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to
make Advances shall automatically be terminated and (B) the Notes, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Borrower.
ARTICLE VII
COMPANY GUARANTY
SECTION 7.01. GUARANTY. The Company hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by
<PAGE> 55
acceleration or otherwise, of all obligations of the Subsidiary Borrower now or
hereafter existing under this Agreement, whether for principal, interest, fees,
expenses or otherwise (such obligations, to the extent not paid by the
Subsidiary Borrower or specifically waived in accordance with Section 9.01,
being the "GUARANTEED OBLIGATIONS"), and agrees to pay any and all expenses
(including reasonable counsel fees and expenses) incurred by the Administrative
Agent or the Lenders in enforcing any rights under this Guaranty. Without
limiting the generality of the foregoing, the Company's liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be
owed by the Subsidiary Borrower to the Administrative Agent or any Lender under
this Agreement but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
the Subsidiary Borrower.
SECTION 7.02. GUARANTY ABSOLUTE. The Company guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or the Lenders with respect thereto. The obligations of the
Company under this Guaranty are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against the Company to
enforce this Guaranty, irrespective of whether any action is brought against the
Subsidiary Borrower or whether the Subsidiary Borrower is joined in any such
action or actions. The liability of the Company under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and the Company hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any or all of the following:
(a) any lack of validity or enforceability of this Agreement or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to departure from this
Agreement, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional
credit to the Subsidiary Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(d) any change, restructuring or termination of the corporate
structure or existence of the Subsidiary Borrower; or
(e) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent or any Lender that might
otherwise constitute a defense available to, or a
<PAGE> 56
discharge of, the Company, the Subsidiary Borrower or any other
guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy or reorganization of the Subsidiary Borrower or
otherwise, all as though such payment had not been made.
SECTION 7.03. WAIVER. The Company hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent or any Lender exhaust any right or take any action against
the Subsidiary Borrower or any other Person or any collateral. The Company
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated herein and that the waiver set forth in this
Section 7.03 is knowingly made in contemplation of such benefits. The Company
hereby waives any right to revoke this Guaranty, and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.
SECTION 7.04. CONTINUING GUARANTY; ASSIGNMENTS. This Guaranty is
a continuing guaranty and shall (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Guaranty and the Revolver Termination Date, (b) be
binding upon the Company, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders, the Administrative Agent and their
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations hereunder (including, without limitation,
all or any portion of its Commitment, the Advances owing to it and the Note or
Notes held by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, in each case as provided in Section 9.07.
SECTION 7.05. SUBROGATION. The Company will not exercise any
rights that it may now or hereafter acquire against the Subsidiary Borrower or
any other insider guarantor that arise from the existence, payment, performance
or enforcement of the Company's obligations under this Agreement, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Administrative Agent or any Lender against the Subsidiary Borrower
or any other insider guarantor or any collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the Subsidiary
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security solely
on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash and the Revolver Termination Date shall have
occurred. If any amount shall be paid to the Company in violation of the
preceding sentence at any time prior to the later of the
<PAGE> 57
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty and the Termination Date, such amount shall be held
in trust for the benefit of the Administrative Agent and the Lenders and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of this Agreement, or
to be held as collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. If (i) the Company shall make payment to
the Administrative Agent or any Lender of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall be paid in full in cash and (iii) the Revolver
Termination Date shall have occurred, the Administrative Agent and the Lenders
will, at the Company's request and expense, execute and deliver to the Company
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Company of an interest
in the Guaranteed Obligations resulting from such payment by the Company.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Lender hereby
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Administrative Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lenders and all holders of
Notes; PROVIDED, HOWEVER, that the Administrative Agent shall not be required to
take any action that exposes the Administrative Agent to personal liability or
that is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Lender prompt notice of each notice given to it by any
Borrower pursuant to the terms of this Agreement.
SECTION 8.02. ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable 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. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an Assumption
Agreement entered into by an Assuming Lender as provided in Section 2.17 or an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as
<PAGE> 58
assignor, and an Eligible Assignee, as assignee, as provided in Section 9.07;
(ii) may consult with legal counsel (including counsel for the Borrowers),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of any Borrower or
to inspect the property (including the books and records) of any Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 8.03. CITIBANK AND AFFILIATES. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Administrative Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Citibank in its individual capacity. Citibank and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Company, any of its Subsidiaries and any Person who may do business
with or own securities of the Company or any such Subsidiary, all as if Citibank
were not the Administrative Agent and without any duty to account therefor to
the Lenders.
SECTION 8.04. LENDER CREDIT DECISION. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on the financial statements referred to in Section
4.01(e) and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative 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.
SECTION 8.05. INDEMNIFICATION. The Lenders (other than the
Designated Bidders) agree to indemnify the Administrative Agent (to the extent
not reimbursed by the Company), ratably according to the respective principal
amounts of the Revolving Credit Notes then held by each of them (or if no
Revolving Credit Notes are at the time outstanding or if any Revolving Credit
Notes are held by Persons that are not Lenders, ratably according to the
respective amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any
<PAGE> 59
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Administrative Agent under this
Agreement, PROVIDED that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender (other than the Designated Bidders) agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Administrative
Agent is not reimbursed for such expenses by the Company.
SECTION 8.06. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders and
the Company. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Administrative Agent, which successor
Administrative Agent, so long as no Default has occurred and is continuing,
shall be approved by the Company, which approval shall not be unreasonably
withheld or delayed. If no successor Administrative Agent shall have been so
appointed by the Required Lenders in accordance with the immediately preceding
sentence, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least US$50,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 8.07. LOCAL AGENT. The Local Agent has been designated
under this Agreement to carry out duties of the Administrative Agent. The Local
Agent shall be subject to each of the obligations to be performed by the Local
Agent, and each of the Borrowers and the Lenders agrees that the Local Agent
shall be entitled to exercise each of the rights and shall be entitled to each
of the benefits of the Administrative Agent under this Agreement as relate to
the performance of its obligations.
SECTION 8.08. OTHER AGENTS. Each Lender hereby acknowledges that
neither
<PAGE> 60
the syndication agent nor the documentation agent has any liability hereunder
other than in its capacity as Lender.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Revolving Credit Notes, nor consent to any
departure by any Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders (other than
the Designated Bidders), do any of the following: (a) waive any of the
conditions specified in Section 3.01, (b) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (c) reduce the
principal of, or interest on, the Revolving Credit Notes or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any reduction of
Commitment or for any payment of principal of, or interest on, the Revolving
Credit Notes or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Notes, or the number of Lenders, that shall be required for the
Lenders or any of them to take any action hereunder or (f) amend this Section
9.01; PROVIDED FURTHER that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any Note; and PROVIDED FURTHER that
no amendment, waiver or consent of Section 9.07(i) shall, unless in writing and
signed by each Lender that has granted a funding option to a SPC in addition to
the Lenders required above to take such action, affect the rights or duties of
such Lender or SPC under this Agreement or any Note.
SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to the Company, at its address at One Geon Center, Avon Lake Ohio 44012,
Attention: Secretary, with a copy to: Chief Financial Officer at such address;
if to Geon Canada, at its address at One Geon Center, Avon Lake, Ohio 44012,
Attention: Secretary; if to any Lender, at its Domestic Lending Office specified
in a written notice to the Company and the Administrative Agent from time to
time; and if to the Administrative Agent, at its address at Agency Services, 2
Penn's Way, Suite 200, New Castle, Delaware 19720 Attention: Ms. Pat Dimery,
with a copy to 399 Park Avenue, New York, New York 10043, Attention: Chemicals
Department; or, as to any Borrower or the Administrative Agent, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and communications shall, when mailed, telecopied,
telegraphed or telexed, be effective when deposited in the mails, telecopied,
<PAGE> 61
delivered to the telegraph company or confirmed by telex answerback,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article II, III or VIII shall not be effective until received by the
Administrative Agent.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS AND EXPENSES. (a) The Company agrees to pay
on demand all costs and expenses of the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Administrative Agent with respect thereto
and with respect to advising the Administrative Agent as to its rights and
responsibilities under this Agreement. The Company further agrees to pay on
demand all costs and expenses of the Administrative Agent and the Lenders, if
any (including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Notes and the other documents to be
delivered hereunder, including, without limitation, reasonable fees and expenses
of counsel for the Administrative Agent and each Lender in connection with the
enforcement of rights under this Section 9.04(a).
(b) (i) The Company agrees to indemnify and hold harmless the
Administrative Agent and each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "INDEMNIFIED
PARTY") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with (i) the Notes,
this Agreement, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances or (ii) the actual or alleged
presence of Hazardous Materials on any property of the Company or any of its
Subsidiaries or any Environmental Action relating in any way to the Company or
any of its Subsidiaries, in each case whether or not such investigation,
litigation or proceeding is brought by the Company, its directors, shareholders
or creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense resulted from such Indemnified Party's gross
negligence or willful
<PAGE> 62
misconduct. The Company also agrees not to assert any claim against the
Administrative Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, for special or indirect damages arising out of or otherwise
relating to the Notes, this Agreement, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Advances.
(ii) Each Indemnified Party shall, promptly after becoming aware
of any actual or threatened action or claim against such Indemnified Party in
respect of which indemnification may be sought against the Company pursuant to
this Section 9.04(b), notify the Company in writing of such action or claim. In
case any such action shall be brought against any Indemnified Party and such
Indemnified Party shall notify the Company of the commencement thereof, the
Company may participate therein or assume the defense thereof and after notice
from the Company to such Indemnified Party of an election so to assume the
defense thereof, such Indemnified Party shall cooperate fully, completely and
promptly in the defense thereof, including without limitation, the settlement of
outstanding claims, and the Company will not be liable to such Indemnified Party
under this Section 9.04(b) for any legal or other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation incurred with the consent of the Company,
which consent shall not be unreasonably withheld or delayed; PROVIDED, HOWEVER,
that unless and until the Company so assumes the defense of any such action, the
Company shall have the right to participate at its own expense in the defense of
any such action to which it is a party. If the Company shall not have so assumed
the defense of any such action or if any Indemnified Party shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to the Company (in which case the Company
shall not have the right to direct the defense of such action on behalf of such
Indemnified Party), legal and other expenses incurred by such Indemnified Party
shall be borne by the Company; PROVIDED that the Company shall be liable only
for the expenses of a single legal counsel for all Indemnified Parties in
connection with any single action. Notwithstanding the foregoing, the Company
shall not be liable for any settlement of any action or claim effected without
its consent.
(iii) The Company will not settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification has been sought hereunder
(whether or not an Indemnified Party is a party to such claim, action, suit or
proceeding) without the prior written consent of the Administrative Agent,
unless such settlement, compromise or consent includes an unconditional release
of the Administrative Agent and each Indemnified Party from all liability
arising from such claim, action, suit or proceeding.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance, LIBO Rate Advance or Local Rate Advance is made by any
Borrower to or for the account of a Lender other than on the last day of the
Interest Period for such Advance, as a result of a payment or Conversion
pursuant to Section 2.08(d) or (e), 2.10 or 2.12,
<PAGE> 63
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, such Borrower shall, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any additional losses, costs or expenses that it may reasonably incur as a
result of such payment or Conversion, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of
the Company hereunder, the agreements and obligations of the Company contained
in Sections 2.11, 2.14 and 9.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 9.05. RIGHT OF SET-OFF. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender and each of its Affiliates is hereby
authorized at any time that payment owed to such Lender is not made by any
Borrower to the Administrative Agent when due and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or such Affiliate to or for
the credit or the account of such Borrower against any and all of the
obligations of such Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, whether or not such Lender shall have made any
demand under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify such Borrower after any such
set-off and application, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates may have.
SECTION 9.06. BINDING EFFECT. This Agreement shall become
effective (other than Sections 2.01 and 2.03, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by each Borrower and the Administrative Agent and when
the Administrative Agent shall have been notified by each Initial Lender that
such Initial Lender has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrowers, the Administrative Agent and each Lender
and their respective successors and assigns, except that no Borrower shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
SECTION 9.07. ASSIGNMENTS, DESIGNATIONS AND PARTICIPATIONS. (a)
Each Lender (other than the Designated Bidders) may and, if demanded by the
Company (following
<PAGE> 64
a demand by such Lender pursuant to Section 2.11 or Section 2.14) upon at least
20 Business Days' notice to such Lender and the Administrative Agent, will
assign to one or more Persons all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Revolving Credit Advances owing to it and the Revolving Credit
Note or Notes held by it); PROVIDED, HOWEVER, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement (other than any right to make Competitive Bid
Advances or Competitive Bid Advances owing to it), (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
US$5,000,000 or an integral multiple of US$1,000,000 in excess thereof, (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Company pursuant to this Section 9.07(a)
shall be arranged by the Company after consultation with the Administrative
Agent and shall be either an assignment of all of the rights and obligations of
the assigning Lender under this Agreement or an assignment of a portion of such
rights and obligations made concurrently with another such assignment or other
such assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Company pursuant to this
Section 9.07(a) unless and until such Lender shall have received one or more
payments from either the Company or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement and (vi) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any
Revolving Credit Note subject to such assignment and a processing and
recordation fee of US$3,000. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with
<PAGE> 65
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Borrower or the performance or observance by
any Borrower of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01(e) and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender 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; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Revolving Credit Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit C hereto, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Company.
Within five Business Days after its receipt of such notice, the Company, at its
own expense, shall execute and deliver to the Administrative Agent in exchange
for the surrendered Revolving Credit Note a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Revolving Credit Note to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Revolving Credit Note or Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Revolving Credit Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A-1 hereto.
(d) Each Lender (other than the Designated Bidders) may designate
one or more banks or other entities to have a right to make Competitive Bid
Advances as a Lender pursuant to Section 2.03; PROVIDED, HOWEVER, that (i) no
such Lender shall be entitled to make more than three such designations, (ii)
each such Lender making one or more of such designations shall retain the right
to make Competitive Bid Advances as a Lender pursuant to Section 2.03, (iii)
each such designation shall be to a Designated Bidder and (iv) the parties to
<PAGE> 66
each such designation shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, a Designation Agreement. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Designation Agreement, the designee thereunder shall be a
party hereto with a right to make Competitive Bid Advances as a Lender pursuant
to Section 2.03 and the obligations related thereto.
(e) By executing and delivering a Designation Agreement, the
Lender making the designation thereunder and its designee thereunder confirm and
agree with each other and the other parties hereto as follows: (i) such Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; (ii) such Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such designee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Designation Agreement; (iv) such designee will, independently and without
reliance upon the Administrative Agent, such designating Lender 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; (v) such designee confirms that it is a Designated
Bidder; (vi) such designee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such designee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(f) Upon its receipt of a Designation Agreement executed by a
designating Lender and a designee representing that it is a Designated Bidder,
the Administrative Agent shall, if such Designation Agreement has been completed
and is substantially in the form of Exhibit D hereto, (i) accept such
Designation Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrowers.
(g) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assumption Agreement, each Assignment
and Acceptance and each Designation Agreement delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders
and, with respect to Lenders other than the Designated Bidders, the Commitment
of, and principal amount of the Advances owing to, each Lender from time to time
(the "REGISTER"). The entries in the Register shall be conclusive and
<PAGE> 67
binding for all purposes, absent manifest error, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(h) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Company hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Agreement, (iv) each
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by any
Borrower therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.
(i) Each Lender may grant to a special purpose funding vehicle
(an "SPC") the option to fund all or any part of any Advance that such Lender is
obligated to fund under this Agreement (and upon the exercise by such SPC of
such option to fund, such Lender's obligations with respect to such Advance
shall be deemed satisfied to the extent of any amounts funded by such SPC);
PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Company hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) each Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (iv) any such option granted to a SPC shall
not constitute a commitment by such SPC to fund any Advance and (v) no SPC shall
have any right to approve any amendment or waiver of any provision of this
Agreement or any Note, or any consent to any departure by any Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such grant of funding
option, or postpone any date fixed for any payment of principal of, or interest
on, the Notes or any fees or other amounts payable hereunder, in each case to
the extent subject to such grant of funding option.
<PAGE> 68
(j) Any Lender may, in connection with any assignment,
designation, participation or grant of funding option or proposed assignment,
designation, participation or grant of funding option pursuant to this Section
9.07, disclose to the assignee, designee, participant or SPC or proposed
assignee, designee, participant or SPC, any information relating to any Borrower
furnished to such Lender by or on behalf of such Borrower; PROVIDED that, prior
to any such disclosure, the assignee, designee, participant or SPC or proposed
assignee, designee, participant or SPC shall agree to preserve the
confidentiality of any Confidential Information relating to any Borrower
received by it from such Lender.
(k) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 9.08. CONFIDENTIALITY. Neither the Administrative Agent
nor any Lender or SPC shall disclose any Confidential Information to any Person
without the consent of the Company, other than (a) to the Administrative Agent's
or such Lender's Affiliates and their officers, directors, employees, agents and
advisors and to actual or prospective assignees and participants, and then only
on a confidential basis, (b) as required by any law, rule or regulation or
judicial process, (c) to any rating agency when required by it, PROVIDED that,
prior to any such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Company received
by it from such Lender and (d) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking.
SECTION 9.09. GOVERNING LAW. This Agreement and the Notes shall
be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.10. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of 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 of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.11. CURRENCY CONVERSION FOR JUDGMENTS. (a) If for
purposes of obtaining judgment in any court it is necessary to convert a sum due
hereunder in US Dollars 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
Administrative Agent could purchase US Dollars with such other currency at
Citibank's principal office in New York at 11:00 A.M. (New York time) on the
later of (i) the Business Day preceding that on which judgment is rendered and
(ii) if such judgment is
<PAGE> 69
appealed, the Business Day on which such judgment is upheld.
(b) If for purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in a Foreign Currency into US Dollars,
the parties 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 Administrative Agent could purchase such Foreign Currency
with US Dollars at Citibank's principal office in New York at 11:00 A.M. (New
York time) on the later of (i) the Business Day preceding that on which judgment
is rendered and (ii) if such judgment is appealed, the Business Day on which
such judgment is upheld.
(c) The obligation of each Borrower in respect of any sum due
from it in any currency (the "PRIMARY CURRENCY") to any Lender or the
Administrative Agent hereunder shall, notwithstanding any judgment in any other
currency, be discharged only to the extent that on the Business Day following
receipt by such Lender or the Administrative Agent (as the case may be), of any
sum adjudged to be so due in such other currency, such Lender or the
Administrative Agent (as the case may be) may in accordance with normal banking
procedures purchase the applicable Primary Currency with such other currency; if
the amount of the applicable Primary Currency so purchased is less than such sum
due to such Lender or the Administrative Agent (as the case may be) in the
applicable Primary Currency, each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the
Administrative Agent (as the case may be) against such loss, and if the amount
of the applicable Primary Currency so purchased exceeds such sum due to any
Lender or the Administrative Agent (as the case may be) in the applicable
Primary Currency, such Lender or the Administrative Agent (as the case may be)
agrees to remit to such Borrower such excess.
SECTION 9.12. JURISDICTION, ETC. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. The Subsidiary Borrower hereby agrees that service of
process in any such action or proceeding brought in any such New York State
court or in such federal court may be made on the Subsidiary Borrower at One
Geon Center, Avon Lake, Ohio 44012, Attention: Secretary. Each Borrower hereby
further irrevocably further consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties hereto by
registered or certified mail, postage prepaid, to such Borrower at its address
specified pursuant to Section 9.02. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any
<PAGE> 70
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
<PAGE> 71
SECTION 9.13. WAIVER OF JURY TRIAL. Each of the Borrowers, the
Administrative Agent and the Lenders hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or the
Notes or the actions of the Administrative Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE GEON COMPANY
By ____________________________
Title:
GEON CANADA INC.
By ____________________________
Title:
CITIBANK, N.A.,
as Administrative Agent
By ____________________________
Title:
<PAGE> 72
Initial Lenders
---------------
Commitment
- ----------
US$18,500,000 CITIBANK, N.A.
By_________________________
Title:
US$14,500,000 THE BANK OF NEW YORK
By__________________________
Title:
US$14,500,000 SCOTIABANC INC.
By__________________________
Title:
US$13,00,000 CIBC INC.
By__________________________
Title:
US$14,500,000 KEY BANK NATIONAL ASSOCIATION
By__________________________
Title:
US$14,500,000 MELLON BANK, N.A.
By__________________________
Title:
<PAGE> 73
US$14,500,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By_________________________
Title:
US$14,500,000 NATIONAL CITY BANK
By_________________________
Title:
US$17,000,000 NATIONSBANK, N.A.
By_________________________
Title:
US$14,500,000 BANK ONE, MICHIGAN (f/k/a NBD Bank)
By_________________________
Title:
US$150,000,000 Total of the Commitments
<PAGE> 74
<TABLE>
<CAPTION>
SCHEDULE I
THE GEON COMPANY US$150,000,000
AMENDED AND RESTATED 364-DAY
CREDIT AGREEMENT
PRICING GRID
- -----------------------------------------------------------------------------------------------------------------------------------
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BASIS FOR Long Term Long Term Long Term Long Term Long Term Long Term
PRICING* Senior Unsecured Senior Unsecured Senior Unsecured Senior Unsecured Senior Unsecured Senior
Debt Rated at Debt Rated at Debt Rated at Debt Rated at Debt Rated at Unsecured
Least A- by Least BBB+ by Least BBB by Least BBB- by Least BB+ by Debt Rated
Standard & Standard & Standard & Standard & Standard & lower than
Poor's or A3 by Poor's or Baa1 by Poor's or Baa2 by Poor's and Baa3 Poor's and Ba1 by Level 5 or no
Moody's Moody's Moody's by Moody's/ Moody's rating
- -----------------------------------------------------------------------------------------------------------------------------------
APPLICABLE 0.075% 0.100% 0.125% 0.150% 0.200% 0.250%
FACILITY FEE
- -----------------------------------------------------------------------------------------------------------------------------------
APPLICABLE
MARGIN 0.325% 0.350% 0.375% 0.475% 0.675% 1.000%
(LIBOR+)
USAGE<=33%
- -----------------------------------------------------------------------------------------------------------------------------------
APPLICABLE
MARGIN 0.425% 0.400% 0.500% 0.600% 0.800% 1.125%
(LIBOR+)
USAGE>33%
<FN>
- --------
* If the ratings by S&P and Moody's fall within different levels and the
differential is one level, the higher rating will apply. If the ratings by S&P
and Moody's fall within different levels and the differential is two levels or
more, one level higher than the lower rating will apply.
</TABLE>
<PAGE> 75
EXHIBIT A-1 - FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
US$_________________ Dated:___________, 19__
FOR VALUE RECEIVED, the undersigned, THE GEON COMPANY, a Delaware
corporation (the "BORROWER"), HEREBY PROMISES TO PAY to the order of (the
"LENDER") for the account of its Applicable Lending Office on the Termination
Date (each as defined in the Credit Agreement referred to below) the principal
sum of US$[amount of the Lender's Commitment in figures] or, if less, the
aggregate principal amount of the Revolving Credit Advances made by the Lender
to the Borrower pursuant to the Amended and Restated Credit Agreement dated as
of May 27, 1999 among the Borrower, Geon Canada Inc., the Lender and certain
other lenders parties thereto and Citibank, N.A., as Administrative Agent for
the Lender and such other lenders (as amended or modified from time to time, the
"CREDIT AGREEMENT"; the terms defined therein being used herein as therein
defined) outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Credit Advance from the date of such Revolving Credit
Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, N.A., as Administrative Agent, at 399 Park
Avenue, New York, New York 10043, in same day funds. Each Revolving Credit
Advance owing to the Lender by the Borrower pursuant to the Credit Agreement,
and all payments made on account of principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto
which is part of this Promissory Note.
This Promissory Note is one of the Revolving Credit Notes
referred to in, and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, (i) provides for the making of Revolving
Credit Advances by the Lender to the Borrower from time to time in an aggregate
amount not
<PAGE> 76
to exceed at any time outstanding the US Dollar amount first above mentioned,
the indebtedness of the Borrower resulting from each such Revolving Credit
Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
THE GEON COMPANY
By________________________
Title:
<PAGE> 77
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
AMOUNT OF
AMOUNT OF PRINCIPAL PAID UNPAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
======================================================================================================================
</TABLE>
EXHIBIT A-2 - FORM OF
COMPETITIVE BID
PROMISSORY NOTE
US$_______________ Dated: _______________, 199_
FOR VALUE RECEIVED, the undersigned, THE GEON COMPANY, a Delaware
corporation (the "COMPANY"), HEREBY PROMISES TO PAY to the order of Citibank,
N.A., as
<PAGE> 78
Administrative Agent or its designated Local Agent (as defined in the Amended
and Restated Credit Agreement dated as of May 27, 1999 among the Company, Geon
Canada Inc., certain lenders parties thereto, and Citibank, N.A., as
Administrative Agent such lenders (as amended or modified from time to time, the
"CREDIT AGREEMENT"; the terms defined therein being used herein as therein
defined)), the principal amount set forth above or, if less, the aggregate
principal amount of all Competitive Bid Advances made by the Lenders to the
Borrowers pursuant to the Credit Agreement, and such principal amount shall
become due on the maturity date specified for such principal amount in the
Competitive Bid Register and the Credit Agreement.
The Company promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in full,
at the interest rate and payable at such times as are specified from time to
time in the Competitive Bid Register and the Credit Agreement.
Both principal and interest in respect of each Competitive Bid
Advance (i) in US Dollars are payable in lawful money of the United States of
America to Citibank, as Administrative Agent, at its Applicable Administrative
Agent's Account, in same day funds and (ii) in any Foreign Currency are payable
in such currency at the applicable Payment Office of the Local Agent, in same
day funds. Each Competitive Bid Advance owing to a Lender by any Borrower
pursuant to the Credit Agreement and the applicable Notice of Competitive Bid
Borrowing, and all payments made on account of principal thereof, shall be
recorded by the Administrative Agent in the Competitive Bid Register.
This Promissory Note is the Competitive Bid Note referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Competitive Bid advances by
the Lenders to the Borrowers from time to time in an aggregate amount not to
exceed at any time outstanding the US Dollar Amount first above mentioned, the
indebtedness of the Borrowers resulting from each such Competitive Bid Advance
being evidenced by this Promissory Note, (ii)contains provisions for determining
the US Dollar Equivalent of Advances denominated in Foreign Currencies and (iii)
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events.
The Company hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
THE GEON COMPANY
By
Title:
<PAGE> 79
EXHIBIT B-1 - FORM OF NOTICE
OF REVOLVING CREDIT
BORROWING
Citibank, N.A., as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention:______________
Ladies and Gentlemen:
The undersigned, The Geon Company, refers to the Amended and Restated
Credit Agreement, dated as of May 27, 1999 (as amended or modified from time to
time, the "CREDIT AGREEMENT", the terms defined therein being used herein as
therein defined), among the undersigned, Geon Canada Inc., certain Lenders
parties thereto and Citibank, N.A., as Administrative Agent for said Lenders,
and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests a Revolving Credit Borrowing
under the Credit Agreement, and in that connection sets forth below the
information relating to such Revolving Credit Borrowing (the "PROPOSED REVOLVING
CREDIT BORROWING") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit Borrowing
is ___________, 199_.
(ii) The Type of Advances comprising the Proposed Revolving
Credit Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Revolving Credit
Borrowing is US$_____________.
[(iv) The initial Interest Period for each Eurodollar Rate
Advance made as part of the Proposed Revolving Credit Borrowing is
_____ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Revolving
Credit Borrowing:
(A) the representations and warranties contained in Section 4.01 of
the Credit Agreement are correct, before and after giving effect to the
Proposed Revolving Credit Borrowing and to the application of the
proceeds therefrom, as though made on and as
<PAGE> 80
of such date; and
(B) no event has occurred and is continuing, or would result from
such Proposed Revolving Credit Borrowing or from the application of
the proceeds therefrom, that constitutes a Default.
Very truly yours,
THE GEON COMPANY
By________________________
Title:
<PAGE> 81
EXHIBIT B-2 - FORM OF
NOTICE OF COMPETITIVE
BID BORROWING
Citibank, N.A., as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, [name of Borrower], refers to the Amended and
Restated Credit Agreement, dated as of May 27, 1999 (as amended or modified from
time to time, the "CREDIT AGREEMENT", the terms defined therein being used
herein as therein defined), among the undersigned, [The Geon Company][Geon
Canada Inc.], certain Lenders parties thereto and Citibank, N.A., as
Administrative Agent for said Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.03 of the Credit Agreement that the undersigned hereby
requests a Competitive Bid Borrowing under the Credit Agreement, and in that
connection sets forth the terms on which such Competitive Bid Borrowing (the
"PROPOSED COMPETITIVE BID BORROWING") is requested to be made:
(A) Date of Competitive Bid Borrowing ________________________
(B) Amount of Competitive Bid Borrowing ________________________
(C) Maturity Date ________________________
(D) Interest Rate Basis ________________________
(E) Interest Payment Date(s) ________________________
[(F) Currency ________________________]
[(G) Borrower's Account Location ________________________]
(H) ________________ ________________________
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:
(a) the representations and warranties contained in Section 4.01
are correct, before and after giving effect to the Proposed
Competitive Bid Borrowing and to the
<PAGE> 82
application of the proceeds therefrom, as though made on and as of
such date;
(b) no event has occurred and is continuing, or would result from
the Proposed Competitive Bid Borrowing or from the application of the
proceeds therefrom, that constitutes a Default;
(c) no event has occurred and no circumstance exists as a result
of which the information concerning the undersigned that has been
provided to the Administrative Agent and each Lender by the
undersigned in connection with the Credit Agreement would include an
untrue statement of a material fact or omit to state any material fact
or any fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading;
and
(d) the aggregate amount of the Proposed Competitive Bid
Borrowing and all other Borrowings to be made on the same day under
the Credit Agreement is within the aggregate amount of the unused
Commitments of the Lenders.
The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.03(a)(v) of
the Credit Agreement.
Very truly yours,
[NAME OF BORROWER]
By__________________
Title:
<PAGE> 83
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement dated
as of May 27, 1999 (as amended or modified from time to time, the "CREDIT
AGREEMENT") among The Geon Company, a Delaware corporation (the "COMPANY"), Geon
Canada Inc., a federal Canadian corporation, the Lenders (as defined in the
Credit Agreement) and Citibank, N.A., as administrative agent for the Lenders
(the "ADMINISTRATIVE AGENT"). Terms defined in the Credit Agreement are used
herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto
agree as follows:
1. 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 as of the date
hereof (other than in respect of Competitive Bid Advances) equal to the
percentage interest specified on Schedule 1 hereto of all outstanding rights and
obligations under the Credit Agreement (other than in respect of Competitive Bid
Advances). After giving effect to such sale and assignment, the Assignee's
Commitment and the amount of the Revolving Credit Advances owing to the Assignee
will be as set forth on Schedule 1 hereto.
2. The Assignor (i) 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; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Note held by the Assignor and requests
that the Administrative Agent exchange such Revolving Credit Note for a new
Revolving Credit Note payable to the order of the Assignee in an amount equal to
the Commitment assumed by the Assignee pursuant hereto or new Revolving Credit
Notes payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto and the Assignor in an amount equal to
the Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01(e)
<PAGE> 84
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor 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) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender;
and (vi) attaches any U.S. Internal Revenue Service forms required under Section
2.14 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"EFFECTIVE DATE") shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments under the Credit Agreement and the Revolving Credit Notes in respect of
the interest assigned hereby (including, without limitation, all payments of
principal, interest and facility fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Revolving Credit Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
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 of Schedule 1 to this Assignment
<PAGE> 85
and Acceptance by telecopier shall be effective as delivery of a manually
executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
<PAGE> 86
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: ___ %
Assignee's Commitment: US$____________
Aggregate outstanding principal
amount of Revolving Credit Advances assigned: US$____________
Principal amount of Revolving Credit Note
payable to Assignee: US$____________
Principal amount of Revolving Credit Note
payable to Assignor: US$____________
Effective Date:* ________________, 19__
[NAME OF ASSIGNOR], as Assignor
By_______________________
Title:
Dated: ___________, 19__
[NAME OF ASSIGNEE], as Assignee
By_______________________
Title:
Dated: ___________, 19__
Domestic Lending Office:
- --------
* This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Administrative
Agent.
<PAGE> 87
[Address]
Eurodollar Lending Office:
[Address]
Accepted and Approved this
____ day of_____________, 19_
CITIBANK, N.A., as Administrative Agent
By____________________
Title:
Approved this _____day
of ____________, 19_
THE GEON COMPANY
By____________________
Title:
<PAGE> 88
EXHIBIT D - FORM OF
DESIGNATION AGREEMENT
Dated _______________, 199_
Reference is made to the Amended and Restated Credit Agreement dated
as of May 27, 1999 (as amended or modified from time to time, the "CREDIT
AGREEMENT") among The Geon Company, a Delaware corporation (the "COMPANY"), Geon
Canada Inc., a federal Canadian Corporation, the Lenders (as defined in the
Credit Agreement) and Citibank, N.A., as agent for the Lenders (the
"ADMINISTRATIVE AGENT"). Terms defined in the Credit Agreement are used herein
with the same meaning.
_________________________ (the "DESIGNOR") and
________________________ (the "DESIGNEE") agree as follows:
1. The Designor hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Competitive Bid
Advances pursuant to Section 2.03 of the Credit Agreement.
2. The Designor makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto and
(ii) the financial condition of any Borrower or the performance or observance by
any Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
3. The Designee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Designor 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) confirms that it is a Designated Bidder; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Credit Agreement
as are delegated to the Administrative Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; and (v) 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 by it as a
Lender.
<PAGE> 89
4. Following the execution of this Designation Agreement by the
Designor and its Designee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date for
this Designation Agreement (the "EFFECTIVE DATE") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise specified on the
signature page hereto.
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, the Designee shall be a party to the Credit Agreement
with a right to make Competitive Bid Advances as a Lender pursuant to Section
2.03 of the Credit Agreement and the rights and obligations of a Lender related
thereto.
6. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
7. This Designation Agreement may be executed in any number of
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 of a signature page to this Designation Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Designation Agreement.
IN WITNESS WHEREOF, the Designor and the Designee have caused this
Designation Agreement to be executed by their officers thereunto duly authorized
as of the date first above written.
Effective Date:* _______________________, 199__
[NAME OF DESIGNOR],
as Designor
By______________________
Title:
[NAME OF DESIGNEE],
as Designee
- --------
* This date should be no earlier than five Business Days after the
delivery of this Designation Agreement to the Administrative Agent.
<PAGE> 90
By_______________________
Title:
Applicable Lending
Office (and address
for notices):
[Address]
Accepted this ____ day
of _______________, 199_
CITIBANK, N.A., as Agent
By_________________________
Title:
<PAGE> 91
EXHIBIT E-1 - FORM OF
OPINION OF COUNSEL
FOR THE BORROWERS
<PAGE> 1
Exhibit (c)(1)
[LETTERHEAD OF THE GEON COMPANY]
December 16, 1998
CONFIDENTIAL
C. Bryant Nickerson
Treasurer, CFO and Secretary
O'Sullivan Corporation
P.O. Box 3510
Winchester, VA 22604-2547
Dear Mr. Nickerson:
The Geon Company (Geon), a Delaware corporation with offices at One Geon
Center, Avon Lake, Ohio 44012, and O'Sullivan Corporation (O'Sullivan) a
corporation with offices at 1944 Valley Avenue, Winchester, Virginia 22601,
wish to discuss possible synergistic combinations and/or relationships between
our two companies (the "Scope"). One or both of the parties may consider all or
some portion of the information which the parties will exchange in discussing
the Scope (whether in the form of oral communication, written documents, data
storage media, things, plant or facility visits, or any other suitable or
customary form) to have a confidential, proprietary, or trade secret nature
(all such hereafter referred to as "Proprietary Information"). For purposes of
administrative convenience, each party will regard all information disclosed by
the other party in discussing the Scope as constituting the disclosing party's
Proprietary Information except to the extent that a disclosing party identifies
information (or particular elements thereof) when conveyed as not constituting
Proprietary Information.
With respect to all such Proprietary Information disclosed by a party, the
receiving party shall:
(a) use at lease the same efforts to maintain the confidentiality of
the disclosed Proprietary Information as the receiving party uses with its own
information of similar import and sensitivity.
<PAGE> 2
(b) not disclose the Proprietary Information to any third party
without the consent of the disclosing party;
(c) use the disclosed Proprietary Information only for the purposes
within the Scope and not for any other purpose; and
(d) limit access the disclosed Proprietary Information to those of the
receiving party's employees and agents who have a need-to-know,
who have agreed to honor and/or have received instructions to
honor the terms of this letter agreement, and who will safeguard
such disclosed Proprietary Information against further disclosure
with the duty of care set forth in subparagraph (a) above.
The receiving party assumes all responsibility for a failure by a receiving
party's employee to maintain confidentiality of such Proprietary Information.
The duties of confidentiality hereunder shall expire ten (10) years after the
date of last disclosure hereunder.
The foregoing obligations shall not apply however, to any such Proprietary
Information which;
(v) the receiving party demonstrates it possessed prior to disclosure
by the disclosing party;
(w) now or hereafter constitutes information generally available to
the public, so long as such public availability results from a cause
other than a violation of the provisions of this letter agreement by
the receiving party;
(x) a third party discloses to the receiving party, so long as the
receiving party, upon diligent inquiry, has no reasonable basis to
believe the third party has an existing obligation of confidentiality
to the disclosing party, directly or indirectly with respect to such
Proprietary Information;
<PAGE> 3
(y) the receiving party develops information equivalent to the
Proprietary Information without reference in any manner to the
disclosed Proprietary Information; or
(z) the receiving party must disclose pursuant to a valid order of a
court of competent jurisdiction or an administrative agency;
PROVIDED THAT the receiving party must give the disclosing party
as much advance notice of the order as reasonably possible and
co-operate with the disclosing party, at the disclosing party's
expense, in lawful actions the disclosing party takes to
resist or restrict disclosure under such order or to obtain
confidential treatment of Proprietary Information made available
pursuant to the order.
Simply because more general information otherwise available to the public or to
the receiving party embraces, but does not specfically disclose, a particular
aspect of, or some item or portion of, the Proprietary Information, shall not
operate to relieve the receiving party of the confidentiality obligations in
this letter agreement.
Upon request of a disclosing party, the party receiving a particular item of
Proprietary Information will return to the disclosing party the originals of the
Proprietary Information provided to the receiving party, together with all
copies of the same made by or for the receiving party, and together with all
documents generated by the receiving party which reflect the disclosed
Proprietary Information, or in the alternative, destroy all such material and
certify the destruction in wiring to the disclosing party; PROVIDED THAT the
receiving party may retain one copy thereof for legal defense purposes only.
Nothing in this letter shall operate to grant, expressly or by implication, any
rights under a disclosing party's patents, technical information, know-how, or
other intellectual property, not operate as an independent undertaking on the
part of either party to do or perform duties or obligations not falling within
the purview of the terms of this letter, nor operate to require the disclosure
of any particular item(s) of information.
<PAGE> 4
Each party acknowledges the possible inadequate nature of remedies at law for
any breach by it of the provisions of this letter, and agrees that a disclosing
party, with respect to a particular item(s) of Proprietary Information, will
have a right to seek equitable relief in the event of a breach or threatened
breach by a receiving party.
Each party understands that the other does not make any representation of
warranty as to the accuracy or completeness of the Proprietary Information and
that only such representations and warranties as may be contained in a
definitive written agreement regarding the Scope shall be binding upon the
parties. Each party further understands that the other is under no obligation
to negotiate an agreement regarding the Scope of to enter into a definitive
agreement regarding the Scope.
In addition, each party agrees that, without the prior written consent of the
other, none of its directors, officers, employees or agents who had access,
directly or indidrectly, to the Proprietary Information, will, for period of
three years from the date hereof, directly or indirectly solicit for employment
any person employed by the other party with whom any of such persons have had
contact or who became known to any such persons during the evaluation of the
other party. Each party also agrees that neither it nor its directors,
officers, employees, agents, financing sources, advisors and representatives
will contact any employee or shareholder of the other party in connection with
its evaluation of the other party without the prior written consent of the
other party.
The parties may terminate the agreement embodied by this letter at any time
upon the giving of written notice from one party to the other, but both the
duties of confidentiality undertaken as to Proprietary Information disclosed
prior to any such termination and the rights of the parties to enforce such
confidentiality duties nonetheless shall survive such termination for the
duration set forth in this letter.
The laws of the state of Ohio and the United Statrs shall govern the
interpretation of the terms of this letter.
This letter comprises the entire agreement and understanding between the
parties hereto relating to the Proprietary Information referred to in this
letter, and supersedes and cancels any and all prior oral and written
understandings (if any
<PAGE> 5
such existed) respecting the same. No modification, amendment or waiver of this
letter agreement or any provision(s) thereof shall have validity unless reduced
to a writing executed on behalf of both parties.
Both Geon and O'Sullivan must agree to the foregoing terms before any exchange
of information may occur. Please indicate O'Sullivan's agreement by executing
an original of this letter and returning the executed original to me.
Very truly yours,
/s/ Don Knechtges, 12/16/98
Accepted and agreed to for
O'Sullivan Corporation:
By /s/ C. Bryant Nickerson
--------------------------------
C. Bryant Nickerson
Title Treasurer, CFO and Secretary
----------------------------
Date December 16, 1998
-----------------------------
<PAGE> 1
EXHIBIT (C)(2)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 2, 1999, (the
"Agreement"), by and among THE GEON COMPANY, a Delaware corporation ("Parent"),
TGC ACQUISITION CORPORATION, a Virginia corporation and a wholly-owned
subsidiary of Parent ("Sub"), and O'SULLIVAN CORPORATION, a Virginia corporation
(the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in contemplation thereof it is proposed that Sub will make a
tender offer (the "Offer") to purchase all the issued and outstanding shares of
common stock, $1.00 par value, of the Company ("Common Stock"), subject to the
terms and conditions of this Agreement, at a price per share of Common Stock of
$12.25 net to the seller in cash (the "Offer Price") and, if less than all of
the issued and outstanding shares of Common Stock are tendered and the Offer is
completed, Sub will merge with the Company in the manner hereinafter described;
WHEREAS, the Directors of the Company have unanimously determined that
each of the Offer and the Merger (as hereinafter defined) are fair to, and in
the best interests of, the holders of Common Stock, approved the Offer and the
Merger and recommended the acceptance of the Offer and approval and adoption of
this Agreement by the stockholders of the Company;
WHEREAS, in order to induce Parent and Sub to enter into this
Agreement, the Company's Board of Directors has taken action to eliminate any
requirement under the Trust Agreement for O'Sullivan Corporation Salary
Continuation Agreements, with First Union National Bank as trustee and dated as
of November 18, 1997 (the "Salary Continuation Agreements Trust") that the
Salary Continuation Agreements Trust be fully funded for all current benefit
obligations upon a change of control of the Company; and
WHEREAS, as a further inducement for Parent and Sub to enter into this
Agreement, Arthur H. Bryant II, Magalen O. Bryant and John C. O. Bryant have,
simultaneously with the execution of this Agreement, entered into share tender
agreements with Parent and Sub (the "Share Tender Agreements"), pursuant to
which they have agreed to tender into the Offer all of the shares of Common
Stock held by them.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.1 THE OFFER. Provided that (a) this Agreement shall not have been
terminated in accordance with Article VI hereof, (b) the Share Tender Agreements
shall have been executed
<PAGE> 2
simultaneously with this Agreement and (c) the Board of Directors has taken
action to eliminate any requirement that the Salary Continuation Agreements
Trust be fully funded for all current benefit obligations upon a change of
control of the Company, and so long as none of the events set forth in Annex A
hereto (the "Tender Offer Conditions") shall have occurred and are continuing,
as promptly as practicable, but in no event later than the fifth business day
after the public announcement of the execution of this Agreement, Sub shall
commence the Offer. The obligations of Sub to accept for payment and promptly to
pay for any shares of Common Stock tendered shall be subject only to the Tender
Offer Conditions, any of which may be waived by Parent and Sub; PROVIDED,
HOWEVER, that, without the consent of the Company, Sub shall not waive the
condition that there shall have been validly tendered and not validly withdrawn
prior to the expiration of the Offer a number of shares of Common Stock which
represent at least 70% of the total voting power of all shares of capital stock
of the Company outstanding on a fully diluted basis (the "Minimum Condition").
The Tender Offer Conditions are for the sole benefit of Parent and Sub and may
be asserted by Parent and Sub regardless of the circumstances giving rise to any
such Tender Offer Condition and, subject to the preceding sentence, may be
waived by Parent and Sub in whole or in part. Sub expressly reserves the right
to modify the terms of the Offer, including, without limitation, except as
provided below, to extend the Offer beyond any scheduled expiration date;
PROVIDED, HOWEVER, without the consent of the Company, Sub shall not (i) reduce
the number of shares of Common Stock to be purchased in the Offer, (ii) reduce
the Offer Price, (iii) modify or add to the conditions set forth in Annex A or
(iv) change the form of consideration payable in the Offer. Notwithstanding the
foregoing, the Offer may not be extended beyond any scheduled expiration date
unless any of the Tender Offer Conditions shall not have been satisfied;
PROVIDED, HOWEVER, (i) even if the Tender Offer Conditions have not been
satisfied, the Offer may not be extended beyond the three month anniversary of
the date of commencement of the Offer and (ii) if the Tender Offer Conditions
have been satisfied, then the Offer may be extended for an additional five
business days so long as at the time of such extension, all conditions to Sub's
obligations to purchase shares of Common Stock pursuant to the Offer are
irrevocably waived.
1.2 COMPANY ACTIONS. The Company hereby consents to the Offer and the
Merger and represents that (a) its Board of Directors (at a meeting duly called
and held) has (i) determined by the unanimous vote of the Directors that each of
the Offer and the Merger is fair to, and in the best interests of, the holders
of Common Stock, (ii) approved the Offer, the Merger, this Agreement and the
Share Tender Agreements, (iii) recommended acceptance of the Offer and approval
and adoption of this Agreement by the stockholders of the Company and (iv) taken
all other action necessary to render Articles 14 and 14.1 of the Virginia Stock
Corporation Act (the "VSCA") inapplicable to the Offer and the Merger; and (b)
Bowles Hollowell Conner, a Division of First Union Capital Markets Corp.
("Bowles Hollowell Conner"), has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by the holders of
Common Stock pursuant to the Offer and the Merger is fair to the holders of
Common Stock from a financial point of view, subject to the usual and customary
assumptions and qualifications contained in such opinion. The Company shall file
with the Securities and Exchange Commission (the "Commission"), as soon as
practicable on the date of the commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
containing the recommendations referred to in clause (a) of the preceding
sentence; PROVIDED, HOWEVER, that such recommendations may be withdrawn,
modified or
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<PAGE> 3
amended in accordance with Section 4.7. Parent, Sub and their counsel shall be
given a reasonable opportunity to review and comment upon the Schedule 14D-9
prior to its filing with the Commission. The Company agrees to provide Parent
and its counsel with any comments the Company or its counsel may receive from
the Commission or its staff with respect to the Schedule 14D-9 promptly after
the receipt of such comments and shall provide Parent and its counsel an
opportunity to participate, including by way of discussions with the Commission
or its staff, in the response of the Company to such comments. The Schedule
14D-9 will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the Commission and on the
date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
information supplied by Parent or Sub for inclusion in the Schedule 14D-9. The
Company, Parent and Sub each agrees promptly to correct any information provided
by it for use in the Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the Commission and disseminated to the Company's stockholders,
in each case as and to the extent required by applicable federal securities
laws. In connection with the Offer, the Company will promptly furnish (or cause
to be furnished) Sub with mailing labels, security position listings and any
available listing or computer list containing the names and addresses of the
record holders of the Common Stock as of the most recent practicable date and
shall furnish (or cause to be furnished) Sub with such additional information
(including, but not limited to, updated lists of holders of Common Stock and
their addresses, mailing labels and lists of security positions) and such other
assistance as Sub or its agents may reasonably request in communicating the
Offer to the Company's stockholders. 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 and
Sub and their agents shall hold in confidence the information contained in any
such labels, listings and files, will use such information only in connection
with the Offer and the Merger and, if this Agreement shall be terminated, will,
upon request, deliver, and will use their best efforts to cause their agents to
deliver, to the Company all copies of such information then in their possession
or control.
1.3 COMPOSITION OF THE BOARD OF DIRECTORS. Promptly upon the acceptance
for payment of, and payment by Sub in accordance with the Offer for, at least
70% of the outstanding shares of common Stock pursuant to the Offer (the "Offer
Closing"), Sub shall be entitled to designate such number of directors on the
Board of Directors of the Company, rounded up to the next whole number, as will
give Sub, subject to compliance with Section 14(f) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), 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 Board of Directors (giving effect to the
directors elected pursuant to this sentence) multiplied by the percentage that
such number of shares of Common Stock so accepted for payment and paid for or
otherwise acquired or owned by Sub or Parent bears to the number of shares of
Common Stock outstanding and the Company and its Board of Directors shall, at
such time, take any and all such action needed to cause Sub's designees to be
appointed to the Company's Board of Directors (including to cause directors to
resign). At all
3
<PAGE> 4
times before the Effective Time, Parent, Sub and the Company shall use their
reasonable efforts to ensure that at least two members of the Company's Board of
Directors, as constituted on the date hereof, remain on the Company's Board of
Directors, except to the extent that no such individuals or their appointees
agree to serve as directors (the "Continuing Directors"). In the event that one
or more Continuing Directors resign from the Company's Board of Directors,
Parent, Sub and the Company shall permit the remaining, or in the case of the
resignation of all Continuing Directors, the resigning, Continuing Director or
Continuing Directors to appoint his or their successors in his or their
reasonable discretion. The Company shall take all action requested by Parent
which is reasonably necessary to effect any such election, including mailing to
its stockholders the Information Statement containing the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and
the Company agrees to make such mailing with the mailing of the Schedule 14D-9
so long as Sub shall have provided to the Company on a timely basis all
information required to be included in the Information Statement with respect to
Sub's designees. In furtherance thereof, the Company will increase the size of
the Company's Board of Directors, or use its reasonable efforts to secure the
resignation of directors, or both, as is necessary to permit Sub's designees to
be elected to the Company's Board of Directors. As of the Offer Closing, the
Company, if so requested by Parent or Sub, will use its reasonable efforts to
cause persons designated by Sub to constitute the same percentage of each
committee of such board, each board of directors of each subsidiary of the
Company and each committee of each such board (in each case to the extent of the
Company's ability to elect such persons).
1.4 ACTION BY DIRECTORS. Following the election or appointment of the
Parent's designees pursuant to Section 1.3 and prior to the Effective Time, and,
so long as there shall be at least one Continuing Director, if requested by a
majority of the Continuing Directors, such designees shall abstain from acting
upon, and the approval of a majority of the Continuing Directors shall be
required to authorize, any termination of this Agreement by the Company, any
amendment of this Agreement requiring action by the Board of Directors of the
Company, any extension of time for the performance of any of the obligations or
other acts of Parent of Sub under this Agreement and any waiver of compliance
with any of the covenants, agreements or conditions under this Agreement for the
benefit of the Company, unless no such individuals or their appointees agree to
serve as Continuing Directors.
1.5 OFFER DOCUMENTS, SCHEDULE 14D-1 AND PROXY/INFORMATION STATEMENT.
The Offer will be conducted in accordance with the applicable provisions, and
rules and regulations of the Commission, under the Exchange Act. The documents
pursuant to which the Offer will be made, including a Tender Offer Statement on
Schedule 14D-1 and Offer to Purchase and related letter of transmittal
(collectively, the "Offer Documents"), will comply in all material respects with
the Exchange Act, and the rules and regulations thereunder and any other
applicable laws. If at any time prior to the expiration or termination of the
Offer any event occurs which should be described in an amendment or supplement
thereto, Sub will file and disseminate, as required, an amendment or supplement
which complies in all material respects with the Exchange Act and the rules and
regulations thereunder and any other applicable laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment upon the
Offer Documents prior to their filing with the Commission. The Company agrees
that any information supplied by the Company for inclusion in the Offer
Documents will not, at the time the Offer
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<PAGE> 5
Documents are first published, sent or given to the Company's stockholders,
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Company will promptly correct any information provided by it for inclusion in
the Offer Documents if and to the extent that such information becomes false or
misleading in any material respect, and Parent and Sub will take all steps
necessary to cause the Offer Documents as so corrected to be filed with the
Commission and as so corrected to be disseminated to the Company's stockholders,
in each case as and to the extent required by the Exchange Act. The information
supplied or to be supplied by Parent and Sub for inclusion in the proxy or
information statement, as applicable, to be prepared in connection with the
Merger, if required (the "Proxy/Information Statement") and the Schedule 14D-9
of the Company will not, as of the date of such Proxy/Information Statement or
Schedule 14D-9, as applicable, contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made, in light of the circumstances under which they are made, not misleading.
Parent and Sub each agrees to promptly correct any information provided by it in
the Proxy/Information Statement and the Schedule 14D-9 of the Company, as
applicable, if and to the extent that such information becomes false or
misleading in any material respect.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.1 THE MERGER. (a) Subject to the terms and conditions of this
Agreement, at the time of the Closing (as defined in Section 2.10 hereof),
Articles of Merger (the "Articles of Merger") shall be duly prepared, executed
and acknowledged by Sub and the Company in accordance with the VSCA and shall be
filed on the Closing Date (as defined in Section 2.10 hereof). The Merger of Sub
and the Company (the "Merger") shall become effective upon the issuance of the
Certificate of Merger by the State Corporation Commission of the Commonwealth of
Virginia in accordance with the provisions and requirements of the VSCA. The
date and time when the Merger shall become effective is hereinafter referred to
as the "Effective Time".
(b) At the Effective Time, Sub shall be merged with and into the
Company and the separate corporate existence of Sub shall cease, and the Company
shall continue as the surviving corporation under the laws of the Commonwealth
of Virginia under the name of "O'Sullivan Corporation" (the "Surviving
Corporation").
(c) From and after the Effective Time, the Merger shall have the
effects set forth in Section 13.1-721 of the VSCA.
2.2 CONVERSION OF STOCK. At the Effective Time:
(a) Each share of Common Stock then issued and outstanding (other
than any shares of Common Stock which are held by the Company as treasury shares
or otherwise or, directly or indirectly, by Parent or any direct or indirect
subsidiary of Parent (including Sub), all
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<PAGE> 6
of which shall be cancelled and none of which shall receive any payment with
respect thereto) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and represent the right to receive
an amount in cash, without interest, equal to the price paid for each share of
Common Stock pursuant to the Offer (the "Merger Consideration").
(b) Each share of common stock, par value $1.00 per share of Sub
then issued and outstanding shall, by virtue of the Merger and without any
action on the part of the holder thereof, become one fully paid and
nonassessable share of common stock, $1.00 par value, of the Surviving
Corporation.
2.3 SURRENDER OF CERTIFICATES. (a) Concurrently with or prior to the
Effective Time, Parent shall designate a bank or trust company located in the
United States to act as paying agent (the "Paying Agent") for purposes of making
the cash payments contemplated hereby. As soon as practicable after the
Effective Time, Parent shall cause the Paying Agent to mail and/or make
available to each holder of a certificate theretofore evidencing shares of
Common Stock (other than those which are held by the Company as treasury shares
or otherwise or, directly or indirectly by Parent or any direct or indirect
subsidiary of Parent (including Sub)) a notice and letter of transmittal
advising such holder of the effectiveness of the Merger and the procedure for
surrendering to the Paying Agent such certificate or certificates which
immediately prior to the Effective Time represented outstanding Common Stock
(the "Certificates") in exchange for the Merger Consideration deliverable in
respect thereof pursuant to this Article II. Upon the surrender for cancellation
to the Paying Agent of such Certificates, together with a letter of transmittal,
duly executed and completed in accordance with the instructions thereon, and any
other items specified by the letter of transmittal, the Paying Agent shall
promptly pay to the Person (as defined in Section 7.13 hereof) entitled thereto
the Merger Consideration deliverable in respect thereof. Until so surrendered,
each Certificate shall be deemed, for all corporate purposes, to evidence only
the right to receive upon such surrender the Merger Consideration deliverable in
respect thereof to which such Person is entitled pursuant to this Article II. No
interest shall be paid or accrued in respect of such cash payments.
(b) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefore are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
Person requesting such transfer pay to the Paying Agent any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with Article II,
provided that the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory to it against
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<PAGE> 7
any claim that may be made against the Surviving Corporation with respect to the
Certificate claimed to have been lost, stolen or destroyed.
2.4 PAYMENT. Concurrently with or immediately prior to the Effective
Time, Parent or Sub shall deposit in trust with the Paying Agent cash in United
States dollars in an aggregate amount equal to the product of (i) the number of
shares of Common Stock outstanding immediately prior to the Effective Time on a
fully diluted basis (other than shares of Common Stock which are held by the
Company as treasury shares or otherwise or, directly or indirectly by Parent or
any direct or indirect subsidiary of Parent (including Sub)) and (ii) the Merger
Consideration (such amount being hereinafter referred to as the "Payment Fund").
The Payment Fund shall be invested by the Paying Agent as directed by Parent 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, commercial paper rated of the highest quality by Moody's
Investors Services, Inc. or Standard & Poor's Ratings Group or certificates of
deposit, bank repurchase agreements or bankers' acceptances of a commercial bank
having at least $100,000,000 in assets (collectively, "Permitted Investments")
or in money market funds which are invested in Permitted Investments, and any
net earnings with respect thereto shall be paid to Parent as and when requested
by Parent. The Paying Agent shall, pursuant to irrevocable instructions, make
the payments referred to in Section 2.2(a) hereof out of the Payment Fund. The
Payment Fund shall not be used for any other purpose except as otherwise agreed
to by Parent. Promptly following the date which is three months after the
Effective Time, the Paying Agent shall return to Parent all cash, certificates
and other instruments in its possession that constitute any portion of the
Payment Fund (other than net earnings on the Payment Fund which shall be paid to
Parent) and the Paying Agent's duties shall terminate. Thereafter, each holder
of a Certificate may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive in
exchange therefor the Merger Consideration, without interest, but shall have no
greater rights against the Surviving Corporation or Parent than may be accorded
to general creditors of the Surviving Corporation or Parent under applicable
law. Notwithstanding the foregoing, neither the Paying Agent nor any party
hereto shall be liable to a holder of shares of Common Stock for any Merger
Consideration delivered to a public official pursuant to applicable property,
escheat and similar laws.
2.5 NO FURTHER RIGHTS OF TRANSFERS. At and after the Effective Time,
each holder of a Certificate shall cease to have any rights as a stockholder of
the Company, except for, in the case of a holder of a Certificate (other than
shares to be cancelled pursuant to Section 2.2(a) hereof), the right to
surrender his or her Certificate in exchange for payment of the Merger
Consideration, and no transfer of shares of Common Stock shall be made on the
stock transfer books of the Surviving Corporation. Certificates presented to the
Surviving Corporation after the Effective Time shall be cancelled and exchanged
for cash as provided in this Article II. At the close of business on the day of
the Effective Time the stock ledger of the Company with respect to Common Stock
shall be closed.
2.6 STOCK OPTION AND OTHER PLANS. Each outstanding stock option to
purchase Common Stock (an "Option") heretofore granted under the Company's 1995
Stock Option Plan, 1995 Outside Directors Stock Option Plan or 1985 Incentive
Stock Option Plan or any other employee, director or other stock option plan now
or formerly maintained by the Company
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(collectively, the "Option Plans"), whether or not vested or exercisable, shall
be deemed to be cancelled immediately prior to the Effective Time and shall no
longer be exercisable for the purchase of shares of Common Stock. The holder of
each Option shall receive a payment in cash (subject to any applicable
withholding taxes) at the Effective Time (the "Cash Payment") equal to the
product of (x) the total number of shares of Common Stock subject to such
Option, whether or not then vested or exercisable, and (y) the excess, if any,
of the Merger Consideration over the exercise price per share of Common Stock
subject to such Option. Prior to the Effective Time, the Board of Directors of
the Company (or, if appropriate, any committee or subcommittee thereof) shall
take such further action as may be necessary or appropriate for the cancellation
of the Options and payment of the Cash Payment. The Option Plans and any other
plan, program or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of the Company or any subsidiary
(collectively, with the Option Plans, referred to as the "Stock Plans") shall be
terminated by the Company effective as of the Effective Time. The Company will
take all steps to ensure that neither the Company nor any of its subsidiaries is
or will be bound by any Options or other options, warrants, rights or agreements
which would entitle any Person, other than Parent or its affiliates, to own any
capital stock of the Surviving Corporation or any of its subsidiaries or to
receive any payment in respect thereof. The Company will use its best efforts to
obtain all necessary consents to ensure that as of the Effective Time, the only
rights of the holders of Options in respect of such Options will be to receive
the Cash Payment in cancellation and settlement thereof.
2.7 ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION. Subject to
Section 4.11(a), the articles of incorporation of Sub in effect immediately
prior to the Effective Time, shall be the articles of incorporation of the
Surviving Corporation after the consummation of the Merger until amended in
accordance with applicable law.
2.8 BY-LAWS OF THE SURVIVING CORPORATION. Subject to Section 4.11(a),
the by-laws of Sub in effect immediately prior to the Effective Time, shall be
the by-laws of the Surviving Corporation after the consummation of the Merger
until amended in accordance with applicable law.
2.9 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the
Effective Time, the directors of Sub immediately prior to the Effective Time
shall be the directors of the Surviving Corporation, until their successors are
duly elected or appointed and qualified in accordance with applicable law. At
the Effective Time, the officers of Sub immediately prior to the Effective Time
shall be the officers of the Surviving Corporation, until their successors are
duly elected or appointed and qualified in accordance with applicable law.
2.10 CLOSING. The closing of the Merger (the "Closing") shall take
place at the offices of Thompson Hine & Flory LLP, Cleveland, Ohio, as soon as
practicable after the last of the conditions set forth in Article V hereof is
fulfilled or waived (subject to applicable law) but in no event later than the
fifth business day thereafter, or at such other time and place and on such other
date as Parent and the Company shall mutually agree (the "Closing Date").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Parent and Sub as follows:
(a) DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Each of
the Company and its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and each such corporation has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Each of the Company and its subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except in
such jurisdictions where the failure to be so qualified or licensed and in good
standing is not reasonably likely to have a material adverse effect on the
business, properties, assets, liabilities, operations, results of operations,
condition (financial or otherwise) or prospects (the "Condition") of the Company
and its subsidiaries taken as a whole. The Company has made available to Parent
and Sub complete and correct copies of the Articles of Incorporation and By-Laws
of the Company and its subsidiaries, in each case as amended to the date of this
Agreement.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The Company has the
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by the
Company, and the consummation by it of the transactions contemplated hereby,
have been duly authorized and approved by its Board of Directors and no other
corporate action on the part of the Company is necessary to authorize the
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby (other than the approval of
this Agreement and the Merger by the holders of at least 70% of the shares of
Common Stock). This Agreement has been duly executed and delivered by the
Company and is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and general equitable principles.
(c) CAPITALIZATION.
(i) The authorized capital stock of the Company consists of
30,000,000 shares of Common Stock. As of the date of this Agreement,
15,594,687 shares of Common Stock are issued and outstanding and
301,242 shares of Common Stock are reserved for issuance pursuant to
outstanding Options granted under the Stock Plans. All issued and
outstanding shares of Common Stock have been validly issued and are
fully paid and nonassessable,
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and are not subject to, nor were they issued in violation of, any
preemptive rights. Except as set forth in this Section 3.1(c) or on
Schedule 3.1(c) (i) of the disclosure letter to this Agreement (the
"Disclosure Letter"), (i) there are no shares of capital stock of the
Company authorized, issued or outstanding and (ii) there are not as of
the date hereof, and at the Effective Time there will not be, any
outstanding or authorized options, warrants, rights, subscriptions
claims of any character, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or otherwise,
relating to Common Stock or any other shares of capital stock of the
Company, pursuant to which the Company is or may become obligated to
issue shares of Common Stock, any other shares of its capital stock or
any securities convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of the capital stock of the Company.
The Company has no authorized or outstanding bonds, debentures, notes
or other indebtedness with respect to which the holders thereof have
the right to vote (or convertible or exchangeable into or exercisable
for securities having the right to vote) with the stockholders of the
Company or any of it subsidiaries on any matter ("Voting Debt"). As of
the Effective Time, the Surviving Corporation will have no obligation
to issue, transfer or sell any shares of Common Stock of the Surviving
Corporation pursuant to any Employee Plan (as hereinafter defined) or
otherwise. Schedule 3.1(c)(i) of the Disclosure Letter lists, as of the
date of this Agreement, the number of shares of Common Stock subject
to, and the exercise price of, each outstanding Option. The Company has
made available to Parent and Sub complete and correct copies of the
Stock Plans and the forms of option agreement used with respect to each
Option Plan.
(ii) Schedule 3.1 (c) (ii) of the Disclosure Letter lists all
of the Company's subsidiaries. All of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable, are not subject
to, nor were they issued in violation of, any preemptive rights, and
are owned, of record and beneficially, by the Company, free and clear
of all liens, claims, security interests, charges, encumbrances,
options or claims whatsoever ("Encumbrances"). No shares of capital
stock of any of the Company's subsidiaries are reserved for issuance
and there are no outstanding or authorized options, warrants, rights,
subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities, or other commitments,
contingent or otherwise, relating to the capital stock of any
subsidiary of the Company, pursuant to which such subsidiary is or may
become obligated to issue any shares of capital stock of such
subsidiary or any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of such subsidiary.
Except for the subsidiaries listed on Schedule 3.1(c)(ii) of the
Disclosure Letter, the Company does not own, directly or indirectly,
any capital stock or other equity interest in any Person or have any
direct or indirect equity or ownership interest in any Person and
neither the Company nor any of its subsidiaries is subject to any
obligation or requirement to provide funds for or to make any
investment (in the form of a loan, capital
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contribution or otherwise) to or in any Person. The Company's
subsidiaries have no Voting Debt.
(d) CONSENTS AND APPROVALS; NO VIOLATIONS. Except as disclosed in
Schedule 3.1(d) of the Disclosure Letter and assuming (i) the filings required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), are made and the waiting period thereunder has been terminated or
has expired, (ii) the requirements of the Exchange Act relating to the
Proxy/Information Statement and the Offer are met, (iii) the filing of the
Articles of Merger and other appropriate merger documents, if any, as required
by the VSCA, is made and (iv) approval of this Agreement and the Merger by the
holders of at least 70% of the outstanding shares of Common Stock is obtained,
the execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby will not: (1) violate any
provision of the articles of incorporation or by-laws of the Company or any of
its subsidiaries, each as amended; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority applicable to the Company or any of its subsidiaries
or by which any of their respective properties or assets may be bound; (3)
require any filing with, or permit, consent or approval of, or the giving of any
notice to, any governmental or regulatory body, agency or authority; or (4)
result in a violation or breach of, conflict with, constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any Encumbrance upon any of the properties or assets of the Company or any of
its subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, franchise, permit, agreement, lease,
franchise agreement or other instrument or obligation to which the Company or
any of its subsidiaries is a party, or by which it or any of their respective
properties or assets may be bound except, in the case of clauses (2), (3) and
(4) above, for any such filing, permit, consent, approval or violation, which is
not reasonably likely to have a material adverse effect on the Condition of the
Company and its subsidiaries, taken as a whole, and is not reasonably likely to
prevent or materially delay consummation of the transactions contemplated by
this Agreement.
(e) COMPANY REPORTS AND FINANCIAL STATEMENTS.
(i) Since January 1, 1998, the Company has filed all material
forms, reports, statements and other documents required to be filed by
it with the Commission, including without limitation (a) all Annual
Reports on Form 10-K, (b) all Quarterly Reports on Form 10-Q, (c) all
proxy statements relating to meetings of stockholders (whether annual
or special), (d) all Current Reports on Form 8-K and (e) all other
reports, schedules, registration statements and other documents
required to be filed with the Commission. All of the documents filed by
the Company with the Commission during such period, including all
exhibits contained or incorporated by reference in such documents, are
collectively referred to as the "Commission Filings." The Commission
Filings, as amended to date, (i) were prepared in all material respects
in accordance with the requirements of the Securities Act of 1933, as
amended, or the Exchange Act, as the case may be, and (ii) did not at
the time they were filed contain any untrue statement of a material
fact or omit to state a material fact required to be stated
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therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The Company has, prior to the date of this Agreement, made available
to Parent true and complete copies of all Commission Filings.
(ii) Each of the consolidated balance sheets of the Company and
its consolidated subsidiaries as of the end of the fiscal years ended
December 31, 1998 and 1997 and the consolidated statements of
operations, consolidated statement of stockholders' equity and
consolidated statements of cash flows for the fiscal years ended
December 31, 1998 and 1997 included in the Commission Filings, were
prepared in accordance with generally accepted accounting principles
(as in effect when prepared) applied on a consistent basis (except as
may be indicated therein or in the notes or schedules thereto) and
fairly present in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the
dates thereof and the results of operations and changes in financial
position for the periods then ended.
(f) ABSENCE OF CERTAIN CHANGES.
(i) Except as previously disclosed in the Commission Filings or
as otherwise disclosed in Schedule 3.1(f) or Schedule 3.1(k) of the
Disclosure Letter or as otherwise contemplated by this Agreement, since
December 31, 1998 (i) there has not been any material adverse change in
the Condition of the Company and its subsidiaries taken as a whole;
(ii) the businesses of the Company and each of its subsidiaries have
been conducted only in the ordinary course, the Company and its
subsidiaries have not engaged in any material transaction or entered
into any material agreement outside of the ordinary course of business
and, to the knowledge of the Company, neither the Company nor any of
its subsidiaries has incurred any material liabilities (direct,
contingent or otherwise) ; (iii) there has been no declaration, setting
aside or payment of any dividend or other distribution with respect to
the Common Stock or any other capital stock of the Company (except for
regular quarterly dividends) or any repurchase, redemption or other
acquisition by the Company of any shares of Common Stock or other
capital stock of the Company; (iv) there has not been any material
amendment of any term of any outstanding security of the Company; and
(v) there has not been any change in any method of accounting or
accounting practice by the Company, except for any such change required
because of a concurrent change in generally accepted accounting
principles.
(ii) Furthermore, except as disclosed in Schedule
3.1(f) of the Disclosure Letter, since December 31, 1998, there has not
been any (a) grant of any severance or termination pay or stay-in-place
bonus to any director or officer of the Company or any of its
subsidiaries, (b) entering into of any employment, deferred
compensation or other similar agreement (or any material amendment to
any such existing agreement) with any director or officer of the
Company or any of its subsidiaries, (c) increase in benefits payable
under any existing severance or
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termination pay or stay-in-place bonus policies or agreements with any
director or officer of the Company or any of its subsidiaries, except
as provided under any Employee Plan, contract, agreement or
arrangement, or (d) increase in compensation, bonus or other benefits
payable to any director or officer of the Company or any of its
subsidiaries, except for normal annual adjustments that are not unusual
in nature or amount or except as provided under any Employee Plan,
contract, agreement or arrangement listed in the Disclosure Letter.
(g) PERMITS; COMPLIANCE. Except as is disclosed in Schedule 3.1(g)
of the Disclosure Letter, the Company is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders necessary to own, lease and operate
its properties and to carry on its business in substantially the manner as now
being conducted, other than those of which the failure of the Company to be in
possession is not reasonably likely to have a material adverse effect on the
Condition of the Company and its subsidiaries taken as a whole (collectively,
the "Company Permits"). Except as set forth in Schedule 3.1(g) of the Disclosure
Letter, the Company is not in conflict with, or in default or violation of, (a)
any federal, state or foreign law applicable to the Company or by which any of
its properties are bound or subject or (b) any of the Company Permits, other
than conflicts, defaults or violations that are not reasonably likely to have a
material adverse effect on the Condition of the Company and its subsidiaries
taken as a whole. Except as set forth in Schedule 3.1(g) of the Disclosure
Letter, since January 1, 1999, the Company has not received any notification
with respect to possible material conflicts, defaults or violations of any
federal, state, local or foreign law applicable to the Company or by which any
of its properties are bound or subject that have not been cured without any
further material liability or obligation.
(h) LITIGATION. Except as disclosed in the Commission Filings or in
Schedule 3.1(h) of the Disclosure Letter, there is no action, suit, proceeding
at law or in equity, or any arbitration or any administrative or other
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 which,
individually or in the aggregate, is reasonably likely to have a material
adverse effect on the Condition of the Company and its subsidiaries taken as a
whole. Except as disclosed in the Commission Filings or in Schedule 3.1(h) of
the Disclosure Letter, neither the Company nor any of its subsidiaries is
subject to any judgment, order or decree entered in any lawsuit or proceeding
which could have a material adverse effect on the Condition of the Company and
its subsidiaries taken as a whole or on the ability of the Company or any
subsidiary to conduct its business as presently conducted or are reasonably
likely to prevent or delay consummation of the Offer or the Merger.
(i) EMPLOYEE BENEFIT PLANS.
(i) Schedule 3.1(i) of the Disclosure Letter lists all
"employee benefit plans" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations thereunder ("ERISA"), including, without
limitation, all retirement, savings and other pension plans, all
health, severance, insurance, disability and other
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employee welfare plans and all incentive, vacation, accrued leave, sick
pay, sick leave and other similar plans, all bonus, stock option, stock
purchase, restricted stock, incentive, profit-sharing, deferred
compensation, supplemental retirement, unemployment benefit, severance
and other employee benefit plans, programs or arrangements (whether or
not insured) and all material employment, termination, severance,
stay-in-place bonus or compensation agreements, in each case for the
benefit of, or relating to current or former employees or current or
former directors of the Company, whether or not in writing or exempt
from the provisions of ERISA, that the Company or any of its
subsidiaries maintain, contribute to or are otherwise a party to
("Employee Plans"). For purposes of all of the representations
contained in this Section 3.1 (i), the term "subsidiaries" shall
include all employers (whether or not incorporated) that are by reason
of common control treated together with the Company or any of its
subsidiaries as a single employer within the meaning of Section 414 of
the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder (the "Code").
(ii) All Employee Plans have been maintained and operated in
all material respects in compliance with their terms and the
requirements prescribed by all applicable statutes, orders or
governmental rules or regulations with respect thereto, and the Company
and its subsidiaries have performed all material obligations required
to be performed by them under, and are not in any material respect in
default under or in violation of, any of the Employee Plans.
(iii) Except as set forth in Schedule 3.1(i) of the Disclosure
Letter, each Employee Plan intended to be qualified under Section
401(a) of the Code has heretofore been determined by the Internal
Revenue Service to so qualify, and each trust created thereunder has
heretofore been determined by the Internal Revenue Service to so
qualify, and each trust created thereunder has heretofore been
determined by the Internal Revenue Service to be exempt from tax under
the provisions of Section 501(a) of the Code and, to the best knowledge
of the Company and its subsidiaries, nothing has occurred since the
date of the most recent determination that would be reasonably likely
to cause any such Employee Plan or trust to fail to qualify under
Section 401(a) or 501(a) of the Code.
(iv) Neither the Company nor any of its subsidiaries have
incurred any material liability to the Pension Benefit Guaranty
Corporation ("PBGC") under Section 4001 ET SEQ. of ERISA, and no
condition exists that could reasonably be expected to result in the
Company or any of its subsidiaries incurring material liability under
Title IV of ERISA, either singly or as a member of any trade or
business, whether or not incorporated, under common control of or
affiliated with the Company, within the meaning of Section 414(b), (c),
(m) or (o) of the Code. All premiums payable to the PBGC have been paid
when due.
(v) The Company has made available to Parent copies of all
material documents in connection with each Employee Plan including,
without
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limitation (where applicable), (a) all Employee Plans as in effect on
the date hereof, together with all amendments thereto; (b) all current
summary plan descriptions, if applicable; (c) all current trust
agreements, declarations of trust and other documents establishing
other funding arrangements (and all amendments thereto and the latest
financial statements thereof); (d) the most recent Internal Revenue
Service determination letter, if applicable; (e) annual reports
required to be filed within the last year pursuant to ERISA or the Code
with respect to the Employee Plans; and (f) the most recently prepared
financial statements.
(vi) Neither the Company nor any of its subsidiaries has
engaged in any non-exempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) with respect to any
Employee Plan that would subject any of them to a material tax, penalty
or liability under ERISA or the Code.
(vii) Full payment has been made of all amounts which the
Company or any of its subsidiaries is required, under applicable law or
under any Employee Plan, to have paid as contributions thereto as of
the last day of the most recent fiscal year of such Employee Plan ended
prior to the date hereof and as of the date hereof.
(viii) There are no actions, suits or claims pending, or to the
best knowledge of the Company, threatened or anticipated (other than
routine claims for benefits) with respect to any Employee Plan.
(ix) Except as set forth on Schedule 3.1(i) of the Disclosure
Letter, no Employee Plan provides for the payment of severance or any
other benefits upon the termination of an employee's employment.
(j) TAXES. The Company has filed or caused to be filed, within the
times and in the manner prescribed by law, all United Stated federal, state,
local and foreign tax returns and tax reports ("Tax Returns") which are required
to be filed by, or with respect to, and are material to, the Company or any of
its subsidiaries. Such Tax Returns reflect accurately all material liability for
taxes of the Company and its subsidiaries for the periods covered thereby. All
material federal, state, local and foreign income, profits, franchise, sales,
use, occupancy and excise taxes and other material taxes, assessments, duties,
fees, levies, imports or other governmental charges (including any interest and
penalties thereon) ("Taxes") payable by, or due from, the Company or any of its
subsidiaries have been fully paid or adequately disclosed and fully provided for
on the financial statements of the Company and its subsidiaries in accordance
with generally accepted accounting principles. No audit or other examination,
pending or, to the best knowledge of the Company, threatened litigation or
appeal of any Tax Return or Tax liability of the Company or any of its
subsidiaries is currently in progress (or to the best knowledge of the Company
scheduled to be conducted as of the date hereof). There are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any Tax Return of the Company or any of its subsidiaries. Except as provided in
Schedule 3.1(j) of
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the Disclosure Letter, neither the Company nor any of its subsidiaries has been
included in any "consolidated", "unitary" or "combined" Tax Return provided for
under the laws of the United States, any foreign jurisdiction or any state or
locality for any taxable period for which the statute of limitations has not
expired. All material Taxes which the Company or any of its subsidiaries were
required by law to withhold in connection with amounts paid or owing to any
employee or independent contractor have been timely paid over to the proper
authorities to the extent due and payable. Except as provided in Schedule 3.1(j)
of the Disclosure Letter, there are no tax sharing, allocation, indemnification
or similar agreements in effect as between the Company or any predecessor or
affiliate thereof and any other party (including any of their predecessors or
affiliates) under which the Company or any of the Company's subsidiaries are
liable or could be liable for any Taxes or other claims of any party.
(k) LIABILITIES. Except as set forth in the Commission Filings or
as disclosed in Schedule 3.1(k) of the Disclosure Letter or as otherwise
contemplated by this Agreement, neither the Company nor any of its subsidiaries
has any material outstanding claims, liabilities or indebtedness, contingent or
otherwise, that would be required to be disclosed in the Company's consolidated
financial statements prepared in accordance with generally accepted accounting
principles applied on a consistent basis, other than liabilities incurred
subsequent to December 31, 1998 in the ordinary course of business. Neither the
Company nor any of its subsidiaries is in default in respect of the material
terms and conditions of any indebtedness or other agreement.
(l) BROKER'S OR FINDER'S FEE. Except for Bowles Hollowell Conner
(whose fees and expenses will be paid by the Company in accordance with the
Company's agreement with such firm, a true and correct copy of which has been
provided to Parent), no agent, broker, Person or firm acting on behalf of the
Company is, or will be, entitled to any fee, commission or broker's or finder's
fees from any of the parties hereto, or from any Person controlling, controlled
by, or under common control with any of the parties hereto, in connection with
this Agreement or any of the transactions contemplated hereby.
(m) ENVIRONMENTAL LAWS AND REGULATIONS. Except as disclosed in the
Commission Filings or in Schedule 3.1(m) of the Disclosure Letter or as would
not, individually or in the aggregate, have a material adverse effect on the
Condition of the Company and its subsidiaries taken as a whole, (i) the Company
and its subsidiaries are in compliance with all Environmental Laws; (ii)
Hazardous Substances requiring remediation under any Environmental Law have not
been released or disposed of on any real property owned or operated by the
Company or any subsidiary of the Company; (iii) the Company and its subsidiaries
are not subject to liability for any notice of off-site disposal or
contamination; (iv) the Company and its subsidiaries have not received notice of
any Environmental Claims under any Environmental Law; and (v) there are no
facts, conditions, occurrences or circumstances regarding the Company, its
subsidiaries or any property owned or operated by the Company or its
subsidiaries that could reasonably be expected (a) to form the basis of any
Environmental Claim against the Company, its subsidiaries or any property owned
or operated by the Company or its subsidiaries, or (b) to cause such property to
be subject to any restrictions on the ownership, use, or transferability of any
such property under any Environmental Law. "Environmental Law" means any
applicable law, regulation, order or decree relating to Hazardous Substances or
the protection of human health or the environment. "Hazardous Substance" means
any hazardous or
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toxic material, substance, waste, pollutant or contaminant as defined under any
Environmental Law, in any concentration, including, without limitation, any
petroleum or petroleum products, friable asbestos or polychlorinated biphenyls.
"Environmental Claims" means any and all administrative, regulatory or judicial
actions, suits, demand letters, claims, liens, notices of noncompliance or
violation of, investigations or proceedings relating in any way to any
Environmental Law (hereinafter "claims"), including without limitation, (i) any
and all Claims by governmental or regulatory authorities for enforcement,
clean-up, removal, response, remedial or other actions or damages pursuant to
any applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to human health, safety or the environment.
(n) STATE TAKEOVER STATUTES; NO STOCKHOLDER RIGHTS PLAN. The Board
of Directors of the Company has approved the Offer, the Merger, this Agreement
and the Share Tender Agreements and such approval is sufficient to render
inapplicable to the Offer, the Merger, this Agreement and the Share Tender
Agreements the provisions of Articles 14 and 14.1 of the VSCA. The Company does
not have a stockholder rights plan or "poison pill," but the Company's Amended
and Restated Articles of Incorporation, as amended, contain a provision (which
the Company does not believe constitutes such a plan or "poison pill") requiring
a super-majority stockholder vote to approve certain matters such as the Merger.
(o) OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Bowles Hollowell Conner to the effect that, as of the date of this
Agreement, the consideration to be received in the Offer and the Merger by the
Company's stockholders is fair to the Company's stockholders from a financial
point of view, subject to the usual and customary assumptions and qualifications
contained in such opinion, and a complete and correct signed copy of such
opinion has been, or promptly upon receipt thereof will be, delivered to Parent.
(p) MATERIAL CONTRACTS. Except as set forth in Schedule 3.1(p) of
the Disclosure Letter or as disclosed in the Commission Filings, neither the
Company nor any of its subsidiaries is a party to, or is bound by (a) any
material agreement, indenture or other instrument relating to the borrowing of
money by the Company or any of its subsidiaries or the guarantee by the Company
or any of its subsidiaries of any such obligation relating to the borrowing of
money or (b) any other contract or agreement or amendment thereto that (i)
should be or should have been filed as an exhibit to a Form 10-K filed by the
Company with the Commission or (ii) places any material restrictions on the
right of the Company or any of its subsidiaries to engage in any material
business activity currently conducted (collectively, the "Company Contracts").
Neither the Company nor any of its subsidiaries is in material default under any
of the Company Contracts, and, to the knowledge of the Company, there has not
occurred any event that, with the lapse of time or the giving of notice or both,
would constitute such a material default under any of the Company Contracts.
(q) LABOR. Except as set forth on Schedule 3.1(q) of the Disclosure
Letter, the Company is not a party to or bound by any collective bargaining
agreement respecting its employees, nor, to the knowledge of the Company, is
there existing or contemplated any threat
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of any strike, organized walkout or other organized work stoppage or labor
organizational effort by any employees of the Company.
(r) VOTE REQUIRED. The only vote of the holders of any class or
series of capital stock of the Company necessary to approve the Merger is the
affirmative vote of the holders of at least 70% of the outstanding shares of
Common Stock. There is no vote of the holders of any class or series of capital
stock of the Company necessary in order for Sub to commence and consummate the
Offer.
(s) REAL AND PERSONAL PROPERTY.
(i) Schedule 3.1(s) of the Disclosure Letter lists all material
real property owned (the "Owned Real Property") or leased (the "Leased
Real Property") by the Company or any of its subsidiaries. Except as
set forth on Schedule 3.1(s) of the Disclosure Letter, the Company has
(i) good and valid title to all of the Owned Real Property, (ii) good
and valid title to all of the tangible personal property recorded as an
asset in the consolidated financial statements of the Company as of
December 31, 1998, and not disposed of since that date in the ordinary
course of business, and (iii) a valid and existing leasehold interest
in all of the Leased Real Property, that, in the case of each of
clauses (i), (ii) and (iii) above, is free and clear of any Encumbrance
other than Permitted Encumbrances. For purposes of this Section 3.1(s),
"Permitted Encumbrances" means all (A) Encumbrances that do not
materially interfere with the use of, or materially diminish the value
of, the property subject thereto, (B) liens for taxes not yet due and
payable, (C) such Encumbrances as are shown in title policies or
surveys made available to Parent or Sub and (D) capital lease
obligations entered into in the ordinary course of business.
(ii) Except as set forth on Schedule 3.1(s) of Disclosure
Letter, the Owned Real Property and the Leased Real Property are,
considering the age of such property, in reasonably good condition,
normal wear and tear excepted, and are suitable in all material
respects for their present purposes. Except as set forth on Schedule
3.1(s) of the Disclosure Letter, to the knowledge of the Company, none
of the buildings or improvements owned or leased by the Company or any
of it subsidiaries is subject to any material structural defect. The
primary business operations currently conducted on the owned Real
Property and the Leased Real Property are not in violation of
applicable zoning laws and regulations, except for violations that
could not have a material adverse effect on the Condition of the
Company and its subsidiaries taken as a whole. To the knowledge of the
Company, the buildings and other structures located on the Owned Real
Property do not encroach on the real property of any other Person, and,
to the knowledge of the Company, no building or structure of any other
Person encroaches on any of the Owned Real Property, except for
encroachments that could not have a material adverse effect on the
Condition of the Company and its subsidiaries taken as a whole. The
buildings and structures on the Owned Real Property have direct
vehicular access (or indirect vehicular access through valid and
enforceable
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easements) to public roads and all appropriate utilities necessary for
the conduct of the business thereon as it is presently conducted. The
Company has made available to Parent all owner's policies of title
insurance as to Owned Real Property, lessee's policies of title
insurance as to Leased Real Property, and related surveys that are in
its possession.
(t) INTELLECTUAL PROPERTY RIGHTS.
(i) Schedule 3.1(t) of the Disclosure Letter lists each of the
following items: (i) material patents and applications therefor,
registrations of material trademarks (including service marks) and
applications therefor, and registration of material copyrights and
applications therefor that are owned by the Company or any of its
subsidiaries, (ii) unexpired material licenses relating to Intellectual
Property Rights that have been granted to or by the Company or any of
its subsidiaries, and (iii) all other material agreements of the
Company or any of its subsidiaries relating to Intellectual Property
Rights. As used in this Agreement, the term "Intellectual Property
Rights" includes patents, patent applications, trademarks, trademark
applications, service marks, service mark applications, copyrights,
copyright applications, and proprietary trade names, publication
rights, computer programs (including source codes and object codes),
inventions, know how, trade secrets, technology, processes and
formulae.
(ii) Except as set forth in Section 3.1(t) of the Disclosure
Letter, the Company and its subsidiaries own or have the right to use
all of the material Intellectual Property Rights that are used in the
conduct of the business of the Company or its subsidiaries. Except as
set forth in Schedule 3.1(t) of the Disclosure Letter and to the
knowledge of the Company, such ownership and right to use are free and
clear of all Encumbrances and claims or rights to use of third parties.
The Company has no knowledge of any material allegations or claims that
any product or process manufactured, used, sold or under development by
or for the Company or its subsidiaries infringes on the Intellectual
Property Rights of any third party. Neither the Company nor any of its
subsidiaries has knowledge of any material challenge to the validity,
ownership or right to use or license by the Company of any of the
Intellectual Property Rights owned, used or licensed by the Company.
(u) INSURANCE. Schedule 3.1(u) of the Disclosure Letter lists, and
the Company has made available to Parent for review, current and complete copies
of, all insurance policies, binders and surety and fidelity bonds relating to
the Company and its subsidiaries (including, without limitation, all policies or
binders of casualty, general liability and workers' compensation insurance, but
excluding the owner's and lessee's policies of title insurance referred to in
Section 3.1(s)), all of which are currently in full force and effect. To the
knowledge of the Company, all premiums and other amounts due and payable under
each such policy, binder and bond have been timely paid. To the knowledge of the
Company, neither the Company nor any of its subsidiaries is in default with
respect to any material provision contained in any such policy, binder or bond
and has not failed to give any notice of or present any material
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claim thereunder as required under the terms of the policy. Except for claims
set forth on Schedule 3.1(u) of the Disclosure Letter, there are no material
outstanding unpaid claims under any such policy, binder or bond, and neither the
Company nor any of its subsidiaries has received any written notice of
cancellation or non-renewal of any such policy, binder or bond. Except as set
forth on Schedule 3.1(u) of the Disclosure Letter, neither the Company nor any
of its subsidiaries has received any written notice from any of its insurance
carriers that any insurance premiums paid by it will be materially increased in
the future as a result of the claims experience of the Company or such
subsidiary.
(v) INVENTORY. Since December 31, 1998, the inventory of the
Company and its subsidiaries has been maintained in the ordinary course of
business and consistent with the past practices of the Company and its
subsidiaries.
(w) COMPUTER SOFTWARE AND DATABASES. The Company owns or has the
right to use pursuant to valid and existing licenses all of the material
computer software and databases necessary for the conduct of its business as
presently conducted ("Computer Software and Databases"). The Company has
undertaken a program to determine that the Computer Software and Databases, and
all computer hardware used by the Company and its subsidiaries, will process
dates correctly prior to, during, and after the calendar year 2000, including
but not limited to century recognition and calculations that accommodate same
century and multi-century formulas, date values, and interface values and that
reflect century changes ("Year 2000 Compliant"). The Company believes that it
has taken reasonable steps to determine that its vendors, customers and other
Persons with whom it does a material amount of business are Year 2000 Compliant.
3.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Each of Parent
and Sub represents and warrants to the Company as follows:
(a) DUE ORGANIZATION; GOOD STANDING AND CORPORATE POWER. Each of
Parent and Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which each is incorporated and
has the requisite corporate power and authority to carry on its business as now
being conducted. Each of Parent and Sub is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
or licensing necessary, other than in such jurisdictions where the failure to be
so qualified or licensed (individually or in the aggregate) would not have a
material adverse effect on the Condition of Parent and its subsidiaries taken as
a whole. Parent has delivered to the Company complete and correct copies of its
certificate of incorporation and by-laws and the articles of incorporation and
by-laws of Sub, in each case as amended, to the date of this Agreement.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of Parent and Sub
has full corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Parent and Sub, and the consummation by each of them of the transactions
contemplated hereby, have been duly authorized by the Boards of Directors of
Parent and Sub. No other corporate action on the part of either of Parent or Sub
is necessary to
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authorize the execution, delivery and performance of this Agreement by each of
Parent and Sub and the consummation of the transactions contemplated hereby
(other than the approval of this Agreement by the sole stockholder of Sub, if
required by the VSCA). This Agreement has been duly executed and delivered by
each of Parent and Sub and is a valid and binding obligation of each of Parent
and Sub, enforceable against each of Parent and Sub in accordance with its
terms, except to the extent that its enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally and general equitable principles.
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming (i) the filings
required under the HSR Act are made and the waiting period thereunder has been
terminated or has expired, (ii) the requirements of the Exchange Act relating to
the Proxy/Information Statement and the Offer are met, (iii) the filing of the
Articles of Merger and other appropriate merger documents, if any, as required
by the laws of the VSCA is made and (iv) approval of the Merger by the sole
stockholder of Sub if required by the VSCA is received, the execution and
delivery of this Agreement by Parent and Sub and the consummation by Parent and
Sub of the transactions contemplated hereby will not: (1) violate any provision
of the articles of incorporation or by-laws of Parent or Sub, each as amended;
(2) violate any statute, ordinance, rule, regulation, order or decree of any
court or of any governmental or regulatory body, agency or authority applicable
to Parent or Sub or by which any of their respective properties or assets may be
bound; (3) require any filing with, or permit, consent or approval of, or the
giving of any notice to any governmental or regulatory body, agency or
authority; or (4) result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, or result in the
creation of any Encumbrance upon any of the properties or assets of the Parent,
Sub or any of their subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
agreement, lease or other instrument or obligation to which Parent or Sub or any
of their subsidiaries is a party, or by which they or their respective
properties or assets may be bound except in the case of clauses (2), (3) and (4)
above for any such filing, permit, consent, approval or violation, which is not
reasonably likely to have a material adverse effect on the Condition of the
Parent and Sub, taken as a whole, and is not reasonably likely to prevent or
materially delay consummation of the transactions contemplated by this
Agreement.
(d) BROKER'S OR FINDER'S FEE. No agent, broker, Person or firm
acting on behalf of Parent or Sub is, or will be, entitled to any broker's or
finder's fees or similar fee or commission from any of the parties hereto, or
from any Person controlling, controlled by, or under common control with any of
the parties hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(e) FINANCING. Parent has sufficient funds available to purchase on
a fully diluted basis all the outstanding shares of Common Stock pursuant to the
Offer and the Merger and to pay all fees and expenses related to the
transactions contemplated by this Agreement.
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(f) COMMON STOCK OWNERSHIP. As of the date hereof, none of Parent
or its subsidiaries beneficially owns (within the meaning of Rule 13d-3 under
the Exchange Act) any shares of Common Stock.
(g) INTERIM OPERATIONS OF SUB. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby and has not engaged
in any business activities or conducted any operations other than in connection
with the transactions contemplated hereby.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING DATE
4.1 ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS. During the
period commencing on the date hereof and ending on the Closing Date, the Company
shall, and shall cause each of its subsidiaries to, upon reasonable notice,
afford Parent and Sub, and their respective counsel, accountants, consultants
and other authorized representatives, reasonable access during normal business
hours to the employees, properties, books and records of the Company and its
subsidiaries in order that they may have the opportunity to make such
investigations as they shall reasonably request of the affairs of the Company
and its subsidiaries. The Company shall furnish as promptly as reasonably
practicable to Parent (a) a copy of each report, schedule, registration
statement and other document filed by it or its subsidiaries during such period
pursuant to the requirements of federal or state securities laws and (b) all
other information concerning its or its subsidiaries' business, properties and
personnel as Parent and Sub may reasonably request.
4.2 CONFIDENTIALITY. Information obtained by Parent and Sub pursuant to
Section 4.1 hereof shall be subject to the provisions of the Confidentiality
Agreement between the Company and Parent dated December 16, 1998 (the "Parent
Confidentiality Agreement").
4.3 CONDUCT OF THE BUSINESS OF THE COMPANY PENDING THE CLOSING DATE.
The Company agrees that, except as permitted, required or specifically
contemplated by, or otherwise described in, this Agreement or otherwise
consented to or approved in writing in advance by Parent, during the period
commencing on the date hereof and ending on the Closing Date:
(a) The Company and each of its subsidiaries will conduct their
respective operations only according to their ordinary and usual course of
business consistent with past practice and will use their reasonable best
efforts to preserve intact their respective business organizations, keep
available the services of their officers and employees and maintain satisfactory
relationships with licensors, suppliers, distributors, clients and others having
business relationships with them;
(b) Neither the Company nor any of its subsidiaries shall (i)
make any change in or amendment to its articles of incorporation or by-laws (or
comparable governing documents); (ii) issue or sell any shares of its capital
stock (other than in connection with the exercise of Options outstanding on the
date hereof) or any of its other securities, or issue any securities convertible
into, or options, warrants or rights to purchase or subscribe to, or enter into
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any arrangement or contract with respect to the issuance or sale of, any shares
of its capital stock or any of its other securities, or make any other changes
in its capital structure; (iii) sell or pledge or agree to sell or pledge any
stock owned by it in any of its subsidiaries; (iv) except for regular quarterly
dividends, declare, pay, set aside or make any dividend or other distribution or
payment with respect to, or split, combine, redeem or reclassify, any shares of
its capital stock; (v) enter into any contract or commitment with respect to
capital expenditures in excess of $1,000,000 or enter into any other material
contract except contracts in the ordinary course of business, it being
understood that the Company shall be permitted to make all capital expenditures
contemplated in its 1999 capital expenditure budget, (vi) release or relinquish
any material contract rights other than in the ordinary course of business;
(vii) adopt, enter into or amend in any material respect any Employee Plan or
non-employee benefit plan or program, employment agreement, severance agreement,
stay-in-place bonus agreement, license agreement or retirement agreement, or,
except in the ordinary course of business and consistent with past practice or
except as required under any Employee Plan, contract, agreement or arrangement
listed on Schedule 3.1(i) of the Disclosure Letter, pay or commit to pay any
bonus or contingent or other extraordinary compensation to any employee or
director or increase in any manner the compensation or fringe benefits payable
to any employee or director; (viii) merge, consolidate or enter into a share
exchange with any other Person, acquire a material amount of capital stock or
assets of any other Person, or sell, lease, license, mortgage, pledge or
otherwise dispose of a material amount of assets to any other Person, except for
the purchase or sale of inventory in the ordinary course of business consistent,
in all material respects, with past practice; (ix) other than in the ordinary
course of business, transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of, encumber or subject to any lien, any assets or incur or modify any
indebtedness or other liability or issue any debt securities or assume,
guarantee or endorse or otherwise as an accommodation become responsible for the
obligations of any Person; (x) agree to the settlement of any material claim or
litigation; (xi) make any material tax election or settle or comprise any
material tax liability; (xii) make any material change in its method of
accounting or (xiii) agree, in writing or otherwise, to take any of the
foregoing actions; and
(c) The Company shall not, and shall not permit any of its
subsidiaries to, (i) take any action, engage in any transaction or enter into
any agreement which would cause any of the representations or warranties set
forth in Section 3.1 hereof to be untrue as of the Closing Date or (ii) purchase
or acquire, or offer to purchase or acquire, any shares of capital stock of the
Company.
4.4 PROXY/INFORMATION STATEMENT. If stockholder approval of the Merger
is required by law or the Company's Amended and Restated Articles of
Incorporation (as amended), as promptly as practicable, the Company will prepare
and file a preliminary Proxy/Information Statement with the Commission and will
use its best efforts to respond to the comments of the Commission in connection
therewith and to furnish all information required to prepare the definitive
Proxy/Information Statement (including, without limitation, financial statements
and supporting schedules and certificates and reports of independent public
accountants). Promptly after the expiration or termination of the Offer, if
required by the VSCA or the Company's Amended and Restated Articles of
Incorporation (as amended) in order to consummate the Merger, the Company will
cause the definitive Proxy/Information Statement to be mailed to the
stockholders of the Company and, if necessary, after the definitive
Proxy/Information Statement
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shall have been so mailed, promptly circulate amended, supplemental or
supplemented proxy material and, if required in connection therewith, resolicit
proxies. The Company will not use any proxy materials in connection with the
meeting of its stockholders without Parent's prior approval, which approval
shall not be unreasonably withheld. The Proxy/Information Statement will comply
in all material respects with the provisions of applicable federal securities
laws and, on the date filed with the Commission and on the date first sent to
the Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by Parent and Sub for
inclusion in the Proxy/Information Statement.
4.5 STOCKHOLDER APPROVAL. Promptly after the expiration or termination
of the Offer, if required by the VSCA or the Company's Amended and Restated
Articles of Incorporation (as amended) in order to consummate the Merger, the
Company, acting through its Board of Directors shall, in accordance with
applicable law, call a special meeting of the holders of Common Stock for the
purpose of voting upon this Agreement and the Merger and the Company agrees that
this Agreement and the Merger shall be submitted at such special meeting. The
Company shall use its reasonable efforts to solicit from its stockholders
proxies, and shall take all other action necessary and advisable, to secure the
vote of stockholders required by applicable law or the Company's Amended and
Restated Articles of Incorporation (as amended) to obtain the approval for this
Agreement. Subject to Section 4.7 of this Agreement, the Company agrees that it
will include in this Proxy/Information Statement the recommendation of its Board
of Directors that holders of Common Stock approve and adopt this Agreement and
approve the Merger. Parent will cause all shares of Common Stock owned by Parent
and its subsidiaries to be voted in favor of the Merger.
4.6 REASONABLE BEST EFFORTS. Subject to the terms and conditions
provided herein, each of the Company, Parent and Sub shall, and the Company
shall cause each of its subsidiaries to, cooperate and use their respective
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to make, or cause to be made, all filings necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
their respective reasonable best efforts to obtain, prior to the Closing Date,
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company and
its subsidiaries as are necessary for consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the Offer and
the Merger. The Company, Parent and Sub shall use their reasonable efforts to
consummate the Merger as promptly as practicable after the Offer Closing.
4.7 NO SOLICITATION OF OTHER OFFERS. (a) From the date of this
Agreement until the Effective Time or the earlier termination of this Agreement
in accordance with Article VI, neither the Company nor any of its subsidiaries,
shall, directly or indirectly, take (and the Company shall not authorize or
permit its or its subsidiaries' officers, directors, employees, representatives,
consultants, investment bankers, attorneys, accountants or other agents or
affiliates, to so take) any action to (i) solicit, initiate, encourage or take
any other action to
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facilitate the submission of any Acquisition Proposal, or (ii) participate in
any way in discussions or negotiations with, or, furnish any information
(whether public or nonpublic), to any Person (other than Parent or Sub) in
connection with an Acquisition Proposal; PROVIDED, HOWEVER, that the Company may
take any action described in clause (ii) above, if (A) such action is taken in
connection with an unsolicited Acquisition Proposal, (B) the Board of Directors
believes in its good faith judgment (based on the advice of its financial and
legal advisors) that failing to take such action would constitute a breach of
its fiduciary duties and (C) in the case of the disclosure of nonpublic
information relating to the Company in connection with an Acquisition Proposal,
the disclosure of such information is covered by a confidentiality agreement
that provides substantially the same protection to the Company as is afforded by
the Parent Confidentiality Agreement.
In addition, neither the Board of Directors of the Company nor any
committee thereof shall withdraw or modify in a manner adverse to Parent or Sub
the approval and recommendation of the Offer and this Agreement or approve or
recommend any Acquisition Proposal, provided that the Board of Directors (or a
committee thereof) may, prior to the acceptance for payment of shares of Common
Stock pursuant to the Offer, recommend to its stockholders an unsolicited
Acquisition Proposal and in connection therewith withdraw or modify its approval
or recommendation of the Offer or the Merger if (i) the Board of Directors of
the Company has determined in its good faith judgment (based on the advice of
its financial and legal advisors) that the unsolicited Acquisition Proposal is a
Superior Proposal, and (ii) simultaneously with such withdrawal, modification or
recommendation, the Company terminates this Agreement in accordance with Section
6.1(e) and pays to Parent the break-up fee in accordance with Section 6.3. Any
actions permitted under, and taken in compliance with, this Section 4.7 shall
not be deemed a breach of any other covenant or agreement of such party
contained in this Agreement. It is understood and agreed that for all purposes
of this Section 4.7 any actions taken by the Company or its subsidiaries or
their officers, directors, employees, representatives, consultants, investment
bankers, attorneys, accountants or other agents or affiliates prior to the date
hereof in soliciting, encouraging, initiating, facilitating or participating in
any discussions relating to any Acquisition Proposal shall not be construed to
render an Acquisition Proposal received after the date hereof a solicited
Acquisition Proposal.
The Company will promptly notify Parent orally and in writing of
any Acquisition Proposal or any inquiries with respect thereto. Any such written
notification will include the identity of the Person making such inquiry or
Acquisition Proposal and a description of the material terms of such Acquisition
Proposal (or the nature of the inquiry) and will indicate whether the Company is
providing or intends to provide the Person making the Acquisition Proposal with
access to nonpublic information relating to the Company or any of its
subsidiaries. The Company will, to the extent reasonably practicable, also
promptly inform Parent of any material change in the details (including
amendments or proposed amendments) of any such request or Acquisition Proposal.
In the event that the Board of Directors of the Company determines that an
Acquisition Proposal is a Superior Proposal and desires to terminate this
Agreement pursuant to Section 6.1(e), it will give Parent written notice of its
intention to terminate this Agreement no later than three business days in
advance of any date that it intends to terminate this Agreement. During that
three business day period, Parent will have the right, by giving written notice
to the Company, to match the terms of such Superior Proposal. If Parent
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notifies the Company within such three business day period that it agrees to
match the terms of the Superior Proposal, the Company will forthwith cease any
discussion with the Person making the Superior Proposal, and Parent and the
Company will promptly incorporate the terms of the Superior Proposal in this
Agreement. Except for such amendments, the provisions of this Agreement
(including the provisions of this Section 4.7) will remain in full force and
effect.
"Acquisition Proposal" shall mean any proposal or offer from any
Person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company or any of its subsidiaries (other
than investors in the ordinary course of business) or of over 20% of any class
of equity securities of the Company or any of its subsidiaries or any tender
offer or exchange offer that if consummated would result in any Person
beneficially owning more than 20% of any class of equity securities of the
Company or any of its subsidiaries, or any merger, consolidation, business
combination, sale of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company and taken as a whole
its subsidiaries other than the transactions contemplated by this Agreement.
"Superior Proposal" shall mean a bona fide Acquisition Proposal on terms which a
majority of the members of the Board of Directors of the Company determines in
its good faith judgment (based on the advice of its financial and legal
advisors) to be more favorable to the Company and its stockholders than the
transactions contemplated hereby.
(b) Immediately following the purchase of shares of Common Stock
pursuant to the Offer, the Company will request each Person which has heretofore
executed a confidentiality agreement in connection with its consideration of
acquiring the Company or any portion thereof other than Parent to return all
confidential information heretofore furnished to such Person by or on behalf of
the Company.
(c) Nothing contained in this Section 4.7 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders if, in the opinion of the Board of
Directors of the Company, after consultation with counsel, failure to so
disclose would be inconsistent with its fiduciary duties to the Company's
stockholders under applicable law; PROVIDED that the Company does not, except as
permitted by this Section 4.7, withdraw or modify, or propose to withdraw or
modify, its position with respect to the Offer or the Merger or approve or
recommend, or propose to approve or recommend, any Acquisition Proposal.
4.8 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Parent of: (a) any notice of, or other communication relating to, a
material default or event that, with notice or lapse of time or both, would
become a material default, received by the Company or any of its subsidiaries
subsequent to the date of this Agreement and prior to the Closing Date, under
any material contract to which the Company or any of its subsidiaries is a party
or is subject; (b) any material notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement; (c) any action, suit, claim or
proceeding commenced against or, to the knowledge of the Company, any material
threat of an action, suit, claim or proceeding made against, or any pending
investigation of the Company that, if pending on the date of this Agreement,
would have been required to be
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disclosed in Schedule 3.1(h) of the Disclosure Letter or that relates to the
transactions contemplated by this Agreement; and (d) any material adverse change
in the Condition of the Company and its subsidiaries taken as a whole or the
occurrence of any event which is reasonably likely to result in any such change.
Each of the Company and Parent shall give prompt notice to the other party of
any notice or other communication from any third party alleging that the consent
of such third party is or may be required in connection with the transactions
contemplated by this Agreement.
4.9 HSR ACT. The Company and Parent shall, within five business days
from the date of this Agreement, file Notification and Report Forms under the
HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust Division
of the Department of Justice (the "Antitrust Division") and shall use their best
efforts to respond as promptly as practicable to all inquiries received from the
FTC or the Antitrust Division for additional information or documentation.
4.10 EMPLOYEE BENEFITS. Parent agrees that, during the period
commencing at the Effective Time and ending on the second anniversary thereof,
the employees (and former employees) of the Company and its subsidiaries will
continue to be provided with employee benefits and benefit plans no less
favorable than those in the aggregate provided by the Company and its
subsidiaries as of the Effective Time. Parent will, and will cause the Surviving
Corporation to, honor employee (or former employee) benefit obligations and
contractual rights existing as of the Effective Time and all employment,
incentive and deferred compensation or severance agreements, plans or policies
adopted by the Board of Directors of the Company (or any committee or
subcommittee thereof) prior to the date hereof in accordance with their terms,
in each case to the extent disclosed in the Disclosure Letter. Parent will
provide employees of the Company and its subsidiaries with credit for service
with the Company or any of its subsidiaries or predecessors prior to the
Effective Time for purposes of determining eligibility to participate vesting,
benefits and benefit accrual under any employee benefit plans of Parent or its
subsidiaries. Employees of the Company and its subsidiaries shall not be subject
to pre-existing condition limitations, proof of insurability requirements, or
any similar conditions or requirements under health benefit plans maintained by
Parent or its subsidiaries that would delay commencement of an employee's
participation in or limit an employee's level of coverage under, any of the
health benefit plans of Parent or its subsidiaries. Subject to the action taken
by the Board of Directors with respect to the Salary Continuation Agreements
Trust as set forth in Section 1.1.(c) and from and after the Effective Time, the
Surviving Corporation shall assume and fully discharge, and Parent shall
guarantee the performance of, all obligations of the Company (and the Surviving
Corporation) under the salary continuation agreements listed on Appendix A of
the Salary Continuation Agreements Trust or on Schedule 3.1(i) of the Disclosure
Letter (the "Salary Continuation Agreements"). The Company, Parent and its
subsidiaries (including the Surviving Corporation) shall not amend or terminate
any of the Salary Continuation Agreements at any time, shall continue to make
sufficient cash deposits into the Salary Continuation Agreements Trust to permit
the trustee to pay all premiums required to be paid pursuant to life insurance
contracts held in the Salary Continuation Agreements Trust and shall not
directly or indirectly take any action that would in any way diminish or reduce
the cash surrender value of such life insurance contracts (including, but not
limited to, borrowing against the cash surrender value of the life insurance
contracts).
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4.11 DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION. (a) The
articles of incorporation and the by-laws of the Surviving Corporation shall
contain the provisions with respect to indemnification and exculpation from
liability set forth in the Company's Amended and Restated Articles of
Incorporation (as amended) and By-Laws on the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who on or prior to the Effective Time were
directors, officers, employees or agents of the Company, unless such
modification is required by law.
(b) For six years from the Effective Time, Parent shall either (x)
maintain in effect the Company's current directors' and officers' liability
insurance covering those persons who are currently covered on the date of this
Agreement by the Company's directors' and officers' liability insurance policy
(a copy of which has been heretofore delivered to Parent) (the "Indemnified
Parties"); PROVIDED, HOWEVER, that in no event shall Parent be required to
expend in any one year an amount in excess of 200% of the annual premiums
currently paid by the Company for such insurance which the Company represents to
be $107,000 for the twelve month period ending December 31, 1999; and, PROVIDED,
FURTHER, that if the annual premiums of such insurance coverage exceed such
amount, Parent shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount and to give prompt written notice
of any reduction in the amount or scope of coverage resulting therefrom to the
directors and officers affected thereby; PROVIDED FURTHER, that Parent may
substitute for such Company policies, policies with at least the same coverage
containing terms and conditions which are no less advantageous and provided that
said substitution does not result in any gaps or lapses in coverage with respect
to matters occurring prior to the Effective Time or (y) cause the Parent's,
directors' and officers' liability insurance then in effect to cover those
persons who are covered on the date of this Agreement by the Company's
directors' and officers' liability insurance policy with respect to those
matters covered by the Company's directors' and officers' liability policy.
(c) Parent agrees, from and after the date of purchase of shares
of Common Stock pursuant to the Offer, to indemnify all Indemnified Parties to
the fullest extent permitted by applicable law with respect to all acts and
omissions arising out of such individuals' services as officers, directors,
employees or agents of the Company or any of its subsidiaries or as trustees or
fiduciaries of any plan for the benefit of employees, or otherwise on behalf of,
the Company or any of its subsidiaries, occurring prior to the Effective Time
including, without limitation, the transactions contemplated by this Agreement.
Without limitation of the foregoing, in the event any such Indemnified Party is
or becomes involved in any capacity in any action, proceeding or investigation
in connection with any matter, including without limitation, the transactions
contemplated by this Agreement, occurring prior to, and including, the Effective
Time, Parent, from and after the date of purchase of shares of Common Stock
pursuant to the Offer, will pay as incurred such Indemnified Party's legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith. Parent shall pay all expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing this
Section 4.11 or any action involving an Indemnified Party resulting from the
transactions contemplated by this Agreement. If for any reason the
indemnification provided for in this Section 4.11 is unavailable with respect to
any Indemnified Party or insufficient to hold him or her harmless with respect
to any such loss, claim, damage or liability, then Parent shall contribute to
the
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<PAGE> 29
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect (i)
the relative economic interests of the Company and its affiliates on the one
hand and Parent on the other in connection with the Offer and the Merger to
which such loss, claim, damage or liability relates, (ii) the relative fault of
the Company and its affiliates on the one hand and Parent on the other with
respect to such loss, claim, damage or liability, and (iii) any other relevant
equitable considerations.
(d) This Section 4.11 shall survive the consummation of the
Merger, is intended to benefit the Company, Parent, the Surviving Corporation
and the Indemnified Parties, and shall be binding on all successors and assigns
of Parent and the Surviving Corporation.
4.12 FINANCING. Parent shall provide Sub with the funds necessary to
consummate the Offer and the Merger and the transactions contemplated hereby in
accordance with the terms hereof.
4.13 PARENT GUARANTEE. Parent hereby guarantees the performance of
all of Sub's obligations under this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.1 CONDITIONS PRECEDENT TO OBLIGATION OF PARENT, SUB AND THE COMPANY.
The respective obligations of Parent and Sub, on the one hand, and the Company,
on the other hand, to effect the Merger are subject to the satisfaction or
waiver (subject to applicable law) at or prior to the Closing Date of each of
the following conditions:
(a) APPROVAL OF COMPANY'S STOCKHOLDERS. To the extent required by
applicable law or the Company's Amended and Restated Articles of Incorporation
(as amended), this Agreement and the Merger shall have been approved and adopted
by holders of at least 70% of the Common Stock of the Company in accordance with
applicable law (if required by applicable law) or the Company's Amended and
Restated Articles of Incorporation (as amended);
(b) HSR ACT. Any waiting period (and any extension thereof) under
the HSR Act applicable to the Merger shall have expired or been terminated;
(c) INJUNCTIONS. No preliminary or permanent injunction or other
order shall have been issued by any court or by any governmental or regulatory
agency, body or authority which prohibits the consummation of the Offer or the
Merger and the transactions contemplated by this Agreement and which is in
effect on the Closing Date; PROVIDED, HOWEVER, that, in the case of a decree,
injunction or other order, each of the parties shall have used reasonable
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any decree, injunction or other order that may be
entered;
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<PAGE> 30
(d) PAYMENT FOR COMMON STOCK. Sub shall have accepted for payment
and paid for the shares of Common Stock tendered pursuant to the Offer; and
(e) STATUTES. No statute, rule, regulation, executive order, decree
or order of any kind shall have been enacted, entered, promulgated or enforced
by any court or governmental authority which prohibits the consummation of the
Offer or the Merger or has the effect of making the purchase of Common Stock
illegal.
5.2 CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY. The obligation
of the Company to effect the Merger is also subject to the satisfaction or
waiver, at or prior to the Closing Date, of the following condition:
(a) PERFORMANCE BY PARENT AND SUB. Each of the Parent and Sub shall
have performed in all material respects all obligations and agreements, and
complied in all material respects with all covenants and conditions, contained
in Sections 1.3 and 2.4 of this Agreement to be performed or complied with by it
prior to the Closing Date.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether before or after approval of the Merger by the Company's stockholders:
(a) by mutual written consent of the Company, on the one hand, and
of Parent and Sub, on the other hand;
(b) by either Parent, on the one hand, or the Company, on the other
hand, if any governmental or regulatory agency shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, shares of
Common Stock pursuant to the Offer or the Merger and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by either Parent, on the one hand, or the Company, on the other
hand, if the Effective Time shall not have occurred within six months after
commencement of the Offer unless the Effective Time shall not have occurred
because of a material breach of any representation, warranty, obligation,
covenant, agreement or condition set forth in this Agreement on the part of the
party seeking to terminate this Agreement;
(d) by Parent, on the one hand, or the Company, on the other hand,
if the Offer is terminated or expires in accordance with its terms without Sub
having purchased any Common Stock thereunder due to a failure of any of the
conditions set forth in Annex A hereto to be satisfied, unless such termination
or expiration has been caused by or results from the
30
<PAGE> 31
failure of the party seeking to terminate this Agreement to perform in any
material respect any of its respective covenants or agreements contained in this
Agreement;
(e) subject to the provisions of Section 6.3, by either Parent, on
the one hand, or the Company, on the other hand, if the Board of Directors of
the Company determines that an Acquisition Proposal will result in a Superior
Proposal and the Board believes (and has been advised by counsel) that a failure
to terminate this Agreement and enter into an agreement to effect the Superior
Proposal would constitute a breach of its fiduciary duties;
(f) prior to the consummation of the Offer, by the Company, if (i)
any of the representations and warranties of Parent or Sub contained in this
Agreement were untrue or incorrect in any material respect when made or have
since become, and at the time of termination remain, incorrect in any material
respect, or (ii) Parent or Sub shall have breached or failed to comply in any
material respect with any of their respective obligations, covenants or
agreements under this Agreement, including, without limitation, their obligation
to commence the Offer within the time period required by Section 1.1 of this
Agreement; and
(g) by the Company, if Parent or Sub shall have terminated the
Offer prior to the Offer Closing, the Offer is terminated or expires without Sub
having purchased any shares of Common Stock or if Sub or Parent fails to
purchase validly tendered shares of Common Stock in violation of the terms and
conditions of the Offer or this Agreement.
6.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 6.1 hereof by Parent or Sub, on the one hand, or
the Company, on the other hand, written notice thereof shall forthwith be given
to the other party or parties specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of Parent, Sub or
the Company, except that Section 4.2, 6.3, 7.1 and this Section 6.2 hereof shall
survive any termination of this Agreement. Nothing in this Section 6.2 shall
relieve any part to this Agreement of liability for breach of this Agreement.
6.3 BREAK-UP FEE. (i) If this Agreement is terminated by the
Company in accordance with Section 6.1 (e); (ii) if the Board of Directors of
the Company fails to recommend, withdraws, modifies or changes its
recommendation of the Offer or the Merger in any respect adverse to Parent or
Sub, or has resolved to do so, for any reason other than a breach by Parent or
Sub in any material respect of its representations or warranties contained in
this Agreement or a failure by Parent or Sub to perform in any material respect
any of its covenants or agreements contained in this Agreement; or (iii) if,
prior to the purchase of shares of Common Stock by Sub, the Company violates its
obligations under Section 4.7 in any material respect and thereafter the Company
enters into an agreement to effect a Superior Proposal, then the Company shall
pay to Parent in same day funds a fee of $5,000,000, in the case of clause (i),
within two business days after the termination of this Agreement, in the case of
clause (ii), within two business days after the withdrawal, modification or
change of the recommendation and, in the case of clause (iii), within two
business days after the execution of an agreement referred to in such clause.
Payment of the $5,000,000 fee by the Company shall be Parent and Sub's
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<PAGE> 32
exclusive remedy against the Company for any of the matters referred to in
clauses (i), (ii) or (iii) above.
ARTICLE VII
MISCELLANEOUS
7.1 FEES AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses.
7.2 REPRESENTATIONS AND WARRANTIES. The respective representations and
warranties of the Company, on the one hand, and Parent and Sub, on the other
hand, contained herein or in any certificates or other documents delivered prior
to or at the Closing shall not be deemed waived or otherwise affected by any
investigation made by any party. Each and every such representation and warranty
shall expire with, and be terminated and extinguished by, the Closing and
thereafter none of the Company, Parent or Sub shall be under any liability
whatsoever with respect to any such representation or warranty. This Section 7.2
shall have no effect upon any other obligation, covenant or agreement of the
parties hereto, whether to be performed before or after the Effective Time.
7.3 EXTENSION; WAIVER. Subject to the provisions of Section 1.1 hereof,
at any time prior to the Effective Time, the parties hereto, by action taken by
or on behalf of the respective Boards of Directors of the Company, Parent or
Sub, may (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein by any other applicable party or
in any document, certificate or writing delivered pursuant hereto by any other
applicable party or (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
7.4 PUBLIC ANNOUNCEMENTS. The Company, on the one hand, and Parent and
Sub, on the other hand, agree to consult promptly with each other prior to
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated hereby, and shall not issue any such press
release or make any such public statement prior to such consultation and review
by the other party of a copy of such release or statement, unless required by
applicable law. The Company will not issue any press release or make any public
statement that might constitute the commencement of the Offer without the prior
written consent of Parent.
7.5 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
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<PAGE> 33
(a) if to the Company to it at:
O'Sullivan Corporation
1944 Valley Avenue
Winchester, VA 22601
Attention: Chief Financial Officer
with a copy to:
McGuire, Woods, Battle & Boothe LLP
One James Center
901 East Cary Street
Richmond, VA 23219
Attention: Robert L. Burrus, Jr., Esq.
(b) if to either Parent or Sub, to it at:
The Geon Company
One Geon Center
Avon Lake, Ohio 44012-0122
Attention: Chief Executive Officer
with a copy to:
The Geon Company
One Geon Center
Avon Lake, Ohio 44012-0122
Attention: General Counsel
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing thereof, except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.6 ENTIRE AGREEMENT. This Agreement, the Disclosure Letter, the Parent
Confidentiality Agreement and the Annex and other documents referred to herein
or delivered pursuant hereto, collectively contain the entire understanding of
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings, oral and written, with
respect thereto.
7.7 BINDING EFFECT; BENEFIT; ASSIGNMENT. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interest or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, which
consent shall not be unreasonably withheld in the case of an assignment to
another direct or indirect
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<PAGE> 34
wholly-owned subsidiary of Parent for purposes of avoiding recognition of
taxable gain or loss for federal income tax purposes by either Sub or the
Company in connection with the Merger. It is understood and agreed that any
permitted assignment will not cause Parent or Sub to be relieved of its
obligations under this Agreement and that the Surviving Corporation (whether the
Surviving Corporation is Sub or any other direct or indirect wholly-owned
subsidiary) shall have all the obligations of the Surviving Corporation
specified in this Agreement. Nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, expect for Sections 4.10
and 4.11, which are intended to be for the benefit of the persons referred to
therein, and may be enforced by such persons.
7.8 FURTHER ACTIONS. Each of the parties hereto agrees that, subject to
its legal obligations, it will use its reasonable best efforts to fulfill all
conditions precedent specified herein, to the extent that such conditions are
within its control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
7.9 HEADINGS. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only, do not constitute
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement.
7.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
7.11 APPLICABLE LAW. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia, without regard to the conflict or choice of laws
rules thereof.
7.12 SEVERABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
7.13 "PERSON" DEFINED. "Person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, a limited liability
company, an unincorporated organization, a group and a government or other
department or agency thereof.
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<PAGE> 35
IN WITNESS WHEREOF, each of Parent, Sub and the Company has caused this
Agreement to be executed by its respective officers thereunto duly authorized,
all as of the date first above written.
THE GEON COMPANY
By: /s/ Gregory L. Rutman
----------------------------------
Name: Gregory L. Rutman
Title: Vice President, General Counsel
and Secretary
TGC AQUISITION CORPORATION
By: /s/ Donald P. Knechtges
----------------------------------
Name: Donald P. Knechtges
Title: Chairman, President and Chief
Executive Officer
O'SULLIVAN CORPORATION
By: /s/ John S. Campbell
----------------------------------
Name: John S. Campbell
Title: President and Chief Executive
Officer
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<PAGE> 36
ANNEX A
-------
to
Agreement and Plan of Merger
----------------------------
The capitalized terms used in this Annex A shall have the
meanings set forth in the Agreement to which it is annexed, except that the term
"Merger Agreement" shall be deemed to refer to the Agreement to which this Annex
A is appended and "Purchaser" shall be deemed to refer to Sub.
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the Commission, including Rule 14e-1c under the Exchange Act,
pay for any shares of Common Stock tendered and may terminate or amend the Offer
in accordance with the Merger Agreement and may postpone the acceptance of, and
payment for, shares of Common Stock, if (i) there shall not have been validly
tendered and not withdrawn prior to the expiration of the Offer a number of
shares of Common Stock which represent at least 70% of the total voting power of
all shares of capital stock of the Company outstanding on a fully diluted basis
(the "Minimum Condition"), (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated or (iii) at any time on or after the
date of the Merger Agreement and at or before the expiration date of the Offer
(as the same may be extended from time to time) any of the following shall
occur:
(a) any court or domestic government or governmental authority or
agency shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree
or injunction or other order or the Antitrust Division or the
Federal Trade Commission has indicated to Parent and the
Company that it may seek to obtain a decree, injunction or
other order which (i) makes illegal, materially delays or
otherwise directly or indirectly materially restrains or
prohibits the Offer or the Merger, (ii) prohibits or
materially limits the ownership or operation by Parent or
Purchaser of all or any material portion of the business or
assets of the Company or compels Parent or Purchaser to
dispose of all or any material portion of the business or
assets of Parent or Purchaser or the Company, or imposes any
limitations on the ability of Parent or Purchaser to conduct
its business or own such assets, (iii) imposes limitations on
the ability of Parent or Purchaser effectively to exercise
full rights of ownership of the shares of Common Stock,
including, without limitation, the right to vote any shares of
Common Stock acquired or owned by Purchaser or Parent on all
matters properly presented to the Company's stockholders, (iv)
requires divestiture by Parent or Purchaser of any shares of
Common Stock, or (v) otherwise materially adversely affects
the Condition of the Company and its subsidiaries taken as a
whole;
(b) there shall have occurred (i) any general suspension greater
than 24 hours of trading in, or limitation on prices for,
securities on any national securities exchange or in the over
the-counter market, (ii) any material change in United States
or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (iii) a declaration of a
banking moratorium or any
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<PAGE> 37
suspension of payments in respect of banks in the United
States, or (iv) a declaration of war by the United States
having a material adverse effect on the Company or materially
adversely affecting (or materially delaying) the consummation
of the Offer, or (v) in the case of any of the situations
described in clauses (i) through (iii) inclusive existing at
the date of commencement of the Offer, a material acceleration
or worsening thereof;
(c) all consents, registrations, approvals, permits,
authorizations, notices, reports or other filings required to
be obtained or made by the Company, Parent or Purchaser with
or from any governmental or regulatory entity in connection
with the execution, delivery and performance of the Merger
Agreement, the Offer and the consummation of the transactions
contemplated by the Merger Agreement shall not have been made
or obtained and such failure could reasonably be expected to
have a material adverse effect on the Condition of the Company
and its subsidiaries taken as a whole or could be reasonably
likely to prevent or materially delay consummation of the
transactions contemplated by the Merger Agreement;
(d) any representation or warranty made by the Company in the
Merger Agreement (i) (A) was untrue or incorrect in any
material respect when made or (B) has become untrue or
incorrect in any material respect and (ii) at the time of
termination or amendment remains untrue or incorrect in any
material respect;
(e) there shall have been a breach by the Company of any of its
covenants or agreements in any material respect contained in
the Merger Agreement;
(f) the Company's Board of Directors shall have withdrawn,
modified or amended in any respect adverse to Parent or
Purchaser its recommendation of the Offer or the Merger, or
shall have resolved to do so; or
(g) the Merger Agreement shall have been terminated in
accordance with its terms;
which, in the reasonable judgment of Purchaser, in any such case and regardless
of the circumstances giving rise to any such condition, would make it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser
and may be asserted by Purchaser, or may be waived by Purchaser, in whole or in
part at any time and from time to time in its sole discretion; PROVIDED,
HOWEVER, that without the consent of the Company, Parent and Purchaser shall not
waive the Minimum Condition.
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<PAGE> 1
Exhibit (C)(3)
SHARE TENDER AGREEMENT
This SHARE TENDER AGREEMENT (this "Agreement"), dated as of June 2,
1999, is made and entered into by and among THE GEON COMPANY, a Delaware
corporation (the "Parent"), TGC ACQUISITION CORPORATION, a Virginia corporation
and wholly-owned subsidiary of the Parent (the "Sub"), and ARTHUR H. BRYANT II
individually and in the capacities indicated on the signature page (the
"Shareholder"), a shareholder of O'SULLIVAN CORPORATION, a Virginia corporation
(the "Company").
WHEREAS, the Shareholder is the beneficial owner or as set forth on
Exhibit A is authorized to act as the representative of such beneficial owner,
of the shares listed and described on Exhibit A attached hereto (the "Shares"),
of Common Stock, $1.00 par value per share, of the Company (the "Common Stock"),
and holds options (the "Options") to acquire 14,000 shares of Common Stock
granted pursuant to the Company's 1995 Outside Directors Stock Option Plan;
WHEREAS, the Parent, the Sub and the Company have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides, among other things, that the Sub will commence a
tender offer for all of the Common Stock (the "Offer") at a price of $12.25 per
share net to the seller in cash (the "Offer Price") and thereafter, subject to
certain conditions, be merged with and into the Company; and
WHEREAS, as a condition to the willingness of the Parent and the Sub to
enter into the Merger Agreement, the Parent and the Sub have requested that the
Shareholder agree, and in order to induce the Parent and the Sub to enter into
the Merger Agreement, the Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The Shareholder
represents and warrants to the Parent and the Sub as follows:
(a) The Shareholder is the beneficial owner of, or as set forth on
Exhibit A is authorized to act as the representative of such beneficial owner,
and has, or such beneficial owner has, as the case may be, good and marketable
title to, all of the Shares, free and clear of any mortgage, pledge,
hypothecation, claim, security interest, charge, encumbrance, title defect,
title retention agreement, voting trust agreement, interest, option, call,
demand, subscription, lien, charge or similar restriction or limitation or any
other rights of others, including any restriction on the right to vote, sell or
otherwise dispose of the Shares (each, an "Encumbrance"), except as set forth in
this Agreement.
<PAGE> 2
(b) Except for the Shares and the Options, the Shareholder does not,
directly or indirectly, beneficially own or have any option, warrant or other
right to acquire any securities of the Company that are or may by their terms
become entitled to vote on any securities that are convertible or exchangeable
into or exercisable for any securities of the Company that are or may by their
terms become entitled to vote, nor, except as set forth on Exhibit A, is the
Shareholder subject to any contract, commitment, arrangement, understanding or
relationship, other than this Agreement, that allows or obligates him to vote or
acquire any shares of Common Stock or other securities of the Company. Except as
set forth on Exhibit A, the Shareholder holds power to vote the Shares and has
not granted a proxy to any Person to vote the Shares, except as provided in this
Agreement.
(c) The Shareholder is competent to and has sufficient capacity to
execute and deliver this Agreement and to perform the Shareholder's obligations
hereunder. This Agreement has been duly executed and delivered by the
Shareholder and, assuming the due authorization, execution and delivery of this
Agreement by the Parent and the Sub, is a valid and binding obligation of the
Shareholder enforceable against the Shareholder in accordance with its terms,
except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
(d) Neither the execution and delivery of this Agreement by the
Shareholder nor the performance by the Shareholder of the Shareholder's
obligations hereunder will conflict with, result in a violation or breach of, or
constitute a default (or an event that, with notice or lapse of time or both,
would result in a default) or give rise to any right of termination, amendment,
cancellation or acceleration or result in the creation of any Encumbrance on any
of the Shares under (i) any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Shareholder is a party or by
which the Shareholder is bound or (ii) any injunction, judgment, writ, decree,
order or ruling applicable to the Shareholder.
3. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE SUB. The Parent
and the Sub represent and warrant to the Shareholder as follows:
(a) Each of the Parent and the Sub is a corporation duly organized,
validly existing and in good standing under the laws of their respective states
of incorporation, has the requisite corporate power and authority to execute and
deliver this Agreement, to perform their respective obligations hereunder and to
consummate the transactions contemplated hereby, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement.
(b) This Agreement has been duly executed and delivered by the
Parent and the Sub and, assuming the due execution and delivery of this
Agreement by the Shareholder, is a valid and binding obligation of each of the
Parent and the Sub, enforceable against each of them in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of
2
<PAGE> 3
creditors' rights generally and (ii) laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.
(c) Neither the execution and delivery of this Agreement nor the
performance by the Parent and the Sub of their respective obligations hereunder
will conflict with, result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would result in a
default) or give rise to any right of termination, amendment, cancellation or
acceleration under, (i) their respective charter or by-laws, (ii) any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which the Parent or the Sub is a party or by which the Parent or the Sub is
bound or (iii) any injunction, judgment, writ, decree, order or ruling
applicable to the Parent or the Sub.
(d) Neither the execution and delivery of this Agreement nor the
performance by the Parent and the Sub of their respective obligations hereunder
will violate any law, decree, statute, rule or regulation applicable to the
Parent or the Sub or require any order, consent, authorization or approval of,
filing or registration with, or declaration or notice to, any court,
administrative agency or other governmental body or authority, other than any
required notices or filings pursuant to the HSR Act or federal or state
securities laws.
4. TRANSFER OF THE SHARES. During the term of this Agreement, except as
otherwise provided herein, the Shareholder will not (a) tender into any tender
or exchange offer (other than the Offer) or otherwise sell, transfer, pledge,
assign, hypothecate or otherwise dispose of, or encumber with any Encumbrance,
any of the Shares, (b) exercise any of the Options (except to the extent
permitted under Section 2.6 of the Merger Agreement), (c) deposit the Shares
into a voting trust, enter into a voting agreement or arrangement with respect
to the Shares or grant any proxy or power of attorney with respect to the
Shares, or (d) enter into any contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition, sale, transfer,
pledge, assignment, hypothecation or other disposition of any interest in or the
voting of any shares of Common Stock or any other securities of the Company.
5. ADJUSTMENTS. In the event of (a) any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of capital
stock or other securities of the Company on, of or affecting the Shares or the
like or any other action that would have the effect of changing the
Shareholder's ownership of the Common Stock or other securities of the Company
or (b) the Shareholder, or any other beneficial owner set forth in Exhibit A,
becoming the beneficial owner of any additional shares of Common Stock or other
securities of the Company, then the terms of this Agreement will apply to the
shares of capital stock held by the Shareholder, or such beneficial owner, as
the case may be, immediately following the effectiveness of the relevant event,
as though they were Shares hereunder. The Shareholder hereby agrees, while this
Agreement is in effect, to promptly notify the Parent of the number of any new
shares of Common Stock or other securities of the Company acquired by the
Shareholder, or such beneficial owner, as the case may be, if any, after the
date hereof.
6. TENDER OF THE SHARES. Subject to the terms and conditions of the
Merger Agreement and provided that this Agreement is not terminated in
accordance with Section 9, the Shareholder will validly tender (and not
withdraw), or cause the record owner of such shares to
3
<PAGE> 4
validly tender (and not withdraw), and sell pursuant to and in accordance with
the terms of the Offer all of the Shares beneficially owned by the Shareholder
or the other beneficial owners set forth on Exhibit A. The Shareholder hereby
agrees and acknowledges that the Sub's obligation to accept for payment and pay
for the Shares in the Offer is subject to all the terms and conditions of the
Offer. Upon the purchase of all of the Shares by the Sub pursuant to the Offer,
this Agreement will terminate in accordance with Section 9.
7. VOTING OF THE SHARES. The Shareholder hereby agrees, so long as this
Agreement remains in effect, to vote all of the Shares (a) in favor of the
approval and adoption of the Merger Agreement and the approval of the
transactions contemplated thereby and (b) against any action or agreement that
would result in a breach of any representation, warranty, covenant or agreement
of the Company contained in the Merger Agreement or would impede, interfere
with, delay or prevent the consummation of the Merger or the purchase of shares
of Common Stock pursuant to the Offer; provided, however, that the provisions of
this Section 7 will not prevent the Shareholder, acting in his capacity as a
director of the Company, to exercise his fiduciary duties, including with
respect to the matters set forth in Article 4.7 of the Merger Agreement.
8. NO SOLICITATION. The Shareholder will not, directly or indirectly,
through any agent, financial advisor, attorney, accountant or other
representative or otherwise, (a) solicit, initiate or take any other action to
facilitate any inquiries or the making of any proposal which constitutes an
Acquisition Proposal, (b) participate in any discussions or negotiations
regarding any Acquisition Proposal, (c) in connection with an Acquisition
Proposal, disclose any nonpublic information relating to the Company or afford
access to the properties, books or records of the Company to any person or (d)
otherwise cooperate in any way with, assist, participate in, facilitate or
encourage any effort or attempt by any other Person to make an Acquisition
Proposal; provided, however, that the provisions of this Section 8 will not
prevent the Shareholder, acting in his capacity as a director of the Company, to
exercise his fiduciary duties, including with respect to the matters set forth
in Article 4.7 of the Merger Agreement.
9. TERMINATION. This Agreement will automatically, without any notice
to or action by any party, terminate (a) upon the earlier to occur of (i) the
purchase of all the Shares pursuant to the Offer in accordance with Section 6 or
(ii) the date the Merger Agreement is terminated in accordance with its terms or
(b) by the mutual written consent of the Shareholder and the Parent.
10. EXPENSES. Except as otherwise expressly provided in this Agreement
or the Merger Agreement, all costs and expenses incurred by any of the parties
hereto in connection with this Agreement, the Merger Agreement and the
transactions contemplated hereby and thereby will be borne by the party
incurring such costs and expenses.
11. PUBLICITY. The Parent, the Sub and the Shareholder shall consult
with each other before issuing any press release or otherwise making any public
statement with respect to this Agreement and the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement before such consultation, except as may be required by applicable law
or stock exchange rules.
4
<PAGE> 5
12. ENFORCEMENT OF THE AGREEMENT. The Shareholder acknowledges and
agrees 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 Parent and the Sub
will be entitled to an injunction, restraining order or other equitable remedy
to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which the Parent or
the Sub is entitled at law or in equity.
13. MISCELLANEOUS.
(a) The Shareholder hereby waives any rights of appraisal or rights
to dissent from the Merger that the Shareholder may have under applicable law.
(b) Any provision of this Agreement may be waived at any time by the
party that is entitled to the benefits thereof. No such waiver will be effective
unless in writing and signed by the party or parties sought to be bound thereby.
Any waiver by any party of a breach of any provision of this Agreement will not
operate as or be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Agreement. The failure of a
party to insist upon strict adherence to any term of this Agreement or one or
more sections hereof will not be considered a waiver or deprive that party of
the right thereafter to insist upon strict adherence to that term or any other
term of this Agreement.
(c) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements among the parties with respect to such matters. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified, except
upon the delivery of a written agreement executed by the parties hereto.
(d) This Agreement will be governed by and construed in accordance
with the laws of the Commonwealth of Virginia, notwithstanding any conflict of
law provision to the contrary.
(e) The descriptive headings contained herein are for convenience
and reference only and will not affect in any way the meaning or interpretation
of this Agreement.
(f) All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered in accordance with Section
7.5 of the Merger Agreement, addressed, in the case of the Parent or the Sub, to
the address of the Parent set forth in Section 7.5 of the Merger Agreement and,
in the case of the Shareholder, to the address set forth on the signature page
of this Agreement.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original but all of which shall together
constitute but one and the same agreement.
5
<PAGE> 6
(h) This Agreement is binding upon and is solely for the benefit of
the parties hereto and their respective successors, legal representatives and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned by any of the parties hereto
without the prior written consent of the other parties.
(i) If any term or provision of this Agreement is determined to be
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 and shall in no way be affected, impaired or
invalidated. 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.
(j) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity will be cumulative and
not alternative, and the exercise of any thereof by either party will not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written above.
THE GEON COMPANY
BY: /s/ Gregory L. Rutman
----------------------------------------------------
NAME: Gregory L. Rutman
TITLE: Vice President, General Counsel and Secretary
TGC ACQUISITION CORPORATION
BY: /s/ Donald P. Knechtges
----------------------------------------------------
NAME: Donald P. Knechtges
TITLE: Chairman, President and Chief Executive Officer
ARTHUR H. BRYANT II
/s/ Arthur H. Bryant II
--------------------------------------------------------
ADDRESS: P.O. Box 810
-----------------------------------------------
Irvington, VA 22480
-----------------------------------------------
ARTHUR H. BRYANT II, AS CUSTODIAN FOR
GRAY FAIRFAX BRYANT (MINOR)
/s/ Arthur H. Bryant II
--------------------------------------------------------
ARTHUR H. BRYANT II, AS CUSTODIAN FOR
TAYLOR CARLYLE BRYANT (MINOR)
/s/ Arthur H. Bryant II
--------------------------------------------------------
ARTHUR H. BRYANT II, AS TRUSTEE OF
THE BRYANT FOUNDATION
/s/ Arthur H. Bryant II
--------------------------------------------------------
7
<PAGE> 8
EXHIBIT A
---------
- - 1,249,758 shares owned by Arthur H. Bryant II directly.
- - 8,233 shares as Custodian for Gray Fairfax Bryant (minor).
- - 8,233 shares as Custodian For Taylor Carlyle Bryant (minor).
- - 1,129,860 shares in The Bryant Foundation for which Arthur H. Bryant is
the Trustee.
8
<PAGE> 1
Exhibit (C)(4)
SHARE TENDER AGREEMENT
This SHARE TENDER AGREEMENT (this "Agreement"), dated as of June 2,
1999, is made and entered into by and among THE GEON COMPANY, a Delaware
corporation (the "Parent"), TGC ACQUISITION CORPORATION, a Virginia corporation
(the "Sub"), and MAGALEN O. BRYANT in her capacities as indicated on the
signature page (the "Shareholder"), a shareholder of O'SULLIVAN CORPORATION, a
Virginia corporation (the "Company").
WHEREAS, the Shareholder is the beneficial owner or, as set forth on
Exhibit A, is authorized to act as the representative of such beneficial owner,
of the shares, listed and described on Exhibit A attached hereto (the "Shares")
of Common Stock, $1.00 par value per share, of the Company (the "Common Stock");
WHEREAS, the Parent, the Sub and the Company have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides, among other things, that the Sub will commence a
tender offer for all of the Common Stock (the "Offer") at a price of $12.25 per
share net to the seller in cash (the "Offer Price") and thereafter, subject to
certain conditions, be merged with and into the Company; and
WHEREAS, as a condition to the willingness of the Parent and the Sub to
enter into the Merger Agreement, the Parent and the Sub have requested that the
Shareholder agree, and in order to induce the Parent and the Sub to enter into
the Merger Agreement, the Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The Shareholder
represents and warrants to the Parent and the Sub as follows:
(a) The Shareholder is the beneficial owner of, or, as set forth on
Exhibit A, is authorized to act as the representative of such beneficial owner,
and has, or such beneficial owner has, as the case may be, good and marketable
title to, all of the Shares, free and clear of any mortgage, pledge,
hypothecation, claim, security interest, charge, encumbrance, title defect,
title retention agreement, voting trust agreement, interest, option, call,
demand, subscription, lien, charge or similar restriction or limitation or any
other rights of others, including any restriction on the right to vote, sell or
otherwise dispose of the Shares (each, an "Encumbrance"), except as set forth in
this Agreement.
<PAGE> 2
(b) Except for the Shares, the Shareholder does not, directly or
indirectly, beneficially own or have any option, warrant or other right to
acquire any securities of the Company that are or may by their terms become
entitled to vote on any securities that are convertible or exchangeable into or
exercisable for any securities of the Company that are or may by their terms
become entitled to vote, nor, except as set forth on Exhibit A, is the
Shareholder subject to any contract, commitment, arrangement, understanding or
relationship, other than this Agreement, that allows or obligates her to vote or
acquire any shares of Common Stock or other securities of the Company. Except as
set forth on Exhibit A, the Shareholder holds power to vote the Shares and has
not granted a proxy to any Person to vote the Shares, except as provided in this
Agreement.
(c) The Shareholder is competent to and has sufficient capacity to
execute and deliver this Agreement and to perform the Shareholder's obligations
hereunder. This Agreement has been duly executed and delivered by the
Shareholder and, assuming the due authorization, execution and delivery of this
Agreement by the Parent and the Sub, is a valid and binding obligation of the
Shareholder enforceable against the Shareholder in accordance with its terms,
except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
(d) Neither the execution and delivery of this Agreement by the
Shareholder nor the performance by the Shareholder of the Shareholder's
obligations hereunder will conflict with, result in a violation or breach of, or
constitute a default (or an event that, with notice or lapse of time or both,
would result in a default) or give rise to any right of termination, amendment,
cancellation or acceleration or result in the creation of any Encumbrance on any
of the Shares under (i) any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Shareholder is a party or by
which the Shareholder is bound or (ii) any injunction, judgment, writ, decree,
order or ruling applicable to the Shareholder.
3. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE SUB. The Parent
and the Sub represent and warrant to the Shareholder as follows:
(a) Each of the Parent and the Sub is a corporation duly organized,
validly existing and in good standing under the laws of their respective states
of incorporation, has the requisite corporate power and authority to execute and
deliver this Agreement, to perform their respective obligations hereunder and to
consummate the transactions contemplated hereby, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement.
(b) This Agreement has been duly executed and delivered by the
Parent and the Sub and, assuming the due execution and delivery of this
Agreement by the Shareholder, is a valid and binding obligation of each of the
Parent and the Sub, enforceable against each of them in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of
2
<PAGE> 3
creditors' rights generally and (ii) laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.
(c) Neither the execution and delivery of this Agreement nor the
performance by the Parent and the Sub of their respective obligations hereunder
will conflict with, result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would result in a
default) or give rise to any right of termination, amendment, cancellation or
acceleration under, (i) their respective charter or by-laws, (ii) any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which the Parent or the Sub is a party or by which the Parent or the Sub is
bound or (iii) any injunction, judgment, writ, decree, order or ruling
applicable to the Parent or the Sub.
(d) Neither the execution and delivery of this Agreement nor the
performance by the Parent and the Sub of their respective obligations hereunder
will violate any law, decree, statute, rule or regulation applicable to the
Parent or the Sub or require any order, consent, authorization or approval of,
filing or registration with, or declaration or notice to, any court,
administrative agency or other governmental body or authority, other than any
required notices or filings pursuant to the HSR Act or federal or state
securities laws.
4. TRANSFER OF THE SHARES. During the term of this Agreement, except as
otherwise provided herein, the Shareholder will not (a) tender into any tender
or exchange offer (other than the Offer) or otherwise sell, transfer, pledge,
assign, hypothecate or otherwise dispose of, or encumber with any Encumbrance,
any of the Shares, (b) deposit the Shares into a voting trust, enter into a
voting agreement or arrangement with respect to the Shares or grant any proxy or
power of attorney with respect to the Shares, or (c) enter into any contract,
option or other arrangement or undertaking with respect to the direct or
indirect acquisition, sale, transfer, pledge, assignment, hypothecation or other
disposition of any interest in or the voting of any shares of Common Stock or
any other securities of the Company.
5. ADJUSTMENTS. In the event of (a) any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of capital
stock or other securities of the Company on, of or affecting the Shares or the
like or any other action that would have the effect of changing the
Shareholder's ownership of the Common Stock or other securities of the Company
or (b) the Shareholder, or any other beneficial owner set forth on Exhibit A,
becoming the beneficial owner of any additional shares of Common Stock or other
securities of the Company, then the terms of this Agreement will apply to the
shares of capital stock held by the Shareholder, or such beneficial owner, as
the case may be, immediately following the effectiveness of the relevant event,
as though they were Shares hereunder. The Shareholder hereby agrees, while this
Agreement is in effect, to promptly notify the Parent of the number of any new
shares of Common Stock or other securities of the Company acquired by the
Shareholder, or such beneficial owner, as the case may be, if any, after the
date hereof.
6. TENDER OF THE SHARES. Subject to the terms and conditions of the
Merger Agreement and provided that this Agreement is not terminated in
accordance with Section 9, the Shareholder will validly tender (and not
withdraw), or cause the record owner of such shares to validly tender (and not
withdraw), and sell pursuant to and in accordance with the terms of the
3
<PAGE> 4
Offer all of the Shares beneficially owned by the Shareholder or the other
beneficial owners set forth on Exhibit A. The Shareholder hereby agrees and
acknowledges that the Sub's obligation to accept for payment and pay for the
Shares in the Offer is subject to all the terms and conditions of the Offer.
Upon the purchase of all of the Shares by the Sub pursuant to the Offer, this
Agreement will terminate in accordance with Section 9.
7. VOTING OF THE SHARES. The Shareholder hereby agrees, so long as this
Agreement remains in effect, to vote all of the Shares (a) in favor of the
approval and adoption of the Merger Agreement and the approval of the
transactions contemplated thereby and (b) against any action or agreement that
would result in a breach of any representation, warranty, covenant or agreement
of the Company contained in the Merger Agreement or would impede, interfere
with, delay or prevent the consummation of the Merger or the purchase of shares
of Common Stock pursuant to the Offer.
8. NO SOLICITATION. The Shareholder will not, directly or indirectly,
through any agent, financial advisor, attorney, accountant or other
representative or otherwise, (a) solicit, initiate or take any other action to
facilitate any inquiries or the making of any proposal which constitutes an
Acquisition Proposal, (b) participate in any discussions or negotiations
regarding any Acquisition Proposal, (c) in connection with an Acquisition
Proposal, disclose any nonpublic information relating to the Company or afford
access to the properties, books or records of the Company to any person or (d)
otherwise cooperate in any way with, assist, participate in, facilitate or
encourage any effort or attempt by any other Person to make an Acquisition
Proposal.
9. TERMINATION. This Agreement will automatically, without any notice
to or action by any party, terminate (a) upon the earlier to occur of (i) the
purchase of all the Shares pursuant to the Offer in accordance with Section 6 or
(ii) the date the Merger Agreement is terminated in accordance with its terms or
(b) by the mutual written consent of the Shareholder and the Parent.
10. EXPENSES. Except as otherwise expressly provided in this Agreement
or the Merger Agreement, all costs and expenses incurred by any of the parties
hereto in connection with this Agreement, the Merger Agreement and the
transactions contemplated hereby and thereby will be borne by the party
incurring such costs and expenses.
11. PUBLICITY. The Parent, the Sub and the Shareholder shall consult
with each other before issuing any press release or otherwise making any public
statement with respect to this Agreement and the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement before such consultation, except as may be required by applicable law
or stock exchange rules.
12. ENFORCEMENT OF THE AGREEMENT. The Shareholder acknowledges and
agrees 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 Parent and the Sub
will be entitled to an injunction, restraining order or other equitable remedy
to prevent breaches of this Agreement and to enforce specifically the terms and
4
<PAGE> 5
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which the Parent or
the Sub is entitled at law or in equity.
13. MISCELLANEOUS.
(a) The Shareholder hereby waives any rights of appraisal or rights
to dissent from the Merger that the Shareholder may have under applicable law.
(b) Any provision of this Agreement may be waived at any time by
the party that is entitled to the benefits thereof. No such waiver will be
effective unless in writing and signed by the party or parties sought to be
bound thereby. Any waiver by any party of a breach of any provision of this
Agreement will not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
or one or more sections hereof will not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement.
(c) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements among the parties with respect to such matters. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified, except
upon the delivery of a written agreement executed by the parties hereto.
(d) This Agreement will be governed by and construed in accordance
with the laws of the Commonwealth of Virginia, notwithstanding any conflict of
law provision to the contrary.
(e) The descriptive headings contained herein are for convenience
and reference only and will not affect in any way the meaning or interpretation
of this Agreement.
(f) All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in
accordance with Section 7.5 of the Merger Agreement, addressed, in the case of
the Parent or the Sub, to the address of the Parent set forth in Section 7.5 of
the Merger Agreement and, in the case of the Shareholder, to the address set
forth on the signature page of this Agreement.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original but all of which shall together
constitute but one and the same agreement.
(h) This Agreement is binding upon and is solely for the benefit of
the parties hereto and their respective successors, legal representatives and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned by any of the parties hereto
without the prior written consent of the other parties.
5
<PAGE> 6
(i) If any term or provision of this Agreement is determined to be
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 and shall in no way be affected, impaired or
invalidated. 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.
(j) All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof at law or in equity will be cumulative
and not alternative, and the exercise of any thereof by either party will not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
6
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written above.
THE GEON COMPANY
BY: /s/ Gregory L. Rutman
--------------------------------------------------
NAME: Gregory L. Rutman
TITLE: Vice President, General Counsel and Secretary
TGC ACQUISITION CORPORATION
BY: /s/ Donald P. Knechtges
--------------------------------------------------
NAME: Donald P. Knechtges
TITLE: Chairman, President and Chief Executive Officer
MAGALEN O. BRYANT
/s/ Magalen O. Bryant
------------------------------------------------------
ADDRESS: Lochnau
---------------------------------------------
Box 1050
---------------------------------------------
Middleburg, VA 20118
---------------------------------------------
MAGALEN O. BRYANT, AS CO-TRUSTEE OF
THE EJO TRUST
/s/ Magalen O. Bryant
------------------------------------------------------
7
<PAGE> 8
EXHIBIT A
---------
- - 198,475 shares owned by Magalen O. Bryant directly.
- - 708,861 shares in The EJO Trust for which Magalen O. Bryant is a
co-trustee.
8
<PAGE> 1
Exhibit (C)(5)
SHARE TENDER AGREEMENT
This SHARE TENDER AGREEMENT (this "Agreement"), dated as of June 2,
1999, is made and entered into by and among THE GEON COMPANY, a Delaware
corporation (the "Parent"), TGC ACQUISITION CORPORATION, a Virginia corporation
(the "Sub"), and JOHN C.O. BRYANT (the "Shareholder"), a shareholder of
O'SULLIVAN CORPORATION, a Virginia corporation (the "Company").
WHEREAS, the Shareholder is the beneficial owner of 809,739 shares (the
"Shares") of Common Stock, $1.00 par value per share, of the Company (the
"Common Stock"), and holds options (the "Options") to acquire 11,000 shares of
Common Stock granted pursuant to the Company's 1995 Outside Directors Stock
Option Plan;
WHEREAS, the Parent, the Sub and the Company have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides, among other things, that the Sub will commence a
tender offer for all of the Common Stock (the "Offer") at a price of $12.25 per
share net to the seller in cash (the "Offer Price") and thereafter, subject to
certain conditions, be merged with and into the Company; and
WHEREAS, as a condition to the willingness of the Parent and the Sub to
enter into the Merger Agreement, the Parent and the Sub have requested that the
Shareholder agree, and in order to induce the Parent and the Sub to enter into
the Merger Agreement, the Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The Shareholder
represents and warrants to the Parent and the Sub as follows:
(a) The Shareholder is the beneficial owner of, and has good and
marketable title to, all of the Shares, free and clear of any mortgage, pledge,
hypothecation, claim, security interest, charge, encumbrance, title defect,
title retention agreement, voting trust agreement, interest, option, call,
demand, subscription, lien, charge or similar restriction or limitation or any
other rights of others, including any restriction on the right to vote, sell or
otherwise dispose of the Shares (each, an "Encumbrance"), except as set forth in
this Agreement.
(b) Except for the Shares and the Options, the Shareholder does not,
directly or indirectly, beneficially own or have any option, warrant or other
right to acquire any securities of the Company that are or may by their terms
become entitled to vote on any securities that are
<PAGE> 2
convertible or exchangeable into or exercisable for any securities of the
Company that are or may by their terms become entitled to vote, nor is the
Shareholder subject to any contract, commitment, arrangement, understanding or
relationship, other than this Agreement, that allows or obligates him to vote or
acquire any shares of Common Stock or other securities of the Company. The
Shareholder holds exclusive power to vote the Shares and has not granted a proxy
to any Person to vote the Shares, except as provided in this Agreement.
(c) The Shareholder is competent to and has sufficient capacity to
execute and deliver this Agreement and to perform the Shareholder's obligations
hereunder. This Agreement has been duly executed and delivered by the
Shareholder and, assuming the due authorization, execution and delivery of this
Agreement by the Parent and the Sub, is a valid and binding obligation of the
Shareholder enforceable against the Shareholder in accordance with its terms,
except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
(d) Neither the execution and delivery of this Agreement by the
Shareholder nor the performance by the Shareholder of the Shareholder's
obligations hereunder will conflict with, result in a violation or breach of, or
constitute a default (or an event that, with notice or lapse of time or both,
would result in a default) or give rise to any right of termination, amendment,
cancellation or acceleration or result in the creation of any Encumbrance on any
of the Shares under (i) any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Shareholder is a party or by
which the Shareholder is bound or (ii) any injunction, judgment, writ, decree,
order or ruling applicable to the Shareholder.
3. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE SUB. The Parent
and the Sub represent and warrant to the Shareholder as follows:
(a) Each of the Parent and the Sub is a corporation duly organized,
validly existing and in good standing under the laws of their respective states
of incorporation, has the requisite corporate power and authority to execute and
deliver this Agreement, to perform their respective obligations hereunder and to
consummate the transactions contemplated hereby, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement.
(b) This Agreement has been duly executed and delivered by the
Parent and the Sub and, assuming the due execution and delivery of this
Agreement by the Shareholder, is a valid and binding obligation of each of the
Parent and the Sub, enforceable against each of them in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
(c) Neither the execution and delivery of this Agreement nor the
performance by the Parent and the Sub of their respective obligations hereunder
will conflict with, result in a
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violation or breach of, or constitute a default (or an event that, with notice
or lapse of time or both, would result in a default) or give rise to any right
of termination, amendment, cancellation or acceleration under, (i) their
respective charter or by-laws, (ii) any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which the Parent or the
Sub is a party or by which the Parent or the Sub is bound or (iii) any
injunction, judgment, writ, decree, order or ruling applicable to the Parent or
the Sub.
(d) Neither the execution and delivery of this Agreement nor the
performance by the Parent and the Sub of their respective obligations hereunder
will violate any law, decree, statute, rule or regulation applicable to the
Parent or the Sub or require any order, consent, authorization or approval of,
filing or registration with, or declaration or notice to, any court,
administrative agency or other governmental body or authority, other than any
required notices or filings pursuant to the HSR Act or federal or state
securities laws.
4. TRANSFER OF THE SHARES. During the term of this Agreement, except as
otherwise provided herein, the Shareholder will not (a) tender into any tender
or exchange offer (other than the Offer) or otherwise sell, transfer, pledge,
assign, hypothecate or otherwise dispose of, or encumber with any Encumbrance,
any of the Shares, (b) exercise any of the Options (except to the extent
permitted under Section 2.6 of the Merger Agreement), (c) deposit the Shares
into a voting trust, enter into a voting agreement or arrangement with respect
to the Shares or grant any proxy or power of attorney with respect to the
Shares, or (d) enter into any contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition, sale, transfer,
pledge, assignment, hypothecation or other disposition of any interest in or the
voting of any shares of Common Stock or any other securities of the Company.
5. ADJUSTMENTS. In the event of (a) any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of capital
stock or other securities of the Company on, of or affecting the Shares or the
like or any other action that would have the effect of changing the
Shareholder's ownership of the Common Stock or other securities of the Company
or (b) the Shareholder becoming the beneficial owner of any additional shares of
Common Stock or other securities of the Company, then the terms of this
Agreement will apply to the shares of capital stock held by the Shareholder
immediately following the effectiveness of the relevant event, as though they
were Shares hereunder. The Shareholder hereby agrees, while this Agreement is in
effect, to promptly notify the Parent of the number of any new shares of Common
Stock or other securities of the Company acquired by the Shareholder, if any,
after the date hereof.
6. TENDER OF THE SHARES. Subject to the terms and conditions of the
Merger Agreement and provided that this Agreement is not terminated in
accordance with Section 9, the Shareholder will validly tender (and not
withdraw), or cause the record owner of such shares to validly tender (and not
withdraw), and sell pursuant to and in accordance with the terms of the Offer
all of the Shares beneficially owned by the Shareholder. The Shareholder hereby
agrees and acknowledges that the Sub's obligation to accept for payment and pay
for the Shares in the Offer is subject to all the terms and conditions of the
Offer. Upon the purchase of all of the Shares by the Sub pursuant to the Offer,
this Agreement will terminate in accordance with Section 9.
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<PAGE> 4
7. VOTING OF THE SHARES. The Shareholder hereby agrees, so long as this
Agreement remains in effect, to vote all of the Shares (a) in favor of the
approval and adoption of the Merger Agreement and the approval of the
transactions contemplated thereby and (b) against any action or agreement that
would result in a breach of any representation, warranty, covenant or agreement
of the Company contained in the Merger Agreement or would impede, interfere
with, delay or prevent the consummation of the Merger or the purchase of shares
of Common Stock pursuant to the Offer; provided, however, that the provisions of
this Section 7 will not prevent the Shareholder, acting in his capacity as a
director of the Company, to exercise his fiduciary duties, including with
respect to the matters set forth in Article 4.7 of the Merger Agreement.
8. NO SOLICITATION. The Shareholder will not, directly or indirectly,
through any agent, financial advisor, attorney, accountant or other
representative or otherwise, (a) solicit, initiate or take any other action to
facilitate any inquiries or the making of any proposal which constitutes an
Acquisition Proposal, (b) participate in any discussions or negotiations
regarding any Acquisition Proposal, (c) in connection with an Acquisition
Proposal, disclose any nonpublic information relating to the Company or afford
access to the properties, books or records of the Company to any person or (d)
otherwise cooperate in any way with, assist, participate in, facilitate or
encourage any effort or attempt by any other Person to make an Acquisition
Proposal; provided, however, that the provisions of this Section 8 will not
prevent the Shareholder, acting in his capacity as a director of the Company, to
exercise his fiduciary duties, including with respect to the matters set forth
in Article 4.7 of the Merger Agreement.
9. TERMINATION. This Agreement will automatically, without any notice
to or action by any party, terminate (a) upon the earlier to occur of (i) the
purchase of all the Shares pursuant to the Offer in accordance with Section 6 or
(ii) the date the Merger Agreement is terminated in accordance with its terms or
(b) by the mutual written consent of the Shareholder and the Parent.
10. EXPENSES. Except as otherwise expressly provided in this Agreement
or the Merger Agreement, all costs and expenses incurred by any of the parties
hereto in connection with this Agreement, the Merger Agreement and the
transactions contemplated hereby and thereby will be borne by the party
incurring such costs and expenses.
11. PUBLICITY. The Parent, the Sub and the Shareholder shall consult
with each other before issuing any press release or otherwise making any public
statement with respect to this Agreement and the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement before such consultation, except as may be required by applicable law
or stock exchange rules.
12. ENFORCEMENT OF THE AGREEMENT. The Shareholder acknowledges and
agrees 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 Parent and the Sub
will be entitled to an injunction, restraining order or other equitable remedy
to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which the Parent or
the Sub is entitled at law or in equity.
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<PAGE> 5
13. MISCELLANEOUS.
(a) The Shareholder hereby waives any rights of appraisal or rights
to dissent from the Merger that the Shareholder may have under applicable law.
(b) Any provision of this Agreement may be waived at any time by
the party that is entitled to the benefits thereof. No such waiver will be
effective unless in writing and signed by the party or parties sought to be
bound thereby. Any waiver by any party of a breach of any provision of this
Agreement will not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
or one or more sections hereof will not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement.
(c) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements among the parties with respect to such matters. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified, except
upon the delivery of a written agreement executed by the parties hereto.
(d) This Agreement will be governed by and construed in accordance
with the laws of the Commonwealth of Virginia, notwithstanding any conflict of
law provision to the contrary.
(e) The descriptive headings contained herein are for convenience
and reference only and will not affect in any way the meaning or interpretation
of this Agreement.
(f) All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in
accordance with Section 7.5 of the Merger Agreement, addressed, in the case of
the Parent or the Sub, to the address of the Parent set forth in Section 7.5 of
the Merger Agreement and, in the case of the Shareholder, to the address set
forth on the signature page of this Agreement.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original but all of which shall together
constitute but one and the same agreement.
(h) This Agreement is binding upon and is solely for the benefit of
the parties hereto and their respective successors, legal representatives and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned by any of the parties hereto
without the prior written consent of the other parties.
(i) If any term or provision of this Agreement is determined to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and
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<PAGE> 6
provisions of this Agreement will nevertheless remain in full force and effect
and shall in no way be affected, impaired or invalidated. 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.
(j) All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof at law or in equity will be cumulative
and not alternative, and the exercise of any thereof by either party will not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
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<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written above.
THE GEON COMPANY
THE GEON COMPANY
BY: /s/ Gregory L. Rutman
----------------------------------------------------
NAME: Gregory L. Rutman
TITLE: Vice President, General Counsel and Secretary
TGC ACQUISITION CORPORATION
BY: /s/ Donald P. Knechtges
----------------------------------------------------
NAME: Donald P. Knechtges
TITLE: Chairman, President and Chief Executive Officer
JOHN C. O. BRYANT
/s/ John C.O. Bryant
-------------------------------------------------------
ADDRESS: 13118 Aden Road
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Nokesville, VA 20181
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