SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): JULY 9, 1999
AQUA ALLIANCE INC.
______________________________________________________
(Exact Name of Registrant as Specified in Charter)
DELAWARE 033-017921 13-3418759
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
30 HARVARD MILL SQUARE, WAKEFIELD, MASSACHUSETTS 01880
____________________________________________________________
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (781) 246-5200
NOT APPLICABLE
_____________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On July 9, 1999, Aqua Alliance Inc. ("AAI") entered into an
Agreement and Plan of Merger (the "Merger Agreement"), among Vivendi, a
societe anonyme organized and existing under the laws of the Republic of
France ("Vivendi"), Aqua Acquisition Corporation, a Delaware corporation
and an indirect wholly owned subsidiary of Vivendi ("Purchaser"), and AAI,
dated as of July 9, 1999. The Merger Agreement provides for the
commencement of a tender offer by Purchaser (the "Tender Offer") by Friday,
July 16, 1999, pursuant to which Purchaser will offer to purchase (i) all
outstanding shares of Class A Common Stock, par value $.001 per share (the
"Shares") of AAI that Vivendi does not already own at a price of $2.90 per
Share in cash (the "Offer Price") and (ii) all outstanding warrants
("Warrants") to purchase Shares issued pursuant to the AAI Rights Offering
dated January 26, 1998 at a price of $.40 per Warrant which represents the
difference between the exercise price of the Warrants and the Offer Price.
Under the terms of the Merger Agreement, each Share that is not purchased
in the Tender Offer will be acquired by merger as soon as practical
thereafter in a second step merger (the "Merger") for the Offer Price. In
addition, in the Merger, each Warrant that is not purchased in the Tender
Offer will remain outstanding and become exercisable, upon payment of the
$2.50 exercise price, in exchange for the Offer Price. A copy of the
Merger Agreement is attached hereto as Exhibit 1 and is hereby incorporated
herein by reference.
On July 12, 1999, AAI issued a press release concerning the
execution of the Merger Agreement, a copy of which is attached hereto as
Exhibit 2 and is hereby incorporated herein by reference. The terms of the
transactions described in such press release are qualified in their
entirety by reference to the Merger Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits
(1) Agreement and Plan of Merger, dated as of July 9, 1999,
among AAI, Vivendi and Purchaser.
(2) Press Release of AAI dated July 12, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
AQUA ALLIANCE INC.
By: /s/ Alain Brunais
----------------------------
Name: Alain Brunais
Title: Senior Vice President and
Chief Financial Officer
Date: July 12, 1999
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(1) Agreement and Plan of Merger, dated as of July 9, 1999,
among AAI, Vivendi and Purchaser.
(2) Press Release of AAI dated July 12, 1999.
AGREEMENT AND PLAN OF MERGER,
DATED AS OF JULY 9, 1999,
AMONG
VIVENDI,
AQUA ACQUISITION CORPORATION
AND
AQUA ALLIANCE INC.
AGREEMENT AND PLAN OF MERGER, dated as of July 9, 1999 (this
"AGREEMENT"), among Vivendi, a sociEtE anonyme organized and existing under
the laws of the Republic of France ("PARENT"), Aqua Alliance Corporation, a
Delaware corporation and an indirect wholly owned subsidiary of Parent
("PURCHASER"), and Aqua Alliance Inc., a Delaware corporation (the
"COMPANY").
WHEREAS, Parent beneficially owns an aggregate of 153,609,975
shares (the "PURCHASER SHARES") of Class A Common Stock, par value $.001
per share ("SHARES"), of the Company, constituting approximately 83% of the
total outstanding Shares, and has proposed to the special committee of the
Board of Directors of the Company (the "SPECIAL COMMITTEE"), that Purchaser
acquire the remaining Shares;
WHEREAS, Parent has also proposed to the Special Committee that
Purchaser acquire all outstanding Warrants issued pursuant to the Company
Rights Agreement dated January 26, 1998 ("WARRANTS");
WHEREAS, immediately prior to the Effective Time (as defined
below) Parent will cause the contribution of the Purchaser Shares to
Purchaser (including Shares acquired through the exercise of all Warrants
then owned directly or indirectly by Parent);
WHEREAS, the Board of Directors of the Company (the "BOARD") and
the Special Committee have determined that it is in the best interests of
the Company to approve Purchaser's proposed acquisition and have voted (i)
to recommend that the stockholders and Warrantholders of the Company accept
the Offer (as defined below) and tender their Shares and Warrants pursuant
to the Offer and (ii) to approve and deem advisable the merger (the
"MERGER") of Purchaser with and into the Company, with the Company being
the surviving corporation, in accordance with the General Corporation Law
of the State of Delaware ("DELAWARE LAW") following consummation of the
Offer;
WHEREAS, it is proposed that Purchaser will make a cash tender
offer (the "OFFER") in compliance with Section 14(d)(1) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the rules and
regulations promulgated thereunder, to acquire (i) all the issued and
outstanding Shares (other than the Purchaser Shares) for $2.90 per Share
(such amount, or any greater amount per Share paid pursuant to the Offer,
being hereinafter referred to as the "PER SHARE AMOUNT") and (ii) all
issued and outstanding Warrants for $0.40 per Warrant (such amount, or any
greater amount per Warrant paid pursuant to the Offer, being hereinafter
referred to as the "PER WARRANT AMOUNT"), in each case, net to the seller
in cash, upon the terms and subject to the conditions of this Agreement;
and that the Offer will be followed by the Merger, pursuant to which each
issued and outstanding Share not owned by Purchaser will be converted into
the right to receive the Per Share Amount and each Warrant not owned by
Purchaser will be converted into the right to exercise such Warrant in
exchange for the Per Share Amount, upon the terms and subject to the
conditions provided herein; and
WHEREAS, the Special Committee has received the opinion of Beacon
Group Capital Services, L.L.C. ("Beacon") that the consideration to be
received by the holders of Shares (other than Parent and its subsidiaries)
pursuant to the Offer and the Merger is fair to such holders from a
financial point of view.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. THE OFFER. (a) Provided that this Agreement shall
not have been terminated in accordance with Section 8.01 and none of the
events set forth in Annex A hereto shall have occurred or be existing,
Purchaser shall commence, and Parent shall cause Purchaser to commence,
within the meaning of Rule 14d-2 under the Exchange Act, the Offer as
promptly as reasonably practicable after the date hereof, but in no event
later than five business days after the initial public announcement of
Purchaser's intention to commence the Offer. The obligation of Purchaser to
accept for payment and pay for Shares and/or Warrants tendered pursuant to
the Offer shall be subject only to the satisfaction of the conditions set
forth in Annex A hereto. Purchaser expressly reserves the right to waive
any such condition, to increase the Per Share Amount and/or the Per Warrant
Amount and to make any other changes in the terms and conditions of the
Offer; PROVIDED, HOWEVER, that, without the prior written consent of the
Special Committee, Purchaser will not (i) decrease the Per Share Amount or
the Per Warrant Amount, (ii) reduce the maximum number of Shares or
Warrants to be purchased in the Offer, (iii) change the form of the
consideration payable in the Offer, (iv) add to, modify or supplement the
conditions to the Offer set forth in Annex A hereto, (v) extend the
expiration date of the Offer beyond the twentieth business day following
commencement thereof; PROVIDED, HOWEVER, Purchaser may extend the
expiration date of the Offer, (A) if the conditions to the Offer set forth
in Annex A have not been satisfied and (B) to the extent necessary to
respond to comments on the Offer Documents (as defined below) from the
United States Securities and Exchange Commission (the "SEC") or (vi) make
any other change in the terms or conditions of the Offer which is
materially adverse to the holders of Shares or Warrants. The Per Share
Amount and the Per Warrant Amount shall, subject to any applicable
withholding of taxes, be net to each seller in cash, upon the terms and
subject to the conditions of the Offer. Subject to the terms and conditions
of the Offer, Purchaser shall, and Parent shall cause Purchaser to, accept
for payment and pay, as promptly as practicable after expiration of the
Offer, for all Shares and Warrants validly tendered and not properly
withdrawn.
(b) On the date of commencement of the Offer, Parent and
Purchaser shall file with the SEC (i) a Tender Offer Statement on Schedule
14D-1, including all exhibits thereto (together with all amendments and
supplements thereto, the "SCHEDULE 14D-1"), with respect to the Offer and
(ii) a Rule 13e-3 Transaction Statement on Schedule 13E-3, including all
exhibits thereto (together with all amendments and supplements thereto, the
"SCHEDULE 13E-3"), with respect to the Offer and the other transactions
contemplated hereby (the "TRANSACTIONS"). The Schedule 14D-1 and the
Schedule 13E-3 shall contain or shall incorporate by reference an offer to
purchase (the "OFFER TO PURCHASE") and the related letter of transmittal
(the Schedule 14D-1, the Schedule 13E-3, the Offer to Purchase, the related
letter of transmittal and such other documents, together with all
supplements and amendments thereto, being referred to herein collectively
as the "OFFER DOCUMENTS"). Parent, Purchaser and the Company shall correct
promptly any information provided by any of them for use in the Offer
Documents which shall become false or misleading, and Parent and Purchaser
shall take all steps necessary to cause the Schedule 14D-1 and the Schedule
13E-3, as so corrected, to be filed with the SEC and the other Offer
Documents, as so corrected, to be disseminated to holders of Shares and
Warrants, in each case as and to the extent required by applicable law.
The Company, the Special Committee and their respective counsel shall be
given reasonable opportunity to review and comment on the Offer Documents
prior to the filing thereof with the SEC. Parent and Purchaser shall
provide the Company, the Special Committee and their respective counsel
with a copy of any written comments or telephonic notification of any oral
comments Parent or Purchaser may receive from the SEC or its staff with
respect to the Offer Documents promptly after the receipt thereof. Parent
and its counsel shall provide the Company, the Special Committee and their
respective counsel with a reasonable opportunity to participate in all
communications with the SEC and its staff, including any meetings and
telephone conferences, relating to the Offer Documents, the Transactions or
this Agreement. In the event that Parent or the Purchaser receives any
comments from the SEC or its staff with respect to the Offer Documents,
each shall use its reasonable best efforts to respond promptly to such
comments and take all other actions necessary to resolve the issues raised
therein.
(c) Parent shall provide or cause to be provided to Purchaser on
a timely basis the funds necessary to accept for payment, and pay for, any
Shares and/or Warrants that Purchaser becomes obligated to accept for
payment, and pay for, pursuant to the Offer.
SECTION 1.02. COMPANY ACTION. (a) As soon as reasonably
practicable after the date of commencement of the Offer, the Company shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-
9, including all exhibits thereto (together with all amendments and
supplements thereto, the "SCHEDULE 14D-9"), containing the recommendations
of the Special Committee and the Board described in Section 3.04(b), and
shall disseminate the Schedule 14D-9 to the extent required by Rule 14d-9
under the Exchange Act, and any other applicable law. The Company, Parent
and Purchaser shall correct promptly any information provided by any of
them for use in the Schedule 14D-9 which shall become false or misleading,
and the Company shall take all steps necessary to cause the Schedule 14D-9,
as so corrected, to be filed with the SEC and disseminated to holders of
Shares and Warrants, in each case as and to the extent required by
applicable law. Parent, Purchaser and their respective counsel shall be
given the opportunity to review and comment on the Schedule 14D-9 prior to
the filing thereof with the SEC. The Company shall provide Parent,
Purchaser and their respective counsel with a copy of any written comments
or telephonic notification of any oral comments the Company may receive
from the SEC or its staff with respect to the Schedule 14D-9 promptly after
the receipt thereof. The Company and its counsel shall provide Parent,
Purchaser and their respective counsel with a reasonable opportunity to
participate in all communications with the SEC and its staff, including any
meetings and telephone conferences, relating to the Schedule 14D-9, the
Transactions or this Agreement.
(b) In connection with the Transactions, the Company shall
promptly furnish, or cause to be furnished, Parent and Purchaser with
mailing labels containing the names and addresses of the record holders of
Shares and Warrants as of a recent date and of those persons becoming
record holders subsequent to such date, together with copies of all lists
of stockholders, Warrantholders, security position listings and computer
files and all other information in the Company's possession or control
regarding the beneficial owners of Shares and Warrants, and shall furnish
to Purchaser such information and assistance (including updated lists of
stockholders, Warrantholders, security position listings and computer
files) as Parent and Purchaser may reasonably request in communicating the
Offer to the Company's stockholders and Warrantholders. 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 Purchaser 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 deliver, and will
use their reasonable efforts to cause their agents to deliver, to the
Company all copies and any extracts or summaries from such information then
in their possession or control.
ARTICLE II
THE MERGER
SECTION 2.01. THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with Delaware
Law, at the Effective Time (as hereinafter defined) Purchaser shall be
merged with and into the Company. As a result of the Merger, the separate
corporate existence of Purchaser shall cease and the Company shall continue
as the surviving corporation of the Merger (the "SURVIVING CORPORATION").
SECTION 2.02. CLOSING. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 8.01 and subject to the satisfaction or
waiver of the conditions set forth in Article VII, the consummation of the
Merger will take place as promptly as practicable (and in any event within
two business days) after the satisfaction or waiver of the conditions set
forth in Article VII at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, New York, New York, unless another date, time or
place is agreed to in writing by the parties hereto.
SECTION 2.03. EFFECTIVE TIME. As promptly as practicable after
the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "CERTIFICATE OF MERGER") with the
Secretary of State of the State of Delaware, in such form as is required
by, and executed in accordance with the relevant provisions of, Delaware
Law (the date and time of such filing being the "EFFECTIVE TIME").
SECTION 2.04. EFFECT OF THE MERGER. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers
and franchises of the Company and Purchaser shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions,
disabilities and duties of the Company and Purchaser shall become the
debts, liabilities, obligations, restrictions, disabilities and duties of
the Surviving Corporation.
SECTION 2.05. CERTIFICATE OF INCORPORATION; BY-LAWS. (a) At the
Effective Time, the Certificate of Incorporation of Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as
provided by law and such Certificate of Incorporation.
(b) The By-laws of Purchaser, as in effect immediately prior to
the Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of
the Surviving Corporation and such By-laws.
SECTION 2.06. DIRECTORS AND OFFICERS. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of
the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation. The
officers of the Company immediately prior to the Effective Time shall be
the initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
SECTION 2.07. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be cancelled pursuant to Section
2.07(b) and any Dissenting Shares (as hereinafter defined)) shall be
cancelled and shall be converted automatically into the right to receive
an amount equal to the Per Share Amount in cash (the "SHARE
CONSIDERATION") payable, without interest, to the holder of such Share,
upon surrender, in the manner provided in Section 2.09, of the certificate
that formerly evidenced such Share;
(b) Each Share and each Warrant owned by Purchaser immediately
prior to the Effective Time shall be cancelled without any conversion
thereof and no payment or distribution shall be made with respect thereto;
(c) Each Warrant issued and outstanding immediately prior to the
Effective Time (other than any Warrants to be cancelled pursuant to Section
2.07(b)) shall remain outstanding and shall be converted automatically into
the right to exercise each such Warrant at an exercise price of $2.50 in
exchange for an amount equal to the Per Share Amount in Cash (the "WARRANT
CONSIDERATION") payable without interest, to the holder of such Warrant,
upon exercise, in the manner provided by the terms of such Warrant; and
(d) Each share of common stock, par value $.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, par value $.001 per share, of the
Surviving Corporation.
SECTION 2.08. DISSENTING SHARES. (a) Notwithstanding any
provision of this Agreement to the contrary, Shares that are outstanding
immediately prior to the Effective Time and which are held by stockholders
who shall have not voted in favor of the Merger or consented thereto in
writing and who shall have demanded properly in writing appraisal for such
Shares in accordance with Section 262 of Delaware Law (collectively, the
"DISSENTING SHARES") shall not be converted into or represent the right to
receive the Share Consideration. Such stockholders shall be entitled to
receive payment of the appraised value of such Shares held by them in
accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to perfect or
who effectively shall have withdrawn or lost their rights to appraisal of
such Shares under such Section 262 shall thereupon be deemed to have been
converted into and to have become exchangeable for, as of the Effective
Time, the right to receive the Share Consideration, without any interest
thereon, upon surrender, in the manner provided in Section 2.09, of the
certificate or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of such demands,
and any other instruments served pursuant to Delaware Law and received by
the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under Delaware Law. The
Company shall not, except with the prior written consent of Parent, make
any payment with respect to any demands for appraisal or offer to settle or
settle any such demands.
SECTION 2.09. SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a)
Prior to the Effective Time, Parent shall designate a bank or trust company
reasonably satisfactory to the Company to act as agent (the "PAYING AGENT")
for the holders of Shares and Warrants in connection with the Merger to
receive the funds to which holders of Shares and Warrants shall become
entitled pursuant to Section 2.07(a) and Section 2.07(b), respectively.
When and as needed, Parent shall make available to the Paying Agent
sufficient funds to make the payments pursuant to Section 2.07 hereof to
holders (other than Parent or any of its affiliates) of Shares and Warrants
that are issued and outstanding immediately prior to the Effective Time
(such amounts being hereinafter referred to as the "EXCHANGE FUND"), and to
make the appropriate cash payments, if any, to holders of Dissenting
Shares. The Paying Agent shall, pursuant to irrevocable instructions, make
the payments provided for in the preceding sentence out of the Exchange
Fund. The Exchange Fund shall not be used for any other purpose, except as
provided in this Agreement.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each person who was, at the Effective Time, a
holder of record of Shares entitled to receive the Share Consideration
pursuant to Section 2.07(a) a form of letter of transmittal in customary
form (which shall specify that delivery shall be effected, and risk of loss
and title to the certificates evidencing such Shares (the "CERTIFICATES"),
shall pass, only upon proper delivery of the Certificates to the Paying
Agent) and instructions for use in effecting the surrender of the
Certificates pursuant to such letter of transmittal. Upon surrender to the
Paying Agent of a Certificate, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions
thereto, and such other documents as may be required pursuant to such
instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Share Consideration for each Share formerly
evidenced by such Certificate, and such Certificate shall then be canceled.
No interest shall accrue or be paid on the consideration payable upon the
surrender of any Certificate for the benefit of the holder of such
Certificate. If payment of the Share Consideration is to be made to a
person other than the person in whose name the surrendered Certificate is
registered on the stock transfer books of the Company, it shall be a
condition of payment that the Certificate so surrendered shall be endorsed
properly or otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Share Consideration to a person
other than the registered holder of the Certificate surrendered or shall
have established to the satisfaction of the Surviving Corporation that such
taxes either have been paid or are not applicable.
(c) At any time following the sixth month after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying
Agent to deliver to it any funds which had been made available to the
Paying Agent and not disbursed to holders of Shares (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it), and thereafter such holders
shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat and other similar laws) only as general
creditors thereof with respect to any Share Consideration that may be
payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the
Paying Agent shall be liable to any holder of a Share for any Share
Consideration delivered in respect of such Share to a public official
pursuant to any abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time,
the stock transfer books of the Company shall be closed and thereafter
there shall be no further registration of transfers of Shares on the
records of the Company. From and after the Effective Time, the holders of
Shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such Shares except as otherwise provided
herein or by applicable law.
SECTION 2.10. WITHHOLDING RIGHTS. The Surviving Corporation or
the Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Shares or Warrants such amounts that the Surviving Corporation or the
Paying Agent is required to deduct and withhold with respect to the making
of such payment under the United States Internal Revenue Code of 1986, as
amended (the "Code"), or any provision of state, local or foreign tax law.
To the extent that amounts are so withheld by the Surviving Corporation or
the Paying Agent, such amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares or Warrants in
respect of which such deduction and withholding was made by the Surviving
Corporation or the Paying Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Purchaser that, except as set forth in the Company SEC Reports (as defined
herein) or the disclosure schedule dated the date hereof and attached
hereto (the "DISCLOSURE SCHEDULE"), it being understood that disclosure on
the Disclosure Schedule shall be deemed disclosure respecting all sections
of the Agreement:
SECTION 3.01. ORGANIZATION AND QUALIFICATION. 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 has the requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Each of the Company and its Subsidiaries has all necessary
licenses, permits, authorizations, and governmental approvals to own, lease
and operate its properties and to carry on its business as it is currently
being conducted, except where the failure to have such licenses, permits,
authorizations and governmental approvals would not, individually or in the
aggregate, have a Company Material Adverse Effect (as hereinafter defined).
Each of the Company and its Subsidiaries is duly qualified and in good
standing to do business in each jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its properties
makes such qualification necessary, other than where the failure to be so
duly qualified and in good standing would not have a Company Material
Adverse Effect. The term "COMPANY MATERIAL ADVERSE EFFECT," as used in this
Agreement, means any change or effect that, individually or when taken
together with all other such changes or effects, is or is reasonably likely
to be materially adverse to the financial condition, business, or results
of operations of the Company and its Subsidiaries, taken as a whole.
SECTION 3.02. CERTIFICATE OF INCORPORATION AND BY-LAWS. The
Company has heretofore furnished to Parent and Purchaser a complete and
correct copy of the Certificate of Incorporation and the By-laws, each as
amended to date, of the Company. Such Certificate of Incorporation and By-
laws are in full force and effect. None of the Company and its Subsidiaries
is in violation of any provision of its Certificate of Incorporation or By-
laws.
SECTION 3.03. CAPITALIZATION. The authorized capital stock of the
Company consists of 255,000,000 Shares, 5,000 shares of Class B Common
Stock, par value .001 per share ("CLASS B STOCK") and 2,500,000 shares of
preferred stock, par value $.01 per share ("PREFERRED STOCK"). As of July
9,1999, (i) 185,266,429 Shares were issued and outstanding, all of which
were validly issued, fully paid and nonassessable, (ii) 89,902 Shares were
held in the treasury of the Company, (iii) 2,000,000 Shares were authorized
for future issuance (with respect to which options to acquire Shares were
issued and outstanding) pursuant to employee stock options or stock
incentive rights granted pursuant to the Company's stock option plans, (iv)
3,949,099 Shares were reserved for issuance upon the exercise of Warrants,
(v) 3,833,333 Shares were reserved for issuance upon the conversion of the
Company's 8% Convertible Debentures Due 2015, (vi) no shares of Class B
Common Stock were issued and outstanding; and (vii) no shares of Preferred
Stock were issued and outstanding. Except as set forth in Section 3.03 of
the Disclosure Schedule or as otherwise contemplated by this Agreement,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital
stock of the Company or any Subsidiary or obligating the Company or any
Subsidiary to issue or sell any shares of capital stock of, or other equity
interests in, the Company or any Subsidiary. All shares of capital stock of
the Company and any Subsidiary subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully
paid and nonassessable. There are no outstanding contractual obligations of
the Company or any Subsidiary to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any Subsidiary or to provide
funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any person.
SECTION 3.04. AUTHORITY RELATIVE TO THIS AGREEMENT. (a)The
Company has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to
consummate the Transactions. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the Transactions have
been duly and validly authorized by all necessary corporate action, and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the Transactions (other than,
with respect to the Merger, the approval and adoption of this Agreement by
the affirmative vote of a majority of the then outstanding Shares, if and
to the extent required by applicable law, and the filing and recordation of
appropriate merger documents as required by Delaware Law). This Agreement
has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and
Purchaser, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(b) The Company hereby represents that (i)the Special Committee
has been duly authorized and constituted, (ii) the Special Committee, at a
meeting thereof duly called and held on July 9, 1999, determined that this
Agreement and the Transactions are fair to and in the best interests of the
stockholders of the Company (other than the Parent and its affiliates), and
(iii)the Board of Directors of the Company, at a meeting thereof duly
called and held on July 9, 1999, (A) determined that this Agreement and the
Transactions are fair to and in the best interests of the stockholders of
the Company, (B) determined that it is advisable for the Company to enter
into, and, if and to the extent required by applicable law, for the
stockholders of the Company to approve and adopt, this Agreement and the
Transactions, (C) approved and adopted this Agreement and the Transactions,
including the Offer and the Merger, (D) recommended that the stockholders
of the Company tender their Shares pursuant to the Offer and, if and to the
extent required by applicable law, approve and adopt this Agreement and the
Merger and (E) recommended that the Warrantholders of the Company tender
their Warrants pursuant to the Offer.
SECTION 3.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i)conflict with or
violate the Certificate of Incorporation or By-laws of the Company or any
Subsidiary, (ii)assuming that all consents, approvals, authorizations, and
other actions described in subsection (b) have been obtained or made, to
the knowledge of the Company conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any
Subsidiary is bound or affected or (iii) except as set forth on Section
3.05 of the Disclosure Schedule, result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or require payment under, or result in the
creation of any Encumbrance on any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, or trigger any right of
first refusal under, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary or any of their respective properties is
bound, except for any thereof that would not have a Company Material
Adverse Effect. The restrictions on business combinations contained in
Section 203(a) of Delaware Law will not apply to Parent, Purchaser or their
respective affiliates as a result of this Agreement or the Transactions.
(b) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, domestic or
foreign, except for applicable requirements, if any, of the Exchange Act,
state securities or "blue sky" laws ("BLUE SKY LAWS"), and filing and
recordation of appropriate merger documents as required by Delaware Law.
SECTION 3.06. SEC FILINGS; FINANCIAL STATEMENTS. (a) The Company
has filed all forms, reports and documents required to be filed by it with
the SEC since October 31, 1996, and has heretofore made available to Parent
and Purchaser, in the form filed with the SEC, (i) its Annual Reports on
Form 10-K for the fiscal years ended October 31, 1996, 1997 and 1998,
respectively, (ii) all proxy statements relating to the Company's meetings
of stockholders (whether annual or special) held since October 31, 1996,
and (iii)all other forms, reports and other registration statements (other
than Quarterly Reports on Form 10-Q) filed by the Company with the SEC
since October 31, 1996 (the forms, reports and other documents referred to
in clauses (i), (ii) and (iii) above being referred to herein,
collectively, as the "SEC REPORTS"). The SEC Reports (i) were prepared in
accordance with the requirements of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and the Exchange Act, as the case may be, and the
rules and regulations thereunder, (ii) to the knowledge of the Company, 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 therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, and (iii) were
filed in a timely manner or were deemed filed in a timely manner pursuant
to Rule 12(b)-25 Under the Exchange Act. No Subsidiary of the Company was
or is required to file any form, report or other document with the SEC.
(b) Each of the financial statements (including, in each case,
any notes thereto) contained in the SEC Reports (i)was prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presented in all material
respects the consolidated financial position, results of operations and
cash flows of the Company and the consolidated Subsidiaries as at the
respective dates thereof and for the respective periods indicated therein,
except that any unaudited interim financial statements were or will be
subject to normal and recurring year-end adjustments that did not and are
not expected, individually or in the aggregate, to have a Company Material
Adverse Effect.
(c) The Company has no liabilities or obligations of any nature,
except:(i) as and to the extent set forth on the balance sheet of the
Company as at April 30, 1999, including the notes thereto (the "1999
BALANCE SHEET"), (ii) as would not, individually or in the aggregate, have
a Company Material Adverse Effect or (iii) liabilities and obligations
incurred in the ordinary course of business consistent with past practice
since April 30, 1999 and which would not have a Company Material Adverse
Effect.
(d) Since April 30, 1999, there has not been any Company Material
Adverse Effect, except for changes that affect the economy in general or
the industry in which the Company operates.
SECTION 3.07. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT.
The information supplied by the Company for inclusion in the Schedule 14D-9
and the Offer Documents shall not, at the respective times the Schedule
14D-9 or the Offer Documents are filed with the SEC or are first published,
sent or given to stockholders and/or Warrantholders of the Company, as the
case may be, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under
which they are made, not misleading. The information supplied by the
Company for inclusion in the proxy statement or information statement to be
sent to the stockholders of the Company in connection with the
Stockholders' Meeting (as defined in Section 6.01) or the information
statement to be sent to such stockholders, as appropriate (such proxy
statement or information statement, as amended or supplemented, being
referred to herein as the "PROXY STATEMENT"), shall not, at the date the
Proxy Statement (or any amendment or supplement thereto) is first mailed to
stockholders of the Company, at the time of the Stockholders' Meeting and
at the Effective Time, be false or misleading with respect to any material
fact, or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading or necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. The Schedule 14D-9, Proxy Statement and the
Offer Documents shall comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder
except that no representation or warranty is made by the Company with
respect to statements made or incorporated by reference therein based on
information supplied by Parent or Purchaser for inclusion or incorporation
by reference therein.
SECTION 3.08. BROKERS. No broker, finder or investment banker
(other than Beacon) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made
by or on behalf of the Company. The Company has heretofore furnished to
Parent a complete and correct copy of all agreements between the Company
and Beacon pursuant to which such firm would be entitled to any payment
relating to the Transactions.
SECTION 3.09. OPINION OF FINANCIAL ADVISOR. The Special Committee
has received the opinion of Beacon dated July 9, 1999, that, as of the date
of such opinion, the Per Share Amount to be received by the stockholders of
the Company pursuant to this Agreement are fair to such stockholders of the
Company (other than Parent and its affiliates) from a financial point of
view and such opinion has not been withdrawn. A copy of such opinion has
been delivered to Parent and Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and
warrant to the Company that:
SECTION 4.01. CORPORATE ORGANIZATION. Each of Parent and
Purchaser is a corporation duly organized, validly existing under the laws
of the jurisdiction of its organization and Purchaser is in good standing
in the State of Delaware.
SECTION 4.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of
Parent and Purchaser has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the Transactions. The execution and delivery of this
Agreement by Parent and Purchaser and the consummation by Parent and
Purchaser of the Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part
of Parent or Purchaser are necessary to authorize this Agreement or to
consummate the Transactions (other than, with respect to the Merger, the
filing and recordation of appropriate merger documents as required by
Delaware Law). This Agreement has been duly and validly executed and
delivered by Parent and Purchaser and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and
binding obligation of each of Parent and Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms.
SECTION 4.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not,
and the performance of this Agreement by Parent and Purchaser will not, (i)
conflict with or violate the Certificate of Incorporation or By-laws (or
equivalent organizational documents) of either Parent or Purchaser, or (ii)
assuming that all consents, approvals, authorizations, and other actions
described in subsection (b) have been made, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to Parent or
Purchaser or by which any property or asset of either of them is bound or
affected.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and
Purchaser will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, except (i) for applicable requirements, if
any, of the Exchange Act, Blue Sky Laws, and filing and recordation of
appropriate merger documents as required by Delaware Law and (ii) where
failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or delay
consummation of the Merger, or otherwise prevent Parent or Purchaser from
performing their respective obligations under this Agreement.
SECTION 4.04. FINANCING. Each of Parent and Purchaser has
available to it sufficient funds to acquire all the outstanding Shares and
Warrants in the Offer and/or the Merger and to pay the related fees and
expenses.
SECTION 4.05. OFFER DOCUMENTS; PROXY STATEMENT. The information
supplied by Parent and Purchaser for inclusion in the Offer Documents will
not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the case may
be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they
are made, not misleading. The information supplied by Parent and Purchaser
for inclusion in the Proxy Statement will not, on the date the Proxy
Statement (or any amendment or supplement thereto) is first mailed to
stockholders and Warrantholders of the Company, at the time of the
Stockholders' Meeting (as defined below) or at the Effective Time, contain
any statement which, at such time and in light of the circumstances under
which it is made, is false or misleading with respect to any material fact,
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not false or misleading
or necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Stockholders' Meeting which
shall have become false or misleading. The Offer Documents shall comply in
all material respects as to form with the requirements of the Exchange Act
and the rules and regulations thereunder.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE COMPANY. The Company
hereby covenants and agrees that, prior to the Effective Time, unless
otherwise expressly contemplated by this Agreement or consented to in
writing by Parent and Purchaser, the Company will and will cause its
Subsidiaries to (a)operate its business in the usual and ordinary course
consistent with past practices; (b)use its reasonable best efforts to
preserve substantially intact its business organization, maintain its
rights and franchises, retain the services of its respective principal
officers and key employees and maintain its relationships with its
respective principal customers, suppliers and other persons with which it
or any Subsidiary has significant business relations; and (c)use its
reasonable best efforts to maintain and keep its properties and assets in
as good repair and condition as at present, ordinary wear and tear
excepted.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. STOCKHOLDERS' MEETING. If required by applicable
law in order to consummate the Merger, the Company, acting through the
Board, shall in accordance with Delaware Law and its Certificate of
Incorporation and By-laws, take all necessary action to duly call, give
notice of, convene and hold an annual or special meeting of its
stockholders as soon as practicable for the purpose of considering and
taking action on this Agreement and the transactions contemplated hereby
(the "STOCKHOLDERS' MEETING"). At the Stockholders' Meeting, Parent and
Purchaser shall cause all Shares then owned by them and their subsidiaries
to be voted in favor of the approval and adoption of this Agreement and the
transactions contemplated hereby. In the event a Stockholders' Meeting is
called, the Company shall use its reasonable best efforts to solicit from
stockholders of the Company proxies in favor of the approval and adoption
of the Merger Agreement and to secure the vote or consent of stockholders
required by Delaware Law to approve and adopt the Merger Agreement, unless
otherwise required by the applicable fiduciary duties of the directors of
the Company or of the Company's directors constituting the Special
Committee, as determined by such directors in good faith, and after
consultation with independent legal counsel (which may include the
Company's regularly engaged legal counsel).
SECTION 6.02. PROXY STATEMENT. If required by applicable law, as
soon as practicable following consummation of the Offer, Parent, Purchaser
and the Company shall file the Proxy Statement with the SEC under the
Exchange Act, and shall use its best efforts to have the Proxy Statement
cleared by the SEC. Parent, Purchaser and the Company shall cooperate with
each other in the preparation of the Proxy Statement, and the Company shall
notify Parent and Purchaser of the receipt of any comments of the SEC with
respect to the Proxy Statement and of any requests by the SEC for any
amendment or supplement thereto or for additional information and shall
provide to Parent and Purchaser promptly copies of all correspondence
between the Company or any representative of the Company and the SEC. The
Company shall give Parent, Purchaser and their respective counsel the
opportunity to review the Proxy Statement prior to its being filed with the
SEC and shall give Parent, Purchaser and their respective counsel the
opportunity to review all amendments and supplements to the Proxy Statement
and all responses to requests for additional information and replies to
comments prior to their being filed with, or sent to, the SEC. Each of the
Company, Parent and Purchaser agrees to use its reasonable efforts, after
consultation with the other parties hereto, to respond promptly to all such
comments of and requests by the SEC and to cause the Proxy Statement and
all required amendments and supplements thereto to be mailed to the holders
of Shares entitled to vote at the Stockholders' Meeting at the earliest
practicable time.
SECTION 6.03. PUBLIC ANNOUNCEMENTS. Parent, Purchaser and the
Company shall each obtain the prior consent of each other before issuing
any press release or otherwise making any public statements with respect to
this Agreement or any Transaction and shall not issue any such press
release or make any such public statement without such prior consent,
except as may be required by law or any listing agreement with a national
securities exchange to which Parent or the Company is a party.
SECTION 6.04. REDEMPTION OF SUBORDINATED CONVERTIBLE DEBENTURES.
The Company shall use its reasonable best efforts to cause the redemption
of the Company's 8% Subordinated Convertible Debentures prior to the
Effective Time or as soon as reasonably practicable thereafter.
SECTION 6.05. FURTHER ACTION. Subject to the terms and conditions
herein provided, each of the parties hereto covenants and agrees to use all
reasonable efforts to deliver or cause to be delivered such documents and
other papers and to take or cause to be taken such further actions as may
be necessary, proper or advisable under applicable laws to consummate and
make effective the Transactions, including the Merger.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. CONDITIONS TO THE MERGER. The respective
obligations of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived, in whole or in part, to the extent
permitted by applicable law:
(a) STOCKHOLDER APPROVAL. This Agreement and the Transactions
shall have been approved and adopted by the affirmative vote of the
stockholders of the Company to the extent required by Delaware Law and the
Certificate of Incorporation and By-laws of the Company; and
(b) NO ORDER. No foreign, United States or state governmental
authority or other agency or commission or foreign, United States or state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is then in effect and has the effect of making the acquisition of
Shares by Purchaser illegal or otherwise restricting, preventing or
prohibiting consummation of the Offer or the Merger.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. TERMINATION. This Agreement may be terminated and
the Merger and the other transactions contemplated hereby may be abandoned
at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated
hereby by the stockholders of the Company: (a) by mutual written consent
duly authorized by the Boards of Directors of Parent, Purchaser and the
Company, if such termination is also approved by the Special Committee;
(b) by either Parent, Purchaser or the Company if (i) the
Effective Time shall not have occurred on or before December 31, 1999;
PROVIDED, HOWEVER, that the right to terminate this Agreement under this
Section 8.01(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such
date or (ii) any court of competent jurisdiction or other governmental
authority shall have issued an order, decree, ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(c) by Parent, if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Annex A
hereto, Purchaser shall have (A) failed to commence the Offer within 60
days following the date of this Agreement, (B) terminated the Offer without
having accepted any Shares or Warrants for payment thereunder, or (C)
failed to pay for the Shares and Warrants validly tendered pursuant to the
Offer within 90 days following the commencement of the Offer, unless such
termination or failure to pay for Shares or Warrants shall have been caused
by or resulted from the failure of Parent or Purchaser to perform in any
material respect any covenant or agreement of either of them contained in
this Agreement or the material breach by Parent or Purchaser of any
representation or warranty of either of them contained in this Agreement or
(ii) prior to the purchase of any Shares or Warrants validly tendered
pursuant to the Offer, the Special Committee shall have withdrawn or
modified in a manner that is, in the reasonable judgment of Parent,
materially adverse to Parent or Purchaser, its approval or recommendation
of this Agreement, the Offer, the Merger or any other Transaction or shall
have recommended another merger, consolidation or business combination
involving, or acquisition of, the Company or its assets or another tender
offer for Shares or Warrants, or shall have resolved to do any of the
foregoing.
SECTION 8.02. EFFECT OF TERMINATION. In the event of the
termination of this Agreement pursuant to Section 8.01, this Agreement
shall forthwith become void, and there shall be no liability on the part of
any party hereto, except as set forth in Sections 9.01 and 9.11; PROVIDED,
HOWEVER that nothing contained herein shall relieve any party from
liability for wilful breach of this Agreement.
SECTION 8.03. AMENDMENT. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards
of Directors at any time prior to the Effective Time; PROVIDED, HOWEVER,
that, after the approval and adoption of this Agreement and the
Transactions contemplated hereby by the stockholders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of
the Merger, imposes conditions to the Merger other than set forth in
Article VII or would otherwise amend or change the terms and conditions of
the Merger in a manner materially adverse to the holders of Shares, other
than Parent and its affiliates; and PROVIDED FURTHER that such amendment is
also approved by the Special Committee. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 8.04. WAIVER. At any time prior to the Effective Time,
any party hereto may (i) extend the time for the performance of any
obligation or other act of any other party hereto, (ii) waive any
inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any
agreement or condition contained herein; PROVIDED, HOWEVER, that, if the
Company seeks to make such extension or waiver as provided in (i), (ii) or
(iii) above, it must first obtain the approval of the Special Committee.
Any such extension or waiver shall be valid if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of
this Agreement pursuant to Section 8.01, as the case may be, except that
the agreements set forth in Articles II and this Article IX shall survive
the Effective Time indefinitely.
SECTION 9.02. NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, by facsimile (followed by
delivery of a copy via overnight courier service) or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this
Section 9.02):
(a) if to Parent or Purchaser:
C/O Vivendi North America Corporation
800 3rd Avenue
17th Floor
New York, NY 10022
Attention: General Counsel
Telecopier: (212) 753-9301
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Attention: Martha E. McGarry, Esq.
Telecopier: (212) 735-2000
(b) if to the Company:
Aqua Alliance Inc.
30 Harvard Mill Square
Wakefield, Ma. 01880
Attention: General Counsel
Telecopier: (212) 702-2711
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Attention: Martha E. McGarry, Esq.
Telecopier: (212) 735-2000
SECTION 9.03. CERTAIN DEFINITIONS. For purposes of this
Agreement, the term:
(a) "AFFILIATE" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;
(b) "BUSINESS DAY" means any day on which the principal offices
of the SEC in Washington, D.C. are open to accept filings, or, in the case
of determining a date when any payment is due, any day on which banks are
not required or authorized by law or executive order to close in the City
of New York;
(c) "ENCUMBRANCE" means any security interest, pledge, mortgage,
lien, charge, adverse claim of ownership or use, or other encumbrance of
any kind.
(d) "PERSON" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d) of the Exchange Act);
(e) "SUBSIDIARY" or "SUBSIDIARIES" means any corporation,
partnership, joint venture or other legal entity of which the Company or
any Subsidiary of the Company, as the case may be (either alone or through
or together with any other Subsidiary), owns, directly or indirectly, 50%
or more of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or
other governing body of such corporation or other legal entity; and
SECTION 9.04. SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the Transactions is not affected in any
manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as possible
in a mutually acceptable manner in order that the Transactions be
consummated as originally contemplated to the fullest extent possible.
SECTION 9.05. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement
constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to
the subject matter hereof. This Agreement shall not be assigned by
operation of law or otherwise, except that Parent and Purchaser may assign
all or any of their rights and obligations hereunder to any affiliate of
Parent provided that no such assignment shall relieve the assigning party
of its obligations hereunder if such assignee does not perform such
obligations.
SECTION 9.06. PARTIES IN INTEREST. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Section 6.04
(which is intended to be for the benefit of the persons covered thereby and
may be enforced by such persons).
SECTION 9.07. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at law or equity.
SECTION 9.08. GOVERNING LAW. Except to the extent that Delaware
Law applies to these Transactions, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable
to contracts executed in and to be performed in that State.
SECTION 9.09. HEADINGS. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.10. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
SECTION 9.11. FEES AND EXPENSES. All fees and expenses incurred
in connection with this Agreement and the Transactions contemplated hereby
shall be paid by Parent.
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
AQUA ALLIANCE INC.
By: /s/ Thierry Mallet
-------------------------
Name: Thierry Mallet
Title: President and CEO
VIVENDI
By: /s/ Daniel Caille
-------------------------
Name: Daniel Caille
Title: Directeur
AQUA ACQUISITION
CORPORATION
By: /s/ Michel Avenas
-------------------------
Name: Michel Avenas
Title: President
ANNEX A
Notwithstanding any other term or provision of the Offer, Purchaser
shall not be required to, subject to any applicable rules and regulations
of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to
Purchaser's obligation to pay for or return tendered Shares and Warrants
promptly after termination or withdrawal of the Offer), accept for payment,
purchase or pay for any validly tendered Shares and Warrants and may
terminate or amend the Offer and may postpone the acceptance for payment of
and payment for any Shares and Warrants, if (i) the Minimum Condition (as
defined in the Offer to Purchase) is not satisfied or (ii) at any time on
or after July 16, 1999, and prior to the acceptance for payment of any
Shares or Warrants, any of the following shall occur or exist (or shall
have been determined by the Company to have occurred or existed) that, in
Purchaser's judgment in any such case and regardless of the
circumstances giving rise thereto (including an action or omission to act
by Purchaser), makes it inadvisable or impracticable to proceed with
the Offer or with such acceptance for payment or payment:
(a) there shall have been any action threatened or taken, or approval
withheld, or any statute, rule or regulation proposed, sought, promulgated,
enacted, entered, amended, enforced or deemed to be applicable to the
Offer, the Merger, Parent or Purchaser or any of their subsidiaries, by
any governmental, regulatory or administrative authority or agency or
tribunal, domestic or foreign, which, in Purchaser's sole judgment,
would directly or indirectly: (i) make the acceptance for payment of, or
payment for, some or all of the Shares or Warrants illegal or otherwise
restrict or prohibit consummation of the Offer or the Merger, or (ii) delay
or restrict the ability of Purchaser, or render Purchaser unable,
to accept for payment or pay for some or all of the Shares or Warrants
pursuant to the Offer or to consummate the Merger; or
(b) there shall be threatened, instituted or pending any action or
proceeding by any government or governmental authority or agency, domestic
or foreign, or by any other person, domestic or foreign, before any court
or governmental authority or agency, domestic or foreign, challenging or
seeking to, or which could, make illegal, delay or otherwise directly or
indirectly restrain or prohibit or make materially more costly (i) the
making of the Offer, (ii) the acceptance for payment of, or payment for,
some of or all Shares or Warrants pursuant to the Offer, (iii) the purchase
of Shares or Warrants pursuant to the Offer, (iv) consummation of the
Merger, (v) seeking to obtain damages in connection with the Offer or the
Merger, or (vi) seeking to restrain or prohibit the consummation of the
Offer, the Merger or the transactions contemplated thereby or which
otherwise directly or indirectly relates to the Offer or the Merger; or
(c) a preliminary or permanent injunction or other order by any
Federal or state court which prevents (i) the acceptance for payment of, or
payment for, some of or all the Shares or Warrants pursuant to the Offer or
(ii) consummation of the Merger shall have been issued and shall remain in
effect; or
(d) the Special Committee (i) shall have withdrawn or modified in a
manner that is, in the reasonable judgment of Purchaser, materially
adverse to Purchaser or Parent (including by way of any amendment to
the Schedule 13E-3) its recommendation of the Offer or (ii) shall have
resolved to do any of the foregoing; or
(e) any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of the Company and
its subsidiaries, taken as a whole, which is or may be material to the
Company and its subsidiaries taken as a whole; or
(f) there shall have occurred: (i) the declaration of any banking
moratorium or suspension of payments in respect of banks in the United
States; (ii) any general suspension of trading in, or limitation on prices
for, securities on any United States national securities exchange or in the
over-the-counter market; (iii) the commencement of a war, armed hostilities
or any other national or international crisis directly or indirectly
involving the United States; (iv) any limitation (whether or not mandatory)
by any governmental, regulatory or administrative agency or authority on,
or any event which might affect, the extension of credit by banks or other
lending institutions in the United States; or (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(g) all consents and approvals required to be obtained from any
Federal or state governmental agency, authority or instrumentality in
connection with the Offer shall not have been obtained or Purchaser
shall have been advised that any such consent or approval will be denied or
substantially delayed, or will not be given other than upon terms or
conditions which would, in the opinion of Purchaser, make it
impracticable to proceed with the Offer or the Merger; or
(h) Parent, Purchaser and the Company (with the approval of the
Special Committee) shall have agreed that Purchaser shall terminate the
Offer or postpone for payment of or the payment for Shares or Warrants
thereunder.
The foregoing conditions are for Purchaser's sole benefit and may
be asserted by Purchaser regardless of the circumstances giving rise to
any such condition (including any action or inaction by Purchaser) or
may be waived by Purchaser in whole or in part. Purchaser's failure
at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right, and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time. In certain
circumstances, if Purchaser waives any of the foregoing conditions, it
may be required to extend the Expiration Date of the Offer. Any
determination by Purchaser concerning the events described above and
any related judgment or decision by Purchaser regarding the
inadvisability of proceeding with the purchase of or payment for any Shares
or Warrants tendered will be final and binding on all parties.
TABLE OF CONTENTS
PAGE
ARTICLE I
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.01. THE OFFER. . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. COMPANY ACTION . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.01. THE MERGER . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.02. CLOSING . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.03. EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.04. EFFECT OF THE MERGER . . . . . . . . . . . . . . . . . 6
SECTION 2.05. CERTIFICATE OF INCORPORATION; BY-LAWS . . . . . . . . 6
SECTION 2.06. DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . 6
SECTION 2.07. CONVERSION OF SECURITIES . . . . . . . . . . . . . . . 6
SECTION 2.08. DISSENTING SHARES . . . . . . . . . . . . . . . . . . 7
SECTION 2.09. SURRENDER OF SHARES; STOCK TRANSFER
BOOKS . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.10. WITHHOLDING RIGHTS . . . . . . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . 10
SECTION 3.01. ORGANIZATION AND QUALIFICATION . . . . . . . . . . . 10
SECTION 3.02. CERTIFICATE OF INCORPORATION AND
BY-LAWS . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.03. CAPITALIZATION . . . . . . . . . . . . . . . . . . . 10
SECTION 3.04. AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . 11
SECTION 3.05. NO CONFLICT; REQUIRED FILINGS AND
CONSENTS . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.06. SEC FILINGS; FINANCIAL STATEMENTS . . . . . . . . . 13
SECTION 3.07. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT. . 14
SECTION 3.08. BROKERS . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.09. OPINION OF FINANCIAL ADVISOR . . . . . . . . . . . . 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER . . . . . . 15
SECTION 4.01. CORPORATE ORGANIZATION . . . . . . . . . . . . . . . 15
SECTION 4.02. AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . 15
SECTION 4.03. NO CONFLICT; REQUIRED FILINGS AND
CONSENTS . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.04. FINANCING . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.05. OFFER DOCUMENTS; PROXY STATEMENT . . . . . . . . . . 16
ARTICLE V
COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE COMPANY . . . . . . . . 17
ARTICLE VI
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.01. STOCKHOLDERS' MEETING . . . . . . . . . . . . . . . 17
SECTION 6.02. PROXY STATEMENT . . . . . . . . . . . . . . . . . . 18
SECTION 6.03. PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . 18
SECTION 6.04. REDEMPTION OF SUBORDINATED CONVERTIBLE DEBENTURES . 19
SECTION 6.05. FURTHER ACTION . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
CONDITIONS TO THE MERGER . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.01. CONDITIONS TO THE MERGER . . . . . . . . . . . . . . 19
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . 20
SECTION 8.01. TERMINATION . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.02. EFFECT OF TERMINATION . . . . . . . . . . . . . . . 21
SECTION 8.03. AMENDMENT . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.04. WAIVER . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.01. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS . . . . . . . . . . . . . . . . . . . 21
SECTION 9.02. NOTICES . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.03. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . 23
SECTION 9.04. SEVERABILITY . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.05. ENTIRE AGREEMENT; ASSIGNMENT . . . . . . . . . . . . 24
SECTION 9.06. PARTIES IN INTEREST . . . . . . . . . . . . . . . . 24
SECTION 9.07. SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . 24
SECTION 9.08. GOVERNING LAW . . . . . . . . . . . . . . . . . . . 24
SECTION 9.09. HEADINGS . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.10. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.11. FEES AND EXPENSES . . . . . . . . . . . . . . . . . 25
ANNEX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-I
[Aqua Alliance Inc. Logo]
Contact: Robert S. Volland
Aqua Alliance Inc.
781-224-6116
WAKEFIELD, MA July 12, 1999--Aqua Alliance Inc. (AMEX, AAI) announced today
that on July 9, 1999, it entered into a definitive merger agreement with
Vivendi for the purchase by Vivendi of all outstanding shares of Aqua
Alliance common stock that it does not already own for $2.90 per share in
cash and all outstanding warrants to purchase common stock for $.40 per
warrant. Vivendi currently owns approximately 83% of Aqua Alliance's
common stock.
The terms of the merger agreement represent an improvement from Vivendi's
prior proposal of $2.00 per share in cash. The Aqua Alliance Board of
Directors approved the merger agreement after approval by a special
committee of independent directors, which was advised by separate legal and
financial advisors. The special committee has received the opinion of its
financial advisors that the cash consideration to be received in the
transaction is fair to the Aqua Alliance stockholders other than Vivendi
from a financial point of view.
The merger agreement provides for the commencement of a tender offer by
Vivendi by Friday, July 16, 1999. Under the terms of the merger agreement,
each Aqua Alliance share that is not purchased in the offer will be
acquired by merger as soon as practical thereafter in a second step merger,
also for $2.90 per share in cash. Also in the second step merger, each
warrant that is not purchased in the offer will remain outstanding and be
exercisable, upon payment of the $2.50 exercise price, in exchange for
$2.90 in cash.
In connection with entering into the merger agreement, Vivendi and Aqua
Alliance have reached an agreement in principle settling the litigations
filed in the Delaware Court of Chancery by certain stockholders of Aqua
Alliance, subject to completion of confirmatory discovery and court
approval.
Aqua Alliance Inc. is an integrated single source provider of services and
solutions for the water and wastewater and hazardous waste remediation
markets. Aqua Alliance, through its subsidiaries, provides a comprehensive
range of services and technologies directed primarily at providing complete
services for the operation, maintenance and management of water and
wastewater treatment systems; engineering, design and construction of water
and wastewater facilities; and the remediation of hazardous waste.
Aqua Alliance Inc.
30 Harvard Mill Square, Wakefield, MA 01880-5371
Tel: 781 224 6116 Fax: 781 224 6696 www.aquaalliance.com
