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EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
by and between
U.S. Can Corporation
and
Pac Packaging Acquisition Corporation
Dated as of June 1, 2000
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TABLE OF CONTENTS
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RECITALS ..................................................................................1
ARTICLE I THE MERGER ......................................................................2
Section 1.1 The Merger................................................................2
Section 1.2 Closing...................................................................2
Section 1.3 Effective Time............................................................2
Section 1.4 Subsequent Actions........................................................2
Section 1.5 Certificate of Incorporation..............................................3
Section 1.6 The Bylaws................................................................3
Section 1.7 Officers and Directors....................................................3
ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK ..........................................3
Section 2.1 Effect on Capital Stock...................................................3
Section 2.2 Stock Options.............................................................5
Section 2.3 Dissenting Shares.........................................................5
Section 2.4 Payment for Company Shares and Stock Options in the Merger................6
Section 2.5 No Transfer of Company Shares After the Effective Time....................7
Section 2.6 No Liability..............................................................7
Section 2.7 Lost Certificates.........................................................8
Section 2.8 No Fractional Shares......................................................8
Section 2.9 Adjustments to Prevent Dilution...........................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY .................................8
Section 3.1 Organization and Qualification; Subsidiaries..............................8
Section 3.2 Charter Documents and Bylaws..............................................9
Section 3.3 Capitalization............................................................9
Section 3.4 Authority Relative to this Agreement.....................................10
Section 3.5 No Conflict; Required Filings and Consents...............................11
Section 3.6 SEC Filings; Financial Statements........................................12
Section 3.7 Absence of Certain Changes or Events.....................................13
Section 3.8 Intellectual Property....................................................14
Section 3.9 Material Contracts.......................................................15
Section 3.10 Environmental Matters....................................................16
Section 3.11 Benefit Plans............................................................16
Section 3.12 Tax Matters..............................................................19
Section 3.13 Litigation...............................................................20
Section 3.14 Opinion of Financial Advisor.............................................20
Section 3.15 Brokers..................................................................21
Section 3.16 Properties and Assets....................................................21
Section 3.17 Compliance with Laws in General..........................................21
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Section 3.18 Labor Matters............................................................21
Section 3.19 Required Company Vote....................................................22
Section 3.20 State Takeover Laws......................................................22
Section 3.21 Rights Agreement.........................................................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NEWCO .......................................23
Section 4.1 Organization and Qualification; Subsidiaries.............................23
Section 4.2 Charter Documents and Bylaws.............................................23
Section 4.3 Authority Relative to this Agreement.....................................23
Section 4.4 No Conflict; Required Filings and Consents...............................24
Section 4.5 Ownership of Newco; No Prior Activities..................................24
Section 4.6 Litigation...............................................................25
Section 4.7 Financing................................................................25
Section 4.8 Management Arrangements..................................................25
Section 4.9 Capitalization...........................................................25
Section 4.10 Brokers..................................................................26
Section 4.11 No Registration..........................................................26
ARTICLE V COVENANTS.......................................................................26
Section 5.1 Interim Operations of the Company........................................26
Section 5.2 Meeting of the Stockholders..............................................29
Section 5.3 Filings; Other Action....................................................30
Section 5.4 Access...................................................................31
Section 5.5 Notification of Certain Matters..........................................31
Section 5.6 Publicity................................................................31
Section 5.7 Indemnification..........................................................31
Section 5.8 Employee Benefit Plans...................................................33
Section 5.9 No Solicitation of Transactions..........................................33
Section 5.10 Third Party Standstill Agreements........................................35
Section 5.11 Consents.................................................................35
Section 5.12 Delisting................................................................35
Section 5.13 Actions Respecting Commitment Letters; Financing, Notification...........35
Section 5.14 Financial Statements.....................................................36
Section 5.15 State Takeover Laws......................................................36
Section 5.16 Senior Subordinated Notes................................................36
ARTICLE VI CONDITIONS ....................................................................37
Section 6.1 Conditions to the Obligations of Each Party..............................37
Section 6.2 Conditions to the Obligations of Newco...................................37
Section 6.3 Conditions to the Obligations of the Company.............................38
ARTICLE VII TERMINATION ..................................................................40
Section 7.1 Termination by Mutual Consent............................................40
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Section 7.2 Termination by Either Newco or the Company...............................40
Section 7.3 Termination by Newco.....................................................40
Section 7.4 Termination by the Company...............................................40
Section 7.5 Effect of Termination....................................................41
ARTICLE VIII MISCELLANEOUS; GENERAL ......................................................41
Section 8.1 Payment of Expenses......................................................41
Section 8.2 Survival.................................................................42
Section 8.3 Modification or Amendment................................................42
Section 8.4 Waiver of Conditions.....................................................42
Section 8.5 Counterparts.............................................................42
Section 8.6 Governing Law............................................................43
Section 8.7 Notices..................................................................43
Section 8.8 Entire Agreement, etc....................................................44
Section 8.9 Interpretation...........................................................44
Section 8.10 Certain Definitions......................................................44
Section 8.11 No Third Party Beneficiaries.............................................45
Section 8.12 Company Disclosure Schedule..............................................45
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GLOSSARY OF DEFINED TERMS
Position of
Defined Term Definition
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Acquisition Proposal Section 5.9(a)
affiliate Section 8.10
associate Section 8.10
Agreement Preamble
Berkshire Recitals
Berkshire Commitment Letter Recitals
Benefit Plans Section 3.11(b)
Board Recitals
Bylaws Section 1.6
Certificate of Merger Section 1.3
Certificates Section 2.4(b)
Charter Section 1.5
Claim Section 5.7(a)
Closing Section 1.2
Code Section 3.11(c)
Commitment Letters Section 4.7
Common Stock Recitals
Company Preamble
Company Disclosure Schedule Article III
Company Material Adverse Effect Section 3.1
Company Shares Section 2.1(a)
Company Subsidiary Section 3.1
Confidentiality Agreement Section 5.4
COBRA Section 3.11(f)
Current Premium Section 5.7(b)
Current SEC Reports Article III
DGCL Section 1.1
Debt Commitment Letters Section 4.7
Dissenting Shares Section 2.3
D&O Insurance Section 5.7(b)
Effective Time Section 1.3
Environmental Law Section 3.10
ERISA Section 3.11(b)
Exchange Act Section 3.5(b)
Exempted Person Section 3.20
Expenses Section 8.1(a)
Financing Section 4.7
Governmental Authority Section 3.5(b)
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HSR Act Section 3.5(b)
Indemnified Parties Section 5.7(a)
Indenture Section 5.16
Intellectual Property Section 3.8
knowledge of the Company Section 8.10
Law Section 3.5(a)
Liens Section 3.5(a)
Material Contracts Section 3.9(b)
Merger Recitals
Merger Consideration Section 2.1(a)
Multiemployer Pension Plans Section 3.11(b)
Newco Preamble
Newco Material Adverse Effect Section 4.1
Newco Common Stock Section 2.1(d)
Newco Preferred Stock Section 2.1(d)
Newco Shares Section 2.1(d)
Newco Stockholder Section 2.4(c)
NYSE Section 3.5(b)
Notes Section 5.16
Notice of Superior Proposal Section 5.9(a)
Option Consideration Section 2.2(a)
Options Section 3.3(a)
Option Plans Section 3.3(a)
Order Section 6.1(c)
Paying Agent Section 2.4(a)
Payment Fund Section 2.4(a)
Pension Plans Section 3.11(b)
person Section 8.10
Preferred Stock Section 3.3(a)
Proxy Statement Section 5.2(b)
Representatives Section 5.4
Rights Section 3.21
Rights Agreement Section 3.21
Rollover Shares Section 2.1(c)
Rollover Stockholder Recitals
Schedule 13E-3 Section 5.2(b)
SEC Article III
SEC Reports Section 3.6(a)
Securities Act Section 3.6(a)
Special Committee Recitals
Stockholders Meeting Section 5.2(a)
subsidiary Section 8.10
Substitute Debt Financing Section 5.13(b)
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Superior Proposal Section 5.9(a)
Surviving Corporation Section 1.1
Surviving Corporation Common Stock Section 2.1(c)
Surviving Corporation Preferred Stock Section 2.1(c)
Tax Section 3.12(f)
Tax Return Section 3.12(f)
Transactions Recitals
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"),
dated as of June 1, 2000, between U.S. Can Corporation, a Delaware corporation
(the "Company"), and Pac Packaging Acquisition Corporation, a Delaware
corporation ("Newco").
RECITALS
WHEREAS, the Company desires that Newco merge with and into the
Company, all upon the terms and subject to the conditions of this Agreement (the
"Merger");
WHEREAS, a special committee of the Board of Directors of the Company
(the "Board") consisting solely of disinterested directors (the "Special
Committee"), subject to the terms and conditions set forth herein, has
unanimously (i) determined that (A) the Merger is advisable and in the best
interests of the Company and its public stockholders and (B) the cash
consideration to be received for certain outstanding shares of common stock, par
value $0.01 per share, of the Company (the "Common Stock"), in the Merger is
fair to the stockholders of the Company who will be entitled to receive such
cash consideration, (ii) recommended that the Board approve and adopt this
Agreement, the Merger and the other transactions contemplated hereby
(collectively, the "Transactions") and (iii) recommended approval and adoption
by the stockholders of the Company of this Agreement and the Transactions;
WHEREAS, the Board has heretofore taken the actions referred to in
Section 3.20 and Section 3.21 relating to Section 203 of the DGCL (as defined
below) and the Rights Agreement (as defined below);
WHEREAS, the Board, subject to the terms and conditions set forth
herein, has (i) determined that (A) the Merger is advisable and in the best
interests of the Company and its public stockholders and (B) the cash
consideration to be received for certain outstanding shares of Common Stock in
the Merger is fair to the stockholders of the Company who will be entitled to
receive such cash consideration, (ii) approved and adopted this Agreement and
the Transactions and (iii) recommended approval and adoption by the stockholders
of the Company of this Agreement and the Transactions;
WHEREAS, those stockholders of the Company to be identified on Schedule
I hereto (each, a "Rollover Stockholder" and collectively, the "Rollover
Stockholders"), shall retain all or a portion of their equity interest in the
Company in connection with the Merger as more fully described herein;
WHEREAS, concurrent with the execution of this Agreement, Berkshire
Partners LLC ("Berkshire") has entered into an agreement with Newco in which it
has agreed, subject to the terms and conditions set forth therein, to invest (or
cause its affiliates to invest) up to a specified amount in Newco at or prior to
the Effective Time (the "Berkshire Commitment Letter"); and
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WHEREAS, the Company and Newco intend that the Merger qualify as a
leveraged recapitalization for financial reporting purposes but such
qualification shall not be a condition to this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined below), Newco shall be merged with
and into the Company and the separate corporate existence of Newco shall
thereupon cease. The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation") and shall
continue to be governed by the laws of the State of Delaware, and the separate
corporate existence of the Company with all its rights, privileges, immunities
and franchises shall continue unaffected by the Merger, except as set forth in
Sections 1.5, 1.6 and 1.7. The Merger shall have the effects specified in the
General Corporation Law of the State of Delaware, as amended (the "DGCL").
Section 1.2 Closing. Subject to the conditions contained in this
Agreement, the closing of the Merger (the "Closing") shall take place (i) at
9:00 a.m. at the offices of Mayer, Brown & Platt, Chicago, Illinois, as promptly
as practicable but in no event later than the third business day after which the
last to be fulfilled or waived of the conditions set forth in Article VI (other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions) shall be fulfilled
or waived in accordance with this Agreement, or (ii) at such other date, place
and time as the Company and Newco may agree in writing.
Section 1.3 Effective Time. At the Closing, the Company and Newco will
cause a Certificate of Merger (the "Certificate of Merger") to be executed,
acknowledged and filed with the Secretary of State of the State of Delaware as
provided in Section 251 of the DGCL. The Merger shall become effective at the
time when the Certificate of Merger has been duly filed with the Secretary of
State of the State of Delaware or such other later time as shall be agreed upon
by the parties and set forth in the Certificate of Merger in accordance with the
DGCL (the "Effective Time").
Section 1.4 Subsequent Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or other actions or things are necessary
or desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Newco or to be acquired by the
Surviving Corporation as a result of, or
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in connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of the Company and Newco
or otherwise, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of each of the Company and Newco or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
Section 1.5 Certificate of Incorporation. The certificate of
incorporation of Newco as in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation (the
"Charter"), until duly amended as provided therein or by applicable Law, except
that Article I thereof shall be amended and restated in its entirety to state:
"The name of the Corporation is U.S. Can Corporation (the "Corporation")."
Section 1.6 The Bylaws. The bylaws of Newco as in effect immediately
prior to the Effective Time shall be the bylaws of the Surviving Corporation
(the "Bylaws").
Section 1.7 Officers and Directors. The directors of Newco and the
officers of the Company immediately prior to the Effective Time shall, from and
after the Effective Time, be the directors and officers, respectively, of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the Charter and the Bylaws.
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK
Section 2.1 Effect on Capital Stock. At the Effective Time, the Merger
shall have the following effects on the capital stock of the Company and Newco:
(a) At the Effective Time, each share of the Company's Common
Stock (each, a "Company Share" and together the "Company Shares")
issued and outstanding immediately prior to the Effective Time (other
than (i) Company Shares issued and held in the Company's treasury, (ii)
the Rollover Shares (as defined below) and (iii) the Dissenting Shares
(as defined below)) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right
to receive an amount equal to twenty dollars ($20.00) in cash (the
"Merger Consideration"). All such Company Shares, by virtue of the
Merger and without any action on the part of the holders thereof, shall
no longer be outstanding and shall be canceled and retired and shall
cease to exist, and each holder of a certificate representing any such
Company Shares shall thereafter cease to have any rights (including
rights under the Rights Plan) with respect to such Company Shares,
except the right to receive the Merger Consideration for such Company
Shares upon the surrender of such certificate in accordance with
Section 2.4.
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(b) At the Effective Time, each Company Share issued and held
in the Company's treasury shall, by virtue of the Merger and without
any action on the part of the holder thereof, cease to be outstanding,
be canceled and be retired without payment of any consideration
therefor and cease to exist.
(c) The Schedule I attached hereto as of the date of this
Agreement describes the persons that potentially may be Rollover
Stockholders, and the maximum number of shares of Common Stock that may
be Rollover Shares. Prior to June 20, 2000, Newco shall provide to the
Company a definitive Schedule I that shall set forth (i) the name of
each person that in fact will be a Rollover Stockholder, (ii) all other
information necessary to complete Schedule I with respect to each
Rollover Stockholder set forth thereon and (iii) an aggregate number of
Rollover Shares, which shall not be greater than the maximum number set
forth on the initial Schedule I; provided that such definitive Schedule
I shall not name as a Rollover Stockholder any person that is not an
Exempted Person (as defined below). If the definitive Schedule I is
submitted as provided herein, then (A) such definitive Schedule I shall
become and be Schedule I to this Agreement and (B) without limiting the
effect of Clause (A), the Company shall use its reasonable best efforts
to cause the Board of Directors of the Company to confirm its approval
of such definitive Schedule I within five business days of its being
submitted to the Company. At the Effective Time, the aggregate number
of issued and outstanding shares of Common Stock held by a Rollover
Stockholder and designated on Schedule I under the column designated
"Rollover Shares" (each a "Rollover Share" and together the "Rollover
Shares") shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to receive (1)
the aggregate number of shares of common stock, par value $0.01 per
share, of the Surviving Corporation ("Surviving Corporation Common
Stock") and (2) the aggregate number of shares of preferred stock, par
value $0.01 per share, of the Surviving Corporation ("Surviving
Corporation Preferred Stock") set forth on Schedule I next to the name
of each such Rollover Stockholder in the columns designated "Surviving
Corporation Common Stock" and "Surviving Corporation Preferred Stock,"
respectively. All such Rollover Shares, by virtue of the Merger and
without any action on the part of the holders thereof, shall no longer
be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such Rollover
Shares shall thereafter cease to have any rights with respect to such
Rollover Shares, except the right to receive the Surviving Corporation
Common Stock and the Surviving Corporation Preferred Stock for such
Rollover Shares as set forth in Schedule I upon the surrender of such
certificate in accordance with Section 2.4.
(d) At the Effective Time, each share of common stock, par
value $0.01 per share, of Newco ("Newco Common Stock") shall, by virtue
of the Merger and without any action on the part of the holder thereof,
be converted into one share of Surviving Corporation Common Stock and
each share of preferred stock, par value $0.01 per share, of Newco
("Newco Preferred Stock") shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into the
right to receive one share of Surviving
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Corporation Preferred Stock. All such shares of Newco Common Stock and
Newco Preferred Stock (collectively, the "Newco Shares"), by virtue of
the Merger and without any action on the part of the holders thereof,
shall no longer be outstanding and shall be canceled and retired and
shall cease to exist, and each holder of a certificate representing any
such Newco Common Stock or Newco Preferred Stock shall thereafter cease
to have any rights with respect to such Newco Common Stock and Newco
Preferred Stock, except the right to receive Surviving Corporation
Common Stock or Surviving Corporation Preferred Stock as set forth
above. For purposes of this Section 2.1, references to Company Shares
and Rollover Shares include the Rights associated with such Company
Shares and Rollover Shares.
Section 2.2 Stock Options. As part of the Transactions, the Company and
the Surviving Corporation shall cause Options granted under the Option Plans to
be treated as follows:
(a) At the Effective Time, all then outstanding Options shall
be canceled and in lieu thereof, each holder of such an Option shall
receive from the Surviving Corporation, an amount in cash equal to the
product of (i) the excess, if any, of the Merger Consideration over the
per share exercise price of such Option and (ii) the number of Company
Shares subject to such Option, net of any applicable withholding taxes
(the "Option Consideration").
(b) Each of the Company and the Surviving Corporation, as the
case may be, covenants that prior to the Effective Time it will take
all actions necessary to provide that the cancellation and cash-out of
Options pursuant to this Section 2.2 will qualify for exemption under
Rule 16b-3(d) or (e), as applicable, under the Exchange Act.
(c) The Company shall use its reasonable best efforts to
obtain all necessary consents, waivers or releases from holders of
Options and shall take such action as may be reasonably necessary to
give effect to, and accomplish, the transactions contemplated by this
Section 2.2.
(d) Except as otherwise provided herein or agreed by the
parties, the Option Plans shall terminate effective as of the Effective
Time and the Company shall use its reasonable best efforts to cause the
provisions in 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 Company Subsidiary to be canceled as of the
Effective Time.
Section 2.3 Dissenting Shares. Notwithstanding any provisions of this
Agreement to the contrary, Company Shares which are issued and outstanding
immediately prior to the Effective Time and which are held by a Company
stockholder who has not voted such Company Shares in favor of the Merger, who
shall have delivered a written demand for appraisal of such Company Shares in
the manner provided by the DGCL and who, as of the Effective Time, shall not
have effectively withdrawn or lost such right to appraisal (the "Dissenting
Shares") shall not be converted into a right to receive the Merger
Consideration. The holders thereof shall be entitled only to such rights as are
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granted by Section 262 of the DGCL. Each holder of Dissenting Shares who becomes
entitled to payment for such Company Shares pursuant to Section 262 of the DGCL
shall receive payment therefor from the Surviving Corporation in accordance with
the DGCL; provided, however, that (i) if any such holder of Dissenting Shares
shall have failed to establish its entitlement to appraisal rights as provided
in Section 262 of the DGCL, (ii) if any such holder of Dissenting Shares shall
have effectively withdrawn its demand for appraisal of such Company Shares or
lost its right to appraisal and payment for its Company Shares under Section 262
of the DGCL or (iii) if neither any holder of Dissenting Shares nor the
Surviving Corporation shall have filed a petition demanding a determination of
the value of all Dissenting Shares within the time provided in Section 262 of
the DGCL, such holder shall forfeit the right to appraisal of such Company
Shares and each such Company Share shall be treated as if such Company Share had
been converted, as of the Effective Time, into a right to receive the Merger
Consideration, without interest thereon, from the Surviving Corporation as
provided in Section 2.1. The Company shall give Newco prompt notice of any
demands received by the Company for appraisal of Company Shares, and, until the
Effective Time, Newco shall have the right to participate in all negotiations
and proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Newco, make any payment with respect to, or settle
or offer to settle, any such demands.
Section 2.4 Payment for Company Shares and Stock Options in the Merger.
The manner of making payment for Company Shares and Options in the Merger shall
be as follows:
(a) At the Effective Time, the Company shall deposit in trust
for the benefit of the holders of Company Shares and Options, as the
case may be, with a bank or trust company designated by Newco and
approved by the Company (the "Paying Agent"), cash in an aggregate
amount equal to the sum of (A) the product of (1) the number of Company
Shares issued and outstanding at the Effective Time (other than Company
Shares owned by the Company and the Rollover Shares) and (2) the Merger
Consideration and (B) the amount necessary for the payment in full of
the Option Consideration for all Options outstanding at the Effective
Time (such aggregate amount being hereinafter referred to as the
"Payment Fund"). The Paying Agent shall, pursuant to irrevocable
instructions, make the payments provided for in Sections 2.1 and 2.2
out of the Payment Fund. The Payment Fund shall not be used for any
other purpose except as provided in this Agreement.
(b) Promptly after the Effective Time, the Paying Agent shall
mail to each record holder, as of the Effective Time, of an outstanding
certificate or certificates which, immediately prior to the Effective
Time, represented Company Shares other than Rollover Shares (the
"Certificates") a form letter of transmittal and instructions for use
in effecting the surrender of the Certificates for payment therefor.
Upon surrender to the Paying Agent of a Certificate, together with such
letter of transmittal duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor cash in an amount
equal to the product of the number of Company Shares, other than
Rollover Shares, represented by such Certificate and the Merger
Consideration (subject to reduction only for any applicable withholding
or stock transfer taxes) and such Certificate shall forthwith be
canceled. No
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interest will be paid or accrued on the cash payable upon the surrender
of the Certificates. If payment is to be made to a person other than
the person in whose name the Certificate surrendered is registered, it
may be a condition of payment that the Certificate so surrendered shall
be properly endorsed or otherwise in proper form for transfer and that
the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the
registered holder of the Certificate surrendered of the Merger
Consideration, or that such person shall establish to the satisfaction
of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this
Section 2.4, each Certificate shall represent, for all purposes, only
the right to receive an amount in cash equal to the Merger
Consideration multiplied by the number of Company Shares, other than
Rollover Shares, evidenced by such Certificate.
(c) At the Closing, each Rollover Stockholder and each holder
of Newco Shares (each, a "Newco Stockholder" and collectively, the
"Newco Stockholders") shall surrender the certificate(s) representing
the Rollover Shares or the Newco Shares held by such Rollover
Stockholder or Newco Stockholder and the Surviving Corporation shall
issue to each such Rollover Stockholder and Newco Stockholder a
certificate or certificates representing the number of shares of
Surviving Corporation Common Stock and Surviving Corporation Preferred
Stock to which such Rollover Stockholder and Newco Stockholder is
entitled pursuant to Sections 2.1(c), 2.1(d) and Schedule I.
(d) Any portion of the Payment Fund that remains unclaimed by
the stockholders of the Company on the first anniversary of the
Effective Time shall promptly be repaid to the Surviving Corporation
and any stockholders of the Company who have not theretofore complied
with Section 2.4(b) shall thereafter look only to the Surviving
Corporation for payment of their claim for the Merger Consideration for
Company Shares, without any interest or dividends thereon. Unless
otherwise directed by the Surviving Corporation, the Paying Agent shall
invest and reinvest the Payment Fund on behalf of the Surviving
Corporation in securities issued or guaranteed by the United States
government or certificates of deposit of commercial banks that have, or
are members of a group of commercial banks that has, consolidated total
assets of not less than $10,000,000,000 and the Surviving Corporation
shall receive the interest earned thereon.
(e) Any portion of the Payment Fund made available to the
Paying Agent pursuant to Section 2.4(a) to pay for Company Shares that
become Dissenting Shares shall be returned to the Surviving Corporation
upon demand.
Section 2.5 No Transfer of Company Shares After the Effective Time. No
transfers of Company Shares shall be made on the stock transfer books of the
Surviving Corporation at or after the Effective Time.
Section 2.6 No Liability. Neither the Surviving Corporation nor the
Paying Agent shall be liable to any person in respect of any cash delivered to a
public official pursuant to any applicable
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abandoned property, escheat or similar law. If any Certificates shall not have
been surrendered prior to the second anniversary of the Effective Time (or
immediately prior to such earlier date on which any payment pursuant to this
Article II would otherwise escheat to or become the property of any governmental
entity), the cash payment in respect of such Certificate shall, unless otherwise
provided by applicable Law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
Section 2.7 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
(who shall be the record owner of such Certificate) claiming such Certificate to
be lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such person of a bond in such reasonable amount as the Surviving
Corporation may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Paying Agent will issue in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration deliverable
in respect thereof pursuant to this Agreement.
Section 2.8 No Fractional Shares. Notwithstanding any other provision
of this Agreement, no fractional shares of Surviving Corporation Common Stock
will be issued and any Rollover Stockholder or Newco Stockholder entitled to
receive a fractional share of Surviving Corporation Common Stock but for this
Section 2.8 shall be entitled to receive in lieu thereof an amount in cash
(without interest) determined by multiplying such fraction (rounded to the
nearest one-hundredth of a share) by $20.00.
Section 2.9 Adjustments to Prevent Dilution. In the event that prior to
the Effective Time, solely as a result of a reclassification, stock split
(including a reverse split), or stock dividend or stock distribution, made on a
pro rata basis to all holders of such class of stock of the entity making such a
stock dividend or stock distribution, there is a change in the number of Company
Shares or Newco Shares outstanding or issuable upon the conversion, exchange or
exercise of securities or rights convertible or exchangeable into or exercisable
for Company Shares or Newco Shares, then the Merger Consideration, Option
Consideration, and the number of shares of Surviving Corporation Common Stock
and Surviving Corporation Preferred Stock into which the Rollover Shares and
Newco Shares are entitled to be converted pursuant to Sections 2.1(c), 2.1(d)
and Schedule I shall all be equitably adjusted to eliminate the effects of such
event.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed in the Company's Annual Report on Form
10-K for the year ended December 31, 1999, the Company's definitive proxy
statement filed with the Securities and Exchange Commission (the "SEC") on March
28, 2000, the Company's Quarterly Report on Form 10-Q for the period ended March
31, 2000 and the Company's Current Reports on Form 8-K filed with the SEC on
January 13, 2000 and March 2, 2000 (the "Current SEC Reports") or set forth in
the Disclosure Schedule delivered by the Company to Newco concurrently with the
execution of this
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<PAGE> 16
Agreement (the "Company Disclosure Schedule"), the Company hereby represents and
warrants to Newco that:
Section 3.1 Organization and Qualification; Subsidiaries. The Company
and each subsidiary of the Company (each, a "Company Subsidiary") is a
corporation or limited liability company, as the case may be, duly incorporated
or formed, as the case may be, validly existing and in good standing or its
equivalent under the laws of the jurisdiction of its incorporation or formation
and has the requisite power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted except where the failure to be in good standing or
its equivalent or to have such governmental approvals would not, individually or
in the aggregate, have a Company Material Adverse Effect or prevent or
materially delay the consummation of the Transactions. The Company and each
Company Subsidiary is duly qualified or licensed as a foreign corporation to do
business, and is in good standing or its equivalent, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its business makes such qualification or licensing necessary, except for such
failure to be so qualified or licensed and in good standing or its equivalent
that would not, individually or in the aggregate, have a Company Material
Adverse Effect or prevent or materially delay the consummation of the
Transactions. The term "Company Material Adverse Effect" means, for all purposes
of this Agreement, any effect, circumstance or change that is materially adverse
to the business, operations, assets and liabilities (taken together), financial
condition or results of operations of the Company and the Company Subsidiaries,
taken as a whole. Section 3.1 of the Company Disclosure Schedule sets forth a
complete and accurate list of all subsidiaries of the Company. Except as set
forth in Section 3.1 of the Company Disclosure Schedule, the Company owns
directly or indirectly all of the issued and outstanding shares of capital stock
of, or other equity interests in, the Company Subsidiaries. Other than as set
forth in Section 3.1 of the Company Disclosure Schedule, as of the date of this
Agreement the Company has no other equity interest or profit participation in
any entity other than the Company Subsidiaries. No Company Shares are held by a
Company Subsidiary.
Section 3.2 Charter Documents and Bylaws. The Company has heretofore
furnished to Newco a complete and correct copy of the restated certificate of
incorporation and the bylaws of the Company as now in effect. The restated
certificate of incorporation and bylaws of the Company are each in full force
and effect. The Company is not in violation of any of the provisions of its
restated certificate of incorporation or bylaws.
Section 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of
(i) 50,000,000 shares of Common Stock and (ii) 10,000,000 shares of
preferred stock, par value $0.01 per share (the "Preferred Stock"). As
of May 31, 2000, (i) 13,447,269 shares of Common Stock were issued and
outstanding, all of which are validly issued, fully paid, nonassessable
and free of preemptive rights, and 82,498 shares of Common Stock were
held in treasury and (ii) no shares of Preferred Stock were issued and
outstanding. As of May 31, 2000, the Company was obligated to issue up
to 1,823,483 shares of Common Stock at a weighted average
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<PAGE> 17
exercise price of $16.3559 per share pursuant to outstanding options
("Options") granted pursuant to the Company's 1984 Incentive Stock
Option Plan, 1993 Stock Option Plan, 1994 Stock Option Plan, 1995
Equity Incentive Plan, 1997 Equity Incentive Plan, 1998 Equity
Incentive Plan and 1999 Equity Incentive Plan (the "Option Plans").
Except as set forth above, there are not now, nor (except as expressly
permitted by this Agreement) will there be at the Effective Time, any
options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments of any character relating to the issued or
unissued capital stock of the Company or obligating the Company to
issue, reserve for issuance or sell any shares of capital stock of, or
other equity interests in, the Company or any Company Subsidiary.
Section 3.3(a) of the Company Disclosure Schedule sets forth the name
of each holder of an Option, together with the exercise price and
number of shares of Common Stock subject to each such Option as of
March 29, 2000. Except as contemplated hereby, there are no outstanding
contractual obligations of the Company or any Company Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock of,
or other equity interests in, the Company or any Company Subsidiary.
(b) Other than as set forth on Section 3.3(b) of the Company
Disclosure Schedule, there are no stockholder agreements, voting trusts
or other agreements or understandings to which the Company is a party
relating to voting or disposition of any shares of capital stock of the
Company or granting to any person or group of persons the right to
elect, or to designate or nominate for election, a director to the
board of directors of the Company. All of the outstanding shares of
capital stock of, or other equity interests in, each of the Company
Subsidiaries have been validly issued and are fully paid,
non-assessable and free of any preemptive rights and, except as set
forth in Section 3.1 of the Company Disclosure Schedule, are owned
directly or indirectly by the Company free and clear of all liens,
charges, claims or encumbrances.
Section 3.4 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 the approval and adoption of
this Agreement by the holders of a majority of the then outstanding
shares of Common Stock and the filing and recordation of appropriate
documents for the Merger as required by the DGCL. This Agreement has
been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Newco,
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to creditors'
rights generally and to general principles of equity.
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<PAGE> 18
(b) The Special Committee has unanimously (i) determined that
(A) the Merger is advisable and in the best interests of the Company
and its stockholders other than the Rollover Stockholders and (B) the
Merger Consideration is fair to the stockholders of the Company other
than the Rollover Stockholders and (ii) recommended that the Board
approve and adopt this Agreement and the Transactions. Following such
actions by the Special Committee, the Board of Directors of the Company
unanimously (i) determined that (A) the Merger is advisable and in the
best interests of the Company and its stockholders other than the
Rollover Stockholders and (B) the Merger Consideration is fair to the
stockholders of the Company other than the Rollover Stockholders and
(ii) approved and adopted this Agreement and the Transactions.
Section 3.5 No Conflict; Required Filings and Consents.
(a) Except as set forth in Section 3.5(a) of the Company
Disclosure Schedule, the execution and delivery of this Agreement by
the Company does not, and the performance of this Agreement by the
Company and the consummation by the Company of the Transactions will
not (i) conflict with or violate the restated certificate of
incorporation or bylaws of the Company or conflict with or violate the
certificate of incorporation or bylaws or equivalent organizational
documents of any Company Subsidiary, (ii) assuming that all consents,
approvals, authorizations and other actions described in subsection (b)
have been obtained and all filings and obligations described in
subsection (b) have been made or complied with, conflict with or
violate any foreign or domestic (federal, state or local) law, statute,
ordinance, rule, regulation, permit, license, injunction, writ,
judgment, decree or order ("Law") applicable to the Company or any
Company Subsidiary or by which any asset of the Company or any Company
Subsidiary is bound or affected, or (iii) conflict with, 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 right of termination, amendment, acceleration or cancellation of,
or require any payment under, or result in the creation of a lien,
claim, security interest or other charge, title imperfection or
encumbrance (collectively, "Liens") on any asset of the Company or any
Company Subsidiary pursuant to, any contract, note, bond, mortgage,
indenture, lease, agreement or other instrument or obligation to which
the Company or any Company Subsidiary is a party or by which any asset
of the Company or any Company Subsidiary is bound or affected, except,
with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults, or other occurrences that would not,
individually or in the aggregate, have a Company Material Adverse
Effect or prevent or materially delay the consummation of the
Transactions.
(b) The execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company
and the consummation by the Company of the Transactions will not,
require any consent, approval, authorization or permit of, or filing
with or notification to, any domestic (federal, state or local) or
foreign government or governmental, regulatory or administrative
authority, agency, commission, board, bureau,
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<PAGE> 19
court or instrumentality or arbitrator of any kind ("Governmental
Authority"), except (i) for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
New York Stock Exchange ("NYSE"), the pre-merger notification
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR
Act"), the European Community Merger Control Regulation or any other
applicable foreign antitrust, competition or foreign investment Laws,
and filing and recordation of appropriate documents for the Merger as
required by the DGCL and (ii) other consents, approvals,
authorizations, permits, filings or notifications where the failure to
obtain all such consents, approvals, authorizations or permits, and to
make all such filings or notifications, would not prevent or materially
delay consummation of the Transactions and would not, individually or
in the aggregate, have a Company Material Adverse Effect.
Section 3.6 SEC Filings; Financial Statements.
(a) Since January 1, 1998, the Company has filed all forms,
reports, statements and other documents required to be filed with the
SEC, including (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 Reports on Form 8-K,
(E) all other reports or registration statements and (F) all amendments
and supplements to all such reports and registration statements
(collectively, the "SEC Reports"). The SEC Reports, as well as all
forms, reports and documents to be filed by the Company with the SEC
after the date hereof and prior to the Effective Time, (i) were and
will be prepared in all material respects in accordance with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), the Exchange Act and the published rules and regulations of the
SEC thereunder, each as applicable to such SEC Reports and (ii) did not
as of the time they were filed, and in the case of such forms, reports
and documents filed by the Company with the SEC after the date of this
Agreement, will not as of the time they are 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
therein, in the light of the circumstances under which they were and
will be made, not misleading. No Company Subsidiary is subject to the
periodic reporting requirements of the Exchange Act. To the knowledge
of the Company as of the date hereof, there is no material unresolved
violation of the Exchange Act or the published rules and regulations of
the SEC asserted by the SEC in writing with respect to the SEC Reports.
(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the SEC Reports has been
prepared in all material respects in accordance with the published
rules and regulations of the SEC and generally accepted accounting
principles applied on a consistent basis throughout the periods
indicated (except as may be set forth in the notes thereto) and each
fairly presents, in all material respects, the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated subsidiaries as at the respective dates thereof and for
the respective periods
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<PAGE> 20
indicated therein, except as otherwise set forth in the notes thereto
(subject, in the case of unaudited statements, to normal and recurring
year-end adjustments).
(c) Except as set forth in any SEC Report and except as
disclosed in Section 3.6(c) of the Company Disclosure Schedule, at the
date of the most recent audited financial statements of the Company
included in the SEC Reports, neither the Company nor any of the Company
Subsidiaries had, and since such date neither the Company nor any of
the Company Subsidiaries has incurred, any liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise)
which, individually or in the aggregate, would be required to be
disclosed in a balance sheet (or the footnotes thereto) of the Company
prepared in accordance with generally accepted accounting principles
except liabilities incurred in the ordinary and usual course of
business and consistent with past practice, liabilities incurred in
connection with the Transactions, and liabilities that have not had and
would not reasonably be expected to have a Company Material Adverse
Effect.
Section 3.7 Absence of Certain Changes or Events. From December 31,
1999 to the date hereof, except as contemplated or permitted by this Agreement
or the Transactions or as disclosed in the Company Disclosure Schedule, the
Company and the Company Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and there has not
been (a) any material change by the Company in its accounting methods,
principles or practices except as required by generally accepted accounting
principles and disclosed in any SEC Report filed since December 31, 1999, (b)
any material revaluation by the Company of any material asset (including any
writing down of the value of inventory or writing off of notes or accounts
receivable), other than in the ordinary course of business consistent with past
practice after the date of the most recent SEC Report filed prior to the date
hereof, (c) any entry by the Company or any Company Subsidiary into any
commitment or transaction material to the Company and the Company Subsidiaries
taken as a whole, except in the ordinary course of business and consistent with
past practice, (d) any declaration, setting aside or payment of any dividend or
distribution in respect of any shares of the Company's capital stock or any
redemption, purchase or other acquisition of any of the Company's securities,
(e) any material increase in the benefits under, or the establishment, material
amendment or termination of, any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, or other employee benefit
plan covering employees of the Company or any Company Subsidiary, or any
material increase in the compensation payable or to become payable to or any
other material change in the employment terms for any directors or officers of
the Company or any Company Subsidiary or any other employee earning
noncontingent cash compensation in excess of $200,000 per year, (f) any entry by
the Company or any Company Subsidiary into any employment, consulting,
severance, termination or indemnification agreement with any director or officer
of the Company or any Company Subsidiary or entry into any such agreement with
any other person for a noncontingent cash amount in excess of $100,000 per year
or outside the ordinary course of business, (g) any issuance by the Company or
any Company Subsidiary of any notes, bonds or other debt securities or any
capital stock or other equity securities or any securities convertible,
exchangeable or exercisable into any capital stock or other equity securities,
except for the issuance of any shares of Common Stock pursuant to the exercise
of any stock options pursuant to the Option
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<PAGE> 21
Plans and the issuance of any capital stock expressly contemplated by this
Agreement, (h) any agreement by the Company or any Company Subsidiary to take
any of the actions described in this Section 3.7 except as expressly
contemplated by this Agreement, or (i) any event, change or circumstance that
has or is reasonably likely to have a Company Material Adverse Effect.
Section 3.8 Intellectual Property. Except as set forth in Section 3.8
of the Company Disclosure Schedule and except as would not have a Company
Material Adverse Effect, the Company and each of the Company Subsidiaries own
and possess free and clear of any Liens, or have the valid and enforceable right
to use, the patents, copyrights, know-how (including trade secrets and other
proprietary or confidential information, systems or procedures), trademarks,
service marks, trade names, domain names, inventions, software, data, databases,
specifications and designs (collectively, "Intellectual Property") presently
employed by them in connection with the operation of the businesses now operated
by them. Section 3.8 of the Company Disclosure Schedule sets forth a complete
list of all material: (i) patented and registered Intellectual Property, and
pending patent applications or applications for registration of Intellectual
Property, owned or filed by the Company or any Company Subsidiary, (ii) all
trade names and material trademarks, service marks and copyrights owned or used
by the Company or any Company Subsidiary, and (iii) all licenses of Intellectual
Property to which the Company or any of the Company Subsidiaries is a party.
Neither the Company nor any of the Company Subsidiaries has received any written
notice of infringement or misappropriation of or conflict with asserted
Intellectual Property rights of others that, if decided in a manner adverse to
the Company, would have a Company Material Adverse Effect. No claim by any third
party contesting the validity, enforceability, use or ownership of any of the
Intellectual Property owned or used by the Company or any Company Subsidiary, is
currently outstanding or is threatened that would reasonably be expected to have
a Company Material Adverse Effect. The Company has no knowledge of any material
infringement or misappropriation by any third party with respect to the
Intellectual Property of the Company or any Company Subsidiary. All of the
Intellectual Property owned or used by the Company or any Company Subsidiary as
of the date hereof will be owned or licensed, subject to any modification of a
license agreement agreed upon by the Company in the ordinary course of business,
by the Company or such Company Subsidiary on identical terms and conditions
immediately subsequent to the Closing except for such changes which,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. The Company and each Company Subsidiary has
taken all reasonable and necessary actions to maintain and protect its
Intellectual Property except for those actions, which the failure to take,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
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<PAGE> 22
Section 3.9 Material Contracts.
(a) Except as disclosed in Section 3.9(a) of the Company
Disclosure Schedule, neither the Company nor any of the Company
Subsidiaries is, nor, to the Company's knowledge, is any other party,
in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Material
Contracts (as hereinafter defined) to which it is a party, except for
such defaults which, individually or in the aggregate, would not
reasonably be expected to result in a Company Material Adverse Effect;
and, to the knowledge of the Company, there has not occurred any event
that, with the lapse of time or giving of notice or both, would
constitute such a default other than such events which, individually or
in the aggregate, would not reasonably be expected to have a Company
Material Adverse Effect. Each of the Material Contracts is in full
force and effect and is enforceable in accordance with its terms
subject to applicable bankruptcy, insolvency or similar laws relating
to creditors' rights and general principles of equity except where the
failure to be in full force and effect or enforceable individually or
in the aggregate would not reasonably be expected to have a Company
Material Adverse Effect.
(b) Section 3.9(b) of the Company Disclosure Schedule sets
forth a list as of the date of this Agreement of all (i) credit
agreements, indentures, and other agreements related to any
indebtedness for borrowed money in excess of $500,000 of the Company or
any Company Subsidiary, (ii) material joint venture or other similar
agreements to which the Company or any Company Subsidiary is a party,
(iii) lease agreements to which the Company or any Company Subsidiary
is a party with annual lease payments in excess of $250,000, (iv)
agreements under which the Company or any Company Subsidiary has
advanced or loaned any other person any material amount, (v) guaranties
of any obligations in excess of $500,000 (other than a guarantee by the
Company of a Company Subsidiary's debts or a guarantee by a Company
Subsidiary of the Company's debts or another Company Subsidiary's
debts), (vi) agreements or groups of related agreements with the same
party or group of parties the performance of which involves annual
consideration in excess of $500,000 which are not cancelable by the
Company on 90-days' or less notice without premium or penalty, (vii)
agreements under which the Company has granted any person registration
rights (including demand and piggy-back registration rights), (viii)
material agreements purporting to restrict or prohibit the Company or
any Company Subsidiary from engaging or competing in any business or
engaging or competing in any business in any geographic area, (ix) all
employment, consulting, severance, termination or indemnification
agreements between the Company or any Company Subsidiary and any
director or officer of the Company or any Company Subsidiary or any
other employee earning noncontingent cash compensation in excess of
$200,000 per year, and (x) all other contracts which are material to
the Company and the Company Subsidiaries taken as a whole
(collectively, the "Material Contracts"). The Company has made
available to Newco a correct and complete copy of each agreement listed
in Section 3.9(b) of the Company Disclosure Schedule.
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<PAGE> 23
(c) Except as set forth in Section 3.5 of the Company
Disclosure Schedule, no Material Contract will, by its terms, terminate
as a result of the Transactions or require any consent from any party
thereto in order to remain in full force and effect immediately after
the Effective Time, except for any Material Contracts which, if
terminated or if any such consents were not obtained, would not have a
Company Material Adverse Effect.
Section 3.10 Environmental Matters. Except as set forth in Sections
3.10 or 3.17 of the Company Disclosure Schedule and except as would not have a
Company Material Adverse Effect, neither the Company nor any of the Company
Subsidiaries has violated, or has any liability under, any environmental, safety
or similar law or regulation applicable to its business or property relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or waste, pollutants or contaminants ("Environmental Law"), lacks any
permits, licenses or other approvals required of them under applicable
Environmental Law or is violating any term or condition of any such permit,
license or approval. Except as set forth in Section 3.10 of the Company
Disclosure Schedule and except as would not have a Company Material Adverse
Effect, neither the Company nor any of the Company Subsidiaries has received any
written notice or report regarding any violation of, or any liability under, any
Environmental Law, with respect to their operations, properties or facilities.
The Company and the Company Subsidiaries have made available to Newco all
material environmental audits, reports and other material environmental
documents relating to their properties, facilities or operations which are in
their possession or control. Neither the Company nor any of the Company
Subsidiaries has treated, stored, disposed of, arranged for or permitted the
disposal of, handled, or released any substance, or owned or operated its
business or any property or facility (and no such property or facility is, to
the knowledge of the Company, currently contaminated by any such substance) in a
manner that has given or would reasonably be expected to give rise to any
Company Material Adverse Effect. Neither the Company nor any of the Company
Subsidiaries has arranged for the disposal or treatment or for the
transportation for disposal or treatment, of any substance at any off-site
location where such arrangement has had or would reasonably be expected to have
a Company Material Adverse Effect.
Section 3.11 Benefit Plans.
(a) Except as disclosed in the Current SEC Reports or in
Sections 3.9(b) or 3.11 of the Company Disclosure Schedule or as
expressly contemplated by this Agreement, there exists no employment,
consulting, severance or termination agreement, arrangement or
understanding between the Company or any Company Subsidiary and any
employee, officer or director of the Company or any Company Subsidiary
earning noncontingent cash compensation in excess of $200,000 per year.
(b) Section 3.11 of the Company Disclosure Schedule contains a
list of all (i) "employee pension benefit plans" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (sometimes referred to herein as "Pension Plans"), including
any such Pension Plans that are "multiemployer plans" (as such term is
defined in Section 4001(a)(3) of ERISA) (collectively, the
"Multiemployer Pension
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<PAGE> 24
Plans"), (ii) "employee welfare benefit plans" (as defined in Section
3(1) of ERISA) and all other benefit plans and (iii) other bonus,
deferred compensation, severance pay, pension, profit-sharing,
retirement, insurance, stock purchase, stock option, or other fringe
benefit plan, arrangement or practice maintained, or contributed to, by
the Company or any of the Company Subsidiaries for the benefit of any
current or former employees, officers or directors of the Company or
any of the Company Subsidiaries (collectively, the "Benefit Plans").
The Company has delivered or made available to Newco correct and
complete copies of (i) each Benefit Plan, (ii) the most recent annual
report on Form 5500 filed with the Internal Revenue Service with
respect to each Benefit Plan (if any such report was required), (iii)
the most recent summary plan description for each Benefit Plan for
which such summary plan description is required and (iv) each trust
agreement and group annuity contract relating to any Benefit Plan.
(c) Except as disclosed in the Company Disclosure Schedule,
all Pension Plans intended to be qualified plans have been the subject
of determination letters from the Internal Revenue Service to the
effect that such Pensions Plans are qualified and exempt from Federal
income taxes under Section 401(a) and 501(a), respectively, of the
Internal Revenue Code of 1986, as amended (the "Code"), and no such
determination letter has been revoked. To the knowledge of the Company
as of the date hereof, there is no reasonable basis for the revocation
of any such determination letter.
(d) Except as disclosed in Section 3.11 of the Company
Disclosure Schedule, none of the Benefit Plans is, and none of the
Company or any of the Company Subsidiaries has ever maintained or had
an obligation to contribute to (i) a "single employer plan" (as such
term is defined in Section 4001(a)(15) of ERISA) subject to Section 412
of the Code or Title IV of ERISA, (ii) a "multiemployer plan" (as such
term is defined in Section 3(37) of ERISA), or (iii) a funded welfare
benefit plan (as such term is defined in Section 419 of the Code).
Except as disclosed in Section 3.11 of the Company Disclosure Schedule,
there are no unpaid contributions due prior to the date hereof with
respect to any Benefit Plan that are required to have been made under
the terms of such Benefit Plan, any related insurance contract or any
applicable Law. Except as disclosed in Section 3.11 of the Company
Disclosure Schedule, none of the Company or any of the Company
Subsidiaries has incurred any liability or taken any action, and the
Company does not have any knowledge of any action or event, that could
reasonably be expected to cause any one of them to incur any liability
(i) under Section 412 of the Code or Title IV of ERISA with respect to
any "single-employer plan" (as such term is defined in Section
4001(a)(15) of ERISA), (ii) on account of a partial or complete
withdrawal (as such term is defined in Sections 4203 and 4205 of ERISA,
respectively) with respect to any Multiemployer Pension Plan, or (iii)
on account of unpaid contributions to any Multiemployer Pension Plan,
which, in the case of clauses (i), (ii) or (iii), would result in a
Company Material Adverse Effect.
(e) None of the Company or any of the Company Subsidiaries has
engaged in a non-exempt "prohibited transaction" (as such term is
defined in Section 406 of ERISA and
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<PAGE> 25
Section 4975 of the Code) or any breach of fiduciary responsibility
with respect to any Benefit Plan subject to ERISA that reasonably could
be expected to subject the Company or any of the Company Subsidiaries
to (x) any material tax or penalty on prohibited transactions imposed
by Section 4975 of the Code or (y) any liability under Section 502(i)
or Section 502(l) of ERISA except in each case as to (y) as would not,
individually or in the aggregate, result in a Company Material Adverse
Effect. As of the date of this Agreement, except as disclosed in the
Company Disclosure Schedule, with respect to any Benefit Plan: (i) no
filing, application or other matter is pending with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation, the United
States Department of Labor or any other governmental body, and (ii)
there is no action, suit or claim pending, other than routine claims
for benefits.
(f) Except as disclosed in the Company Disclosure Schedule,
none of the Company or any of the Company Subsidiaries has any
obligation to provide any material health benefits or other non-pension
benefits to retired or other former employees, except as specifically
required by Part 6 of Title I of ERISA ("COBRA").
(g) For purposes of this Section 3.11, the term "Company ERISA
Affiliate" means each trade or business (whether or not incorporated)
which together with the Company is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code.
(h) Each Benefit Plan has at all times been maintained, by its
terms and in operation, in accordance with all applicable Laws in all
material respects, including (to the extent applicable) Code Section
4980B. Further, there has been no failure to comply with applicable
ERISA or other requirements concerning the filing of reports,
documents, and notices with the Secretary of Labor and Secretary of
Treasury or the furnishing of such documents to participants or
beneficiaries that could subject the Company, any Benefit Plan or any
Company ERISA Affiliate to any material civil or any criminal sanction.
(i) The Company and each Company ERISA Affiliate have made
full and timely payment of all amounts required to be contributed under
the terms of each Benefit Plan and applicable Law or required to be
paid as expenses under such Benefit Plan, and no excise taxes are
assessable as a result of any nondeductible or other contributions made
or not made to a Benefit Plan. The assets of all Benefit Plans which
are required under applicable Laws to be held in trust are in fact held
in trust, and, except as disclosed in the Company Disclosure Schedule,
the assets of each such Benefit Plan equal or exceed the liabilities of
each such Benefit Plan. The liabilities of each Benefit Plan are
properly and accurately reported on the financial statements and
records of the Company. The assets of each Benefit Plan are reported at
their fair market value on the books and records of each such Benefit
Plan.
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Section 3.12 Tax Matters. Except as set forth in Section 3.12 of the
Company Disclosure Schedule:
(a) Except where the failure to do so has not had, and would
not reasonably be expected to have, a Company Material Adverse Effect:
(i) the Company and each of the Company Subsidiaries has filed all
federal income Tax Returns and all other Tax Returns required to be
filed by it prior to the date hereof, and each such Tax Return has been
prepared in compliance with all applicable Laws and is true and correct
in all material respects; (ii) the Company and each of the Company
Subsidiaries has paid (or the Company has paid on the Company
Subsidiaries' behalf) all Taxes shown as due on such returns and all
other Taxes due and payable prior to the date hereof except such Taxes
as are currently being contested in good faith and for which adequate
reserves, as applicable, have been established in the Company's
financial statements in accordance with generally accepted accounting
principles, and the most recent financial statements contained in the
Current SEC Reports reflect an adequate reserve for all Taxes payable
by the Company and the Company Subsidiaries for all taxable periods and
portions thereof through the date of such financial statements; and
(iii) neither the Company nor any Company Subsidiary has incurred any
liability for Taxes subsequent to the date of such most recent
financial statement other than in the ordinary course of such Company's
or Company Subsidiary's business.
(b) Except as would not have a Company Material Adverse
Effect: (i) no Tax Return of the Company or any of the Company
Subsidiaries is under audit or examination by any taxing authority, and
no written notice of such an audit or examination or any other audit or
examination with respect to Taxes has been received by the Company or
any of the Company Subsidiaries; (ii) each deficiency resulting from
any audit or examination relating to Taxes by any taxing authority has
been paid, except for deficiencies currently being contested in good
faith and for which adequate reserves, as applicable, have been
established in the Company's financial statements in accordance with
generally accepted accounting principles; (iii) there are no liens for
Taxes upon the assets of the Company or any Company Subsidiary except
liens relating to current Taxes not yet due and payable; (iv) all Taxes
which the Company or any Company Subsidiary is required by Law to
withhold or to collect for payment have been duly withheld and
collected; (v) none of the Company or the Company Subsidiaries has
consented to extend the time in which any Tax may be assessed or
collected by any taxing authority; and (vi) to the knowledge of the
Company, no written claim has been made by any taxing authority in a
jurisdiction where the Company and the Company Subsidiaries do not file
Tax Returns that the Company or Company Subsidiary is or may be subject
to taxation in that jurisdiction.
(c) There is no contract or arrangement, plan or agreement by
or with the Company or any Company Subsidiary covering any person that,
individually or collectively, would give rise to the payment of any
amount by the Company or a Company Subsidiary that would not be
deductible by the Company or such Company Subsidiary by reason of
Section 280G of the Code with respect to the Transactions.
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(d) Each of the Company and the Company Subsidiaries has made
available to Newco true, correct and complete copies of all federal
income Tax Returns, and all other material Tax Returns, examination
reports and statements of deficiencies assessed against or agreed to by
any of the Company or the Company Subsidiaries that have been filed by
any of the Company or the Company Subsidiaries for the taxable years
ending December 31, 1996, 1997, 1998 and, if filed at the time of
execution of this Agreement, 1999.
(e) None of the Company or the Company Subsidiaries (A) has
been a member of an affiliated group filing a consolidated federal
income Tax Return (other than a group the common parent of which was
the Company), (B) is a party to or bound by any Tax allocation or Tax
sharing agreement with any person other than the Company and the
Company Subsidiaries, or (C) has any liability for the Taxes of any
person (other than any of the Company or the Company Subsidiaries)
under Treas. Reg. ss.1.1502-6 (or any similar provision of Law), as a
transferee or successor, by contract, or otherwise.
(f) As used in this Section 3.12, the terms (i) "Tax" (and,
with correlative meaning, "Taxes") means: (A) any federal, state, local
or foreign net income, gross income, gross receipts, windfall profit,
severance, property, production, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add-on
minimum, ad valorem, value added, transfer, stamp, or environmental
tax, or any other tax of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed by
any Governmental Authority; and (B) any liability of the Company or any
Company Subsidiary for the payment of amounts with respect to payments
of a type described in clause (A) as a result of any obligation of the
Company or any Company Subsidiary under any tax sharing agreement or
tax indemnity agreement; and (ii) "Tax Return" means any return, report
or similar statement required to be filed with respect to any Tax.
Section 3.13 Litigation. Except as set forth in Section 3.13 of the
Company Disclosure Schedule, there is no suit, claim, action, proceeding or
investigation pending, or, to the knowledge of the Company, threatened against
the Company or any of the Company Subsidiaries, at law or in equity, that,
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect or prevent or materially delay the consummation of the
Transactions (it being understood that the mere filing of litigation, or mere
existence of litigation, by or on behalf of stockholders of the Company, that
challenges or otherwise seeks damages with respect to the Transactions shall not
in and of itself be deemed to have such effect). Neither the Company nor any of
the Company Subsidiaries is subject to any outstanding order, writ, injunction
or decree that would reasonably be expected to have a Company Material Adverse
Effect or prevent or materially delay the consummation of the Transactions.
Section 3.14 Opinion of Financial Advisor. The Special Committee has
received the opinion of Lazard Fre'res & Co. LLC on or prior to the date of this
Agreement to the effect that the Merger Consideration to be received in the
Merger by the Company's stockholders is fair to the
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Company's stockholders other than the Rollover Stockholders from a financial
point of view and the Company has delivered a copy of such opinion to Newco.
Section 3.15 Brokers. No broker, finder or investment banker (other
than Lazard Fre'res & Co. LLC) 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 or any Company Subsidiary. Prior to the
execution hereof, the Company has made available to Newco a complete and correct
copy of all agreements between the Company and Lazard Fre'res & Co. LLC pursuant
to which such firm would be entitled to any payment relating to the
Transactions.
Section 3.16 Properties and Assets. The Company and the Company
Subsidiaries have good and valid title to, or, in the case of leased properties
and assets, valid leasehold interests in, all of their material tangible
properties and assets, real and personal, used or held for use in their
businesses located on their premises or shown on the consolidated balance sheet
of the Company and the Company Subsidiaries as of December 31, 1999 or acquired
thereafter, free and clear of any Liens, except (i) as set forth in the Current
SEC Reports or Section 3.16 of the Company Disclosure Schedule, (ii) Liens for
taxes not yet due and payable and for which adequate reserves, as applicable,
have been established in the Company's financial statements in accordance with
generally accepted accounting principles, (iii) Liens which do not, individually
or in the aggregate, materially interfere with or materially impair the conduct
of the business of the Company or any Company Subsidiary and (iv) Liens which
would not reasonably be expected to result in a Company Material Adverse Effect.
Except as set forth in Section 3.16 of the Company Disclosure Schedule, neither
the Company nor any Company Subsidiary owns any material real property. The real
property listed in Section 3.16 of the Company Disclosure Schedule constitutes
all of the material real property used or occupied by the Company or any Company
Subsidiary as of the date hereof.
Section 3.17 Compliance with Laws in General. Except as set forth in
Sections 3.10 or 3.17 of the Company Disclosure Schedule, (i) the Company has
not received any notices of, nor to its knowledge have there been any,
violations by the Company or any Company Subsidiary of any Law relating to its
business and operations that, individually or in the aggregate, would reasonably
be expected to have a Company Material Adverse Effect and (ii) the Company and
the Company Subsidiaries possess all permits, licenses, certifications, and
other governmental or regulatory authorizations and approvals necessary to
enable the Company and the Company Subsidiaries to carry on their businesses as
presently conducted, except for such failure to possess such permits, licenses,
certifications and other governmental authorizations and approvals which would
not be reasonably expected to have a Company Material Adverse Effect.
Section 3.18 Labor Matters. Except as set forth in Section 3.18 of the
Company Disclosure Schedule, (i) there is no labor strike, dispute, slowdown,
stoppage or lockout actually pending, or to the knowledge of the Company,
threatened against or affecting the Company or any of the Company Subsidiaries,
(ii) neither the Company nor any of the Company Subsidiaries is a party to or
bound by any collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor organization
or employee association in each case applicable
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to employees of the Company or any of the Company Subsidiaries, and (iii) none
of the employees of the Company or any of the Company Subsidiaries is
represented by any labor organization and, to the knowledge of the Company,
there are not any union organizing activities with respect to the Company or the
Company Subsidiaries, except in each case where the foregoing would not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect.
Section 3.19 Required Company Vote. The approval of this Agreement at
the Stockholders Meeting (as defined below) by holders of a majority of the
issued and outstanding shares of Common Stock entitled to vote at the
Stockholders Meeting is the only vote of the holders of any class or series of
the Company's securities necessary to approve this Agreement and the Merger.
Section 3.20 State Takeover Laws. Based on information provided by
Newco to the Company on or prior to the date hereof, the Company has taken such
actions as it reasonably determined necessary for the consummation of the
Transactions under Section 203 of the DGCL and to permit Newco, Paul W. Jones,
John L. Workman, Roger B. Farley, David R. Ford, Thomas A. Scrimo, J. Michael
Kirk, Gillian V.N. Derbyshire, Ricardo Poma, Francisco A. Soler, Salcorp Ltd.,
Katsura, S.A. Barcel Corporation, Scarsdale Company N.V., Inc., Windsor
International Corporation, Atlas World Carriers S.A., The World Financial
Corporation S.A., Citigroup Inc., Salomon Smith Barney Inc., Berkshire Partners
LLC, Bank of America, N.A., other lenders which participate with any or all of
the foregoing persons in the Transactions, and their respective spouses,
associates, affiliates and subsidiaries (collectively, the "Exempted Persons"),
or any combination thereof, to become "interested stockholders" (within the
meaning of Section 203 of the DGCL), in connection with developing agreements,
arrangements or understandings among themselves relating to the participation or
all or any of them in the Transactions and by taking any and all actions
relating to the consummation of, and by consummating, the Transactions.
Section 3.21 Rights Agreement. The Board has amended the Amended and
Restated Rights Agreement dated as of October 19, 1995 between the Company and
Harris Trust and Savings Bank, as Rights Agent (the "Rights Agreement") in a
manner sufficient so that the execution and delivery of this Agreement and the
consummation of the Merger and the other Transactions will not cause (i) any of
the Exempted Persons, or any combination of them, to constitute an Acquiring
Person (as defined in the Rights Agreement) or to be a Beneficial Owner of or to
beneficially own (as such terms are defined in the Rights Plan) 15% or more of
the outstanding Company Shares (subject to certain limitations set forth in
Amendment No. 1 to Rights Agreement dated the date hereof), (ii) a Distribution
Date (as defined in the Rights Agreement) to occur or (iii) the preferred share
purchase rights (the "Rights") issued pursuant to the Rights Plan to become
exercisable.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEWCO
Newco hereby represents and warrants to the Company that:
Section 4.1 Organization and Qualification; Subsidiaries. Newco is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be in good standing or to have such governmental approvals would not,
individually or in the aggregate, have a Newco Material Adverse Effect (as
defined below). Newco is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failure to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Newco Material Adverse Effect. The term "Newco Material
Adverse Effect" means, for all purposes of this Agreement, any effect,
circumstance or change that would be reasonably expected to prevent or
materially delay the consummation of the Transactions or otherwise prevent Newco
from performing its obligations under this Agreement. Newco has no subsidiaries.
Section 4.2 Charter Documents and Bylaws. Newco heretofore has provided
the Company a complete and correct copy of its certificate of incorporation and
its bylaws. The certificate of incorporation and bylaws of Newco so provided are
in full force and effect. Newco is not in violation of any of the provisions of
its certificate of incorporation or bylaws.
Section 4.3 Authority Relative to this Agreement.
(a) Newco 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 Newco and the consummation by Newco of
the Transactions have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part Newco
(including on the part of the stockholders of Newco) are necessary to
authorize this Agreement or to consummate the Transactions (other than
the filing and recordation of appropriate documents for the Merger as
required by the DGCL). This Agreement has been duly and validly
executed and delivered by Newco and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and
binding obligation of Newco, enforceable against Newco in accordance
with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws
relating to creditors' rights generally and to general principles of
equity.
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(b) The Board of Directors and stockholders of Newco have
approved and adopted this Agreement and the Transactions in accordance
with the DGCL and Newco's certificate of incorporation and bylaws.
Section 4.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Newco does
not, and the performance of this Agreement by Newco and the
consummation by Newco of the Transactions will not, (i) conflict with
or violate the certificate of incorporation or bylaws or equivalent
organizational documents of Newco, (ii) assuming that all consents,
approvals, authorizations and other actions described in subsection (b)
have been obtained and all filings and obligations described in
subsection (b) have been made or complied with, conflict with or
violate any Law applicable to Newco or by which any asset of Newco is
bound or affected, or (iii) conflict with, 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 right of
termination, amendment, acceleration or cancellation of, or require any
payment under or result in the creation of a Lien on any asset of Newco
pursuant to, any contract, note, bond, mortgage, indenture, lease,
agreement, or other instrument or obligation to which Newco is a party
or by which any asset of Newco is bound or affected, except, with
respect to clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults, or other occurrences which would not, individually
or in the aggregate, have a Newco Material Adverse Effect.
(b) The execution and delivery of this Agreement by Newco does
not, and the performance of this Agreement by Newco and the
consummation by Newco of the Transactions will not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, the New York Stock Exchange,
the pre merger notification requirements of the HSR Act, the European
Community Merger Control Regulation or any other applicable foreign
antitrust, competition or foreign investment Laws, and the filing and
recordation of appropriate merger documents as required by the DGCL and
(ii) other consents, approvals, authorizations, permits, filings or
notifications where the failure to obtain all such consents, approvals,
authorizations or permits, and to make all such filings or
notifications, would not prevent or delay consummation of the Merger,
or otherwise prevent Newco from performing its obligations under this
Agreement.
Section 4.5 Ownership of Newco; No Prior Activities. Newco was formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement. Newco (i) has not conducted, and will not prior to the Effective Time
conduct, any business and (ii) has no, and prior to the Effective Time will have
no, assets or liabilities, except, in either case, in connection with the
Transactions and except, in the case of (ii), as set forth on Schedule 4.5(ii)
hereto. No Company Shares are held by Newco or any subsidiary of Newco. As of
the date hereof, the capital stock of Newco, including options, warrants and
other rights to acquire capital stock, is beneficially owned
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as follows: Berkshire - 2,000 shares of Newco Common Stock, Paul W. Jones - 700
shares of Newco Common Stock, and John L. Workman - 300 shares of Newco Common
Stock.
Section 4.6 Litigation. There is no suit, claim, action, proceeding or
investigation pending, or, to the knowledge of Newco, threatened against Newco,
at law or in equity, that, individually or in the aggregate, could reasonably be
expected to prevent or materially delay the consummation of the Transactions (it
being understood that the mere filing of litigation, or mere existence of
litigation, by or on behalf of stockholders of the Company, that challenges or
otherwise seeks damages with respect to the Transactions shall not in and of
itself be deemed to have such effect). Newco is not subject to any outstanding
order, writ, injunction or decree that could reasonably be expected to have a
Newco Material Adverse Effect.
Section 4.7 Financing. Newco has provided the Company with commitment
letters from Salomon Smith Barney Inc., Citicorp North America, Inc., Banc of
America Bridge LLC, Bank of America, N.A. and Banc of America Securities LLC and
their respective affiliates, dated as of June 1, 2000 and June 1, 2000,
respectively (the "Debt Commitment Letters"), and the Berkshire Commitment
Letter (collectively, the "Commitment Letters" and the financing to be provided
thereunder, the "Financing"). The obligations to fund the commitments under the
Commitment Letters are not subject to any condition other than as set forth in
the Commitment Letters. Newco is not aware of any fact or occurrence existing on
the date of this Agreement that makes any of the assumptions or statements set
forth in the Commitment Letters inaccurate or that causes the Commitment Letters
to be ineffective or that precludes the satisfaction of the conditions set forth
in the Commitment Letters. The Commitment Letters have been duly executed by all
parties thereto and are in full force and effect as of the date hereof. All
commitment and other fees required to be paid under the Commitment Letters on or
prior to the date hereof have been paid. The aggregate amount of financing
committed pursuant to the Commitment Letters is sufficient to fund all amounts
required to be paid in connection with the consummation of the Transactions,
including the Merger Consideration and the Option Consideration as provided in
Section 2.4. Newco believes that, upon the consummation of the Transactions,
including the Financing, (i) the Surviving Corporation will not be insolvent,
(ii) the Surviving Corporation will not be left with unreasonably small capital,
(iii) the Surviving Corporation will not have incurred debts beyond its ability
to pay such debts as they mature, and (iv) the capital of the Surviving
Corporation will not be impaired.
Section 4.8 Management Arrangements. Newco has provided the Company
with true and correct copies of written term sheets relating to the
participation of certain members of Company's management in the transactions
contemplated by this Agreement.
Section 4.9 Capitalization. As of the date hereof, the authorized
capital stock of Newco consists of 5,000 shares of Newco Common Stock. As of the
date hereof, 3,000 shares of Newco Common Stock were issued and outstanding, all
of which are validly issued, fully paid, nonassessable and free of preemptive
rights, and no shares of common stock were held in treasury.
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Section 4.10 Brokers. No broker, finder or investment banker (other
than Salomon Smith Barney Inc. and Banc of America Securities LLC) 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, Berkshire or
Newco.
Section 4.11 No Registration. No registration is required under any
federal or state securities laws in connection with the offer, sale or issuance
of shares of Newco stock pursuant to the Merger and the Transactions.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company covenants
and agrees that during the period from the date of this Agreement to the
Effective Time (unless Newco shall otherwise agree in writing and except as
otherwise expressly contemplated or permitted by this Agreement or the Company
Disclosure Schedule):
(a) the business of the Company and the Company Subsidiaries
shall be conducted only in the ordinary and usual course and each of
the Company and the Company Subsidiaries shall use its reasonable best
efforts to preserve its business organization intact and maintain its
existing relations with customers, employees and business associates;
(b) the Company shall not (i) sell, transfer or pledge or
agree to sell, transfer or pledge any stock owned by it in any of the
Company Subsidiaries (except for the pledge of such stock for
collateral purposes in connection with its bank working capital
facility); (ii) except as expressly contemplated by this Agreement,
amend, or permit the amendment of, its restated certificate of
incorporation or bylaws or the similar organizational documents of any
of the Company Subsidiaries; (iii) split, combine or reclassify the
outstanding Company Shares; or (iv) declare, set aside or pay any
dividend or distribution payable in cash, stock or property with
respect to the Company Shares or any other capital stock of the
Company;
(c) neither the Company nor any of the Company Subsidiaries
shall (i) issue, deliver or sell or authorize or propose the issuance,
delivery or sale of, any shares of, or debt or equity securities
convertible or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, capital stock or other
equity interests of any class of the Company or the Company
Subsidiaries other than Company Shares issuable pursuant to the
agreements or arrangements described in Section 3.3(a) of the Company
Disclosure Schedule and Options issued under the Option Plans in the
ordinary course of business (but in no event shall all such Options
granted after the date hereof represent the right to purchase more than
50,000 shares of Common Stock (subject to adjustment for events of the
type described in Section 2.9) and in no event shall any Options
granted after the date hereof have an exercise price per share of
Common Stock less than the fair market value of a share of Common Stock
as of the grant date) or (ii) repurchase, redeem or otherwise acquire,
or permit any Company
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Subsidiary to repurchase, redeem or otherwise acquire, any shares of
capital stock or other equity interests of the Company or any Company
Subsidiary (including securities exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, capital
stock or other equity interests of the Company or any Company
Subsidiary);
(d) neither the Company nor any of the Company Subsidiaries
shall (i) except in the ordinary course of business and consistent with
past practice, grant or agree to any increase in the compensation of
any director, officer or employee earning in excess of $200,000 in
cash, noncontingent compensation per year, except for increases
contemplated by or required under employment agreements listed in
Section 3.7 of the Company Disclosure Schedule and bonuses payable in
the ordinary course under the Company's existing annual bonus plan,
(ii) enter into any new or materially amend any existing employment,
severance or termination agreement with any such director, officer or
employee or (iii) except as may be required to comply with applicable
Law, become obligated under any Benefit Plan that was not in existence
on the date hereof or amend or modify any Benefit Plan in existence on
the date hereof to materially enhance the benefits thereunder;
(e) the Company shall not, and shall not permit any of the
Company Subsidiaries to, acquire or agree to acquire, including by
merging or consolidating with, or purchasing all, substantially all, or
any material portion of, the assets or capital stock or other equity
interest of, any material business;
(f) the Company shall not, and shall not permit any of the
Company Subsidiaries to, sell, lease, license, encumber or otherwise
dispose of, or agree to sell, lease, license, encumber or otherwise
dispose of, any of its assets outside the ordinary course of business,
other than (i) assets with an aggregate book value not in excess of
$500,000 or (ii) pursuant to existing contracts or commitments
described in Section 5.1(f) of the Company Disclosure Schedule;
(g) except as contemplated by the Debt Commitment Letters, the
Company shall not, and shall not permit any of the Company Subsidiaries
to, incur or enter into any agreement to incur any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any
debt securities or warrants or rights to acquire any debt securities of
the Company or any Company Subsidiary, except (i) in the ordinary
course of business consistent with past practice, provided that such
borrowings are made under the Company's existing credit agreements in
an aggregate amount not to exceed the amounts currently authorized
under those agreements (other than borrowings to finance any
obligations of the Company hereunder) at any time outstanding, (ii) any
indebtedness for borrowed money or guarantees of indebtedness for
borrowed money acquired in any acquisition permitted hereunder or (iii)
subject to the limitations set forth in clause (i) above, any
continuation, extension, refinancing, renewal or replacement of any
existing indebtedness or guarantee or any indebtedness or guarantee
permitted by this Section 5.1(g);
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(h) the Company shall not, and shall not permit any of the
Company Subsidiaries to, make any loans or advances to, guarantees for
the benefit of, or investments in, any person (other than the Company
or an existing Company Subsidiary or an entity which becomes, after the
date hereof, a subsidiary of the Company) except in the ordinary course
of business consistent with past practice;
(i) neither the Company nor any of the Company Subsidiaries
shall merge or consolidate with any person except for the Merger and
except for any merger between or among (x) two or more Company
Subsidiaries or (y) any Company Subsidiary or Subsidiaries and the
Company, provided that the Company is the surviving corporation in any
such merger;
(j) neither the Company nor any Company Subsidiary shall
liquidate, dissolve or effect a recapitalization or reorganization in
any form of transaction;
(k) the Company shall not, and shall not permit any of the
Company Subsidiaries to, enter into, amend, modify or supplement any
Material Contract or agreement (i) outside of the ordinary course of
business and consistent with past practice (except as may be necessary
for the Company to comply with its obligations hereunder) or (ii)
restricting in any material respect the conduct of the businesses of
the Company and the Company Subsidiaries taken as a whole;
(l) the Company shall not, and shall not permit any of the
Company Subsidiaries to, make any capital expenditures (other than
pursuant to commitments prior to the date hereof and set forth on
Section 5.1(l) of the Company Disclosure Schedule) in excess of
$2,500,000 (other than an acquisition permitted in accordance herewith
and other than expenditures in accordance with the Company's Year 2000
Capital Plan dated February 10, 2000, a copy of which has been
previously provided to Newco);
(m) the Company and the Company Subsidiaries shall comply in
all material respects with their respective obligations under the
Material Contracts as such obligations become due and with their
respective obligations under applicable Law;
(n) the Company shall not, and shall not permit any of the
Company Subsidiaries to, enter into, amend, modify or supplement any
material agreement, transaction, commitment or arrangement with any
officer, director or other affiliate (or any affiliate of any of the
foregoing) other than agreements, transactions, commitments and
arrangements which are (i) solely between the Company and any one or
more Company Subsidiaries, (ii) solely between Company Subsidiaries,
(iii) permitted by Section 5.1(d) or (iv) contemplated by this
Agreement or the Transactions;
(o) the Company and the Company Subsidiaries shall use their
reasonable best efforts to continue in force with good and responsible
insurance companies adequate
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insurance covering risks of such types and in such amounts as are
consistent with past practice;
(p) except as may be required as a result of a change in Law
or in generally accepted accounting principles, neither the Company nor
any Company Subsidiary shall make any material change in any of the
accounting principles or practices used by it;
(q) the Company shall not, and shall not permit any of the
Company Subsidiaries to, settle any litigation for amounts in excess of
$250,000 individually or $1,000,000 in the aggregate;
(r) neither the Company nor any Company Subsidiary shall make
any material tax election other than those tax elections as are
consistent with past practice; and
(s) neither the Company nor any of the Company Subsidiaries
will enter into any agreement to do any of the foregoing.
Section 5.2 Meeting of the Stockholders.
(a) So long as the Special Committee or the Board shall not
have withdrawn, modified or changed its recommendation in accordance
with the provisions of the next succeeding sentence, the Company will
take all action reasonably necessary in accordance with applicable Law
and its restated certificate of incorporation and bylaws to convene a
special meeting of its stockholders to consider and vote upon the
approval of this Agreement, the Merger and such other matters as may be
necessary to effectuate the Transactions (the "Stockholders Meeting")
as promptly as practicable following the execution and delivery of this
Agreement. The Special Committee and the Board shall recommend such
approval and shall use their reasonable best efforts to solicit such
approval; provided, however, that the Special Committee or the Board
may at any time prior to stockholder approval of the Merger decline to
make, withdraw, modify or change any such recommendations to the extent
that the Special Committee or the Board determines in good faith, after
consultation with its independent legal counsel, that making such
recommendation or the failure to so withdraw, modify or change its
recommendation would be inconsistent with the Special Committee's or
the Board's fiduciary duties to the Company's stockholders (other than
the Rollover Stockholders) under applicable Law (which declinations,
withdrawal, modification or change shall not constitute a breach by the
Company of this Agreement).
(b) As soon as reasonably practicable after the date of this
Agreement and in connection with the Stockholders Meeting, the Company
shall file with the SEC a proxy statement (the "Proxy Statement") and
form of proxy relating to the Merger and the other Transactions, which
shall comply as to form with all applicable Laws. The Company shall
obtain and furnish the information required to be included in the Proxy
Statement and shall respond promptly to any comments made by the SEC
with respect to the Proxy Statement
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and cause the Proxy Statement and form of proxy to be mailed to the
Company's stockholders at the earliest practicable date. Newco shall
cooperate in the preparation of the Proxy Statement and shall as soon
as practicable following the date hereof furnish the Company with all
information for inclusion in the Proxy Statement as shall be reasonably
requested by the Company. The Company agrees, as to information with
respect to the Company, its officers, directors, stockholders and
subsidiaries contained in the Proxy Statement or a Statement on
Schedule 13E-3 ("Schedule 13E-3"), and Newco agrees, as to information
with respect to Newco, its officers, directors, stockholders,
subsidiaries and financing contained in the Proxy Statement or a
Schedule 13E-3, that such information, at the date the Proxy Statement
is mailed and (as then amended or supplemented) at the time of the
Stockholders Meeting, will not be false or misleading with respect to
any 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 in which they are made, not misleading. Newco and its
counsel shall be given an opportunity to review the Proxy Statement and
all amendments or supplements thereof, prior to their being filed with
the SEC and the Company shall not make any such filing without the
approval of Newco (which shall not be unreasonably withheld or
delayed). The Company will advise Newco, promptly after it receives
notice thereof, of the time when the Proxy Statement and Schedule 13E-3
have been cleared by the SEC or any request by the SEC for amendment of
the Proxy Statement or the Schedule 13E-3 or comments from the SEC
thereon and proposed responses thereto or requests by the SEC for
additional information. The Company, on the one hand, and Newco, on the
other hand, agree to promptly correct any information provided by
either of them for use in the Proxy Statement or Schedule 13E-3, if
any, if and to the extent that it shall have become false or
misleading, and the Company further agrees to take all steps reasonably
necessary to cause the Proxy Statement and the Schedule 13E-3 as so
corrected to be filed with the SEC and to use its reasonable best
efforts to cause the Proxy Statement to be disseminated to the
Company's stockholders, in each case, as and to the extent required by
applicable Laws. The Company shall cooperate in the preparation,
signing (to the extent required) and filing of a Schedule 13E-3 and
shall as soon as practicable following the date hereof furnish Newco
with all information for inclusion in the Schedule 13E-3 as shall be
reasonably requested by Newco. Notwithstanding the foregoing, the
Company shall not be required to take any of the actions provided for
under this Section 5.2(b) if the Special Committee or the Board
determines in good faith, after consultation with its independent legal
counsel, that making its recommendation (as contemplated by Section
5.2(a)) or the failure to so withdraw, modify or change such
recommendation would be inconsistent with the Special Committee's or
the Board's fiduciary duties to the Company's stockholders (other than
the Rollover Stockholders) under applicable Law.
Section 5.3 Filings; Other Action. Subject to the terms and conditions
of this Agreement, the Company and Newco shall: (a) if required by applicable
Law, promptly make their respective filings and thereafter make any other
required submissions under the HSR Act and the European Community Merger
Regulation (or any other applicable foreign antitrust, competition or foreign
investment Laws) with respect to the Merger and the other Transactions; and (b)
use their reasonable
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best efforts promptly to take, or cause to be taken, all other action and do, or
cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the Transactions, as soon as practicable.
Section 5.4 Access. Subject to restrictions contained in
confidentiality agreements to which the Company is subject and upon reasonable
notice, the Company shall (and shall cause each of the Company Subsidiaries to)
afford the officers, counsel, accountants, investors, financing sources and
other authorized representatives ("Representatives") of Newco reasonable access,
during normal business hours during the period prior to the Effective Time, to
its properties, books, contracts and records and appropriate individuals as it
may reasonably request (including employees, attorneys, accountants and other
professionals), and during such period, the Company shall (and shall cause each
of the Company Subsidiaries to) furnish promptly to Newco such information
concerning its business, properties and personnel as Newco may reasonably
request. Newco will not, and will cause its Representatives not to, use any
information obtained pursuant to this Section 5.4 for any purpose unrelated to
the consummation of the Transactions. Except as otherwise agreed to by the
Company, and notwithstanding termination of this Agreement, the terms and
provisions of the Confidentiality Agreement, dated June 1, 2000, between the
Company and Newco (the "Confidentiality Agreement") shall apply to all
information furnished thereunder or hereunder.
Section 5.5 Notification of Certain Matters. The Company shall give
prompt written notice to Newco, and Newco shall give prompt written notice to
the Company, of (i) the occurrence, or failure to occur, of any event that would
be likely to cause any representation or warranty made by such party contained
in this Agreement to be untrue or inaccurate in any material respect and (ii)
any material failure of the Company or Newco, as the case may be, or of any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder. Notwithstanding anything in this Agreement to the contrary, no such
notification shall affect the representations, warranties or covenants of the
parties or the conditions to the obligations of the parties hereunder.
Section 5.6 Publicity. Except as otherwise required by Law, the Company
and Newco shall consult with each other in issuing any press releases or
otherwise making public statements with respect to the Transactions and in
making any filings with any federal or state governmental or regulatory agency
or with NYSE or any national securities exchange with respect thereto.
Section 5.7 Indemnification.
(a) From and after the Effective Time, the Surviving
Corporation will indemnify and hold harmless the present and former
officers and directors of the Company and its subsidiaries (the
"Indemnified Parties"), against all losses, expenses, claims, damages,
liabilities and amounts that are paid in settlement of, or otherwise in
connection with, any claim, action, suit, proceeding or investigation
(a "Claim"), to which any such person is or may become a party by
virtue of his or her service as a present or former director or officer
of the Company or any of its subsidiaries and arising out of actual or
alleged events, actions
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or omissions occurring or alleged to have occurred at or prior to the
Effective Time (including the Transactions), in each case to the
fullest extent permitted under the DGCL (and shall pay expenses in
advance of the final disposition of any such action or proceeding to
each Indemnified Party to the fullest extent permitted under the DGCL,
upon receipt from the Indemnified Party to whom expenses are advanced
of the undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification).
(b) The Surviving Corporation shall cause to be maintained in
effect for not less than six years after the Effective Time directors'
and officers' liability insurance and fiduciary liability insurance
("D&O Insurance") covering the Indemnified Parties with respect to
matters occurring at or prior to the Effective Time that is no less
favorable to the Indemnified Parties than the Company's current
insurance, with an amount of coverage of not less than 100% of the
amount of coverage maintained by the Company as of the date of this
Agreement, provided that (i) if the existing D&O Insurance expires, is
terminated or canceled during such six year period, the Surviving
Corporation will obtain D&O Insurance in an amount and scope that is no
less favorable to the Indemnified Parties than the existing D&O
Insurance; provided, however, that the Surviving Corporation will not
be obligated to incur an annual premium in excess of 200% of the last
annual premium paid prior to the date of this Agreement (the "Current
Premium") in order to obtain D&O Insurance in such amount and scope and
(ii) if D&O Insurance in an amount and scope that is no less favorable
to the Indemnified Parties than the existing D&O Insurance is not
available for an annual premium that is not in excess of 200% of the
Current Premium or if the annual premium for D&O Insurance is increased
to an amount in excess of 200% of the Current Premium, in each case
during such six year period, the Surviving Corporation will obtain D&O
Insurance in an amount and scope as great as can be obtained for the
remainder of such period for an annual premium not in excess (on an
annualized basis) of 200% of the Current Premium. The provisions of
this Section 5.7(b) shall be deemed to have been satisfied if prepaid
policies shall have been obtained by the Company prior to Closing,
which policies provide such directors and officers with coverage for an
aggregate period of six years with respect to claims arising from facts
or events that occurred on, or prior to, the Effective Time, including
the Transactions. If such prepaid policies shall have been obtained by
the Company prior to the Closing, then the Surviving Corporation shall
continue to honor the Company's obligations thereunder and use its
reasonable best efforts to maintain such policies in full force and
effect.
(c) Subject to applicable Law, the existing certificate of
incorporation and bylaws of the Company shall not be amended, including
by operation of Sections 1.5 and 1.6, in a manner which adversely
affects the rights of the Indemnified Parties under any provisions
regarding indemnification or exculpation from liability therein or
under this Section 5.7. All rights to indemnification and/or
advancement of expenses contained in any agreement with any Indemnified
Parties as in effect on the date hereof with respect to matters
occurring at or prior to the Effective Time (including the
Transactions) shall survive the Merger and continue in full force and
effect.
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(d) This Section 5.7 shall survive the consummation of the
Merger and is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties referred to herein, their heirs
and personal representatives and shall be binding on the Surviving
Corporation and its successors and assigns.
(e) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then, and
in each case, to the extent necessary, proper provision shall be made
so that the successors and assigns of the Surviving Corporation shall
assume the obligations set forth in this Section 5.7.
Section 5.8 Employee Benefit Plans. Subject to Section 2.2 and except
as provided in Section 4.8, at least until the first anniversary of the
Effective Time, the Surviving Corporation (and any successor thereto) shall
honor, without modification, all employment, consulting, severance, termination
or indemnification agreements, arrangements or understandings between the
Company or any Company Subsidiaries and any current or former employee, officer
or director of the Company or any Company Subsidiaries as set forth in the
Current SEC Reports or in the Company Disclosure Schedule in effect on the
Effective Time except as may be otherwise mutually agreed by the Surviving
Corporation and a current or former employee, officer or director covered by
such an agreement. The Surviving Corporation and its successors shall pay or
provide all benefits vested as of the Effective Time under any Benefit Plan in
accordance with the terms of such plan. Nothing in this Section 5.8 shall be
deemed to limit or otherwise affect the right of the Surviving Corporation to
terminate employment or change the place of work, responsibilities, status or
designation of any employee or group of employees as the Surviving Corporation
may determine in the exercise of its business judgment and in compliance with
(a) applicable laws and (b) the agreements, arrangements and understandings
described in the first sentence of this Section 5.8.
Section 5.9 No Solicitation of Transactions.
(a) The Company will immediately cease any existing
discussions and negotiations with any third parties conducted prior to
the date hereof with respect to any Acquisition Proposal (as defined
below). The Company shall not, directly or indirectly, through any
officer, director, employee, attorney, financial advisor, accountant or
other representative, agent, affiliate or any of its subsidiaries or
otherwise, (i) solicit, initiate, continue or encourage any inquiry,
proposal or offer that constitutes, or could reasonably be expected to
lead to, a proposal or offer for a merger, consolidation, business
combination, sale of substantial assets (other than in the ordinary
course of business), sale of a significant portion of the shares of
capital stock (including by way of a tender offer), reorganization,
recapitalization, reclassification, extraordinary joint venture or
similar transaction involving the Company or any of its subsidiaries,
other than the transactions contemplated by this Agreement (any of the
foregoing inquiries, proposals or offers being referred to in this
Agreement as an "Acquisition Proposal"), (ii) continue or engage in
negotiations or discussions concerning, or provide any
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non-public information or data to any person relating to, any
Acquisition Proposal, or (iii) agree to, approve or recommend any
Acquisition Proposal; provided, that nothing contained in this Section
5.9 shall prevent the Company from (A) furnishing non-public
information or data to, or entering into discussions or negotiations
with, any person in connection with an unsolicited bona fide
Acquisition Proposal by such person if (1) the Special Committee
determines in good faith, after consultation with its independent
financial advisors, that such Acquisition Proposal is reasonably likely
to, if consummated, result in a transaction more favorable to the
Company's stockholders (other than the Rollover Stockholders) from a
financial point of view than the transactions contemplated by this
Agreement, and (2) prior to furnishing such non-public information to,
or entering into discussions or negotiations with, such person, the
Company receives from such person an executed confidentiality agreement
with terms no less favorable in the aggregate to the Company than those
contained in the Confidentiality Agreement; or (B) complying with Rule
14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal. If the Special Committee determines in good faith that any
Acquisition Proposal constitutes a Superior Proposal (as defined
below), the Company shall promptly give written notice to Newco,
specifying the parties to and the structure and material terms of such
Superior Proposal (a "Notice of Superior Proposal"). The Special
Committee may (subject to the following sentences of this subsection
and compliance with Section 7.4(b) and Section 8.1(b), recommend any
such Superior Proposal, recommend the Company's entering into an
agreement with respect to such Superior Proposal, approve the
solicitation of additional takeover or other investment proposals or
cause the Company to exercise its rights under Section 7.4(b), in each
case at any time after the second business day following delivery to
Newco of the Notice of Superior Proposal. The Special Committee may
take any of the foregoing actions pursuant to the preceding sentence
only if an Acquisition Proposal that was a Superior Proposal at the
time of delivery of a Notice of Superior Proposal continues to be a
Superior Proposal in light of any improved transaction proposed by
Newco prior to the expiration of the two business day period specified
in the preceding sentence. For purposes of this Agreement, a "Superior
Proposal" means any bona fide Acquisition Proposal that the Special
Committee determines, in its good faith reasonable judgment, after
consultation with its independent financial advisors, to be made by a
person with the financial ability to consummate such proposal and
would, if consummated, result in transaction more favorable to the
Company's stockholders (other than the Rollover Stockholders) from a
financial point of view than the Transactions or any transactions
otherwise proposed by Newco as contemplated above.
(b) The Company shall notify Newco immediately (and in no
event later than 24 hours) after receipt by the Company of any
Acquisition Proposal. Such notice shall be made orally and in writing
and shall indicate in reasonable detail the identity of the offeror and
the material terms (including price) and conditions of such Acquisition
Proposal.
(c) The Company and the Board shall not (i) redeem the Rights
or (ii) waive or amend any provision of the Rights Agreement, in any
case to permit or facilitate the
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consummation of any Acquisition Proposal, unless this Agreement has
been terminated in accordance with the terms and conditions set forth
herein.
Section 5.10 Third Party Standstill Agreements. During the period from
the date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any material provision of any confidentiality
or standstill agreement to which the Company is a party (other than any
involving Berkshire (or its affiliates) or Newco). During such period, the
Company agrees to enforce, to the fullest extent permitted under applicable law,
the provisions of any such agreements, including seeking injunctions to prevent
any breaches of such agreements and to enforce specifically the terms and
provisions thereof in a court in the United States or any state thereof having
jurisdiction. Notwithstanding the foregoing, if specifically requested by an
entity or group, the Special Committee may waive the provisions of any
standstill agreement to the extent necessary to permit such entity or group to
submit an Acquisition Proposal that the Special Committee believes, in its good
faith judgment, is reasonably likely to result in a Superior Proposal provided
that no such waiver shall occur unless the Special Committee has determined,
after consultation with its independent legal counsel, that the failure to waive
such provisions would be inconsistent with the Special Committee's fiduciary
duties to the Company's stockholders (other than the Rollover Stockholders)
under applicable Law.
Section 5.11 Consents. The Company and Newco shall use their reasonable
best efforts to obtain promptly all consents, waivers, approvals, authorizations
and permits of, and to make promptly all registrations and filings with and
notifications to, any Governmental Authority or other third party necessary for
the consummation of the Transactions.
Section 5.12 Delisting. Each of the parties agrees to cooperate with
each other in taking, or causing to be taken, all actions reasonably necessary
to delist the Common Stock from the NYSE and to terminate registration of the
Common Stock under the Exchange Act, provided that such delisting and
termination shall not be effective until after the Effective Time of the Merger.
Section 5.13 Actions Respecting Commitment Letters; Financing,
Notification.
(a) Newco and its affiliates shall perform all obligations
required to be performed by them in accordance with and pursuant to the
Commitment Letters and shall not amend, terminate or waive any
provisions under such Commitment Letters if the effect thereof would be
reasonably likely to prevent or materially delay the consummation of
the Transactions.
(b) Newco shall use its reasonable best efforts to obtain the
financing on the terms set forth in the Debt Commitment Letters;
provided, however, that Newco shall be entitled to obtain, in its sole
discretion, substitute debt financing with other nationally recognized
financial institutions ("Substitute Debt Financing"), provided that
such Substitute Debt Financing does not materially delay the
consummation of the Transactions.
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(c) Newco shall provide prompt written notice to the Company
of (i) Berkshire's refusal or intended refusal to provide the financing
described in the Berkshire Commitment Letter and (ii) following its
receipt of notification by a potential lender under a Debt Commitment
Letter or in connection with any Substitute Debt Financing, its refusal
or intended refusal to provide the financing described in the
applicable Debt Commitment Letter and, in each case, the stated reasons
therefor. In any such event, Newco shall use its reasonable best
efforts to find substitute financing for such financing as promptly as
practicable, it being understood that in no event shall Berkshire have
any obligation to increase the amount of its equity investment as
provided for in the Berkshire Commitment Letter.
Section 5.14 Financial Statements. During the period prior to the
Effective Time, the Company shall provide to Newco consolidated monthly
financial statements within 45 calendar days following the end of each fiscal
month. Further, the Company shall provide, and shall cause the Company
Subsidiaries and Company Representatives to provide, at Newco's cost, all
reasonable cooperation in connection with the arrangement of the Financing
including (a) promptly providing to Newco's financing sources all material
financial information in their possession with respect to the Company and the
Transactions reasonably requested by Newco, including information and
projections prepared by the Company relating to the Company and the
Transactions, (b) causing the Company's senior officers and other Company
Representatives to be reasonably available to Newco's financing sources in
connection with such Financing, to reasonably participate in due diligence
sessions and to reasonably participate in presentations related to the
Financing, including presentations to rating agencies, potential lenders and
other investors, and (c) reasonably assisting in the preparation of one or more
appropriate offering documents and assisting Newco's financing sources in
preparing other appropriate marketing materials, in each case to be used in
connection with the Financing. Nothing herein shall imply that the completion of
any such syndication, securities offerings or other financing is a condition to
the obligation of Newco to consummate the Merger.
Section 5.15 State Takeover Laws. The Company shall, upon the request
of Newco, take all reasonable steps to assist in any challenges by Newco to the
validity or applicability to the Transactions, including the Merger, of any
state takeover law.
Section 5.16 Senior Subordinated Notes. At or prior to the Effective
Time, the Company and Newco will take all such actions as may be necessary to
(i) repurchase some or all of the Company's outstanding 10-1/8% Senior
Subordinated Notes (the "Notes"), (ii) obtain the consent of at least a majority
of the principal amount of the Notes outstanding to a supplemental indenture to
the Indenture, dated as of October 17, 1996 (the "Indenture"), between the
Company, as issuer, United States Can Company, as guarantor and Harris Trust and
Savings Bank, as trustee relating to the Notes that would permit the
Transactions, including the Financing, to be effected without resulting in any
breach or default under the Indenture or the Notes and (iii) execute such
supplemental indenture, in each such case, on terms and conditions reasonably
acceptable to Newco. Notwithstanding the foregoing, in no event shall the
Company be required to take any action that
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could obligate the Company to repurchase any Notes or incur any additional
obligation to the holders of the Notes prior to the Closing.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to the Obligations of Each Party. The
obligations of the Company and Newco to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) Company Stockholder Approval. This Agreement and the
Merger shall have been approved and adopted by the stockholders of the
Company in accordance with the DGCL, the Company's restated certificate
of incorporation and its bylaws.
(b) Competition Laws. Any waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR Act
shall have expired or been terminated. Any approvals or authorizations
required under the European Community Merger Regulation shall have been
obtained.
(c) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any law, rule, regulation,
executive order or decree, judgment, injunction, ruling or other order,
whether temporary, preliminary or permanent (collectively, "Order"),
that is then in effect and has the effect of prohibiting the
consummation of the Merger or otherwise imposing material limitations
on the ability of the Surviving Corporation or the Company Subsidiaries
effectively to hold and continue the business of the Company and the
Company Subsidiaries in all material respects after the Effective Time;
provided, that the party invoking this condition shall use its
reasonable best efforts to have such Order repealed or removed.
(d) Financing. The Company shall have received or shall be
concurrently receiving the debt financing proceeds described in the
Debt Commitment Letters or, if applicable, an equal amount of proceeds
from any Substitute Debt Financing, unless the cause of such
non-receipt is a breach by Newco of any covenant under this Agreement.
Section 6.2 Conditions to the Obligations of Newco. The obligations of
Newco to consummate the Merger are subject to the satisfaction of the following
additional conditions, unless waived by Newco in writing:
(a) Representations and Warranties. The representations and
warranties of the Company set forth herein shall be true and correct as
of the date of this Agreement and as of the Effective Time except for
(i) changes specifically contemplated by this Agreement and
(ii) those representations and warranties that address matters only as
of a particular date (which shall remain true and correct as of such
date) and in each case except where the failure of such representation
and warranty to be so true and correct would not have a Company
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Material Adverse Effect (other than representations and warranties that
are already so qualified or that are qualified as to the prevention or
delay of the consummation of any of the Transactions and the
representations and warranties set forth in Section 3.3, Section 3.20
and Section 3.21, which in each such case shall be true and correct in
all material respects) and except, with respect to any representation
or warranty made by the Company in this Agreement, to the extent (but
only to such extent) that Newco, Berkshire, Paul W. Jones, John L.
Workman, Roger B. Farley or David R. Ford had actual knowledge as of
the date of this Agreement of any such breach by the Company of, or any
such inaccuracy in, such representation or warranty of the Company.
(b) Covenants and Agreements. The Company shall have performed
all obligations and complied with all agreements and covenants of the
Company to be performed or complied with by it under this Agreement
prior to the Effective Time in each case in all material respects.
(c) Consents. The Company shall have obtained all (i) consents
and approvals from Governmental Authorities necessary or required for
the consummation of the Transactions the absence of which would have a
Company Material Adverse Effect or would prohibit the consummation of
the Transactions, and (ii) the consents and approvals from the third
parties identified on Schedule 6.2(c) attached hereto, all on terms and
conditions reasonably satisfactory to Newco.
(d) Officers' Certificate. At the Closing, the Company shall
have delivered a certificate, duly executed by the Company's Chief
Executive Officer and Chief Financial Officer, stating that the
conditions to Closing set forth in Sections 6.2(a) and (b) above have
been satisfied.
(e) Certified Copies. At the Closing, the Company shall
deliver certified copies of (i) the resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery and
performance of this Agreement and the other agreements contemplated
hereby applicable to it and the Transactions, (ii) the restated
certificate of incorporation and the bylaws of the Company and (iii)
the tabulation of the stockholder vote taken at the Stockholders
Meeting.
(f) Director Resignations. At the Closing, the Company shall
deliver signed letters of resignation from each director of the Company
pursuant to which each such director resigns from his position as a
director of the Company and makes such resignation effective at or
prior to the Effective Time.
Section 6.3 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction of the following additional conditions, unless waived by the
Company, acting under the direction of the Special Committee, in writing:
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(a) Representations and Warranties. The representations and
warranties of Newco set forth herein shall be true and correct as of
the date of this Agreement and as of the Effective Time except for (i)
changes specifically contemplated by this Agreement and (ii) those
representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such date)
and in each case except where failure of such representation and
warranty to be so true and correct would not reasonably be expected to
have a Newco Material Adverse Effect (other than representations and
warranties that are already so qualified or that are qualified as to
the prevention or delay of the consummation of any of the Transactions,
which in each such case shall be true and correct in all material
respects).
(b) Covenants and Agreements. Newco shall have performed all
obligations and complied with all agreements and covenants of Newco to
be performed or complied with by it under this Agreement prior to the
Effective Time in each case in all material respects.
(c) Officers' Certificate. At the Closing, Newco shall have
delivered a certificate, duly executed by Newco's President and
Treasurer, stating that the conditions to Closing set forth in Sections
6.3(a) and (b) above have been satisfied.
(d) Certified Copies. At the Closing, Newco shall deliver
certified copies of (i) the resolutions duly adopted by Newco's board
of directors authorizing the execution, delivery and performance of
this Agreement and the other agreements contemplated hereby applicable
to it and the Transactions, (ii) the resolutions duly adopted by
Newco's stockholders approving this Agreement and the Transactions, and
(iii) the certificate of incorporation and the bylaws of Newco.
(e) Solvency Opinion. The Board shall have received written
advice, reasonably satisfactory to the Board, from an independent
advisor confirming the belief of Newco set forth in the last sentence
of Section 4.7.
(f) Change in Control Waivers. Each of Paul W. Jones and John
L. Workman, and at least three of Roger B. Farley, David R. Ford,
Thomas A. Scrimo, J. Michael Kirk and Gillian V.N. Derbyshire shall
have entered into agreements with the Company that acknowledge that the
consummation of the Transactions will not give rise to a right by him
or her to receive any change in control severance payments from the
Company, the Surviving Corporation or any Company Subsidiary under
agreements existing as of the date of this Agreement between him or
her, on the one hand, and the Company or any Company Subsidiary, on the
other hand.
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ARTICLE VII
TERMINATION
Section 7.1 Termination by Mutual Consent. This Agreement may be
terminated and the Merger and the other Transactions may be abandoned at any
time prior to the Effective Time, before or after the approval by holders of
Common Stock referred to in Section 6.1(a), by the mutual consent of the
Company, acting under the direction of the Special Committee, and Newco.
Section 7.2 Termination by Either Newco or the Company. This Agreement
may be terminated and the Merger and the other Transactions may be abandoned at
any time prior to the Effective Time by the Company, acting under the direction
of the Special Committee, or by Newco if (a) before or after the approval by
holders of Common Stock referred to in Section 6.1(a), the Merger shall not have
been consummated on or before November 30, 2000, (b) before or after the
approval by holders of Common Stock referred to in Section 6.1(a), there shall
be any Law that makes consummation of the Merger illegal or otherwise prohibited
or any Order that is final and nonappealable preventing the consummation of the
Merger, or (c) if the Stockholders Meeting shall have been held and completed
and the approval by the holders of Common Stock referred to in Section 6.1(a)
shall not have been obtained by reason of the failure to obtain the required
vote at the Stockholders Meeting or any adjournment or postponement thereof;
provided, that the right to terminate this Agreement pursuant to this Section
7.2 shall not be available to any party that has breached in any material
respect its obligations under this Agreement in any manner that shall have
proximately contributed to the failure of the Merger to be consummated.
Section 7.3 Termination by Newco. This Agreement may be terminated and
the Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, before or after approval by the holders of Common Stock referred
to in Section 6.1(a), by Newco if:
(a) prior to the Effective Time there has been a breach of any
representation, warranty, covenant or agreement on the part of the
Company set forth in this Agreement such that any of the conditions set
forth in Section 6.1 or 6.2 would not be satisfied and such breach is
not cured within thirty days after Newco's written notification to the
Company of the occurrence of such breach and is incapable of being
cured prior to November 30, 2000; or
(b) (i) the Special Committee or the Board withdraws, modifies
or changes its approval or recommendation of this Agreement or the
Transactions in a manner adverse to Newco or (ii) the Special Committee
shall have recommended to the Board or the Company's stockholders an
Acquisition Proposal other than the Merger or (iii) the Special
Committee or the Board fails to reconfirm its recommendation of this
Agreement to the Company's stockholders within ten days after a
reasonable written request by Newco to do so or (iv) the Special
Committee or the Board resolves to do any of the foregoing.
Section 7.4 Termination by the Company. This Agreement may be
terminated and the Merger and the other Transactions may be abandoned at any
time prior to the Effective Time, before or after the approval by holders of
Common Stock referred to in Section 6.1(a), by the Company, acting under the
direction of the Special Committee, if:
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<PAGE> 48
(a) prior to the Effective Time there has been a breach of any
representation, warranty, covenant or agreement on the part of Newco
set forth in this Agreement such that any of the conditions set forth
in Section 6.1 or 6.3 would not be satisfied and such breach is not
cured within thirty days after the Company's written notification to
Newco of the occurrence of such breach and is incapable of being cured
prior to November 30, 2000; or
(b) prior to stockholder approval of the Merger referred to in
Section 6.1(a), and no earlier than two (2) business days after the
receipt by Newco of a Notice of Superior Proposal, if the Company has
complied with Section 5.9(a) and the Superior Proposal described in
such Notice of Superior Proposal continues to be a Superior Proposal in
light of any transaction proposed by Newco prior to the end of the
second business day after the receipt by Newco of such Notice of
Superior Proposal.
Section 7.5 Effect of Termination. Except as set forth in Section 8.1,
in the event of termination of this Agreement pursuant to this Article VII, no
party hereto (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except that nothing
herein will relieve the Company or Newco from liability for any willful breach
of this Agreement.
ARTICLE VIII
MISCELLANEOUS; GENERAL
Section 8.1 Payment of Expenses.
(a) Except as otherwise set forth in this Section 8.1, whether
or not the Merger shall be consummated, each party hereto shall pay its
own Expenses; provided that, effective as of the Effective Time, the
Surviving Corporation shall pay all of the Expenses paid by or on
behalf of either the Company or Newco. "Expenses" as used in this
Agreement shall include all reasonable out-of-pocket expenses
(including all fees and expenses of outside counsel, investment
bankers, financing sources, legal counsel, experts and consultants to a
party hereto) incurred by a party or on its behalf in connection with
or related to the authorization, preparation, negotiation, execution
and performance of this Agreement and all other matters relating to the
closing of the Transactions.
(b) The Company agrees that if (i) Newco shall terminate this
Agreement pursuant to Section 7.3(b) or (ii) the Company shall
terminate this Agreement pursuant to Section 7.4(b) or (iii) an
Acquisition Proposal shall have been publicly disclosed prior to the
Stockholders Meeting and shall remain pending at the time of the
Stockholders Meeting and either Newco or the Company shall terminate
this Agreement pursuant to Section 7.2(c), the Company shall pay Newco
a non-refundable fee of six million dollars ($6,000,000), which amount
shall be payable by wire transfer of same day funds (x) concurrently
with and as a condition to any such termination by the Company and (y)
within three (3) business days after
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<PAGE> 49
the date this Agreement is so terminated by Newco. The Company
acknowledges that the agreements contained in this Section 8.1(b) are
an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Newco would not enter into this
Agreement; accordingly, if the Company fails to pay promptly the
amounts due pursuant to this Section 8.1(b), and, in order to obtain
any such payment, Newco commences a legal proceeding which results in a
judgment against the Company for the amounts set forth in this Section
8.1(b), the Company shall pay to Newco its costs and expenses
(including attorneys' fees) in connection with such proceeding,
together with interest on the amounts set forth in this Section 8.1(b)
at the prime rate of Citibank N.A. in effect on the date any such
payment was required to be made.
Section 8.2 Survival. The representations and warranties in this
Agreement and in any certificate delivered pursuant hereto shall terminate at
the Effective Time. The covenants and agreements in this Agreement shall survive
the Effective Time in accordance with their terms.
Section 8.3 Modification or Amendment. Subject to the provisions of
applicable Law, at any time prior to the Effective Time, the parties to this
Agreement may modify or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the parties hereto, provided that any
such agreement by the Company shall be effective only if authorized or approved
by the Special Committee; provided, however that the addition of the definitive
Schedule I contemplated by Section 2.1(c) shall not require any authorization or
approval of the Special Committee.
Section 8.4 Waiver of Conditions.
(a) Any provision of this Agreement may be waived prior to the
Effective Time if, and only if, such waiver is in writing and signed by
an authorized representative of the party against whom the waiver is to
be effective, provided that any such waiver by the Company shall be
effective only if authorized or approved by the Special Committee.
(b) No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. Except as otherwise provided in this Agreement, the
rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by Law.
Section 8.5 Counterparts. For the convenience of the parties hereto,
this Agreement may be executed in any number of counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
shall together constitute the same agreement.
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<PAGE> 50
Section 8.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflict of laws thereof.
Section 8.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given: (i) when
sent if sent by facsimile, provided that receipt of the fax is promptly
confirmed by telephone; (ii) when delivered, if delivered personally to the
intended recipient; (iii) three business days following sending by registered or
certified mail, postage prepaid; and (iv) one business day following sending, if
sent by overnight delivery via a national courier service providing proof of
delivery, and in each case, addressed to a party at the following address for
such party (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 8.7):
If to Newco: Pac Packaging Acquisition Corporation
900 Commerce Drive
Oak Brook, Illinois 60523
Attention: Paul Jones
Facsimile No.: (630) 571-0402
with a copy to: Mayer, Brown & Platt
190 South LaSalle Street
Chicago, IL 60603
Attention: Frederick B. Thomas
James T. Lidbury
Facsimile No.: (312) 701-7711
Ropes and Gray
One International Place
Boston, MA 02110-2624
Attention: David C. Chapin
Facsimile No.: (617) 951-7050
If to the Company: Special Committee of the Board of Directors
c/o Benjamin J. Bailar
410 East Walnut
Lake Forest, IL 60045
Facsimile No.: (847) 295-3936
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<PAGE> 51
with a copy to: Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Suite 2100
Chicago, IL 60606
Attention: Charles W. Mulaney, Jr.
Brian W. Duwe
Facsimile No. (312) 407-0411
and a copy to U.S. Can Corporation
900 Commerce Drive
Oak Brook, IL 60523
Attention: General Counsel
Facsimile No.: (630) 573-0715
Section 8.8 Entire Agreement, etc. This Agreement and the agreements
referenced herein or contemplated hereby (a) constitute the entire agreement,
and supersede all other prior agreements and understandings, both written and
oral, among the parties, with respect to the subject matter hereof, and (b)
shall not be assignable by operation of law or otherwise except that Newco may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect wholly-owned newly formed
Delaware subsidiary of Newco or to any newly-formed Delaware corporation having
substantially the same shareholders and capital structure as Newco; provided,
that in either case (i) such assignee shall be deemed to have made the
representations and warranties of Newco set forth herein as if it were Newco,
(ii) such assignee shall be deemed substituted for Newco for all purposes
hereof, (iii) such assignment shall not result in the failure to be satisfied of
any condition to either party's obligation to consummate the Merger set forth in
Article VI and (iv) the Company, acting through the Special Committee, shall
have given its prior written consent to such assignment, which consent shall not
be unreasonably withheld or delayed. No such assignment shall relieve Newco of
its liabilities and obligations hereunder. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
Section 8.9 Interpretation. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof. References in this Agreement to Articles and Sections are
references to Articles and Sections of this Agreement, unless expressly
otherwise stated. Whenever the words "include," "includes," or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." The definitions in this Agreement are applicable to the
singular as well as the plural forms of such terms.
Section 8.10 Certain Definitions. For purposes of this Agreement, the
term:
"affiliate" and "affiliates" shall have the meaning set forth in Rule
12b-2 under the Exchange Act.
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<PAGE> 52
"associate" and "associates" shall have the meaning set forth in Rule
12b-2 under the Exchange Act.
"knowledge of the Company" means the actual knowledge of Roger B.
Farley, David R. Ford, Paul W. Jones or John L. Workman.
"person" means any individual or any corporation, partnership, limited
liability company or other legal entity.
"subsidiary" of any person means any corporation, partnership, limited
liability company or other legal entity of which such person (either alone or
through or together with any subsidiary) owns, directly or indirectly, more than
50% of the stock or other equity or beneficial 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.
Section 8.11 No Third Party Beneficiaries. Except as provided in
Section 5.7, this Agreement is not intended to be for the benefit of, and shall
not be enforceable by, any person not a party hereto.
Section 8.12 Company Disclosure Schedule. Any disclosure made in a
section of the Company Disclosure Schedule shall be deemed disclosed for all
purposes of this Agreement to which such disclosure could reasonably be expected
to be pertinent, notwithstanding the omission of a cross reference thereto.
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<PAGE> 53
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto on the date first
hereinabove written.
U.S. CAN CORPORATION
By: /s/ PAUL W. JONES
------------------------
Name: Paul W. Jones
Title:
PAC PACKAGING ACQUISITION
CORPORATION
By: /s/ RICHARD K. LUBIN
------------------------
Name: Richard K. Lubin
Title: Senior Vice President
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<PAGE> 54
SCHEDULE I
TO BE COMPLETED IN ACCORDANCE WITH SECTION 2.1(c) OF THE AGREEMENT. THE
DEFINITIVE SCHEDULE I CONTEMPLATED BY SECTION 2.1(c) MAY ONLY INCLUDE
EXEMPTED PERSONS AS ROLLOVER STOCKHOLDERS AND THE AGGREGATE NUMBER OF
ROLLOVER SHARES SET FORTH ON THE DEFINITIVE SCHEDULE I MAY NOT EXCEED
4,000,000 SHARES OF COMMON STOCK.
Rollover Shares (column 2) held by each Rollover Stockholder (column 1),
respectively, to be converted, in the aggregate, into the following number of
shares of Surviving Corporation Common Stock (column 3) and Surviving
Corporation Preferred Stock (column 4):
<TABLE>
<CAPTION>
1. 2. 3. Surviving 4. Surviving
Corporation Corporation
Rollover Stockholder Rollover Shares Common Stock Preferred Stock
-------------------- --------------- ------------ ---------------
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 55
SCHEDULE 4.5(ii)
ASSETS
Approximately $3,000.00 in cash, which represents the aggregate amount paid to
Newco by Berkshire, Paul W. Jones and John L. Workman in exchange for their
respective shares of Newco Common Stock as adjusted for service fees associated
with Newco's bank account.
<PAGE> 56
SCHEDULE 6.2(c)
Amended and Restated Credit Agreement, dated April 25, 1997, as amended; and
10-1/8% Senior Subordinated Notes Due 2006 Indenture, dated October 17, 1996
unless, in either case, refinanced or redeemed or if otherwise such consent is
not required to consummate the Transactions.
