STOCK PURCHASE AGREEMENT
by and among
QMS, INC.,
MINOLTA INVESTMENTS COMPANY
and
MINOLTA CO., LTD.
Dated as of June 7, 1999
1. AGREEMENT TO SELL AND PURCHASE 1
1.1 Sale and Purchase 1
2. CLOSING, DELIVERY AND PAYMENT 2
2.1 Closing 2
2.2 Delivery 2
2.3 Company Board Representation 2
3. TENDER OFFER 2
3.1 The Offer 2
3.2 Company Actions 3
3.3 SEC Documents 4
3.4 Company Board Representation; Section 14(f) 5
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 6
4.1 Organization 6
4.2 Capitalization; Voting Rights 6
4.3 Authorization; Binding Obligations 7
4.4 SEC Reports; Financial Statements 7
4.5 No Undisclosed Liabilities 8
4.6 Absence of Changes 8
4.7 Schedule 14D-9; Offer Documents 8
4.8 Consents and Approvals 9
4.9 No Default 9
4.10 Rights to Property 9
4.11 Litigation 10
4.12 Compliance with Applicable Law 10
4.13 Employee Plans 11
4.14 Labor Matters 13
4.15 Environmental Matters 14
4.16 Tax Matters 16
4.17 Absence of Questionable Payments 17
4.18 Material Contracts 18
4.19 Related Party Transactions 19
4.20 Insurance 19
4.21 Intellectual Property 19
4.22 Year 2000 20
4.23 Customers and Suppliers 21
4.24 Opinion of Financial Advisor 21
4.25 Brokers 21
4.26 Product Liability; Product Warranty 21
4.27 Takeover Statute; Certificate of Incorporation 21
4.28 Amendment to the Rights Agreement 22
4.29 Offering of Company Shares 22
4.30 No Misrepresentation 22
5. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER 22
5.1 Organization 22
5.2 Authorization; Binding Obligation 23
5.3 Offer Documents 23
5.4 Consents and Approvals; No Violations 23
5.5 Investment Representations 24
5.6 Financing 24
6. COVENANTS 24
6.1 Use of Proceeds 24
6.2 Conduct of Business 24
6.3 Access to Information 26
6.4 No Solicitation 27
6.5 Certificate of Incorporation 28
6.6 Company Name 28
6.7 Integration Committee 28
6.8 Strategic Meetings 29
6.9 Governance 29
6.10 Indemnification of Directors 29
6.11 Cross License Agreements 29
6.12 Engine Sales and Purchase Agreement 29
6.13 Employment Agreements 29
6.14 Registration Rights 30
7. CONDITIONS TO CLOSING 30
7.1 Conditions to Purchaser's Obligations at the Closing 30
(a) Representations and Warranties True; Performance of
Obligations 30
(b) Consents, Permits and Waivers 30
(c) Certificates 30
(d) Acquisition of QMS Europe B.V. and QMS Australia
Pty. Ltd. 30
(e) Related Agreements 30
(f) Foothill Credit Facility 30
(g) Listing on NYSE 30
(h) Legal Opinion 31
(i) Proceedings and Documents 31
7.2 Conditions to Obligations of the Company 31
(a) Representations and Warranties True 31
(b) Performance of Obligations 31
(c) Compliance Certificate 31
(d) Consents, Permits and Waivers 31
(e) Legal Opinion 31
8. INDEMNIFICATION 31
8.1 Survival of Representations, Warranties and Covenants 31
8.2 Indemnification 32
8.3 Indemnification Procedures 32
9. MISCELLANEOUS 33
9.1 Definitions 33
9.2 Governing Law 35
9.3 Jurisdiction; Service of Process 35
9.4 Successors and Assigns 35
9.5 Entire Agreement 35
9.6 Severability 36
9.7 Amendment and Waiver 36
9.8 Delays or Omissions 36
9.9 Notices 36
9.10 Expenses 37
9.11 Titles and Subtitles 38
9.12 Counterparts 38
9.13 Pronouns 38
9.14 Currency 38
9.15 Publicity 38
9.16 Confidentiality 38
INDEX OF ANNEXES AND EXHIBITS
Conditions to the Offer Annex A
Terms of Registration Rights Exhibit A
Form of Legal Opinion of Hand Arendall LLC Exhibit B
Form of Legal Opinion of Weil, Gotshal &
Manges LLP Exhibit C
QMS, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of June
7, 1999, by and among QMS, INC., a Delaware corporation (the "Company"), MINOLTA
INVESTMENTS COMPANY, a Delaware corporation (the "Purchaser"), and MINOLTA CO.,
LTD., a corporation organized under the laws of Japan (the "Parent").
Recitals
Whereas, the Company and the Parent entered into a letter agreement, dated
May 17, 1999 (the "Letter"), regarding future negotiations which may lead to (i)
the issuance and sale by the Company to the Parent (or a wholly owned subsidiary
of the Parent) of 2,130,000 Shares (the "Company Shares"), representing 19.9% of
the outstanding Shares, (ii) a cash tender offer by the Parent (or one of its
Affiliates) to purchase 5,440,000 Shares, which when added to the Company
Shares, would constitute an aggregate of approximately 51% of the outstanding
Shares on a fully-diluted basis, including the associated Rights (as hereinafter
defined) and (iii) a term loan (the "Loan") in the aggregate original principal
amount of $12,800,000 from the Parent (or one of its Affiliates) to the Company;
Whereas, pursuant to the Letter, the Parent advanced to the Company an
aggregate amount of $5,000,000 to be applied against certain amounts expected to
be owed by the Parent to the Company with respect to ordinary commercial
transactions between the Parent and the Company;
Whereas, the Company and the Parent are, as of the date hereof, entering
into a Loan Agreement (the "Loan Agreement"), pursuant to which the Purchaser
shall provide to the Company the Loan;
Whereas, the Company, the Purchaser and the Parent have approved this
Agreement and the Company has authorized the sale and issuance of the Company
Shares; and
Whereas, certain capitalized terms used herein are defined in Section 9.1
hereof;
Now, Therefore, in consideration of the foregoing recitals and of the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE
1.1 Sale and Purchase . Subject to the terms and conditions hereof, the
Company hereby agrees to issue and sell to the Purchaser, and the Purchaser
agrees to purchase from the Company, at the Closing (as hereinafter defined),
the Company Shares at a purchase price (the "Purchase Price") of $5.75 per Share
(for an aggregate purchase price of $12,247,500 or $5.75 multiplied by 2,130,000
Shares).
2. Closing, Delivery and Payment.
2.1 Closing. The closing of the sale and purchase of the Company Shares
under this Agreement (the "Closing") shall take place at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 on June 7, 1999
or at such other date and time as the Company and the Purchaser may mutually
agree in writing (such date is hereinafter referred to as the "Closing Date").
2.2 Delivery. At the Closing, subject to the terms and conditions hereof,
including the deliveries required by Article 7 hereof, (i) the Company shall
deliver to the Purchaser duly and validly executed certificates representing the
Company Shares to be purchased by the Purchaser against payment of the Purchase
Price by wire transfer of immediately available funds in lawful money of the
United States to an account designated by the Company, and (ii) the Company, the
Purchaser and the Parent shall each execute the Related Agreements (as
hereinafter defined) to which it is a party.
2.3 Company Board Representation. On and after the Closing Date, the Purchaser
shall be entitled to designate two (2) persons on the Company Board. The
Company shall use its best efforts to promptly, but in no event later than the
purchase of and payment for the Shares by the Purchaser pursuant to the Offer,
secure the resignations of such number of its incumbent directors as is
necessary to enable the designees of the Purchaser to be so elected or appointed
to the Company Board, and the Company shall take all action available to the
Company to cause such designees of the Purchaser to be elected or appointed at
such time to fill the vacancies created by such action. At such time, the
Company shall, if requested by the Purchaser, also take all action necessary to
cause the persons designated by the Purchaser to constitute at least the same
percentage (rounded up to the next whole number which is less than a majority)
as is on the Company Board of (i) each committee of the Company Board, (ii) each
board of directors (or similar body) of each subsidiary of the Company and (iii)
each committee (or similar body) of each such subsidiary board. The provisions
of this Section 2.3 are in addition to and shall not limit any rights which the
Purchaser or any of its Affiliates may have as a holder or beneficial owner of
Shares as a matter of applicable Law with respect to the election of directors
or otherwise.
3. Tender Offer.
3.1 The Offer.
(a) As promptly as practicable (but in no event later than five business days
after the public announcement of the execution hereof), the Purchaser shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) a tender offer (the "Offer") to purchase
5,440,000 Shares, including the associated rights to purchase shares of the
Series A Participating Preferred Stock of the Company (the "Rights") pursuant to
the Company Rights Agreement, dated as of March 8, 1999, between the Company and
South Alabama Trust Company, Inc., as Rights Agent (the "Rights Agreement"), at
a price of $6.25 per Share, net to the seller in cash (such price, or such
higher price per Share as may be paid in the Offer, being referred to herein as
the "Offer Price"), subject to the conditions set forth in Annex A hereto.
(b) The obligations of the Purchaser to commence the Offer and to accept for
payment and to pay for any Shares validly tendered on or prior to the expiration
of the Offer and not withdrawn shall be subject only to the conditions set forth
in Annex A hereto. The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") containing the terms set forth in this Agreement and
the conditions set forth in Annex A hereto.
(c) The Purchaser expressly reserves the right to modify the terms of the
Offer; provided, however, that, without the Company's prior written consent, the
Purchaser shall not decrease the Offer Price or decrease the number of Shares
sought or impose additional conditions; provided, further, that, if on the
initial scheduled expiration date of the Offer, which shall be 20 business days
after the date that the Offer is commenced, all conditions to the Offer shall
not have been satisfied or waived, the Purchaser may, from time to time until
such time as all such conditions are satisfied or waived, in its sole
discretion, extend the expiration date; provided, further, that the expiration
date of the Offer may not be extended beyond September 1, 1999. In addition,
the Offer Price may be increased and the Offer may be extended to the extent
required by applicable Law (as hereinafter defined) in connection with such
increase, in each case without the consent of the Company. The Purchaser shall,
on the terms and subject to the prior satisfaction or waiver of the conditions
of the Offer, accept for payment and pay for the Shares validly tendered as
promptly as practicable; provided, however, that, if, immediately prior to the
initial expiration date of the Offer, the Shares validly tendered and not
withdrawn pursuant to the Offer, in the aggregate with the Company Shares, equal
less than 51% of the outstanding Shares on a fully diluted basis, the Purchaser
may extend the Offer for a period not to exceed 20 business days,
notwithstanding that all other conditions to the Offer are satisfied as of such
expiration date of the Offer.
3.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer and represents
that the Company Board, at a meeting duly called and held, has (i) unanimously
determined that each of this Agreement and the Offer are advisable and fair to,
and in the best interests of, the Company and its stockholders, (ii) unanimously
approved, without condition or qualification, this Agreement and the
Transactions contemplated hereby, including the Offer and the acquisition of the
Shares pursuant to this Agreement and the Offer, for purposes of Section 203 of
the DGCL (the "Section 203 Approval"), so that the provisions of Section 203 of
the DGCL are not applicable to the transactions provided for, referred to, or
contemplated by, this Agreement, (iii) received the opinion of The Robinson
Humphrey Company, financial advisor to the Company (the "Financial Advisor"), to
the effect that the Offer Price to be received by holders of the Shares pursuant
to the Offer is fair to the stockholders of the Company from a financial point
of view; and (iv) resolved to unanimously recommend that the stockholders of the
Company accept the Offer and tender their Shares thereunder to the Purchaser.
(b) In connection with the Offer, the Company shall promptly furnish or cause
to be furnished to the Purchaser mailing labels, security position listings and
any available listings or computer files containing the names and addresses of
all holders of record of the Shares as of a recent date, and shall furnish the
Purchaser with such additional information (including, but not limited to,
updated lists of holders of the Shares and their addresses, mailing labels and
lists of security positions) and such assistance as the Purchaser or its agents
may reasonably request in communicating the Offer to the record and beneficial
holders of the Shares. Subject to the requirements of applicable Law, and
except for such steps as are necessary to disseminate the Offer Documents (as
hereinafter defined), the Purchaser and its affiliates and associates shall hold
in confidence the information contained in any such labels, listings and files
and all other information delivered pursuant to this Section 3.2(b), shall use
such information only in connection with the Offer and, if this Agreement shall
be terminated, shall deliver to the Company all copies, extracts or summaries of
such information in their possession or the possession of their agents.
3.3 SEC Documents.
(a) On the date the Offer is commenced, the Parent and the Purchaser shall
file with the United States Securities and Exchange Commission (the "SEC") a
Tender Offer Statement on Schedule 14D-1 in accordance with the Exchange Act
with respect to the Offer (together with all amendments and supplements
thereto and including the exhibits thereto, the "Schedule 14D-1"). The
Schedule 14D-1 will include, as exhibits, the Offer to Purchase and a form of
letter of transmittal (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). Concurrently with the filing of
the Schedule 14D-1 by the Parent and the Purchaser, the Company shall file with
the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 in accordance
with the Exchange Act (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9"), which shall, except as
otherwise provided herein, contain the recommendation referred to in clause
(iv) of Section 3.2(a) hereof. The Company and its counsel shall be given a
reasonable opportunity to review and comment upon the Schedule 14D-1 and all
amendments and supplements thereto prior to their filing with the SEC or
dissemination to stockholders of the Company.
(b) The Parent and the Purchaser shall take all steps necessary to ensure that
the Offer Documents, and the Company shall take all steps necessary to ensure
that the Schedule 14D-9, will comply in all material respects with the
provisions of applicable federal and state securities Laws. The information
provided and to be provided by the Parent, the Purchaser or the Company for use
in the Schedule 14D-1, the Offer Documents and the Schedule 14D-9 shall not, on
the date first filed with the SEC or first published, sent or provided to
stockholders, as the case may be, 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 light of the circumstances under
which they were made, not misleading. Each of the Parent and the Purchaser
shall take all steps necessary to cause the Offer Documents, and the Company
shall take all steps necessary to cause the Schedule 14D-9, to be filed with the
SEC and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal and state securities Laws. Each of the
Parent and the Purchaser, on one hand, and the Company, on the other hand, shall
promptly correct any information provided by it for use in the Offer Documents
and the Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect. The Purchaser shall take all steps
necessary to cause the Offer Documents, and the Company shall take all steps
necessary to cause the Schedule 14D-9, as so corrected, to be filed with the SEC
and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal and state securities Laws. The Purchaser
and its counsel shall be given a reasonable opportunity to review and comment
upon the Schedule 14D-9 and all amendments and supplements thereto prior to
their filing with the SEC or dissemination to stockholders of the Company. The
Company agrees to provide the Purchaser and its counsel with copies of any
written comments that the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments and each of the Parent and the Purchaser agrees to provide the Company
and its counsel with copies of any written comments that the Parent, the
Purchaser or their respective counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after the receipt of such comments.
3.4 Company Board Representation; Section 14(f).
(a) Promptly after (i) the purchase of and payment for any Shares by the
Purchaser or any of its Affiliates as a result of which the Purchaser and its
Affiliates own beneficially at least a majority of the then outstanding Shares
and (ii) compliance with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, whichever shall occur later, the Parent, the Purchaser
and the Company shall take all action available and within their respective
control so that the number of directors on the Company Board shall be
established at nine (9) directors consisting of (A) five (5) persons designated
by the Purchaser, (B) Messrs. Edward E. Lucente and James A. Wallace and (C) two
(2) persons not affiliated with the Company, the Purchaser or the Parent. The
Company shall use its best efforts to promptly secure the resignations of such
number of its incumbent directors as is necessary to enable the designees of the
Purchaser to be so elected or appointed to the Company Board. At such time, the
Company shall, if requested by the Purchaser, also take all action necessary to
cause the persons designated by the Purchaser to constitute at least the same
percentage (rounded up to the next whole number) as is on the Company Board of
(i) each committee of the Company Board (other than the Audit Committee), (ii)
each board of directors (or similar body) of each subsidiary of the Company and
(iii) each committee (or similar body) of each such subsidiary board. The
provisions of this Section 3.4(a) are in addition to and shall not limit any
rights which the Parent, the Purchaser or any of their Affiliates may have as a
holder or beneficial owner of Shares as a matter of applicable Law with respect
to the election of directors or otherwise.
(b) The Company shall promptly take all actions required pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to
fulfill its obligations under Section 3.4(a), including mailing to stockholders
the information required by such Section 14(f) and Rule 14f-1 (or, at the
Purchaser's request, furnishing such information to the Purchaser for inclusion
in the Offer Documents initially filed with the SEC and distributed to the
stockholders of the Company) as is necessary to enable the Purchaser's designees
to be elected to the Company Board. The Purchaser shall supply the Company any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-1.
(c) On and after the purchase of and payment for the Shares by the Purchaser
pursuant to the Offer, in the event that the Purchaser and its Affiliates
beneficially own less than a majority of the then outstanding Shares, the
Purchaser shall be entitled to designate (to the extent not already designated
pursuant to Section 2.3 hereof) the greater of (i) two (2) directors on the
Company Board or (ii) such number of directors on the Company Board (rounded up
to the next whole number which is less than a majority) equal to the product of
the total number of directors on the Company Board multiplied by the percentage
that the number of Shares beneficially owned by the Purchaser and its Affiliates
bears to the total number of Shares then outstanding. The Company shall either
(i) use its best efforts to promptly secure the resignations of such number of
its incumbent directors as is necessary to enable the designees of the Purchaser
to be so elected or appointed to the Company Board or (ii) take such action as
is necessary to increase the size of the Company Board by such number of
directors, and, in either case, the Company shall take all action available to
the Company to cause such designees of the Purchaser to be elected or appointed
to fill the vacancies created by such action. At such time, the Company shall,
if requested by the Purchaser, also take all action necessary to cause the
persons designated by the Purchaser to constitute at least the same percentage
(rounded up to the next whole number which is less than a majority) as is on the
Company Board of (i) each committee of the Company Board, (ii) each board of
directors (or similar body) of each subsidiary of the Company and (iii) each
committee (or similar body) of each such subsidiary board. The provisions of
this Section 3.4(c) are in addition to and shall not limit any rights which the
Purchaser or any of its Affiliates may have as a holder or beneficial owner of
Shares as a matter of applicable Law with respect to the election of directors
or otherwise.
4. Representations and Warranties of the Company.
Except as set forth on the disclosure schedule delivered by the Company to
the Parent prior to the execution of this Agreement (the "Disclosure Schedule"),
the Company hereby represents and warrants to each of the Parent and the
Purchaser as follows:
4.1 Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware. The Company has all
requisite corporate power and authority to own and operate its properties and
assets, and has all requisite corporate power and authority to execute and
deliver this Agreement and the Loan Agreement and the agreements and instruments
contemplated thereby (collectively, the "Related Agreements"), to issue and sell
the Shares hereunder, and to carry out the provisions of this Agreement and the
Related Agreements. Section 4.1 of the Disclosure Schedule sets forth a list of
all subsidiaries of the Company. Except as listed in Section 4.1 of the
Disclosure Schedule, the Company does not own, directly or indirectly,
beneficially or of record, equity securities of any other corporation, limited
partnership or similar entity, and the Company is not a participant in any joint
venture, partnership, trust or similar arrangement. The Company is duly
qualified and is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so would not have a
Material Adverse Effect on the business, assets, liabilities, financial
condition, operations or prospects of the Company.
4.2 Capitalization; Voting Rights. The authorized capital stock of the
Company, immediately prior to the Closing, will consist of (i) 25,000,000 shares
of Common Stock of which, as of the date hereof, 10,708,335 are issued and
outstanding and (ii) 500,000 shares of Preferred Stock, no par value, of which
(A) 250,000 shares have been designated Series A Participating Preferred Stock
and reserved for issuance upon the exercise of the Rights distributed to the
holders of the Common Stock pursuant to the Rights Agreement and (B) none of
which are issued and outstanding as of the date hereof. All issued and
outstanding shares of the Company's Common Stock (i) have been duly authorized
and validly issued, (ii) are fully paid and non-assessable, (iii) were issued in
compliance with all applicable federal and state Laws concerning the issuance of
securities and (iv) are free of preemptive rights. As of the date hereof, (i)
1,800,709 Shares were reserved for issuance and issuable upon or otherwise
deliverable in connection with the exercise of outstanding options issued to
directors, officers, employees and consultants pursuant to the Stock Option
Plans (the "Company Stock Options") and (ii) 200,000 Shares were reserved for
issuance and issuable upon or otherwise deliverable in connection with the
exercise of warrants (the "Warrants"), consisting of (A) the Warrant to Purchase
100,000 Shares, exercisable until November 7, 1999 at an exercise price of
$5.00, issued to Foothill Capital Corporation and (B) the Warrant to Purchase
100,000 Shares, exercisable until December 31, 2001 at an exercise price of
$6.50, issued to INK (AL) QRS 12-21, Inc. Except as and to the extent publicly
disclosed by the Company in the Company SEC Reports (as hereinafter defined),
since October 2, 1998, no shares of the Company's capital stock have been issued
other than pursuant to Company Stock Options already in existence on such date,
and no Company Stock Options have been granted. Except as set forth on Section
4.2 of the Disclosure Schedule, the execution and delivery of this Agreement and
the Related Agreements or the consummation of the transactions contemplated
hereby and thereby will not cause any outstanding Company Stock Options or
Warrants to become exercisable. Except as set forth above, as of the date
hereof, there are outstanding (i) no shares of capital stock or other voting
securities of the Company; (ii) no securities of the Company or any of its
subsidiaries convertible into or exchangeable for shares of capital stock or
voting securities of the Company; (iii) except for the Rights Agreement, no
options or other rights to acquire from the Company or any of its subsidiaries,
and no obligations of the Company or any of its subsidiaries to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of the Company; and (iv) no equity
equivalents, interests in the ownership or earnings of the Company or any of its
subsidiaries or other similar rights (including stock appreciation rights)
(collectively, "Company Securities"). There are no outstanding obligations of
the Company or any of its subsidiaries to repurchase, redeem or otherwise
acquire any Company Securities. There are no stockholder agreements, voting
trusts or other agreements or understandings to which the Company or any of its
subsidiaries is a party or to which it is bound relating to the voting of any
shares of capital stock of the Company. Section 4.2 of the Disclosure Schedule
sets forth information regarding the current exercise price, date of grant and
number granted of Company Stock Options for each holder thereof.
4.3 Authorization; Binding Obligations.
(a) The Company has all necessary corporate power and authority to execute and
deliver this Agreement and the Related Agreements and to consummate the
transactions contemplated hereby and thereby. No other corporate proceedings on
the part of the Company are necessary to authorize this Agreement and the
Related Agreements or to consummate the transactions contemplated hereby and
thereby. This Agreement and the Related Agreements have been duly and validly
executed and delivered by the Company and constitute valid, legal and binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
(b) The Company Board has, by unanimous vote of those present (who constituted
100% of the directors then in office), duly and validly authorized the execution
and delivery of this Agreement and the Related Agreements and approved the
consummation of the transactions contemplated hereby and thereby, and taken all
corporate actions required to be taken by the Company Board for the consummation
of the transactions, including the authorization, issuance, sale and delivery of
the Company Shares and the Offer, contemplated hereby and thereby and has
resolved to deem this Agreement and the Transactions advisable and fair to, and
in the best interests of, the Company and its stockholders.
4.4 SEC Reports; Financial Statements. The Company has filed all required
forms, reports and documents with the SEC since September 27, 1996, each of
which has complied in all material respects with all applicable requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange
Act, each as in effect on the dates such forms, reports and documents were
filed. The Company has heretofore delivered to the Parent, in the form filed
with the SEC (including any amendments thereto), (i) its Annual Reports on Form
10-K for each of the fiscal years ended on or after September 27, 1996; (ii) all
definitive proxy statements relating to the Company's meetings of stockholders
(whether annual or special) held since September 27, 1996; and (iii) all other
reports or registration statements filed by the Company with the SEC since
October 2, 1998 (the "Company SEC Reports"). None of such forms, reports or
documents, including, without limitation, any financial statements or schedules
included or incorporated by reference therein, contained, when filed, any untrue
statement of a material fact or omitted to state a material fact required to be
stated or incorporated by reference therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements of the Company included
in the Company SEC Reports complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto and fairly present, in conformity with GAAP on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and their consolidated results of operations and changes
in financial position for the periods then ended (subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments). Except
as and to the extent publicly disclosed by the Company in the Company SEC
Reports, since October 2, 1998, there has not been any change, or any
application or request for any change, by the Company or any of its
subsidiaries, in accounting principles, methods or policies for financial
accounting or Tax purposes (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments).
4.5 No Undisclosed Liabilities. Except as and to the extent publicly disclosed
by the Company in the Company SEC Reports, as of October 2, 1998 (the "Audit
Date"), none of the Company or its subsidiaries has any material liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, and
whether due or to become due or asserted or unasserted.
4.6 Absence of Changes. Except as and to the extent publicly disclosed by the
Company in the Company SEC Reports, since the Audit Date, the business of the
Company and its subsidiaries has been carried on only in the ordinary and usual
course consistent with past practice, none of the Company or its subsidiaries
has taken any of the actions described in Sections 6.2 (a) through 6.2(n) or
incurred any liabilities of any nature, whether or not accrued, contingent or
otherwise, which do or which would reasonably be expected to have, and there
have been no events, changes or effects with respect to the Company or its
subsidiaries, which do or which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
4.7 Schedule 14D-9; Offer Documents. The Schedule 14D-9, any other document
required to be filed by the Company with the SEC in connection with the
Transactions or any information supplied by the Company for inclusion in the
Offer Documents will not, at the respective times the Schedule 14D-9, any such
other filings by the Company, the Offer Documents or any amendments or
supplements thereto are filed with the SEC or are first published, sent or given
to stockholders of the Company, as the case may be, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they are made, not misleading. The Schedule 14D-9
and any other document required to be filed by the Company with the SEC in
connection with the Transactions will, when filed by the Company with the SEC,
comply as to form in all material respects with the applicable provisions of the
Exchange Act and the rules and regulations thereunder. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to the
statements made in any of the foregoing documents based on and in conformity
with information supplied in writing by or on behalf of the Parent or the
Purchaser specifically for inclusion therein.
4.8 Consents and Approvals. Except for filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the Securities Act, the Exchange Act, state securities or blue
sky Laws, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and as otherwise set forth in Section 4.8 to the Disclosure
Schedule, no filing with or notice to, and no permit, authorization, consent or
approval of, any court or tribunal or administrative, governmental or regulatory
body, agency or authority in the United States (a "Governmental Entity") is
necessary for the execution and delivery by the Company of this Agreement or the
Related Agreements or the consummation by the Company of the transactions
contemplated hereby or thereby.
4.9 No Default. Neither the Company nor any of its subsidiaries is in
violation of any term of (i) its certificate of incorporation, bylaws or other
organizational documents, (ii) any agreement or instrument related to
indebtedness for borrowed money or any other agreement to which it is a party or
by which it is bound, or (iii) any domestic (or to the Knowledge of the Company,
foreign) law, order, writ, injunction, decree, ordinance, award, stipulation,
statute, judicial or administrative doctrine, rule or regulation entered by a
Governmental Entity ("Law") applicable to the Company, its subsidiaries or any
of their respective properties or assets, the consequence of which violation
does or would reasonably be expected to (A) have, individually or in the
aggregate, a Material Adverse Effect on the Company or (B) prevent or materially
delay the performance of this Agreement and the Related Agreements by the
Company. The execution, delivery and performance of this Agreement and the
Related Agreements and the consummation of the transactions contemplated hereby
and thereby will not (i) result in any violation of or conflict with, constitute
a default under, require any consent, waiver or notice under any term of, or
result in the reduction or loss of any benefit or the creation or acceleration
of any right or obligation under, (A) the certificate of incorporation, bylaws
or other organizational document of the Company (or any of its subsidiaries),
(B) any material agreement, note, bond, mortgage, indenture, contract, lease,
Company Permit (as hereinafter defined) or other obligation or right to which
the Company or any of its subsidiaries is a party or by which any of the assets
or properties of the Company or any of its subsidiaries is bound or (C) any
instrument or Law or (ii) other than pursuant to the Loan Agreement, result in
the creation of (or impose any obligation on the Company or any of its
subsidiaries to create) any Lien upon any of the properties or assets of the
Company or any of its subsidiaries pursuant to any such term, except where any
of the foregoing do not or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
4.10 Rights to Property.
(a) Section 4.10 of the Disclosure Schedule sets forth all of the real property
owned in fee by the Company and its subsidiaries. Each of the Company and its
subsidiaries has good and marketable title to each parcel of real property owned
by it free and clear of all Liens, except (i) Liens for Taxes not yet due and
payable and general and special assessments not in default and payable without
penalty and interest, and (ii) other Liens which do not materially interfere
with the Company's or any of its subsidiaries' use and enjoyment of such real
property or materially detract from or diminish the value thereof.
(b) Section 4.10 of the Disclosure Schedule sets forth all leases, subleases
and other agreements (the "Real Property Leases") under which the Company or any
of its subsidiaries uses or occupies or has the right to use or occupy, now or
in the future, any real property. The Company has heretofore delivered to the
Parent true, correct and complete copies of all Real Property Leases (and all
modifications, amendments and supplements thereto and all side letters to which
the Company or any of its subsidiaries is a party affecting the obligations of
any party thereunder). Each Real Property Lease constitutes the valid and
legally binding obligation of the Company or its subsidiaries, enforceable in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar Laws of general applicability relating to or affecting creditors' rights
or by general equity principles), and is in full force and effect. All rent and
other sums and charges payable by the Company and its subsidiaries as tenants
under each Real Property Lease are current, no termination event or condition or
uncured default of a material nature on the part of the Company or any such
subsidiary or, to the Knowledge of the Company, the landlord, exists under any
Real Property Lease. Each of the Company and its subsidiaries has a good and
valid leasehold interest in each parcel of real property leased by it free and
clear of all Liens, except (i) Liens for Taxes not yet due and payable and
general and special assessments not in default and payable without penalty and
interest, and (ii) other Liens which do not materially interfere with the
Company's or any of its subsidiaries' use and enjoyment of such real property or
materially detract from or diminish the value thereof. No party to any such
Real Property Leases has given notice to the Company or any of its subsidiaries
of or made a claim against the Company or any of its subsidiaries with respect
to any breach or default thereunder.
(c) Subject only to the Liens (as defined in the Loan Agreement) permitted
under Section 4.1(f) of the Loan Agreement, each of the Company and its
subsidiaries has good and marketable title to all other properties and assets it
purports to own, including those reflected in the most recent consolidated
financial statements contained in the Company SEC Reports.
4.11 Litigation. Except as and to the extent disclosed by the Company in
the Company SEC Reports or Section 4.11 of the Disclosure Schedule, there is no
suit, claim, action, proceeding or investigation pending or, to the Company's
Knowledge, threatened against the Company or any of its subsidiaries or any of
their respective properties or assets which (a) seeks monetary damages in excess
of $500,000, seeks equitable relief or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company or
(b) as of the date hereof, questions the validity of this Agreement, the Related
Agreements or any action to be taken by the Company in connection with the
consummation of the transactions contemplated hereby or thereby or could
otherwise prevent or delay the consummation of the transactions contemplated by
this Agreement or the Related Agreements. Except as and to the extent publicly
disclosed by the Company in the Company SEC Reports, none of the Company or its
subsidiaries is subject to any outstanding order, writ, injunction or decree.
4.12 Compliance with Applicable Law. The Company and its subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the "Company Permits"), except for failures to hold such permits,
licenses, variances, exemptions, orders and approvals which do not or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company. The Company and its subsidiaries are in
compliance in all material respects with the terms of the Company Permits. The
Company and its subsidiaries are in compliance in all material respects with all
Laws applicable to the Company, its subsidiaries or their respective assets or
operations. No investigation or review by any Governmental Entity with respect
to the Company or its subsidiaries is pending or, to the Company's Knowledge,
threatened, nor, to the Company's Knowledge, has any Governmental Entity
indicated an intention to conduct the same.
4.13 Employee Plans.
(a) Section 4.13(a) of the Disclosure Schedule sets forth a list of (i) all
"employee benefit plans," as defined in Section 3(3) of ERISA, and all other
employee benefit plans or other benefit arrangements or payroll practices
including, without limitation, bonus plans, executive compensation, consulting
or other compensation agreements, incentive, equity or equity-based
compensation, or deferred compensation arrangements, stock purchase, severance
pay, sick leave, vacation pay, salary continuation for disability,
hospitalization, medical insurance, life insurance, scholarship programs and
directors' benefit, bonus or other incentive compensation, which the Company or
any of its subsidiaries maintains, contributes to or has any obligation to or
liability for (each an "Employee Benefit Plan" and collectively, the "Employee
Benefit Plans"); and (ii) all "employee pension plans", as defined in Section
3(2) of ERISA, subject to Title IV of ERISA or Section 412 of the Code, to which
the Company, any of its subsidiaries or any trade or business (whether or not
incorporated) which is or has ever been under common control, or which is or has
ever been treated as a single employer, with the Company or any subsidiary under
Section 414(b), (c), (m) or (o) of the Code ("ERISA Affiliate") has ever
sponsored, maintained, contributed or been obligated to contribute in the last
six years (the "Title IV Plans"). Except as separately set forth on Section
4.13(a) of the Disclosure Schedule, none of the Employee Benefit Plans is a
multiemployer plan, as defined in Section 3(37) of ERISA ("Multiemployer Plan"),
or is or has been subject to Sections 4063 or 4064 of ERISA ("Multiple Employer
Plans"), nor has the Company, its subsidiaries or any ERISA Affiliate ever been
obligated to contribute to a Multiemployer Plan.
(b) True, correct and complete copies of the following documents, with respect
to each of the Employee Benefit Plans and Title IV Plans (other than a
Multiemployer Plan) have been made available or delivered to the Parent by the
Company: (i) any plans and related trust documents, and amendments thereto; (ii)
the three most recent Forms 5500 and schedules thereto; (iii) the most recent
Internal Revenue Service ("IRS") determination letter; (iv) the three most
recent financial statements and actuarial valuations, if applicable; (v) summary
plan descriptions; (vi) written communications to employees relating to the
Employee Benefit Plans; and (vii) written descriptions of all non-written
agreements relating to the Employee Benefit Plans.
(c) As of the date hereof, (i) all payments required to be made by or under any
Employee Benefit Plan, any related trusts, or any collective bargaining
agreement or pursuant to Law have been made by the due date thereof (including
any valid extension), and all contributions for any period ending on or before
the Closing Date which are not yet due will have been paid or accrued on the
balance sheet on or prior to the Closing Date; (ii) the Company and its
subsidiaries have performed all material obligations required to be performed by
them under any Employee Benefit Plan; (iii) the Employee Benefit Plans have been
administered in material compliance with their terms and the requirements of
ERISA, the Code and other applicable Laws; (iv) there are no material actions,
suits, arbitrations or claims (other than routine claims for benefit) pending or
threatened with respect to any Employee Benefit Plan; and (v) the Company and
its subsidiaries have no material liability as a result of any "prohibited
transaction" (as defined in Section 406 of ERISA and Section 4975 of the Code)
for any excise Tax or civil penalty.
(d) Except as set forth in Section 4.13(d) of the Disclosure Schedule:
(i) There is no "amount of unfunded benefit liabilities" as defined in Section
4001(a)(18) of ERISA in any of the respective Title IV Plans. Each of the
respective Title IV Plans are fully funded in accordance with the actuarial
assumptions used by the Pension Benefit Guaranty Corporation ("PBGC") to
determine the level of funding required in the event of the termination of
such Title IV Plan and the "benefit liabilities" as defined in Section 4001(a)
(16) of ERISA of such Title IV Plan using such PBGC assumptions do not exceed
the assets of such Title IV Plan.
(ii) There has been no "reportable event" as that term is defined in Section
4043 of ERISA and the regulations thereunder with respect to the Title IV Plans
which would require the giving of notice or any event requiring disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA.
(iii) Neither the Company nor any ERISA Affiliate has terminated any Title
IV Plan, or incurred any outstanding liability under Section 4062 of ERISA to
the PBGC, or to a trustee appointed under Section 4042 of ERISA. All premiums
due the PBGC with respect to the Title IV Plans have been paid.
(iv) Neither the Company nor any ERISA Affiliate or any organization to which
the Company or any ERISA Affiliate is a successor or parent corporation, within
the meaning of Section 4069(b) of ERISA, has engaged in any transaction within
the last five years which might be alleged to come within the meaning of Section
4069 of ERISA.
(v) The Company and its subsidiaries are not subject to any unsatisfied
withdrawal liability with respect to any Multiemployer Plan.
(vi) Each of the Employee Benefit Plans which is intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined by the IRS
to be so "qualified" and the trusts maintained pursuant thereto are exempt from
federal income taxation under Section 501 of the Code, and the Company knows of
no fact which would adversely affect the qualified status of any such Pension
Plan or the exemption of such trust.
(vii) None of the Employee Benefit Plans provide for continuing post-
employment health or life insurance coverage for any participant or any
beneficiary of a participant except as may be required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended.
(viii) No stock or other security issued by the Company forms or has formed a
material part of the assets of any Employee Benefit Plan.
(ix) Neither the execution and delivery of this Agreement nor the consummation
of the Transactions will by itself or in combination with any other event (i)
result in any material payment becoming due, or materially increase the amount
of compensation due, to any current or former employee of the Company or any of
its subsidiaries; (ii) materially increase any benefits otherwise payable under
any Employee Benefit Plan; or (iii) result in the acceleration of the time of
payment or vesting of any such material benefits.
(x) All amendments and actions required to bring the Employee Benefit Plans
into conformity in all material respects with all of the applicable provisions
of the Code, ERISA and other applicable laws have been made or taken except to
the extent that such amendments or actions are not required by law to be made
or taken until a date after the Closing Date.
(xi) Any bonding required with respect to the Employee Benefit Plans in
accordance with applicable provisions of ERISA has been obtained and is in full
force and effect.
(xii) Any individual who performs services for the Company (other than
through a contract with an organization other than such individual) and who is
not treated as an employee for federal income tax purposes by the Company is not
an employee for such purposes.
4.14 Labor Matters.
(a) Section 4.14 of the Disclosure Schedule sets forth a list of all
employment, labor or collective bargaining agreements to which the Company or
any subsidiary is party and except as set forth therein, there are no
employment, labor or collective bargaining agreements which pertain to employees
of the Company or any of its subsidiaries. The Company has heretofore made
available to the Parent true and complete copies of (i) the employment
agreements listed on Section 4.14 of the Disclosure Schedule and (ii) the labor
or collective bargaining agreements listed on Section 4.14 of the Disclosure
Schedule, together with all amendments, modifications, supplements and side
letters affecting the duties, rights and obligations of any party thereunder.
(b) No employees of the Company or any of its subsidiaries are represented by
any labor organization; no labor organization or group of employees of the
Company or any of its subsidiaries has made a pending demand for recognition or
certification; and, to the Company's Knowledge, there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or threatened in writing to be brought or filed with the
National Labor Relations Board or any other labor relations tribunal or
authority. To the Company's Knowledge, there are no organizing activities
involving the Company or any of its subsidiaries pending with any labor
organization or group of employees of the Company or any of its subsidiaries.
(c) There are no unfair labor practice charges, grievances or complaints
pending or threatened in writing by or on behalf of any employee or group of
employees of the Company or any of its subsidiaries.
(d) Except as disclosed in Section 4.11 of the Disclosure Schedule, there are
no complaints, charges or claims against the Company or any of its subsidiaries
pending, or threatened in writing to be brought or filed, with any Governmental
Entity or arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment of any individual by the
Company or any of its subsidiaries.
(e) The Company and each of its subsidiaries is in compliance in all material
respects with all Laws relating to the employment of labor, including all such
Laws and orders relating to wages, hours, collective bargaining, discrimination,
civil rights, safety and health workers' compensation and the collection and
payment of withholding and/or Social Security Taxes and similar Taxes (as
defined in Section 4.16).
(f) There has been no "mass layoff" or "plant closing" as defined by the Worker
Adjustment and Retraining Notification Act ("WARN") and any similar state or
local "plant closing" law with respect to Seller Entity within the six (6)
months prior to Closing.
4.15 Environmental Matters.
(a) For purposes of this Agreement:
(i) "Environmental Costs and Liabilities" means any and all losses,
liabilities, obligations, damages (including compensatory, punitive and
consequential damages), fines, penalties, judgments, actions, claims, costs and
expenses (including, without limitation, fees, disbursements and expenses of
legal counsel, experts, engineers and consultants and the costs of investigation
and feasibility studies and clean up, remove, treat, or in any other way address
any Hazardous Materials (as hereinafter defined)) arising from, under or
pursuant to any Environmental Law (as hereinafter defined);
(ii) "Environmental Law" means any applicable federal, state, local or foreign
Law (including common Law), statute, rule, regulation, ordinance, decree or
other legal requirement relating to the protection of natural resources, the
environment and public and employee health and safety or pollution or the
release or exposure to Hazardous Materials (as hereinafter defined), as such
Laws have been and may be amended or supplemented through the Closing Date;
(iii) "Hazardous Material" means any substance, material or waste which is
regulated, classified or otherwise characterized as hazardous, toxic, pollutant,
contaminant or words of similar meaning or regulatory effect by any Governmental
Entity or the United States, and includes, without limitation, petroleum,
petroleum by-products and wastes, asbestos and polychlorinated biphenyls;
(iv) "Release" means any release, spill, effluent, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, or migration into
the indoor or outdoor environment, or into or out of any property owned,
operated or leased by the applicable party or its subsidiaries; and
(v) "Remedial Action" means all actions, including, without limitation, any
capital expenditures, required by a Governmental Entity or required under or
taken pursuant to any Environmental Law, or voluntarily undertaken to (A) clean
up, remove, treat, or in any other way, ameliorate or address any Hazardous
Materials or other substance in the indoor or outdoor environment; (B) prevent
the Release or threat of Release, or minimize the further Release of any
Hazardous Material so it does not endanger or threaten to endanger the public
health or welfare of the indoor or outdoor environment; (C) perform pre-remedial
studies and investigations or post-remedial monitoring and care pertaining or
relating to a Release; or (D) bring the applicable party into compliance with
any Environmental Law.
(b) Except as set forth in Section 4.15 of the Disclosure Schedule:
(i) The operations of the Company and its subsidiaries have been and, as of the
Closing Date, will be, in material compliance with all Environmental Laws, and
the Company is not aware of any facts, circumstances or conditions, which
without significant capital expenditures, would prevent material compliance in
the future;
(ii) The Company and its subsidiaries have obtained and will, as of the Closing
Date, maintain all material permits, authorizations, licenses or similar
approvals required under applicable Environmental Laws for the continued
operations of their respective businesses;
(iii) The Company and its subsidiaries are not subject to any outstanding
written orders or material contracts with any Governmental Entity or other
person respecting (A) Environmental Laws, (B) Remedial Action or (C) any Release
or threatened Release of a Hazardous Material;
(iv) The Company and its subsidiaries have not received any written
communication alleging, with respect to any such party, the violation of or
liability (real or potential) under any Environmental Law;
(v) Neither the Company nor any of its subsidiaries has any contingent
liability in connection with the Release of any Hazardous Material (whether on-
site or off-site);
(vi) The operations of the Company or its subsidiaries do not involve the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined and regulated under 40 C.F.R. Parts 260-270 (in effect as of the date
of this Agreement) or any state equivalent;
(vii) There is not now, nor, to the Company's Knowledge, has there been in
the past, on or in any property of the Company or its subsidiaries any of the
following: (A) any underground storage tanks or surface impoundments, (B) any
asbestos-containing materials, or (C) any polychlorinated biphenyls; and
(viii) No judicial or administrative proceedings are pending or, to the
Company's Knowledge, threatened against the Company and its subsidiaries
alleging the violation of or seeking to impose liability pursuant to any
Environmental Law and there are no investigations pending or, to the Company's
Knowledge, threatened against the Company or any of its subsidiaries under
Environmental Laws.
(c) None of the exceptions set forth on Section 4.15 of the Disclosure Schedule
is reasonably likely to result in the Company and its Subsidiaries incurring
Environmental Costs and Liabilities in excess of $300,000 individually or in the
aggregate.
(d) The Company has provided the Parent with copies of all environmentally
related assessments, audits, investigations, sampling or similar reports
relating to the Company or its subsidiaries or any real property currently or
formerly owned, operated or leased by or for the Company and its subsidiaries.
4.16 Tax Matters.
(a) The Company and each of its subsidiaries, and each affiliated,
unitary or combined group (within the meaning of Section 1504 of the Code or
comparable provisions of state, local or foreign Tax law) of which the Company
or any of its subsidiaries is or has been a member, has timely filed all Tax
Returns and reports required to be filed by it. All such Tax Returns are
complete and correct in all material respects.
(b) The Company and each of its subsidiaries has paid (or the Company has
paid on its subsidiaries' behalf) all Taxes due for the periods covered by such
Tax Returns. The most recent consolidated financial statements contained in the
Company SEC Reports reflect an adequate reserve for all Taxes payable by the
Company and its subsidiaries for all Taxable periods and portions thereof
through the date of such financial statements.
(c) The Company and its subsidiaries have complied in all material
respects with all applicable Laws with respect to the payment and withholding of
Taxes.
(d) No federal, state, local or foreign audits or other administrative
proceedings or court proceedings are presently pending with regard to any
federal income or material state, local or foreign Taxes or Tax Returns of the
Company or its subsidiaries and neither the Company nor any of its subsidiaries
has received a written notice that any taxing authority intends to conduct any
audit or proceeding. To the Company's Knowledge, no claim has been made within
the past two years by a taxing authority in a jurisdiction where the Company or
any of its subsidiaries does not file Tax Returns to the effect that the Company
or any of its subsidiaries is or may be subject to Taxation by that
jurisdiction.
(e) Neither the Company nor any of its subsidiaries has received any
private letter rulings from the IRS or comparable rulings from other taxing
authorities.
(f) Neither the Company nor any of its subsidiaries has (A) agreed to or
is required to make any adjustments pursuant to Section 481(a) of the Code (or
any predecessor provision) or any similar provision of domestic or foreign state
or local law by reason of a change in accounting methods initiated by Company or
any subsidiary, (B) executed or entered into a closing agreement pursuant to
Section 7121 of the Code or any predecessor provision thereof or any similar
provision of domestic or foreign state or local law with respect to the Company
or any subsidiary, (C) filed a consent pursuant to Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code)
owned by Company or any subsidiary.
(g) No property owned by Company or any subsidiary (A) is required to be
treated as being owned by another Person pursuant to the provisions of Section
168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of 1986, (B) is "tax-
exempt use property" within the meaning of Section 168(h)(1) of the Code, (C) is
"tax-exempt bond financed property" within the meaning of Section 168(g) of the
Code or (D) is subject to Section 168(g)(1)(A) of the Code.
(h) There is no contract, plan or arrangement involving the Company or any
subsidiary that, individually or collectively, could give rise to the payment of
any amount that would not be deductible by the Company or any subsidiary by
reason of Section 280G or Section 162(m) of the Code.
(i) Except for the group of which the Company is the common parent that
files a consolidated federal income Tax Return, neither the Company nor any of
its subsidiaries is or was a member of any consolidated, combined or affiliated
group of corporations that filed or was required to file a consolidated,
combined or unitary Tax Return.
(j) Neither Company nor any subsidiary is a party to, bound by, or
obligated under, any Tax sharing agreement.
(k) Neither Company nor any of its subsidiaries has constituted either a
"distributing corporation" or a "controlled corporation" (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-
free treatment under Section 355 of the Code (A) in the two years prior to the
date of this Agreement or (B) in a distribution which could otherwise constitute
part of a "plan" or "series of related transactions" (within the meaning of
Section 355(e) of the Code) in conjunction with the Transactions.
(l) Neither the Company nor any of its subsidiaries is a "United States
real property holding company" within the meaning of Section 897 of the Code.
(m) The net operating loss carryovers of the Company and its subsidiaries
as at the close of their taxable year ended October 2, 1998 for federal income
Tax purposes were at least $38 million and, except as a result of the
Transactions, were not subject to any limitations or restrictions on their
utilization.
(n) For purposes of this Agreement, "Tax" or "Taxes" shall mean all taxes,
charges, fees, imposts, levies, duties, gaming or other assessments, including,
without limitation, all net income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, alternative or add-on
minimum, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp, occupation, property
and estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts imposed by any taxing authority (domestic or foreign)
and shall include any transferee liability in respect of Taxes, and any
liability in respect of Taxes imposed by contract, operation of law, assumption,
Tax sharing agreement, Tax indemnity agreement, any similar agreement or
otherwise. "Tax Returns" shall mean any report, return, document, declaration or
any other information or filing required to be supplied to any taxing authority
or jurisdiction (foreign or domestic) with respect to Taxes, including, without
limitation, information returns, any document with respect to or accompanying
payments of estimated Taxes, or with respect to or accompanying requests for the
extension of time in which to file any such report, return document, declaration
or other information.
4.17 Absence of Questionable Payments. Neither the Company nor any of its
subsidiaries nor, to the Company's Knowledge, any director, officer, agent,
employee or other person acting on behalf of the Company or any of its
subsidiaries, has used any corporate or other funds for unlawful contributions,
payments, gifts, or entertainment, or made any unlawful expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds in violation of Section 30A of the
Exchange Act. Neither the Company nor any of its subsidiaries nor, to the
Company's Knowledge, any director, officer, agent, employee or other person
acting on behalf of the Company or any of its subsidiaries, has accepted or
received any unlawful contributions, payments, gifts, or expenditures. To the
Company's Knowledge, the Company and each of its subsidiaries which is required
to file reports pursuant to Section 12 or 15(d) of the Exchange Act is in
compliance with the provisions of Section 13(b) of the Exchange Act.
4.18 Material Contracts.
(a) Section 4.18 of the Disclosure Schedule sets forth a list of all Material
Contracts (as hereinafter defined). The Company has heretofore made available
to the Parent true, correct and complete copies of all written or oral contracts
and agreements (and all amendments, modifications and supplements thereto and
all side letters to which the Company or any of its subsidiaries is a party
affecting the obligations of any party thereunder) to which the Company or any
of its subsidiaries is a party or by which any of its properties or assets are
bound that are material to the business, properties or assets of the Company and
its subsidiaries taken as a whole, including, without limitation, to the extent
any of the following are, individually or in the aggregate, material to the
business, properties or assets of the Company and its subsidiaries taken as a
whole, all: (i) employment, severance, product design or development, personal
services, consulting, non-competition or indemnification contracts (including,
without limitation, any contract to which the Company or any of its subsidiaries
is a party involving employees of the Company) involving an amount in excess of
$100,000; (ii) licensing, merchandising or distribution agreements; (iii)
contracts granting a right of first refusal or first negotiation; (iv)
partnership or joint venture agreements; (v) agreements for the acquisition,
sale or lease of material properties or assets, in excess of $250,000, of the
Company (by merger, purchase or sale of assets or stock or otherwise) entered
into since January 1, 1997; (vi) loan or credit agreements, mortgages,
indentures or other agreements or instruments evidencing indebtedness for
borrowed money by the Company or any of its subsidiaries or any such agreement
pursuant to which indebtedness for borrowed money may be incurred; (vii)
agreements that purport to limit, curtail or restrict the ability of the Company
or any of its subsidiaries to compete in any geographic area or line of
business; and (viii) commitments and agreements to enter into any of the
foregoing (collectively, together with any such contracts entered into in
accordance with Section 6.1 hereof, the "Material Contracts"). Neither the
Company nor any of its subsidiaries is a party to or bound by any severance or
other agreement with any employee or consultant pursuant to which such person
would be entitled to receive any additional compensation or an accelerated
payment of compensation as a result of the consummation of the Transactions.
(b) Each of the Material Contracts constitutes the valid and legally binding
obligation of the Company or its subsidiaries, enforceable in accordance with
its terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of
general applicability relating to or affecting creditors' rights or by general
equity principles), and is in full force and effect. There is no default under
any Material Contract so listed either by the Company or, to the Company's
Knowledge, by any other party thereto, and no event has occurred that with the
lapse of time or the giving of notice or both would constitute a default
thereunder by the Company or, to the Company's Knowledge, any other party.
(c) No party to any such Material Contract has given notice to the Company of
or made a claim against the Company with respect to any breach or default
thereunder.
4.19 Related Party Transactions. Except for agreements expressly
contemplated hereby, agreements between the Company and its employees with
respect to the grant of Company Stock Options pursuant to the Stock Option
Plans, and agreements listed on the Disclosure Schedule, there are no
agreements, understandings or proposed transactions between the Company and
any of its officers or directors or any Affiliate thereof. Except as set
forth on the Disclosure Schedule, there are no obligations of the Company to
officers, directors, shareholders or employees of the Company, other than (a)
for payment of salary for services rendered, (b) for reimbursement for
reasonable expenses incurred on behalf of the Company, (c) for other employee
benefits (including stock option agreements outstanding under the Stock Option
Plans), and (d) pursuant to applicable Law. Except as may be disclosed in the
Company SEC Reports, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
4.20 Insurance. The insurance policies maintained by the Company or any of its
subsidiaries have been issued by insurers, which, to the Company's Knowledge,
are reputable and financially sound and provide coverage for the operations
conducted by the Company and its subsidiaries of a scope and coverage consistent
with customary industry practice.
4.21 Intellectual Property.
(a) Section 4.21 of the Disclosure Schedule sets forth a list of all
Intellectual Property of the Company and its subsidiaries.
(b) The Company and its subsidiaries own or possess adequate licenses or other
valid rights to use (in each case, free and clear of any Liens), all
Intellectual Property used or held for use in connection with the business of
the Company and its subsidiaries as currently conducted or as contemplated to be
conducted.
(c) The use of any Intellectual Property by the Company and its subsidiaries
does not infringe on or otherwise violate the rights of any person and is in
accordance with any applicable license pursuant to which the Company or any of
its subsidiaries acquired the right to use any Intellectual Property.
(d) No person is challenging, infringing on or otherwise violating any right of
the Company or any of its subsidiaries with respect to any Intellectual Property
owned by and/or licensed to the Company or its subsidiaries.
(e) Neither the Company nor any of its subsidiaries has received any notice
written or otherwise of any assertion or claim, pending or not, with respect to
any Intellectual Property used by the Company or its subsidiaries.
(f) No Intellectual Property owned and/or licensed by the Company or its
subsidiaries is being used or enforced in a manner that would result in the
abandonment, cancellation or unenforceability of such Intellectual Property.
(g) For purposes of this Agreement, "Intellectual Property" means (i) all
trademarks, trademark rights, trade names, trade name rights, trade dress and
other indications of origin, corporate names, brand names, logos, certification
rights, service marks, applications for trademarks and for service marks, know-
how and other proprietary rights and information, the goodwill associated with
the foregoing and registration in any jurisdiction of, and applications in any
jurisdictions to register, the foregoing, including any extension, modification
or renewal of any such registration or application; (ii) all inventions,
discoveries and ideas (whether patentable or unpatentable and whether or not
reduced to practice), in any jurisdiction, all improvements thereto, and all
patents, patent rights, applications for patents (including, without limitation,
divisions, continuations, continuations in part and renewal applications), and
any renewals, extensions or reissues thereof, in any jurisdiction; (iii)
nonpublic information, trade secrets and confidential information and rights in
any jurisdiction to limit the use or disclosure thereof by any person; (iv)
writings and other works, whether copyrightable or not, in any jurisdiction, and
all registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; (v) all mask works and all
applications, registrations and renewals in connection therewith, in any
jurisdiction; (vi) all computer software (including data and related
documentation); (vii) any similar intellectual property or proprietary rights;
and (viii) all copies and tangible documentation thereof and any claims or
causes of action arising out of or relating to any infringement or
misappropriation of any of the foregoing.
4.22 Year 2000.
(a) All of the Computer Programs (as hereinafter defined), computer firmware,
computer hardware (whether general or special purpose) and other similar or
related items of automated, computerized and/or software system(s) that are used
or relied on by the Company or by any of its subsidiaries in the conduct of
their respective businesses will not malfunction, will not cease to function,
will not generate incorrect data, and will not provide incorrect results when
processing, providing, and/or receiving (i) date-related data into and between
the twentieth and twenty-first centuries and (ii) date-related data in
connection with any valid date in the twentieth and twenty-first centuries.
(b) All of the products and services sold, licensed, rendered or otherwise
provided after December 31, 1993 by the Company or by any of its subsidiaries in
the conduct of their respective businesses will not malfunction, will not cease
to function, will not generate incorrect data and will not produce incorrect
results when processing, providing and/or receiving (i) date-related data into
and between the twentieth and twenty-first centuries and (ii) date-related data
in connection with any valid date in the twentieth and twenty-first centuries;
and neither the Company nor any of its subsidiaries is or will be subject to
claims or liabilities arising from their failure to do so.
(c) Neither the Company nor any of its subsidiaries has made other
representations or warranties regarding the ability of any product or service
sold, licensed, rendered or otherwise provided by the Company or by any of its
subsidiaries in the conduct of their respective businesses to operate without
malfunction, to operate without ceasing to function, to generate correct data
and to produce correct results when processing, providing and/or receiving (i)
date-related data into and between the twentieth and twenty-first centuries and
(ii) date-related data in connection with any valid date in the twentieth and
twenty-first centuries.
(d) For the purposes of this Agreement, "Computer Programs" means (i) any and
all computer software programs, including all source and object code; (ii)
databases and compilations, including any and all data and collections of data,
whether machine readable or otherwise; (iii) billing, reporting, and other
management information systems; (iv) all descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the foregoing;
(v) all content contained on any Internet site(s); and (vi) all documentation,
including user manuals and training materials, relating to any of the foregoing.
4.23 Customers and Suppliers. Section 4.23 of the Disclosure Schedule sets
forth a list of the twenty (20) largest customers and the ten (10) largest
suppliers of the Company, as measured by the dollar amount of purchases thereby
or therefrom, during the fiscal year ended October 2, 1998, showing the
approximate total sales by the Company to each such customer and the approximate
total purchases by the Company from each such supplier, during such period. The
Company has not received notice (oral or written) from any such customer or
supplier that (i) the Company is no longer in good standing with such customer
or supplier or (ii) that such customer or supplier plans to materially reduce
the volume of its business with the Company.
4.24 Opinion of Financial Advisor. The Financial Advisor has delivered to the
Company Board its opinion, dated the date of this Agreement, to the effect that,
as of such date, the Offer Price to be received by holders of the Shares
pursuant to the Offer is fair to the stockholders of the Company from a
financial point of view, and such opinion has not been withdrawn or modified.
The Company has been authorized by the Financial Advisor to permit the inclusion
of such opinion in its entirety in the Offer Documents and the Schedule 14D-9,
so long as such inclusion is in form and substance reasonably satisfactory to
the Financial Advisor and its counsel.
4.25 Brokers. No broker, finder or investment banker (other than the Financial
Advisor, a true and correct copy of whose engagement agreement has been provided
to the Parent) is entitled to any brokerage, finder's or other fee or commission
or expense reimbursement in connection with the Transactions based upon
arrangements made by and on behalf of the Company or any of its Affiliates.
4.26 Product Liability; Product Warranty. All products and services sold,
rented, leased, provided or delivered by the Company or its subsidiaries to
customers on or prior to the Closing Date conform or will conform to applicable
contractual commitments, express and implied warranties, product and service
specifications and quality standards, and, to the Knowledge of the Company, the
Company has no liability (and there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand against the Company giving rise to any liability) for replacement or
repair thereof or other damages in connection therewith. Except as set forth on
Section 4.26 of the Disclosure Schedule, no product or service sold, leased,
rented, provided or delivered by the Company to customers on or prior to the
Closing Date is subject to any guaranty, warranty or other indemnity beyond the
applicable standard terms and conditions of sale, rent or lease (which standard
terms and conditions have been disclosed to the Parent in Section 4.26 of the
Disclosure Schedule). Except as set forth on Section 4.26 of the Disclosure
Schedule, the Company has no liability (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand against the Company which might give rise to any liability)
arising out of any injury to a person or property as a result of the ownership,
possession, provision or use of any equipment, product or service sold, rented,
leased, provided or delivered by the Company on or prior to the Closing Date.
All product liability claims that have been asserted against the Company since
January 1, 1992, and that individually seek damages in excess of $100,000,
whether covered by insurance or not and whether litigation has resulted or not,
are listed and summarized on Section 4.26 of the Disclosure Schedule.
4.27 Takeover Statute; Certificate of Incorporation. The Company has taken all
actions required to be taken by it in order to exempt this Agreement, the
Related Agreements, the Offer, the acquisition of Shares pursuant to this
Agreement and the Offer and the transactions contemplated hereby and thereby
from, and this Agreement, the Related Agreements, the Offer, the acquisition of
Shares pursuant to this Agreement and the Offer and the transactions
contemplated hereby and thereby (the "Covered Transactions") are exempt from (i)
the requirements of any "moratorium," "control share," "fair price," "affiliate
transaction," "business combination" or other antitakeover Laws and regulations
of any state (collectively, "Takeover Statutes"), including, without limitation,
Section 203 of the DGCL, or any (ii) antitakeover provision in the Company's
certificate of incorporation and bylaws, including Article 10 thereof. The
provisions of Section 203 of the DGCL do not apply to the Covered Transactions.
4.28 Amendment to the Rights Agreement. The Company Board has taken all
necessary action (including any amendment thereof) under the Rights Agreement so
that (a) neither the execution or delivery of this Agreement or the Related
Agreements nor any other transaction contemplated hereby or thereby, including
the making of the Offer or the purchase of the Shares pursuant thereto, will
cause (i) the Rights to become exercisable under the Rights Agreement, (ii) the
Parent or the Purchaser to be deemed an "Acquiring Person" (as defined in the
Rights Agreement) or (iii) the "Stock Acquisition Date" (as defined in the
Rights Agreement) to occur upon any such event and (b) the Parent, the Purchaser
and their Affiliates will be excluded from the definition of Acquiring Person
under the Rights Agreement for purposes of the Transactions. The Company has
provided the Parent with an executed copy of the Rights Agreement, and any
amendments thereto, substantially in form and substance satisfactory to the
Parent.
4.29 Offering of Company Shares. Assuming the accuracy of the representations
and warranties of the Parent and the Purchaser contained in Section 5.5, the
issuance, offer and sale of the Company Shares will be exempt from the
registration requirements of the Securities Act and will have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities Laws. Neither the Company nor any agent on its behalf has solicited
or will solicit any offers to sell or has offered to sell or will offer to sell
all or any part of the Company Shares to any person or persons so as to bring
the sale of such Company Shares by the Company within the registration
provisions of the Securities Act.
4.30 No Misrepresentation. No representation or warranty of the Company,
contained herein or in any certificate or document delivered pursuant hereto,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading.
5. Representations and Warranties of Parent and Purchaser.
The Parent and the Purchaser hereby represent and warrant to the Company as
follows:
5.1 Organization. Each of the Parent and the Purchaser is a corporation
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
businesses as now conducted or proposed by the Parent to be conducted, except
where the failure to be duly organized, existing and in good standing or to have
such power and authority would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Parent.
5.2 Authorization; Binding Obligation. Each of the Parent and the Purchaser
has all necessary corporate power and authority to execute and deliver this
Agreement and the Related Agreements and to consummate the transactions
contemplated hereby and thereby. No other corporate proceedings on the part of
the Parent or the Purchaser are necessary to authorize this Agreement and the
Related Agreements or to consummate the transactions contemplated hereby or
thereby. This Agreement and the Related Agreements have been duly and validly
executed and delivered by each of the Parent and the Purchaser and constitute
valid, legal and binding agreements of each of the Parent and the Purchaser,
enforceable against each of the Parent and the Purchaser in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
5.3 Offer Documents. The Offer Documents and any other documents to be filed
by the Parent and the Purchaser with the SEC or any other Government Entity in
connection with the Offer and the other transactions will comply as to form in
all material respects with the requirements of the Exchange Act and the
Securities Act, respectively, and will not, on the date of filing with the SEC,
contain any untrue statement of a material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, neither the Parent nor the Purchaser
makes any representation or warranty with respect to the statements made in any
of the foregoing documents based on and in conformity with information supplied
by or on behalf of the Company specifically for inclusion therein.
5.4 Consents and Approvals; No Violations. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky Laws, the HSR Act, no filing with or notice to, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution and delivery by the Parent or the Purchaser of this
Agreement or the Related Agreements or the consummation by the Parent or the
Purchaser of the transactions contemplated hereby or thereby, except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings or give such notice do not or would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the Parent.
Neither the execution, delivery and performance of this Agreement and the
Related Agreements by the Parent or the Purchaser nor the consummation by the
Parent or the Purchaser of the transactions contemplated hereby or thereby will
(i) conflict with or result in any breach of any provision of the respective
certificate of incorporation or bylaws (or similar governing documents) of the
Parent or the Purchaser, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration or Lien)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Parent or the Purchaser is a party or by which any of them or any
of their respective properties or assets may be bound or (iii) violate any Law
applicable to the Parent or the Purchaser, except in the case of (ii) or (iii)
for violations, breaches or defaults which do not or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Parent.
5.5 Investment Representations. The Purchaser is purchasing the Company Shares
for its own account and not with a view to the distribution thereof. The
Purchaser understands that the Company Shares have not been registered under
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law.
5.6 Financing. The Parent and the Purchaser have sufficient financial capacity
to consummate the purchase of the Company Shares, the Offer, the Loan and other
transactions contemplated by this Agreement and the Related Agreements.
6. COVENANTS.
6.1 Use of Proceeds. The Company shall use the proceeds from the sale of
the Company Shares hereunder solely for the acquisition of QMS Europe B.V. and
QMS Australia Pty. Ltd. and the payment in full of all obligations outstanding
under the Foothill Credit Facility (as defined in the Loan Agreement) and any
expenses incurred in connection therewith and with this Agreement and the
Related Agreements; provided, however, that the Company shall not be required
to pay in full all obligations outstanding under the Foothill Credit Facility
in the event the Foothill Credit Facility has become a Permitted Credit
Facility (as defined in the Loan Agreement) within 60 days after the Closing
Date.
6.2 Conduct of Business. From and after the date hereof (unless the Purchaser
has given its prior written consent) and until the expiration date of the Offer,
as it may be extended pursuant to Section 3.1 (the "Expiration Date"), except as
contemplated by this Agreement or the Related Agreements, the Company shall, and
shall cause each of its subsidiaries to, conduct its operations in the ordinary
and usual course of business consistent with past practice and, to the extent
consistent therewith, with no less diligence and effort than would be applied in
the absence of this Agreement, seek to preserve intact its current business
organizations, seek to keep available the service of its current officers and
employees and seek to preserve its relationships with customers, suppliers and
others having business dealings with it to the end that goodwill and ongoing
businesses shall be unimpaired. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement or in
the Disclosure Schedule, prior to the Expiration Date, neither the Company nor
any of its subsidiaries shall, without the prior written consent of the
Purchaser:
(a) amend its certificate of incorporation or bylaws (or other similar
governing instrument) or amend, modify or terminate the Rights Agreement (other
than as contemplated by Section 4.27);
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue,
sell or deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other securities convertible into or exchangeable for any stock or
any equity equivalents (including, without limitation, any stock options or
stock appreciation rights), except for the issuance or sale of Shares pursuant
to outstanding Company Stock Options;
(c) (i) split, combine or reclassify any shares of its capital stock; (ii)
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock;
(iii) make any other actual, constructive or deemed distribution in respect of
any shares of its capital stock or otherwise make any payments to stockholders
in their capacity as such; or (iv) redeem, repurchase or otherwise acquire any
of its securities or any securities of any of its subsidiaries (including
redeeming any Rights);
(d) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any of its subsidiaries;
(e) alter through merger, liquidation, reorganization, restructuring or in any
other fashion the corporate structure or ownership of any subsidiary;
(f) except as permitted under the Loan Agreement, (i) incur or assume any
long-term or short-term debt or issue any debt securities, except for borrowings
under existing lines of credit in the ordinary and usual course of business
consistent with past practice and in amounts not material to the Company and its
subsidiaries taken as a whole; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to the wholly
owned subsidiaries of the Company or customary loans or advances to employees in
the ordinary and usual course of business consistent with past practice and in
amounts not material to the maker of such loan or advance); (iv) pledge or
otherwise encumber shares of capital stock of the Company or its subsidiaries;
or (v) mortgage or pledge any of its material assets, tangible or intangible, or
create or suffer to exist any material Lien thereupon;
(g) except as may be required by Law or as contemplated by this Agreement,
enter into, adopt or amend or terminate any bonus, profit sharing, compensation,
severance, termination, stock option, stock appreciation right, restricted
stock, performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, severance or other employee
benefit agreement, trust, plan, fund, award or other arrangement for the benefit
or welfare of any director, officer or employee in any manner or increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan and arrangement as in effect as of
the date hereof (including, without limitation, the granting of stock
appreciation rights or performance units) or take any action to accelerate the
vesting of any Company Stock Options;
(h) acquire, sell, lease or dispose of any assets outside the ordinary and
usual course of business consistent with past practice or any assets which in
the aggregate are material to the Company and its subsidiaries taken as a whole,
enter into any commitment or transaction outside the ordinary and usual course
of business consistent with past practice or grant any exclusive distribution
rights;
(i) except as may be required as a result of a change in Law or in GAAP, change
any of the accounting principles or practices used by it;
(j) revalue in any material respect any of its assets, including, without
limitation, writing down the value of inventory or writing-off notes or accounts
receivable other than in the ordinary and usual course of business consistent
with past practice or as required by GAAP;
(k) except for the acquisition of QMS Europe B.V. and QMS Australia Pty. Ltd.
pursuant to Section 6.1, (i) acquire (by merger, consolidation, or acquisition
of stock or assets) any corporation, partnership or other business organization
or division thereof or any equity interest therein; (ii) enter into any license
or cross license, joint development or other agreements with respect to any
Intellectual Property of the Company; (iii) enter into any agreement for the
purchase of engines for printer products; (iv) enter into or amend in any
material respect any other contract or agreement, other than in the ordinary and
usual course of business consistent with past practice; (v) authorize any new
capital expenditure or expenditures which, individually, is in excess of
$100,000 or, in the aggregate, are in excess of $300,000; or (vi) enter into or
amend any contract, agreement, commitment or arrangement providing for the
taking of any action that would be prohibited hereunder;
(l) settle or compromise any Tax liability material to the Company and its
subsidiaries taken as a whole or, except as may be required by law, make or
revoke any Tax election or change (or make a request to any taxing authority to
change) any aspect of its method of accounting for Tax purposes;
(m) other than as permitted under this Agreement and the Related Agreements,
pay, discharge or satisfy any material claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary and usual course of
business consistent with past practice of liabilities reflected or reserved
against in the consolidated financial statements of the Company and its
subsidiaries or incurred in the ordinary and usual course of business consistent
with past practice or waive the benefits of, or agree to modify in any manner,
any confidentiality, standstill or similar agreement to which the Company or any
of its subsidiaries is a party;
(n) settle or compromise any pending or threatened suit, action or claim
relating to the Transactions; or
(o) take, propose to take, or agree in writing or otherwise to take, any of the
actions described in Sections 6.2(a) through 6.2(n) or any action which would
make any of the representations or warranties of the Company contained in this
Agreement (i) which are qualified as to materiality untrue or incorrect or (ii)
which are not so qualified untrue or incorrect in any material respect.
6.3 Access to Information.
(a) From and after the date hereof and until the Expiration Date, the Company
shall give the Parent, the Purchaser and their authorized representatives
(including counsel, financial advisors and auditors) reasonable access during
normal business hours to all employees, plants, offices, warehouses and other
facilities and to all books and records of the Company and its subsidiaries,
shall permit the Parent to make such inspections as the Parent may reasonably
require and shall cause the Company's officers and those of its subsidiaries to
furnish the Parent with such financial and operating data and other information
with respect to the business, properties and personnel of the Company and its
subsidiaries as the Parent may from time to time reasonably request, provided
that no investigation pursuant to this Section 6.3(a) shall affect or be deemed
to modify any of the representations or warranties made by the Company.
(b) During the period from and after the date hereof until such time as
the Purchaser and its Affiliates hold less than 14% of the Shares then
outstanding, the Company shall furnish to the Parent or the Purchaser (i) such
monthly financial statements and data as are regularly prepared for distribution
to Company management and (ii) at the earliest time they are available, such
quarterly and annual financial statements as are prepared for the Company's SEC
filings, which (in the case of this clause (ii)) shall be in accordance with the
books and records of the Company.
6.4 No Solicitation.
(a) From and after the date hereof until the Expiration Date and except as
expressly permitted by the following provisions of this Section 6.4, the Company
shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any officer, director or employee of or any investment
banker, attorney, accountant or other advisor or representative of, the Company
or any of its subsidiaries to, directly or indirectly, (i) solicit, initiate or
encourage the submission of any Acquisition Proposal (as hereinafter defined) or
(ii) participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate,
any Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal;
provided, however, that nothing contained in this Section 6.4(a) shall prohibit
the Company Board from furnishing information to, or entering into discussions
or negotiations with, any person that makes an unsolicited bona fide written
Acquisition Proposal if, and only to the extent that (A) the Company Board,
after consultation with and based upon consultation with independent legal
counsel, determines in good faith that such action is necessary for the Company
Board to comply with its fiduciary duties to the Company and its stockholders
under applicable Law, (B) the Company Board determines in good faith that such
Acquisition Proposal (which shall not be subject to any financing condition), if
accepted, is reasonably likely to be consummated, taking into account all legal,
financial, regulatory and other aspects of the proposal and the person making
the proposal, and believes in good faith, after consultation with its Financial
Advisor and after taking into account the strategic benefits to be derived from
the Offer, would, if consummated, result in a transaction more favorable to the
Company and its stockholders from a financial point of view than the Offer (any
such more favorable Acquisition Proposal being referred to herein as a "Superior
Proposal"), and (C) prior to taking such action, the Company (x) provides
reasonable notice to the Parent to the effect that it is taking such action and
(y) receives from such person an executed confidentiality/standstill agreement
in reasonably customary form and in any event containing terms at least as
stringent as those among the Parent, the Purchaser and the Company. Prior to
providing any information to or entering into discussions or negotiations with
any person in connection with an Acquisition Proposal by such person, the
Company shall notify the Parent of any Acquisition Proposal (including, without
limitation, the material terms and conditions thereof and the identity of the
person making it) as promptly as practicable (but in no case later than 24
hours) after its receipt thereof, and shall provide the Parent with a copy of
any written Acquisition Proposal or amendments or supplements thereto, and shall
thereafter inform the Parent on a prompt basis of the status of any discussions
or negotiations with such a third party, and any material changes to the terms
and conditions of such Acquisition Proposal, and shall promptly give the Parent
a copy of any information delivered to such person which has not previously been
reviewed by the Parent. Immediately after the execution and delivery of this
Agreement, the Company shall, and shall cause its subsidiaries and affiliates,
and their respective officers, directors, employees, investment bankers,
attorneys, accountants and other agents to cease and terminate any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any possible Acquisition Proposal and shall notify each party
that it, or any officer, director, investment advisor, financial advisor,
attorney or other representative retained by it, has had discussions with during
the 30 days prior to the date of this Agreement that the Company Board no longer
seeks the making of any Acquisition Proposal. The Company agrees that it will
take the necessary steps to promptly inform the individuals or entities referred
to in the first sentence hereof of the obligations undertaken in this Section
6.4(a).
(b) The Company Board shall not withdraw or modify, or propose to withdraw or
modify, in a manner adverse to the Purchaser, its approval or recommendation of
the Offer unless the Company Board after consultation with and based upon the
advice of independent legal counsel, determines in good faith that such action
is necessary for the Company Board to comply with the fiduciary duties to the
Company and its stockholders under applicable Law; provided, however, the
Company Board may not approve or recommend (and in connection therewith,
withdraw or modify its approval or recommendation of this Agreement or the
Offer) an Acquisition Proposal unless such an Acquisition Proposal is a Superior
Proposal and unless it shall have first consulted with independent legal
counsel, and have determined, based upon such advice, that such action is
necessary for the Company Board to comply with its fiduciary duties to the
Company and its stockholders. Nothing contained in this Section 6.4(b) shall
prohibit the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders which, in the good faith reasonable
judgment of the Company Board, based on the advice of independent legal counsel,
is required under applicable Law; provided, however, that except as otherwise
permitted in this Section 6.4(b), the Company does not withdraw or modify, or
propose to withdraw or modify, its position with respect to the Offer or approve
or recommend, or propose to approve or recommend, an Acquisition Proposal.
Notwithstanding anything contained in this Agreement to the contrary, any action
by the Company Board permitted by, and taken in accordance with, this Section
6.4 shall not constitute a breach of this Agreement by the Company. Nothing in
this Section 6.4 shall (i) permit the Company to terminate this Agreement or
(ii) affect any other obligations of the Company under this Agreement.
6.5 Certificate of Incorporation. The Company Board shall take all
necessary action under the Certificate of Incorporation of the Company so
that (i) the Parent, the Purchaser and their Affiliates shall be excluded
from the definition of "Interested Stockholder" under Article 10 of the
Certificate of Incorporation or (ii) any "Business Combination" (as defined
in such Article 10) between the Company and the Parent or the Purchaser shall
be approved by the requisite action of the Company Board.
6.6 Company Name. Upon the acquisition by the Purchaser and its
Affiliates of at least a majority of the outstanding Shares, the Company shall
take all action available to the Company, including submitting a proposal at a
meeting of stockholders, to change the name of the Company to a name which shall
include the word "Minolta" and be reasonably acceptable to the Purchaser.
6.7 Integration Committee. The Company and the Parent shall agree to establish
a committee (the "Integration Committee") on or prior to the acquisition by the
Purchaser and/or its Affiliates of the Shares pursuant to the Offer and maintain
the Integration Committee after such acquisition until such time as the
Purchaser and its Affiliates hold less than a majority of the Shares then
outstanding. The Company and the Parent shall, through the Integration
Committee, use commercially reasonable best efforts to integrate the Company's
and the Parent's printer related operations.
6.8 Strategic Meetings. From and after the acquisition by the Purchaser and/or
its Affiliates of the Shares pursuant to the Offer until such time as the
Purchaser and its Affiliates hold less than a majority of the Shares then
outstanding, representatives of the Company shall meet from time to time, but no
less than four (4) times per year, with representatives of the Parent to review
corporate strategies, improvement of operations and such other matters relating
to the business of the Company as the Parent and the Company shall reasonably
determine.
6.9 Governance. During the period from and after the Closing Date until such
time as the Purchaser and its Affiliates hold less than 35% of the Shares then
outstanding, the Company Board, without the approval of a majority of the
Company Board, including a majority of the directors designated by the
Purchaser, shall not authorize or approve:
(a) any annual or quarterly operating or capital budget or business
plan, or any material amendment or modification thereto;
(b) any change in the Company's principal line of business, entry into a
new line of business or any change in the Company's corporate strategy; or
(c) the election, appointment or employment of any officer of the Company.
6.10 Indemnification of Directors. The Company shall indemnify any director
designated by the Purchaser to the full extent permitted by the DGCL. The
Company shall maintain in effect directors and officers liability insurance for
the benefit of the directors and officers of the Company, including, without
limitation, any directors designated by the Purchaser.
6.11 Cross License Agreements. The Company and the Parent shall, through the
Integration Committee, negotiate in good faith and use commercially reasonable
best efforts to enter into cross license agreements, on terms satisfactory to
each party and to the extent authorized by a third party licensor, on a
worldwide basis without charge, with respect to certain Intellectual Property of
each party. Such Intellectual Property shall include, without limitation,
trademarks, copyrights and proprietary technology with respect to, in the case
of the Company, the source code of page description languages and, in the case
of the Parent, engine video interface, image enhancement, color calibration used
in laser beam printers and the know-how regarding multi-function products.
6.12 Engine Sales and Purchase Agreement. On or prior to the acquisition by the
Purchaser and/or its Affiliates of the Shares pursuant to the Offer, the Company
and the Parent shall, through the Integration Committee, negotiate in good faith
and use commercially reasonable best efforts to enter into a sales and purchase
agreement, on terms satisfactory to each party, in which agreement the Company
shall (i) designate the Parent as the primary provider of engines to the Company
and (ii) set forth terms and conditions with respect to the selection and
purchase by the Company of engines manufactured by the Parent.
6.13 Employment Agreements. On or prior to the acquisition by the Purchaser
and/or its Affiliates of the Shares pursuant to the Offer, the Company shall use
commercially reasonable best efforts to enter into employment agreements on
terms satisfactory to the Purchaser with each of Edward E. Lucente, to serve as
President and Chief Executive Officer, and James A. Wallace, to serve as Vice
President and Chief Financial Officer.
6.14 Registration Rights. If immediately following the Offer, the Purchaser and
its Affiliates hold less than a majority of the outstanding Shares, the Company,
the Purchaser and the Parent shall negotiate and execute a registration rights
agreement for the Company Shares on the terms and conditions set forth on
Exhibit A hereto.
7. Conditions to Closing.
7.1 Conditions to Purchaser's Obligations at the Closing. The Purchaser's
obligations to purchase the Shares at the Closing are subject to the
satisfaction, at or prior to the Closing, of the following conditions:
(a) Representations and Warranties True; Performance of Obligations. The
representations and warranties made by the Company in Section 4 hereof shall be
true and correct in all material respects as of the Closing Date with the same
force and effect as if they had been made as of the Closing Date, and the
Company shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to the Closing.
(b) Consents, Permits and Waivers. The Company shall have obtained any and all
material consents, permits and waivers necessary or appropriate for the
consummation of the transactions contemplated by this Agreement and the Related
Agreements.
(c) Certificates. The Company shall have delivered to the Parent (i) a
Compliance Certificate, executed by the President of the Company, dated the date
of the Closing, to the effect that the conditions specified in subsections (a)
and (b) of this Section 7.1 have been satisfied and (ii) a copy of the Company's
certificate of incorporation and by-laws, certified by the Secretary or
Assistant Secretary of the Company as true and correct and as to their
continuing effect as of the date of the Closing.
(d) Acquisition of QMS Europe B.V. and QMS Australia Pty. Ltd. On or prior to
the Closing, the Company shall have acquired 100% of the outstanding shares of
the capital stock of QMS Europe B.V. and QMS Australia Pty. Ltd. pursuant to the
Share Purchase Agreement, dated May 17, 1999, among the Company, Alto Imaging
Group N.V. and Jalak Investments B.V.
(e) Related Agreements. The Parent shall have received the Related Agreements,
in form and substance satisfactory to the Parent, duly executed by the Company.
(f) Foothill Credit Facility. The Foothill Credit Facility shall have been
amended to authorize (or Foothill Capital Corporation shall otherwise have
consented in writing to) the transactions contemplated in this Agreement and the
Related Agreements.
(g) Listing on NYSE. The Company Shares shall have been approved for listing
on the New York Stock Exchange, subject to official notice of issuance unless
the failure to be so approved was due to any action or inaction on the part of
the Parent or the Purchaser.
(h) Legal Opinion. The Parent and the Purchaser shall have received from Hand
Arendall, LLC an opinion addressed to the Parent and the Purchaser, dated as of
the Closing Date, in form and substance reasonably satisfactory to the Parent,
substantially in the form attached hereto as Exhibit B.
(i) Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
and instruments incident to such transactions shall be reasonably satisfactory
in substance and form to the Parent and its counsel, and the Parent and its
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.
7.2 Conditions to Obligations of the Company. The Company's obligation to
issue and sell the Shares is subject to the satisfaction, on or prior to the
Closing, of the following conditions:
(a) Representations and Warranties True. The representations and warranties
made by the Parent and the Purchaser in Section 5 hereof shall be true and
correct in all material respects at the date of the Closing, with the same force
and effect as if they had been made on and as of said date.
(b) Performance of Obligations. Each of the Parent and the Purchaser shall
have performed and complied with all agreements and conditions herein required
to be performed or complied with by each of the Parent and the Purchaser on or
before the Closing.
(c) Compliance Certificate. The Purchaser shall have delivered to the Company
a Compliance Certificate, executed by an officer of the Purchaser, dated the
date of the Closing, to the effect that the conditions specified in subsections
(a) and (b) of this Section 7.2 have been satisfied.
(d) Consents, Permits and Waivers. The Parent and the Purchaser shall have
obtained any and all consents, permits and waivers necessary or appropriate for
the consummation of the transactions contemplated by this Agreement and the
Related Agreements.
(e) Legal Opinion. The Company shall have received from Weil, Gotshal & Manges
LLP an opinion addressed to the Company, dated as of the Closing Date, in form
and substance reasonably satisfactory to the Company, substantially in the form
attached hereto as Exhibit C.
8. Indemnification.
8.1 Survival of Representations, Warranties and Covenants. The
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement and the Closing hereof. All
statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the Transactions shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such certificate or
instrument. The representations and warranties of the Company shall terminate
on the date 18 months after the date hereof, except with respect to any
representation and warranty with respect to which the Parent or the Purchaser
has furnished a written claim of breach to the Company prior to such termination
date, in which event such representation and warranty shall survive in effect
until such claim is resolved.
8.2 Indemnification. The Company hereby agrees to indemnify and hold harmless
the Parent and the Purchaser and their respective directors, officers,
employees, Affiliates, agents, successors and assigns (collectively the
"Indemnified Parties") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys'
fees, expenses and disbursements of any kind, including, without limitation,
those arising from third-party claims (collectively, "Losses"), which may be
imposed upon, incurred by or asserted against the Indemnified Parties based
upon, attributable to or resulting from (i) the failure of any representation or
warranty of the Company, contained herein or in any certificate or document
delivered pursuant hereto, to be true and correct in all respects as of the date
made or (ii) the breach of any covenant or other agreement on the part of the
Company under this Agreement; provided, however, that (i) the Company shall not
have any liability under this Section 8.2 unless and until the aggregate amount
of the Losses finally determined to arise thereunder exceeds $300,000 and (ii)
the aggregate amount that the Indemnified Parties shall be entitled to recover
hereunder shall be limited to $12,247,500.
8.3 Indemnification Procedures.
(a) The Indemnified Parties may make a claim for indemnification under Section
8.2 not involving a claim or action by a third party, by giving written notice
of the assertion of such claim covered by this indemnity to the Company. In the
event that any Legal Proceedings shall be instituted by any third party or that
any claim or demand shall be asserted by any third party in respect of which
indemnification may be sought under Section 8.2 (a "Third-Party Claim"), the
Parent shall reasonably promptly cause written notice of the assertion of such
Third-Party Claim of which it has knowledge to be forwarded to the Company. The
Company shall have the right, at its sole option and expense, to be represented
by counsel of its choice (as approved by the independent directors of the
Company) and to defend against, negotiate, settle or otherwise deal with any
Third-Party Claim (as approved by the independent directors of the Company). If
the Company elects to defend against, negotiate, settle or otherwise deal with
any Third-Party Claim, the Company's choice of counsel must be reasonably
satisfactory to the Parent, and the Company shall within five (5) days of such
notice (or sooner, if the nature of the Third-Party Claim so requires) notify
the Parent of its intent to do so. If the Company elects not to defend against,
negotiate, settle or otherwise deal with any Third-Party Claim, fails to notify
the Parent of its election as herein provided or contests its obligation to
indemnify the Parent or the Purchaser for such Losses under this Agreement, the
Parent may defend against, negotiate, settle or otherwise deal, with such Third-
Party Claim. If the Parent defends any Third-Party Claim, then the Company
shall reimburse the Parent for the expenses of defending such Third-Party Claim
with respect to which it is entitled to be indemnified hereunder, together with
interest accrued on such expenses at the rate of eight percent (8%) per annum,
commencing from the date such expenses are paid by the Parent through to the
date such expenses are reimbursed by the Company (the "Accrued Interest"). If
the Company shall assume the defense of any Third-Party Claim, the Parent may
participate, at its own expense, in the defense of such Third-Party Claim;
provided, however, that the Parent shall be entitled to participate in any such
defense with separate counsel at the expense of the Company (as provided above)
if (i) so requested by the Company to participate or (ii) in the reasonable
opinion of counsel to the Parent, a conflict or potential conflict exists
between the Parent and the Company that would make such separate representation
advisable. The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such Third-Party
Claim, including, without limitation, by providing reasonable access (with any
out-of-pocket costs to be borne by the Company) to the books, records, employees
and agents of the Company and its subsidiaries.
After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement (which is
approved by the independent directors of the Company) shall have been
consummated, or the Parent and the Company (as approved by the independent
directors of the Company) shall have arrived at a mutually binding agreement
with respect to a claim for indemnification under Section 8.2, including,
without limitation, any Third-Party Claim, the Parent shall forward to the
Company notice (the "Resolution Notice") of any sums due and owing by the
Company pursuant to this Agreement with respect to such matter, including,
without limitation, all expenses and Accrued Interest related to such Losses
(the "Indemnified Amount") and the Company shall be required to pay the
Indemnified Amount to the Parent or the Purchaser by wire transfer of
immediately available funds within ten (10) business days after the date of such
notice.
The failure of the Parent to give reasonably prompt notice of any
Third-Party Claim shall not release, waive or otherwise affect the Company's
obligations with respect thereto except to the extent that the Company can
demonstrate actual loss and prejudice as a result of such failure.
9. Miscellaneous.
9.1 Definitions. Capitalized terms not defined herein and defined in the
Related Agreements shall have the meanings herein as therein defined. As used
in this Agreement, the following terms shall have the following respective
meanings:
"Affiliate" of a Person means (i) any Person who directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with such other Person, (ii) a Person owning or controlling
a majority of the outstanding voting securities or other voting interest of such
Person, (iii) any trust or beneficiary of a trust of which such Person is the
sole trustee and (iv) any lineal descendants, ancestors, spouse or former
spouses of such Person (as part of a marital dissolution) (or any trust for the
benefit of such Person). For the purpose of this definition, the terms
"control," "controlled by" and "under common control with," with respect to the
relationship between or among two or more Persons, means the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or indirectly,
of securities having the power to elect a majority of the board of directors or
similar body governing the affairs of such Person.
"Acquisition Proposal" means any bona fide proposal or offer by a
person other than the Parent, the Purchaser and their respective Affiliates to
acquire beneficial ownership (as defined in Section 13(d) of the Exchange Act)
of all or a material portion of the Company's assets on a consolidated basis or
25% or more of the outstanding Shares of the Company pursuant to a merger,
consolidation or other business combination, sale of shares of capital stock or
assets, tender offer, exchange offer or similar transaction with respect to the
Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Stock Option" means each then outstanding option to purchase
any shares of capital stock of the Company.
"DGCL" means the General Corporation Law of the State of Delaware.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles utilized in the
United States, as set forth in the Statement on Auditing Standards No. 69
entitled "The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles in the Independent Auditors Report" promulgated by the
American Institute of Certified Public Accountants (or any successor statement
or amendment thereto) in effect on the date hereof unless otherwise specified
herein as in effect on another date or dates.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Knowledge of the Company" or "the Company's Knowledge" means the
actual knowledge after due inquiry of any relevant personnel at the Company.
"Lien" means, with respect to any asset (including, without
limitation, any security) any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
"Material Adverse Effect" means with respect to any entity, any
change, circumstance or effect that, individually or in the aggregate with all
other changes, circumstances and effects, is or is reasonably likely to be
materially adverse to (i) the assets, properties, condition (financial or
otherwise), results of operations or prospects of such entity and its
subsidiaries taken as a whole or (ii) the ability of such party to consummate
the Transactions.
"Offer" is defined in the recitals to this Agreement.
"Person" means any individual, partnership, joint-stock company, firm,
corporation, association, unincorporated organization, joint venture, trust or
other entity.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Shares" means shares of the Common Stock , par value $0.01 per share,
of the Company.
"Stock Option Plans" means the 1987 Stock Option Plan, the 1997 Stock
Incentive Plan and the Stock Option Plan for Directors, as such Plans may be
amended and modified from time to time.
"Transactions" means the transactions contemplated by this Agreement,
including the purchase of the Company Shares and the Offer.
9.2 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware.
9.3 Jurisdiction; Service of Process. The parties hereto hereby irrevocably
submit to the non-exclusive jurisdiction of any federal or state court located
within the State of Delaware over any dispute arising out of or relating to this
Agreement or any of the Transactions, and each party hereby irrevocably agrees
that all claims in respect of such dispute or any suit, action, or proceeding
related thereto may be heard and determined in such courts. The parties hereto
hereby irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Each of the parties hereto
hereby consents to process being served by the other party hereto in any suit,
action or proceeding by the mailing of a copy thereof in accordance with the
provisions of Section 9.9. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING BROUGHT BY THE COMPANY, THE PURCHASER OR THE PARENT
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO OR CONNECTED WITH THIS AGREEMENT OR THE TRANSACTIONS.
9.4 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns. Nothing in this Agreement shall create or be deemed to create any
third party beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement or of any
rights or obligations hereunder may be made by any party hereto (by operation of
law or otherwise) without the prior written consent of the other parties hereto
and any attempted assignment without the required consents shall be void;
provided, however, that the Parent and the Purchaser may assign this Agreement
or any or all rights or obligations hereunder (including, without limitation,
the Purchaser's rights to purchase the Shares and the Parent's and the
Purchaser's right to seek indemnification hereunder) to any direct or indirect
wholly owned subsidiary of the Parent, but no such assignment shall relieve the
Parent or the Purchaser of their respective obligations hereunder. Upon any
such permitted assignment, the references in this Agreement to the Parent or the
Purchaser, as the case may be, shall also apply to any such assignee unless the
context otherwise requires.
9.5 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the
Related Agreements and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof and, except for the parties' agreement
regarding the confidentiality of information exchanged by the parties,
supersedes any and all prior agreements, understandings and promises between the
parties with respect to the subject matter hereof, including, without
limitation, the Letter of Intent.
9.6 Severability. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
9.7 Amendment and Waiver. This Agreement may be amended or modified only upon
the written consent of the parties hereto.
9.8 Delays or Omissions. It is agreed that no delay or omission to exercise
any right, power or remedy accruing to one party, upon any breach, default or
noncompliance by the other party under this Agreement or the Related Agreements,
shall impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on the part or the Parent or the Purchaser of any breach,
default or noncompliance under this Agreement or the Related Agreements or any
waiver on such party's part of any provisions or conditions of this Agreement or
the Related Agreements must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this
Agreement, the Related Agreements or the Company's By-Laws or otherwise afforded
to any party, shall be cumulative and not alternative.
9.9 Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (i) upon personal delivery to the party
to be notified; (ii) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, and, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent:
If to the Company, to:
QMS, Inc.
One Magnum Pass
Mobile, AL 36618
Attn: Edward E. Lucente
Fax: 334-633-0020
with a copy to:
Hand Arendall, LLC
AmSouth Bank Building, Suite 3000
Mobile, AL 36601
Attn: Gregory R. Jones, Esq.
Fax: 334-694-6375
If to the Parent or the Purchaser, to:
Minolta Co., Ltd.
3-13, 2-Chome, Azuchi-Machi, Chuo-Ku
Osaka 541-8556, Japan
Attn: Shoei Yamana
Manager, Corporate Strategy Division
Fax: 81-6-6263-3788
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue,
New York, NY 10153
Attn: Stephen M. Besen, Esq,
Fax: 212-310-8715
9.10 Expenses.
(a) Each party hereto shall pay all of its respective costs and
expenses, including, without limitation, legal, accounting and all other
similarly related costs, incurred with respect to the negotiation, execution and
delivery of this Agreement and the Related Agreements.
(b) If (i) the Company Board accepts a Superior Proposal, (ii) the
Company breaches or fails to perform or comply with any of the terms of Section
6.4 or (iii) any of the events set forth in clause (f) of Annex A hereto occurs
and, in any case, the Purchaser fails to purchase Shares pursuant to the Offer,
the Company shall pay, or cause to be paid to the Parent, or the Purchaser, at
the time of such event, an amount equal to $1,000,000 (the "Break-up Fee") plus
an amount equal to the Parent's and the Purchaser's actual and reasonably
documented out-of-pocket expenses incurred by Parent or the Purchaser in
connection with the Offer, this Agreement and the consummation of the
Transactions, including, without limitation, the fees (other than any break-up,
success or other contingent fee) and out-of-pocket expenses payable to all
banks, investment banking firms and other financial institutions and persons and
their respective agents and counsel incurred in connection with acting as the
Parent's and the Purchaser's financial advisor with respect to, or arranging or
committing to provide or providing any financing for, the Transactions up to an
aggregate of $1,000,000 (the "Expenses"). In addition, if (i) the Purchaser
terminates the Offer without the Purchaser purchasing any Shares thereunder,
(ii) at or prior to the time of such termination of the Offer, a person has made
an Acquisition Proposal and, (iii) within 12 months after such termination of
the Offer, the Company announces its intention to enter into an agreement with
respect to an Acquisition Proposal or enters into an agreement with respect to
an Acquisition Proposal, then the Company shall pay the Break-up Fee and the
Expenses concurrently with such announcement or the execution of such agreement;
provided, however, that the Company shall not be required to pay the Expenses
unless such Acquisition Proposal is a Superior Proposal. Any payments required
to be made pursuant to this Section 9.10(b) shall be made by wire transfer of
same day funds to an account designated by Parent.
(c) The Company acknowledges that the agreements contained in this Section
9.10 are an integral part of the Transactions, and that, without these
agreements, the Company, the Parent and the Purchaser would not have entered
into this Agreement; accordingly, if the Company fails to promptly pay the
amount due pursuant to Section 9.10, and, in order to obtain such payment, the
Parent commences a suit which results in a judgment against the Company for the
fee set forth in this Section 9.10, the Company shall pay to the Parent its
costs and expenses (including attorneys' fees) in connection with such suit,
together with interest on the amount owed at the prime rate of Citibank, N.A. in
effect from time to time during such period plus two percent, commencing from
the date such amount became due through the date such amount is paid by the
Company.
9.11 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in
construing this Agreement.
9.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.13 Pronouns. All pronouns contained herein and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the parties hereto may require.
9.14 Currency. Unless otherwise provided herein, all currency amounts set forth
herein shall be in United States Dollars.
9.15 Publicity. Except as may be required by applicable Law or by obligations
pursuant to any listing agreement with the New York Stock Exchange, none of the
Parent, the Purchaser or the Company shall issue any press release or make any
public disclosure regarding the Transactions unless such press release or public
disclosure is approved by the other party in advance.
9.16 Confidentiality. Each party agrees not to disclose or use (except as
permitted or required for performance by the party receiving such Confidential
Information of its right or duties hereunder) any Confidential Information of
the other party obtained prior to the Expiration Date in connection with the
Transactions, this Agreement and the Related Agreements for a period of five (5)
years after the receiving party's receipt of such confidential information.
Each party further agrees to take appropriate measures to prevent any such
prohibited disclosure by its present and future employees, officers, agents,
subsidiaries or consultants during such period.
In Witness Whereof, the parties hereto have executed this Stock Purchase
Agreement as of the date set forth in the first paragraph hereof.
Company:
QMS, INC.
By:/s/ Edward E. Lucente
Name:
Title:
Purchaser:
MINOLTA INVESTMENTS COMPANY
By:/s/
Name:
Title:
Parent:
MINOLTA CO., LTD.
By:/s/
Name:
Title:
STOCK PURCHASE AGREEMENT
ANNEX A
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings
set forth in the Stock Purchase Agreement of which this Annex A is a part.
Notwithstanding any other provision of the Offer, the Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to the Purchaser's obligation to pay for or return tendered Shares promptly
after termination or withdrawal of the Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any tendered Shares, and, subject to the terms of the Stock
Purchase Agreement, may amend the Offer or terminate the Offer and not accept
for payment any tendered Shares, if (i) there shall not have been validly
tendered and not withdrawn prior to the expiration of the Offer such number of
Shares which, when added to the Shares, if any, beneficially owned by the
Purchaser and its Affiliates, would constitute at least a majority of the Shares
outstanding on a fully diluted basis (the "Minimum Condition"), (ii) any
applicable waiting period under the HSR Act has not expired or been terminated
prior to the expiration of the Offer, and/or (iii) at any time on or after the
date of the Stock Purchase Agreement and prior to the Expiration Date, any of
the following events shall occur:
(a) there shall be threatened or pending any suit, action or
proceeding (i) seeking to prohibit or impose any material limitations on the
Purchaser's ownership or operation (or that of any of its Affiliates) of all or
a material portion of their or the Company's businesses or assets, (ii) seeking
to compel the Purchaser or its Affiliates to dispose of or hold separate any
material portion of the business or assets of the Company, the Parent or the
Purchaser and their respective subsidiaries, in each case taken as a whole,
(iii) challenging the acquisition by the Purchaser of any Shares pursuant to the
Offer, (iv) seeking to restrain or prohibit the making or consummation of the
Offer or the performance of any of the other Transactions, (v) seeking to obtain
from the Company any damages that would be reasonably likely to have a Material
Adverse Effect on the Company, (vi) seeking to impose material limitations on
the ability of the Purchaser, or rendering the Purchaser unable, to accept for
payment, pay for or purchase some or all of the Shares pursuant to the Offer,
(vii) seeking to impose material limitations on the ability of the Purchaser
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders, or (viii) which otherwise is
reasonably likely to have a Material Adverse Effect on the Company or, as a
result of the Transactions, the Parent or the Purchaser; or
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer, or any other action shall be taken by any Governmental Entity, other than
the application to the Offer of applicable waiting periods under the HSR Act,
that is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (viii) of paragraph (a) above;
or
(c) there shall have occurred (1) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange, the
American Stock Exchange, the Tokyo Stock Exchange or in the Nasdaq National
Market System, for a period in excess of 24 hours (excluding suspensions or
limitations resulting solely from physical damage or interference with such
exchanges not related to market conditions), (2) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or Japan (whether or not mandatory), (3) the commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States or Japan or, in the case of any such circumstance in
existence on the date hereof, any material deterioration of the situation, (4)
any limitation or proposed limitation (whether or not mandatory) by any United
States or Japanese governmental authority or agency that has a Material Adverse
Effect generally on the extension of credit by banks or other financial
institutions, (5) any change in general financial bank or capital market
conditions which has a Material Adverse Effect on the ability of financial
institutions in the United States or Japan to extend credit or syndicate loans,
(6) any decline in either the Dow Jones Industrial Average, the Nikkei Average
or the Standard & Poor's Index of 500 Industrial Companies by an amount in
excess of 20% measured from the close of business on the date of this Agreement
or (7) in the case of any of the situations in clauses (1) through (6)
inclusive, existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(d) the representations and warranties of the Company set forth in
the Stock Purchase Agreement shall not be true and accurate in all material
respects as of the date of consummation of the Offer as though made on or as of
such date (except for those representations and warranties that address matters
only as of a particular date or only with respect to a specific period of time
which need only be true and accurate as of such date or with respect to such
period) or the Company shall have breached or failed to perform or comply in all
material respects with any obligation, agreement or covenant required by the
Stock Purchase Agreement to be performed or complied with by it; or
(e) there shall have occurred any events or changes which have had or
which are reasonably likely to have or constitute, individually or in the
aggregate, a Material Adverse Effect on the Company; or
(f) the Company Board (i) shall have withdrawn, or modified or
changed in a manner adverse to the Parent or the Purchaser (including by
amendment of the Schedule 14D-9), its recommendation of the Offer, (ii) shall
have recommended an Acquisition Proposal, (iii) shall have adopted any
resolution to effect any of the foregoing, or (iv) upon request of the Parent or
the Purchaser, shall fail to reaffirm its approval or recommendation of the
Offer; or
(g) any Person or "group" (as defined in Section 13(d)(5) of the
Exchange Act), other than the Parent, the Purchaser or their respective
Affiliates or any group of which any of them is a member, shall have acquired or
announced its intention to acquire beneficial ownership (as determined pursuant
to Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the Shares;
which in the sole good faith judgment of the Purchaser, in any such case, and
regardless of the circumstances (including any action or inaction by the
Purchaser, other than a breach of this Agreement or the Related Agreements)
giving rise to such condition makes it inadvisable to proceed with the Offer
and/or with such acceptance for payment of or payments for Shares.
The foregoing conditions are for the sole benefit of the Parent and
the Purchaser and may be waived by the Parent or the Purchaser, in whole or in
part, at any time and from time to time, in the sole discretion of the Parent or
the Purchaser. The failure by the Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any right
and each such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.
EXHIBIT A
TERMS OF REGISTRATION RIGHTS
1. Demand Registrations: Three.
2. Piggyback Registrations: All registrations of the Shares.
3. The underwriters for demand registrations shall be nationally recognized
investment bankers and managers and mutually acceptable to the Company
and the Purchaser.
4. Company shall pay all expenses of registration.
5. Other customary terms and conditions.
EXHIBIT B
FORM OF LEGAL OPINION
OF
HAND ARENDALL LLC
1. The Company is a corporation validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. The Company is duly qualified to transact business and
is in good standing as a foreign corporation in the States of Alabama and
Colorado.
2. The authorized capital stock of the Company consists of 25,000,000 shares
of common stock, par value $.01 per share, and 500,000 shares of preferred
stock, no par value. As of June 7, 1999, there were 10,708,335 shares of common
stock, and no shares of preferred stock, issued and outstanding. Except as set
forth and disclosed in the Agreement, to our knowledge, there are no outstanding
securities of the Company convertible into or evidencing the right to purchase
or subscribe for any shares of capital stock of the Company, there are no
outstanding or authorized options, warrants, calls, subscriptions, rights,
commitments or any other instruments or agreements of any character obligating
the Company to issue any shares of its capital stock or any securities
convertible into or evidencing the right to purchase or subscribe for any shares
of such stock, and there are no agreements or understandings with respect to the
voting, sale or transfer of any shares of capital stock of the Company to which
the Company is a party.
3. The shares of common stock to be issued pursuant to the Stock Purchase
Agreement (the "Agreement") have been duly authorized and, when issued as
contemplated by the Agreement, will be validly issued, fully paid and
nonassessable and free of preemptive rights pursuant to law or in the Company's
Certificate of Incorporation.
4. The Company has all requisite corporate power and authority to execute and
deliver the Agreement and to perform its obligations thereunder. The execution,
delivery and performance of the Agreement by the Company have been duly
authorized by all necessary corporate action on the part of the Company. The
Agreement has been duly and validly executed and delivered by the Company.
5. The execution and delivery by the Company of the Agreement and the
performance by the Company of its obligations thereunder will not conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Certificate of Incorporation or by-laws of the Company, (ii)
any of the terms, conditions or provisions of any material document, agreement
or other instrument to which the Company is a party or by which it is bound of
which we are aware, (iii) Delaware or federal law or regulation (other than
federal and state securities or blue sky laws, as to which we express no opinion
in this paragraph), or (iv) any judgment, writ, injunction, decree, order or
ruling of any court or governmental authority binding on the Company of which we
are aware.
6. No consent, approval, waiver, license or authorization or other action by
or filing with any Delaware or federal governmental authority is required in
connection with the execution and delivery by the Company of the Agreement, the
consummation by the Company of the transactions contemplated thereby or the
performance by the Company of its obligations thereunder, except for "those
already obtained."
7. Except as disclosed in the Agreement, to our knowledge, there is no
litigation, proceeding or governmental investigation pending or overtly
threatened against the Company that relates to any of the transactions
contemplated by the Agreement or which, if adversely determined, would have a
material adverse effect on the business, assets or financial condition of the
Company and its subsidiaries taken as a whole.
8. Assuming that the representations of the Purchaser contained in the
Agreement are true, correct and complete, it is not necessary in connection with
the offer, sale and delivery of the Company Shares to the Purchaser pursuant to
the Agreement to register the Company Shares under the Securities Act of 1933,
as amended.
EXHIBIT C
FORM OF LEGAL OPINION
OF
WEIL, GOTSHAL & MANGES LLP
1. The Purchaser is a corporation validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. The Purchaser is duly qualified to transact business
and is in good standing as a foreign corporation in Alabama.
2. The Purchaser has all requisite corporate power and authority to execute
and deliver the Agreement and to perform its obligations thereunder. The
execution, delivery and performance of the Agreement by the Purchaser have been
duly authorized by all necessary corporate action on the part of the Purchaser.
The Agreement has been duly and validly executed and delivered by the Purchaser.
3. The execution and delivery by the Purchaser of the Agreement and the
performance by the Purchaser of its obligations thereunder will not conflict
with, constitute a default under or violate (i) any of the terms, conditions or
provisions of the Certificate of Incorporation or by-laws of the Purchaser, (ii)
any of the terms, conditions or provisions of any material document, agreement
or other instrument to which the Purchaser is a party or by which it is bound of
which we are aware, (iii) Delaware corporate or federal law or regulation (other
than federal and state securities or blue sky laws, as to which we express no
opinion in this paragraph), or (iv) any judgment, writ, injunction, decree,
order or ruling of any court or governmental authority binding on the Purchaser
of which we are aware.
4. No consent, approval, waiver, license or authorization or other action by
or filing with any Delaware corporate or federal governmental authority is
required in connection with the execution and delivery by the Purchaser of the
Agreement, the consummation by the Purchaser of the transactions contemplated
thereby or the performance by the Purchaser of its obligations thereunder,
except for any required filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, federal and state securities or blue sky
laws, as to which we express no opinion in this paragraph and those already
obtained.