EXECUTION COPY
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KIEWIT MATERIALS COMPANY,
RINKER MATERIALS CORPORATION
and
JEM LEAR ACQUISITION COMPANY, INC.
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AGREEMENT AND PLAN OF MERGER
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Dated as of July 9, 2002
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 9, 2002 (the "Agreement"),
among Kiewit Materials Company, a Delaware corporation (the "Company"), Rinker
Materials Corporation, a Georgia corporation ("Parent"), and Jem Lear
Acquisition Company, Inc., a Delaware corporation and a wholly owned subsidiary
of Parent ("Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company (the "Board of Directors")
and the Board of Directors of Purchaser have each determined that it is in the
best interests of their respective stockholders for Purchaser to acquire the
Company upon the terms and subject to the conditions set forth herein; and
WHEREAS, in furtherance thereof, it is proposed that Purchaser will make a
cash tender offer (the "Offer") to acquire all shares (the "Shares") of the
issued and outstanding common stock, $.01 par value, of the Company (the
"Company Common Stock") for $17.00 per share of Company Common Stock or such
higher price as may be paid in the Offer (the "Per Share Amount"), net to the
seller in cash; and
WHEREAS, also in furtherance of such acquisition, the Board of Directors
and the Board of Directors of Purchaser have each approved the merger of
Purchaser with and into the Company (the "Merger") following the Offer in
accordance with the General Corporation Law of the State of Delaware ("Delaware
Law") and upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Parent and Purchaser hereby agree as follows:
ARTICLE I
THE TENDER OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 hereof and none of the events set forth in Annex I
hereto shall have occurred and be existing, Purchaser shall commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934 (the "Exchange
Act")) the Offer as promptly as reasonably practicable following the public
announcement of the execution of this Agreement, but in no event later than ten
business days following the date of the execution of this Agreement. The
obligation of Purchaser to accept for payment any Shares tendered shall be
subject only to the satisfaction of those conditions set forth in Annex I.
Parent expressly reserves the right from time to time, subject to Sections
1.1(b) and 1.1(d) hereof, to waive any such condition, to increase the Per Share
Amount, or to make any other changes in the terms and conditions of the Offer.
The Per Share Amount shall be net to the seller in cash, subject to reduction
only for any applicable back-up withholding or stock transfer taxes required by
law to be withheld from
payments to the seller. The Company agrees that no Shares held by the Company or
any of its Subsidiaries (as hereinafter defined) will be tendered pursuant to
the Offer.
(b) Without the prior written consent of the Company, Parent shall not (i)
decrease the Per Share Amount or change the form of consideration payable in the
Offer, (ii) decrease the number of Shares sought, (iii) amend or waive
satisfaction of the Minimum Condition (as defined in Annex I) other than to
reduce the percentage of Shares in such condition to any percentage that is not
less than a majority or (iv) impose additional conditions to the Offer or amend
any other condition or term of the Offer in any manner adverse to the holders of
Shares. Upon the terms and subject to the conditions of the Offer, Purchaser
will, and Parent will cause it to, accept for payment and purchase, as promptly
as practicable after expiration of the Offer, all Shares validly tendered and
not withdrawn prior to the expiration of the Offer that Purchaser becomes
obligated to accept for payment and pay pursuant to the Offer.
(c) The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") having only the conditions set forth in Annex I hereto. As soon as
practicable on the date the Offer is commenced, Parent and Purchaser shall file
with the Securities and Exchange Commission (the "SEC") a Tender Offer Statement
on Schedule TO (together with all amendments and supplements thereto, the
"Schedule TO") with respect to the Offer that will comply in all material
respects with the provisions of such Schedule TO and all applicable federal
securities laws, and will contain (including as an exhibit) or incorporate by
reference the Offer to Purchase and forms of the related letter of transmittal
and other ancillary Offer documents pursuant to which the Offer will be made
(which documents, together with any supplements or amendments thereto, are
referred to collectively herein as the "Offer Documents"). Parent and Purchaser
agree promptly to correct the Schedule TO or the Offer Documents if and to the
extent that any of them shall have become false or misleading in any material
respect (and the Company, with respect to written information supplied by it
specifically for use in the Schedule TO or the Offer Documents, shall promptly
notify Parent of any required corrections of such information and shall
cooperate with Parent and Purchaser with respect to correcting such information)
and to supplement the information provided by it specifically for use in the
Schedule TO or the Offer Documents to include any information that shall become
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and Parent and Purchaser further
agree to take all steps necessary to cause the Schedule TO, as so corrected or
supplemented, to be filed with the SEC and the Offer Documents, as so corrected
or supplemented, to be disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment on any
Offer Documents before they are filed with the SEC. In addition, Parent and
Purchaser agree to use reasonable efforts to provide the Company and its counsel
with any comments, whether written or oral, that Parent or Purchaser or either
of their counsel may receive from time to time from the SEC or its staff with
respect to the Schedule TO promptly after receipt of such comments and to
consult with the Company and its counsel prior to responding to such comments.
(d) The Offer to Purchase shall provide for an initial expiration date of
September 25, 2002. Purchaser agrees that it shall not terminate or withdraw the
Offer or extend the expiration date of the Offer pursuant to this Agreement
unless at the expiration date of the Offer the conditions to the Offer described
in Annex I hereto shall not have been satisfied or
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earlier waived in accordance with the terms of this Agreement; provided,
however, that if, at the expiration date of the Offer (as it may be extended):
(i) the conditions to the Offer described in Annex I hereto (other
than the Minimum Condition) shall not have been satisfied or earlier waived
but are reasonably capable of being satisfied on or prior to November 8,
2002, or
(ii) the Minimum Condition shall not have been satisfied or, to the
extent permitted in Section 1.1(b), earlier waived;
Purchaser shall, from time to time extend the expiration date of the Offer (each
such individual extension not to exceed 10 business days (as defined in Rule
14d-1 under the Exchange Act) until the date such conditions are satisfied or
earlier waived in accordance with the terms of this Agreement, and Purchaser
becomes obligated to accept for payment and pay for Shares tendered pursuant to
the Offer; provided, further, that in the case of either clause (i) or (ii)
above, and except as otherwise set forth in Section 8.1(e) hereof, the
expiration date of the Offer shall not be extended beyond November 8, 2002,
without the prior written consent of the Company and Purchaser. Notwithstanding
the foregoing, Purchaser may, without the consent of the Company, extend the
expiration date of the Offer (as it may be extended) for any period required by
applicable rules and regulations of the SEC in connection with an increase in
the consideration to be paid pursuant to the Offer. Purchaser may provide a
"subsequent offering period" (as contemplated by, and in accordance with, Rule
14d-11 under the Exchange Act) of not less than three business days nor more
than five business days following its acceptance of and payment for the Shares
in the Offer.
Section 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and represents
and warrants that the Board of Directors, at a meeting duly called and held on
July 8, 2002: (i) approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger; (ii) recommended that
the stockholders of the Company accept the Offer, tender their Shares pursuant
to the Offer and approve this Agreement and the transactions contemplated
hereby, including the Merger; (iii) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are fair
to and in the best interests of the stockholders of the Company; (iv) took all
action necessary to render the limitations on business combinations contained in
Section 203 of the Delaware Law inapplicable to this Agreement, and the
transactions contemplated hereby and thereby; and (v) waived the restrictions on
transferring Shares contained in the Company's Amended and Restated Certificate
of Incorporation (the "Restated Certificate") only to the extent necessary to
permit (x) holders of Shares to tender their Shares in the Offer and (y)
Purchaser to purchase validly tendered Shares in the Offer.
(b) The Company hereby agrees to file with the SEC, concurrently with the
filing by Parent and Purchaser of the Schedule TO with respect to the Offer, a
Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together
with any amendments or supplements thereto, the "Schedule 14D-9") that will
comply in all material respects with the provisions of all applicable federal
securities laws. The Company agrees to mail such Schedule
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14D-9 to the stockholders of the Company along with the Offer Documents. The
Schedule 14D-9 and the Offer Documents shall contain the recommendation of the
Board of Directors described in Section 1.2(a) hereof. The Company agrees
promptly to correct the Schedule 14D-9 if and to the extent that it shall become
false or misleading in any material respect (and each of Parent and Purchaser,
with respect to written information supplied by it specifically for use in the
Schedule 14D-9, shall promptly notify the Company of any required corrections of
such information and cooperate with the Company with respect to correcting such
information) and to supplement the information contained in the Schedule 14D-9
to include any information that shall become necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and the Company shall take all steps necessary to cause the
Schedule 14D-9, as so corrected or supplemented, to be filed with the SEC and
disseminated to the Company's stockholders to the extent required by applicable
federal securities laws. Parent and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 and any supplements
thereto before they are filed with the SEC. The Company shall provide Parent and
its counsel with any comments the Company or its counsel may receive from the
SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of
such comments and shall consult with Parent, Purchaser and their counsel prior
to responding to any comments.
(c) In connection with the Offer, the Company shall promptly upon execution
of this Agreement furnish Parent with mailing labels containing the names and
addresses of all record holders of Shares, and (to the extent available)
non-objecting beneficial owners lists and security position listings of Shares
held in stock depositories, each as of the most recent practicable date, and
shall promptly furnish Parent with such additional information, including
updated lists of stockholders, mailing labels and security position listings,
and such other information and assistance as Parent or its agents may reasonably
request for the purpose of communicating the Offer to the record and beneficial
holders of Shares. Subject to the requirements of applicable law, and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents reasonably necessary to consummate the Offer or the Merger, Parent and
Purchaser shall hold in confidence the information held in such labels and
listings, shall use such information solely in connection with the Offer and the
Merger, and if this Agreement is terminated or if the Offer is otherwise
terminated, shall promptly destroy or cause to be destroyed or deliver or cause
to be delivered to the Company all copies of such information then in their
possession or in the possession of their agents or representatives.
Section 1.3 Directors. Promptly upon the purchase by Purchaser of any
Shares pursuant to the Offer, and from time to time thereafter as Shares are
acquired by Purchaser, Parent shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors as
will give Parent, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors equal to at least that number of
directors which equals the product of the total number of directors on the Board
of Directors (giving effect to the directors appointed or elected pursuant to
this sentence and including current directors serving as officers of the
Company) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Parent or any affiliate of Parent (including for purposes
of this Section 1.3 such Shares as are accepted for payment pursuant to the
Offer, but excluding Shares held by the Company or any of its Subsidiaries)
bears to the number of Shares outstanding. At each such time, the Company will
also cause (i) each committee of the Board of
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Directors, (ii) if requested by Parent, the board of directors of each of the
Subsidiaries and (iii) if requested by Parent, each committee of such board to
include Persons designated by Parent constituting the same percentage of each
such committee or board as Parent's designees constitute on the Board of
Directors. The Company shall, upon request by Parent, promptly increase the size
of the Board of Directors or exercise its reasonable efforts to secure the
resignations of such number of directors as is necessary to enable Parent's
designees to be elected to the Board of Directors in accordance with the terms
of this Section 1.3 and shall cause Parent's designees to be so elected;
provided, however, that, in the event that Parent's designees are appointed or
elected to the Board of Directors, until the Effective Time (as defined in
Section 2.2 hereof) the Board of Directors shall have at least one director who
is a director on the date hereof and who is not an officer of the Company and is
not a designee, stockholder, affiliate or associate (within the meaning of the
federal securities laws) of Parent (one or more of such directors, the
"Independent Directors"); provided, further, that if no Independent Directors
remain, the other directors shall designate one Person to fill one of the
vacancies who shall be neither an officer of the Company nor a designee,
stockholder, affiliate or associate of Parent, and such Person shall be deemed
to be an Independent Director for purposes of this Agreement. Subject to
applicable law, the Company shall promptly take all action necessary pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 1.3 and shall include in the
Schedule 14D-9 mailed to stockholders promptly after the commencement of the
Offer (or an amendment thereof or an information statement pursuant to Rule
14f-1 if Parent has not theretofore designated directors) such information with
respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this
Section 1.3. Parent will supply the Company in writing and be solely responsible
for any written information with respect to itself and its nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1.
Notwithstanding anything in this Agreement to the contrary, following the time
directors designated by Parent constitute a majority of the Board of Directors
and prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors shall be required to (i) amend, modify or terminate this
Agreement on behalf of the Company, (ii) exercise or waive any of the Company's
rights or remedies hereunder, (iii) extend the time for performance of Parent's
obligations hereunder or (iv) take any other action by the Company in connection
with this Agreement required to be taken by the Board of Directors.
ARTICLE II
THE MERGER
Section 2.1 The Merger. At the Effective Time (as defined in Section 2.2)
and subject to and upon the terms and conditions of this Agreement and Delaware
Law, Purchaser shall be merged with and into the Company, the separate corporate
existence of Purchaser shall cease, and the Company shall continue as the
surviving corporation. The Company as the surviving corporation after the Merger
is hereinafter sometimes referred to as the "Surviving Corporation."
Section 2.2 Effective Time. As promptly as practicable, and in any event
within five business days after the satisfaction or waiver of the conditions set
forth in Article VII, the parties hereto shall cause the Merger to be
consummated by filing a Certificate of Merger
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with the Secretary of State of the State of Delaware, in such form as required
by, and executed in accordance with the relevant provisions of, Delaware Law
(the time of such filing being the "Effective Time").
Section 2.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Purchaser shall become the
debts, liabilities and duties of the Surviving Corporation.
Section 2.4 Subsequent Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Purchaser acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of either the Company or Purchaser, all such deeds, bills of
sale, assignments and assurances and to take and do, in the name and on behalf
of each of such corporations or otherwise, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
Section 2.5 Certificate of Incorporation; By-Laws; Directors and Officers.
(a) The Certificate of Incorporation of Purchaser, as in effect immediately
before the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by law and such
Certificate of Incorporation.
(b) The By-Laws of Purchaser, as in effect immediately before the Effective
Time, shall be the By-Laws of the Surviving Corporation until thereafter amended
as provided by law, the Certificate of Incorporation of the Surviving
Corporation and such By-Laws.
(c) The directors of Purchaser immediately before the Effective Time will
be the initial directors of the Surviving Corporation, and the officers of the
Company immediately before the Effective Time will be the initial officers of
the Surviving Corporation, in each case until their successors are elected or
appointed and qualified. If, at the Effective Time, a vacancy shall exist on the
Board of Directors or in any office of the Surviving Corporation, such vacancy
may thereafter be filled in the manner provided by law.
Section 2.6 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Purchaser, the Company or the
holder of any of the following securities:
(a) Common Stock of Purchaser. Each share of common stock, par value $.01
per share, of Purchaser (the "Purchaser Common Stock") issued and outstanding
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immediately prior to the Effective Time shall be converted into one fully paid
and nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-and Purchaser-Owned Company
Common Stock. Each share of Company Common Stock that is owned by Parent,
Purchaser or any Subsidiary of Parent or Purchaser or held in the treasury of
the Company (collectively, the "Excluded Shares") shall automatically be
canceled and retired and shall cease to exist, and no consideration shall be
delivered or deliverable in exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time other than
Excluded Shares or Dissenting Shares (as defined in Section 2.6(d)) shall be
converted into the right to receive the Per Share Amount in cash payable to the
holder thereof upon surrender of the certificate formerly representing such
Share.
(d) Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are held by a holder who has
properly exercised and perfected appraisal rights for payment of the fair value
for such holder's shares as determined in accordance with Section 262 of
Delaware Law ("Dissenting Shares") shall not be converted into the right to
receive the Per Share Amount (but instead shall be converted into the right to
receive payment from the Surviving Corporation with respect to such Dissenting
Shares in accordance with Delaware Law), unless and until such holder shall have
failed to perfect or shall have effectively withdrawn or lost such holder's
right under Delaware Law. If any such holder of Company Common Stock shall have
failed to perfect or shall have effectively withdrawn or lost such right, each
Share of such holder shall be treated as a share of Company Common Stock that
had been converted as of the Effective Time into the right to receive the Per
Share Amount in accordance with Section 2.6(c). The Company shall give prompt
notice to Parent and Purchaser of any demands received by the Company for
appraisal of any Shares, and Parent and Purchaser shall have the right to
participate in all negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of Parent and
Purchaser, make any payment with respect to, or settle or offer to settle, any
such demands.
(e) Cancellation and Retirement of Company Common Stock. As of the
Effective Time, all Shares issued and outstanding immediately prior to the
Effective Time, shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall, to the extent such certificate represents
such Shares, cease to have any rights with respect thereto, except, in all cases
other than Excluded Shares and Dissenting Shares, the right to receive the Per
Share Amount therefor upon surrender of such certificate in accordance with
Section 2.7.
Section 2.7 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Parent shall appoint a
bank or trust company reasonably acceptable to the Company to act as exchange
agent (the "Exchange Agent") to receive the funds necessary to make the payments
contemplated by Section 2.6. At the Effective Time, Parent shall deposit with
the Exchange Agent, for the benefit of the holders
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of Shares, for exchange in accordance with this Article II, cash in an amount
sufficient to make payments as provided in Section 2.6 (such cash consideration
being hereinafter referred to as the "Exchange Fund"). The Exchange Agent shall,
pursuant to irrevocable instructions of the Surviving Corporation, make payments
out of the Exchange Fund. The Exchange Fund shall not be used for any other
purpose.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Exchange Agent to mail to each holder of
record of a certificate or certificates, which immediately prior to the
Effective Time represented outstanding Shares (the "Certificates"), whose Shares
were converted pursuant to Section 2.6(c) into the right to receive the Per
Share Amount (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Parent may reasonably specify) and
(ii) instructions for effecting the surrender of the Certificates in exchange
for payment of the Per Share Amount. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
Parent shall cause the Exchange Agent to pay to the holder of such Certificate
in exchange therefor the Per Share Amount for each share formerly represented by
such Certificate and the Certificate so surrendered shall forthwith be
cancelled. If payment is to be made to a Person other than the Person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer and that the Person requesting such
payment shall have paid any transfer and any other taxes required by reason of
the payment to a Person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.7(b), each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Per Share Amount in cash as contemplated by Section 2.6(c). The
right of any stockholder to receive the Per Share Amount shall be subject to and
reduced by any applicable withholding obligation. After the Effective Time,
there shall be no further transfer on the records of the Company or its transfer
agent of Certificates which have been converted pursuant to this Agreement into
the right to receive the Per Share Amount, and if such Certificates are
presented to the Company for transfer, they shall be canceled against delivery
of the Per Share Amount. No interest will be paid or will accrue on any cash
payable upon the surrender of a Certificate which immediately before the
Effective Time represented outstanding Shares.
(c) No Further Ownership Rights in Company Common Stock Exchanged For Cash.
All cash paid upon the surrender for exchange of Certificates representing
Shares in accordance with the terms of this Article II shall be deemed to have
been paid in full satisfaction of all rights pertaining to the Shares exchanged
for cash theretofore represented by such Certificates.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of the Certificates for six months after
the Effective Time shall be delivered to the Surviving Corporation and any
holders of Shares prior to the Merger
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who have not theretofore complied with this Article II shall thereafter look
only to the Surviving Corporation and only as general creditors thereof for
payment of the Per Share Amount.
(e) No Liability. None of Purchaser, Parent, the Surviving Corporation or
the Exchange Agent, or any employee, officer, director, agent or affiliate
thereof, shall be liable to any Person in respect of any cash from the Exchange
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificates representing Shares shall
not have been surrendered prior to five years after the Effective Time (or
immediately prior to such earlier date on which any consideration to be paid
hereunder in respect of such Certificate would otherwise escheat to or become
the property of any Governmental Entity), any cash, shares, dividends or
distributions payable in respect of such Certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation
free and clear of all claims or interests of any Person previously entitled
thereto.
(f) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by the Surviving Corporation. Any
interest and other income resulting from such investments shall be paid to the
Surviving Corporation. To the extent that there are losses with respect to such
investments, or the Exchange Fund diminishes for other reasons below the level
required to make prompt payments of the Per Share Amount as contemplated hereby,
the Surviving Corporation shall promptly replace or restore the portion of the
Exchange Fund lost through investments or other events so as to ensure that the
Exchange Fund is, at all times, maintained at a level sufficient to make such
payments.
(g) Withholding Rights. The Surviving Corporation shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Shares such amounts as the Surviving Corporation is
required to deduct and withhold with respect to the making of such payment under
the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law. To the extent that amounts are so deducted and
withheld by the Surviving Corporation, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
Shares in respect of which such deduction and withholding was made by the
Surviving Corporation.
(h) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such Person of a bond in such reasonable
amount as the Surviving Corporation may require as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the Per
Share Amount payable pursuant to this Agreement.
Section 2.8 Convertible Debentures. Promptly following the date of this
Agreement, the Company shall give notice to the registered holders of its
outstanding convertible debentures (the "Convertible Debentures") of the
Company's redemption of the Convertible Debentures on a date that is not less
than 30 days after the date such notice is given. The Company shall give such
notice and effect such redemption in accordance with the terms of the Indenture,
dated as of September 14, 2000, between the Company and UMB Bank, N.A. (the
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"Indenture"), as trustee, relating to the Convertible Debentures, the terms of
the Convertible Debentures and applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby represent and warrant to the Company as
follows:
Section 3.1 Corporate Organization. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia and
has the requisite corporate power and authority and any necessary governmental
authority to own, operate or lease the properties that it purports to own,
operate or lease and to carry on its business as it is now being conducted.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate power
and authority and any necessary governmental authority to own, operate or lease
the properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted.
Section 3.2 Capitalization. The authorized capital stock of Purchaser
consists of 750 shares of Purchaser Common Stock. As of the date hereof, 100 of
such shares are issued and outstanding, duly authorized, validly issued, fully
paid and nonassessable and owned beneficially and of record by Parent free and
clear of any liens, security interests, pledges, agreements, claims, charges or
encumbrances of any nature whatsoever ("Liens"). There are no other options,
warrants or other rights, agreements, arrangements or commitments of any
character obligating Purchaser to issue or sell any shares of capital stock of
or other equity interests in Purchaser.
Section 3.3 Authority Relative to this Agreement. The execution and
delivery of this Agreement by Parent and Purchaser and the consummation by
Parent and Purchaser of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Purchaser
and no other corporate proceeding is necessary for the execution and delivery of
this Agreement by Parent or Purchaser, the performance by Parent or Purchaser of
their respective obligations hereunder and the consummation by Parent or
Purchaser of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Purchaser and constitutes a legal, valid
and binding obligation of each of them, enforceable against each of them in
accordance with its terms.
Section 3.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Purchaser do
not, and the performance of this Agreement by Parent and Purchaser will not, (i)
materially conflict with or violate any material law, regulation, court order,
judgment or decree applicable to Parent or Purchaser or by which any of their
property is bound or subject, (ii) violate or conflict with the Certificate of
Incorporation, By-Laws, or equivalent organizational documents of either Parent
or Purchaser, or (iii) result in any material breach of or constitute a material
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination or cancellation of,
or result in the creation of a Lien on
10
any of the property or assets of Parent or Purchaser pursuant to, any material
contract, instrument, permit, license or franchise to which Parent or Purchaser
is a party or by which Parent or Purchaser or any of its property is bound or
subject.
(b) Except for applicable requirements, if any, of the Exchange Act, the
pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the filing and
recordation of an appropriate Certificate of Merger as required by Delaware Law
and filings as may be required under applicable "takeover" or "blue sky" laws,
neither Parent nor Purchaser is required to submit any notice, report or other
filing with any governmental or regulatory authority, agency or body, domestic
or foreign (a "Governmental Entity"), in connection with the execution, delivery
or performance of this Agreement or the consummation of the transactions
contemplated hereby. No waiver, consent, approval or authorization of any
Governmental Entity is required to be obtained or made by either Parent or
Purchaser in connection with its execution, delivery or performance of this
Agreement.
Section 3.5 Financing Arrangements. Parent has or will have funds available
to it sufficient (a) to pay the aggregate Per Share Amount, (b) to refinance any
indebtedness or other obligation of the Company which may become due as a result
of this Agreement or any of the transactions contemplated hereby and (c) to pay
all related fees and expenses.
Section 3.6 No Prior Activities. Except for obligations or liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby
(including any financing), Purchaser has not incurred any obligations or
liabilities, and has not engaged in any business or activities of any type or
kind whatsoever or entered into any agreements or arrangements with any Person
or entity.
Section 3.7 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of Parent or Purchaser.
Section 3.8 Offer Documents; Information Supplied. The Offer Documents and
any amendments or supplements thereto will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder. Neither the Offer Documents nor any amendments thereof or
supplements thereto will, at any time the Offer Documents or any such amendments
or supplements are filed with the SEC or first published, sent or given to the
Company's stockholders, contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, Parent and Purchaser do not make any
representation or warranty with respect to any written information that has been
supplied by the Company or its authorized representatives specifically for
inclusion in the Offer Documents. None of the written information supplied by
Parent, Purchaser or their officers, directors, representatives, agents or
employees specifically for inclusion in (i) the proxy statement to be filed with
the SEC by the Company in connection with the solicitation of proxies from
stockholders at the special meeting of stockholders of the Company to consider
this Agreement and the Merger (the "Company Stockholders' Meeting") or
11
(ii) the information statement to be filed by the Company with the SEC and sent
to such stockholders with respect to the Company Stockholders' Meeting, as
appropriate (such proxy statement or information statement, as amended or
supplemented, is herein referred to as the "Proxy Statement"), will, on the date
the Proxy Statement is first sent to the Company's stockholders or at the time
of Company Stockholders' Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
Section 3.9 Use of "Kiewit" Name. Parent and Purchaser hereby acknowledge
that neither Parent nor the Surviving Corporation, nor any of their affiliates,
shall have any right to use the name "Kiewit," or any derivation thereof, from
and after the Effective Time, subject to the right to use the name for a
transitional period of up to six months in accordance with the terms of that
certain Amendment to Separation Agreement (the "Amended Separation Agreement"),
dated as of July 8, 2002, by and among the Company, Peter Kiewit Sons', Inc.
("PKS") and Kiewit Construction Group Inc.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser as
follows:
Section 4.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Each of the Company's Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. The Company and each of its Subsidiaries has the requisite
corporate power and authority and any necessary governmental authority to own,
operate or lease the properties that it purports to own, operate or lease and to
carry on its business as it is now being conducted, and is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, operated or leased or
the nature of its activities makes such qualification necessary, except for such
failure which (individually or in the aggregate), when taken together with all
other such failures, would not have a Material Adverse Effect. For purposes of
this Agreement, "Material Adverse Effect" means any act, omission, fact or
circumstance that (i) results in or would reasonably be expected to result in
(A) the incurrence or increase of an obligation or liability of the Company or
any of its Subsidiaries, (B) the diminution in value of any of the assets or
rights of the Company or any of its Subsidiaries, or (C) the effective loss by
the Company or any of its Subsidiaries of its rights to use any of the assets of
the Company and its Subsidiaries as such assets are presently used, and (ii)
that exceeds, in any such case, individually or in the aggregate, $32,400,000
(after giving effect to any applicable insurance coverage if the Company or its
Subsidiaries has either, received proceeds from such coverage or, subject to
Section 8.1(e), written notice from any insurer unconditionally accepting
coverage or a portion thereof); provided, however, that (x) any such acts,
omissions, facts or circumstances directly resulting from this Agreement or the
transactions contemplated by this Agreement or the announcement thereof, (y) any
occurrence or condition affecting the aggregates industry
12
generally, or (z) any changes in general economic, regulatory or political
conditions shall not constitute a Material Adverse Effect or be included in any
calculation thereof.
Section 4.2 Capitalization. The authorized capital stock of the Company
consists of: (i) 100,000,000 shares of Company Common Stock; and (ii) 10,000,000
shares of Preferred Stock, par value $.01 per share ("Company Preferred Stock").
As of the date of this Agreement: (A) 36,003,436 shares of Company Common Stock
were issued and outstanding, all of which were duly authorized, validly issued,
fully paid and nonassessable; (B) no shares of Company Preferred Stock were
issued and outstanding; and (C) 2,118,537 shares of Company Common Stock were
reserved for issuance upon the conversion of the Convertible Debentures (which
is the aggregate number of shares into which such Convertible Debentures are
currently convertible) and, when issued upon conversion of the Convertible
Debentures, such shares of Company Common Stock will be duly authorized, validly
issued, fully paid and nonassessable. Except as set forth in Schedule 4.2: (i)
as of the date of this Agreement, none of the Company's or any Subsidiary's
capital stock is held in its treasury; (ii) all shares or other interests of the
Company's and each Subsidiary's capital stock were issued without violation of
any preemptive or similar rights and in compliance in all material respects with
federal and state securities laws and other material applicable law; (iii) the
Company and each Subsidiary has complied in all material respects with the terms
of its capital stock, including the provisions of its respective certificate of
incorporation or the equivalent applicable thereto; (iv) all of the Company's or
any Subsidiary's capital stock acquired by it was purchased from funds legally
available for the repurchase of shares of capital stock and otherwise in
accordance with its certificate of incorporation, by-laws or other governing
instruments and other applicable laws; (v) except for the Convertible Debentures
and as provided for in the Restated Certificate, no options, warrants,
subscriptions, puts, calls or other rights, commitments, undertakings or
understandings to acquire, dispose of or restrict the transfer of, any of the
Company's or any Subsidiary's capital stock or other securities of any kind or
class or rights, obligations or undertakings convertible into the Company's or
any Subsidiary's securities of any kind or class are authorized or outstanding
(and to the extent any of the foregoing exist, the Company and each Subsidiary
has complied in all material respects with their terms and conditions); and (vi)
except for the Convertible Debentures and the Repurchase Agreements (as defined
below) and as otherwise provided in the Restated Certificate, neither the
Company nor any Subsidiary is subject to any obligation to purchase, redeem or
otherwise acquire any of its capital stock or securities (or of any options or
rights or obligations described in clause (v) above) upon the occurrence of a
specified event (and assuming that specified time periods have passed and
appropriate notices have been given) or otherwise.
Section 4.3 Subsidiaries. Schedule 4.3 lists the Subsidiaries of the
Company. Except as set forth in Schedule 4.3, all of the outstanding shares of
capital stock of, or other equity interests in, each Subsidiary of the Company
have been duly authorized, validly issued and are fully paid and nonassessable
and are owned directly or indirectly by the Company, free and clear of all Liens
and free of any other restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other ownership
interests). The Company does not directly or indirectly own any securities or
other beneficial ownership interests in any other entity (including through
joint ventures or partnership arrangements) other than (i) the Subsidiaries of
the Company, (ii) as disclosed on Schedule 4.3, and (iii) investments in
publicly traded securities constituting less than five percent of the
outstanding equity of the issuing entity.
13
For purposes of this Agreement, "Subsidiary" has the meaning set forth in Rule
12b-2 under the Exchange Act.
Section 4.4 Authority Relative to this Agreement.
The Company has the necessary corporate power and authority to enter into
this Agreement and, subject to obtaining any necessary stockholder approval of
the Merger, to carry out its obligations hereunder. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to approval, if necessary,
of the Merger by the Company's stockholders in accordance with Delaware Law.
This Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms.
Section 4.5 No Conflict; Required Filings and Consents.
(a) Except as set forth in Schedule 4.5(a), the execution and delivery of
this Agreement by the Company does not, and the performance of this Agreement by
the Company will not, (i) materially conflict with or violate any material law,
regulation, court order, judgment or decree applicable to the Company or its
Subsidiaries or by which its or any of its Subsidiaries' property is bound or
subject, (ii) violate or conflict with the Restated Certificate or the Company's
By-Laws or the comparable organizational documents of any of its Subsidiaries,
or (iii) result in any material breach of or constitute a material default (or
an event which with notice or lapse of time of both would become a default)
under, or give to others any rights of termination or cancellation of, or result
in the creation of a Lien on any of the material properties or assets of the
Company or any of its Subsidiaries pursuant to, or accelerate material payment
obligations or materially impair or alter any of the material rights, titles and
interests of the Company or of any Subsidiary in any asset of any of them under,
any Company Material Contract (as defined below) or any material permit, license
or franchise.
(b) Except for applicable requirements of the Exchange Act, the pre-merger
notification requirements of the HSR Act, and filing and recordation of an
appropriate merger or other documents as required by Delaware Law, "takeover" or
"blue sky" laws of various states, and except as set forth in Schedule 4.5(b),
the Company is not required to submit any notice, report or other filing with
any Governmental Entity, in connection with the execution, delivery or
performance of this Agreement. No waiver, consent, approval or authorization of
any governmental or regulatory authority, domestic or foreign, is required to be
obtained or made by the Company in connection with its execution, delivery or
performance of this Agreement, except where the failure to obtain such waivers,
consents, approvals or authorizations would not, individually or in the
aggregate, (i) be, or reasonably be expected to be, materially adverse to any
facility or operation of the Company or any of its Subsidiaries, or (ii) impair,
or be reasonably likely to impair, in any material respect, the ability of the
Company to perform its obligations under this Agreement.
14
Section 4.6 SEC Filings; Financial Statements.
(a) Except as set forth on Schedule 4.6, the Company and each Subsidiary
have filed all forms, reports and documents required to be filed with the SEC
since September 30, 2000 (collectively, the "SEC Reports"). The SEC Reports,
including the financial statements and schedules thereto included therein, (i)
were prepared in accordance in all material respects with the requirements of
the Securities Act of 1933, as amended, or the Exchange Act, as the case may be,
and the published rules and regulations of the SEC promulgated thereunder
(collectively, the "Securities Laws") as in effect at the time they were filed
(and, in the case of a registration statement, at the time of effectiveness of
such registration statement) and (ii) did not at the time they were filed (or,
in the case of any registration statement, at the time of effectiveness of such
registration statement or at any time thereafter during which the Company
offered the securities registered on such registration statement) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) The financial statements contained in the SEC Reports were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto) and fairly presented in all material respects the financial position of
the Company and its Subsidiaries on a consolidated basis as at the respective
dates thereof and the statements of operations and cash flows of the Company and
its Subsidiaries on a consolidated basis for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal
year-end adjustments.
(c) Except as reflected or reserved against in the consolidated financial
statements contained in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2001, any Quarterly Reports on Form 10-Q for the
quarters ending after December 31, 2001 or any current reports on Form 8-K filed
after December 31, 2001 (such annual, quarterly and current reports filed prior
to the date hereof, collectively, the "2002 SEC Reports") or as otherwise
disclosed in the 2002 SEC Reports, to the knowledge of the Company, the Company
has no liabilities of any nature (whether accrued, absolute, contingent or
otherwise), other than liabilities incurred after the date of the most recent
balance sheet of the Company included in the SEC Reports in the ordinary course
of business, and liabilities that do not individually exceed $1,000,000, or in
the aggregate exceed $5,000,000.
(d) No formal or informal inquiries have been received by the Company from
any Governmental Entity regarding the Company's or any Subsidiary's accounting
practices or any other matter regarding the Company's or any Subsidiary's
compliance with any Securities Laws.
Section 4.7 Absence of Certain Changes or Events. Since March 31, 2002,
except as contemplated by this Agreement or as set forth in Schedule 4.7, there
has not been:
(a) any Material Adverse Effect;
15
(b) any strike, picketing, work slowdown or other labor disturbance having
or reasonably expected to have a materially adverse effect on the material
assets, liabilities, business or operations of any facility of the Company or
its Subsidiaries;
(c) any material damage, destruction or loss (whether or not covered by
insurance) with respect to any of the material assets of any facility of the
Company or its Subsidiaries;
(d) any redemption or other acquisition of Company Common Stock by the
Company or any declaration or payment of any dividend or other distribution in
cash, stock or property with respect to Company Common Stock, except for
purchases made pursuant to the terms of the Restated Certificate, the Repurchase
Agreements between the Company and holders of the Convertible Debentures (the
"Repurchase Agreements"), the Convertible Debentures or the Indenture;
(e) any change by the Company in accounting principles except insofar as
may have been required by a change in generally accepted accounting principles
and disclosed in the SEC Reports;
(f) any payment of any obligation exceeding $1,000,000 otherwise than in
the ordinary course of business or when such obligation became due, or any
acceleration or deferral of any such obligation;
(g) any merger or consolidation with any other corporation (or any
transaction having a similar effect) involving the Company or any of its
Subsidiaries or any acquisition of any business unit or operation (however
effected) by the Company or any of its Subsidiaries;
(h) any incurring or guaranteeing of any indebtedness for borrowed money
other than in the ordinary course of business or as expressly permitted by this
Agreement;
(i) any sale, lease or other conveyance of all or any portion of (or any
interest in) any material property owned by the Company or any Subsidiary (other
than dispositions in the ordinary course of business); or
(j) any agreement by the Company or any Subsidiary to do any of the
foregoing, or any material contract entered into by the Company or any
Subsidiary not in the ordinary course of business.
Section 4.8 Litigation. Except as disclosed in the 2002 SEC Reports or in
Schedule 4.8, there are no claims, actions, suits, proceedings or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, or any properties or rights of the Company or any of
its Subsidiaries, before any court, administrative, governmental or regulatory
authority or body, domestic or foreign, for which the Company or its
Subsidiaries is reasonably likely to incur (for any individual claim, action,
suit, proceeding or investigation) a loss of more than $1 million (after giving
effect to any applicable insurance coverage). As of the date hereof, neither the
Company, nor its Subsidiaries, nor any of the Company's or any of its
Subsidiaries' properties is subject to any order, judgment, injunction or
decree, having a materially adverse effect on the operation of any facility of
the Company or any
16
of its Subsidiaries, nor is there any proceeding existing or to the Company's
knowledge, threatened that could reasonably be expected to result in any such
order, judgment, injunction or decree. There has been no reservation of rights
by any insurance carrier, and to the Company's knowledge, no such reservation is
threatened, concerning the coverage of the Company or any of its Subsidiaries
with respect to any matter required to be disclosed pursuant to this Section 4.8
or which would be subject to such disclosure if the coverage with respect to
which a reservation of rights is made is not available. To the knowledge of the
Company, Schedule 4.8 lists each employee health claim in excess of $100,000
made by an employee of the Company or its Subsidiaries against the Company or
its Subsidiaries since September 30, 2000, relating to injuries and/or diseases
(including, without limitation, those associated with silica and silica dust),
arising out of such employee's employment with the Company or its Subsidiaries,
and the Company has made available to Parent all of its files relating to such
claims.
Section 4.9 Insurance. Schedule 4.9 lists all of the Company's and each
Subsidiary's material insurance policies now in force, excluding title insurance
policies (all such policies, whether or not listed, "Current Policies"), and
those, to the knowledge of the Company, in force since December 31, 1995 under
which the Company or any of its Subsidiaries are provided coverage under the
insurance program administered by PKS, excluding title insurance policies (all
such policies, "Prior Policies"), and such schedule states the type of policy,
the carrier, the annual premium (for Current Policies only) and the expiration
date. Copies of the Current Policies have been made available to Parent. Except
as set forth in Schedule 4.9: (a) the premiums due on the Current Policies, and
to the knowledge of the Company, the Prior Policies, have been timely paid; (b)
all material claims made against the Company or any Subsidiary that have not
previously been paid by a carrier have been timely reported to the applicable
persons and entities under each applicable Current Policy, and to the knowledge
of the Company, Prior Policy, and neither the Company nor any Subsidiary has
forfeited or waived any material claim under any Current Policy, and to the
knowledge of the Company, any Prior Policies; (c) none of such Current Policies,
and to the knowledge of the Company, any Prior Policies, permit retroactive
premium adjustments against the Company or any Subsidiary (or if they do permit
such adjustments, Schedule 4.9 sets forth the range and whether notice of such
has been received); (d) no notice of cancellation or termination of any Current
Policy, or to the knowledge of the Company, any Prior Policy, has been given to
the Company or any Subsidiary by the carrier of any such policy; (e) all
liability Current Policies, and to the knowledge of the Company, all liability
Prior Policies, are on an "occurrences" basis rather than a "claims made" basis
and (f) no coverage under any Current Policy nor to the knowledge of the Company
under any Prior Policy (including the right of the Company and its Subsidiaries
to make claims under any policy) will terminate or be limited by reason of the
execution, delivery or performance of this Agreement.
Section 4.10 Officers and Directors; Employment Relationships. Schedule
4.10 lists: (a) except as disclosed pursuant to Sections 4.11 and 4.12, any
employment or similar contract pursuant to which the Company or any Subsidiary
has any liability or obligation; and (b) each outstanding Company loan to
employees and contracts or plans relating to such loans (excluding loans under
any qualified retirement plan). Except as provided in contracts or plans
disclosed in Schedule 4.10 (the "Employment Arrangements"), neither the
execution, delivery nor performance of this Agreement will: (i) entitle any
Person to severance pay or other compensation under any Employment Arrangement;
or (ii) accelerate the time of payment or
17
vesting, or increase the amount of compensation or benefits due under any
Employment Arrangement. Except for the Employment Arrangements, neither the
Company nor any of its Subsidiaries has made any representation or promise,
written or oral, to any of its employees concerning continued employment by the
Company or any of its Subsidiaries or employment by Purchaser.
Section 4.11 Labor Relations. Except as set forth in Schedule 4.11: (a) the
Company and each of its Subsidiaries is in compliance in all material respects
with all applicable law respecting employment and compensation practices
(including the so-called wage and hour laws, those relating to equal employment,
and those relating to hiring of Persons who are not U.S. citizens); (b) there
are no material charges, investigations, administrative proceedings or formal
complaints of discrimination (including discrimination based upon sex, age,
race, color, national origin, religion or disability) pending or, to the
Company's knowledge, threatened against the Company or any of its Subsidiaries
either (i) before the Equal Employment Opportunity Commission or any other
Governmental Entity or (ii) by any other Person; (c) there have been no
governmental audits (including any Office of Federal Contract Compliance
Programs audits) of the Company's or any of its Subsidiaries' equal employment
opportunity or wage and hour practices since December 31, 2000; (d) neither the
Company nor any of its Subsidiaries has received since December 31, 2000 notice
of any material unfair labor practice, complaint, charge or other material
matter against or involving the Company or any of its Subsidiaries, and to the
Company's knowledge, none of the foregoing is pending or threatened before any
Governmental Entity; and (e) no representation question exists respecting the
Company's or any of its Subsidiaries employees;
Section 4.12 Employee Benefit Plans. Schedule 4.12 sets forth a list of all
material employee welfare benefit plans (as defined in Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), employee
pension benefit plans (as defined in Section 3(2) of ERISA) and all other bonus,
stock option, stock purchase, benefit, profit sharing, savings, retirement,
disability, insurance, incentive, deferred compensation and other similar fringe
or employee benefit plans, programs or arrangements for the benefit of, or
relating to, any current or former employee, officer, director or agent of, or
independent contractor or consultant to, the Company or any of its Subsidiaries
or their beneficiaries, or that the Company or any Subsidiary either maintains,
is required to contribute to or otherwise participates in (or since September
30, 2000 has maintained, contributed to or otherwise participated in) or as to
which the Company or any Subsidiary has any material unsatisfied liability or
obligation, whether accrued, contingent or otherwise (together, the "Employee
Plans"). The Company has no "ERISA Affiliate" (as defined in Sections 414(b),
(c), (m) or (o) of the Code) other than its Subsidiaries. The Company has
delivered or made available to Parent true and complete copies of all Employee
Plans, as in effect, as well as the latest Internal Revenue Service
determination letters obtained with respect to any Employee Plan intended to be
qualified under Section 401(a) or 501(a) of the Code. None of the Company, any
Subsidiary, or to the knowledge of the Company and its Subsidiaries, any of
their respective directors, officers, employees or agents has, with respect to
any Employee Plan, engaged in or been a party to any "prohibited transaction",
as such term is defined in Section 4975 of the Code or Section 406 of ERISA,
which could result in the imposition of a material penalty assessed pursuant to
Section 502(i) of ERISA, a material tax imposed by Section 4975 of the Code or
other material liability, in each case applicable to the Company, any Subsidiary
or any Employee Plan. The
18
Company, its Subsidiaries and all Employee Plans are and have at all times been
in compliance in all material respects with their obligations under the Employee
Plans and the applicable requirements prescribed by all statutes, orders, or
governmental rules or regulations in effect with respect to such Employee Plans,
including, but not limited to, ERISA and the Code and, to the knowledge of the
Company and its Subsidiaries, there are no pending or threatened claims,
lawsuits or arbitrations (other than routine claims for benefits), relating to
any of the Employee Plans, which have been asserted or instituted against the
Company and its Subsidiaries, any Employee Plan or the assets of any trust or
arrangement created under or as part of any Employee Plan. Each Employee Plan
intended to qualify under Section 401(a) of the Code, and the trusts created
thereunder intended to be exempt from tax under the provisions of Section 501(a)
of the Code, either (i) has received a favorable determination letter from the
Internal Revenue Service to such effect or (ii) is still within the "remedial
amendment period," as described in Section 401(b) of the Code and the
regulations thereunder. All contributions or payments required to be made or
accrued before the Effective Time under the terms of any Employee Plan will have
been made or accrued by the Effective Time. All contributions to the Employee
Plans have been made in accordance with actuarial recommendations, as
applicable, and are currently deductible under the Code, and no excise or
penalty taxes are assessable as a result of nondeductible or other contributions
made or not made to any Employee Plan. No Employee Plan subject to Section 412
of the Code has incurred any "accumulated funding deficiency" (as defined in
ERISA), whether or not waived. Schedule 4.12 sets forth the extent, if any, to
which any of such Employee Plans has: (A) incurred employer liability with
respect to any of such plans as determined in accordance with Sections 4062 or
4063 of ERISA; (B) become entitled to a Lien under Section 412(n) of the Code;
or (C) been the subject of a minimum funding waiver. Neither the Company nor any
Subsidiary has incurred nor reasonably expects to incur any liability to the
Pension Benefit Guaranty Corporation with respect to any Employee Plan other
than liability to pay premiums. Neither the Company nor any Subsidiary has
incurred any withdrawal liability to any "multiemployer plan" (as defined in
Section 3(37) of ERISA). To the extent the Company currently has such
information, Schedule 4.12 sets forth the withdrawal liability that exists under
each multiemployer plan as of the most recent date for which such information is
available (and the Company will use its reasonable best efforts to obtain and
provide to Parent the most recent withdrawal liability available in all other
cases as soon as practicable after the date of this Agreement). Except as set
forth in Schedule 4.12, neither the execution, delivery or performance of this
Agreement will accelerate the time of payment or vesting, or increase the
amount, of compensation or benefits due under any Employee Plan. Except as set
forth in Schedule 4.12, each Employee Plan is terminable in accordance with the
terms expressly set forth therein, except as may be limited by applicable law.
No Employee Plan provides death, medical or other welfare benefits with respect
to current or former employees, officers, directors, agents or independent
contractors or their beneficiaries after retirement or other termination of
service, other than coverage mandated by applicable law.
Section 4.13 Offer Documents; Proxy Statement. The Schedule 14D-9 will
comply as to form in all material respects with the Exchange Act and the rules
and regulations thereunder. Neither the Schedule 14D-9 (including any
information included therein pursuant to Rule 14f-1) nor any of the information
relating to the Company or its affiliates provided by or on behalf of the
Company specifically for inclusion in the Schedule TO or the Offer Documents
will, at the respective times the Schedule 14D-9, the Schedule TO and the Offer
Documents or any amendments or supplements thereto are filed with the SEC and
are first published, sent or
19
given to stockholders of the Company, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Proxy Statement
will comply as to form in all material respects with the applicable requirements
of the Exchange Act and the rules and regulations thereunder. The Proxy
Statement will not, at the time the Proxy Statement (or any amendment or
supplement thereto) is first sent to stockholders or at the time of the Company
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, the Company does not
make any representation or warranty with respect to written information supplied
by Parent, Purchaser or their officers, directors, representatives, agents,
employees or designees to the Board of Directors specifically for inclusion in
the Schedule 14D-9 (including any information that is supplied by Parent,
Purchaser or their officers, directors, representatives, agents, employees or
Parent's or Purchaser's designees to the Board of Directors, for inclusion
therein pursuant to Rule 14f-1) or the Proxy Statement.
Section 4.14 Conduct of Business.
(a) Generally. Except as disclosed in Schedule 4.14(a), neither the
business of the Company nor any of its Subsidiaries is being conducted in
material default or violation of any material term, condition or provision of
(i) the Restated Certificate or By-Laws or the comparable organizational
documents of any of its Subsidiaries, or (ii) any material note, bond, mortgage,
indenture, contract, agreement, lease or other instrument or agreement of any
kind to which the Company or any of its Subsidiaries is now a party or by which
the Company or any of its Subsidiaries, properties or assets may be bound, or
(iii) any material Federal, state, local or foreign statute, law, ordinance,
rule, regulation, judgment, decree, order, concession, grant, franchise, permit
or license or other governmental authorization or approval applicable to the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has at any time made any illegal payments for political
contributions or any bribes, illegal kickback payments or other illegal
payments. Neither the Company nor any of its Subsidiaries is barred from bidding
on any project for a Governmental Entity within the scope of its business as a
result of misconduct by the Company or any such Subsidiary.
(b) Charges or Violations; Investigations. Neither the Company nor any of
its Subsidiaries is (and since January 1, 2001 has not been) either charged
with, in receipt of any notice of, or to the Company's knowledge, under
investigation (either as a subject or as a target) with respect to any material
failure or alleged material failure to comply with any provision of any material
applicable law.
(c) Permits. Without limiting the foregoing except as listed in Schedule
4.14(c): (i) the Company and each of its Subsidiaries has all material permits
required with respect to material assets owned, leased or used by it (and a copy
of all of such permits have been made available to Parent); (ii) each such
permit is in full force and effect; and (iii) the Company and each of its
Subsidiaries is in compliance in all material respects with each such permit;
provided, however, that the foregoing does not require disclosure of state and
local business or similar licenses required of businesses generally.
20
(d) OSHA/MSHA. Without limiting the foregoing and except as set forth in
Schedule 4.14(d), since January 1, 2001, neither the Company nor any of its
Subsidiaries has received any citations or other written notice alleging the
existence of, nor to the Company's knowledge does there exist, any material
"recognized hazard" (as such term is used under the Occupational Safety and
Health Act of 1970 ("OSHA")) or material "significant and substantial mine
safety or health hazard" (as such term is used under the Mine Safety and Health
Act of 1977 ("MSHA")) with respect to any aspect of the Company's or any
Subsidiary's property or operations.
Section 4.15 Taxes.
(a) Except as set forth in Schedule 4.15, (i) the Company and each of its
Subsidiaries has timely filed with the appropriate governmental authorities all
material Tax Returns (as hereinafter defined) required to be filed by or with
respect to the Company or its Subsidiaries or its operations or assets, and such
Tax Returns are true, correct and complete in all material respects, (ii) all
material Taxes (as hereinafter defined) shown to be due on such Tax Returns, all
material Taxes required to be paid on an estimated or installment basis, and all
material Taxes required to be withheld with respect to the Company, its
Subsidiaries or their operations or assets have been timely paid or, if
applicable, withheld and paid to the appropriate taxing authority in the manner
provided by law, (iii) the reserve for Taxes set forth on the balance sheet of
the Company as of March 31, 2002 is adequate for the payment of all Taxes
through the date thereof and no Taxes have been incurred after March 31, 2002
which were not incurred in the ordinary course of business, (iv) there are no
outstanding deficiencies or assessments asserted or proposed against the Company
or any of its Subsidiaries that have not been finally settled or paid in full,
and (v) there are no outstanding agreements, consents or waivers extending the
statutory period of limitations applicable to the assessment of any Taxes or
deficiencies against the Company or any of its Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries has filed a consent to
the application of Section 341(f) of the Code.
(c) Neither the Company nor any of its Subsidiaries is nor have they been a
United States real property holding company (as defined in Section 897(c)(2) of
the Code during the applicable period specified in Section 897(c)(1)(ii) of the
Code.
(d) The Split-Off was not part of a plan or series of related transactions
(within the meaning of Code Section 355(e)) pursuant to which one or more
Persons would acquire, directly or indirectly, stock possessing 50% or more of
the total combined voting power of all classes of stock of the Company entitled
to vote, or stock possessing 50% or more of the total value of all classes of
stock of the Company.
(e) Except as set forth in Schedule 4.15, neither the execution, delivery
or performance of this Agreement will cause any amounts payable under an
Employee Plan to be nondeductible for federal income tax purposes by reason of
Code ss. 280G or subject to tax under Code ss. 4999 or obligate the Company, any
of its Subsidiaries or Purchaser (or any affiliate) to "gross up" or otherwise
compensate any Person because of the imposition of any tax under Code ss. 4999.
21
(f) For purposes of this Agreement, "Split-Off" means the transfer to
stockholders of PKS of all the issued and outstanding common stock and
securities of the Company as of September 30, 2000.
(g) For purposes of this Agreement, "Taxes" means all taxes, charges, fees,
levies or other assessments imposed by any United States Federal, state, or
local taxing authority or by any non-U.S. taxing authority, including but not
limited to, income, gross receipts, excise, property, sales, use, transfer,
payroll, license, ad valorem, value added, withholding, social security,
national insurance (or other similar contributions or payments), franchise,
estimated, severance, stamp, and other taxes (including any interest, fines,
penalties or additions attributable to or imposed on or with respect to any such
taxes, charges, fees, levies or other assessments).
(h) For purposes of this Agreement, "Tax Return" means any return, report,
information return or other document (including any related or supporting
information and, where applicable, profit and loss accounts and balance sheets)
with respect to Taxes.
Section 4.16 Environmental.
(a) Except as disclosed in Schedule 4.16, and, to the knowledge of the
Company, except as would not have or reasonably be expected to either (x) result
in any common law or statutory liability or other obligation in excess of
$1,000,000 in the aggregate (provided that any individual liability or
obligation of less than $10,000 will not be counted toward such aggregate
amount), or (y) materially impair the ability of the Company and its
Subsidiaries to operate any property or facility of the Company or any of its
Subsidiaries (i) the Company and its Subsidiaries comply with all applicable
Environmental Laws (as hereinafter defined), (ii) there are no outstanding
allegations of which either the Company or any of its Subsidiaries has been
provided notice in writing by any Person that the Company or any of its
Subsidiaries is not or has not been in compliance with all applicable
Environmental Laws, (iii) neither the Company nor any of its Subsidiaries has,
nor has the Company or any of its Subsidiaries received any written notice,
claim, order, demand or judgment alleging any current and continuing obligation
or potential liability of the Company or any of its Subsidiaries for response,
cleanup or remediation activities or the costs thereof pursuant to CERCLA or
RCRA (each, as hereinafter defined) or analogous state laws.
(b) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C.ss. 9601 et seq.
"Environmental Laws" means all federal, state and local laws,
regulations and ordinances relating to protection of the environment, the
prevention or minimization of pollution, the control and tracking of any
hazardous material or any similar matters with respect to the foregoing
matters (including CERCLA and RCRA).
"RCRA" means the Resource Conservation and Recovery Act, 42 U.S.C.ss.
6901 et seq.
22
Section 4.17 Properties.
(a) The Company and each of its Subsidiaries has good and marketable title
to, or a valid leasehold interest in, all of its properties and assets, free and
clear of all Liens, other than (i) those Liens listed on Schedule 4.17(a) and
(ii) those Liens that do not, and would not reasonably be expected to have a
material adverse effect on the ability of the Company to use any such property
for the purpose for which it is held or to extract from any such property the
mineral reserves contained therein in accordance with the terms and conditions
of any applicable Company Material Lease or applicable laws, regulations or
permits (such exceptions or exclusions described in clauses (i) and (ii) being
collectively, "Permitted Exceptions").
(b) Schedule 4.17(b) sets forth a list of each material parcel of real
property owned by the Company or any of its Subsidiaries. Schedule 4.17(b) also
sets forth a true and complete list of each material lease or sublease relating
to real property or interests in real property leased by the Company or any of
its Subsidiaries (collectively, the "Company Material Leases"). A copy of each
Company Material Lease has been made available to Purchaser.
(c) With respect to each of the Company Material Leases, (i) such lease or
sublease is valid, binding and enforceable against the Company (or the
Subsidiary that is a party thereto) and in full force and effect, (ii) except as
otherwise set forth in Schedule 4.17(c), such lease or sublease will not cease
to be legal, valid, binding, enforceable and in full force and effect as a
result of the consummation of the transactions contemplated by this Agreement,
nor will the consummation of such transactions constitute a breach or default
under such lease or sublease or otherwise give the landlord a right to terminate
such lease or sublease and (iii) the Company does not know of, nor has it or any
of its Subsidiaries given or received notice of, any violation or default
thereunder (nor, to the knowledge of the Company, does there exist any condition
which with the passage of time or the giving of notice or both would result in
such a violation or default thereunder), except for, in the case of clause
(iii), violations or defaults that would not, have a material adverse effect on
such lease or sublease.
(d) Except as set forth in Schedule 4.17(d): (i) each of the Company's and
its Subsidiaries' owned and leased real property (the "Properties") includes the
right of ingress and egress over public rights-of-way or valid and existing
private easements, except as would not and reasonably would be expected not to
either (x) materially prevent or impair the extraction of mineral reserves
therefrom in accordance with the terms and conditions of any applicable Company
Material Lease or any applicable laws, regulations or permits, or (y) materially
interfere with the use of such facility or property as presently used by the
Company and its Subsidiaries, (ii) the Company and each of its Subsidiaries is
in compliance in all material respects with all applicable laws relating to
zoning and land use in respect of any of the Properties and, to the Company's
knowledge, is in compliance in all material respects with all material covenants
and other restrictions contained in any easement, restrictive covenants or any
similar instrument or agreement applicable to any of the Properties, and neither
the Company nor any of its Subsidiaries has received since January 1, 2001 any
notice alleging such a violation of applicable law or of such covenants or other
restrictions which remains uncured; (iii) to the Company's knowledge, none of
the Properties are subject to any material unpaid assessment (whether or not
due); and (iv) there is no pending or, to the Company's knowledge, contemplated
23
condemnation or eminent domain proceeding affecting in any material respect any
of the Properties.
(e) Except pursuant to leases disclosed on Schedule 4.17(e), no Person has
any right (whether as a lessee, licensee or otherwise) to occupy or use any
portion of the Properties except in the ordinary course of operations of the
business conducted at or for the Property in question.
(f) With respect to the rights of the Company and its Subsidiaries to
extract minerals from its owned or leased Properties listed in Schedule 4.17(b)
as owned or leased for such purpose (the "Mineral Rights"): (i) the Company or
the owning Subsidiary owns all right, title, and interest in and to, or has a
valid leasehold interest in, the Mineral Rights free and clear of all Liens
(except for permitted liens and Liens which do not have a material adverse
affect on the subject Mineral Rights or the Company's or any Subsidiary's right
or ability to extract or exploit the same) and restrictions and subject to the
terms and conditions of any applicable leases as disclosed to Parent; (ii)
neither the Company nor the owning Subsidiary has granted any rights in the
Mineral Rights to any Person; (iii) no Person, to the Company's knowledge, has
asserted that the Company or owning Subsidiary, as applicable, does not have the
right, title and interest in and to the Mineral Rights set forth in clause (i)
above; (iv) subject only to the permits set forth in Schedule 4.14(c), the terms
and conditions of any applicable leases as disclosed to Parent and applicable
law, the Company or Subsidiary owning or leasing the Property has the full and
unencumbered right to extract the minerals which are the subject of the Mineral
Rights; and (v) the Company or the owning Subsidiary, as applicable, is
utilizing the Mineral Rights in accordance in all material respects with all
applicable contracts, permits, and applicable law.
(g) With respect to the Company and its Subsidiaries' rights to use water
in its operations as currently conducted from its owned or leased Property
listed in Schedule 4.17(b) (the "Water Rights"): (i) Schedule 4.17(g) lists all
material rights as to each separate facility (distinguishing those as to which
water is from a public or private water system and those drawn from wells or
other sources) and states whether the right to use the water is subject to
limitations imposed by permit, applicable law or otherwise; (ii) the Company or
the owning Subsidiary owns all right, title, and interest in and to the Water
Rights (other than Water Rights which are derived contractually or on a metered
basis from private or public sources) free and clear of all Liens (except for
permitted liens and Liens which do not have a material adverse effect on the
subject Water Rights) and restrictions; (iii) neither the Company nor the owning
Subsidiary has granted any rights in the Water Rights to any Person except as
set forth on Schedule 4.17(g); (iv) no Person, to the Company's knowledge, has
asserted that the Company or owning Subsidiary, as applicable, does not have the
right, title and interest in and to the Water Rights set forth in clause (i)
above; and (v) the Company or the owning Subsidiary, as applicable, is utilizing
the Water Rights in accordance in all material respects with all applicable
contracts, permits, and applicable law.
Section 4.18 Intellectual Property. Except as set forth in Schedule 4.18,
to the knowledge of the Company, the Company and each of its Subsidiaries owns,
or is licensed or otherwise possesses rights to use all patents, trademarks and
service marks (registered or unregistered), trade names, domain names, computer
software and copyrights and applications and registrations therefor, in each
case, which are material to the conduct of the business of the
24
Company and its Subsidiaries (collectively, the "Intellectual Property Rights"),
free and clear of all payment obligations (other than as set forth in the
intellectual property licenses). Except as set forth in Schedule 4.18, there are
neither any outstanding nor, to the Company's knowledge, threatened disputes or
disagreements with respect to any of the Intellectual Property Rights. To the
knowledge of the Company, no act or omission by the Company or any of its
Subsidiaries, including the use, production, marketing, licensing or sale of the
Company's or any Subsidiary's products or the Company's or any Subsidiary's use
of the Intellectual Property Rights, violates, infringes or misappropriates, in
any material respect, any patent, trademark, service mark, trade name,
copyright, technology, know-how, process, trade secret or other rights or other
intellectual properties of any other Person.
Section 4.19 Material Contracts.
(a) Except as set forth as an exhibit to the 2002 SEC Reports or as set
forth in Schedule 4.19, neither the Company nor any of its Subsidiaries is a
party to or bound by:
(i) any "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K promulgated under the Securities Act of 1933,
as amended ("Regulation S-K"));
(ii) any contract or agreement that involves future aggregate annual
payments by the Company or any of its Subsidiaries of $500,000 or more;
(iii) any contract or agreement that involves future aggregate annual
payments to the Company or any of its Subsidiaries of $500,000 or more;
(iv) any contract, agreement or instrument relating to or evidencing
indebtedness for borrowed money, any capital lease, lease-purchase
arrangement or guaranty of borrowed money of the Company or any of its
Subsidiaries in the amount of $500,000 or more;
(v) any non-competition agreement or any other agreement or obligation
which purports to limit in any material respect the manner in which, or the
localities in which, the business of the Company or any of its Subsidiaries
may be conducted; or
(vi) any voting or other agreement governing how any Shares shall be
voted.
The foregoing contracts and agreements to which the Company or any of its
Subsidiaries is a party or are bound are collectively referred to herein as
"Company Material Contracts." Schedule 4.19 describes each oral Company Material
Contract, and a copy of each written Company Material Contract has been made
available to Purchaser.
(b) Each Company Material Contract is valid and binding on the Company (or
the Subsidiary that is a party thereto) and is in full force and effect, and the
Company (or such Subsidiary) has performed, in all material respects, all
material obligations required to be performed by it to date under each Company
Material Contract.
25
(c) (i) Neither the Company nor any of its Subsidiaries has assigned any of
its rights or obligations under any of the Company Material Leases or Company
Material Contracts (collectively, the "Subject Agreements"); (ii) no act or
event has occurred, and neither the Company nor any of its Subsidiaries has
received any notice asserting that any act or omission has occurred, that, with
notice or lapse of time or both or other action required to be taken by the
other party as a prerequisite to exercising its rights, would constitute a
breach or default under any Subject Agreement by the Company or any of its
Subsidiaries, or to the Company's knowledge, any other party, except where such
breach or default would not have a material adverse effect on the Subject
Agreement; (iii) there is no outstanding notice of cancellation or termination
in connection with any Subject Agreement; (iv) each Subject Agreement is the
valid and binding agreement of the Company (or such Subsidiary) and to the
Company's knowledge, each other party to it, and each such Subject Agreement is,
to the Company's knowledge, in full force and effect and enforceable in
accordance with its terms (subject to applicable bankruptcy, insolvency and
other laws affecting the enforceability of creditors' rights generally and the
discretion of courts in granting or denying equitable remedies); (v) neither the
execution, delivery or performance by the Company or any Subsidiary of any
Subject Agreement violates in any material respect any material applicable law;
and (vi) no Subject Agreement requires the Company or any of its Subsidiaries to
maintain any performance bond, letter of credit or other security arrangement.
Section 4.20 Brokers and Financial Advisors. Except as disclosed in
Schedule 4.20, no broker, finder, investment banker or other financial advisor
is entitled to any brokerage, finder's, financial advisory or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of the Company. The Company has
heretofore furnished to Parent true and complete information concerning the
financial arrangements between the Company and any financial advisor set forth
in Schedule 4.20 pursuant to which such Person would be entitled to any payment
as a result of the transactions contemplated hereunder (the "Advisor Payment").
Section 4.21 Control Share Acquisition. No state takeover statute or
similar statute or regulation or comparable takeover provision of the Restated
Certificate or By-Laws of the Company applies or purports to apply to the Offer,
the Merger or this Agreement.
Section 4.22 Vote Required. The affirmative vote of the holders of a
majority of the outstanding Shares is the only vote of the holders of any class
or series of the Company's capital stock necessary (under applicable law or
otherwise) to adopt this Agreement; provided that no such vote shall be required
if the Merger can be effected pursuant to Section 253 of the Delaware Law.
Section 4.23 Product Liability; Customers and Suppliers.
(a) Product Liability. Schedule 4.23(a) lists all product liability claims
made against the Company or any of its Subsidiaries since December 31, 2000
involving claims of more than $100,000 (but excluding those that were resolved
in the ordinary course of business without litigation).
26
(b) Customers and Suppliers. Schedule 4.23(b) sets forth a complete and
correct list of (i) each customer of the Company accounting for more than
$5,000,000 of the Company's consolidated revenues during the fiscal year ended
December 31, 2001 (the "Significant Customers"), and (ii) the ten largest
suppliers (the "Principal Suppliers") by dollar volume of the Company during
such fiscal year. As of the date of this Agreement, except as set forth on
Schedule 4.23(b), (i) no Significant Customer or Principal Supplier has
terminated its business relationship with the Company or, to the knowledge of
the Company, given notice to the Company of any proposed material adverse
modification or change in its business relationship with the Company or any
Subsidiary, and (ii) no Significant Customer or Principal Supplier has given the
Company or any of its Subsidiaries written notice that it is subject to any
bankruptcy, insolvency or similar proceeding and, to the Company's knowledge, no
such proceeding is pending or threatened.
Section 4.24 Transactions with Affiliates. Except as set forth in Schedule
4.24 or as disclosed in the 2002 SEC Reports, and except for transactions which
would not be required to be disclosed pursuant to Item 404 of Regulation S-K, no
director, officer or affiliate of the Company is currently a party to any
transaction with the Company or any Subsidiary, including any agreement or
arrangement providing for the employment of, furnishing of services by, rental
of real or personal property from or otherwise requiring payment to any such
director, officer or affiliate (other than compensation and benefits as an
employee or director of the Company or any Subsidiary).
Section 4.25 Books and Records. The Company has made available to Parent
the minute books of the Company, and such minute books contain true and correct,
in all material respects, records of all material corporate action taken by the
shareholders, the Board of Directors and the audit committee of the Board of
Directors.
Section 4.26 Other. Without limiting or being limited by any other
representation or warranty by the Company in this Agreement, no representation
or warranty by the Company in this Agreement, contains any untrue statement of a
material fact, or omits a material fact, necessary to make such representation
or warranty not misleading.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, between the date of this Agreement and the
Effective Time, unless Parent shall otherwise consent in writing( which consent
shall not be unreasonably withheld or delayed), the businesses of the Company
and its Subsidiaries shall be conducted only in, and neither the Company nor any
of its Subsidiaries shall take any action except in, the ordinary course of
business and in a manner consistent with past practice; and the Company and each
of its Subsidiaries will use its reasonable efforts to preserve substantially
intact the business organization of the Company and such Subsidiary, to keep
available the services of the present officers, employees and consultants of the
Company and its Subsidiaries and to preserve the present relationships of the
Company and its Subsidiaries with customers, suppliers and other Persons with
which the Company and such Subsidiaries have significant business relations.
27
Without limiting the generality of the foregoing, except as (x) expressly
contemplated by this Agreement or (y) set forth in Schedule 5.1, or (z) Parent
consents in writing (which consent, with respect to the matters set forth in
subsections (c), (d), (e), (h), (k) and, to the extent the contemplated action
relates to a matter set forth in such subsections, subsection (l)), shall not be
unreasonably withheld or delayed), the Company shall not, and shall cause its
Subsidiaries not to:
(a) amend its certificate of incorporation or by-laws or comparable
organizational documents;
(b) (i)(A) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to its capital stock, except
that a wholly owned Subsidiary may declare and pay a dividend or make other
distributions or loan advances to its parent or the Company, or (B) redeem,
purchase or otherwise acquire, directly or indirectly, any of its capital stock
or other securities (other than repurchases of Company Common Stock in
accordance with the Restated Certificate or repurchases of the Convertible
Debentures pursuant to Section 2.8 or in accordance with the terms of the
Repurchase Agreements and the Indenture, in each case in accordance with
applicable law); (ii) issue, sell, pledge, hypothecate, assign, transfer or
otherwise dispose of or encumber (whether or not for value) any (A) additional
shares of its capital stock, (B) securities convertible into or exchangeable
for, or options, warrants, calls, commitments or rights of any kind to acquire,
any shares of its capital stock or (C) of its other securities, other than
Shares issued upon the conversion of the Convertible Debentures; or (iii) split,
combine or reclassify any of its outstanding capital stock;
(c) acquire or agree to acquire (A) by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, joint venture, association or other
business organization or division thereof or (B) any assets, except, with
respect to both of clause (A) and (B) above, (x) purchases of inventory,
equipment and supplies in the ordinary course of business consistent with past
practice or (y) other purchases of less than $1,000,000 and otherwise in the
ordinary course of business consistent with past practice;
(d) except in the ordinary course of business, enter into any Company
Material Contract that involves future aggregate annual payments of $1,000,000
or more, amend in any material respect or terminate any Company Material
Contract, or waive, release or assign any material rights or claims thereunder;
(e) transfer, lease, license, sell, mortgage, pledge, dispose of, or
encumber any material property or assets, other than transfers or dispositions
of (i) excess or obsolete assets, (ii) assets in the ordinary course of business
and consistent with past practice, or (iii) assets having an aggregate value of
no more than $1,000,000;
(f) (i) enter into any employment or severance agreement with or, except in
accordance with the existing policies of the Company or any contractual
obligation, grant any severance or termination pay to any officer, director or
employee of the Company or any Subsidiary; or (ii) hire or agree to hire any new
or additional officers;
28
(g) except as required under the terms of any existing Employee Plan,
employment agreement or other agreement, or to comply with applicable law, (A)
adopt, enter into, terminate, amend or increase the amount or accelerate the
payment or vesting of any benefit or award or amount payable under any Employee
Plan or other arrangement for the current or future benefit or welfare of (i)
any director or officer, or (ii) other than in the ordinary course of business
consistent with past practice, any employee, (B) increase in any manner the
compensation or fringe benefits of, or pay any bonus to, any director, officer
or employee, including without limitation, the Advisor Payment, other than such
increases in compensation or fringe benefits of, or payments of bonuses to, the
persons and in the amounts set forth in Schedule 5.1 hereto, (C) other than
benefits accrued through the date hereof and other than in the ordinary course
of business for employees other than officers or directors of the Company or any
Subsidiary, pay any benefit not provided for under any Employee Plan, or (D)
issue any Convertible Debentures or make any grant or award to any director,
officer or employee of stock options, stock appreciation rights, stock based or
stock related awards, performance units or restricted stock, or any removal of
existing restrictions in any Employee Plans or agreements or awards made
thereunder;
(h) (i) except in the ordinary course of business in amounts consistent
with past practice, incur or assume any indebtedness for money borrowed; (ii)
incur or modify any material indebtedness or other liability; (iii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person, except in
the ordinary course of business and consistent with past practice; or (iv)
except for advances or prepayments in the ordinary course of business in amounts
consistent with past practice, make any loans, advances or capital contributions
to, or investments in, any other Person (other than customary loans or advances
to employees in accordance with past practice that in the aggregate do not
exceed $100,000);
(i) change of the accounting methods used by the Company or its
Subsidiaries unless required by generally accepted accounting principles;
(j) other than in the ordinary course of business consistent with past
practice, make any Tax election or settle or compromise any Tax liability;
(k) settle or compromise any claim, litigation or other legal proceeding,
other than in the ordinary course of business consistent with past practice and
involving less than $100,000; or
(l) enter into an agreement, contract, commitment or arrangement to do any
of the foregoing, or to authorize, recommend, propose or announce an intention
to do any of the foregoing.
Section 5.2 No Solicitation. (a) Except as provided in this Section 5.2(a)
or in Section 5.2(b), the Company shall not, and it shall cause the Subsidiaries
and the officers, directors, employees, agents and representatives of the
Company or any of the Subsidiaries (collectively, the "Company Representatives")
not to, (i) solicit or initiate any inquiries regarding or the submission of,
any Takeover Proposal (as defined below), (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect
to,
29
any Takeover Proposal or (iii) enter into any agreement with respect to any
Takeover Proposal or approve any Takeover Proposal; provided, however, that
nothing contained in this Section 5.2 or any other provision of this Agreement
shall prohibit the Company or the Board of Directors, from (A) taking and
disclosing to the Company's stockholders a position with respect to a tender or
exchange offer by a Third Party pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act or (B) making any disclosure to the Company's
stockholders, if, based on advice from outside counsel, the Board of Directors
determines in good faith, that failing to do so would be reasonably likely to
violate its fiduciary duty under Delaware Law. Upon execution of this Agreement,
the Company shall, and it shall cause the Company Representatives to,
immediately cease any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
Notwithstanding the foregoing, prior to the time of acceptance of Shares for
payment pursuant to the Offer, the Company may furnish information concerning
its business, properties or assets to any Person or group, and may negotiate and
participate in discussions and negotiations with such Person or group concerning
a Takeover Proposal if: (x) such Person or group has submitted an unsolicited
written Takeover Proposal which the Board of Directors believes in good faith is
reasonably likely to lead to a Superior Proposal; and (y) the Board of Directors
determines in good faith, based upon advice of outside counsel that failing to
do so would be reasonably likely to violate the Board of Director's fiduciary
duties to the Company's stockholders under Delaware law. The Company will
promptly notify Parent of the existence and material terms of any proposal or
inquiry received by the Company from a Third Party after the date hereof with
respect to any Takeover Proposal prior to furnishing any non-public information
to, entering into negotiations with, or accepting a Superior Proposal from, such
Third Party. The Company shall use all reasonable efforts to keep Parent
informed of the status and details of any such Superior Proposal.
As used in this Agreement, the following terms have the meanings set forth
below:
"Superior Proposal" means an unsolicited bona fide written Takeover
Proposal by a Third Party, and (i) on terms which the Board of Directors
determines in good faith to be more favorable to the Company's stockholders than
the Offer and the Merger (based on advice of the Company's independent financial
advisor), (ii) for which financing, to the extent required, is then committed or
which in the good faith judgment of the Board of Directors is reasonably likely
to be obtained by such Third Party and (iii) which, in the good faith reasonable
judgment of the Board of Directors of the Company, is reasonably likely to be
consummated.
"Takeover Proposal" means any proposal or offer from a Third Party to
acquire beneficial ownership (as defined under Rule 13d-3 under the Exchange
Act) of all or a material portion of the assets of the Company or any of its
material Subsidiaries or 30% or more of any class of equity securities of the
Company or any of such Subsidiaries pursuant to a merger, consolidation or other
business combination, sale of shares of capital stock, sale of assets, tender
offer, exchange offer or similar transaction with respect to either the Company
or any of such Subsidiaries. A "material portion" of the assets of the Company
or a material Subsidiary shall be at least 30% of the book value of such
entity's assets.
"Third Party" means any Person or group other than Parent, Purchaser or any
affiliate thereof.
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(b) Except as set forth in this Section 5.2(b), neither the Board of
Directors nor any committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Purchaser, the approval or
recommendation by the Board of Directors or any such committee of this Agreement
or the transactions contemplated hereby, including the Offer or the Merger, (ii)
approve or recommend, or propose to approve or recommend, any Takeover Proposal
or (iii) enter into any agreement with respect to any Takeover Proposal.
Notwithstanding anything in this Agreement to the contrary, prior to the time of
acceptance for payment of Shares pursuant to the Offer, the Board of Directors
may withdraw or modify its approval or recommendation of this Agreement or the
transactions contemplated hereby, including the Offer or the Merger, approve or
recommend a Superior Proposal, or enter into an agreement with respect to a
Superior Proposal, in each case if (A) the Company shall have received a
Superior Proposal and (B) the Board of Directors shall have determined in good
faith, based upon advice of outside counsel that failing to take such action
would be reasonably likely to violate the Board of Director's fiduciary duties
to the Company's stockholders under Delaware law.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Proxy Statement. If stockholder approval of the Agreement is
required under Delaware Law and the Restated Certificate, and if a Proxy
Statement is required under the Exchange Act, the Company shall, as promptly as
practicable after the consummation of the Offer, prepare and file with the SEC,
and shall use all reasonable efforts to have cleared by the SEC, and promptly
thereafter shall mail to the Company's stockholders, the Proxy Statement. Parent
and Purchaser will cooperate with the Company in connection with the preparation
of the Proxy Statement including, but not limited to, furnishing to the Company
any and all information regarding Parent and its affiliates as may be required
to be disclosed therein. The Company shall notify Parent promptly of the receipt
of any oral or written comments from the SEC or its staff and of any request by
the SEC or its staff for amendments or supplements to the Proxy Statement or for
additional information and shall supply Parent with copies of all written
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement. The Company shall provide Parent with a reasonable opportunity to
review and comment on the Proxy Statement and any amendment or supplement
thereto or any other materials comprising a communication to or solicitation of
stockholders prior to the filing thereof with the SEC and will provide Parent
with a copy of all such filings with the SEC. If at any time prior to the
Company Stockholders' Meeting, any event with respect to Parent or Purchaser, or
with respect to information supplied by Parent or Purchaser specifically for
inclusion in the Proxy Statement shall occur which is required to be described
in an amendment of, or supplement to, the Proxy Statement, such event shall be
so described by Parent and Purchaser and provided to the Company. The Company
shall promptly file an amendment or supplement to the Proxy Statement with
respect to such information or any information about the Company or its
Subsidiaries which requires the filing of an amendment or supplement. Subject to
the terms of this Agreement, the Proxy Statement shall contain the
recommendation of the Board of Directors that the Company's stockholders approve
this Agreement and the Merger.
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Section 6.2 Meeting of Stockholders of the Company. If stockholder approval
of the Agreement is required under Delaware Law and the Restated Certificate,
the Company shall following the consummation of the Offer, promptly take all
action necessary in accordance with Delaware Law, the Restated Certificate and
the Company's By-Laws to convene the Company Stockholders' Meeting. Parent shall
vote, or cause to be voted, in favor of this Agreement and the Merger all Shares
directly or indirectly beneficially owned by it. The stockholder vote or consent
required for approval of the Merger will be no greater than that set forth in
Delaware Law. Subject to the fiduciary duty of the Board of Directors, the
Company shall use all reasonable efforts to solicit from stockholders of the
Company proxies in favor of the Merger and shall take all other action necessary
or, in the reasonable opinion of Parent, advisable to secure any vote or consent
of stockholders required by Delaware Law to effect the Merger. Notwithstanding
the foregoing, if Purchaser or any other subsidiary of Parent shall acquire at
least ninety percent (90%) of the outstanding Shares on a fully diluted basis,
and provided that the conditions set forth in Article VII shall have been
satisfied or waived, the Company shall, at the request of Parent, take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without the approval of the stockholders
of the Company, in accordance with Section 253 of the Delaware Law.
Section 6.3 Additional Agreements. The Company, Parent and Purchaser will
each comply in all material respects with all applicable laws and with all
applicable rules and regulations of any Governmental Entity in connection with
its execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
Section 6.4 Notification of Certain Matters.
(a) The Company shall give prompt notice to Parent of (i) the occurrence,
or non-occurrence of any event whose occurrence, or non-occurrence causes any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time and (ii) any material failure of the Company or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section
6.4(a) shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
(b) Parent shall give prompt notice to the Company of (i) the occurrence,
or non-occurrence of any event whose occurrence, or non-occurrence causes any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time and (ii) any material failure of Parent or Purchaser, as the case
may be, or any officer, director, employee or agent thereof, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 6.4(b) shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 6.5 Access to Information.
(a) From the date hereof to the Effective Time and subject to applicable
law, the Company shall, and shall cause its officers, directors and employees
to, afford the officers,
32
employees and agents of Parent and Purchaser reasonable access at all reasonable
times to its officers, employees, properties, offices and other facilities and
to books and records, and shall furnish Parent and Purchaser with such
financial, operating and other information as Parent or Purchaser, through its
officers or employees, may reasonably request.
(b) Parent shall, and shall cause its affiliates and each of their
respective officers, directors, employees, financial advisors and agents to hold
all information obtained by them from the Company in accordance with the terms
of the Confidentiality Agreement, dated January 10, 2002 (the "Confidentiality
Agreement"), between Parent and the Company.
Section 6.6 Public Announcements. Parent and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to the Merger and shall not issue any such press release
or make any such public statement before such consultation, except as may be
required by law, judicial process or applicable stock exchange rules.
Section 6.7 Reasonable Efforts; Cooperation; Deliveries.
(a) Reasonable Efforts; Cooperation. Upon the terms and subject to the
conditions hereof, each of the parties hereto shall use all reasonable efforts
to obtain in a timely manner all necessary waivers, consents and approvals and
to effect all necessary registrations and filings, and to use all reasonable
efforts to take, or cause to be taken, all other actions and to do, or cause to
be done, all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement, including, without limitation, (i) cooperating in responding to
inquiries from, and making presentations to, regulatory authorities and (ii)
defending against and responding to any action, suit, proceeding, or
investigation, whether judicial or administrative, challenging or relating to
this Agreement, or the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed. Upon the terms and subject to the
conditions hereof, the Company hereby agrees to use all reasonable efforts to
provide to Parent copies of the Prior Policies prior to the Effective Time.
(b) Upon the terms and subject to the conditions hereof, the Company shall
use all reasonable efforts to obtain in a timely manner prior to the Tender
Offer Effective Time (as defined below) executed estoppel certificates
substantially in the form attached as Exhibit A hereto from the lessor's of the
Properties set forth on Schedule 6.7(b) provided, however, that, any provision
hereof to the contrary notwithstanding, the Company shall not have any
obligation to pay any fee or offer or grant other financial or other
accommodation to any third party for the purpose of obtaining any estoppel
certificate or any costs and expenses of any third party resulting from the
process of obtaining such estoppel certificate. In the event the Company is
unable to obtain estoppel certificates from any of the lessors of the Properties
set forth on Schedule 6.7(b) on or prior to the Tender Offer Effective Time,
then the Company will provide Purchaser with a written explanation as to why, to
the knowledge of Company personnel involved in the process of obtaining such
estoppel certificates, such estoppel certificates were not provided.
33
(c) Promptly following the execution and delivery of this Agreement, and in
no event later than five business days following the date hereof, each of the
parties hereto shall file or cause to be filed all required forms, notifications
or other documents that may be necessary to obtain early termination or
expiration of the waiting period under the HSR Act and thereafter, each party
shall take any and all reasonable actions, including, if requested, the delivery
of reasonable additional information to the appropriate Governmental Entity,
necessary to obtain early termination or expiration of the waiting period under
the HSR Act; provided, that the parties shall request early termination of the
waiting period under the HSR Act.
(d) Upon the terms and subject to the conditions hereof, the Company shall
use all reasonable efforts to obtain in a timely manner prior to or promptly
following the Tender Offer Effective Time, a commitment for an owner or
leasehold title insurance policy, as applicable, with respect to each of the
owned and leased Properties listed on Schedule 6.7(d), issued by First American
Title Insurance Company or another reputable national title insurance company
reasonably acceptable to Purchaser and in form and substance reasonably
satisfactory to Purchaser, "marked up" by a representative of such title insurer
so as to (A) satisfy all requirements to the issuance of a policy pursuant to it
(other than the payment of the title insurance premiums) and have no exceptions
or exclusions other than Permitted Exceptions, with Purchaser acknowledging that
the printed survey exceptions shall be deemed to be Permitted Exceptions; (B)
advance the effective date to a date not earlier than the Tender Offer Effective
Time without the addition of any title exceptions, and (C) result in an
unconditional binding obligation on the part of the title insurer to issue a
final policy pursuant to it (subject to the payment of any title insurance
premiums, and the Company or any Subsidiary executing and delivering owner's
affidavits and other instruments as may be requested by the title insurer in
order to obtain such "marked-up" commitment with a non-imputation endorsement;
but only to the extent that such owner's affidavits and other instruments do not
impose personal liability upon the affiant).
(e) Deliveries. Purchaser's obligation to accept for payment and pay for
any tendered Shares is subject to the delivery to Parent by (or on behalf of)
the Company of the following on or prior to the date on which Purchaser becomes
obligated pursuant to this Agreement and applicable law to purchase the Shares
tendered pursuant to the Offer (such date being referred to as the "Tender Offer
Effective Time"):
(i) Tax Opinion. An opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, special tax counsel to the Company, substantially in the form attached
as Exhibit B hereto.
(ii) Company's Officer's Certificate. A certificate, dated the Tender
Offer Effective Time, and executed by an authorized officer of the Company,
substantially in the form attached as Exhibit C hereto.
(iii) Half Moon Investment. A written acknowledgment from the Company
confirming that it has redeemed its limited partnership interests in Half
Moon Partners, L.P. and that it has received at least $24,200,000 in
proceeds from such redemption.
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Section 6.8 Agreement to Defend and Indemnify.
(a) Parent hereby agrees, and shall cause the Surviving Corporation to
agree from and after the Effective Time, that all rights to indemnification
existing in favor of the present or former directors, officers, employees or
agents of the Company and its Subsidiaries and persons serving in like
capacities for another corporation or entity at the request of the Company
(collectively, the "Indemnified Parties") for costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation arising out of or pertaining to any act or
omission of any such Person occurring at or prior to the Effective Time,
including, without limitation, the transactions contemplated hereby, as provided
in the Restated Certificate or By-Laws and the certificate or articles of
incorporation, by-laws or similar organizational documents of any of the
Subsidiaries, in each case as in effect as of the date of this Agreement, shall
survive the Merger and shall continue in full force and effect for six years
after the Effective Time (without modification or amendment, except as required
by applicable law) in accordance with their terms, to the fullest extent
permitted by law, and shall be enforceable by the Indemnified Parties against
the Surviving Corporation. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (i) the Surviving Corporation shall pay the reasonable fees and expenses
of counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to the Surviving Corporation and to the insurer under
the Run-Off Coverage (as defined below), and (ii) the Surviving Corporation will
cooperate in the defense of any such matter; provided, however, that the
Surviving Corporation shall not be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld); and
further, provided, that the Surviving Corporation shall not be obligated
pursuant to this Section 6.8 to pay the fees and disbursements of more than one
counsel for all Indemnified Parties in any single action except to the extent
that, in the written opinion of counsel for the Indemnified Parties provided to
the Surviving Corporation, two or more of such Indemnified Parties have
conflicting interests in the outcome of such action which cannot be or has not
been, in the opinion of such counsel, waived. Notwithstanding the foregoing, the
Surviving Corporation shall not have any obligation to make any payment under
this Section 6.8(a) unless (i) the carrier of the Run-Off Coverage has denied
coverage of the claim or any portion of the claim for which indemnification is
being sought and the claimant has cooperated with the reasonable requests of the
Surviving Corporation regarding the Run-Off Coverage or (ii) the Run-Off
Coverage has been exhausted.
(b) The Company has, obtained (or will obtain prior to the Effective Time)
"run-off" coverage (the "Run-Off Coverage") for its existing directors' and
officers' liability insurance policy, and such other insurance policies listed
on such Schedule 6.8, in an amount not less than the respective coverage in
place as of the date hereof as set forth on such schedule. Parent shall not, and
shall cause the Surviving Corporation not to, terminate or modify the Run-Off
Coverage. Neither Parent nor the Surviving Company shall have any obligation to
purchase any additional insurance with respect to the Indemnified Parties or
make any payments with respect to the Run-Off Coverage.
(c) This Section 6.8 shall survive the consummation of the Merger.
Notwithstanding Section 9.7 hereof, this Section 6.8 is intended to be for the
benefit of and to
35
grant third-party rights to Indemnified Parties whether or not parties to this
Agreement, and each of the Indemnified Parties shall be entitled to enforce the
covenants contained herein.
(d) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation assume the obligations set
forth in this Section 6.8.
Section 6.9 Continuation of Employee Benefits.
(a) From and after the Effective Time, Parent will cause the Surviving
Corporation and its Subsidiaries to comply with the terms of all written
existing employment, severance, consulting and salary continuation agreements
between the Company or any Subsidiary and any current or former officer,
director, employee or consultant of the Company or any Subsidiary or group of
such officers, directors, employees or consultants, in each case only to the
extent disclosed in Schedule 6.9; provided, however, that nothing in the
foregoing restricts in any way whatsoever the right to terminate any Person
subject only by the terms of disclosed employment contracts and any applicable
law.
(b) To the extent permitted under any applicable law, each employee of the
Company or any Subsidiary shall be given credit under the following employee
benefit plans maintained by Parent in which they become participants as
employees of the Surviving Corporation or any Subsidiary for all service
currently credited by the Company or such Subsidiary under comparable plans of
the Company or any Subsidiary, only as follows:
(i) Under Parent's 401(k) plans, for purposes of eligibility to
participate and vesting;
(ii) Under Parent's severance policy, for purposes of eligibility to
participate and the calculation of the amount of the severance payment; and
under the Company's severance policy, such calculation is currently made on
the basis of one week of severance pay for each full year of service (but
limited in all events to 26 weeks of severance pay); and
(iii) Under Parent's paid time off policy, for purposes of eligibility
to participate and of the calculation of the amount to be accrued.
If any such employee participates in any of Parent's defined benefit pension
plans (which is not expected to occur), no service credit will be granted.
(c) This Section 6.9, which shall survive the consummation of the Merger at
the Effective Time and shall continue without limit, is intended to benefit and
bind the Company, its Subsidiaries, the Surviving Corporation and any Person
referenced in this Section 6.9, each of whom may enforce the provisions of this
Section 6.9 whether or not parties to this Agreement. Except as provided in
clause (a) above, nothing contained in this Section 6.9 shall create any
beneficiary rights in any employee or former employee (including any dependent
thereof) of the
36
Company or the Surviving Corporation in respect of continued employment for any
specified period of any nature or kind whatsoever.
Section 6.10 Transfer Taxes. Parent and the Company shall cooperate in the
preparation, execution and filing of all returns, applications or other
documents regarding any transfer, real property transfer, stamp, recording,
documentary or other similar taxes and any other fees and similar taxes which
become payable in connection with the Merger (collectively, the "Transfer
Taxes"). Subject to the rights of the Surviving Corporation in Sections 1.1(a)
and 2.7(g), Parent shall pay or cause to be paid, without deduction or
withholding from any amounts payable to the holders of the Company Common Stock,
all Transfer Taxes. Without limiting the generality of the foregoing, and
notwithstanding any other provision of this Agreement, Parent shall pay all
Washington State Excise Taxes on Real Estate Sales imposed under Title 82 of the
Washington Revenue Code as a result of the transactions contemplated by this
Agreement.
Section 6.11 Other Agreements. After the date of this Agreement and prior
to the Effective Time, the Company shall not, and shall not permit any of its
Subsidiaries to, amend, alter or otherwise modify the terms of (a) the Amended
Separation Agreement, (b) that certain purchase agreement, dated July 8, 2002,
and as amended as of July 8, 2002, by and between Pacific Rock
Products L.L.C. and Kiewit Construction Company Inc. (the "Columbia River
Property Agreement"), or (c) that certain Administrative Services Agreement,
dated as of September 30, 2000, as amended as of July 8, 2002, by and between
the Company and PKS.
ARTICLE VII
CONDITIONS OF MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the following conditions:
(a) Purchaser shall have made the Offer and shall have purchased the Shares
tendered pursuant to the Offer;
(b) The Merger and this Agreement shall have been approved and adopted by
the requisite vote of the stockholders of the Company, if required by the
Delaware Law or the Restated Certificate; and
(c) No statute, rule, regulation, judgment, writ, decree, order or
injunction shall have been promulgated, enacted, entered or enforced, and no
other action shall have been taken, by any Governmental Entity that in any of
the foregoing cases has the effect of making illegal or directly or indirectly
restraining, prohibiting or restricting the consummation of the Merger.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or
after approval of matters presented in connection with the Merger by the
stockholders of the Company:
(a) By the mutual written consent of Parent and the Company; or
(b) By either of Parent or the Company if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action (which order,
decree or ruling or other action each party hereto shall use its reasonable
efforts to have vacated or reversed), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement.
(c) By the Company:
(i) if the Company has approved a Superior Proposal in accordance with
Section 5.2(b); or
(ii) if Parent or Purchaser shall have terminated the Offer or the
Offer expires without Purchaser purchasing any Shares pursuant thereto;
provided that the Company may not terminate this Agreement pursuant to this
Section 8.1(c)(ii) if the Company is in material breach of this Agreement;
or
(iii) if Parent, Purchaser or any of their affiliates shall have
failed to commence the Offer on or prior to ten business days following the
date of the initial public announcement of the Offer; provided that the
Company may not terminate this Agreement pursuant to this Section
8.1(c)(iii) if the Company is in material breach of this Agreement; or
(iv) if Parent or Purchaser shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
has not been cured within 30 days following written notice thereof to
Parent from the Company; or
(v) if the Offer shall not have expired or been terminated on or
before November 8, 2002; provided that the Company may not terminate this
Agreement pursuant to this Section 8.1(c)(v) if the Company is in material
breach of this Agreement.
(d) By Parent or Purchaser:
(i) if prior to the purchase of the Shares pursuant to the Offer, the
Board of Directors shall have withdrawn, or modified or changed in a manner
adverse to Parent or Purchaser its approval or recommendation of the Offer,
this Agreement and the Merger or shall have approved a Takeover Proposal or
waived the transfer restrictions in
38
the Restated Certificate to enable a Third Party to acquire more than 15%
of the outstanding Shares; or
(ii) if the Offer expires without Parent or Purchaser purchasing any
Shares thereunder, provided that Parent or Purchaser may not terminate this
Agreement pursuant to this Section 8.1(d)(ii) if Parent or Purchaser is in
material breach of this Agreement; or
(iii) (A) if the Company shall have breached in any material respect
any of its covenants or other agreements contained in this Agreement, which
breach or failure to perform has not been cured within 30 days following
written notice thereof to the Company from Parent or (B) if the Company
shall have breached any of its representations or warranties contained in
this Agreement, which breach (x) (without regard to any materiality
qualifier in such representation or warranty) has or is reasonably likely
to have a Material Adverse Effect and (y) has not been cured within thirty
days following written notice thereof to the Company from Parent; or
(iv) if the Offer shall not have expired or been terminated on or
before November 8, 2002; provided that Parent or Purchaser may not
terminate this Agreement pursuant to this Section 8.1(d)(iv) if Parent or
Purchaser is in material breach of this Agreement.
(e) Notwithstanding any provision in this Agreement to the contrary, if
there shall have occurred any event, or the disclosure of any act, omission,
fact or circumstance, that individually or when considered together with any
other matter, may have a Material Adverse Effect, and the Company has a claim
for an insurance recovery for any such occurrence, which, if paid (or if the
carrier accepts coverage for such claim), would result in there being no
Material Adverse Effect,
(i) Parent or Purchaser shall not have the right to terminate this
Agreement pursuant to Section 8.1(d)(ii)-(iv) based in whole or in part
upon any such occurrence; and such occurrence shall not be deemed for the
purposes of this Agreement (including without limitation Annex I hereto) to
constitute a Material Adverse Effect, until the carrier of any applicable
insurance has provided a final written notice to the Company of whether
coverage of any such claim or any portion of such claim for which a
recovery is being sought will be unconditionally accepted or denied (a
"Insurance Recovery Notice"); and
(ii) all references in this Agreement to November 8, 2002 shall be
deemed to be extended to ten (10) business days after the date on which
such Insurance Recovery Notice is obtained, but in no event shall such date
be extended beyond December 8, 2002; and
(iii) pending the receipt of any Insurance Recovery Notice, the
parties shall comply with the terms of this Agreement, including without
limitation Article 1.
Section 8.2 Effect of Termination. (a) In the event of termination of this
Agreement by either the Company or Parent or Purchaser as provided in Section
8.1, this
39
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Purchaser or the Company, other than the
provisions of this Article VIII and as provided in Section 9.1 and except that
nothing herein (other than as provided in Section 8.2(b)) shall relieve any
party for willful breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
(b) If (x) Parent or Purchaser terminates this Agreement pursuant to
Section 8.1(d)(i) or (y) the Company terminates this Agreement pursuant to
Section 8.1(c)(i), then in either such case, the Company shall pay, or cause to
be paid to Parent not later than the second business day following the date of
such termination, an amount equal to $22,700,000 (the "Termination Fee") plus an
amount equal to Parent's and Purchaser's actual and reasonably documented
out-of-pocket expenses (but in no event exceeding in the aggregate $2,000,000)
incurred by Parent or Purchaser directly in connection with the Offer, the
Merger, this Agreement and the consummation of the transactions contemplated
hereby, including, without limitation, the fees and expenses of Parent's counsel
and accountants as well as all fees and expenses payable to all banks and
investment banking firms and their respective counsel incurred in connection
with acting as Parent's or Purchaser's financial advisor with respect to, or
arranging or committing to provide or providing any financing for, the
transactions contemplated hereby (the "Reimbursable Expenses"). Notwithstanding
anything in this Agreement to the contrary, the prompt payment of the
Termination Fee and the Reimbursable Expenses shall be the exclusive remedy of
Parent and Purchaser with respect to a termination of this Agreement pursuant to
Section 8.1(c)(i) or Section 8.1(d)(i).
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement shall terminate at
the Effective Time or the termination of this Agreement pursuant to Section 8.1,
as the case may be, except that the agreements set forth in Article II, Section
6.8 and Section 6.9 shall survive the Effective Time and those set forth in
Sections 6.5 and 9.3 shall survive termination.
Section 9.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile (which notices sent by facsimile shall also be sent
by Federal Express or similar overnight courier), (ii) on the first Business Day
after delivery to Federal Express or similar overnight courier or the Express
Mail service maintained by the United States Postal Service, and (ii) on the
third business day after deposit in the U.S. mail, if mailed by registered or
certified mail (postage prepaid, return receipt requested), in each case to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice, except that notices of changes of address
shall be effective upon receipt):
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(a) if to Parent or Purchaser:
Rinker Materials Corporation
1501 Belvedere Road
West Palm Beach, FL 33406
Attention: Thomas G. Burmeister, Chief Financial Officer
Facsimile: (561) 820-8330
With a copy to:
Rinker Materials Corporation
1501 Belvedere Road
West Palm Beach, FL 33406
Attention: Mike F. Egan, General Counsel
Facsimile: (561) 803-6044; and
Sutherland Asbill & Brennan LLP
999 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
Attention: Thomas B. Hyman, Jr., Esq.
Facsimile: (404) 853-8806
(b) if to the Company:
Kiewit Materials Company
1100 Kiewit Plaza
Omaha, Nebraska 68131
Attention: Donald E. Bowman, Chief Financial Officer
Facsimile: (402) 536-3607
With a copy to:
Kiewit Materials Company
1100 Kiewit Plaza
Omaha, Nebraska 68131
Attention: Mark E. Belmont, General Counsel
Facsimile: (402) 271-2830; and
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Attention: David K. Boston, Esq.
Facsimile: (212) 728-8111
Section 9.3 Expenses. Except as expressly set forth in Section 8.2(b), all
fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs and expenses.
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Section 9.4 Certain Definitions. For purposes of this Agreement, the term:
(a) "affiliate" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person (and, in addition, with respect
to the Company, includes PKS);
(b) "applicable law" means each applicable provision of any constitution,
statute, law, ordinance, code, rule, regulation, decision, order, decree,
judgment or license of any Governmental Entity;
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise;
(d) "knowledge of the Company" means the actual knowledge of Christopher J.
Murphy, Donald E. Bowman and Mark E. Belmont, the Company's Chief Executive
Officer, Chief Financial Officer and General Counsel, respectively, and those
employees of the Company listed on Schedule 9.4 hereto;
(e) "permitted lien" means any Lien (i) for Taxes not yet due and payable
or being contested in good faith in appropriate proceedings, and (ii) imposed by
applicable law and incurred in the ordinary course of business for obligations
not yet due and payable to landlords, carriers, warehousemen, laborers, or
materialmen; and
(f) "Person" means an individual, corporation, partnership, limited
liability company, association, trust or any unincorporated organization, any
Governmental Entity or any other Person or entity.
Section 9.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.6 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the maximum extent possible.
Section 9.7 Entire Agreement; No Third-Party Beneficiaries. This Agreement
and the Confidentiality Agreement constitute the entire agreement and supersede
any and all other prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof
and, except as otherwise expressly provided in
42
Sections 6.8 and 6.9, this Agreement is not intended to confer upon any other
Person any rights or remedies hereunder.
Section 9.8 Assignment.
(a) By Purchaser. Prior to the Effective Time, Purchaser may not assign by
operation of law or otherwise any of its rights and obligations under this
Agreement to any Person. After the Effective Time, Purchaser may assign (by
operation of law or otherwise) its rights and obligations under this Agreement,
in whole or in part, to any Person. After a permitted assignment by Purchaser,
"Purchaser" will refer to such assignee in all provisions subject to such
assignment to the extent appropriate.
(b) By the Company. Except with the prior written consent of Parent and
Purchaser, the Company will not assign (by operation of law or otherwise) any of
its rights and obligations under this Agreement.
(c) Binding Nature. This Agreement is binding upon the parties and their
respective successors or assigns (whether or not permitted) and inures to the
benefit of the parties and their permitted successors and assigns.
Section 9.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within that State.
Section 9.10 Amendment. This Agreement may be amended by the parties hereto
by action taken by Parent and Purchaser, and, subject to Section 1.3, by action
taken by or on behalf of the Board of Directors at any time before the Effective
Time; provided, however, that, after approval of the Merger by the stockholders
of the Company, no amendment may be made which would reduce the amount or change
the type of consideration into which each Share will be converted upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
Section 9.11 Undertakings of Parent. Parent shall perform, or cause to be
performed, when due all obligations of Purchaser under this Agreement.
Section 9.12 Waiver. At any time before the Effective Time, any party
hereto may, subject to Sections 1.1(b) and 1.3, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only as
against such party and only if set forth in an instrument in writing signed by
such party.
Section 9.13 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
43
[SIGNATURE PAGE FOLLOWS]
44
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
RINKER MATERIALS CORPORATION
By: /s/ David V. Clarke
------------------------------
Name: David V. Clarke
Title: President
JEM LEAR ACQUISITION COMPANY, INC.
By: /s/ Peter W. Trimble
------------------------------
Name: Peter W. Trimble
Title: Vice President
KIEWIT MATERIALS COMPANY
By: /s/ Chrisopher J. Murphy
------------------------------
Name: Chrisopher J. Murphy
Title: President and Chief
Executive Officer
45
ANNEX I
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Conditions to the Offer. Notwithstanding any other provision of the Offer,
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to Parent's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay for,
and (subject to any such rules or regulations) may delay the acceptance for
payment of any tendered Shares and (except as provided in this Agreement) amend
or terminate the Offer as to any Shares not then paid for if (i) there shall not
have been validly tendered and not withdrawn prior to the expiration of the
Offer a number of shares of Company Common Stock which, when taken together with
the Shares, if any, beneficially owned by Parent and its subsidiaries,
represents at least ninety percent (90%) of the Company Common Stock outstanding
on a fully diluted basis (the "Minimum Condition"), (ii) any applicable waiting
period under the HSR Act shall not have expired or been terminated prior to the
expiration of the Offer or (iii) at any time after the date of this Agreement
and before the time of acceptance for payment of such Shares, any of the
following events shall occur and be continuing or conditions exist:
(a) there shall be an injunction or other order, decree, judgment or
ruling issued, initiated or threatened and not withdrawn by a Governmental
Entity of competent jurisdiction or a statute, rule, regulation, executive
order or other action shall have been enacted, promulgated or taken or
initiated or threatened and not withdrawn by a Governmental Entity of
competent jurisdiction which in any such case (i) restrains or prohibits or
seeks to restrain or prohibit the making or consummation of the Offer or
the consummation of the Merger, (ii) prohibits or restricts or seeks to
prohibit or restrict the ownership or operation by Parent (or any of its
affiliates or subsidiaries) of any material portion of its or the Company's
business or assets, or compels Parent (or any of its affiliates or
subsidiaries) to dispose of or hold separate any portion of its or the
Company's or any of its Subsidiary's business or assets which is material
to the business of all such entities taken as a whole, (iii) imposes or
seeks to impose limitations on the ability of Parent effectively to acquire
or to hold or to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote the Shares purchased by
Parent on all matters properly presented to the stockholders of the Company
or (iv) imposes or seeks to impose any material limitations on the ability
of Parent or any of its respective affiliates or subsidiaries effectively
to control in any material respect the business and operations of the
Company and its Subsidiaries; provided, however, that in the case of any
such proceeding that has been initiated or threatened, such proceeding
shall be reasonably likely to have one of the foregoing effects; or
(b) this Agreement shall have been terminated by the Company or Parent
in accordance with its terms; or
(c) from and after the date of this Agreement, there shall have
occurred any event, or the disclosure of any act, omission, fact or
circumstance not disclosed pursuant to this Agreement or any SEC Report,
that, individually or when considered together with any other matter, has a
Material Adverse Effect (with any liability or obligation associated with
any such previously undisclosed act, omission, fact or circumstance being
deemed, for purposes of determining whether a Material Adverse Effect has
occurred, to have been incurred or increased, as the case may be, upon such
disclosure); or
(d) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on the
New York Stock Exchange or the Nasdaq National Market (excluding any
coordinated trading halt triggered as a result of a specified decrease in a
market index) related to market conditions, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States by any Governmental Entity, (iii) any material limitation (whether
or not mandatory) by any Governmental Entity on the extension of credit by
banks or other lending institutions, or (iv) a drop of more than 33.33% in
the Dow Jones Industrial Average Index, measured against the value of such
index on the date of this Agreement; or
(e) any of the representations and warranties of the Company set forth
in Section 4.2 of this Agreement shall not be accurate in all respects, in
each case as if such representations and warranties were remade at and as
of the time of such determination; or
(f) any of the representations and warranties of the Company set forth
in this Agreement (other than those in Section 4.2) (without regard to any
materiality qualifications therein) shall not be accurate, except where
such inaccuracies (considered collectively) do not have a Material Adverse
Effect (determined in the manner provided in clause (c) above), in each
case as if such representations and warranties were remade at and as of the
time of such determination; or
(g) the Company shall have failed to perform in any respect any
obligation, agreement or covenant of the Company to be performed or
complied with by it under Section 5.1(a) through (l), of this Agreement; or
(h) the Company shall have failed to perform in any material respect
any material obligation (including, without limitation, the Company's
obligation pursuant to the first sentence of Section 5.1, but excluding
those set forth in Section 5.1(a) through (l)) or to comply in any material
respect with any material agreement or covenant of the Company to be
performed or complied with by it under this Agreement; or
(i) the Board of Directors (i) shall have withdrawn, or modified or
changed in a manner adverse to Parent or Purchaser its approval or
recommendation of this Agreement or the transactions contemplated hereby,
including the Offer and the Merger, (ii) recommended a Takeover Proposal,
(iii) shall have adopted any resolution to effect any of the foregoing,
(iv) waived the transfer restrictions in the Restated Certificate to enable
a Third Party to acquire more than 15% of the outstanding Shares; or
(j) all authorizations, consents and approvals, if any, of any
Governmental Entity necessary for the execution, delivery and performance
of this Agreement, the failure to obtain which would prevent or materially
impair or delay consummation of the
I-2
transactions contemplated hereby or have a Material Adverse Effect, shall
not have been obtained or be in full force and effect; or
(k) Parent shall not have received any of the documents to be
delivered to Parent pursuant to Section 6.7(e) of the Agreement, or
(l) the transactions and all deliveries contemplated by the Columbia
River Property Agreement shall not have been consummated or delivered, as
the case may be;
which, in the reasonable judgment of Parent with respect to each and every
matter referred to above and regardless of the circumstances giving rise to any
such condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Purchaser regardless of the circumstances giving rise to any such
conditions and may be waived by Purchaser in whole or in part at any time and
from time to time, in each case, in the exercise of the good faith judgment of
Purchaser and subject to the terms of this Agreement. The failure by Purchaser
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
I-3
SCHEDULE 9.4
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Human Resources Director: Lori Chavez
Environmental Manager: William Peck
OSHA/MSHA Manager: David Chavez
Tax Manager: Brian Shoemaker
Controller: Todd Freyer
Operating Managers: Dan Speck
John Shaffer
Anthony Russo
Craig Pfingsten
John Fowler
Jeff Wriston