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Exhibit (d)(1)
AGREEMENT AND PLAN OF MERGER
Among
THOMSON US HOLDINGS, INC.
WTI ACQUISITION CORPORATION
and
WAVE TECHNOLOGIES INTERNATIONAL, INC.
Dated as of March 10, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.............................................. 1
ARTICLE II
THE OFFER
SECTION 2.01. THE OFFER................................................ 6
SECTION 2.02. COMPANY ACTION........................................... 8
ARTICLE III
THE MERGER
SECTION 3.01. THE MERGER............................................... 9
SECTION 3.02. EFFECTIVE TIME; CLOSING.................................. 9
SECTION 3.03. EFFECT OF THE MERGER..................................... 9
SECTION 3.04. CERTIFICATE OF INCORPORATION; BY-LAWS.................... 10
SECTION 3.05. DIRECTORS AND OFFICERS................................... 10
SECTION 3.06. CONVERSION OF SECURITIES................................. 10
SECTION 3.07. EMPLOYEE STOCK OPTIONS................................... 11
SECTION 3.08. DISSENTING SHARES........................................ 11
SECTION 3.09. SURRENDER OF SHARES; STOCK TRANSFER BOOKS................ 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARY............... 13
SECTION 4.02. ARTICLES OF INCORPORATION AND BY-LAWS.................... 13
SECTION 4.03. CAPITALIZATION........................................... 14
SECTION 4.04. AUTHORITY RELATIVE TO THIS AGREEMENT..................... 14
SECTION 4.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS............... 15
SECTION 4.06. PERMITS; COMPLIANCE...................................... 15
SECTION 4.07. SEC FILINGS; FINANCIAL STATEMENTS........................ 16
SECTION 4.08. ABSENCE OF CERTAIN CHANGES OR EVENTS..................... 17
SECTION 4.09. ABSENCE OF LITIGATION.................................... 17
SECTION 4.10. EMPLOYEE BENEFIT PLANS................................... 18
SECTION 4.11. LABOR AND EMPLOYMENT MATTERS............................. 20
SECTION 4.12. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT......... 21
SECTION 4.13. PROPERTY AND LEASES...................................... 22
SECTION 4.14. INTELLECTUAL PROPERTY.................................... 23
SECTION 4.15. YEAR 2000 COMPLIANCE..................................... 23
SECTION 4.16. TAXES.................................................... 23
SECTION 4.17. ENVIRONMENTAL MATTERS.................................... 24
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SECTION 4.18. AMENDMENT TO RIGHTS AGREEMENT............................ 24
SECTION 4.19. MATERIAL CONTRACTS....................................... 25
SECTION 4.20. INSURANCE................................................ 27
SECTION 4.21. BROKERS.................................................. 27
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.01. CORPORATE ORGANIZATION................................... 28
SECTION 5.02. AUTHORITY RELATIVE TO THIS AGREEMENT..................... 28
SECTION 5.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS............... 28
SECTION 5.04. FINANCING................................................ 29
SECTION 5.05. OFFER DOCUMENTS; PROXY STATEMENT......................... 29
SECTION 5.06. BROKERS.................................................. 29
SECTION 5.07. ABSENCE OF LITIGATION.................................... 30
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.... 30
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. STOCKHOLDERS' MEETING................................... 32
SECTION 7.02. PROXY STATEMENT......................................... 33
SECTION 7.03. COMPANY BOARD REPRESENTATION; SECTION 14(F)............. 33
SECTION 7.04. ACCESS TO INFORMATION; CONFIDENTIALITY.................. 34
SECTION 7.05. NO SOLICITATION OF TRANSACTIONS......................... 34
SECTION 7.06. EMPLOYEE BENEFITS MATTERS............................... 36
SECTION 7.07. DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.. 36
SECTION 7.08. NOTIFICATION OF CERTAIN MATTERS......................... 37
SECTION 7.09. FURTHER ACTION; REASONABLE BEST EFFORTS................. 37
SECTION 7.10. PUBLIC ANNOUNCEMENTS.................................... 38
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. CONDITIONS TO THE MERGER................................ 38
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. TERMINATION............................................. 39
SECTION 9.02. EFFECT OF TERMINATION................................... 40
SECTION 9.03. FEES AND EXPENSES....................................... 40
SECTION 9.04. AMENDMENT............................................... 42
SECTION 9.05. WAIVER.................................................. 42
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. NOTICES................................................. 42
SECTION 10.02. SEVERABILITY............................................ 43
SECTION 10.03. ENTIRE AGREEMENT; ASSIGNMENT............................ 43
SECTION 10.04. PARTIES IN INTEREST..................................... 44
SECTION 10.05. SPECIFIC PERFORMANCE.................................... 44
SECTION 10.06. GOVERNING LAW........................................... 44
SECTION 10.07. WAIVER OF JURY TRIAL.................................... 44
SECTION 10.08. HEADINGS................................................ 44
SECTION 10.09. COUNTERPARTS............................................ 44
ANNEX A Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER, dated as of March 10, 2000 (this
"Agreement"), among THOMSON US HOLDINGS INC., a Delaware corporation, WTI
ACQUISITION CORPORATION, a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and WAVE TECHNOLOGIES INTERNATIONAL, INC., a Missouri
corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Purchaser and the
Company have each determined that it is in the best interests of their
respective stockholders for Parent to acquire the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, it is proposed
that Purchaser shall make a cash tender offer (the "Offer") to acquire all the
shares of common stock, par value $0.50 per share, of the Company ("Shares")
that are issued and outstanding for $9.75 per Share (such amount, or any greater
amount per Share paid pursuant to the Offer, being the "Per Share Amount"), net
to the seller in cash, upon the terms and subject to the conditions of this
Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (the "Board")
has [unanimously] approved the making of the Offer and resolved to recommend
that holders of Shares tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of Parent, Purchaser and the Company have each approved this
Agreement and declared its advisability and approved the merger (the "Merger")
of Purchaser with and into the Company in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law") and the Missouri
General and Business Corporation Law ("Missouri Law"), following the
consummation of the Offer and upon the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. (a) For purposes of this Agreement:
"Acquisition Proposal" means (i) any proposal or offer from
any person relating to any direct or indirect acquisition of (A) all or
a substantial part of the assets of the Company or of any Subsidiary or
(B) over 15% of any class of equity securities of the Company or of any
Subsidiary; (ii) any tender offer or exchange offer, as defined
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pursuant to the Exchange Act, that, if consummated, would result in any
person beneficially owning 15% or more of any class of equity
securities of the Company or any Subsidiary; (iii) any merger,
consolidation, business combination, sale of all or a substantial part
of the assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any Subsidiary, other than the
Transactions; or (iv) any other transaction the consummation of which
would reasonably be expected to impede, interfere with, prevent or
materially delay the Transaction.
"affiliate" of a specified person means a person who, directly
or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified person.
"beneficial owner", with respect to any Shares, means a person
who shall be deemed to be the beneficial owner of such Shares (i) which
such person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act) beneficially
owns, directly or indirectly, (ii) which such person or any of its
affiliates or associates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or subject to
the passage of time or other conditions), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding or (iii)
which are beneficially owned, directly or indirectly, by any other
persons with whom such person or any of its affiliates or associates or
person with whom such person or any of its affiliates or associates has
any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any Shares.
"business day" means any day on which banks are not required
or authorized to close in The City of New York.
"Company Systems" shall mean all computer, hardware, software,
systems, and equipment (including embedded microcontrollers in
non-computer equipment) embedded within or required to operate the
current products of the Company and the Subsidiaries, and/or material
to or necessary for the Company and the Subsidiaries to carry on their
businesses as currently conducted.
"control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise.
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"Environmental Laws" means any United States federal, state,
local or non-United States laws relating to (i) releases or threatened
releases of Hazardous Substances or materials containing Hazardous
Substances; (ii) the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing
Hazardous Substances; or (iii) pollution or protection of the
environment, health, safety or natural resources.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company or any Subsidiary
and which, together with the Company or any Subsidiary, is treated as a
single employer within the meaning of Section 414(b), (c), (m) or (o)
of the Code.
"Hazardous Substances" means (i) those substances defined in
or regulated under the following United States federal statutes and
their state counterparts, as each may be amended from time to time, and
all regulations thereunder: the Hazardous Materials Transportation Act,
the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water
Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (ii)
petroleum and petroleum products, including crude oil and any fractions
thereof; (iii) natural gas, synthetic gas, and any mixtures thereof;
(iv) polychlorinated biphenyls, asbestos and radon; (v) any other
contaminant; and (vi) any substance, material or waste regulated by any
Governmental Authority pursuant to any Environmental Law.
"Intellectual Property" means (i) United States, non-United
States, and international patents, patent applications and statutory
invention registrations, (ii) trademarks, service marks, trade dress,
logos, trade names, corporate names and other source identifiers, and
registrations and applications for registration thereof, (iii)
copyrightable works, copyrights, and registrations and applications for
registration thereof, and (iv) confidential and proprietary
information, including trade secrets and know-how.
"knowledge of the Company" means the actual knowledge of any
executive officer of the Company.
"Material Adverse Effect" means, when used in connection with
the Company or any Subsidiary, any event, circumstance, change or
effect that is or is reasonably likely to be materially adverse to the
business, prospects, financial condition or results of operations of
the Company and the Subsidiaries, taken as a whole.
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"person" means an individual, corporation, partnership,
limited partnership, limited liability company, syndicate, person
(including, without limitation, a "person" as defined in Section
13(d)(3) of the Exchange Act), trust, association or entity or
government, political subdivision, agency or instrumentality of a
government.
"subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means an affiliate controlled
by such person, directly or indirectly, through one or more
intermediaries.
"Superior Proposal" means any Acquisition Proposal on terms
which the Board determines, in its good faith judgment (after having
received the advice of U.S. Bancorp Piper Jaffray Inc. ("Piper
Jaffray") or another financial advisor of nationally recognized
reputation), to be more favorable to the Company's stockholders than
the Offer and the Merger.
"Taxes" shall mean any and all taxes, fees, levies, duties,
tariffs, imposts and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Governmental Authority or
taxing authority, including, without limitation: taxes or other charges
on or with respect to income, franchise, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment
compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value-added or gains
taxes; license, registration and documentation fees; and customers'
duties, tariffs and similar charges.
"Year 2000 Compliant" means that the Company Systems provide
uninterrupted millennium functionality in that the Company Systems
record, store, process and present calendar dates falling on or after
January 1, 2000, in the same manner and with the same functionality as
the Company Systems record, store, process, and present calendar dates
falling on or before December 31, 1999.
(b) The following terms have the meaning set forth in the
Sections set forth below:
Defined Term Location of Definition
------------ ----------------------
Action 4.09
Agreement Preamble
Blue Sky Laws 4.05(b)
Board Recitals
Certificate of Merger 3.02
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Certificates 3.09(b)
Code 4.10(a)
Company Preamble
Company Licensed Intellectual Property 4.14(b)
Company Owned Intellectual Property 4.14(c)
Company Preferred Stock 4.03
Company Stock Option 3.07
Company Stock Option Plans 3.07
Confidentiality Agreement 7.04(b)
Delaware Law Recitals
Disclosure Schedule 4.01(b)
Dissenting Shares 3.08(a)
Effective Time 3.02
Environmental Permits 4.17
ERISA 4.10(a)
Exchange Act 2.01(a)
Expenses 9.03(a)
Fee 9.03(a)
GAAP 4.07(b)
Governmental Authority 4.05(b)
HSR Act 2.01(a)
IRS 4.10(a)
Law 4.05(a)
Liens 4.13(b)
Material Contracts 4.19(a)
Material Subsidiary 4.01(c)
Merger Recitals
Merger Consideration 2.01(a)
Minimum Condition 2.01(a)
Missouri Law Recitals
Multiemployer Plan 4.10(b)
Multiple Employer Plan 4.10(b)
Non-U.S. Benefit Plan 4.10(g)
Offer Recitals
Offer Documents 2.01(b)
Offer to Purchase 2.01(b)
Parent Preamble
Paying Agent 3.09(a)
Permits 4.06
Permitted Liens 4.13(b)
Per Share Amount Recitals
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Plans 4.10(a)
Proxy Statement 4.12
Purchaser Preamble
Rights 4.03
Rights Agreement 4.03
Schedule 14D-9 2.02(b)
Schedule TO 2.01(b)
SEC 2.01(a)
SEC Reports 4.07(a)
Securities Act 4.07(a)
Shares Recitals
Stockholders' Meeting 7.01(a)
Subsidiary 4.01(a)
Surviving Corporation 3.03
Transactions 2.02(a)
1998 Balance Sheet 4.07(c)
ARTICLE II
THE OFFER
SECTION 2.01. The Offer. (a) Provided that none of the events
set forth in Annex A hereto shall have occurred and be continuing, Purchaser
shall commence the Offer as promptly as reasonably practicable after the date
hereof. The obligation of Purchaser to accept for payment Shares tendered
pursuant to the Offer shall be subject to the condition (the "Minimum
Condition") that at least the number of Shares that shall constitute two-thirds
of the then outstanding Shares on a fully diluted basis (including, without
limitation, all Shares issuable upon the conversion of any convertible
securities or upon the exercise of any options, warrants or rights (other than
the Rights (as defined in Section 4.03) and other than any Shares issuable upon
the exercise of any options in respect of which the Purchaser has received an
agreement from the option holder not to exercise such option until after the
record date for any meeting of the stockholders of the Company for the purpose
of considering and taking action on this Agreement and the Transactions) shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer and also shall be subject to the satisfaction of each of the other
conditions set forth in Annex A hereto. Purchaser expressly reserves the right
to waive any such condition, to increase the price per Share payable in the
Offer, and to make any other changes in the terms and conditions of the Offer;
provided, however, that no change may be made which decreases the price per
Share payable in the Offer or which reduces the maximum number of Shares to be
purchased in the Offer or which imposes conditions to the Offer in addition to
those set forth in Annex A hereto. Notwithstanding the foregoing, Purchaser may,
without the consent of the
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Company, (i) extend the Offer beyond the scheduled expiration date, which shall
be 20 business days following the commencement of the Offer, if, at the
scheduled expiration of the Offer, any of the conditions to Purchaser's
obligation to accept for payment Shares, shall not be satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC"), or the
staff thereof, applicable to the Offer, or (iii) extend the Offer for an
aggregate period of not more than 10 business days beyond the latest applicable
date that would otherwise be permitted under clause (i) or (ii) of this
sentence, if, as of such date, all of the conditions to Purchaser's obligations
to accept for payment Shares are satisfied or waived, but the number of Shares
validly tendered and not withdrawn pursuant to the Offer equals 80% or more, but
less than 90%, of outstanding Shares on a fully diluted basis. In addition, if,
on the initial scheduled expiration date of the Offer, the sole condition
remaining unsatisfied is the failure of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), to have expired or been terminated, then, Purchaser shall extend the
Offer from time to time until the earlier to occur of (i) June 30, 2000 and (ii)
the fifth business day after the expiration or termination of the applicable
waiting period under the HSR Act. The Per Share Amount shall, subject to
applicable withholding of taxes, be net to the seller in cash, upon the terms
and subject to the conditions of the Offer. Purchaser shall pay for all Shares
validly tendered and not withdrawn promptly following the acceptance of Shares
for payment pursuant to the Offer. Notwithstanding the immediately preceding
sentence and subject to the applicable rules of the SEC and the terms and
conditions of the Offer, Purchaser expressly reserves the right to delay payment
for Shares in order to comply in whole or in part with applicable laws. Any such
delay shall be effected in compliance with Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). If the payment equal to
the Per Share Amount in cash (the "Merger Consideration") is to be made to a
person other than the person in whose name the surrendered certificate formerly
evidencing Shares is registered on the stock transfer books of the Company, it
shall be a condition of payment that the certificate so surrendered shall be
endorsed properly or otherwise be in proper form for transfer and that the
person requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the certificate surrendered, or shall have
established to the satisfaction of Purchaser that such taxes either have been
paid or are not applicable.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, Purchaser shall file with the SEC a Tender Offer
Statement on Schedule TO (together with all amendments and supplements thereto,
the "Schedule TO") with respect to the Offer. The Schedule TO shall contain or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule TO, the Offer to Purchase and such other documents,
together with all supplements and amendments thereto, being referred to herein
collectively as the "Offer Documents"). Parent, Purchaser and the Company agree
to correct promptly any information
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provided by any of them for use in the Offer Documents that shall have become
false or misleading, and Parent and Purchaser further agree to take all steps
necessary to cause the Schedule TO, as so corrected, to be filed with the SEC,
and the other Offer Documents, as so corrected, to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws.
SECTION 2.02. Company Action. (a) The Company hereby approves
of and consents to the Offer and represents that (i) the Board, at a meeting
duly called and held on March 10, 2000, has unanimously (A) determined that this
Agreement and the transactions contemplated hereby, including each of the Offer
and the Merger, and the transactions (collectively, the "Transactions"), are
fair to, and in the best interests of, the holders of Shares, (B) approved,
adopted and declared advisable this Agreement and the Transactions (such
approval and adoption having been made in accordance with Missouri Law) and (C)
resolved to recommend that the holders of Shares accept the Offer and tender
Shares pursuant to the Offer, and approve and adopt this Agreement and the
Transactions, and (ii) Piper Jaffray has delivered to the Board an opinion,
which will be confirmed promptly in writing, that the consideration to be
received by the holders of Shares pursuant to each of the Offer and the Merger
is fair to the holders of Shares from a financial point of view. The Company
hereby consents to the inclusion in the Offer Documents of the recommendation of
the Board described in the immediately preceding sentence, and the Company shall
not withdraw or modify such recommendation in any manner adverse to Purchaser or
Parent except as provided in Section 7.05(b). The Company has been advised by
its directors and executive officers that they intend either to tender all
Shares beneficially owned by them to Purchaser pursuant to the Offer or to vote
such Shares in favor of the approval and adoption by the stockholders of the
Company of this Agreement and the Transactions.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, except as
provided in Section 7.05(b), the recommendation of the Board described in
Section 2.02(a), and shall disseminate the Schedule 14D-9 to the extent required
by Rule 14d-9 promulgated under the Exchange Act, and any other applicable
federal securities laws. The Company, Parent and Purchaser agree to correct
promptly any information provided by any of them for use in the Schedule 14D-9
which shall have become false or misleading, and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9, as so corrected, to be
filed with the SEC and disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws.
(c) The Company shall promptly furnish Purchaser with mailing
labels containing the names and addresses of all record holders of Shares and
with security position listings of Shares held in stock depositories, each as of
a recent date, together with all other
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available listings and computer files containing names, addresses and security
position listings of record holders and beneficial owners of Shares. The Company
shall promptly furnish Purchaser with such additional information, including,
without limitation, updated listings and computer files of stockholders, mailing
labels and security position listings, and such other assistance in
disseminating the Offer Documents to holders of Shares as Parent or Purchaser
may reasonably request. Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Offer or the Merger, Parent and
Purchaser shall hold in confidence the information contained in such labels,
listings and files, shall use such information only in connection with the
Transactions, and, if this Agreement shall be terminated in accordance with
Section 9.01, shall deliver to the Company all copies of such information then
in their possession.
ARTICLE III
THE MERGER
SECTION 3.01. The Merger. Upon the terms and subject to the
conditions set forth in Article VIII, and in accordance with Delaware Law and
Missouri Law, Purchaser shall be merged with and into the Company.
SECTION 3.02. Effective Time; Closing. As promptly as
practicable after the satisfaction or, if permissible, waiver of the conditions
set forth in Article VIII, the parties hereto shall cause the Merger to be
consummated by filing this Agreement or a certificate of merger or certificate
of ownership and merger with the Secretary of State of the State of Delaware and
articles of merger with the Secretary of State of the State of Missouri
(collectively, the "Certificate of Merger"), in such forms as are required by,
and executed in accordance with, the relevant provisions of Delaware Law and
Missouri Law (the date and time of such filing being the "Effective Time").
Prior to such filing, a closing shall be held at the offices of Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022, or such other place as
the parties shall agree, for the purpose of confirming the satisfaction or
waiver, as the case may be, of the conditions set forth in Article VIII.
SECTION 3.03. Effect of the Merger. As a result of the Merger,
the separate corporate existence of Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation"). At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of Delaware Law and Missouri Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of the Company
and Purchaser shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and
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duties of the Company and Purchaser shall become the debts, liabilities,
obligations, restrictions, disabilities and duties of the Surviving Corporation.
SECTION 3.04. Certificate of Incorporation; By-laws. (a) At
the Effective Time, subject to Section 7.07(a), the Certificate of Incorporation
of Purchaser, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation until thereafter amended
as provided by law and such Articles of Incorporation; provided, however, that,
at the Effective Time, Article I of the Articles of Incorporation of the
Surviving Corporation shall be amended to read as follows: "The name of the
corporation is Wave Technologies International, Inc."
(b) Unless otherwise determined by Parent prior to the
Effective Time, and subject to Section 7.07(a), the By-laws of Purchaser, as in
effect immediately prior to the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such By-laws.
SECTION 3.05. Directors and Officers. The directors of
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified or until their
earlier death, resignation or approval.
SECTION 3.06. Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to
Section 3.06(b) and any Dissenting Shares (as hereinafter defined))
shall be canceled and shall be converted automatically into the right
to receive an amount equal to the Merger Consideration payable, without
interest, to the holder of such Share, upon surrender, in the manner
provided in Section 3.09, of the certificate that formerly evidenced
such Share;
(b) Each Share held in the treasury of the Company and each
Share owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the
Effective Time shall be canceled without any conversion thereof and no
payment or distribution shall be made with respect thereto; and
(c) Each share of common stock, par value $.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective
Time shall be converted into and
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exchanged for one validly issued, fully paid and nonassessable share of
common stock, par value $0.50 per share, of the Surviving Corporation.
SECTION 3.07. Employee Stock Options. Effective as of the
Effective Time, the Company shall use reasonable best efforts, including
obtaining the consent of the individual option holders, if necessary, to (i)
terminate the Company's 1993 Stock Option Plan, 1995 Stock Option Plan, the
Company's Outside Directors Stock Option Plan and 1997 Stock Option Plan, each
as amended through the date of this Agreement (the "Company Stock Option
Plans"), and (ii) cancel, at the Effective Time, each outstanding option to
purchase shares of Company Common Stock granted under the Company Stock Option
Plans (each, a "Company Stock Option") that is outstanding and unexercised as of
such date. Each holder of a Company Stock Option that is outstanding and
unexercised at the Effective Time shall be entitled to receive from the
Surviving Corporation immediately after the Effective Time, in exchange for the
cancellation of such Company Stock Option, an amount in cash equal to the
excess, if any, of (x) the Per Share Amount over (y) the per share exercise
price of such Company Stock Option, multiplied by the number of shares of
Company Common Stock subject to such Company Stock Option as of the Effective
Time. Any such payment shall be subject to all applicable federal, state and
local tax withholding requirements. The Company shall take all necessary action
to approve the disposition of the Company Stock Options in connection with the
transactions contemplated by this Agreement to the extent necessary to exempt
such dispositions and acquisitions under Rule 16b-3 of the Exchange Act.
SECTION 3.08. Dissenting Shares. (a) Notwithstanding any
provision of this Agreement to the contrary, Shares that are outstanding
immediately prior to the Effective Time and that are held by stockholders who
shall have neither voted in favor of the Merger nor consented thereto in writing
and who shall have demanded properly in writing appraisal for such Shares in
accordance with Section 351.455 of Missouri Law (collectively, the "Dissenting
Shares") shall not be converted into, or represent the right to receive, the
Merger Consideration. Such stockholders shall be entitled to receive payment of
the appraised value of such Shares held by them in accordance with the
provisions of such Section 351.455, except that all Dissenting Shares held by
stockholders who shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such Shares under such Section
351.455 shall thereupon be deemed to have been converted into, and to have
become exchangeable for, as of the Effective Time, the right to receive the
Merger Consideration, without any interest thereon, upon surrender, in the
manner provided in Section 3.09, of the certificate or certificates that
formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of such demands, and
any other instruments served pursuant to Missouri Law and received by the
Company and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under Missouri Law. The
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Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
SECTION 3.09. Surrender of Shares; Stock Transfer Books. (a)
Prior to the Effective Time, Purchaser shall designate a bank or trust company
to act as agent (the "Paying Agent") for the holders of Shares to receive the
funds to which holders of Shares shall become entitled pursuant to Section
3.06(a). Such funds shall be invested by the Paying Agent as directed by the
Surviving Corporation.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each person who was, at the Effective
Time, a holder of record of Shares entitled to receive the Merger Consideration
pursuant to Section 3.06(a) a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, and such Certificate shall then be canceled. No
interest shall accrue or be paid on the Merger Consideration payable upon the
surrender of any Certificate for the benefit of the holder of such Certificate.
If the payment equal to the Merger Consideration is to be made to a person other
than the person in whose name the surrendered certificate formerly evidencing
Shares is registered on the stock transfer books of the Company, it shall be a
condition of payment that the certificate so surrendered shall be endorsed
properly or otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other taxes required by
reason of the payment of the Merger Consideration to a person other than the
registered holder of the certificate surrendered, or shall have established to
the satisfaction of Purchaser that such taxes either have been paid or are not
applicable.
(c) At any time following the sixth month after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and, thereafter, such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any
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Merger Consideration delivered in respect of such Share to a public official
pursuant to any abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time,
the stock transfer books of the Company shall be closed and thereafter there
shall be no further registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by applicable law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and the Purchaser to enter into
this Agreement, the Company hereby represents and warrants to Parent and
Purchaser that, except as otherwise disclosed in the disclosure schedule
delivered simultaneously herewith:
SECTION 4.01. Organization and Qualification; Subsidiaries.
(a) Each of the Company and each subsidiary of the Company ("Subsidiary") is a
corporation duly organized, validly existing and, to the extent applicable, in
good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted. The Company and each Subsidiary is duly qualified
or licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary. Section 4.01(a) of the Disclosure Schedule lists
jurisdictions in which the Company is in the process of withdrawing its
qualification as a foreign corporation.
(b) Except as disclosed in Section 4.01(b) of the Disclosure
Schedule (the "Disclosure Schedule"), the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
SECTION 4.02. Articles of Incorporation and By-laws. The
Company has heretofore furnished to Parent a complete and correct copy of the
Articles of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Subsidiary. Such
Articles of Incorporation, By-laws or equivalent organizational documents are in
full force and effect. Neither the Company nor any Subsidiary is in violation of
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any of the provisions of its Articles of Incorporation, By-laws or equivalent
organizational documents.
SECTION 4.03. Capitalization. The authorized capital stock of
the Company consists of 20,000,000 Shares and 1,000,000 shares of preferred
stock, no par value ("Company Preferred Stock"). As of the date hereof, (a)
4,256,555 Shares are issued and outstanding, all of which are validly issued,
fully paid and nonassessable, (b) no Shares are held in the treasury of the
Company, (c) no Shares are held by any Subsidiary, and (d) 606,492 Shares are
reserved for future issuance pursuant to outstanding employee stock options or
stock incentive rights granted pursuant to the Company Stock Option Plans. As of
the date hereof, no shares of Company Preferred Stock are issued and
outstanding. Except as set forth in this Section 4.03 and Section 4.03 of the
Disclosure Schedule, and except for the rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of September 17, 1998 (the "Rights Agreement"),
between the Company and ChaseMellon Shareholder Services, L.L.C., as rights
agent, there are no options, warrants or other rights, agreements, arrangements
or commitments of any character relating to the issued or unissued capital stock
of the Company or any Subsidiary or obligating the Company or any Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or any Subsidiary. All Shares subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any Shares or any
capital stock of any Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Subsidiary or
any other person. Each outstanding share of capital stock of each Subsidiary is
duly authorized, validly issued, fully paid and nonassessable, and each such
share is owned by the Company or another Subsidiary free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or any Subsidiary's voting rights,
charges and other encumbrances of any nature whatsoever.
SECTION 4.04. Authority Relative to This Agreement. The
Company has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the Transactions have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the Transactions (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
then-outstanding Shares, if and to the extent required by applicable law, and
the filing and recordation of appropriate merger documents as required by
Delaware Law and Missouri Law). This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Parent
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and Purchaser, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
SECTION 4.05. No Conflict; Required Filings and Consents. (a)
Except as set forth in Section 4.05 of the Disclosure Schedule, the execution
and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company will not, (i) conflict with or violate the
Articles of Incorporation or By-laws or equivalent organizational documents of
the Company or any Subsidiary, (ii) assuming all consents, approvals,
authorizations and other actions described in Section 4.05(b) have been obtained
or taken, conflict with or violate any United States or non-United States
statute, law, ordinance, regulation, rule, code, executive order, injunction,
judgment, decree or other order ("Law") applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event which, with notice or lapse of time or both, would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of the Company or any Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or other occurrences
which would not prevent or materially delay consummation of the Offer or the
Merger or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any United States federal, state, county or local or United
Kingdom or other non-United States government, governmental, regulatory or
administrative authority, agency, instrumentality or commission or any court,
tribunal, or judicial or arbitral body (a "Governmental Authority"), except (i)
for applicable requirements, if any, of the Exchange Act, state securities or
"blue sky" laws ("Blue Sky Laws") and the pre-merger notification requirements
of the HSR Act, and filing and recordation of appropriate merger documents as
required by Delaware Law and Missouri Law, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the Offer
or the Merger, or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement, and would not have a Material
Adverse Effect.
SECTION 4.06. Permits; Compliance. Except as set forth in
Section 4.06 of the Disclosure Schedule, each of the Company and the
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Authority necessary for each of the
Company or the
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Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Permits"), except where the failure
to have, or the suspension or cancellation of, any of the Permits would not
prevent or materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement and would not have a Material Adverse Effect. As of the date
hereof, no suspension or cancellation of any of the Permits is pending or, to
the knowledge of the Company, threatened, except where the failure to have, or
the suspension or cancellation of, any of the Permits would not prevent or
materially delay consummation of the Offer or the Merger or otherwise prevent or
materially delay the Company from performing its obligations under this
Agreement and would not have a Material Adverse Effect. Except as set forth in
Section 4.06 of the Disclosure Schedule, neither the Company nor any Subsidiary
is in conflict with, or in default, breach or violation of, (a) any Law
applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (b) any note, bond,
mortgage, indenture, contract, agreement, lease, license, Permit, franchise or
other instrument or obligation to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any property or asset of the
Company or any Subsidiary is bound, except for any such conflicts, defaults,
breaches or violations that would not prevent or materially delay consummation
of the Offer or the Merger or otherwise prevent or materially delay the Company
from performing its obligations under this Agreement and would not have a
Material Adverse Effect.
SECTION 4.07. SEC Filings; Financial Statements. (a) The
Company has filed all forms, reports and documents required to be filed by it
with the SEC since April 30, 1996 and has heretofore delivered to Parent, in the
form filed with the SEC, (i) its Annual Reports on Form 10-KSB for the fiscal
years ended April 30, 1997 and 1998 and on form 10-K for the fiscal year ended
April 30, 1999, respectively, (ii) its Quarterly Reports on Form 10-Q for the
periods ended July 31, 1999 and October 31, 1999, (iii) all proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
held since April 30, 1996 and (iv) all other forms, reports and other
registration statements (other than Quarterly Reports on Form 10-Q not referred
to in clause (ii) above) filed by the Company with the SEC since April 30, 1999
(the forms, reports and other documents referred to in clauses (i), (ii), (iii)
and (iv) above being, collectively, the "SEC Reports"). The SEC Reports (i) were
prepared in accordance with either the requirements of the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act, as the case may
be, and the rules and regulations promulgated thereunder, and (ii) did not, at
the time they were filed, or, if amended, as of the date of such amendment,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Subsidiary is required to file any form, report or other document
with the SEC.
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(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the SEC Reports was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presents, in all material
respects, the consolidated financial position, results of operations and cash
flows of the Company and its consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein, except as
otherwise noted therein (subject, in the case of unaudited statements, to normal
and recurring year-end adjustments which would not have had, and would not have,
a Material Adverse Effect).
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Subsidiaries as at April 30,
1999, including the notes thereto (the "1999 Balance Sheet"), neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except for liabilities and
obligations, incurred in the ordinary course of business consistent with past
practice since April 30, 1999, which would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect.
(d) The Company has heretofore furnished to Parent complete
and correct copies of all amendments and modifications that have not been filed
by the Company with the SEC to all agreements, documents and other instruments
that previously had been filed by the Company with the SEC and are currently in
effect.
SECTION 4.08. Absence of Certain Changes or Events. Since
April 30, 1999, except as set forth in Section 4.08 of the Disclosure Schedule,
or as expressly contemplated by this Agreement, (a) the Company and the
Subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice, (b) there has not been any Material
Adverse Effect, and (c) none of the Company nor any Subsidiary has taken any
action that, if taken after the date of this Agreement, would constitute a
breach of any of the covenants set forth in Section 6.01.
SECTION 4.09. Absence of Litigation. There is no litigation,
suit, claim, action, proceeding or investigation (an "Action") pending or, to
the knowledge of the Company, threatened against the Company or any Subsidiary,
or any property or asset of the Company or any Subsidiary, before any
Governmental Authority that (a) would have a Material Adverse Effect or (b)
seeks to materially delay or prevent the consummation of any Transaction,.
Neither the Company nor any Subsidiary nor any property or asset of the Company
or any Subsidiary is subject to any continuing order of, consent decree,
settlement agreement or similar written agreement with, or, to the knowledge of
the Company, continuing investigation by, any Governmental Authority, or any
order, writ, judgment, injunction, decree, determination or
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award of any Governmental Authority that would prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement or would have a
Material Adverse Effect.
SECTION 4.10. Employee Benefit Plans. (a) Section 4.10(a) of
the Disclosure Schedule lists (i) all employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements, whether legally enforceable or not, to which the Company or any
Subsidiary is a party, with respect to which the Company or any Subsidiary has
any obligation or which are maintained, contributed to or sponsored by the
Company or any Subsidiary for the benefit of any current or former employee,
officer or director of the Company or any Subsidiary, (ii) each employee benefit
plan for which the Company or any Subsidiary could incur liability under Section
4069 of ERISA in the event such plan has been or were to be terminated, (iii)
any plan in respect of which the Company or any Subsidiary could incur liability
under Section 4212(c) of ERISA, and (iv) any contracts, arrangements or
understandings between the Company or any Subsidiary and any employee of the
Company or any Subsidiary including, without limitation, any contracts,
arrangements or understandings relating in any way to a sale of the Company or
any Subsidiary (collectively, the "Plans"). Each Plan is in writing and the
Company has furnished to Purchaser a true and complete copy of each Plan and has
delivered to Purchaser a true and complete copy of each material document, if
any, prepared in connection with each such Plan, including, without limitation,
(i) a copy of each trust or other funding arrangement, (ii) each summary plan
description and summary of material modifications, (iii) the most recently filed
Internal Revenue Service ("IRS") Form 5500, (iv) the most recently received IRS
determination letter for each such Plan, and (v) the most recently prepared
actuarial report and financial statement in connection with each such Plan.
Neither the Company nor any Subsidiary has any express or implied commitment,
whether legally enforceable or not, (i) to create, incur liability with respect
to or cause to exist any other employee benefit plan, program or arrangement,
(ii) to enter into any contract or agreement to provide compensation or benefits
to any individual, or (iii) to modify, change or terminate any Plan, other than
with respect to a modification, change or termination required by this
Agreement, ERISA or the Internal Revenue Code of 1986, as amended (the "Code").
(b) None of the Plans is a multiemployer plan (within the
meaning of Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan") or a
single employer pension plan (within the meaning of Section 4001(a)(15) of
ERISA) for which the Company or any Subsidiary could incur liability under
Section 4063 or 4064 of ERISA (a "Multiple Employer Plan"). Except as set forth
in Section 4.10 of the Disclosure Schedule, none of the Plans (i) provides for
the payment of separation, severance, termination or similar-type benefits to
any person, (ii)
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obligates the Company or any Subsidiary to pay separation, severance,
termination or similar-type benefits solely or partially as a result of any
transaction contemplated by this Agreement, or (iii) obligates the Company or
any Subsidiary to make any payment or provide any benefit as a result of a
"change in control", within the meaning of such term under Section 280G of the
Code. None of the Plans provides for or promises retiree medical, disability or
life insurance benefits to any current or former employee, officer or director
of the Company or any Subsidiary. Each of the Plans other than Non-U.S. Benefit
Plans (defined below) is subject only to the Laws of the United States or a
political subdivision thereof.
(c) Except as set forth in Section 4.10 of the Disclosure
Schedule, each Plan is now and, to the knowledge of the Company, always has been
operated in all material respects in accordance with its terms and the
requirements of all applicable Laws including, without limitation, ERISA and the
Code. Except as set forth in Section 4.10 of the Disclosure Schedule, the
Company and the Subsidiaries have performed all material obligations required to
be performed by them under, are not in any respect in default under or in
violation of, and have no knowledge of any default or violation by any party to,
any Plan. No Action is pending or, to the knowledge of the Company, threatened
with respect to any Plan (other than claims for benefits in the ordinary course)
and no fact or event exists that could give rise to any such Action.
(d) Each Plan that is intended to be qualified under Section
401(a) of the Code or Section 401(k) of the Code has timely received a favorable
determination letter from the IRS covering all of the provisions applicable to
the Plan for which determination letters are currently available that the Plan
is so qualified and each trust established in connection with any Plan which is
intended to be exempt from federal income taxation under Section 501(a) of the
Code has received a determination letter from the IRS that it is so exempt, and
no fact or event has occurred since the date of such determination letter or
letters from the IRS to adversely affect the qualified status of any such Plan
or the exempt status of any such trust.
(e) Except as set forth in Section 4.10 of the Disclosure
Schedule, there has not been any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan.
Neither the Company nor any Subsidiary has incurred any liability under, arising
out of or by operation of Title IV of ERISA (other than liability for premiums
to the Pension Benefit Guaranty Corporation arising in the ordinary course),
including, without limitation, any liability in connection with (i) the
termination or reorganization of any employee benefit plan subject to Title IV
of ERISA, or (ii) the withdrawal from any Multiemployer Plan or Multiple
Employer Plan, and no fact or event exists which could give rise to any such
liability.
(f) Except as set forth in Section 4.10 of the Disclosure
Schedule, all contributions, premiums or payments required to be made with
respect to any Plan have been made on or before their due dates. All such
contributions have been fully deducted for income
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tax purposes and no such deduction has been challenged or disallowed by any
Governmental Authority and no fact or event exists which could give rise to any
such challenge or disallowance.
(g) In addition to the foregoing, with respect to each Plan
that is not subject to United States law (a "Non-U.S. Benefit Plan"):
(i) all employer and employee contributions to each Non-U.S.
Benefit Plan required by law or by the terms of such Non-U.S. Benefit
Plan have been made, or, if applicable, accrued in accordance with
normal accounting practices, and a pro rata contribution for the period
prior to and including the date of this Agreement has been made or
accrued;
(ii) the fair market value of the assets of each funded
Non-U.S. Benefit Plan, the liability of each insurer for any Non-U.S.
Benefit Plan funded through insurance or the book reserve established
for any Non-U.S. Benefit Plan, together with any accrued contributions,
is sufficient to procure or provide for the benefits determined on any
ongoing basis (actual or contingent) accrued to the date of this
Agreement with respect to all current and former participants under
such Non-U.S. Benefit Plan according to the actuarial assumptions and
valuations most recently used to determine employer contributions to
such Non-U.S. Benefit Plan, and no Transaction shall cause such assets
or insurance obligations to be less than such benefit obligations; and
(iii) each Non-U.S. Benefit Plan required to be registered has
been registered and has been maintained in good standing with
applicable regulatory authorities. Each Non-U.S. Benefit Plan is now
and always has been operated in full compliance with all applicable
non-United States laws.
SECTION 4.11. Labor and Employment Matters. (a) Except as set
forth in Section 4.11 of the Disclosure Schedule, (i) there are no controversies
pending or, to the knowledge of the Company, threatened between the Company or
any Subsidiary and any of their respective employees, which controversies would
prevent or materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement or would have a Material Adverse Effect; (ii) neither the Company
nor any Subsidiary is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or any
Subsidiary, nor, to the knowledge of the Company, are there any activities or
proceedings of any labor union to organize any such employees; (iii) neither the
Company nor any Subsidiary has breached or otherwise failed to comply with any
provision of any such agreement or contract, and there are no grievances
outstanding against the Company or any Subsidiary under any such agreement or
contract; (iv) there are no unfair labor practice complaints pending against the
Company or any
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Subsidiary before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any Subsidiary;
and (v) there is no strike, slowdown, work stoppage or lockout, or, to the
knowledge of the Company, threat thereof, by or with respect to any employees of
the Company or any Subsidiary.
(b) The Company and the Subsidiaries are in compliance with
all applicable laws relating to the employment of labor, including those related
to wages, hours, collective bargaining and the payment and withholding of taxes
and other sums as required by the appropriate Governmental Authority and has
withheld and paid to the appropriate Governmental Authority or are holding for
payment not yet due to such Governmental Authority all amounts required to be
withheld from employees of the Company or any Subsidiary and are not liable for
any arrears of wages, taxes, penalties or other sums for failure to comply with
any of the foregoing. The Company and the Subsidiaries have paid in full to all
employees or adequately accrued for in accordance with GAAP consistently applied
all wages, salaries, commissions, bonuses, benefits and other compensation due
to or on behalf of such employees and there is no claim with respect to payment
of wages, salary or overtime pay that has been asserted or is now pending or
threatened before any Governmental Authority with respect to any persons
currently or formerly employed by the Company or any Subsidiary. Neither the
Company nor any Subsidiary is a party to, or otherwise bound by, any consent
decree with, or citation by, any Governmental Authority relating to employees or
employment practices. There is no charge or proceeding with respect to a
violation of any occupational safety or health standards that has been asserted
or is now pending or threatened with respect to the Company. There is no charge
of discrimination in employment or employment practices, for any reason,
including, without limitation, age, gender, race, religion or other legally
protected category, which has been asserted or is now pending or threatened
before the United States Equal Employment Opportunity Commission, or any other
Governmental Authority in any jurisdiction in which the Company or any
Subsidiary have employed or employ any person.
SECTION 4.12. Offer Documents; Schedule 14D-9; Proxy
Statement. Neither the Schedule 14D-9 nor any information supplied by the
Company for inclusion in the Offer Documents shall, at the times the Schedule
14D-9, the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to stockholders of the
Company, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Neither the proxy statement to be sent to the
stockholders of the Company in connection with the Stockholders' Meeting (as
hereinafter defined) or the information statement to be sent to such
stockholders, as appropriate (such proxy statement or information statement, as
amended or supplemented, being referred to herein as the "Proxy Statement"),
shall, at the date the Proxy Statement (or any amendment or supplement thereto)
is first mailed to stockholders of the Company, at the time of the Stockholders'
Meeting and at the Effective Time, contain any statement which, at the time
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and in light of the circumstances under which it was made, is false or
misleading with respect to any material fact, or which omits to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders' Meeting which
shall have become false or misleading. The Schedule 14D-9 and the Proxy
Statement shall comply in all material respects as to form with the requirements
of the Exchange Act and the rules and regulations thereunder.
SECTION 4.13. Property and Leases. (a) The Company and the
Subsidiaries have sufficient title to all their properties and assets to conduct
their respective businesses as currently conducted or as contemplated to be
conducted, with only such exceptions as would not have a Material Adverse
Effect.
(b) Except as set forth in Section 4.13 of the Disclosure
Schedule, each parcel of real property owned or leased by the Company or any
Subsidiary (i) is owned or leased free and clear of all mortgages, pledges,
liens, security interests, conditional and installment sale agreements,
encumbrances, charges or, to the knowledge of the Company, other claims of third
parties of any kind, including, without limitation, any easement, right of way
or other encumbrance to title, or any option, right of first refusal, or right
of first offer (collectively, "Liens"), other than (A) Liens for current taxes
and assessments not yet past due, (B) inchoate mechanics' and materialmen's
Liens for construction in progress, (C) workmen's, repairmen's, warehousemen's
and carriers' Liens arising in the ordinary course of business of the Company or
such Subsidiary consistent with past practice, and (D) all matters of record,
Liens and other imperfections of title and encumbrances that, individually or in
the aggregate, would not have a Material Adverse Effect (collectively,
"Permitted Liens"), and (ii) is neither subject to any governmental decree or
order to be sold nor is being condemned, expropriated or otherwise taken by any
public authority with or without payment of compensation therefor, nor, to the
knowledge of the Company, has any such condemnation, expropriation or taking
been proposed.
(c) All leases of real property leased for the use or benefit
of the Company or any Subsidiary to which the Company or any Subsidiary is a
party, and all amendments and modifications thereto, are in full force and
effect and have not been modified or amended, and there exists no default under
any such lease by the Company or any Subsidiary, nor any event which, with
notice or lapse of time or both, would constitute a default thereunder by the
Company or any Subsidiary, except as would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect.
(d) To the knowledge of the Company, there are no contractual
or legal restrictions that preclude or restrict the ability to use any real
property owned or leased by the Company or any Subsidiary for the purposes for
which it is currently being used. To the
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knowledge of the Company, there are no material latent defects or material
adverse physical conditions affecting the real property, and improvements
thereon, owned or leased by the Company or any Subsidiary other than those that
would not prevent or materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not have a Material Adverse Effect.
SECTION 4.14. Intellectual Property. Except as would not have
a Material Adverse Effect, (a) the conduct of the business of the Company and
the Subsidiaries as currently conducted does not infringe upon or misappropriate
the Intellectual Property rights of any third party, and no claim has been
asserted to the Company that the conduct of the business of the Company and the
Subsidiaries as currently conducted infringes upon or may infringe upon or
misappropriates the Intellectual Property Rights of any third party; (b) with
respect to each item of Intellectual Property owned by the Company or a
Subsidiary and material to the business, financial condition or results of
operations of the Company and the Subsidiaries taken as a whole ("Company Owned
Intellectual Property"), the Company or a Subsidiary is the owner of the entire
right, title and interest in and to such Company Owned Intellectual Property and
is entitled to use such Company Owned Intellectual Property in the continued
operation of its respective business; (c) with respect to each item of
Intellectual Property licensed to the Company or a Subsidiary that is material
to the business of the Company and the Subsidiaries as currently conducted
("Company Licensed Intellectual Property"), the Company or a Subsidiary has the
right to use such Company Licensed Intellectual Property in the continued
operation of its respective business in accordance with the terms of the license
agreement governing such Company Licensed Intellectual Property; (d) the Company
Owned Intellectual Property is valid and enforceable, and has not been adjudged
invalid or unenforceable in whole or in part; (e) to the knowledge of the
Company, no person is engaging in any activity that infringes upon the Company
Owned Intellectual Property; (f) each license of the Company Licensed
Intellectual Property is valid and enforceable, is binding on all parties to
such license, and is in full force and effect; (g) to the knowledge of the
Company, no party to any license of the Company Licensed Intellectual Property
is in breach thereof or default thereunder; and (h) neither the execution of
this Agreement nor the consummation of any Transaction shall adversely affect
any of the Company's rights with respect to the Company Owned Intellectual
Property or the Company Licensed Intellectual Property.
SECTION 4.15. Year 2000 Compliance. All Company Systems are
Year 2000 Compliant except for systems that are not material to the Company.
SECTION 4.16. Taxes. The Company and the Subsidiaries have
filed all United States federal, state, local and United Kingdom and other
non-United States Tax returns and reports required to be filed by them and have
paid and discharged all Taxes required to be paid or discharged, other than (a)
such payments as are being contested in good faith by appropriate
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proceedings and (b) such filings, payments or other occurrences that would not
have a Material Adverse Effect. Neither the IRS nor any other United States or
non-United States taxing authority or agency is now asserting or, to the
knowledge of the Company, threatening to assert against the Company or any
Subsidiary any deficiency or claim for any Taxes or interest thereon or
penalties in connection therewith. Neither the Company nor any Subsidiary has
granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of any Tax. The accruals and reserves
for Taxes reflected in the 1999 Balance Sheet are adequate to cover all Taxes
accruable through such date (including interest and penalties, if any, thereon)
in accordance with GAAP. Neither the Company nor any Subsidiary has made an
election under Section 341(f) of the Code. There are no Tax liens upon any
property or assets of the Company or any of the Subsidiaries except liens for
current Taxes not yet due. Neither the Company nor any of the Subsidiaries has
been required to include in income any adjustment pursuant to Section 481 of the
Code by reason of a voluntary change in accounting method initiated by the
Company or any of the Subsidiaries, and the IRS has not initiated or proposed
any such adjustment or change in accounting method, in either case which
adjustment or change would have a Material Adverse Effect. Except as set forth
in the financial statements described in Section 4.07, neither the Company nor
any of the Subsidiaries has entered into a transaction which is being accounted
for under the installment method of Section 453 of the Code, which would prevent
or materially delay consummation of the Offer or the Merger or otherwise prevent
or materially delay the Company from performing its obligations under this
Agreement or would have a Material Adverse Effect.
SECTION 4.17. Environmental Matters. Except as described in
Section 4.17 of the Disclosure Schedule and would not have a Material Adverse
Effect, (a) the Company has not violated and is not in violation of any
Environmental Law; (b) to the knowledge of the Company, none of the properties
currently or formerly owned, leased or operated by the Company (including,
without limitation, soils and surface and ground waters) are contaminated with
any Hazardous Substance; (c) the Company is not actually, or, to the knowledge
of the Company, potentially or allegedly liable for any off-site contamination
by Hazardous Substances; (d) the Company is not actually, potentially or
allegedly liable under any Environmental Law (including, without limitation,
pending or threatened liens); (e) the Company has all permits, licenses and
other authorizations required under any Environmental Law ("Environmental
Permits"); (f) the Company has always been and is in compliance with its
Environmental Permits; and (g) neither the execution of this Agreement nor the
consummation of the Transactions will require any investigation, remediation or
other action with respect to Hazardous Substances, or any notice to or consent
of Governmental Authorities or third parties, pursuant to any applicable
Environmental Law or Environmental Permit.
SECTION 4.18. Amendment to Rights Agreement. The Company has
irrevocably amended, and the Board has taken all necessary action to irrevocably
amend, the Rights Agreement so that (a) none of the execution or delivery of
this Agreement or the
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Stockholder Agreements, the making of the Offer, the acceptance for payment of
Shares by Purchaser pursuant to the Offer, the consummation of the Merger, the
purchase of Shares or the consummation of any other Transaction will result in
(i) the occurrence of the "flip-in event" described under Section 11 of the
Rights Agreement, (ii) the occurrence of the "flip-over event" described in
Section 13(a) of the Rights Agreement, or (iii) the Rights becoming evidenced
by, and transferable pursuant to, certificates separate from the certificates
representing Shares, and (b) the Rights will expire pursuant to the terms of the
Rights Agreement at the Effective Time.
SECTION 4.19. Material Contracts. (a) Subsections (i) through
(xi) of Section 4.19 of the Disclosure Schedule contain a list of the following
types of contracts and agreements to which the Company or any Subsidiary is a
party (such contracts, agreements and arrangements as are required to be set
forth in Section 4.19(a) of the Disclosure Schedule being the "Material
Contracts"):
(i) each contract and agreement which (A) is likely to
involve consideration of more than $100,000, in the
aggregate, during the calendar year ending December
31, 2000, (B) is likely to involve consideration of
more than $100,000, in the aggregate, over the
remaining term of such contract, and which, in either
case, cannot be canceled by the Company or any
Subsidiary without penalty or further payment and
without more than 90 days' notice;
(ii) all broker, distributor, reseller, dealer,
manufacturer's representative, franchise, agency,
sales promotion, market research, marketing
consulting and advertising contracts and agreements
to which the Company or any Subsidiary is a party and
which (A) is likely to involve consideration of more
than $100,000, in the aggregate, during the calendar
year ending December 31, 2000, (B) is likely to
involve consideration of more than $100,000, in the
aggregate, over the remaining term of such contract,
and which, in either case, cannot be canceled by the
Company or any Subsidiary without penalty or further
payment and without more than 90 days' notice;
(iii) all management contracts (excluding contracts for
employment) and contracts with other consultants,
including any contracts involving the payment of
royalties or other amounts calculated based upon the
revenues or income of the Company or any Subsidiary
or income or revenues related to any product of the
Company or any Subsidiary to which the Company or any
Subsidiary is a party and which (A) is likely to
involve consideration of more than $100,000, in the
aggregate, during the calendar year ending December
31, 2000, (B) is likely to involve consideration of
more than $100,000, in the aggregate, over the
remaining term of such contract, and which, in either
case, cannot be canceled by the Company or any
Subsidiary without penalty or further payment and
without more than 90 days' notice;
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(iv) all contracts and agreements evidencing indebtedness
for borrowed money which individually are in excess
of $25,000;
(v) all contracts and agreements with any Governmental
Authority to which the Company or any Subsidiary is a
party;
(vi) all contracts and agreements that limit, or purport
to limit, the ability of the Company or any
Subsidiary to compete in any line of business or with
any person or entity or in any geographic area or
during any period of time;
(vii) all material contracts or arrangements that result in
any person or entity holding a power of attorney from
the Company or any Subsidiary that relates to the
Company, any Subsidiary or their respective
businesses;
(viii) all contracts relating in whole or in part to
Intellectual Property pursuant to which the Company
or any Subsidiary obtains from a third party the
right to sell, distribute or otherwise display data
or works owned or controlled by such third party and
that is (I) likely to involve consideration of more
than $100,000 in the aggregate during the calendar
year ending December 31, 2000 or (II) that does not
involve any cash consideration but is otherwise
material to the Company or any Subsidiary;
(ix) all contracts relating in whole or in part to
Intellectual Property pursuant to which the Company
or any Subsidiary grants to a third party the right
to sell, distribute or otherwise display data or
works owned or controlled by the Company or any
Subsidiary and that is (I) likely to involve
consideration of more than $100,000 in the aggregate
during the calendar year ending December 31, 2000 or
(II) that does not involve any cash consideration but
is otherwise material to the Company or any
Subsidiary; and
(x) all contracts for employment required to be listed in
Section 4.10 of the Disclosure Schedule; and
(xi) all other contracts and agreements, whether or not
made in the ordinary course of business, which are
material to the Company , any Subsidiary or the
conduct of their respective businesses, or the
absence of which would prevent or materially delay
consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from
performing its obligations under this Agreement or
would have a Material Adverse Effect.
(b) Except as would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially delay
the Company from performing its obligations under this Agreement and would not
have a Material Adverse Effect and except as
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set forth in Section 4.19(b) of the Disclosure Schedule, (i) each Material
Contract is a legal, valid and binding agreement, and none of the Material
Contracts is in default by its terms or has been canceled by the other party;
(ii) to the Company's knowledge, no other party is in breach or violation of, or
default under, any Material Contract; (iii) the Company and the Subsidiaries are
not in receipt of any claim of default under any such agreement; and (iv)
neither the execution of this Agreement nor the consummation of any Transaction
shall constitute default, give rise to cancellation rights, or otherwise
adversely affect any of the Company's rights under any Material Contract. The
Company has furnished or made available to Parent true and complete copies of
all Material Contracts, including any amendments thereto.
SECTION 4.20. Insurance. (a) Section 4.20(a) of the Disclosure
Schedule sets forth, with respect to each insurance policy under which the
Company or any Subsidiary is insured, a named insured or otherwise the principal
beneficiary of coverage which is currently in effect, (i) the names of the
insurer, the principal insured and each named insured, (ii) the policy number,
(iii) the period, scope and amount of coverage and (iv) the premium charged.
(b) With respect to each such insurance policy: (i) the policy
is legal, valid, binding and enforceable in accordance with its terms and is in
full force and effect; (ii) neither the Company nor any Subsidiary is in
material breach or default (including any such breach or default with respect to
the payment of premiums or the giving of notice), and, to the knowledge of the
Company, no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination or modification,
under the policy; and (iii) to the knowledge of the Company, no insurer on the
policy has been declared insolvent or placed in receivership, conservatorship or
liquidation.
(c) At no time subsequent to January 1, 1997 has the Company
or any Subsidiary (i) been denied any insurance or indemnity bond coverage which
it has requested, (ii) made any material reduction in the scope or amount of its
insurance coverage, or (iii) received notice from any of its insurance carriers
that any insurance premiums will be subject to increase in an amount materially
disproportionate to the amount of the increases with respect thereto (or with
respect to similar insurance) in prior years or that any insurance coverage
listed in Section 4.20(a) of the Disclosure Schedule will not be available in
the future substantially on the same terms as are now in effect.
SECTION 4.21. Brokers. No broker, finder or investment banker
(other than Piper Jaffray) is entitled to any brokerage, finder's or other fee
or commission in connection with the Transactions based upon arrangements made
by or on behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and Piper
Jaffray pursuant to which such firm would be entitled to any payment relating to
the Transactions.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement,
Parent and Purchaser hereby, jointly and severally, represent and warrant to the
Company that:
SECTION 5.01. Corporate Organization. Each of Parent and
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 all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted.
SECTION 5.02. Authority Relative to This Agreement. Each of
Parent and Purchaser has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the Transactions. The execution and delivery of this Agreement by
Parent and Purchaser and the consummation by Parent and Purchaser of the
Transactions have been duly and validly authorized by all necessary corporate
action, and no other corporate proceedings on the part of Parent or Purchaser
are necessary to authorize this Agreement or to consummate the Transactions
(other than, with respect to the Merger, the filing and recordation of
appropriate merger documents as required by Delaware Law and Missouri Law). This
Agreement has been duly and validly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and delivery by the
Company, constitutes a legal, valid and binding obligation of each of Parent and
Purchaser enforceable against each of Parent and Purchaser in accordance with
its terms.
SECTION 5.03. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by Parent and Purchaser do not, and
the performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws of either Parent or
Purchaser, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 5.03(b) have been obtained and all filings and
obligations described in Section 5.03(b) have been made, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or Purchaser or by which any property or asset of either of them is bound
or affected, or (iii) result in any breach of, or constitute a 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, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or Purchaser is a party or by which
Parent or Purchaser or any property or asset of either of them is bound or
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affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which would not
prevent or materially delay consummation of the Transactions or otherwise
prevent Parent and Purchaser from performing their material obligations under
this Agreement.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with, or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover
laws, the HSR Act and filing and recordation of appropriate merger documents as
required by Delaware Law and Missouri Law, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the
Transactions, or otherwise prevent Parent or Purchaser from performing their
material obligations under this Agreement.
SECTION 5.04. Financing. Parent has and will have through the
Effective Time sufficient funds to permit Purchaser to consummate all the
Transactions, including, without limitation, acquiring all the outstanding
Shares in the Offer and the Merger.
SECTION 5.05. Offer Documents; Proxy Statement. The Offer
Documents shall not, at the time the Offer Documents are filed with the SEC or
are first published, sent or given to stockholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The information supplied by Parent for inclusion in the
Proxy Statement shall not, at the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders of the Company, at the time
of the Stockholders' Meeting or at the Effective Time, 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 false or misleading, or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders' Meeting which shall have
become false or misleading. Notwithstanding the foregoing, Parent and Purchaser
make no representation or warranty with respect to any information supplied by
the Company or any of its representatives for inclusion in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
SECTION 5.06. Brokers. No broker, finder or investment banker
(other than Scott-Macon Ltd., whose fees shall be paid by Parent) is entitled to
any brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
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SECTION 5.07. Absence of Litigation. There is no Action
pending or, to the knowledge of Parent and the Purchaser, threatened against
Parent or the Purchaser, or any property or asset of Parent or the Purchaser,
before any Governmental Authority that seeks to materially delay or prevent the
consummation of any Transaction. Neither Parent nor the Purchaser nor any
property or asset of Parent or the Purchaser is subject to any continuing order
of, consent decree, settlement agreement or similar written agreement with, or,
to the knowledge of Parent or the Purchaser, continuing investigation by, any
Governmental Authority, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority that would prevent or
materially delay consummation of the Offer or the Merger or otherwise prevent or
materially delay Parent or the Purchaser from performing its obligations under
this Agreement.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. Conduct of Business by the Company Pending the
Merger. The Company agrees that, between the date of this Agreement and the
Effective Time, unless Parent shall otherwise agree in writing, which consent
will not be unreasonably withheld, the businesses of the Company and the
Subsidiary shall be conducted only in, and the Company and the Subsidiaries
shall not take any action except in, the ordinary course of business and in a
manner consistent with past practice; and the Company shall use its reasonable
best efforts to preserve substantially intact the business organization of the
Company and the Subsidiaries, to keep available the services of the current
officers, employees and consultants of the Company and the Subsidiaries and to
preserve the current relationships of the Company and the Subsidiaries with
customers, suppliers and other persons with which the Company or any Subsidiary
has significant business relations. By way of amplification and not limitation,
except as expressly contemplated by this Agreement and Section 6.01 of the
Disclosure Schedule, neither the Company nor any Subsidiary shall, between the
date of this Agreement and the Effective Time, directly or indirectly, do, or
propose to do, any of the following without the prior written consent of Parent,
which consent will not be unreasonably withheld:
(a) amend or otherwise change its Articles of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of, (i) any shares of any class of capital stock of the Company or any
Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any
other
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ownership interest (including, without limitation, any phantom
interest), of the Company or any Subsidiary (except for the issuance of
a maximum of 631,660 Shares issuable pursuant to (A) options
outstanding on the date hereof under the Company Stock Option Plans and
other agreements, (B) the Wave Technologies, Inc, Employee Stock
Purchase Plan and (C) the Wave Technologies, Inc. Profit Sharing and
401(k) Plan) or (ii) any assets of the Company or any Subsidiary,
except in the ordinary course of business and in a manner consistent
with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, or
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization
or any division thereof or any material amount of assets; (ii) incur
any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse, or otherwise become responsible for, the
obligations of any person, or make any loans or advances, except in the
ordinary course of business and consistent with past practice; (iii)
enter into any contract or agreement other than in the ordinary course
of business and consistent with past practice; (iv) authorize, or make
any commitment with respect to, any single capital expenditure which is
in excess of $50,000 or capital expenditures which are, in the
aggregate, in excess of $100,000 for the Company and the Subsidiaries
taken as a whole; or (v) enter into or amend any contract, agreement,
commitment or arrangement with respect to any matter set forth in this
Section 6.01(e), except in the ordinary course of business and
consistent with past practice;
(f) increase the compensation payable or to become payable or
the benefits provided to its directors, officers or employees, except
for increases in the ordinary course of business and consistent with
past practice in salaries or wages of employees of the Company or any
Subsidiary who are not directors or officers of the Company, or grant
any severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of
the Company or of any Subsidiary, or establish, adopt, enter into or
amend any collective bargaining, bonus, profit-sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee;
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(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice,
with respect to accounting policies or procedures;
(h) make any tax election or settle or compromise any material
United States federal, state, local or United Kingdom or other
non-United States income tax liability;
(i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities reflected or reserved against in the 1999 Balance Sheet or
subsequently incurred in the ordinary course of business and consistent
with past practice;
(j) amend, modify or consent to the termination of any
Material Contract, or amend, waive, modify or consent to the
termination of the Company's or any Subsidiary's rights thereunder,
other than in the ordinary course of business and consistent with past
practice;
(k) commence or settle any Action; or
(l) announce an intention, enter into any formal or informal
agreement or otherwise make a commitment, to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. Stockholders' Meeting. (a) If required by
applicable law in order to consummate the Merger, the Company, acting through
the Board, shall, in accordance with applicable law and the Company's Articles
of Incorporation and By-laws, (i) duly call, give notice of, convene and hold an
annual or special meeting of its stockholders as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on this Agreement and the Transactions (the "Stockholders' Meeting") and
(ii) (A) except as provided in Section 7.05(b), include in the Proxy Statement,
and not subsequently withdraw or modify in any manner adverse to Purchaser or
Parent, the unanimous recommendation of the Board that the stockholders of the
Company approve and adopt this Agreement and the Transactions and (B) use its
best efforts to obtain such approval and adoption. At the Stockholders' Meeting,
Parent and Purchaser shall cause all Shares then owned by them and their
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subsidiaries to be voted in favor of the approval and adoption of this Agreement
and the Transactions.
(b) Notwithstanding the foregoing, in the event that Purchaser
shall acquire at least 90% of the then outstanding Shares, the parties shall
take all necessary and appropriate action to cause the Merger to become
effective, in accordance with Section 351.447 of Missouri Law, as promptly as
reasonably practicable after such acquisition, without a meeting of the
stockholders of the Company.
SECTION 7.02. Proxy Statement. If approval of the Company's
shareholders is required by applicable law to consummate the Merger, promptly
following consummation of the Offer, the Company shall file the Proxy Statement
with the SEC under the Exchange Act, and shall use its best efforts to have the
Proxy Statement cleared by the SEC. Parent, Purchaser and the Company shall
cooperate with each other in the preparation of the Proxy Statement, and the
Company shall notify Parent of the receipt of any comments of the SEC with
respect to the Proxy Statement and of any requests by the SEC for any amendment
or supplement thereto or for additional information and shall provide to Parent
promptly copies of all correspondence between the Company or any representative
of the Company and the SEC. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement, including all amendments and
supplements thereto, prior to its being filed with the SEC and shall give Parent
and its counsel the opportunity to review all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company, Parent and Purchaser agrees to use its
reasonable best efforts, after consultation with the other parties hereto, to
respond promptly to all such comments of and requests by the SEC and to cause
the Proxy Statement and all required amendments and supplements thereto to be
mailed to the holders of Shares entitled to vote at the Stockholders' Meeting at
the earliest practicable time.
SECTION 7.03. Company Board Representation; Section 14(f). (a)
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from
time to time thereafter, Purchaser shall be entitled to designate up to such
number of directors, rounded up to the next whole number, on the Board as shall
give Purchaser representation on the Board equal to the product of the total
number of directors on the Board (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors, or both. At such times, the Company shall use its reasonable best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board, (ii) each board of directors of each
Subsidiary, and (iii) each committee of each such board, in each case only to
the extent
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permitted by applicable law. Notwithstanding the foregoing, until the Effective
Time, the Company shall use its reasonable best efforts to ensure that at least
two members of the Board and each committee of the Board and such boards and
committees of the Subsidiaries, as of the date hereof, who are not employees of
the Company shall remain members of the Board and of such boards and committees.
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder to fulfill its obligations under this Section 7.03, and shall include
in the Schedule 14D-9 such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 to
fulfill such obligations. Parent or Purchaser shall supply to the Company, and
be solely responsible for, any information with respect to either of them and
their nominees, officers, directors and affiliates required by such Section
14(f) and Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant
to this Section 7.03, prior to the Effective Time, any amendment of this
Agreement or the Certificate of Incorporation or By-laws of the Company, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or Purchaser, or waiver of any of the Company's rights hereunder, shall require
the concurrence of a majority of the directors of the Company then in office who
neither were designated by Purchaser nor are employees of the Company or any
Subsidiary.
SECTION 7.04. Access to Information; Confidentiality. (a) From
the date hereof until the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser complete access at all reasonable times to the officers,
employees, agents, properties, offices, plants and other facilities, books and
records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser with such financial, operating and other data and information as
Parent or Purchaser, through its officers, employees or agents, may reasonably
request.
(b) All information obtained by Parent or Purchaser pursuant
to this Section 7.04 shall be kept confidential in accordance with the
confidentiality agreement, dated January 13, 2000, as subsequently amended (the
"Confidentiality Agreement"), between Parent and the Company.
(c) No investigation pursuant to this Section 7.04 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto or any condition to the
Offer.
SECTION 7.05. No Solicitation of Transactions. (a) Neither the
Company nor any Subsidiary shall, directly or indirectly, through any officer,
director, agent or otherwise,
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(i) solicit, initiate or encourage the submission of, any Acquisition Proposal
(as defined below) or (ii) except as required by the fiduciary duties of the
Board under applicable law after having received advice from outside legal
counsel (x) participate in any discussions or negotiations regarding or (y)
after also entering into a customary confidentiality agreement on terms no less
favorable to the Company than those contained in the Confidentiality Agreement,
furnish to any person, any information with respect to, or otherwise cooperate
in any way with respect to, or assist or participate in, facilitate or
encourage, any unsolicited proposal that constitutes, or may reasonably be
expected to lead to, a Superior Proposal.
(b) Except as set forth in this Section 7.05(b), neither the
Board 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 or any such committee of this Agreement, the Offer,
the Merger or any other Transaction, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal. Notwithstanding the foregoing, in the
event that, prior to the time of acceptance for payment of Shares pursuant to
the Offer, the Board determines in good faith that it is required to do so by
its fiduciary duties under applicable law after having received advice from
outside legal counsel, the Board may withdraw or modify its approval or
recommendation of the Offer and the Merger, but only to terminate this Agreement
in accordance with Section 9.01(d)(ii) (and, concurrently with such termination,
cause the Company to enter into an agreement with respect to a Superior
Proposal).
(c) The Company shall, and shall direct or cause its
directors, officers, employees, representatives and agents to, immediately cease
and cause to be terminated any discussions or negotiations with any parties that
may be ongoing with respect to any Acquisition Proposal.
(d) The Company shall promptly advise Parent orally (to be
confirmed as soon as reasonably practicable in writing) of (i) any Acquisition
Proposal or any request for information with respect to any Acquisition
Proposal, the material terms and conditions of such Acquisition Proposal or
request and the identity of the person making such Acquisition Proposal or
request and (ii) any changes in any such Acquisition Proposal or request.
(e) Nothing contained in this Section 7.05 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders, if the Board determines in good faith
that it is required to do so by its fiduciary duties under applicable law after
having received advice from outside legal counsel; provided, however, that
neither the Company nor the Board nor any committee thereof shall, except as
permitted by Section 7.05(b), withdraw or modify, or propose publicly to
withdraw or modify, its position with respect to this
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Agreement, the Offer, the Merger or any other Transaction or to approve or
recommend, or propose publicly to approve or recommend, an Acquisition Proposal.
(f) The Company agrees, except as required by the Board's
fiduciary duties under applicable law after having received advice from outside
legal counsel, not to release any third party from, or waive any provision of,
any confidentiality or standstill agreement to which the Company is a party.
SECTION 7.06. Employee Benefits Matters. From and after the
Effective Time, Parent shall cause the Surviving Corporation and its
subsidiaries to honor in accordance with their terms, all contracts, agreements,
arrangements, policies, plans and commitments of the Company and the
Subsidiaries as in effect immediately prior to the Effective Time that are
applicable to any current or former employees or directors of the Company or any
Subsidiary. Employees of the Company or any Subsidiary shall receive credit for
purposes of eligibility to participate and vesting (but not for benefit
accruals) under any employee benefit plan, program or arrangement established or
maintained by the Surviving Corporation or any of its subsidiaries for service
accrued or deemed accrued prior to the Effective Time with the Company or any
Subsidiary; provided, however, that such crediting of service shall not operate
to duplicate any benefit or the funding of any such benefit.
SECTION 7.07. Directors' and Officers' Indemnification and
Insurance. (a) The By-laws of the Surviving Corporation shall contain provisions
no less favorable with respect to indemnification than are set forth in Article
VII of the By-laws of the Company, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect adversely the rights thereunder of individuals
who, at or prior to the Effective Time, were directors, officers, employees,
fiduciaries or agents of the Company, unless such modification shall be required
by law.
(b) The Surviving Corporation shall use its reasonable best
efforts to maintain in effect for three years from the Effective Time, if
available, the current directors' and officers' liability insurance policies
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions that are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that in no event shall
the Surviving Corporation be required to expend pursuant to this Section 7.07(b)
more than an amount per year equal to 200% of current annual premiums paid by
the Company for such insurance (which premiums the Company represents and
warrants to be $35,000 in the aggregate).
(c) In the event the Company or the Surviving Corporation or
any of their respective 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
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(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 Company or the Surviving Corporation, as the case
may be, or at Parent's option, Parent, shall assume the obligations set forth in
this Section 7.07.
SECTION 7.08. Notification of Certain Matters. The Company
shall give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (a) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which reasonably could be expected to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (b) any failure of the Company, Parent or
Purchaser, as the case may be, to comply with or satisfy any covenant or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 7.08 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 7.09. Further Action; Reasonable Best Efforts. (a)
Upon the terms and subject to the conditions hereof, each of the parties hereto
shall (i) make promptly its respective filings, and thereafter make any other
required submissions, under the HSR Act with respect to the Transactions and
(ii) use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the Transactions, including, without limitation, using its reasonable
best efforts to obtain all Permits, consents, approvals, authorizations,
qualifications and orders of Governmental Authorities and parties to contracts
with the Company and the Subsidiaries as are necessary for the consummation of
the Transactions and to fulfill the conditions to the Offer and the Merger;
provided that neither the Company, Purchaser nor Parent will be required by this
Section 7.09 to take any action, including entering into any consent decree,
hold separate orders or other arrangements, that (A) requires the divestiture of
any assets of any of the Purchaser, Parent, Company or any of their respective
subsidiaries or (B) limits Parent's freedom of action with respect to, or its
ability to retain, the Company and the Subsidiaries or any portion thereof or
any of Parent's or its affiliates' other assets or businesses. In case, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and directors of
each party to this Agreement shall use their reasonable best efforts to take all
such action. Parent or the Purchaser will pay all fees associated with the HSR
submission.
(b) Each of the parties hereto agrees to cooperate and use its
reasonable best efforts vigorously to contest and resist any Action, including
administrative or judicial Action, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and that restricts, prevents or
prohibits consummation of the Transactions, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal.
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SECTION 7.10. Public Announcements. Parent, the Purchaser and
the Company agree that no public release or announcement concerning the
Transactions, the Offer or the Merger shall be issued by any party without the
prior consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by Law or the
rules or regulations of any United States or non-United States securities
exchange, in which case the party required to make the release or announcement
shall use its best efforts to allow the other party reasonable time to comment
on such release or announcement in advance of such issuance.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Merger. The obligations of
each party to effect the Merger shall be subject to the satisfaction, at or
prior to the Effective Time, of the following conditions:
(a) Stockholder Approval. If and to the extent required by
Missouri Law, this Agreement and the Transactions shall have been
approved and adopted by the affirmative vote of the stockholders of the
Company;
(b) HSR Act. Any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated;
(c) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) which is then in effect and has the effect of
making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise restricting,
preventing or prohibiting consummation of the Transactions; and
(d) Offer. Purchaser or its permitted assignee shall have
purchased all Shares validly tendered and not withdrawn pursuant to the
Offer.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated
and the Merger and the other Transactions may be abandoned at any time prior to
the Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the Transactions by the stockholders of the Company:
(a) By mutual written consent of each of Parent, Purchaser and
the Company duly authorized by the Boards of Directors of Parent,
Purchaser and the Company; or
(b) By either Parent, Purchaser or the Company if (i) the
Effective Time shall not have occurred on or before June 30, 2000;
provided, however, that the right to terminate this Agreement under
this Section 9.01(b) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the cause of,
or resulted in, the failure of the Effective Time to occur on or before
such date or (ii) any Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any injunction, order, decree
or ruling (whether temporary, preliminary or permanent) which has
become final and nonappealable and has the effect of making
consummation of the Offer or the Merger illegal or otherwise preventing
or prohibiting consummation of the Offer or the Merger; or
(c) By Parent if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Annex A
hereto, Purchaser shall have (A) failed to commence the Offer within 10
business days following the date of this Agreement, (B) terminated the
Offer without having accepted any Shares for payment thereunder or (C)
failed to accept Shares for payment pursuant to the Offer within 90
days following the commencement of the Offer (provided, however, that
the applicable time period specified in (A) and (C) above shall be
extended until the earlier to occur of (x) the fifth business day
following expiration or termination of any applicable waiting period
under the HSR Act and (y) June 30, 2000, unless such action or inaction
under (A), (B) or (C) shall have been caused by or resulted from the
failure of Parent or Purchaser to perform, in any material respect, any
of their material covenants or agreements contained in this Agreement,
or the material breach by Parent or Purchaser of any of their material
representations or warranties contained in this Agreement or (ii) prior
to the purchase of Shares pursuant to the Offer, the Board or any
committee thereof shall have withdrawn or modified in a manner adverse
to Purchaser or Parent its approval or recommendation of this
Agreement, the Offer, the Merger or any other Transaction, or shall
have recommended or approved any Acquisition Proposal, or shall have
resolved to do any of the foregoing; or
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(d) By the Company, upon approval of the Board, if (i)
Purchaser shall have (A) failed to commence the Offer within 10
business days following the date of this Agreement, (B) terminated the
Offer without having accepted any Shares for payment thereunder or (C)
failed to accept Shares for payment pursuant to the Offer within 90
days following the commencement of the Offer (provided, however, that
the applicable time period specified in (A) and (C) above shall be
extended until the earlier to occur of (x) the fifth business day
following expiration or termination of any applicable waiting period
under the HSR Act and (y) June 30, 2000, unless such action or inaction
under (A), (B) or (C) shall have been caused by or resulted from the
failure of the Company to perform, in any material respect, any of its
material covenants or agreements contained in this Agreement or the
material breach by the Company of any of its material representations
or warranties contained in this Agreement or (ii) prior to the purchase
of Shares pursuant to the Offer, the Board determines in good faith
that it is required to do so by its fiduciary duties under applicable
law after having received advice from outside legal counsel in order to
enter into a definitive agreement with respect to a Superior Proposal,
upon three business days' prior written notice to Parent, setting forth
in reasonable detail the identity of the person making, and the final
terms and conditions of, the Superior Proposal and after duly
considering any proposals that may be made by Parent during such three
business day period; provided, however, that any termination of this
Agreement pursuant to this Section 9.01(d)(ii) shall not be effective
until the Company has made full payment of all amounts provided under
Section 9.03.
SECTION 9.02. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 9.01, this Agreement shall
forthwith become void, and there shall be no liability on the part of any party
hereto, except (a) as set forth in Section 9.03 and (b) nothing herein shall
relieve any party from liability for any breach hereof prior to the date of such
termination; provided, however, that the Confidentiality Agreement shall survive
any termination of this Agreement.
SECTION 9.03. Fees and Expenses. (a) In the event that
(i) any person (including, without limitation, the Company or
any affiliate thereof), other than Parent or any affiliate of Parent,
shall have become the beneficial owner of more than 15% of the
then-outstanding Shares, and this Agreement shall have been terminated
pursuant to Section 9.01(b)(i), 9.01(c) or 9.01(d); or
(ii) any person shall have commenced, publicly proposed or
communicated to the Company an Acquisition Proposal that is publicly
disclosed and (A) the Offer shall have remained open for at least 20
business days, (B) the Minimum Condition shall not have been satisfied,
(C) this Agreement shall have been terminated pursuant to
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Section 9.01 and (D) the Company enters into an agreement with respect
to an Acquisition Proposal, or an Acquisition Proposal is consummated,
in each case within 12 months after such termination of this Agreement;
or
(iii) this Agreement is terminated (A) pursuant to (x) Section
9.01(c)(ii) or 9.01(d)(ii) or (y) Section 9.01(c)(i) or 9.01(d)(i), to
the extent that the failure to commence, the termination or the failure
to accept any Shares for payment, as set forth in Section 9.01(c)(i) or
9.01(d)(i), as the case may be, shall relate to the failure of the
Company to perform, in any material respect, any of its material
covenants or agreements contained in this Agreement or the knowing or
intentional breach by the Company of any of its material
representations or warranties contained in this Agreement and (B) the
Company enters into an agreement with respect to an Acquisition
Proposal or an Acquisition Proposal is consummated, in each case within
12 months after such termination of this Agreement; or
(iv) the Company enters into an agreement with respect to an
Acquisition Proposal that was commenced, publicly proposed or
communicated to the Company prior to the termination of this Agreement
pursuant to Section 9.01, or such an Acquisition Proposal is
consummated, in each case within 12 months after the termination of
this Agreement pursuant to Section 9.01, and the Company shall not
therefore have been required to pay the Fee to Parent pursuant to
Section 9.03(a)(i), 9.03(a)(ii) or 9.03(a)(iii);
then, in any such event, the Company shall pay Parent promptly
(but in no event later than one business day after the first of such events
shall have occurred) a fee of $1.5 million (the "Fee"), which amount shall be
payable in immediately available funds, plus all out-of-pocket expenses and fees
up to $250,000, in the aggregate (including, without limitation, all fees of
counsel, accountants, experts and consultants to Parent and Purchaser, the fees
associated with the HSR submission, and all printing and advertising expenses
and filing fees) actually incurred or accrued by either of them or on their
behalf in connection with the Transactions (all the foregoing being referred to
herein collectively as the "Expenses").
(b) Except as set forth in Section 7.09(a) and this Section
9.03, all costs and expenses incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such expenses, whether or not
any Transaction is consummated.
(c) In the event that the Company shall fail to pay the Fee or
any Expenses when due, the term "Expenses" shall be deemed to include the costs
and expenses actually incurred or accrued by Parent and Purchaser (including,
without limitation, fees and expenses of counsel) in connection with the
collection under and enforcement of this Section 9.03, together with interest on
such unpaid Fee and Expenses, commencing on the date that the Fee or such
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Expenses became due, at a rate equal to the rate of interest publicly announced
by Citibank, N.A., from time to time, in the City of New York, as such bank's
Base Rate plus 1%.
SECTION 9.04. Amendment. Subject to Section 7.03, this
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement and
the Transactions by the stockholders of the Company, no amendment may be made
that would reduce the amount or change the type of consideration into which each
Share shall be converted upon consummation of the Merger. This Agreement may not
be amended except by an instrument in writing signed by each of the parties
hereto.
SECTION 9.05. Waiver. Subject to Section 7.03, at any time
prior to the Effective Time, any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties of any other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any agreement of any other party or any condition to its own
obligations contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 10.01):
if to Parent or Purchaser:
Thomson US Holdings, Inc.
Metro Center
One Station Plaza
Stamford, Connecticut 06902
Telecopier No: (203) 348-5718
Attention: General Counsel
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with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telecopier No: (212) 848-7179
Attention: David W. Heleniak, Esq.
Email: dheleniak@shearman.com
if to the Company:
Wave Technologies International, Inc.
10845 Olive Boulevard, Suite 250
St. Louis, Missouri 63141
Telecopier No: (314) 621-5065
Attention:
with a copy to:
Armstrong Teasdale LLP
One Metropolitan Square, Suite 2600
St. Louis, Missouri 63102
Telecopier No: (314) 621-5065
Attention: John L. Gillis, Jr., Esq.
E-mail: jgillis@armstrongteasdale.com
SECTION 10.02. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 10.03. Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with
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respect to the subject matter hereof. This Agreement shall not be assigned
(whether pursuant to a merger, by operation of law or otherwise), except that
Parent and Purchaser may assign all or any of their rights and obligations
hereunder to any affiliate of Parent, provided that no such assignment shall
relieve the assigning party of its obligations hereunder if such assignee does
not perform such obligations.
SECTION 10.04. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Section 7.07 (which is intended to be for
the benefit of the persons covered thereby and may be enforced by such persons).
SECTION 10.05. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 10.06. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed in that State (other
than those provisions set forth herein that are required to be governed by
Missouri Law).
SECTION 10.07. Waiver of Jury Trial. Each of the parties
hereto hereby waives to the fullest extent permitted by applicable law any right
it may have to a trial by jury with respect to any litigation directly or
indirectly arising out of, under or in connection with this Agreement or the
Transactions. Each of the parties hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce
that foregoing waiver and (b) acknowledges that it and the other hereto have
been induced to enter into this Agreement and the Transactions, as applicable,
by, among other things, the mutual waivers and certifications in this Section
10.07.
SECTION 10.08. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 10.09. Counterparts. This Agreement may be executed
and delivered (including by facsimile transmission) in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
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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.
THOMSON US HOLDINGS, INC.
By:
--------------------------------------
Title:
WTI ACQUISITION CORPORATION
Attest:
By:
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Title:
WAVE TECHNOLOGIES INTERNATIONAL, INC.
Attest:
By:
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Title:
50
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment any Shares tendered pursuant to the
Offer, and may extend, terminate or amend the Offer, if (i) immediately prior to
the expiration of the Offer, the Minimum Condition shall not have been
satisfied, (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 on or after the date of this Agreement and prior to the expiration of the
Offer, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any Action
before any Governmental Authority (i) challenging or seeking to make
illegal, materially delay, or otherwise, directly or indirectly,
restrain or prohibit or make materially more costly, the making of the
Offer, the acceptance for payment of any Shares by Parent, Purchaser or
any other affiliate of Parent, or the purchase of Shares, or the
consummation of any other Transaction, or seeking to obtain material
damages in connection with any Transaction; (ii) seeking to prohibit or
limit materially the ownership or operation by the Company, Parent or
any of their subsidiaries of all or any of the business or assets of
the Company, Parent or any of their subsidiaries that is material to
either Parent and its subsidiaries or the Company and the Subsidiaries,
in either case, taken as a whole, or to compel the Company, Parent or
any of their subsidiaries, as a result of the Transactions, to dispose
of or to hold separate all or any portion of the business or assets of
the Company, Parent or any of their subsidiaries that is material to
either Parent and its subsidiaries or the Company and the Subsidiaries,
in each case, taken as a whole; (iii) seeking to impose or confirm any
limitation on the ability of Parent, Purchaser or any other affiliate
of Parent to exercise effectively full rights of ownership of any
Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer or any Stockholder
Agreement or otherwise on all matters properly presented to the
Company's stockholders, including, without limitation, the approval and
adoption of this Agreement and the Transactions; (iv) seeking to
require divestiture by Parent, Purchaser or any other affiliate of
Parent of any Shares; or (v) which otherwise would prevent or
materially delay consummation of the Offer or the Merger or otherwise
prevent or materially delay the Company from performing its obligations
under this Agreement or would have a Material Adverse Effect;
(b) there shall have been any statute, rule, regulation,
legislation or interpretation enacted, promulgated, amended, issued or
deemed applicable to (i) Parent, the Company or any subsidiary or
affiliate of Parent or the Company or (ii) any Transaction, by any
United States or non-United States legislative body or Governmental
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A-2
Authority with appropriate jurisdiction, other than the routine
application of the waiting period provisions of the HSR Act to the
Offer or the Merger, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) any Material Adverse Effect shall have occurred;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the NASDAQ
National Market or the London, Montreal or Toronto Stock Exchanges
(other than a shortening of trading hours or any coordinated trading
halt triggered solely as a result of a specified increase or decrease
in a market index), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or
Canada, (iii) any limitation (whether or not mandatory) by any
government or Governmental Authority, on the extension of credit by
banks or other lending institutions, (iv) a commencement of a war or
armed hostilities or other national or international calamity directly
or indirectly involving the United States or Canada or (v) in the case
of any of the foregoing existing on the date hereof, a material
acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed, or Purchaser
shall have otherwise learned, that beneficial ownership (determined for
the purposes of this paragraph as set forth in Rule 13d-3 promulgated
under the Exchange Act) of 15% or more of the then-outstanding Shares
has been acquired by any person, other than Parent or any of its
affiliates, or (ii) (A) the Board, or any committee thereof, shall have
withdrawn or modified, in a manner adverse to Parent or Purchaser, the
approval or recommendation of the Offer, the Merger Agreement or
approved or recommended any Acquisition Proposal or any other
acquisition of Shares other than the Offer, the Merger or (B) the
Board, or any committee thereof, shall have resolved to do any of the
foregoing;
(f) any representation or warranty of the Company in the
Agreement that is qualified as to materiality or Material Adverse
Effect shall not be true and correct or any such representation or
warranty that is not so qualified shall not be true and correct in any
material respect, in each case as if such representation or warranty
was made as of such time on or after the date of this Agreement;
(g) the Company shall have failed to perform, in any material
respect, any obligation or to comply, in any material respect, with any
agreement or covenant of the Company to be performed or complied with
by it under the Agreement;
(h) the Agreement shall have been terminated in accordance
with its terms; or
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A-3
(i) Purchaser and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for payment of
Shares thereunder;
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment.
The foregoing conditions are for the sole benefit of Purchaser
and Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.