EXHIBIT (d)(5)
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AGREEMENT AND PLAN OF MERGER
dated as of
June 2, 2000
among
HOWMET INTERNATIONAL INC.,
ALCOA INC.
and
HMI ACQUISITION CORP.
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TABLE OF CONTENTS
Page
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ARTICLE I
THE OFFER
SECTION 1.1 The Offer 2
SECTION 1.2 Company Action 3
SECTION 1.3 Stockholder Lists 5
ARTICLE II
THE MERGER
SECTION 2.1 The Merger 5
SECTION 2.2 Effective Time; Closing 5
SECTION 2.3 Effect of the Merger 5
SECTION 2.4 Conversion of Shares 5
SECTION 2.5 Stock Options and SARs 6
SECTION 2.6 Surrender of Shares; Stock Transfer Books 7
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1 Certificate of Incorporation 9
SECTION 3.2 Bylaws 9
SECTION 3.3 Directors and Officers 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1 Organization and Standing 9
SECTION 4.2 Capitalization 10
SECTION 4.3 Authority for Agreement 10
SECTION 4.4 No Conflict 11
SECTION 4.5 Required Filings and Consents 11
SECTION 4.6 Compliance 11
SECTION 4.7 Reports and Financial Statements 11
SECTION 4.8 Absence of Certain Changes or Events 12
SECTION 4.9 Undisclosed Liabilities 12
SECTION 4.10 Brokers 12
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.1 Organization and Standing 13
SECTION 5.2 Authority for Agreement 13
SECTION 5.3 No Conflict 13
SECTION 5.4 Required Filings and Consents 13
SECTION 5.5 Brokers 14
SECTION 5.6 Purchaser Actions 14
SECTION 5.7 Stock Ownership 14
SECTION 5.8 Financing 14
ARTICLE VI
COVENANTS
SECTION 6.1 Conduct of the Business Pending the
Merger 14
SECTION 6.2 Notification of Certain Matters 15
SECTION 6.3 Further Action; Reasonable Best Efforts 15
SECTION 6.4 Stockholders' Meeting; Proxy Statement 15
SECTION 6.5 Indemnification 16
SECTION 6.6 Public Announcements 18
SECTION 6.7 Control of Litigation 18
SECTION 6.8 Limitation on Purchase of Shares 18
ARTICLE VII
CONDITIONS
SECTION 7.1 Conditions to the Obligation of Each
Party 18
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination 19
SECTION 8.2 Effect of Termination 20
SECTION 8.3 Amendments 20
SECTION 8.4 Waiver 20
ARTICLE IX
GENERAL PROVISIONS
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SECTION 9.1 No Third Party Beneficiaries 20
SECTION 9.2 Entire Agreement 20
SECTION 9.3 Succession and Assignment 21
SECTION 9.4 Counterparts 21
SECTION 9.5 Headings 21
SECTION 9.6 Governing Law 21
SECTION 9.7 Severability 21
SECTION 9.8 Construction 21
SECTION 9.9 Non-Survival of Representations
and Warranties 21
SECTION 9.10 Certain Definitions 22
SECTION 9.11 Fees and Expenses 22
SECTION 9.12 Enforcement of Agreement 22
SECTION 9.13 Obligation of Parent 22
SECTION 9.14 Independent Directors Committee 22
SECTION 9.15 Notices 22
ANNEX A -- Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement ") dated as of June 2, 2000
among Howmet International Inc., a Delaware corporation (the "Company"), Alcoa
Inc., a Pennsylvania corporation ("Parent"), and HMI Acquisition Corp., a
Delaware corporation and wholly owned subsidiary of Parent ("Purchaser").
WITNESSETH:
WHEREAS, Cordant Technologies Holding Company, a Delaware corporation
("Cordant Holdings") and wholly owned subsidiary of Cordant Technologies Inc., a
Delaware corporation ("Cordant"), owns 84,650,000 of the shares (the "Cordant
Owned Shares") of common stock, par value $01 per share, of the Company (the
"Shares"), representing approximately 84.6% of the total number of Shares issued
and outstanding as of the date hereof;
WHEREAS, Parent, Omega Acquisition Corp., a Delaware corporation and wholly
owned subsidiary of Parent ("Omega"), and Cordant entered into an Agreement and
Plan of Merger, dated as of March 14, 2000 (the "Cordant Merger Agreement"),
pursuant to which Alcoa has acquired, directly or indirectly, all of the issued
and outstanding shares of common stock, par value $1.00 per share, of Cordant
(the "Cordant Shares") pursuant to a cash tender offer by Omega (the "Cordant
Offer") to purchase all of such Cordant Shares for $57.00 per share, followed by
a merger of Omega with and into Cordant;
WHEREAS, Parent has proposed to acquire, through Purchaser, all of the
issued and outstanding Shares that are not Cordant Owned Shares;
WHEREAS, in furtherance of such acquisition, Purchaser has commenced a cash
tender offer (as amended pursuant to this Agreement, the "Offer") in compliance
with Section l4(d)(l) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to acquire all of the issued and outstanding Shares (other than
the Cordant Owned Shares) for $20.00 per Share, net to the seller in cash,
conditioned on, among other things, Omega's having accepted for payment Cordant
Shares in the Cordant Offer;
WHEREAS, Parent and Purchaser desire to amend the Offer to increase the
amount to be offered to the Company's stockholders for their Shares (other than
the Cordant Owned Shares) to $21.00 per Share (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 Independent Directors Committee (the "Independent Directors
Committee") of the Board of Directors of the Company (the "Company Board") has
unanimously recommended that the Company Board approve the Offer, the Merger (as
defined below) and this Agreement;
WHEREAS, the Company Board has approved the Offer and resolved to recommend
its acceptance by the Company's public stockholders;
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WHEREAS, the respective Boards of Directors of Parent, Purchaser and the
Company have deemed it advisable and in the best interests of their respective
stockholders to consummate the merger of Purchaser with and into the Company
(the "Merger"), upon the terms and subject to the conditions set forth herein,
and by resolutions duly adopted, have approved and adopted the transactions
contemplated by the Agreement;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer. (a) Purchaser shall, and Parent shall cause
Purchaser to, amend the Offer as soon as practicable on or after the date hereof
to (i) increase the Per Share Amount to $21.00, (ii) modify the conditions of
the Offer to conform to the conditions or events set forth in Annex A hereto and
no others and (iii) to make such other amendments as are required to conform the
Offer to this Agreement. Except as otherwise provided in the following sentence,
the obligation of Purchaser to accept for payment and pay for Shares validly
tendered pursuant to the Offer shall be subject only to the satisfaction of the
conditions set forth in Annex A hereto. Purchaser expressly reserves the right
to waive any such condition without the consent of the Company, and to make any
other changes in the terms of the Offer; provided, however, that without the
consent of the Independent Directors Committee, (i) Purchaser may not amend or
waive the Minimum Tender Condition (as defined in Annex A) and (ii) no change
may be made that decreases the Per Share Amount, changes the form of
consideration payable in the Offer, reduces the maximum number of Shares to be
purchased in the Offer, imposes conditions to the Offer in addition to,
modifying or supplementing those set forth in Annex A hereto or otherwise
adversely affects the holders of the Shares. Purchaser may, without the consent
of the Company, (i) extend the Offer from time to time for up to ten business
days for each such extension, if at the then scheduled expiration date of the
Offer any of the conditions of the Offer set forth in Annex A shall not be
satisfied or waived, or (ii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer. Purchaser
shall provide a "subsequent offering period" (as contemplated by Rule 1 4d- 11
under the Exchange Act) of not less than three business days following its
acceptance for payment of Shares in the Offer. If any of the conditions of the
Offer set forth in Annex A is not satisfied or waived on any scheduled
expiration date of the Offer, then, if requested by the Independent Directors
Committee, Purchaser shall extend the Offer one or more times (the period of
each such extension to be determined by Purchaser) for up to 30 days in the
aggregate for all such extensions; provided, that at the time of such extension
any such condition is reasonably capable of being satisfied; and provided,
further, that the failure of such condition to be satisfied is not the result of
a willful breach by the Company of any of its representations, warranties or
covenants contained in this Agreement. Subject to the terms and conditions of
the Offer, Purchaser shall, and Parent shall cause Purchaser to, pay, as
promptly as practicable after expiration of the Offer, for all Shares
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validly tendered in the Offer and not withdrawn.
(c) As soon as practicable after the date hereof, Purchaser shall file
with the SEC an amendment to its Tender Offer Statement on Schedule TO dated
April 18, 2000 (as so amended and together with all previous and further
amendments and supplements thereto, the "Schedule TO") with respect to the
Offer, the Merger and the other transactions contemplated hereby (collectively,
the "Transactions"). The Schedule TO shall contain or shall incorporate by
reference an amended and supplemented Offer to Purchase (as amended and
supplemented, the "Offer to Purchase") and revised forms of the related letter
of transmittal and any related documents (the Schedule TO, the Offer to Purchase
and such other documents, as amended and supplemented, together with all further
amendments and supplements thereto, being referred to herein collectively as the
"Offer Documents"). The Schedule TO shall comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder. The Schedule TO shall not, at the time the Schedule TO or any
amendments or supplements thereto are filed with the SEC or are first published,
sent or given to stockholders of the Company, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they are made, not misleading.
Parent, Purchaser and the Company agree to correct promptly any information
provided by any of them for use in the Offer Documents which 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 law. Parent and
Purchaser shall give the Company, the Independent Directors Committee and their
respective counsel reasonable opportunity to review the Offer Documents and any
amendments thereto prior to the filing thereof with the SEC. Parent and
Purchaser shall provide the Company, the Independent Directors Committee and
their respective counsel with a copy of any written comments or telephonic
notification of any oral comments Parent or Purchaser may receive from the SEC
or its staff with respect to the Offer Documents promptly after the receipt
thereof. Parent and Purchaser shall provide the Company, the Independent
Directors Committee and their respective counsel with a reasonable opportunity,
to the extent practicable, to participate in all communications with the SEC and
its staff, including any meetings and telephone conferences, relating to the
Offer Documents, the Transactions or this Agreement. In the event that Parent or
the Purchaser receives any comments from the SEC or its staff with respect to
the Offer Documents, each shall use its reasonable best efforts to respond
promptly to such comments and take all other actions reasonably necessary to
resolve the issues raised therein.
(d) Parent shall provide or cause to be provided to Purchaser on a
timely basis the funds necessary to pay for any Shares that Purchaser becomes
obligated to accept for payment, and pay for, pursuant to the Offer.
SECTION 1.2. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents that (i) the Independent Directors
Committee has unanimously approved and recommended this Agreement (including all
terms and conditions set forth herein) and the Transactions, (ii) the Company
Board, at a meeting duly called and held, has by a unanimous
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vote of the directors present, based on the approval and recommendation of the
Independent Directors Committee set forth in the preceding clause (i), (A)
determined that this Agreement and the Transactions, including each of the Offer
and the Merger, are advisable and fair to and in the best interests of the
holders of Shares (other than Cordant Holdings and Purchaser), (B) approved and
authorized this Agreement and the Merger and (C) recommended that (1) the
stockholders of the Company (other than Cordant Holdings and Purchaser) accept
the Offer and (2) the stockholders of the Company, if approval is required by
applicable law, approve and adopt this Agreement and the Merger, and (iii)
Goldman, Sachs & Co. (the "Howmet Financial Advisor") has delivered to the
Independent Directors Committee its opinion that, as of the date of this
Agreement, the consideration to be received by the holders of Shares (other than
Cordant Holdings and Purchaser) in the Offer and the Merger is fair to such
holders from a financial point of view.
(b) The Company shall provide for inclusion in the Offer Documents any
information reasonably requested by Parent or Purchaser, and, to the extent
reasonably requested by Parent or Purchaser, the Company shall cooperate in the
preparation of the Offer Documents. The Company hereby consents to the inclusion
in the Offer Documents of the recommendation of the Company Board and the
recommendation of the Independent Directors Committee described in Section
1.2(a).
(c) As soon as reasonably practicable on the date of filing by Purchaser
of the amended Offer, the Company shall file with the SEC an amendment to its
Solicitation/Recommendation Statement on Schedule 14D-9 (as amended and
supplemented, together with all further amendments and supplements thereto, the
"Schedule 14D-9") containing the recommendation of the Independent Directors
Committee and the Company Board described in Section 1.2(a) and shall
disseminate the Schedule 14D-9 to the extent required by Rule l4d-9 promulgated
under the Exchange Act and any other applicable law. The Schedule 14D-9 shall
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder. The Schedule 14D-9 shall not, at
the respective times the Schedule 14D-9 or any amendments or supplements thereto
are filed with the SEC or are first published, sent or given to stockholders of
the Company, as the case may be, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they are made, not misleading. 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 law. The Company shall
give Parent and Purchaser and their counsel reasonable opportunity to review the
Schedule 14D-9 and any amendments thereto prior to the filing thereof with the
SEC. The Company shall provide Parent and Purchaser and their counsel with a
copy of any written comments or telephonic notification of any oral comments the
Company may receive from the SEC or its staff with respect to the Schedule l4D-9
promptly after the receipt thereof The Company shall provide Parent, Purchaser
and their counsel with a reasonable opportunity, to the extent practicable, to
participate in all communications with the SEC and its staff, including any
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meetings and telephone conferences, relating to the Schedule 14D-9, the
Transactions or this Agreement. In the event that the Company receives any
comments from the SEC or its staff with respect to the Schedule 14D-9, it shall
use its reasonable best efforts to respond promptly to such comments and take
all other actions reasonably necessary to resolve the issues raised therein.
SECTION 1.3. Stockholder Lists. To the extent reasonably requested by
Parent, the Company shall promptly, or shall cause its transfer agent promptly
to, furnish Parent and 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 the most recent practicable date,
together with all other available listings and computer files containing names,
addresses and security position listings of record holders and beneficial owners
of Shares. The Company shall furnish Parent and 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 as Parent, Purchaser or their agents may reasonably request.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the General Corporation Law of
the State of Delaware ("Delaware Law"), at the Effective Time (as defined in
Section 2.2) Purchaser shall be merged with and into the Company. As a result of
the Merger, the separate corporate existence of Purchaser shall cease and the
Company shall continue as the surviving corporation of the Merger. In its
capacity as the surviving corporation of the Merger, the Company is sometimes
referred to herein as the "Surviving Corporation."
SECTION 2.2. Effective Time; Closing. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as is required by, and executed in
accordance with the relevant provisions of, Delaware Law. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware, or at such other time as the
parties hereto agree shall be specified in the Certificate of Merger (the date
and time the Merger becomes effective, the "Effective Time"). On the date of
such filing, a closing shall be held at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, Four Times Square, New York, New York, or such other place
as the parties shall agree.
SECTION 2.3. Effect of the Merger. At the Effective Time, the effect of the
Merger shall be provided in the applicable provisions of Delaware Law.
SECTION 2.4. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned by Parent,
Cordant, Cordant Holdings, Purchaser or any subsidiary of any of them
immediately prior to the Effective
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Time shall be cancelled, and no payment shall be made with respect thereto;
(b) each Share outstanding immediately prior to the Effective Time shall,
except as otherwise provided in paragraph (a) or paragraph (d) of this Section
2.4, be converted into the right to receive the Per Share Amount, or if any
greater amount per Share shall have been paid pursuant to the Offer, such
amount, in cash, without interest (such amount, the "Merger Consideration"),
upon surrender of the certificate formerly representing such Share in the manner
provided in Section 2.6 hereof;
(c) each share of common stock of Purchaser outstanding immediately prior
to the Effective Time shall be converted into and become one share of common
stock of the Surviving Corporation and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation; and
(d) anything in this Agreement to the contrary notwithstanding, any
issued and outstanding Shares held by a person (a "Dissenting Stockholder") who
shall not have voted in favor of or consented to the Merger and complies with
all the provisions of Delaware Law concerning the right of holders of Shares to
dissent from the Merger and require appraisal of their Shares ("Dissenting
Shares") shall not be converted as described in Section 2.4(b) but shall become,
by virtue of the Merger, the right to receive such consideration, solely from
the Surviving Corporation, as may be determined to be due to such Dissenting
Stockholder pursuant to Delaware Law. If, after the Effective Time, such
Dissenting Stockholder withdraws his demand for appraisal or fails to perfect or
otherwise loses his right of appraisal, in any case pursuant to Delaware Law,
such Dissenting Stockholder shall forfeit such right to payment for such
Dissenting Shares pursuant to Delaware Law and such Dissenting Shares shall be
deemed to have been converted as of the Effective Time into the right to receive
the Merger Consideration. The Company shall give Parent (i) prompt notice of any
demands for appraisal of Shares received by the Company and (ii) the opportunity
to participate in and direct all negotiations and proceedings with respect to
any such demands. The Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
SECTION 2.5. Stock Options and SARs. (a) Each option to purchase Shares
issued pursuant the Company's Amended and Restated 1997 Stock Awards Plan
(such plan, the "Company Stock Option Plan," and each option issued thereunder,
a "Company Option") shall become exercisable immediately prior to the Effective
Time, as permitted pursuant to the terms and conditions of the Company Stock
Option Plan. The Company shall offer to each holder of a Company Option that is
outstanding immediately prior to the Effective Time (the "Purchase Date")
(whether or not then presently exercisable or vested) to cancel such Company
Option in exchange for an amount in cash equal to the product obtained by
multiplying (x) the difference between the Merger Consideration and the per
share exercise price of such Company Option, and (y) the number of Shares
covered by such Company Option. All payments in respect of such Company Options
shall be made as promptly as practicable after the Purchase Date, subject to the
collection of all applicable withholding taxes required by law to be collected
by the Company. Each Company Option, the holder of which does not accept such
offer, that remains
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outstanding at the Effective Time shall be assumed by Parent and shall be
converted, effective as of the Effective Time, into a vested option with respect
to that number (the "New Share Number") of shares of the common stock, par value
$1.00 per share, of Parent ("Parent Common Stock") that equals the number of
Shares subject to such Company Option immediately before the Effective Time,
times an amount equal to the Merger Consideration divided by the Parent Share
Value (as defined below), rounded to the nearest whole number, with a per-share
exercise price equal to the aggregate exercise price of such option immediately
before the Effective Time, divided by the New Share Number, rounded to the
nearest whole cent; provided that in the case of any such option that was
granted as an "incentive stock option" within the meaning of Section 422 of the
Code and did not cease to qualify as such as a result of any acceleration of
vesting provided for above or otherwise, the number of shares shall be rounded
down to the nearest whole number to determine the New Share Number, and the new
per-share exercise price shall be determined by rounding up to the nearest whole
cent. The "Parent Share Value" means the average of the daily high and low
trading prices of the Parent Common Stock on the New York Stock Exchange on each
trading day during the period of 30 days ending the second trading day prior to
the Effective Time. Upon the Effective Time or as soon as reasonably practicable
thereafter, Parent shall file with the SEC a Registration Statement or
Registration Statements on Form S-8 covering all shares of Parent Common Stock
to be issued pursuant to the options converted into options to purchase shares
of Parent Common Stock pursuant to the terms of this Section 2.5(a) and shall
cause such Registration Statement to remain effective so long as Parent
continues to have a registration statement on Form S-8 (or any successor form)
outstanding for other options to purchase Parent Common Stock (but not beyond
the date when all options so converted to options to purchase Parent Common
Stock shall have been exercised, forfeited or cancelled). In addition, as of the
Effective Time, each of the agreements entered into in 1996 between the Company
and certain key management employees of the Company or one of the Company's
subsidiaries, as amended in connection with the initial public offering of
Shares in 1997 ("SAR Agreements"), providing for the issuance of stock
appreciation rights with respect to Shares (a "SAR") shall be amended such that
the per-share Appreciated Value (as defined in such SAR Agreements) shall equal
the excess of $15 over the Base Value (as defined in such SAR Agreements), the
purchase of Shares in the Offer shall constitute an "Acceleration Event" for
purposes of the SARs, each SAR outstanding as of the purchase of Shares in the
Offer shall become 100% vested and shall be payable in three equal installments
(together with interest) as provided in Section 2.3(b)(ii) of the SAR
Agreements.
(b) The provisions of Section 5.5(a) of the Cordant Merger Agreement shall
govern the treatment of the options to purchase common stock of Cordant granted
to certain key Company employees ("Cordant Options").
(c) In connection with the foregoing, the Company and/or Parent shall (i)
take or cause to be taken all such actions, including without limitation action
by the Board of Directors of the Company or Parent or the appropriate committee
thereof, to accomplish the foregoing and (ii) make in a timely fashion any
notification to holders of Company Options, SARs and/or Cordant Options as may
be necessary or appropriate. No further Company Options shall be granted
pursuant to the Company Stock Option Plan after the date hereof.
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(d) The Company shall take all such steps as may be required to cause the
transactions contemplated by this Section 2.5 and any other dispositions of
Company equity securities (including derivative securities) in connection with
this Agreement by each individual who is a director or officer of the Company to
be exempt under Rule 16b-3 promulgated under the Exchange Act.
SECTION 2.6. Surrender of Shares; Stock Transfer Books. (a) Prior to the
Effective Time Parent shall designate a bank or trust company reasonably
acceptable to the Company to act as agent (the "Paying Agent") for the holders
of Shares in connection with the Merger to receive the funds to which holders of
Shares shall become entitled pursuant to Section 2.4(b). Purchaser will make
available to the Paying Agent, as needed, the aggregate Merger Consideration to
be paid in respect of the Shares (the "Fund"). The Fund shall be invested by the
Paying Agent as directed by Parent. Any net profits resulting from, or interest
or income produced by such investments shall be payable as directed by Parent.
(b) Promptly after the Effective Time, Parent or 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 2.4(b) 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 "Share Certificates") shall pass, only upon proper
delivery to the Paying Agent of the Share Certificates or an affidavit of loss
certificate in the form provided by the Paying Agent) and instructions for use
in effecting the surrender of the Share Certificates or affidavit of loss
certificate pursuant to such letter of transmittal. Upon surrender to the Paying
Agent of a Share Certificate or affidavit, 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 Share Certificate shall be entitled to
receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Share Certificate, and such Share Certificate shall then be
cancelled. Until so surrendered, each such Share Certificate shall, at and after
the Effective Time, represent for all purposes, only the right to receive such
Merger Consideration. No interest shall accrue or be paid to any beneficial
owner of Shares or any holder of any Share Certificate with respect to the
Merger Consideration payable upon the surrender of any Share Certificate. If
payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Share Certificate is registered on the
stock transfer books of the Company, it shall be a condition of payment that the
Share Certificate so surrendered shall be endorsed in blank or to the Paying
Agent 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 Share Certificate surrendered or shall have established to the
satisfaction of the Surviving Corporation that such taxes either have been paid
or are not applicable.
(c) At any time following the sixth month after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any portion of the Fund 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
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respect of all amounts held in the Fund or other funds made available to it),
and thereafter each such holder shall be entitled to look only to the Surviving
Corporation (subject to abandoned property, escheat and other similar laws), and
only as general creditors thereof, with respect to any Merger Consideration that
may be payable upon due surrender of the Share Certificates held by such holder.
The foregoing notwithstanding, neither Parent, the Surviving Corporation nor the
Paying Agent shall be liable to any holder of a Share for any Merger
Consideration delivered in respect of such Share to a public official pursuant
to any abandoned property, escheat or other similar law.
(d) After 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.
(e) Purchaser, the Surviving Corporation and the Paying Agent, as the case
may be, shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to the Offer or this Agreement to any holder of
Shares such amounts that Purchaser, the Surviving Corporation or the Paying
Agent is required to deduct and withhold with respect to the making of such
payment under the Internal Revenue Code of 1986, as amended, the rules and
regulations promulgated thereunder or any provision of state, local or foreign
tax law. To the extent that amounts are so withheld by Purchaser, the Surviving
Corporation or the Paying Agent, such amounts shall be treated for all purposes
of the Offer and this Agreement as having been paid to the holder of the Shares
in respect of which such deduction and withholding was made by Purchaser, the
Surviving Corporation or the Paying Agent.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.1. Certificate of Incorporation. At the Effective Time, the
certificate of incorporation of Purchaser shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended in
accordance with Delaware Law, such certificate of incorporation and the bylaws
of the Surviving Corporation; provided, however, that, at the Effective Time,
Article I of the certificate of incorporation of the Surviving Corporation shall
be amended to read as follows: "The name of the corporation is Howmet
International Inc."
SECTION 3.2. Bylaws. The bylaws of Purchaser in effect at the Effective
Time shall be the bylaws of the Surviving Corporation until amended in
accordance with Delaware Law, and the certificate of incorporation and such
bylaws of the Surviving Corporation.
SECTION 3.3. Directors and Officers. From and after the Effective Time,
in each case until their respective successors are duly elected or appointed and
qualified in accordance with applicable law and the certificate of incorporation
and bylaws of the Surviving Corporation, (i) the directors of Purchaser at the
Effective Time shall be the directors of the Surviving Corporation, and (ii) the
officers of the Company at the Effective Time shall continue as the officers of
the Surviving
13
Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as follows:
SECTION 4.1. Organization and Standing. The Company is a corporation duly
organize validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as presently conducted and to enter into and perform this Agreement and
to carry out the Transactions. The Company is duly qualified to do business as a
foreign corporation and is in good standing in every jurisdiction in which the
failure to so qualify would have a Material Adverse Effect (as defined below) on
the Company. The Company has furnished to Parent true and complete copies of its
certificate of incorporation (the "Company Certificate of Incorporation") and
bylaws (the "Company Bylaws"), each as amended to date and presently in effect.
"Material Adverse Effect" shall mean, with respect to any party hereto, any
change, event or effect that, when taken together with all other changes, events
or effects, is or is reasonably likely to be materially adverse to the business,
results of operations, properties, assets, liabilities or condition (financial
or otherwise) of such party and its subsidiaries, taken as a whole except, with
respect to the Company and its subsidiaries, for such changes, events or effects
that affect generally the aircraft turbine engine industry or the industrial gas
turbine engine industry and not the Company and its subsidiaries specifically.
SECTION 4.2. Capitalization. The authorized capital stock of the Company
consists of 400,000,000 Shares and 10,000,000 shares of preferred stock, $01 par
value per share (the "Preferred Shares"). As of the date hereof, (i) 100,037,057
Shares are issued and outstanding, all of which are validly issued, fully paid
and nonassessable, (ii) no Shares are held in the treasury of the Company, (iii)
4,297,500 Shares are authorized and reserved for future issuance pursuant to
Company Options currently issued under the Company Stock Option Plan and (iv) no
Preferred Shares are issued and outstanding. The Company has previously
furnished to Parent a schedule of outstanding Company Options and SARs,
including, where available, the exercise prices and vesting provisions thereof.
Except as provided in this Section 4.2, in the Corporate Agreement, dated as of
December 2, 1997, as amended, among Cordant, Cordant Holdings and the Company,
or pursuant to the Company Stock Option Plan (including directors' restricted
shares), (A) no subscription, warrant, option, convertible security or other
right (contingent or otherwise) to purchase or acquire any shares of capital
stock of the Company is authorized or outstanding, (B) the Company has no
obligation (contingent or otherwise) to issue any subscription, warrant, option,
convertible security or other such right or to issue or distribute to holders of
any shares of its capital stock any evidence of indebtedness or assets of the
Company, and (C) the Company has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof
14
SECTION 4.3. Authority for Agreement. The execution, delivery and
performance by the Company of this Agreement, and the consummation by the
Company of the Transactions, have been duly authorized by all necessary
corporate action (including without limitation the unanimous approval of the
Independent Directors Committee), other than the approval of stockholders of the
Company to the extent required by applicable law. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Purchaser, constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms. In the event the Merger is consummated pursuant to a provision
of Delaware Law other than Section 253 of Delaware Law, the affirmative vote of
holders of a majority of the outstanding Shares entitled to vote at a duly
called and held meeting of stockholders is the only vote necessary to approve
and adopt this Agreement and the Merger. The Board of Directors of the Company
has adopted resolutions approving for purposes of Section 203 of Delaware Law
Alcoa's becoming an interested stockholder with respect to the Company.
SECTION 4.4. No Conflict. The execution and delivery of this Agreement by
the Company do not, and the performance of this Agreement by the Company and the
consummation of the Transactions will not, (i) conflict with or violate the
Company Certificate of Incorporation or Company Bylaws, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected or the organizational
documents of any of the Company's subsidiaries, 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 of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any property or asset of any of them is
bound or affected, except in the case of clauses (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, (A) have a Material Adverse Effect on the
Company, or (B) prevent or materially delay the performance by the Company of
any of its obligations under this Agreement or the consummation of the
Transactions.
SECTION 4.5. Required Filings and Consents. The execution and delivery
of this Agreement by the Company do not, and the performance of this Agreement
by the Company will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws") and filing
and recordation of appropriate merger documents as required by Delaware Law,
(ii) for any required filings, notifications, approvals or consents under
applicable foreign competition or antitrust laws and (iii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate, (A) have
a Material Adverse Effect on the Company, or (B) prevent or materially delay the
performance by the Company of any of its obligations under this Agreement or the
consummation of the
15
Transactions.
SECTION 4.6. Compliance. Neither the Company nor any of its subsidiaries is
in conflict with or in default or violation of, (i) any law, rule, regulation,
order, judgment or decree applicable to the Company or any of its subsidiaries
or by which any property or asset of the Company or any of its subsidiaries is
bound or affected, or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any property or asset of the Company or
any of its subsidiaries is bound or affected, except for any such conflicts,
defaults or violations that would not, individually or in the aggregate, (A)
have a Material Adverse Effect on the Company, or (B) prevent or materially
delay the performance by the Company of any of its obligations under this
Agreement or the consummation of the Transactions.
SECTION 4.7. Reports and Financial Statements. The Company has previously
furnished to Parent complete and accurate copies, as amended or supplemented, of
its (i) Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
(ii) proxy statements relating to all meetings of its stockholders (whether
annual or special) since December 31, 1998, and (iii) all other reports or
registration statements, including Registration Statements on Form S-8, filed by
the Company with the SEC since December 31, 1998 (such annual reports, proxy
statements, registration statements and other filings, together with any
amendments or supplements thereto, are collectively referred to herein as the
"Company Reports"). The Company Reports constitute all of the documents filed or
required to be filed by the Company with the SEC since December 31, 1998. As of
their respective dates, the Company Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited financial
statements and unaudited interim financial statements of the Company included in
the Company Reports (together, the "Financial Statements") (A) comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, (B) have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods covered
thereby (except as may be indicated therein or in the notes thereto, and in the
case of quarterly financial statements, as permitted by Form 10-Q under the
Exchange Act), and (C) fairly present in all material respects the consolidated
financial condition, results of operations and cash flows of the Company and its
consolidated subsidiaries as of the respective dates thereof and for the periods
referred to therein.
SECTION 4.8. Absence of Certain Changes or Events. Except as contemplated
by this Agreement or as disclosed in the Company Reports filed prior to the date
hereof, since December 31, 1999, the Company and its subsidiaries have conducted
their respective businesses in all material respects only in the ordinary course
and consistent with prior practice and there has not been any event or
occurrence of any condition that has had or could reasonably be expected to have
a Material Adverse Effect on the Company.
SECTION 4.9. Undisclosed Liabilities. Except as and to the extent set forth
in any Company
16
Report filed prior to the date hereof, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required in accordance with GAAP
to be reflected on a consolidated balance sheet of the Company and its
subsidiaries (including the notes thereto), except for liabilities or
obligations incurred in the ordinary course of business consistent with prior
practice since December 31, 1999, that, individually or in the aggregate, have
not had, and could not reasonably be expected to have, a Material Adverse Effect
on the Company.
SECTION 4.10. Brokers. No broker, finder or investment banker (other than
the Howmet Financial Advisor) is entitled to any brokerage, finder's or other
fee or commission in connection with this Agreement or the Transactions based
upon arrangements made by or on behalf of the Company (including the Independent
Directors Committee). The Company has heretofore furnished to Parent a complete
and correct copy of all agreements pursuant to which the Howmet Financial
Advisor is entitled to any payment relating to this Agreement or the
Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and warrant to the
Company as follows:
SECTION 5.1. Organization and Standing. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation and has all requisite corporate power and
authority to conduct its business as presently conducted and to enter into and
perform this Agreement and to carry out the Transactions.
SECTION 5.2. Authority for Agreement. The execution, delivery and
performance by each of Parent and Purchaser of this Agreement, and the
consummation by each of Parent and Purchaser of the Transactions, have been duly
authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by Parent and Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of each of Parent and Purchaser enforceable against
Parent and Purchaser in accordance with its terms.
SECTION 5.3. No Conflict. The execution and delivery of this Agreement by
Parent and Purchaser do not, and the performance of this Agreement by Parent and
Purchaser and the consummation of the Transactions will not, (i) conflict with
or violate the certificate of incorporation or bylaws of Parent or Purchaser,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Parent or Purchaser or any of their respective subsidiaries
or by which any property or asset of Parent or Purchaser or their respective
subsidiaries is bound or affected or the organizational documents of any of such
subsidiaries (other than the Company and its subsidiaries), 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 Parent or
Purchaser or
17
their respective subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or Purchaser or their respective subsidiaries is a
party or by which Parent or Purchaser or their respective subsidiaries or any
property or asset of any of them is bound or affected, except in the case of
clauses (ii) and (iii) for any such conflicts, violations, breaches, defaults or
other occurrences which would not, individually or in the aggregate, prevent or
materially delay the performance by Parent or Purchaser of their respective
obligations under this Agreement or the consummation of the Transactions.
SECTION 5.4. Required Filings and Consents. The execution and delivery of
this Agreement by Parent and Purchaser do not, and the performance of this
Agreement by Parent and Purchaser will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, except (i) for applicable
requirements, if any, of the Exchange Act, state securities or Blue Sky Laws and
filing and recordation of appropriate merger documents as required by Delaware
Law, (ii) for any required filings, notifications, approvals or consents under
applicable foreign competition or antitrust laws and (iii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate, prevent
or materially delay the performance by Parent or Purchaser of any of their
respective obligations under this Agreement or the consummation of the
Transactions.
SECTION 5.5. Brokers. No broker, finder or investment banker is entitled to
any brokerage finder's or other fee or commission payable by the Company in
connection with this Agreement and the Transactions based upon arrangements made
by or on behalf of Parent or Purchaser.
SECTION 5.6. Purchaser Actions. Since the date of its incorporation,
Purchaser has not carried on any business or conducted any operations other than
the commencement of the Offer, the execution of this Agreement, the performance
of its obligations hereunder and matters ancillary thereto.
SECTION 5.7. Stock Ownership. As of the date of this Agreement, Cordant
Holdings own beneficially and of record, 84,650,000 Shares, and Parent does not
own, beneficially or of record, directly or indirectly, any other Shares.
SECTION 5.8. Financing. Parent and Purchaser collectively will have at the
closing of the Offer or at the Effective Time, as the case may be, sufficient
immediately available funds in cash to acquire all of the Shares validly
tendered in the Offer and not withdrawn, to acquire all outstanding Shares
(other than the Cordant Owned Shares or Shares acquired by Purchaser in the
Offer) in the Merger, to perform Parent's and Purchaser's obligations hereunder,
to perform Parent's obligations under the Cordant Offer and the Cordant Merger
Agreement and to pay the related fees and expenses.
ARTICLE VI
COVENANTS
18
SECTION 6.1. Conduct of the Business Pending the Merger. (a) The Company
covenants and agrees that between the date of this Agreement and the Effective
Time, except as otherwise contemplated by this Agreement or unless Parent shall
otherwise consent in writing, (i) the businesses of the Company shall be
conducted only in the ordinary course of business and in a manner consistent
with prior practice, and (ii) the Company shall use its reasonable best efforts
to preserve substantially intact the business organization of the Company, to
keep available the services of the current officers and employees of the Company
and to maintain existing relationships of the Company with customers, suppliers
and other persons with which the Company has significant business relations.
(b) Without limiting the generality of the foregoing, the Company agrees
and covenants that between the date of this Agreement and the Effective Time,
the Company shall not, nor shall the Company permit any of its subsidiaries to,
(i) declare, set aside for payment or pay any dividends on or make other
distributions in respect of any of its capital stock, except for dividends or
other distributions by a wholly owned subsidiary of the Company to the Company
or another wholly owned subsidiary of the Company, (ii) split, combine,
subdivide or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iii) repurchase or otherwise
acquire or permit any subsidiary to purchase or otherwise acquire, any shares of
its capital stock, (iv) issue, deliver, grant, sell or dispose of, or authorize
or propose the issuance, delivery, grant, sale or disposition of, any shares of
its capital stock or any securities convertible into, exchangeable for or
evidencing the right to subscribe for any such shares of its capital stock, or
any rights, warrants, options or any other agreements of any character to
acquire any such shares or convertible or exchangeable securities, other than
the issuance of Shares upon the exercise of Company Options outstanding as of
the date of this Agreement under the Company Stock Option Plan or (v) make any
commitment to take any of the actions prohibited by this Section 6.1.
SECTION 6.2. Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (i) the
occurrence, or nonoccurrence, of any event which would be reasonably likely to
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (ii) any failure by such party (or
Purchaser, in the case of Parent) in any material respect to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 6.2 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
SECTION 6.3. Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall 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 licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and third parties as are
necessary for the consummation of the Transactions and to fulfill the conditions
to the Offer and the Merger. 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
19
officers of Parent and the Surviving Corporation shall use their reasonable best
efforts to take all such action.
SECTION 6.4. Stockholders' Meeting; Proxy Statement. (a) If required by
Delaware Law in order to consummate the Merger, the Company, acting through the
Company Board, shall, in accordance with applicable law and the Company
Certificate of Incorporation and Company Bylaws, (i) duly call, give notice of,
convene and hold a meeting of its stockholders as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on the adoption of this Agreement and the approval of the Merger (the
"Stockholders' Meeting"), (ii) file a proxy or information statement with the
SEC in accordance with the Exchange Act (the "Proxy Statement") and shall use
its reasonable best efforts to have the Proxy Statement cleared by the SEC, and
(iii) include in the Proxy Statement (A) the recommendation of the Company Board
that the stockholders of the Company approve and adopt this Agreement; provided
that such recommendation may be withdrawn, modified or amended to the extent the
Company Board determines that the failure to do so would be inconsistent with
its fiduciary duties to the Company's stockholders under applicable law (as
determined by the Company Board in good faith after consultation with counsel),
and (B) the opinion of the Howmet Financial Advisor that, as of the date of this
Agreement, the consideration to be received by the holders of Shares (other than
Cordant Holdings and Purchaser) in the Offer and the Merger is fair to such
holders from a financial point of view. The Proxy Statement shall comply as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations thereunder. The Proxy Statement shall not, at the time of
mailing thereof and at the time of the Stockholders' Meeting, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Parent, Purchaser and
the Company shall also take any action required to be taken under Blue Sky Laws
or state securities laws in connection with the Merger. Parent, Purchaser and
the Company shall cooperate with each other in taking such action and in the
preparation of the Proxy Statement. Parent and its counsel shall be given
reasonable opportunity to review the Proxy Statement and any amendments thereto
prior to dissemination of the Proxy Statement to holders of Shares, The Company
shall provide Parent and its counsel with a copy of any written comments or
telephonic notification of any oral comments the Company may receive from the
SEC or its staff with respect to the Proxy Statement promptly after the receipt
thereof. The Company shall provide Parent and its counsel with a reasonable
opportunity, to the extent practicable, to participate in all communications
with the SEC and its staff, including any meetings and telephone conferences,
relating to the Proxy Statement. At the Stockholders' Meeting, Parent and
Purchaser shall cause the Cordant Owned Shares and any Shares acquired by
Purchaser in the Offer to be voted in favor of the approval and adoption of this
Agreement and the Merger.
(b) In the event that, following consummation of the Offer, Cordant
Holdings and Purchaser own an aggregate of at least 90% of the then outstanding
Shares, the parties hereto agree, subject to Article VII, to take all necessary
and appropriate action to cause the Merger to become effective without a meeting
of the stockholders of the Company in accordance with Section 253 of Delaware
Law, as promptly as practicable after the consummation of the Offer.
20
SECTION 6.5. Indemnification. (a) It is understood and agreed that all
rights to indemnification by the Company and its subsidiaries now existing in
favor of each present and former director and officer of the Company (or any
subsidiary thereof) and each person who served at the request of the Company as
a director, officer, trustee or fiduciary of another corporation, partnership,
joint venture, trust, pension or other employee benefit plan or enterprise, in
each case determined as of the Effective Time (each an "Indemnified Party"), as
provided in the Company Bylaws or the certificate of incorporation or bylaws of
the applicable subsidiary of the Company or pursuant to any other agreements in
effect on the date hereof, copies of which have been provided to Parent, shall
survive the Merger and shall continue in full force and effect for a period of
at least six years from the Effective Time; provided, however, that all rights
to indemnification in respect of any Action (as defined below) pending or
asserted or claim made within such period shall continue until the disposition
of such Action or resolution of such claim.
(b) Parent shall, and shall cause the Surviving Corporation to, from and
after the Effective Time, indemnify and hold harmless each Indemnified Party
against all losses, claims, damages, liabilities, costs or expenses (including
reasonable attorneys' fees), judgments, fines, penalties and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation arising out of or pertaining to all acts and omissions, or alleged
acts or omissions, occurring on or before the Effective Time, whether commenced,
asserted or claimed prior to, at or after the Effective Time, that are based on
or arise out of the Indemnified Party's service as a director or officer of the
Company (or any subsidiary thereof) or, at the request of the Company, as a
director, officer, trustee or fiduciary of another corporation, partnership,
joint venture, trust, pension or other employee benefit plan or enterprise,
including all acts or omissions in connection with this Agreement and the
Transactions, to the fullest extent permitted under applicable law. In the event
of any such claim, action, suit, proceeding or investigation (an "Action"), (i)
Parent and the Surviving Corporation shall pay, as incurred, the reasonable fees
and expenses of counsel selected by the Indemnified Party, which counsel shall
be reasonably acceptable to Parent, in advance of the final disposition of any
such Action to the fullest extent permitted under applicable law and, if
required, upon receipt of any undertaking required by applicable law, and (ii)
Parent and the Surviving Corporation will cooperate in the defense of any such
matter; provided, however, neither Parent nor the Surviving Corporation shall be
liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld or delayed), and provided further, that
Parent and the Surviving Corporation shall not be obligated pursuant to this
Section 6.5 to pay the fees and disbursements of more than one counsel (together
with local counsel) for all Indemnified Parties in any single Action, unless, in
the good faith judgment of any of the Indemnified Parties, there is or may be a
conflict of interests between two or more of such Indemnified Parties, in which
case there may be separate counsel for each similarly situated group.
(c) Parent and the Surviving Corporation shall cause to be maintained in
effect for six years from the Effective Time the current policies of the
directors' and officers' liability insurance maintained by the Company or by
Cordant with respect to the Company (provided that Parent may substitute
therefor policies of at least the same coverage containing terms and conditions
which are not materially less advantageous) with respect to matters or events
occurring at or prior to the Effective Time to the extent available; provided,
however, that in no
21
event shall Parent or the Surviving Corporation be required to expend an amount
per year in excess of 100% of the current annual premiums paid by the Company to
maintain or procure insurance coverage pursuant hereto; and provided, further,
that if the annual premiums of such insurance coverage exceed such amount,
Parent shall be obligated to cause to be obtained a policy with the greatest
coverage available for a cost not exceeding such amount. Notwithstanding the
foregoing, so long as (i) Parent is required to maintain the directors' and
officers' liability insurance policies of Cordant and its subsidiaries
(including the Company and its Subsidiaries) pursuant to Section 5.9(c) of the
Cordant Merger Agreement and (ii) Parent is in compliance with such obligations
as they apply to the Company and its Subsidiaries, said Section 5.9(c) shall
govern the provision of such insurance by Parent and the Surviving Corporation
pursuant to this Section 6.5(c).
(d) The rights of each Indemnified Party hereunder shall be in addition to
any other rights such Indemnified Party may have under the certificate of
incorporation or bylaws of the Company or any of its subsidiaries, under
Delaware Law or otherwise. The provisions of this Section 6.5 shall survive the
consummation of the Merger and expressly are intended to benefit each of the
Indemnified Parties.
SECTION 6.6. Public Announcements. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any Transaction and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange to which Parent or the Company is a party.
SECTION 6.7. Control of Litigation. Parent shall have the right to conduct
and control, through counsel of its own choosing, in consultation and
cooperation with the Company and the Independent Directors Committee and their
respective counsel, the defense or settlement of any action or claim brought by
any stockholder or purported stockholder of the Company before any domestic or
foreign court of competent jurisdiction which challenges the acquisition in
whole or in part of the Shares or the entering into of this Agreement, seeks to
restrain or prohibit the making or consummation of the Offer or the Merger or
seeks to obtain material damages, including, without limitation, the actions
captioned Peters v. Wilson, Chmelev v. Wilson, McMullen v. Howmet International
Inc., Guido v. Howmet International Inc., Brickell Partners v. Wilson, Berkowitz
v. Wilson, Kaplan v. Howmet International Inc. and Abbot v. Wilson, which
actions have been consolidated for all purposes under the caption In re Howmet
International Shareholders Litigation, and the Company shall not, and shall
cause its subsidiaries and affiliates not to, pay or settle any such claim or
action to which it is a party without the prior written consent of Parent;
provided, that the Company shall be permitted to participate in such defense or
settlement through counsel chosen by it, and the Parent shall not take any
action with respect to such defense or settlement to which the Company shall
reasonably object.
SECTION 6.8. Limitation on Purchase of Shares. Prior to the Effective Time,
the Parent and its affiliates will not purchase or otherwise acquire the
beneficial ownership of any Shares except pursuant to the Offer (amended as
contemplated by Section 1.1) or the Merger.
22
ARTICLE VII
CONDITIONS
SECTION 7.1. Conditions to the Obligation of Each Party. The respective
obligations of Parent, Purchaser and the Company to effect the Merger are
subject to the satisfaction of the following conditions, unless waived (to the
extent permitted) in writing by all parties (any waiver by the Company to be
made only with the approval of the Independent Directors Committee):
(a) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the requisite vote or consent of the stockholders of the
Company to the extent required by Delaware Law.
(b) No Order. No foreign, United States or state governmental authority or
other agency or commission or foreign, United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the acquisition of Shares by Parent or Purchaser or any
affiliate of either of them illegal or otherwise preventing or prohibiting
consummation of any of the Transactions.
(c) Purchaser shall have purchased validly tendered Shares in the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the Offer
and the Merger may be abandoned at any time prior to the Effective Time:
(a) By mutual written consent duly authorized by the Boards of Directors of
Parent and the Company, if such termination is also approved by the Independent
Directors Committee;
(b) By either Parent or the Company if any court of competent jurisdiction
or administrative agency, commission, governmental or regulatory authority,
domestic or foreign, shall have issued an order, decree, ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
Offer or the Merger and such order, decree, ruling or other action shall have
become final and nonappealable; provided, however, that the party seeking to
terminate this Agreement pursuant to this clause (b) shall have used its
reasonable best efforts to remove such order, decree, ruling or action.
(c) By Parent if, due to an occurrence or circumstance that would result in
a failure of any condition set forth in Annex A hereto to be satisfied, (i)
Purchaser shall not have amended the Offer within 10 days following the date of
this Agreement, (ii) the Offer shall have been terminated or shall have expired
in accordance with its terms without Purchaser having accepted for payment any
Shares pursuant to the Offer or (iii) Purchaser shall have failed to accept for
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payment Shares pursuant to the Offer on or before September 30, 2000, unless, in
the case of clauses (ii) and (iii) such termination or failure to pay for Shares
shall have been caused by or resulted from the failure of Parent or Purchaser to
perform in any material respect any covenant or agreement of either of them
contained in this Agreement or the material breach by Parent or Purchaser of any
representation or warranty of either of them contained in this Agreement; or
(d) by the Company (by action of the Independent Directors Committee), if
(1)(A) there has been a material breach by Parent or Purchaser of any
representation, warranty, covenant or agreement set forth in this Agreement or
if any representation or warranty of Parent or Parent shall have become untrue
in any material respect and (B) such breach is not curable, or, if curable, is
not cured within 15 days after written notice of such breach is given to Parent
by the Company; or (2) whether or not Parent or Purchaser shall be in breach of
this Agreement (provided that this clause (2) shall not limit clause (1)), (i)
Purchaser shall not have amended the Offer within 10 days following the date of
this Agreement, (ii) the Offer shall have been terminated or shall have expired
in accordance with its terms without Purchaser having accepted for payment any
Shares validly tendered pursuant to the Offer, or (iii) Purchaser shall have
failed to accept for payment Shares validly tendered pursuant to the Offer on or
before September 30, 2000; provided, however, that the right to terminate this
Agreement pursuant to Section 8.1(d) shall not be available to the Company if
it, at such time, is in material breach of any representation, warranty,
covenant or agreement set forth in this Agreement.
SECTION 8.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1, this Agreement shall forthwith become void,
except that the provisions of this Section 8.2 and of Article IX shall survive
any such termination, and there shall be no liability on the part of any party
hereto or their respective directors, officers, employees or stockholders;
provided that nothing herein shall relieve any party from any liability for any
willful and material breach by such party of any of its covenants or agreements
set forth in this Agreement and all rights and remedies of such nonbreaching
party under this Agreement in the case of such a willful and material breach, at
law or in equity, shall be preserved.
SECTION 8.3. Amendments. This Agreement may not be amended except by action
of the Board of Directors of each of the parties hereto (and, in the case of the
Company, with the approval of the Independent Directors Committee) set forth in
an instrument in writing signed on behalf of each of the parties hereto;
provided, however, that after approval of the Merger by the stockholders of the
Company (if required), no amendment may be made without the further approval of
the stockholders of the Company if the effect of such amendment would be to (i)
reduce the Merger Consideration or change the form thereof or (ii) alter or
change any of the terms and conditions of this Agreement if any of such
alterations or changes, alone or in the aggregate, would be materially adverse
to the stockholders of the Company, or if such approval is otherwise required
under Delaware Law.
SECTION 8.4. Waiver. At any time prior to the Effective Time, whether
before or after any Stockholders' Meeting, any party hereto, by action taken by
its Board of Directors (and, in the case of the Company, with the approval of
the Independent Directors Committee), may (i) extend the time for the
performance of any of the covenants, obligations or other acts of the Company,
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in the case of an extension by Parent or Purchaser, or Parent or Purchaser, in
the case of an extension by the Company, or (ii) waive any inaccuracy of any
representations or warranties or compliance with any of the agreements,
covenants or conditions of the Company, in the case of a waiver by Parent or
Purchaser, or Parent or Purchaser, in the case of a waiver by the Company, or
with any conditions to its own obligations. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party by its duly authorized
officer.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. No Third Party Beneficiaries. Other than the provisions of
Section 6.5 (the "Third Party Provisions"), nothing in this Agreement shall
confer any rights or remedies upon any person other than the parties hereto. The
Third Party Provisions may be enforced by the beneficiaries thereof
SECTION 9.2. Entire Agreement. This Agreement (including Annex A hereto)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, with respect to the
subject matter hereof.
SECTION 9.3. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors and assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties; provided, however, that Purchaser may freely assign its
rights to purchase Shares in the Offer to another wholly owned subsidiary of
Parent without such prior written approval.
SECTION 9.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
SECTION 9.5. Headings. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 9.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of law thereof Each of the Company and Parent hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of Delaware and of the United States of America
located in the State of Delaware (the "Delaware Courts") for any litigation
arising out of or relating to this Agreement and the Transactions (and agrees
not to commence any litigation relating thereto except in such courts), waives
any objection to the laying of venue of any such litigation in the Delaware
Courts and agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in any inconvenient forum.
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SECTION 9.7. Severability. Any term or provision of this Agreement that is
invalid unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
SECTION 9.8. Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
SECTION 9.9. Non-Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. Nothing in this
Section 9.9 shall limit any covenant or agreement of the parties which by its
terms contemplates performance after the Effective Time.
SECTION 9.10. Certain Definitions. For purposes of this Agreement, (i) the
term "affiliate" shall have the same meaning as set forth in Rule l2b-2
promulgated under the Exchange Act, (ii) the term "person" shall mean any
individual, corporation, partnership (general or limited), limited liability
company, limited liability partnership, trust, joint venture, joint-stock
company, syndicate, association, entity, unincorporated organization or
government or any political subdivision, agency or instrumentality thereof and
(iii) the term "subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, of
which such party directly or indirectly owns or controls at least a majority of
the securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization, or any
organization of which such party is a general partner.
SECTION 9.11. Fees and Expenses. Whether or not the Merger is consummated,
all fees and expenses incurred in connection with the Offer, this Agreement and
the Transactions shall be paid by the party incurring such fees and expenses.
SECTION 9.12. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any Delaware Court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION 9.13. Obligation of Parent. Whenever this Agreement requires
Purchaser (or its successors or assignees) to take any action, such requirement
shall be deemed to include an undertaking on the part of Parent to cause
Purchaser to take such action and a guarantee of the
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performance thereof.
SECTION 9.14. Independent Directors Committee. Prior to the Effective
Time, any agreement by the Company to terminate this Agreement pursuant to
Section 8.1(a), any termination of this Agreement by the Company pursuant to
Section 8.1(b) or 8.1(d), any agreement by the Company to amend this Agreement
pursuant to Section 8.3 or any waiver by the Company pursuant to Section 7.1 or
8.4 shall be made, taken or given, as the case may be, only with the
concurrence, or at the direction, of the Independent Directors Committee, as the
Independent Directors Committee may determine, from time to time, in its sole
discretion.
SECTION 9.15. 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,
by registered or certified mail (postage prepaid, return receipt requested) or
by overnight courier service to the respective parties at the following
addresses, or at such other address for a party as shall be specified in a
notice given in accordance with this Section 9.15:
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If to Parent or Purchaser:
Alcoa Inc.
201 Isabella Street
Pittsburgh, PA 15212-5858
Telecopier: (412) 553-3200
Attn: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036-6522
Telecopier: (212) 735-2000
Attn: J. Michael Schell, Esq.
Margaret L. Wolff, Esq.
If to the Company:
Howmet International Inc.
475 Steamboat Road
Greenwich, CT 06830
Telecopier: (203) 625-8771
Attn: General Counsel
with a copy to:
Baker Botts L.L.P.
One Shell Plaza
910 Louisiana
Houston, TX 77002-4995
Telecopier: (713) 229-7701
Attn: J. David Kirkland, Jr., Esq.
and to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
NewYork,NY 10019
Telecopier: (212) 403-2000
Attn: Eric S. Robinson, Esq.
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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.
HOWMET INTERNATIONAL INC.
/s/ Roland A. Paul
By: Roland A. Paul
Title: Vice President and General Counsel
ALCOA INC.
/s/ Richard B. Kelson
By: Richard B. Kelson
Title: Executive Vice President and Chief
Financial Officer
HMI ACQUISITION CORP.
/s/ Barbara S. Jeremiah
By: Barbara S. Jeermiah
Title: Vice President
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other term or provision of the Offer, Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule l4e-1(c) promulgated under the
Exchange Act, to pay for any Shares not theretofore accepted for payment or paid
for unless there shall have been tendered and not withdrawn prior to the
expiration of the Offer not less than that number of Shares that would represent
a majority of the outstanding Shares held by stockholders other than Cordant
Holdings or Purchaser (the "Minimum Tender Condition"). Furthermore,
notwithstanding any other term or provision of the Offer, Purchaser shall not be
required to accept for payment or, subject as aforesaid, to pay for any Shares
not theretofore accepted for payment or paid for, and may terminate or amend the
Offer if, at any time on or after the date hereof, and prior to the acceptance
of such Shares for payment or the payment therefor, any of the following events
or facts shall have occurred:
(a) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the United
States, (ii) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States (whether or not mandatory), (iii) any
limitation (whether or not mandatory) imposed by any government, governmental
agency or authority on the extension of credit by banks or other lending
institutions in the United States, or (iv) the commencement of a war or armed
hostilities or other international calamity directly or indirectly involving the
United States; or
(b) there shall be instituted or pending any action or proceeding by any
domestic or foreign governmental, regulatory or administrative agency or
commission that has, in the good faith judgment of Parent, a reasonable
possibility of success and that (i) challenges the acquisition in whole or in
part of the Shares, seeks to restrain or prohibit the making or consummation of
the Offer or the Merger or seeks to obtain any material damages, (ii) prohibits
or makes illegal the purchase of, or payment for, some or all of the Shares,
(iii) results in a material delay in or restricts the ability of Purchaser, or
renders the Purchaser unable, to accept for payment or pay for some or all of
the Shares or to consummate the Merger, or (iv) imposes limitations on the
ability of Purchaser effectively to acquire or to hold or to exercise full
rights of ownership of the Shares, including, without limitation, the right to
vote the Shares purchased by Purchaser on all matters properly presented to the
stockholders of the Company; or
(c) any statute, rule, regulation, referendum, interpretation or order
shall be enacted, qualified, enforced, promulgated or deemed applicable to (i)
Parent or any of its subsidiaries (including the Company or any of its
subsidiaries) or (ii) the Offer or the Merger, which, in the reasonable judgment
of Parent, would directly or indirectly result in any of the consequences
referred to in clauses (i) through (iv) of paragraph (b) above; or
(d) this Agreement shall have been terminated in accordance with its
terms or Parent
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and the Company (with the approval of the Independent Directors Committee) shall
have agreed that Purchaser shall amend or terminate the Offer or postpone the
acceptance for payment of Shares pursuant thereto; or
(e) any of the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality or Material Adverse
Effect on the Company shall not be true and correct or any such representations
and warranties that are not so qualified shall not be true and correct in any
material respect, in each case as if such representations and warranties were
made at the time of such determination (other than to the extent such
representations and warranties are made as of a specified date, in which case,
such representations and warranties shall not be so true and correct as of such
date); or
(f) the Company shall have failed to perform or comply with in any
material respect any of the agreements or covenants of the Company to be
performed or complied with by it under this Agreement; or
(g) there shall have occurred any event or condition that has had, or
could reasonably be expected to have, a Material Adverse Effect on the Company;
which in the reasonable good faith judgment of Parent with respect to each and
every matter referred to above and regardless of the circumstance (including any
action or inaction by Parent or Purchaser) giving rise to any such condition,
makes it inadvisable to proceed with the Offer, the acceptance for payment or
payment for the Shares in the Offer, or the Merger.
The foregoing conditions (other than the Minimum Tender Condition) are
for the benefit of Parent and Purchaser only and may be asserted regardless of
the circumstances giving rise to any such conditions (including any action or
inaction by Parent or Purchaser). Except as otherwise provided in Section 1.1(a)
of the Merger Agreement, each of the foregoing conditions may be waived by
Purchaser in whole or in part. The failure to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, and each right shall be
deemed a continuing right which may be asserted at any time and from time to
time. Any determination by Parent with respect to the foregoing conditions shall
be final and binding on the parties.
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