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EXHIBIT 99.(c)(1)
AGREEMENT AND PLAN OF MERGER
by and among
FRAMATOME CONNECTORS INTERNATIONAL S.A.
BRAVO ACQUISITION CO.
and
BERG ELECTRONICS CORP.
August 27, 1998
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TABLE OF CONTENTS
ARTICLE I THE OFFER AND MERGER
Section 1.1 The Offer..............................................................2
Section 1.2 Company Actions........................................................4
Section 1.3 Directors..............................................................5
Section 1.4 The Merger.............................................................6
Section 1.5 Effective Time.........................................................6
Section 1.6 Closing................................................................7
Section 1.7 Directors and Officers of the Surviving Corporation....................7
Section 1.8 Stockholders' Meeting..................................................7
Section 1.9 Merger Without Meeting of Stockholders.................................8
ARTICLE II CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock............................................8
Section 2.2 Exchange of Certificates...............................................9
Section 2.3 Dissenting Shares.....................................................11
Section 2.4 Company Option Plans..................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization; Subsidiaries............................................11
Section 3.2 Capitalization........................................................12
Section 3.3 Authorization; Validity of Agreement; Company Action..................14
Section 3.4 Consents and Approvals; No Violations.................................14
Section 3.5 SEC Reports and Financial Statements..................................15
Section 3.6 No Undisclosed Liabilities............................................15
Section 3.7 Absence of Certain Changes............................................16
Section 3.8 Contracts.............................................................17
Section 3.9 Employee Benefit Plans; ERISA.........................................18
Section 3.10 Litigation............................................................19
Section 3.11 Permits; No Default; Compliance with Applicable Laws..................19
Section 3.12 Taxes.................................................................20
Section 3.13 Real and Personal Property............................................21
Section 3.14 Intellectual Property.................................................22
Section 3.15 Environmental Matters.................................................22
Section 3.16 Employee and Labor Matters............................................23
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Section 3.17 Information in Offer Documents........................................23
Section 3.18 Brokers or Finders....................................................24
Section 3.19 Insurance.............................................................24
Section 3.20 Opinion of Financial Advisor..........................................24
Section 3.21 Rights Plan; Takeover Laws............................................24
Section 3.22 Termination Agreement.................................................25
Section 3.23. Exon-Florio...........................................................25
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND THE
PURCHASER
Section 4.1 Organization..........................................................26
Section 4.2 Authorization; Validity of Agreement; Necessary Action................26
Section 4.3 Consents and Approvals; No Violations.................................26
Section 4.4 Information in Offer Documents; Proxy Statement.......................27
Section 4.5 Sufficient Funds......................................................27
Section 4.6 Share Ownership.......................................................27
Section 4.7 Purchaser's Operations................................................27
ARTICLE V COVENANTS
Section 5.1 Interim Operations of the Company.....................................28
Section 5.2 Access to Information.................................................30
Section 5.3 Employee Benefits.....................................................30
Section 5.4 No Solicitation.......................................................31
Section 5.5 Publicity.............................................................33
Section 5.6 Indemnification; D&O Insurance........................................33
Section 5.7 Approvals and Consents; Cooperation; Notification.....................34
Section 5.8 Reasonable Best Efforts; Further Assurances...........................35
Section 5.9 Shareholder Litigation................................................35
Section 5.10 Fair Price Statute....................................................35
Section 5.11 Non-Solicitation and Non-Competition Agreements.......................35
Section 5.12 Transition Services...................................................36
ARTICLE VI CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger............36
Section 6.2 Conditions to the Obligations of the Company to Effect the Merger.....36
Section 6.3 Conditions to the Obligations of Parent and the Purchaser to
Effect the Merger ..................................................37
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Section 6.4 Exception.............................................................37
ARTICLE VII TERMINATION
Section 7.1 Termination...........................................................37
Section 7.2 Effect of Termination.................................................39
ARTICLE VIII MISCELLANEOUS
Section 8.1 Amendment and Modification............................................39
Section 8.2 Nonsurvival of Representations and Warranties.........................40
Section 8.3 Notices...............................................................40
Section 8.4 Interpretation........................................................41
Section 8.5 Counterparts..........................................................41
Section 8.6 Entire Agreement; Third Party Beneficiaries...........................41
Section 8.7 Severability..........................................................42
Section 8.8 Governing Law.........................................................42
Section 8.9 Specific Performance..................................................42
Section 8.10 Assignment............................................................42
Section 8.11 Expenses..............................................................42
Section 8.12 Headings..............................................................42
Section 8.13 Waivers...............................................................42
Section 8.14 Disclosure Schedule...................................................43
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 27, 1998 (this
"Agreement"), by and among FRAMATOME CONNECTORS INTERNATIONAL S.A., a
corporation organized under the laws of the Republic of France ("Parent"), BRAVO
ACQUISITION CO., a Delaware corporation and an indirect wholly-owned subsidiary
of Parent (the "Purchaser"), and BERG ELECTRONICS CORP., a Delaware corporation
(the "Company").
RECITALS
WHEREAS, the Boards of Directors of Parent, the Purchaser and the
Company have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, the acquisition of the Company by Parent
and the Purchaser upon the terms and subject to the conditions set forth herein;
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement and to prescribe certain conditions to the transactions contemplated
hereby;
WHEREAS, to satisfy a condition to Parent and Purchaser entering
into this Agreement and incurring the obligations set forth herein, concurrently
with the execution and delivery of this Agreement, certain stockholders of the
Company have entered into a Stockholders Agreement (the "Stockholders
Agreement") with Purchaser pursuant to which such stockholders have agreed, on
the terms and subject to the conditions thereof, to tender their Shares in the
Offer (as defined below); and
WHEREAS, to satisfy a condition to Parent and Purchaser entering
into this Agreement and incurring the obligations set forth herein, as soon as
practicable following the execution and delivery of this Agreement, Mills &
Partners and certain employees of the Company will enter into Non-Competition
and Non-Solicitation Agreements (the "Non-Competition and Non-Solicitation
Agreements") with the Company pursuant to which such employees and Mills &
Partners will agree, on the terms and subject to the conditions thereof, to
certain non-competition and non-solicitation arrangements with the Company.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
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ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer. (a) Provided that nothing shall have occurred
that, had the Offer referred to below been commenced, would give rise to a right
to terminate the Offer pursuant to any of the conditions set forth in Annex A
hereto, as promptly as practicable after the date hereof (but in no event later
than five business days from the public announcement of the execution hereof),
the Purchaser shall, and Parent shall cause the Purchaser to, commence (within
the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), an offer (the "Offer") to purchase for cash any and all
of the issued and outstanding shares of (i) Common Stock, par value $0.01 per
share, of the Company (referred to herein as either the "Common Shares" or
"Company Common Stock") at a price of $35.00 per Common Share, net to the seller
in cash (such price, or such higher price per Common Share as may be paid in the
Offer, being referred to herein as the "Common Offer Price," provided that
Purchaser shall not be required to increase the Common Offer Price) and (ii)
Class A Common Stock, par value $0.01 per share, of the Company (referred to
herein as either the "Class A Shares" or "Company Class A Common Stock" and,
together with the Common Shares, as the "Shares" or "Company Stock," which
references include for all purposes the related Preferred Stock Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement between the Company and
Harris Trust and Savings Bank, dated as of December 22, 1997) at a price of
$32.965 per Class A Share, net to the seller in cash (such price, or such higher
price per Class A Share as may be paid in the Offer, being referred to herein as
the "Class A Offer Price," provided that Purchaser shall not be required to
increase the Class A Offer Price, and, together with the Common Offer Price, as
the "Offer Price"). The Purchaser shall, on the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, accept for payment and
pay for Shares tendered as soon as it is legally permitted to do so under
applicable law; provided that, if the number of Shares that have been physically
tendered and not withdrawn are more than 50% of the Shares outstanding on a
fully diluted basis but less than 90% of the outstanding shares of each class of
capital stock of the Company, the Purchaser may extend the Offer for up to 20
business days from the date that all conditions to the Offer shall first have
been satisfied or waived. The obligations of the Purchaser to accept for payment
and to pay for any and all Shares validly tendered on or prior to the expiration
of the Offer and not withdrawn shall be subject only to there being validly
tendered in accordance with the terms of the Offer and not withdrawn prior to
the expiration date of the Offer, that number of Shares which, together with any
Shares beneficially owned by Parent or the Purchaser, represent at least a
majority of the Shares outstanding on a fully diluted basis (the "Minimum
Condition") and the other conditions set forth in Annex A hereto. The Offer
shall be made by means of an offer to purchase (the "Offer to Purchase")
containing the terms set forth in this Agreement, the Minimum Condition and the
other conditions set forth in Annex A hereto. The Purchaser shall not amend or
waive the Minimum Condition, decrease the Offer Price or decrease the number of
Shares sought, or impose any additional conditions to the Offer, or amend any
term of the Offer in any manner adverse to the holders of the Shares or extend
the expiration date of the Offer (except for such extensions as are
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contemplated below), in each case without the prior written consent of the
Company (such consent to be authorized by the Board of Directors of the Company
or a duly authorized committee thereof). Notwithstanding the foregoing, the
Purchaser shall, and Parent agrees to cause the Purchaser to, extend the Offer
from time to time until the date that all conditions to the Offer have been
satisfied, subject to the provisions of Section 7.1(b)(i) hereof if, and to the
extent that, at the initial expiration date of the Offer, or any extension
thereof, all conditions to the Offer have not been satisfied or waived. In
addition, the Offer Price may be increased and the Offer may be extended to the
extent required by law in connection with such increase, in each case without
the consent of the Company. In the event of any increase in the Common Offer
Price, the Class A Offer Price will be increased by an equal amount, and in the
event of any increase in the Class A Offer Price, the Common Offer Price will be
increased by an equal amount.
(b) As soon as practicable on the date the Offer is commenced,
Parent and the Purchaser shall file with the United States Securities and
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-1"). The Schedule 14D-1 will
include, as exhibits, the Offer to Purchase and a form of letter of transmittal
and summary advertisement (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). The Offer Documents when filed will
comply as to form in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by Parent or the Purchaser
with respect to omissions or information supplied in writing for inclusion in
the Offer Documents, in each case by the Company. Each of Parent and the
Purchaser further agrees to take all steps necessary to cause the Offer
Documents to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Each of Parent and the Purchaser, on the one hand, and the Company, on the
other hand, agrees promptly to correct any information provided by it for use in
the Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect and each of Parent and the Purchaser
further agrees to take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. The Company and its counsel shall be given a reasonable opportunity to
review the initial Schedule 14D-1 before it is filed with the SEC. In addition,
Parent and the Purchaser agree to provide the Company and its counsel in writing
with any comments or other communications that Parent, the Purchaser or their
counsel may receive from time to time from the SEC or its staff with respect to
the Offer Documents promptly after the receipt of such comments or other
communications.
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Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors, at a meeting duly called and held, has
with the affirmative vote of at least a majority of the members of the Board of
Directors (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger (as defined in Section 1.4), are fair
and in the best interests of the holders of the Shares and approved the
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, which approvals constitute approval of this Agreement, the Offer and the
Merger for purposes of Section 203 of the General Corporation Law of the State
of Delaware (the "DGCL"), and (ii) resolved to recommend that the stockholders
of the Company accept the Offer, tender their Shares thereunder to the Purchaser
and approve and adopt this Agreement and the Merger, which recommendation shall
not be withdrawn, modified or amended except as permitted by Section 5.4(b)
hereof.
(b) As soon as practicable after the time the Offer is commenced,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to
the provisions of Section 5.4(b) of this Agreement, contain the recommendation
referred to in clause (ii) of Section 1.2(a) hereof. The Company will use its
reasonable best efforts to cause the Schedule 14D-9 to be filed on the same date
that the Schedule 14D-1 is filed; provided, however, that in any event the
Schedule 14D-9 will be filed no later than ten business days following the
commencement of the Offer. The Schedule 14D-9 when filed will comply as to form
in all material respects with the provisions of applicable federal securities
laws and, on the date filed with the SEC and on the date first published, sent
or given to the Company's stockholders, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to omissions or information
supplied in writing for inclusion in the Schedule 14D-9, in each case by Parent
or the Purchaser. The Company further agrees to take all steps necessary to
cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Each of the Company, on the one hand, and Parent and
the Purchaser, on the other hand, agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect 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 to be disseminated to holders
of the Shares, in each case as and to the extent required by applicable federal
securities laws. Each of Parent, the Purchaser and its counsel shall be given a
reasonable opportunity to review the initial Schedule 14D-9 before it is filed
with the SEC. In addition, the Company agrees to provide Parent, the Purchaser
and their counsel in writing with any comments or other communications that the
Company or its counsel may receive from time to time from the SEC or its staff
with respect to the Schedule 14D-9 promptly after the receipt of such comments
or other communications.
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(c) In connection with the Offer, the Company will promptly
furnish or cause to be furnished to the Purchaser mailing labels, security
position listings and any available listing or computer file containing the
names and addresses of the record holders of the Shares as of a recent date
(which shall in no event be more than ten days prior to the date hereof), and
shall furnish the Purchaser with such additional information (including updated
lists of holders of Shares and their addresses, mailing labels and lists of
security positions) and such other assistance as the Purchaser or its agents may
reasonably request in communicating the Offer to the record and beneficial
stockholders of the Company. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and the Purchaser and each of their
affiliates, associates, partners, employees, agents and advisors shall hold in
confidence the information contained in any of such labels and lists and the
additional information referred to in the preceding sentence, will use such
information only in connection with the Offer, and, if this Agreement is
terminated, will upon request of the Company deliver or cause to be delivered to
the Company all copies of such information then in its possession or the
possession of its agents or representatives.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for Shares by
Parent or any of its subsidiaries which represent at least a majority of the
outstanding shares of Company Stock (on a fully diluted basis), Parent shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors of the Company as is equal to the product of
the total number of directors on such Board (giving effect to any additional
directors designated by Parent pursuant to this Section) multiplied by the
percentage that the aggregate number of Shares beneficially owned by the
Purchaser, Parent and any of their affiliates (including Shares accepted for
payment) bears to the total number of shares of Company Stock then outstanding.
The Company shall, upon request of and as specified by the Purchaser or Parent,
on the date of such request, either increase the size of its Board of Directors
or secure the resignations of such number of its incumbent directors as is
necessary, consistent with the request of Purchaser or Parent, to enable
Parent's designees to be so elected to the Company's Board of Directors, and
shall take all actions necessary to cause Parent's designees to be so elected or
appointed. At such times, the Company will use its reasonable best efforts to
cause individuals designated by Parent to constitute the same percentage as such
individuals represent on the Company's Board of Directors of each committee of
the Board (other than any committee of the Board established to take action
under this Agreement), each board of directors of each Subsidiary (as defined in
Section 3.1) and each committee of each such board. Notwithstanding the
foregoing, until the Effective Time, the Company shall retain as members of its
Board of Directors at least two directors who are directors of the Company on
the date hereof; provided, that subsequent to the purchase of and payment for
Shares pursuant to the Offer, Parent shall always have its designees represent
at least a majority of the entire Board of Directors. The Company's obligations
under this Section 1.3(a) shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to such Section 14(f) and Rule 14f-1
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in order to fulfill its obligations under this Section 1.3(a), including without
limitation mailing to stockholders the information required by such Section
14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be elected
to the Company's Board of Directors. Parent or the Purchaser will supply the
Company any information with respect to either of them and their nominees,
officers, directors and affiliates required by such Section 14(f) and Rule
14f-1.
(b) From and after the time, if any, that Parent's designees
constitute a majority of the Company's Board of Directors, 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 of time for
performance of any of the obligations of Parent or the Purchaser hereunder, any
waiver of any condition or any of the Company's rights hereunder or other action
by the Company in connection with the rights of the Company hereunder may be
effected only with the concurrence of a majority of the directors of the Company
then in office who were directors of the Company on the date hereof.
Section 1.4 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.5 hereof) the Company
and the Purchaser shall consummate a merger (the "Merger") pursuant to which (a)
the Purchaser shall be merged with and into the Company and the separate
corporate existence of the Purchaser shall thereupon cease, (b) the Company
shall be the successor or surviving corporation in the Merger (the "Surviving
Corporation") and shall continue to be organized under the laws of the State of
Delaware, and (c) the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger. Should the merger of the Purchaser with and into the Company give
rise to any material tax liability, at the election of Parent and subject to the
consent of the Company, such consent not to be unreasonably withheld, the Merger
may be structured so that the Company shall be merged with and into Purchaser
with the result that Purchaser shall be the Surviving Corporation. Pursuant to
the Merger, (x) the Certificate of Incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation, and (y) the By-laws of the
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 and such By-laws. The Merger shall have
the effects set forth in the DGCL.
Section 1.5 Effective Time. On the date of the Closing (as defined in
Section 1.6 hereof) (or on such other date as the parties may agree), the
Company and Purchaser shall file with the Delaware Secretary of State a
certificate of merger or other appropriate document (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL, and shall make all other filings, recordings and publications required
by the DGCL with respect to the Merger. The Merger shall become effective at
such time as the certificate of merger is duly filed with the Delaware Secretary
of State or such later time as is specified in the Certificate of Merger (the
time the Merger becomes effective is hereinafter referred to as the "Effective
Time").
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Section 1.6 Closing. The closing of the Merger (the "Closing") will
take place at 11:00 a.m. on a date to be specified by the parties, which shall
be no later than the second business day after satisfaction or waiver of all of
the conditions set forth in Article VI hereof (the "Closing Date"), at the
offices of Weil, Gotshal & Manges LLP, 100 Crescent Court, Suite 1300, Dallas,
Texas 75201, unless another date or place is agreed to in writing by the parties
hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. The
directors of the Purchaser immediately prior to the Effective Time shall, from
and after the Effective Time, be the directors of the Surviving Corporation
until their successors shall have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-laws. The officers
of the Company immediately prior to the Effective Time shall, from and after the
Effective Time, be the officers of the Surviving Corporation until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-laws.
Section 1.8 Stockholders' Meeting.
(a) If the Purchaser owns less than 90% of the Shares following
the purchase of Shares by the Purchaser pursuant to the Offer, the Company,
acting through its Board of Directors, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as
practicable following the acceptance for payment and purchase of
Shares by the Purchaser pursuant to the Offer for the purpose of
voting, considering and taking action upon this Agreement and the
Merger;
(ii) promptly prepare and file with the SEC a preliminary
proxy or information statement relating to the Merger and this
Agreement, obtain and furnish the information required by the SEC
to be included in the Proxy Statement (as hereinafter defined)
and, after consultation with Parent, respond promptly to any
comments made by the SEC with respect to the preliminary proxy or
information statement, use its reasonable best efforts to have
cleared by the SEC and cause a definitive proxy or information
statement and all other proxy materials for such meeting (the
"Proxy Statement") to be mailed to its stockholders and use its
reasonable best efforts to obtain the necessary adoption of this
Agreement and the transactions contemplated hereby by its
stockholders and will otherwise comply with all legal
requirements applicable to such meeting; and
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(iii) subject to the fiduciary obligations of the Board
under applicable law as advised by the Company's outside counsel
and subject to Section 5.4(b) hereof, include in the Proxy
Statement the recommendation of the Board that stockholders of
the Company approve and vote in favor of the adoption of this
Agreement and the Merger.
(b) Parent agrees that it will provide the Company with the
information concerning Parent and the Purchaser required to be included in the
Proxy Statement and will vote, or cause to be voted, all of the Shares then
owned by Parent, the Purchaser or any of its other subsidiaries and affiliates
in favor of the approval of the Merger and the adoption of this Agreement.
Section 1.9 Merger Without Meeting of Stockholders. Notwithstanding
Section 1.8 hereof, in the event that the Purchaser shall acquire at least 90%
of the outstanding shares of each class of capital stock of the Company,
pursuant to the Offer or otherwise, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without a meeting of stockholders of the
Company.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock or common stock of the Purchaser (the "Purchaser
Common Stock"):
(a) Each share of the Purchaser Common Stock issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation and shall constitute the only outstanding shares of capital stock of
the Surviving Corporation.
(b) Any shares of Company Stock held by the Company as treasury
stock and any shares of Company Stock owned by Parent, the Purchaser or any
other wholly owned Subsidiary (as defined in Section 3.1 hereof) of Parent
immediately prior to the Effective Time shall be cancelled and retired and shall
cease to exist and no consideration shall be delivered in exchange therefor.
(c) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than Common Shares to be
cancelled in accordance with Section 2.1(b) hereof and any Dissenting Shares (if
applicable and as defined in Section 2.3 hereof)) shall be converted into the
right to receive the Common Offer Price, payable to the holder thereof, without
interest (the "Common Stock Merger Consideration"),
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upon surrender of the certificate formerly representing such share of Company
Common Stock in the manner provided in Section 2.2 hereof.
(d) Each share of Company Class A Common Stock issued and
outstanding immediately prior to the Effective Time (other than Class A Shares
to be cancelled in accordance with Section 2.1(b) hereof and any Dissenting
Shares (if applicable and as defined in Section 2.3 hereof)) shall be converted
into the right to receive the Class A Offer Price, payable to the holder
thereof, without interest (the "Class A Common Stock Merger Consideration" and,
together with the Common Stock Merger Consideration, the "Merger
Consideration"), upon surrender of the certificate formerly representing such
share of Company Class A Common Stock in the manner provided in Section 2.2
hereof.
(e) All such shares of Company Stock, when so converted in
accordance with Sections 2.1(c) and 2.1(d) hereof, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance with
Section 2.2 hereof, without interest, or to perfect any rights of appraisal as a
holder of Dissenting Shares (as hereinafter defined) that such holder may have
pursuant to Section 262 of the DGCL.
Section 2.2 Exchange of Certificates.
(a) Parent shall designate a bank or trust company, or an
affiliate thereof, of nationally recognized standing to act as agent for the
holders of shares of Company Stock in connection with the Merger (the "Paying
Agent") for the purpose of exchanging certificates representing Shares and to
receive the funds to which holders of shares of Company Stock shall become
entitled pursuant to Sections 2.1(c) and 2.1(d) hereof. Prior to the Effective
Time, Parent shall take all steps necessary to deposit or cause to be deposited
with the Paying Agent such funds for timely payment hereunder. Such funds shall
be invested by the Paying Agent as directed by Parent or the Surviving
Corporation.
(b) As soon as reasonably practicable after the Effective Time
but in no event more than three business days thereafter, the Paying Agent shall
mail to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Company Stock (the "Certificates"), whose shares were converted pursuant to
Section 2.1 hereof into the right to receive the Merger Consideration (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment of the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed and
properly completed, the
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holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Stock formerly represented by
such Certificate and the Certificate so surrendered shall forthwith be
cancelled. If payment of any portion of the Merger Consideration is to be made
to a person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and 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 the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2.
(c) At 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 of Company Stock on the records of the Company. From and
after the Effective Time, the holders of Certificates evidencing ownership of
shares of Company Stock outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this Article II.
(d) At any time following six months after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds (including any interest received with respect thereto)
which had been made available to the Paying Agent and which have not been
disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect to
the Merger Consideration payable upon due surrender of their Certificates,
without any interest thereon. Notwithstanding the foregoing, neither the
Surviving Corporation nor the Paying Agent shall be liable to any holder of a
Certificate for Merger Consideration delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. Any amounts remaining
unclaimed by holders of Shares two years after the Effective Time (or such
earlier date immediately prior to such time as such amounts would otherwise
escheat to or become property of any governmental entity) shall, to the extent
permitted by applicable law, become the property of Parent free and clear of any
claims or interest of any person previously entitled thereto.
(e) Any portion of the Merger Consideration made available to the
Paying Agent pursuant to Section 2.2(a) hereof to pay for Shares for which
appraisal rights have been perfected shall be returned to Parent upon demand.
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Section 2.3 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares in accordance
with the DGCL ("Dissenting Shares") shall not be converted into a right to
receive the Merger Consideration, unless and until such holder fails to perfect
or withdraws or otherwise loses his or her right to appraisal. If after the
Effective Time such holder fails to perfect or withdraws or loses his right to
appraisal, such Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration, without
interest thereon. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of Shares, and Parent shall have the right
to participate in all negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
Section 2.4 Company Option Plans. At the Effective Time, each then
outstanding option (collectively, the "Options") to purchase or acquire shares
of Company Common Stock under the Company's 1993 Stock Option Plan, as amended,
the Company's 1998 Incentive Compensation Plan and the director option to
purchase 48,660 shares of Company Common Stock (collectively, the "Option
Plans"), whether or not then exercisable or vested, shall be cancelled and shall
represent the right to receive in cash an amount equal to the product of (i) the
number of shares of Company Common Stock subject to each such Option and (ii)
the excess of (A) the Common Stock Merger Consideration over (B) the per share
exercise price of such Option. Prior to the Effective Time, the Company shall
take all actions (including, if appropriate, obtaining any consents from holders
of Options or making any amendments to the terms of the Option Plans) that are
necessary to give effect to the transactions contemplated by this Section.
Notwithstanding any other provision of this Section, payment may be withheld in
respect of any stock option until necessary consents are obtained.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as
follows:
Section 3.1 Organization; Subsidiaries. (a) Each of the Company and
its Subsidiaries is a corporation or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be in good standing
would not reasonably be expected to have a Company Material Adverse Effect (as
hereinafter defined). Each of the Company and its Subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the property owned or leased by it or the
nature of the business conducted by it makes such
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qualification necessary, except where the failure to be so duly qualified and in
good standing would not reasonably be expected to have a Company Material
Adverse Effect. As used in this Agreement, the word "Subsidiary" means, with
respect to any party, any corporation, partnership or other entity or
organization, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such party is a general partner (excluding such
partnerships where such party or any Subsidiary of such party does not have a
majority of the voting interest in such partnership) or (ii) 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 is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries. As used in
this Agreement, "Company Material Adverse Effect" means any change in or effect
on the business of the Company and its Subsidiaries that is materially adverse
to the business, financial condition, assets or results of operations of the
Company and its Subsidiaries taken as a whole, but excluding (i) any change
resulting from general economic or industry conditions and (ii) any circumstance
arising from any act or omission on the part of the Parent or the Purchaser not
otherwise contemplated by this Agreement. Section 3.1 of the disclosure
schedules delivered to Parent by the Company on or prior to entering into this
Agreement (the "Company Disclosure Schedule") sets forth a complete and correct
list of all of the Company's Subsidiaries and their respective jurisdictions of
incorporation or organization. Except as set forth in Section 3.1 of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary holds any
interest in a partnership or joint venture of any kind.
(b) Except as set forth in Section 3.1(b) of the Company
Disclosure Schedule, the Company has heretofore delivered to Parent a complete
and correct copy of each of its Certificate of Incorporation and By-laws, as
currently in effect, and has heretofore made available to Parent a complete and
correct copy of the charter and by-laws of each of its Subsidiaries, as
currently in effect. In all material respects, the minute books of the Company
and the Company Subsidiaries contain accurate records of all meetings and
accurately reflect all other actions taken by the stockholders, the boards of
directors and all committees of the boards of directors of the Company and the
Company Subsidiaries. Complete and accurate copies of all such minute books and
of the stock register of the Company and each Company Subsidiary have been made
available by the Company to Parent.
(c) To the knowledge of the Company, Substrate Technologies Inc.
and TVS Berg Ltd. are currently operating with all necessary permits and
licenses and are in compliance with all applicable laws and regulations, except
where the failure to be in compliance with such laws and regulations would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 3.2 Capitalization. (a) As of the date hereof, the authorized
capital stock of the Company consists of 120,000,000 shares of Company Common
Stock, 7,000,000 shares of Company Class A Common Stock, and 28,500,000 shares
of preferred stock, par value $.01 per share (the "Company Preferred Stock"), of
which 670,000 shares are designated as Series A
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Junior Preferred Stock. As of August 24, 1998, (i) 39,398,204 shares of Company
Common Stock were issued and outstanding, (ii) 2,348,497 shares of Company
Common Stock were reserved for issuance upon exercise of Options granted
pursuant to the Option Plans, (iii) 1,440,784 Options were granted and remained
unexercised pursuant to the Option Plans, (iv) 1,908,554 shares of Company
Common Stock were reserved for issuance upon conversion of outstanding shares of
Company Class A Common Stock, (v) 255,500 shares of Company Common Stock were
issued and held in the treasury of the Company, (vi) 1,908,554 shares of Company
Class A Common Stock were issued and outstanding, (vii) there were no shares of
Company Preferred Stock issued and outstanding and (viii) 670,000 shares of
Series A Junior Preferred Stock were reserved for issuance upon exercise of the
Rights. All the outstanding shares of the Company's capital stock are duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights. Since August 24, 1998, no additional shares of capital stock or
securities convertible into or exchangeable for such capital stock, have been
issued other than any shares of Company Common Stock issued upon exercise of the
Options granted under the Option Plans or upon conversion of outstanding shares
of Company Class A Common Stock, and no shares of Company Preferred Stock have
been issued. Section 3.2(a) of the Company Disclosure Schedule identifies (i)
the holders of each of the Options, (ii) the number of Options vested for each
holder, (iii) the Option Plan under which each Option was issued, (iv) the
number of Options held by such holder and (v) the exercise price of each of the
Options. All shares of Company Common Stock subject to issuance as aforesaid,
upon issuance prior to the Effective Time on the terms and conditions specified
in the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights. Except
for shares of Company Common Stock issuable upon exercise of the Options
described in Section 3.2(a) of the Company Disclosure Schedule or upon
conversion of outstanding shares of Company Class A Common Stock, or as
otherwise set forth in Section 3.2(a) of the Company Disclosure Schedule, there
are no (i) options, warrants, calls, subscriptions or other rights, convertible
securities, agreements or commitments of any character obligating the Company or
any Company Subsidiary to issue, transfer or sell any shares of capital stock or
other equity interest in, the Company or any Company Subsidiary or securities
convertible into or exchangeable for such shares or equity interests, (ii)
outstanding contractual obligations or commitments of any character of the
Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any
capital stock of the Company or any Company Subsidiary, (iii) outstanding
contractual obligations or commitments of any character restricting the transfer
of, or requiring the registration for sale of, any capital stock of the Company
or any Company Subsidiary, (iv) outstanding contractual obligations or
commitments of any character granting any preemptive or antidilutive right with
respect to, any capital stock of the Company or any Company Subsidiary or (v)
voting trusts or similar agreements to which the Company or any Company
Subsidiary is a party with respect to the voting of the capital stock of the
Company or any Company Subsidiary. Except as set forth in Section 3.2(a) of the
Company Disclosure Schedule, there are no outstanding contractual obligations of
the Company or any Company Subsidiary to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
Company Subsidiary or any other person, other than guarantees by the Company of
any indebtedness of any Company Subsidiary.
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(b) Each outstanding share of capital stock of each Company
Subsidiary is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights. Except as disclosed in Section 3.2(b) of the Company
Disclosure Schedule, all of the outstanding shares of capital stock of each
Company Subsidiary are owned of record and beneficially, directly or indirectly,
by the Company, free and clear of all mortgages, security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
the Company's or such other Company Subsidiary's voting rights, charges and
other material encumbrances of any nature whatsoever.
Section 3.3 Authorization; Validity of Agreement; Company Action. The
Company has full corporate power and authority to execute and deliver, and to
perform its obligations under, this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by the Company of
this Agreement, and the consummation by it of the transactions contemplated
hereby, have been duly authorized by its Board of Directors and no other
corporate action on the part of the Company is necessary to authorize the
execution and delivery by the Company of this Agreement and the consummation by
it of the transactions contemplated hereby, except, in the case of the Merger,
for the requisite approval of stockholders contemplated by Section 1.8 hereof,
if applicable. This Agreement has been duly executed and delivered by the
Company and (assuming due and valid authorization, execution and delivery hereof
by Parent and Purchaser) is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 3.4 Consents and Approvals; No Violations. Except as
disclosed in Section 3.4 of the Company Disclosure Schedule and except, with
respect to paragraphs (iv) and (v) hereof, for (a) filings pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and other applicable antitrust or competition laws, (b) applicable
requirements under the Exchange Act, (c) the filing of the Certificate of
Merger, (d) applicable requirements under "takeover" or "blue sky" laws of
various states, and (e) matters specifically described in this Agreement,
neither the execution, delivery or performance of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated hereby will
(i) violate or conflict with any provision of the Certificate of Incorporation
or By-laws of the Company or the charter or by-laws of any of its Subsidiaries,
(ii) result in a violation or breach of, or result in any loss of benefit or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, acceleration or
modification) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, permit, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound,
(iii) violate or conflict
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with any order, writ, judgment, injunction or decree binding upon or applicable
to the Company, any of its Subsidiaries or any of their properties or assets,
(iv) violate or conflict with any law, statute, rule or regulation binding upon
or applicable to the Company, any of its Subsidiaries or any of their properties
or assets, (v) require on the part of the Company or any of its Subsidiaries any
action by or in respect of any filing or registration with, notification to, or
authorization, consent or approval of, any court, legislative, executive or
regulatory authority or agency (a "Governmental Entity") or (vi) result in the
creation or imposition of any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind on any asset of the Company or any of its
Subsidiaries, except in the case of clauses (ii), (iv), (v) or (vi) for such
violations, breaches or defaults which, or filings, registrations,
notifications, authorizations, consents or approvals the failure of which to
obtain, would not reasonably be expected to have a Company Material Adverse
Effect or would not materially adversely affect the ability of the Company to
consummate the transactions contemplated by this Agreement.
Section 3.5 SEC Reports and Financial Statements. The Company has
filed all reports required to be filed by it with the SEC pursuant to the
Exchange Act and the Securities Act of 1933, as amended (the "Securities Act"),
since January 1, 1997 (as such documents have been amended since the date of
their filing, collectively, the "Company SEC Documents"). The Company SEC
Documents (a) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (b) as of their
respective filing dates, or if amended, as of the date of the last such
amendment, did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Each of the historical consolidated balance sheets
(including the related notes) included in the Company SEC Documents fairly
presents in all material respects the financial position of the Company and its
consolidated Subsidiaries as of the date thereof, and the other related
historical statements (including the related notes) included in the Company SEC
Documents fairly present in all material respects the results of operations and
cash flows of the Company and its consolidated Subsidiaries for the respective
periods or as of the respective dates set forth therein. Each of the historical
consolidated balance sheets and historical statements of operations and cash
flow (including the related notes) included in the Company SEC Documents has
been prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved,
except as otherwise noted therein and, in the case of unaudited interim
financial statements, subject to normal year-end adjustments and except as
permitted by Form 10-Q of the SEC. The books and records of the Company and its
Subsidiaries have been, and are being, maintained, in all material respects, in
accordance with GAAP and any other applicable legal and accounting requirements.
Section 3.6 No Undisclosed Liabilities. Except (a) for liabilities
and obligations incurred in the ordinary course of business consistent with past
practices since December 31, 1997, (b) for liabilities and obligations disclosed
in the Company SEC Documents filed prior to the date hereof, (c) for liabilities
and obligations incurred in connection with the Offer and the Merger or
otherwise as contemplated by this Agreement and (d) as disclosed in Section 3.6
of
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the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
has incurred any liabilities or obligations of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, except for
such liabilities or obligations which would not have a Company Material Adverse
Effect.
Section 3.7 Absence of Certain Changes. Except as (a) disclosed in
the Company SEC Documents filed prior to the date hereof, (b) disclosed in
Section 3.7 of the Company Disclosure Schedule, or (c) contemplated by this
Agreement, since December 31, 1997, the Company has conducted its business in
the ordinary and usual course, consistent with past practices, and there has not
been:
(i) any transaction, commitment, dispute or other event,
occurrence, development of a state of circumstances or facts or
condition (financial or otherwise) of any character (whether or
not in the ordinary course of business consistent with past
practices) which, alone or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of
capital stock of the Company or any repurchase, redemption or
other acquisition by the Company or any of its Subsidiaries of
any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company or such Subsidiary;
(iii) any amendment of any material term of any outstanding
security of the Company or any of its Subsidiaries;
(iv) any incurrence, assumption or guarantee by the Company
or any of its Subsidiaries of any indebtedness for borrowed money
other than in the ordinary course of business consistent with
past practices and in amounts and on terms consistent with past
practices;
(v) any acquisition, sale or transfer of any material assets
of the Company or any of its Subsidiaries;
(vi) any creation or assumption by the Company or any of its
Subsidiaries of any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind on any material asset other
than in the ordinary course of business consistent with past
practices;
(vii) any transaction or commitment made or any contract or
agreement entered into by the Company or any of its Subsidiaries
or any relinquishment by the Company or any of its Subsidiaries
of any contract or other right or any amendment or termination
of, or default under, any Material Agreement (as defined in
Section 3.8), in each case, material to the Company and its
Subsidiaries, taken as a whole, other than
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transactions and commitments in the ordinary course of business
consistent with past practices;
(viii) any making of any loan, advance or capital
contribution to or investment in any Person other than loans,
advances or capital contributions to or investments in
wholly-owned Subsidiaries of the Company made in the ordinary
course of business consistent with past practices and payroll,
travel and similar advances made in the ordinary course of
business consistent with past practices;
(ix) any damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets of
the Company or any of its Subsidiaries which, individually or in
the aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect;
(x) any transaction, agreement or understanding between the
Company or its Subsidiaries on the one hand and any current
director or officer of the Company or any Subsidiary or any
transaction which would be subject to proxy statement disclosure
under the Exchange Act pursuant to the requirements of Item 404
of Regulation S-K (an "Affiliate Transaction");
(xi) any material change in any method of accounting or
accounting practice by the Company or any of its Subsidiaries,
except as required by reason of a concurrent change in GAAP; or
(xii) any (x) increase in compensation, bonus or other
benefits payable (including any retention or stay bonus) to
directors, officers or employees of the Company or any of its
Subsidiaries, other than in the ordinary course of business
consistent with past practices, (y) grant of, or increase in
benefits payable under, any severance or termination pay to any
director, officer or employee of the Company or any of its
Subsidiaries or (z) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any
such existing agreement) with any director, officer or employee
of the Company or any of its Subsidiaries.
Section 3.8 Contracts. Except as disclosed in or attached as exhibits
to the Company SEC Documents or as disclosed in Section 3.8(a) of the Company
Disclosure Schedule, neither the Company nor any of the Company Subsidiaries is
a party to or bound by any contract required to be described in or filed as an
exhibit to the Company's SEC filings (collectively with the documents disclosed
in Section 3.8(b) of the Company Disclosure Schedule, the "Material
Agreements"). The Company has previously made available to Parent true and
correct copies of the Material Agreements. Neither the Company nor any Company
Subsidiary knows of, or has received notice of, any violation or default under
(nor does there exist any condition which with the passage of time or the giving
of notice would cause such a violation of or default under) any Material
Agreement except for violations or defaults that would not,
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individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect.
Section 3.9 Employee Benefit Plans; ERISA.
(a) Pension and Multiemployer Plans. The Company and its
Subsidiaries have not during the preceding six years made or had an obligation
to make contributions to any pension plan subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or described in
Section 3(37), 4063 or 4064 of ERISA with respect to their employees. With
respect to any Benefit Plan that is a defined benefit plan, as of the date
hereof, all funding requirements have been met in accordance with the law of the
relevant jurisdiction, and the Company has accounted for such plans in
accordance with GAAP, except as would not have a Company Material Adverse
Effect.
(b) Tax Qualification. The Benefit Plans (as defined below) and
their related trusts intended to qualify under Sections 401 and 501(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), respectively, have been
determined by the Internal Revenue Service (the "IRS") to qualify under such
sections, as amended by the Tax Reform Act of 1986, and to the knowledge of the
Company nothing has occurred since the date of such determination letters which
could not be corrected or otherwise remedied without having a Company Material
Adverse Effect.
(c) Compliance with Laws. The Benefit Plans have been maintained
in accordance with their terms and applicable laws, except for any noncompliance
as would not reasonably be expected to result in a Company Material Adverse
Effect.
(d) Claims. Except as disclosed in Section 3.9(d) of the Company
Disclosure Schedule, there are no pending or to the knowledge of the Company
threatened actions, claims or proceedings against any Benefit Plan or its
assets, plan sponsor, plan administrator or fiduciaries with respect to the
operation of such plan (other than routine benefit claims) which would
reasonably be expected to have a Company Material Adverse Effect.
(e) Change in Control. Except as disclosed in Section 3.9(e) of
the Company Disclosure Schedule or in connection with the Options, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee (current, former or retired) of the Company and its Subsidiaries,
(ii) increase any benefits under any Benefit Plan or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.
(f) Benefit Plans. For purposes hereof, "Benefit Plans" means all
"employee benefit plans," as defined in Section 3(3) of ERISA, and all bonus or
other incentive compensation, deferred compensation, disability, severance,
stock award, stock option, stock purchase, tuition assistance plans or policies
and each employment or other similar contract,
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each plan or arrangement providing for insurance coverage (including any
self-insured arrangements), supplemental unemployment benefits, vacation
benefits, retirement benefits, profit-sharing, stock appreciation or
post-retirement insurance or benefits, in each case which the Company or any of
its affiliates maintains or to which the Company or any of its affiliates makes
or has an obligation to make contributions with respect to current or former
employees or directors of the Company or any of its affiliates. For purposes of
this Section 3.9, "affiliate" of any Person means any other Person which,
together with such Person, would be treated as a single employer under Section
414 of the Code.
(g) Disclosure. Section 3.9(g) of the Company Disclosure Schedule
contains a list of all of the Benefit Plans. Other than Benefit Plans for
foreign Subsidiaries, copies of the Benefit Plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
have been made available to Purchaser together with, if applicable, (A) the most
recent annual reports (Form 5500 including, if applicable, Schedule B thereto)
prepared in connection with any such plan and (B) the most recent actuarial
valuation report prepared in connection with any such plan. The Company has made
available to the Purchaser copies of the most recent Internal Revenue Service
determination letters with respect to each Benefit Plan which is intended to be
qualified under Section 401(a) of the Code.
(h) Unions. Except as set forth in Section 3.9(h) of the Company
Disclosure Schedule, neither the Company nor any Subsidiary is a party to or
subject to any union contract or collective bargaining agreement for U.S.
employees.
Section 3.10 Litigation. Except as disclosed in Section 3.10 of the
Company Disclosure Schedule or as disclosed in the Company SEC Documents filed
prior to the date hereof or for shareholder suits against the Company related
to, arising out of or resulting from the transactions contemplated by this
Agreement, there is no action, suit, proceeding, audit or investigation pending
or, to the knowledge of the Company, threatened against or involving the Company
or any of its Subsidiaries or any of their respective properties, by or before
any court, governmental or regulatory authority, arbitrator or by any third
party that could prevent, enjoin, or materially alter or delay any of the
transactions contemplated by this Agreement or that, if adversely determined,
would reasonably be expected to have a Company Material Adverse Effect. Except
as disclosed in Section 3.10 of the Company Disclosure Schedule or as disclosed
in the Company SEC Documents filed prior to the date hereof, neither the Company
nor any of its Subsidiaries is subject to any outstanding order, writ,
injunction or decree which has had or, individually or in the aggregate, would
reasonably be expected to have a Company Material Adverse Effect.
Section 3.11 Permits; No Default; Compliance with Applicable Laws.
Each of the Company and the Company Subsidiaries is in possession of all
material franchises, grants, authorizations, licenses, permits, easements,
variances, exceptions, consents, certificates, approvals, clearances and orders
of any Governmental Entity necessary for the Company or any Company Subsidiary
to own, lease and operate its properties or to carry on their respective
businesses substantially in the manner described in the Company SEC Documents
and as it is
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now being conducted (the "Company Permits"), and all such Company Permits are
valid, and in full force and effect, and no suspension or cancellation of any of
the Company Permits is pending or, to the knowledge of the Company, threatened
and no condition exists that with notice or lapse of time or both would
constitute a material default under the Company Permits, and none of the Company
Permits will be terminated or impaired or become terminable, in whole or in
part, as a result of the transactions contemplated hereby. The business of the
Company and each of its Subsidiaries is not in default or violation of, and has
not since January 1, 1998 defaulted on or violated, and to the knowledge of the
Company none is under investigation with respect to or has been threatened to be
charged with or given notice of any default or violation of, any term, condition
or provision of any statute, law, rule, regulation, judgment, decree, order,
permit, license or other governmental authorization or approval (including any
Company Permit) applicable to the Company or any of its Subsidiaries or by which
any property, asset or operation of the Company or any of its Subsidiaries is
bound or affected, including, laws, rules and regulations relating to
occupational health and safety, employee benefits, wages, workplace safety,
equal employment opportunity and race, religious or sex discrimination,
excluding defaults or violations which are disclosed in the Company SEC
Documents or which would not reasonably be expected to have a Company Material
Adverse Effect.
Section 3.12 Taxes. (a) Except as disclosed in Section 3.12 of the
Company Disclosure Schedule: (i) all material Tax Returns required to be filed
by or with respect to the Company and each of its Subsidiaries have been filed
and such Tax Returns were true and correct in all material respects; (ii) the
Company and each of its Subsidiaries has paid (or there has been paid on its
behalf) all material Taxes that are due whether or not shown on any Tax Return,
except for Taxes being contested in good faith by appropriate proceedings and
for which adequate reserves have been established in the Company's financial
statements (as of the date thereof); and (iii) none of the material Tax Returns
filed by the Company and its Subsidiaries is currently the subject of an audit.
(b) Except as disclosed in Section 3.12 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries, (i) currently is the
beneficiary of any extension of time within which to file any material Tax
Return; (ii) has filed a consent under Section 341(f) of the Code concerning
collapsible corporations; (iii) has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible under Section 280G
of the Code; (iv) has been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code during the five-year period
ending on the date the Offer commences; (v) neither the Company nor any of its
Subsidiaries is a party to any material tax allocation or sharing agreement;
(vi) has any liability for the taxes of any person (other than any of the
Company and its Subsidiaries) under Treasury Regulation 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise; or (vii) has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a tax
assessment or deficiency.
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(c) Section 3.12 of the Company Disclosure Schedule lists all
material federal, state, local, and foreign Tax Returns filed with respect to
any of the Company and its Subsidiaries for taxable periods ending after
December 31, 1992, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of audit. The Company
has delivered to Purchaser correct and complete copies of all Tax Returns,
examination reports, and statements of deficiencies assessed against or agreed
to by any of the Company and its Subsidiaries for taxable periods ending after
December 31, 1992.
(d) Prior to the Closing Date, the Company shall provide
Purchaser with a U.S. tax balance sheet for the Company for the taxable periods
ending December 31, 1997, such U.S. tax balance sheet having been prepared in a
manner consistent with the U.S. tax balance sheet for the Company for the
taxable period ending December 31, 1996 that was previously provided to
Purchaser by the Company.
(e) As soon as practicable after the execution of this Agreement,
the Company shall provide to Purchaser the taxable income and net operating loss
carryovers to 1998 that the Company expects to report on its Tax Returns for the
taxable periods ending December 31, 1997 and such reported amounts will not
differ materially from those amounts actually reported on the Company's Tax
Returns for the taxable periods ending December 31, 1997.
(f) The term "Taxes" shall mean all taxes, charges, fees, levies,
or other similar assessments or liabilities imposed by the United States of
America, or by any state, local, or foreign government, or any subdivision,
agency, or other similar person of the United States or any such government,
including without limitation (i) income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, and estimated taxes
and (ii) any interest, penalties or additions thereto, whether disputed or not.
(g) The term "Tax Returns" shall mean any report, return,
declaration, claim for refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and including any amendment
thereof.
Section 3.13 Real and Personal Property. The Company and its
Subsidiaries, as the case may be, have good and marketable title to all of their
respective real property and good title to all of their respective leasehold
interests and other properties, as reflected in the most recent balance sheet
included in the Company SEC Documents, except for properties and assets that
have been disposed of in the ordinary course of business consistent with past
practices since the date of such balance sheet, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever, except (i) any
lien for current Taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject
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thereto or affected thereby, or otherwise materially impair the Company's
business operations (in the manner presently carried on by the Company) or (iii)
as disclosed in the Company SEC Documents. All leases under which the Company
leases any real or personal property are in good standing, valid and effective
in accordance with their respective terms, and there is not, under any of such
leases, any existing default, breach or event which with notice or lapse of time
or both would become a default or breach which could reasonably be expected to
have a Company Material Adverse Effect.
Section 3.14 Intellectual Property. The Company and the Subsidiaries
own or possess adequate licenses or other rights to use all Intellectual
Property Rights necessary to conduct the business now operated by them, except
where the failure to own or possess such licenses or rights has not had and
would not reasonably be expected to have a Company Material Adverse Effect. To
the knowledge of the Company, the Intellectual Property Rights of the Company
and the Subsidiaries do not conflict with or infringe upon any Intellectual
Property Rights of others to the extent that, if sustained, such conflict or
infringement has had and would reasonably be expected to have a Company Material
Adverse Effect. For purposes of this Agreement, "Intellectual Property Right"
means any trademark, service mark, trade name, copyright, patent, software
license, invention, trade secret, know-how or other similar proprietary
intellectual property right (including any registrations or applications for
registration of any of the foregoing).
Section 3.15 Environmental Matters. Except as disclosed in Section
3.15 of the Company Disclosure Schedule or as disclosed in the Company SEC
Documents:
(i) the Company and its Subsidiaries are in compliance with
applicable laws, regulations, judicial decisions, ordinances,
judgments, orders, permits, rules or governmental requirements
relating to the environment, the effect of the environment on
human health and safety, or pollutants, contaminants or any
toxic, radioactive, ignitable, corrosive, reactive or otherwise
hazardous substances, wastes or materials (collectively,
"Environmental Laws"), except for any noncompliance that
individually or in the aggregate would not reasonably be expected
to have a Company Material Adverse Effect;
(ii) there are no outstanding notices of violation, notices,
requests for information, orders, complaints, or penalties
against the Company or any of its Subsidiaries under or pursuant
to Environmental Laws which individually or in the aggregate
would reasonably be expected to have a Company Material Adverse
Effect;
(iii) there are no judicial or administrative proceedings,
investigations or actions pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened, which allege the
violation of or liability under any Environmental Law which
individually or in the aggregate would have reasonably be
expected to have a Company Material Adverse Effect;
(iv) there are no liabilities of or relating to the Company
or any of its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, determined,
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determinable or otherwise, arising under or relating to any
Environmental Law which individually or in the aggregate would
reasonably be expected to have a Company Material Adverse Effect,
and there are no known facts, conditions, situations or sets of
circumstances which could reasonably be expected to result in or
be the basis for any such liability which would have a Company
Material Adverse Effect;
(v) any operations conducted in, and each facility or real
property owned, leased or operated by the Company or any of its
Subsidiaries in the State of New Jersey satisfy the requirements
of the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6
et seq. ("ISRA"), and the regulations implemented thereunder,
including but not limited to N.J.A.C. 7:26B-2.3, except where the
failure to satisfy such requirements would not reasonably be
expected to have a Company Material Adverse Effect; and
(vi) consummation of the Offer, the Merger and the
transactions contemplated by this Agreement will not require
compliance with the Connecticut Hazardous Waste Establishment
Transfer Act (General Statutes Section 22a-134, et seq.), as
amended, and any rules or regulations promulgated thereunder
("CTA"), except for any non-compliance that would not reasonably
be expected to have a Company Material Adverse Effect.
Section 3.16 Employee and Labor Matters. (a) Except as set forth in
Section 3.16 of the Company Disclosure Schedule: (i) since January 1, 1997 there
has been no labor strike or work stoppage against, or lockout by, the Company or
any of its Subsidiaries or, to the Company's knowledge, any activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company or any of its Subsidiaries, which employees were not subject to
collective bargaining agreement at December 31, 1997, (ii) there is no unfair
labor practice charge or complaint against the Company or any of its
Subsidiaries pending before, or, to the knowledge of the Company, threatened by,
the National Labor Relations Board, and (iii) there is no pending or, to the
knowledge of the Company, threatened union grievance against the Company or any
of its Subsidiaries that would reasonably be expected to have a Company Material
Adverse Effect.
Section 3.17 Information in Offer Documents. None of the information
supplied or to be supplied by the Company or any of its Subsidiaries, or any of
their officers, directors, employees, representatives or agents for inclusion or
incorporation by reference in the Offer Documents or the Schedule 14D-9,
including any amendments or supplements thereto, contains or, with respect to
the information included or incorporated by reference into the Offer Documents
or the Schedule 14D-9, will contain at the respective times the Offer Documents
and the Schedule 14D-9 are filed with the SEC or first published, sent or given
to the Company's stockholders, any statement which, at such time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact, or omit to state any material fact necessary in order to make
the statements therein not false or misleading. Notwithstanding the foregoing,
the Company does not make any representation or warranty with respect to the
information that has been or will be supplied by Parent or the Purchaser or
their officers, directors, employees, representatives or agents for inclusion or
incorporation by
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reference in any of the foregoing documents. The Schedule 14D-9 and any
amendments or supplements thereto will comply in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder.
Section 3.18 Brokers or Finders. The Company represents, as to
itself, its Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except Morgan
Stanley Dean Witter ("Morgan Stanley"), the fees and expenses of which will be
paid by the Company in accordance with the Company's agreement with such firm, a
true and complete copy of which has heretofore been furnished to Parent. The
Company has no obligations or commitments to any investment banker or financial
advisor in connection with any future transactions that may be considered or
entered into by the Company after the Effective Time.
Section 3.19 Insurance. The Company maintains insurance coverage with
reputable insurers in such amounts and covering such risks as are in accordance
with normal industry practice for companies engaged in businesses similar to
that of the Company (taking into account the cost and availability of such
insurance).
Section 3.20 Opinion of Financial Advisor. The Company has received
the written opinion of Morgan Stanley to the effect that, as of the date hereof,
the consideration to be received by the holders of the Common Shares in the
Offer and the Merger is fair from a financial point of view to such holders. A
copy of such opinion has been provided to the Purchaser.
Section 3.21 Rights Plan; Takeover Laws. (a) The Company and its
Board of Directors have amended the Rights Agreement between the Company and
Harris Trust and Savings Bank dated December 22, 1997 (the "Rights Agreement")
(without redeeming the Rights issued thereunder), which amendment has been
provided to Parent, so that neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) cause any
Rights issued pursuant to the Rights Agreement to become exercisable, to be
triggered or to separate from the Shares to which they are attached, (ii) cause
the Parent or the Purchaser or any of their affiliates to be an Acquiring Person
(as defined in the Rights Agreement) in connection with the transactions
contemplated hereby or (iii) trigger other provisions of the Rights Agreement,
including giving rise to a Distribution Date (as defined in the Rights
Agreement) in connection with the transactions contemplated hereby, and such
amendment shall remain in full force and effect from and after the date hereof.
(b) The Company has taken all action required by it in order to
exempt this Agreement and the Stockholders Agreement and the transactions
contemplated hereby and thereby from, and this Agreement and the Stockholders
Agreement and the transactions contemplated hereby and thereby are exempt from,
the requirements of any "moratorium",
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"control share", "fair price" or other anti-takeover laws and regulations
(collectively, "Takeover Laws") of the State of Delaware and any other state.
Section 3.22. Termination Agreement. The Company has entered into a
Termination Agreement (the "Termination Agreement") with Hicks, Muse & Co.
Partners, L.P. Incorporated ("HM&Co") providing for the termination of that
certain Amended and Restated Monitoring and Oversight Agreement dated as of
March 6, 1996 among the Company, Berg Electronics Group, Inc. and HM&Co (the
"Oversight Agreement"). A copy of the Termination Agreement has been provided to
Parent.
Section 3.23. Exon-Florio. Except as disclosed in Section 3.23 of the
Company Disclosure Schedule, to the knowledge of the Company, neither the
Company nor any of its Subsidiaries:
(i) has, or has had within the past three yeas, any contract
with an agency of the Government of the United States with
national defense responsibilities, including any component of the
Department of Defense;
(ii) has, or has had within the past five years, any
contract with any agency of the Government of the United States
involving any information, technology or data which is classified
under Executive Order 12356 of April 2, 1982 or Executive Order
12958 of April 17, 1995;
(iii) is a supplier to any of the military services of the
United States or the Department of Defense of any products or
services (including research and development) as a prime
contractor or a first tier subcontractor or, if known, a
subcontractor at any level or a seller to any such prime
contractor or subcontractor;
(iv) has technology which has military applications;
(v) produces products or technical data subject to validated
licenses or under general license GTDR pursuant to the U.S.
Export Administration Regulations (15 C.F.R. Part 730 et seq.);
or
(vi) produces defense articles or technical data or defense
services subject to the International Traffic in Arms Regulations
(22 C.F.R. Subchapter M).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
AND THE PURCHASER
Parent and the Purchaser jointly and severally represent and warrant
to the Company as follows:
Section 4.1 Organization. Each of Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
Section 4.2 Authorization; Validity of Agreement; Necessary Action.
Each of Parent and the Purchaser has full corporate power and authority to
execute and deliver, and to perform its obligations under, this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by Parent and the Purchaser of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly authorized by their
respective Boards of Directors and no other corporate action on the part of
Parent and the Purchaser is necessary to authorize the execution and delivery by
Parent and the Purchaser of this Agreement and the consummation by them of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and the Purchaser and (assuming due and valid authorization,
execution and delivery hereof by the Company) is a valid and binding obligation
of each of Parent and the Purchaser, enforceable against them in accordance with
its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Section 4.3 Consents and Approvals; No Violations. Except, with
respect to paragraphs (iv) and (v) hereof, for (a) filings pursuant to the HSR
Act and other applicable antitrust or competition laws, (b) applicable
requirements under the Exchange Act, (c) the filing of the Certificate of
Merger, (d) applicable requirements under "takeover" or "blue sky" laws of
various states, and (e) as described in this Agreement, neither the execution,
delivery or performance of this Agreement by Parent and the Purchaser nor the
consummation by Parent and the Purchaser of the transactions contemplated hereby
will (i) violate or conflict with any provision of the charter or by-laws or
other comparable constituent documents of Parent or the Purchaser, (ii) result
in a violation or breach of, or result in any loss of benefit or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, acceleration or modification) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
Parent or the Purchaser is a party or by which any of them or any of their
properties or assets may be bound, (iii) violate or conflict with any order,
writ, judgment, injunction or decree applicable to or binding upon Parent or the
Purchaser or any of their properties or assets, (iv) violate or conflict with
any law, statute, rule or regulation applicable to or binding upon Parent or the
Purchaser or any of their properties or assets, (v) require on the part of
Parent or the Purchaser any action by or in
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respect of filing or registration with, notification to, or authorization,
consent or approval of, any Governmental Entity or (vi) result in the creation
or imposition of any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind on any asset of the Parent or the Purchaser, except in
the case of clauses (ii), (iv), (v) or (vi) for such violations, breaches or
defaults which, or filings, registrations, notifications, authorizations,
consents or approvals the failure of which to obtain, would not materially
adversely affect the ability of Parent and the Purchaser to consummate the
transactions contemplated by this Agreement.
Section 4.4 Information in Offer Documents; Proxy Statement. None of
the information supplied or to be supplied by Parent or the Purchaser, or any of
their officers, directors, employees, representatives or agents for inclusion or
incorporation by reference in the Offer Documents, the Schedule 14D-9 or the
Proxy Statement, including any amendments or supplements thereto, will, in the
case of the Offer Documents and the Schedule 14D-9, at the respective times the
Offer Documents and the Schedule 14D-9 are filed with the SEC or first
published, sent or given to the Company's stockholders, or, in the case of the
Proxy Statement, at the date the Proxy Statement is first mailed to the
Company's stockholders or at the time of the Special Meeting, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein not
false or misleading. Notwithstanding the foregoing, Parent and the Purchaser do
not make any representation or warranty with respect to the information that has
been supplied by the Company or any of its Subsidiaries or their officers,
directors, employees, representatives or agents for inclusion or incorporation
by reference in any of the foregoing documents. The Offer Documents and the
Proxy Statement, in each case, when filed, and any amendments or supplements
thereto, in each case, when filed, will comply in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder.
Section 4.5 Sufficient Funds. Either Parent or the Purchaser has
sufficient funds available to purchase all of the Shares outstanding on a fully
diluted basis, to repay all outstanding indebtedness of the Company and the
Company Subsidiaries that may become due in connection with the transaction
contemplated hereby and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
Section 4.6 Share Ownership. None of Parent, the Purchaser or any of
their respective affiliates beneficially owns any Shares.
Section 4.7 Purchaser's Operations. The Purchaser is a wholly owned
Subsidiary of Parent which was formed solely for the purpose of engaging in the
transactions contemplated hereby and has not engaged in any business activities
or conducted any operations other than in connection with the transactions
contemplated hereby.
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ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company covenants
and agrees that, except (i) as contemplated by this Agreement, (ii) as disclosed
in Section 5.1 of the Company Disclosure Schedule or (iii) as agreed in writing
by Parent, after the date hereof, and prior to the time the directors of the
Purchaser have been elected to, and shall constitute a majority of, the Board of
Directors of the Company pursuant to Section 1.3 (the "Election Date"):
(a) the business of the Company and its Subsidiaries shall be
conducted only in the ordinary course of business, consistent with past
practices and, to the extent consistent therewith, each of the Company and its
Subsidiaries shall use its reasonable best efforts to preserve its business
organization intact and maintain its existing relations with customers,
suppliers and other third parties, and to keep available the services of their
present officers, employees and business associates;
(b) each of the Company and its Subsidiaries will not, directly
or indirectly, (i) amend or propose any change to its Certificate of
Incorporation or By-laws or similar organizational documents or (ii) split,
combine or reclassify its outstanding capital stock;
(c) neither the Company nor any of its Subsidiaries shall: (i)
declare, set aside or pay any dividend or other distribution (whether payable in
cash, stock or property or any combination thereof) with respect to its capital
stock (other than cash dividends from any wholly-owned Subsidiary of the Company
to the Company or any other Subsidiary of the Company all of the capital stock
of which is owned directly or indirectly by the Company); (ii) issue or sell any
additional shares of, or securities convertible into or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of capital stock of any class of the Company or its Subsidiaries, other
than issuances pursuant to the exercise of Options outstanding on the date
hereof and disclosed on Schedule 3.2(a) hereto or conversion of Class A Shares
into Common Shares in accordance with the terms thereof; (iii) sell, lease,
license (subject to the further restrictions of paragraph (vi) hereof) or
dispose of any assets or properties other than in the ordinary course of
business consistent with past practices which individually or in the aggregate
are in an amount in excess of $500,000; (iv) incur, assume, prepay or modify any
debt, other than in the ordinary course of business consistent with past
practices; (v) license or sublicense (in each case subject to the further
restrictions of paragraph (vi) hereof) any asset or property of the Company or
any Subsidiary of the Company except in the ordinary course of business
consistent with past practice on a basis that results in a positive current
royalty net of any royalties due by the Company or any Subsidiary on account of
sales by the licensee or sublicensee; (vi) license or sublicense any
Intellectual Property of the Company or any Subsidiary; or (vii) redeem,
purchase or otherwise acquire, directly or indirectly, any of its or its
Subsidiaries' capital stock (except as contemplated by
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any employee benefit or stock plans or any employment or severance agreement as
in effect on the date hereof);
(d) neither the Company nor any of its Subsidiaries shall acquire
(by merger, consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof;
(e) neither the Company nor any of its Subsidiaries shall make
any investment other than in readily marketable securities in an amount in
excess of $500,000 in the aggregate whether by purchase of stock or securities,
contributions to capital or any property transfer;
(f) neither the Company nor any of its Subsidiaries shall waive,
release, grant, or transfer any rights of value material to the Company and its
Subsidiaries taken as a whole;
(g) neither the Company nor any of its Subsidiaries shall, except
as may be required or contemplated by this Agreement or by applicable law, (i)
enter into, adopt, materially amend or terminate any Benefit Plans, (ii) enter
into or amend any retention plan or stay bonus arrangement, employment or
severance agreement, (iii) increase in any manner the compensation or other
benefits of its officers or directors or (iv) increase in any manner the
compensation or other benefits of any other employees (except, in the case of
this clause (iv), for normal increases in the ordinary course of business,
consistent with past practices);
(h) neither the Company nor any of its Subsidiaries shall: (i)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
(other than Subsidiaries of the Company), except pursuant to contractual
indemnification agreements entered into in the ordinary course of business,
consistent with past practices; (ii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to
Subsidiaries of the Company and payroll, travel and similar advances made in the
ordinary course of business consistent with past practices); (iii) revalue in
any material respect any of its assets, including, without limitation, writing
down the value of inventory in any material manner or write-off of notes or
accounts receivable in any material manner; or (iv) authorize or make capital
expenditures which exceed $2,500,000 individually or $20,000,000 in the
aggregate;
(i) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any material claims, liabilities or obligations (whether
absolute, accrued, asserted or unasserted, contingent or otherwise) other than
the payment, discharge or satisfaction in the ordinary course of business,
consistent with past practices, of liabilities reflected or reserved against in
the consolidated financial statements of the Company or incurred since the most
recent date thereof pursuant to an agreement or transaction described in this
Agreement (including the schedules hereto) or incurred in the ordinary course of
business, consistent with past practices;
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(j) neither the Company nor any of its Subsidiaries shall change
in any material respect any of the accounting methods, principles, policies or
procedures used by it unless required by GAAP or applicable law;
(k) the Company will not amend, modify or terminate any Material
Agreement or enter into any new agreement material to the business of the
Company, other than in the ordinary course of business consistent with past
practices or with the prior written consent of Parent, which consent shall not
be unreasonably withheld;
(l) neither the Company nor any Subsidiary will amend or modify
any existing Affiliate Transaction or enter into any new Affiliate Transaction
other than with the prior written consent of Parent;
(m) neither the Company nor any of its Subsidiaries will take or
commit to take any action that would make any representation or warranty of the
Company hereunder inaccurate in any respect at, or as of any time prior to, the
Election Date; and
(n) neither the Company nor any of its Subsidiaries will
authorize or enter into an agreement to do any of the foregoing.
Section 5.2 Access to Information. (a) Upon reasonable notice, the
Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Parent, reasonable access, during the period prior to the
Closing Date, to all its offices, properties, books, contracts, commitments and
records and, during such period, the Company shall (and shall cause each of its
Subsidiaries to) furnish promptly to Parent, its officers, employees,
accountants, counsel, financing sources and other representatives (a) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of federal
securities laws or regulatory boards or agencies and (b) all other information
concerning its business, properties and personnel as Parent may reasonably
request. Unless otherwise required by law and until the Closing Date, Parent
will hold any such information which is nonpublic in confidence in accordance
with the provisions of the Confidentiality Agreement between the Company and
Parent, dated as of July 21, 1998 (the "Confidentiality Agreement").
(b) The Company (i) shall confer on a regular and frequent basis
with one or more designated representatives of Parent to report operational
matters of materiality, the general status of ongoing operations and such other
matters as Purchaser may reasonably request and (ii) shall provide Parent access
to customers and suppliers of the Company and its Subsidiaries.
Section 5.3 Employee Benefits. Parent and the Purchaser agree that
during the period commencing on the Effective Date and ending on the date that
is one year from the
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Effective Date, the Surviving Corporation and its Subsidiaries and successors
shall provide those persons who, immediately prior to the Effective Time, were
employees of the Company or its Subsidiaries ("Retained Employees") with
employee plans and programs that provide benefits substantially comparable in
the aggregate to those provided to such Retained Employees immediately prior to
the Effective Time (disregarding for this purpose any stock options or other
equity based compensation provided to such employees prior to the Effective
Time). With respect to such employee plans and programs provided by the
Surviving Corporation and its Subsidiaries and successors, service accrued by
such Retained Employees during employment with the Company and its Subsidiaries
prior to the Effective Time shall be recognized for all purposes, except to the
extent necessary to prevent duplication of benefits and except for benefit
accrual under any defined benefit pension plan maintained by Purchaser. Amounts
paid before the Effective Time by employees of the Company and its Subsidiaries
under any medical plans of the Company shall after the Effective Time be taken
into account in applying deductible and out-of-pocket limits applicable under
any medical plan provided by Parent in substitution therefor to the same extent
as if such amounts had been paid under such Parent medical plan.
Section 5.4 No Solicitation. (a) From and after the date hereof,
neither the Company nor any of its Subsidiaries shall (whether directly or
indirectly through advisors, agents or other intermediaries), nor shall the
Company or any of its Subsidiaries authorize or permit any of its or their
directors, officers, advisors, agents or representatives, to (i) initiate,
solicit, encourage or facilitate, directly or indirectly, any Acquisition
Proposal (as defined in Section 5.4(c) hereof), (ii) engage in negotiations or
discussions (other than, upon contact initiated by a third party, to advise such
third party of the existence of the restrictions set forth in this Section 5.4)
with, or furnish any information or data to, any third party relating to an
Acquisition Proposal, or (iii) grant any waiver or release under any standstill
or similar agreement with respect to any class of equity securities of the
Company or any of its Subsidiaries. Notwithstanding anything to the contrary
contained in this Section 5.4 or in any other provision of this Agreement, the
Company and its Board of Directors may participate in discussions or
negotiations with or furnish information to any third party making an
Acquisition Proposal not solicited in violation of this Section 5.4 (a
"Potential Acquiror") or approve such an Acquisition Proposal if the Company's
Board of Directors is advised by its financial advisor that such Potential
Acquiror has the financial wherewithal to be reasonably capable of consummating
such an Acquisition Proposal, and the Board determines in good faith (A) after
receiving advice from its financial advisor, that such third party has submitted
to the Company an Acquisition Proposal which is a Superior Proposal (as defined
in Section 5.4(d) hereof), and (B) based upon advice of outside legal counsel,
that the failure to participate in such discussions or negotiations or to
furnish such information or approve an Acquisition Proposal would violate the
Board's fiduciary duties under applicable law. The Company agrees that any
non-public information furnished to a Potential Acquiror will be pursuant to a
confidentiality agreement containing confidentiality and standstill provisions
substantially similar to the confidentiality and standstill provisions of the
Confidentiality Agreement, but in no event less favorable to the Company, in a
material respect. A copy of the confidentiality agreement entered into with the
Potential Acquiror shall be provided to Parent for
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informational purposes only. In the event that the Company shall determine to
provide any information as described above, or shall receive any Acquisition
Proposal, it first shall promptly inform Parent in writing as to the fact that
information is to be provided and shall furnish to Parent the identity of the
recipient of such information and/or the Potential Acquiror and the terms of any
such Acquisition Proposal and shall continue to advise Parent after providing
such information. The Company will immediately cease and cause its advisors,
agents and other intermediaries to terminate any existing activities,
discussions and negotiations conducted heretofore with respect to any
Acquisition Proposal and shall use its reasonable best efforts to cause any
parties in possession of confidential information about the Company that was
furnished by or on behalf of the Company to return or destroy all such
information in the possession of any such party or in the possession of any
agent or advisor of such party.
(b) The Board of Directors of the Company shall not (i) withdraw
or modify or propose to withdraw or modify, in any manner adverse to Parent, the
approval or recommendation of such Board of Directors of this Agreement, the
Offer or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal or (iii) cause or agree to cause the Company
to enter into any letter of intent, agreement in principle or agreement related
to any Acquisition Proposal unless, in each case, the Board determines in good
faith (A) after receiving advice from its financial advisor that such
Acquisition Proposal is a Superior Proposal and (B) based upon advice of outside
legal counsel that the failure to take such action would violate the Board's
fiduciary duties under applicable law.
(c) For purposes of this Agreement, "Acquisition Proposal" shall
mean any inquiry, proposal or offer, whether in writing or otherwise, made by a
third party (other than Parent) relating to (i) any acquisition or purchase of
20% or more of the consolidated assets of the Company and its Subsidiaries or of
20% or more of any class of equity securities of the Company or any of its
Subsidiaries, (ii) any tender offer (including a self tender offer) or exchange
offer that if consummated would result in any third party beneficially owning
20% or more of any class of equity securities of the Company or any of its
Subsidiaries, (iii) any merger, consolidation, business combination, sale of
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries whose assets, individually or
in the aggregate, constitute more than 20% of the consolidated assets of the
Company and its Subsidiaries or (iv) any other transaction the consummation of
which would reasonably be expected to interfere with in a material way, prevent
or materially delay the Merger or which would reasonably be expected to
materially dilute the benefits to Parent of the transactions contemplated hereby
(but excluding, in each case, the transactions contemplated hereby).
(d) For purposes of the Agreement, the term "Superior Proposal"
means any bona fide Acquisition Proposal, which proposal was not solicited by
the Company after the date of this Agreement, made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than a majority of the Shares then
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outstanding or all or substantially all the assets of the Company, and otherwise
on terms which the Board of Directors of the Company determines in good faith to
be more favorable to the Company and its stockholders than the Offer and the
Merger (based on advice of the Company's financial advisor that the value of the
consideration provided for in such proposal is superior to the value of the
consideration provided for in the Offer and the Merger).
(e) For purposes of the Agreement, the term "third party" means
any person, corporation, entity or "group," as defined in Section 13(d) of the
Exchange Act and the rules of the Commission promulgated thereunder, other than
Parent or any of its affiliates.
(f) Notwithstanding the foregoing, nothing contained in this
Section 5.4 shall prohibit the Company from taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Company's stockholders which
the Board of Directors of the Company determines in good faith, on the basis of
advice from outside legal counsel (who may be the Company's regularly engaged
outside legal counsel), that such action is required in order to comply with the
fiduciary duties of the Board of Directors to the stockholders of the Company
under applicable law. Notwithstanding anything contained in this Agreement to
the contrary, (i) any action by the Board of Directors permitted to be taken by
this Section 5.4 shall not constitute a breach of this Agreement by the Company
and (ii) any "stop-look-and-listen" communication with respect to the Offer, the
Merger or this Agreement solely of the nature contemplated by Rule 14d-9 under
the Exchange Act made by the Company as a result of an Acquisition Proposal
shall in no event be deemed a withdrawal or modification by the Board of
Directors of its approval or recommendation of the Offer, the Merger or this
Agreement.
Section 5.5 Publicity. The initial press releases with respect to the
execution of this Agreement shall be approved in advance by both Parent and the
Company. Thereafter, so long as this Agreement is in effect, neither the
Company, Parent nor any of their respective affiliates shall issue or cause the
publication of any press release or statement with respect to the Merger, this
Agreement or the other transactions contemplated hereby without prior
consultation with the other party, except as may be required by law or by any
listing agreement with a national securities exchange or national securities
quotation system.
Section 5.6 Indemnification; D&O Insurance. (a) The Company shall,
and from and after the consummation of the Offer, Parent shall or shall cause
the Surviving Corporation or an affiliate of Parent to indemnify, defend and
hold harmless the present and former directors and officers of the Company and
its Subsidiaries (the "Indemnified Parties") from and against all losses,
expenses, claims, damages or liabilities arising out of the transactions
contemplated by this Agreement to the fullest extent provided under the
Company's certificate of incorporation and bylaws in effect on the date hereof;
provided that such indemnification shall be subject to any limitation imposed
from time to time under applicable law. All rights to indemnification and
exculpation existing in favor of the directors and officers of the Company as
provided in the Company's Certificate of Incorporation or By-laws, as in effect
as of the date hereof, with respect to matters occurring through the Effective
Time (including the right
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to advancement of expenses), shall survive the Merger and shall not be amended,
repealed or otherwise modified for a period of six years after the consummation
of the Offer in any manner that would adversely affect the rights of the
individuals who at or prior to the consummation of the Offer were directors or
officers of the Company with respect to occurrences at or prior to the
consummation of the Offer and Parent shall cause the Surviving Corporation to
honor all such rights to indemnification.
(b) For a period of three years after the Effective Time, Parent
will cause the Surviving Corporation to use its reasonable best efforts to
provide directors and officers liability insurance issued by a reputable insurer
in respect of acts and omissions occurring prior to the Effective Time covering
each of the Indemnified Parties currently covered by the Company's officers' and
directors' liability insurance on terms with respect to coverage and amount no
less favorable than those of such policy in effect on the date hereof; provided
that in satisfying its obligation under this Section 5.6, Parent shall not be
obligated to cause the Surviving Corporation to pay premiums in excess of 200%
of the amount per annum the Company paid in its last full fiscal year, which
amount has been disclosed to Parent.
Section 5.7 Approvals and Consents; Cooperation; Notification. (a)
The parties hereto shall use their respective reasonable best efforts, and
cooperate with each other, to (i) determine as promptly as practicable all
governmental and third party authorizations, approvals, consents or waivers,
including, pursuant to the HSR Act and other applicable antitrust or competition
laws, advisable (in Parent's and Purchaser's discretion) or required in order to
consummate the transactions contemplated by this Agreement, including, the Offer
and the Merger, (ii) obtain such authorizations, approvals, consents or waivers
as promptly as practicable and (iii) prepare the Proxy Statement and the Offer
Documents.
(b) The Company, Parent and the Purchaser shall take all actions
necessary to file as soon as practicable all notifications, filings and other
documents required to obtain all governmental authorizations, approvals,
consents or waivers, including, under the HSR Act and other applicable antitrust
or competition laws, and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission, the Antitrust Division of the
Department of Justice and any other Governmental Entity for additional
information or documentation and to respond as promptly as practicable to all
inquiries and requests received from any Governmental Entity in connection
therewith.
(c) The Company shall give prompt notice to Parent of (i) the
occurrence of any event, condition or development material to the Company and
its Subsidiaries, taken as a whole, (ii) any notice or other communication from
any Person claiming its consent is or may be required in connection with the
transactions contemplated by this Agreement, (iii) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement and (iv) any
actions, suits, claims, investigations or proceedings commenced or, to the best
of its knowledge threatened against, relating to or involving or otherwise
affecting the Company or any of its Subsidiaries which, if pending on the date
of this Agreement, would have been required to have been
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disclosed pursuant to Section 3.10 or which relate to the consummation of the
transactions contemplated by this Agreement. Each of the Company and Parent
shall give prompt notice to the other of the occurrence or failure to occur of
an event that would, or, with the lapse of time would cause any condition to the
consummation of the Offer or the Merger not to be satisfied.
Section 5.8 Reasonable Best Efforts; Further Assurances. (a) Each of
the parties hereto agrees to use its respective reasonable best efforts to take,
or cause to be taken, all 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 contemplated by this Agreement,
including the Offer and the Merger.
(b) At and after the Effective Time, the officers and directors
of the Surviving Corporation will be authorized to execute and deliver, in the
name and on behalf of the Company or Purchaser, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Purchaser, any other actions and things to vest, perfect or confirm
of record or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
Section 5.9 Shareholder Litigation. The Company and Parent agree that
in connection with any litigation which may be brought against the Company or
its directors relating to the transactions contemplated hereby, the Company will
keep Parent, and any counsel which Parent may retain at its own expense,
informed of the course of such litigation, to the extent Parent is not otherwise
a party thereto, and the Company agrees that it will consult with Parent prior
to entering into any settlement or compromise of any such shareholder
litigation; provided, that, no such settlement or compromise will be entered
into without Parent's prior written consent, which consent shall not be
unreasonably withheld.
Section 5.10 Fair Price Statute. If any "fair price" or "control
share acquisition" or "anti-takeover" statute, or similar statute or regulations
shall become applicable to the transactions contemplated by this Agreement or by
the Stockholders Agreement, the Company and the Board of Directors of the
Company shall grant such approvals and take such actions as are necessary so
that the transactions contemplated hereby and thereby may be consummated as
promptly as practicable on the terms contemplated hereby and thereby, and
otherwise to minimize the effects of such statute or regulation on the
transactions contemplated hereby or thereby.
Section 5.11 Non-Solicitation and Non-Competition Agreements. As soon
as practicable following the execution of this Agreement, the Company will enter
into Non-Solicitation and Non-Competition Agreements substantially in the form
of the agreements or as otherwise set forth in Section 5.11 of the Company
Disclosure Schedule with the individuals and the entities listed in such Section
of the Company Disclosure Schedule.
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Section 5.12 Transition Services. The Company shall enter into an
agreement with Mills & Partners pursuant to which, at the election of the
Company, Mills & Partners will provide transition services to the Surviving
Corporation for a period of up to six months (as determined by the Company)
following the Effective Time at a cost that is equal to the cost to Mills &
Partners of providing those services. For the purposes of this Section,
"transition services" means financial, treasury, accounting, tax, audit, benefit
administration, management information services and other related services, and
other similar administrative services currently provided to the Company or its
Subsidiaries by Mills & Partners.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation 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) this Agreement shall have been adopted by the requisite vote
of the holders of Company Stock, if required by applicable law and the
Certificate of Incorporation (provided that Parent shall comply with its
obligations in respect of the voting of Shares set forth in Section 1.8(b));
(b) any waiting period applicable to the Merger under the HSR Act
and other applicable antitrust or competition laws shall have expired or been
terminated, as applicable;
(c) no judgment, statute, rule, regulation, order, decree or
injunction shall have been enacted, promulgated or issued by any Governmental
Entity or court which prohibits or restrains the consummation of the Merger; and
(d) Parent, the Purchaser or their affiliates shall have
purchased shares of Company Stock pursuant to the Offer; provided that neither
Parent nor the Purchaser may invoke this condition if Purchaser shall have
failed to purchase shares of Company Stock so tendered and not withdrawn in
violation of the terms of this Agreement or the Offer.
Section 6.2 Conditions to the Obligations of the Company to Effect
the Merger. The obligation of the Company to effect the Merger shall be further
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) the representations and warranties of Parent and the
Purchaser shall be true and accurate in all material respects as of the
Effective Time as if made at and as of such time (except for those
representations and warranties that address matters only as of a
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particular date or only with respect to a specific period of time which need
only be true and accurate as of such date or with respect to such period); and
(b) each of Parent and the Purchaser shall have performed in all
material respects all of the respective obligations hereunder required to be
performed by Parent or the Purchaser, as the case may be, at or prior to the
Effective Time.
Section 6.3 Conditions to the Obligations of Parent and the Purchaser
to Effect the Merger. The obligations of Parent and the Purchaser to effect the
Merger shall be further subject to the satisfaction at or prior to the Effective
Time of the following conditions:
(a) the representations and warranties of the Company shall be
true and accurate in all material respects as of the Effective Time as if made
at and as of such time (except for those representations and warranties that
address matters only as of a particular date or only with respect to a specific
period of time which need only be true and accurate as of such date or with
respect to such period); and
(b) the Company shall have performed in all material respects all
of the respective obligations hereunder required to be performed by the Company,
at or prior to the Effective Time.
Section 6.4 Exception. The conditions set forth in Section 6.2 and
6.3 hereof shall cease to be conditions to the obligations of the parties if the
Purchaser shall have accepted for payment and paid for Shares validly tendered
pursuant to the Offer.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the
Merger contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after stockholder approval thereof:
(a) By the mutual consent of Parent, the Purchaser and the
Company.
(b) By either of the Company, on the one hand, or Parent and the
Purchaser, on the other hand:
(i) if shares of Company Stock shall not have been purchased
pursuant to the Offer on or prior to December 31, 1998; provided
further, however, that the right to terminate this Agreement
under this Section 7.1(b)(i) 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 Parent or the
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Purchaser, as the case may be, to purchase shares of Company
Stock pursuant to the Offer on or prior to such date; or
(ii) if there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or if
any Governmental Entity shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or
other action the parties hereto shall use their respective
reasonable best efforts to lift), in each case restraining,
enjoining or otherwise prohibiting the transactions contemplated
by this Agreement or prohibiting Parent to acquire or hold or
exercise rights of ownership of the Shares, and such order,
decree, ruling or other action shall have become final and
non-appealable.
(c) By the Company:
(i) if, subject to the provisions of Section 5.4(b) hereof
and prior to the purchase of shares of Company Stock pursuant to
the Offer, a third party shall have made an Acquisition Proposal
that the Board of Directors of the Company determines in good
faith, after consultation with its financial advisor, is a
Superior Proposal and the Company shall have executed a
definitive agreement with such third party in respect of such
Superior Proposal; or
(ii) if Parent or the Purchaser shall have terminated the
Offer, or the Offer shall have expired, without Parent or the
Purchaser, as the case may be, purchasing any shares of Company
Stock pursuant thereto; provided that the Company may not
terminate this Agreement pursuant to this Section 7.1(c)(ii) if
the Company is in material breach of this Agreement.
(d) By Parent and the Purchaser if, prior to the purchase of
shares of Company Stock pursuant to the Offer, (i) the Board of Directors of the
Company shall have withdrawn, modified or changed in a manner adverse to Parent
or the Purchaser its approval or recommendation of the Offer, this Agreement or
the Merger; (ii) the Board of Directors of the Company shall have approved or
recommended an Acquisition Proposal or shall have executed an agreement in
principle or definitive agreement relating to an Acquisition Proposal or similar
business combination with a person or entity other than Parent, the Purchaser or
their affiliates (or the Board of Directors of the Company resolves to do any of
the foregoing); or (iii) any person or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Parent or any of its affiliates) shall have become
the beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange
Act) of at least 50% of the outstanding Shares or shall have acquired, directly
or indirectly, at least 50% of the assets of the Company.
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Section 7.2 Effect of Termination.
(a) In the event of the termination of this Agreement as provided
in Section 7.1, written notice thereof shall forthwith be given to the other
party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and void,
and there shall be no liability on the part of Parent, the Purchaser or the
Company or their respective directors, officers, employees, stockholders,
representatives, agents or advisors other than, with respect to Parent, the
Purchaser and the Company, the obligations pursuant to this Section 7.2,
Sections 5.12, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.10, 8.11, 8.12, 8.13
and the last sentence of Section 5.2(a). Nothing contained in this Section 7.2
shall relieve Parent, the Purchaser or the Company from liability for willful
breach of this Agreement.
(b) In the event that this Agreement is terminated by the Company
pursuant to Section 7.1(c)(i) hereof or by Parent and the Purchaser pursuant to
Section 7.1(d) hereof, the Company shall pay to Parent by wire transfer of
immediately available funds to an account designated by Parent on the next
business day following such termination, an amount equal to $65,000,000 (the
"Termination Fee").
(c) The Company acknowledges that the agreements contained in
this Section 7.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into this
Agreement; accordingly, if the Company fails to promptly pay any amount due
pursuant to this Section 7.2, and, in order to obtain such payment, the other
party commences a suit which results in a judgment against the Company for the
fee or fees and expenses set forth in this Section 7.2, the Company shall also
pay to Parent its costs and expenses incurred in connection with such
litigation.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto, by action taken
by their respective Boards of Directors (which in the case of the Company shall
include approvals as contemplated in Section 1.3(b)), at any time prior to the
Closing Date with respect to any of the terms contained herein; provided,
however, that after the approval of this Agreement by the stockholders of the
Company, no such amendment, modification or supplement shall reduce or change
the Merger Consideration or adversely affect the rights of the Company's
stockholders hereunder without the further approval of such stockholders.
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Section 8.2 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time. This Section 8.2 shall not limit any covenant or agreement
contained in this Agreement which by its terms contemplates performance after
the Effective Time.
Section 8.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, with delivery by such service confirmed, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or the Purchaser, to:
Tour Framatome
1, Place de la Coupole
92084 Paris La Defense
France
Telephone: 33 (0)1 47 96 14 43
Telecopy: 33 (0)1 47 96 33 88
Attention: Philippe Anglaret
with copies to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4334
Telecopy: (212) 450-5648
Attention: John J. McCarthy, Jr., Esq.
(b) if to the Company, to:
Berg Electronics Corp.
101 South Hanley Road
St. Louis, Missouri 63105
Telephone: (314) 746-2245
Telecopy: (314) 746-2299
Attention: David M. Sindelar
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with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Telephone: (214) 746-7738
Telecopy: (214) 746-7777
Attention: R. Scott Cohen, Esq.
Any notice which is not sent to the party's counsel in the manner and at the
address or telecopy number set forth above within 24 hours following the time
such notice is given to such party shall be deemed not to be validly delivered
to such party.
Section 8.4 Interpretation. The words "hereof", "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include", "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation". The words describing
the singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders and words denoting natural persons shall
include corporations and partnerships and vice versa. The phrase "to the
knowledge of" or any similar phrase shall mean such facts and other information
which as of the date of determination are actually known to any senior or
executive vice president, chief financial officer, general counsel, chief
compliance officer, controller, and any officer superior to any of the
foregoing. The phrases "the date of this Agreement", "the date hereof" and terms
of similar import, unless the context otherwise requires, shall be deemed to
refer to August 27, 1998. As used in this Agreement, the term "affiliate(s)"
shall have the meaning set forth in Rule 12b-2 of the Exchange Act. The parties
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement. As used in this
Agreement, "Person" means an individual or corporation, partnership, limited
liability company, association, trust, unincorporated organization, joint
venture, estate, governmental entity or other legal entity.
Section 8.5 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 8.6 Entire Agreement; Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement (a) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the
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subject matter hereof, and (b) except as provided in Section 5.6, are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
Section 8.7 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 8.8 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof or of any other
jurisdiction.
Section 8.9 Specific Performance. Each of the parties hereto
acknowledges and agrees that in the event of any breach of this Agreement, each
non-breaching party would be irreparably and immediately harmed and could not be
made whole by monetary damages. It is accordingly agreed that the parties hereto
(a) will waive, in any action for specific performance, the defense of adequacy
of a remedy at law and the posting of any bond in connection therewith and (b)
shall be entitled, in addition to any other remedy to which they may be entitled
at law or in equity, to compel specific performance of this Agreement in any
action instituted in a court of competent jurisdiction.
Section 8.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties hereto, except that Parent and Purchaser
may transfer or assign, in whole or from time to time in part, to one or more of
its affiliates, the right to purchase Shares pursuant to the Offer, but any such
transfer or assignment will not relieve Parent or Purchaser, as the case may be,
of its obligations under the Offer or prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective permitted successors and assigns.
Section 8.11 Expenses. Except as set forth in Section 7.2 hereof, all
costs and expenses incurred in connection with the Offer, the Merger, this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
Section 8.12 Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
Section 8.13 Waivers. Except as otherwise provided in this Agreement,
any failure of any of the parties to comply with any obligation, covenant,
agreement or condition herein may
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be waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 8.14 Disclosure Schedule. The Company Disclosure Schedule
shall be construed with and as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein.
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
FRAMATOME CONNECTORS INTERNATIONAL S.A.
By: /s/ PHILIPPE ANGLARET
---------------------------------------
Name: Philippe Anglaret
Title: Chairman and President
BRAVO ACQUISITION CO.
By: /s/ PHILIPPE ANGLARET
---------------------------------------
Name: Philippe Anglaret
Title: Chairman and President
BERG ELECTRONICS CORP.
By: /s/ JAMES N. MILLS
---------------------------------------
Name: James N. Mills
Title: Chairman of the Board and
Chief Executive Officer
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, subject to the
provisions of the Merger Agreement, Parent and the Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to the Purchaser's obligation to pay for or return tendered Shares promptly
after termination or withdrawal of the Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any tendered Shares, and may terminate the Offer and not accept for
payment any tendered Shares if (i) any applicable waiting period under the HSR
Act or other applicable antitrust or competition laws has not expired or been
terminated prior to the expiration of the Offer, (ii) the Minimum Condition has
not been satisfied, or (iii) at any time on or after August 27, 1998, and before
the time of acceptance of Shares for payment pursuant to the Offer, any of the
following shall exist:
(a) there shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign, before
any court or governmental authority or agency, domestic or foreign, that has
reasonable likelihood of success (i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit the
making of the Offer, the acceptance for payment of or payment for some of or all
the Shares by Parent or the consummation by Parent of the Merger, or seeking to
obtain material damages in connection with the transactions contemplated by the
Offer or the Merger, (ii) seeking to restrain or prohibit Parent's ownership or
operation (or that of its respective subsidiaries or affiliates) of all or any
material portion of the business or assets of the Company and its Subsidiaries,
taken as a whole, or of Parent and its subsidiaries, taken as a whole, or to
compel Parent or any of its subsidiaries or affiliates to dispose of or hold
separate all or any material portion of the business or assets of the Company
and its Subsidiaries, taken as a whole, or of Parent and its subsidiaries, taken
as a whole, (iii) seeking to impose or confirm material limitations on the
ability of Parent or any of its subsidiaries or affiliates effectively to
exercise full rights of ownership of the Shares, including, without limitation,
the right to vote any Shares acquired or owned by Parent or any of its
subsidiaries or affiliates on all matters properly presented to the Company's
stockholders, or (iv) seeking to require divestiture by Parent or any of its
subsidiaries or affiliates of all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a whole; or
(b) there shall be any statute, rule, regulation, order, decree or
injunction enacted, promulgated or issued by any court, government or
governmental authority or agency that is reasonably likely, directly or
indirectly, to result in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and accurate in all material respects as of
the date of consummation of the Offer as though made on or as of such date
(except for those
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representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time which need only be true and
accurate as of such date or with respect to such period);
(d) the Company shall have breached or failed to perform or comply
with, in any material respects, any obligation, agreement or covenant under the
Merger Agreement;
(e) the Merger Agreement shall have been terminated in accordance with
its terms;
(f) the Board of Directors of the Company shall have withdrawn or
modified or changed in a manner adverse to Parent or the Purchaser its approval
or recommendation of the Offer, the Merger Agreement or the Merger or shall have
recommended an Acquisition Proposal or shall have executed an agreement in
principle or definitive agreement relating to an Acquisition Proposal or similar
business combination with a person or entity other than Parent, the Purchaser or
their affiliates or the Board of Directors of the Company shall have adopted a
resolution to do any of the foregoing.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent (subject to any assignment in accordance with Section 8.10 hereof) and,
subject to the Merger Agreement, may be asserted by either of them or may be
waived by Parent or the Purchaser, in whole or in part at any time and from time
to time in the sole discretion of Parent or the Purchaser. The failure by Parent
or the Purchaser at any time to exercise any such rights shall not be deemed a
waiver of any right and each right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
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