EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
September 25, 2000
among
BUSH BOAKE ALLEN INC.,
INTERNATIONAL FLAVORS & FRAGRANCES INC.
and
B ACQUISITION CORP.
TABLE OF CONTENTS
PAGE #
ARTICLE I DEFINITIONS.............................................2
SECTION 1.01. Certain Defined Terms...............................2
SECTION 1.02. Cross-References....................................5
ARTICLE II THE OFFER...............................................7
SECTION 2.01. The Offer...........................................7
SECTION 2.02. Company Actions.....................................8
SECTION 2.03. Board of Directors Representation...................9
ARTICLE III THE MERGER.............................................11
SECTION 3.01. The Merger.........................................11
SECTION 3.02. Conversion of Shares...............................11
SECTION 3.03. Surrender and Payment..............................12
SECTION 3.04. Stock Options......................................14
SECTION 3.05. Withholding Rights.................................14
SECTION 3.06. Lost Certificates..................................14
SECTION 3.07. Articles of Incorporation..........................15
SECTION 3.08. Bylaws.............................................15
SECTION 3.09. Directors and Officers.............................15
SECTION 3.10. Closing............................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
COMPANY................................................15
SECTION 4.01. Corporate Existence and Power......................15
SECTION 4.02. Corporate Authorization............................16
SECTION 4.03. Governmental Authorization.........................16
SECTION 4.04. Non-Contravention..................................17
SECTION 4.05. Capitalization.....................................17
SECTION 4.06. Subsidiaries.......................................18
SECTION 4.07. SEC Reports........................................19
SECTION 4.08. Financial Statements...............................19
SECTION 4.09. Proxy Statement; Schedule 14D-9....................20
SECTION 4.10. Absence of Certain Changes or Events...............21
SECTION 4.11. Litigation.........................................22
SECTION 4.12. Employee Benefit Plans.............................22
SECTION 4.13. Labor Relations....................................25
SECTION 4.14. Compliance with Laws; Permits......................25
SECTION 4.15. Taxes..............................................26
SECTION 4.16. Environmental Matters..............................28
SECTION 4.17. Real Property......................................28
SECTION 4.18. Intellectual Property..............................30
SECTION 4.19. Finders and Investment Bankers.....................32
SECTION 4.20. Opinion of Financial Advisor.......................32
SECTION 4.21. State Takeover Statutes; Required Vote.............32
SECTION 4.22. Affiliate Transactions.............................32
SECTION 4.23. Contracts..........................................32
SECTION 4.24. No Other Representations...........................33
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT...............33
SECTION 5.01. Corporate Existence and Power......................33
SECTION 5.02. Corporate Authorization............................34
SECTION 5.03. Governmental Authorization.........................34
SECTION 5.04. Non-Contravention..................................34
SECTION 5.05. Disclosure Documents...............................35
SECTION 5.06. Financing..........................................35
SECTION 5.07. Brokers............................................35
SECTION 5.08. Parent Not an Interested Shareholder...............36
SECTION 5.09. Litigation.........................................36
SECTION 5.10. No Other Representations...........................36
ARTICLE VI COVENANTS..............................................36
SECTION 6.01. Conduct of the Company.............................36
SECTION 6.02. Access to Information..............................39
SECTION 6.03. No Solicitation....................................40
SECTION 6.04. Notices of Certain Events..........................42
SECTION 6.05. Merger Subsidiary..................................42
SECTION 6.06. Indemnification and Insurance......................43
SECTION 6.07. Employee Benefits..................................45
SECTION 6.08. Meeting of the Company's Shareholders..............46
SECTION 6.09. Proxy Statement....................................46
SECTION 6.10. Reasonable Best Efforts............................47
SECTION 6.11. Public Announcements...............................47
SECTION 6.12. Further Assurances.................................47
SECTION 6.13. Filings, Other Action..............................48
SECTION 6.14. Confidentiality....................................49
SECTION 6.15. State Takeover Laws................................49
ARTICLE VII CONDITIONS TO THE MERGER...............................49
SECTION 7.01. Conditions to the Obligations of Each Party........49
ARTICLE VIII TERMINATION............................................50
SECTION 8.01. Termination........................................50
SECTION 8.02. Effect of Termination..............................52
ARTICLE IX MISCELLANEOUS..........................................52
SECTION 9.01. Notices............................................52
SECTION 9.02. Survival of Representations and Warranties and
Agreements......................................53
SECTION 9.03. Amendments; No Waivers.............................53
SECTION 9.04. Fees and Expenses..................................54
SECTION 9.05. Successors and Assigns.............................55
SECTION 9.06. Governing Law......................................55
SECTION 9.07. Jurisdiction.......................................55
SECTION 9.08. Counterparts; Effectiveness........................55
SECTION 9.09. Entire Agreement; Third Party Beneficiaries........56
SECTION 9.10. Headings...........................................56
SECTION 9.11. Severability.......................................56
SECTION 9.12. WAIVER OF JURY TRIAL...............................56
Exhibit A: Voting and Tender Agreement
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of September 25, 2000
(the "Agreement"), among BUSH BOAKE ALLEN INC., a Virginia corporation (the
"Company"), INTERNATIONAL FLAVORS & FRAGRANCES INC., a New York corporation
("Parent"), and B ACQUISITION CORP., a Virginia corporation and a wholly
owned subsidiary of Parent ("Merger Subsidiary").
The respective Boards of Directors of Parent, Merger
Subsidiary and the Company have each approved the acquisition of the
Company by Parent on the terms and subject to the conditions set forth in
this Agreement.
In furtherance of such acquisition, Parent proposes to cause
Merger Subsidiary to commence a tender offer to purchase all of the issued
and outstanding shares of common stock, par value $1.00 per share, of the
Company (the "Common Stock" or the "Shares"), at a price of $48.50 per
share net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in this Agreement (such tender offer,
as it may be amended and supplemented from time to time as permitted under
this Agreement, the "Offer").
The respective Boards of Directors of Parent, Merger
Subsidiary and the Company, and Parent, as sole shareholder of Merger
Subsidiary, have each approved, upon terms and subject to the conditions
set forth in this Agreement, the merger of Merger Subsidiary, with and into
the Company (the "Merger"), whereby each issued and outstanding Share not
owned directly or indirectly by Parent or the Company will be converted
into the right to receive per share consideration paid pursuant to the
Offer.
The Board of Directors of the Company has unanimously (i)
approved and adopted this Agreement, (ii) found the Agreement fair to, and
in the best interest of, the Company and its shareholders and (iii)
resolved to recommend that the shareholders approve the Merger.
The Board of Directors of Parent has approved and adopted
this Agreement and the Merger and, in its capacity as the sole shareholder
of Merger Subsidiary, has approved this Agreement.
As a condition and further inducement to Parent and Merger
Subsidiary to enter into this Agreement and incurring the obligations set
forth herein, International Paper Company, a New York corporation (the
"Principal Shareholder"), concurrently herewith is entering into a Voting
and Tender Agreement (the "Support Agreement"), dated as of the date
hereof, with Parent, Merger Subsidiary and the Company, in the form
attached hereto as Exhibit A, pursuant to which the Principal Shareholder
has agreed, among other things, to tender its Shares in the Offer and to
vote such Shares in favor of the Merger upon the terms and subject to the
conditions set forth therein.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. Definitions shall apply
equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All references herein
to Articles, Sections and Exhibits shall be deemed to be references to
Articles and Sections of, and Exhibits to, this Agreement unless the
context shall otherwise require. All Exhibits attached hereto shall be
deemed incorporated herein as if set forth in full herein and, unless
otherwise defined therein, all terms used in any Exhibit shall have the
meaning ascribed to such term in this Agreement. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation." The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise expressly provided herein, any statute referred to herein
means such statute as from time to time amended, modified or supplemented.
For the purposes of this Agreement, the following terms have the following
meanings:
"Affiliate" means, when used with respect to any Person, any
other Person directly or indirectly through one or more intermediaries
controlling, controlled by, or under common control with such Person. As
used in the definition of "Affiliate," the term "control" means possession,
directly or indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
"business day" shall have the meaning given such term in
Rule 14d-1(g)(3) of the Exchange Act.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Disclosure Letter" means the disclosure letter from
the Company to Parent, dated the date hereof.
"Environment" means navigable waters, waters of the
contiguous zone, ocean waters, natural resources, surface waters, ground
water, drinking water supply, land surface, subsurface strata, ambient air,
both inside and outside of buildings and structures, man-made buildings and
structures, and plant and animal life on earth.
"Environmental Claims" means any written notice of lawsuit,
claim, investigation or other notification by any Person, pursuant to
Environmental Laws or principles of common law relating to pollution,
protection of the Environment or health and safety, that any of the current
or past operations of the Company or any of its Subsidiaries, or any
by-product thereof or Hazardous Substance used thereat, or any of the
property currently or formerly owned, leased or operated by the Company or
any of its Subsidiaries, or the operations or property of any predecessor
or affiliates of the Company or any of its Subsidiaries is subject to or
may be implicated in any proceeding, action, investigation, claim, lawsuit
or order, by any Governmental Entity or any other person.
"Environmental Laws" means all Laws and orders relating to
pollution, protection of the Environment, or the emission, discharge,
Release or threatened Release of Hazardous Substances into the Environment
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Substances, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C.ss.9601 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C.ss.6901 et seq., the Toxic
Substances Control Act, 15 U.S.C.ss.2601 et seq., the Federal Water
Pollution Control Act, 33 U.S.C.ss.1251 et seq., the Clean Air Act, 42
U.S.C.ss.7401 et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C.ss.121 et seq., the Safe Drinking Water Act, 42 U.S.C.ss. 300f
et seq., the Oil Pollution Act of 1990 and analogous material state, local
and foreign laws and orders.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"facilities" means any real property or leaseholds, or other
interests currently owned or operated by the Company or any of its
Subsidiaries and any buildings, plants, structures, or equipment (including
motor vehicles) currently owned or operated by the Company or any of its
Subsidiaries.
"Governmental Entity" means any foreign, supranational,
federal, state, municipal or other court, administrative agency, commission
or other governmental or regulatory body or authority or instrumentality or
political subdivision, or any official thereof.
"Hazardous Substance" means any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste, special
waste, industrial substance or waste, petroleum or petroleum-derived
substance or waste, radioactive substance or waste, or any other substance
regulated under or defined by any Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
"Knowledge" means the actual knowledge of the chief
executive officer, chief financial officer, chief accounting officer,
treasurer, officer primarily responsible for human resources and safety,
controller and general counsel of the Company.
"Lien" means, with respect to any asset or right, any
mortgage, deed of trust, lien (statutory or other), pledge, hypothecation,
assignment, claim, charge, security interest, conditional sale agreement,
title, exception, or encumbrance, option, right of first offer or refusal,
easement, servitude, voting or transfer restriction, or any other right of
another to or adverse claim of any kind in respect of such asset or right,
including, without limitation, under any shareholder agreement.
"NYSE" means the New York Stock Exchange Inc.
"Parent Disclosure Letter" means the disclosure letter from
Parent to the Company, dated the date hereof.
"Person or person" means any natural person, firm,
corporation, business trust, joint venture, joint stock company,
incorporated or unincorporated association, company, partnership, limited
liability company or other entity, or any Governmental Entity, or any
agency or political subdivision thereof, and shall include any successor
(by merger or otherwise) of such entity.
"Proceeding" means any action, arbitration, hearing,
litigation, suit (whether civil, criminal, administrative, investigative,
or informal) or similar proceeding commenced, brought, conducted, or heard
by or before, or otherwise involving, any Governmental Entity or
arbitrator.
"Release" means any release, spill, emission, discharge,
placing, leaking, pumping, injection, deposit, disposal, dispersal,
leaching or migration into the Environment or into or out of any property,
including the movement of Hazardous Substances through or in the
Environment.
"Remedial Action" means all actions, whether voluntary or
involuntary, reasonably necessary to comply with, or discharge any
obligation under, Environmental Laws or required by a Governmental Entity
to clean up, remove, treat, cover or in any other way adjust Hazardous
Substances in the indoor or outdoor Environment; or perform remedial
studies, investigations, restoration and post-remedial studies,
investigations and monitoring on, about or in any real property.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Subsidiary" means, as of the relevant date of
determination, with respect to any Person, each entity as to which such
Person directly or indirectly owns beneficially or of record or has the
power to vote or control a majority of the voting securities of such entity
or of any class of equity interests of such entity the holders of which are
ordinarily entitled to vote for the election of the members of the board of
directors or other persons performing similar functions.
"Superior Proposal" means a bona fide Acquisition Proposal
on terms which the Board of Directors of the Company determines in its good
faith judgment (after consultation with a nationally-recognized investment
banking firm acting as the Company's advisor) to be more favorable from a
financial point of view to the Company and its shareholders than the
transactions contemplated by this Agreement, which the Board of Directors
determines in good faith is reasonably capable of being financed, and the
conditions to the consummation of which are, in the good faith
determination of the Board of Directors, reasonably capable of being
satisfied.
"VSCA" means the Virginia Stock Corporation Act.
SECTION 1.02. Cross-References. The following terms shall
have the meanings ascribed thereto in the Section set forth opposite such
term:
Acquisition Proposal...............................................6.03(a)
Agreement.........................................................Recitals
Antitrust Laws.....................................................6.13(b)
Articles of Merger.................................................3.01(b)
Certificates.......................................................3.03(b)
Closing...............................................................3.10
CO.................................................................4.17(a)
Common Stock......................................................Recitals
Company...........................................................Recitals
Company Disclosure Documents.......................................4.09(a)
Company Material Adverse Effect.......................................4.01
Company Option Plans..................................................3.04
Company Proxy Statement............................................4.09(a)
Company SEC Reports...................................................4.07
Company Subsidiary Securities......................................4.06(b)
Confidentiality Agreement.............................................6.02
Continuing Directors...............................................2.03(b)
CSFB..................................................................4.19
D&O Insurance......................................................6.06(c)
Defined Benefit Plan...............................................6.07(b)
Disbursing Agent...................................................3.03(a)
Effective Time.....................................................3.01(b)
Employee Benefit Arrangements......................................6.01(g)
Employee Plan......................................................4.12(a)
ERISA..............................................................4.12(c)
Exchange Fund......................................................3.03(a)
Expenses...........................................................9.04(b)
fully-diluted basis................................................Annex A
GAAP..................................................................4.08
Indemnification Liabilities........................................6.06(b)
Indemnified Parties................................................6.06(b)
Intellectual Property.................................................4.18
Leased Real Property...............................................4.17(b)
Merger............................................................Recitals
Merger Consideration...............................................3.02(b)
Merger Subsidiary.................................................Recitals
Minimum Condition..................................................Annex A
Offer.............................................................Recitals
Offer Documents....................................................2.01(b)
Option................................................................3.04
Options...............................................................3.04
Option Consideration..................................................3.04
Owned Real Property................................................4.17(a)
Parent............................................................Recitals
Parent Material Adverse Effect........................................5.01
PBGC...............................................................4.12(f)
Permitted Owned Real Property Exceptions...........................4.17(a)
Preferred Stock...................................................Recitals
Principal Shareholder.............................................Recitals
Real Property......................................................4.17(b)
Real Property Leases...............................................4.17(b)
Schedule TO .......................................................2.01(b)
Schedule 14D-9.....................................................2.02(b)
Shares............................................................Recitals
Shareholders Meeting..................................................6.08
Subsequent Period..................................................2.01(c)
Support Agreement.................................................Recitals
Surviving Corporation..............................................3.01(a)
Tax Authority......................................................4.15(b)
Tax Returns........................................................4.15(b)
Taxes..............................................................4.15(b)
Termination Date...................................................8.01(b)
Termination Fee....................................................9.04(b)
Title IV Plans.....................................................4.12(f)
ARTICLE II
THE OFFER
SECTION 2.01. The Offer. (a) Subject to the provisions of
this Agreement, as promptly as practicable following the date hereof, and
in any event not later than 10 business days after the date hereof, Merger
Subsidiary shall, and Parent shall cause Merger Subsidiary to, commence,
within the meaning of Rule l4d-2 under the Exchange Act, the Offer. The
obligation of Merger Subsidiary to, and of Parent to cause Merger
Subsidiary to, commence and consummate the Offer and accept for payment and
pay for any Shares tendered shall be subject only to the satisfaction of
the conditions set forth in Annex A and to the terms and conditions of this
Agreement; provided that except for the Minimum Condition (as defined in
Annex A), which may not be waived by Parent and Merger Subsidiary without
the Company's consent, which consent may be withheld in the Company's sole
judgment, (provided the Company shall consent to a waiver of the Minimum
Condition to enable Merger Subsidiary to purchase all Shares owned by the
Principal Shareholder and tendered into the Offer) Parent and Merger
Subsidiary may waive any other conditions to the Offer and may make changes
in the terms and conditions of the Offer except that, without the prior
written consent of the Company, no decrease in the per share price or the
number of Shares sought in the Offer may be made and no change may be made
(i) to the form of consideration to be paid, (ii) which imposes conditions
to the Offer in addition to those set forth in Annex A or (iii) that is
otherwise adverse to the holders of Shares.
(b) On the date of commencement of the Offer, Parent and
Merger Subsidiary shall file with the SEC a Tender Offer Statement on
Schedule TO (as amended and supplemented from time to time, the "Schedule
TO"), which shall comply with the provisions of applicable federal
securities laws, and shall contain or incorporate by reference the offer to
purchase relating to the Offer and forms of the related letter of
transmittal and other appropriate documents (which documents, as amended or
supplemented from time to time, are referred to herein collectively as the
"Offer Documents"). The Company will promptly supply to Parent and Merger
Subsidiary in writing, for inclusion in the Offer Documents, all
information concerning the Company required under the Exchange Act and the
rules and regulations thereunder or otherwise appropriate to be included in
the Offer Documents. The Company and its counsel shall be given a
reasonable opportunity to review and comment on the Offer Documents before
their being filed with the SEC. Parent and Merger Subsidiary agree to
provide the Company and its counsel any comments or communications, written
or oral, which Parent, Merger Subsidiary or their counsel may receive from
the staff of the SEC with respect to the Offer Documents promptly upon
receipt thereof. Each of Parent and Merger Subsidiary, on the one hand, and
the Company, on the other hand, shall promptly correct any information
provided by either of them for use in the Offer Documents if and to the
extent that it shall become false or misleading, and Parent and Merger
Subsidiary shall take all steps necessary to cause the Offer Documents as
so corrected to be filed with the SEC and disseminated to the shareholders
of the Company as and to the extent required by applicable laws.
(c) The initial scheduled expiration date of the Offer shall
be 20 business days after the date of its commencement. Notwithstanding the
foregoing, Parent and Merger Subsidiary shall have the right, without the
consent of the Company, to extend the Offer, (i) from time to time if, at
the scheduled or extended expiration date of the Offer, any of the
conditions to the Offer shall not have been satisfied or waived, for a
period of time until such conditions are satisfied or waived; provided that
notwithstanding anything to the contrary, if any of the conditions to the
Offer is not satisfied or waived on any scheduled expiration date of the
Offer, Parent and Merger Subsidiary shall be required to extend the Offer
until such condition or conditions are satisfied or waived unless such
condition or conditions could not reasonably be expected to be satisfied by
the Termination Date, (ii) for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to
the Offer or any period required by applicable law and (iii) for one or
more subsequent offering periods of up to an additional 20 business days in
the aggregate (a "Subsequent Period") pursuant to Rule 14d-11 of the
Exchange Act.
(d) Subject to the terms and conditions of the Offer and
this Agreement, Merger Subsidiary shall, and Parent shall cause Merger
Subsidiary to, accept for payment for Shares validly tendered and not
withdrawn pursuant to the Offer as soon as it is legally permitted to do so
under applicable law and to promptly pay for such Shares; provided that
Merger Subsidiary shall, and Parent shall cause Merger Subsidiary to,
accept immediately and pay promptly for all Shares as they are tendered
during a Subsequent Period. Parent shall provide or cause to be provided to
Merger Subsidiary on a timely basis the funds necessary to purchase any
Shares that Merger Subsidiary becomes obligated to purchase pursuant to the
Offer.
SECTION 2.02. Company Actions. (a) The Company hereby
approves of and consents to the Offer and represents that the Board of
Directors of the Company, at a meeting duly called and held, has (i)
determined as of the date hereof that this Agreement and the Offer and the
Merger are fair to and in the best interests of the Company's shareholders,
(ii) approved and adopted this Agreement, the Support Agreement and the
transactions contemplated hereby and thereby (including the Offer and
Merger), (iii) has taken all other actions necessary to render Article 14
(Affiliated Transactions) and Article 14.1 (Control Share Acquisitions) of
the VSCA not applicable to the transactions contemplated by this Agreement
and the Support Agreement, including the Merger and the Offer and any
exercise of the option set forth in the Support Agreement, and (iv)
recommended acceptance of the Offer and approval and adoption of this
Agreement and the Merger by the Company's shareholders; provided, however,
that such recommendation and approval may be withdrawn, modified or amended
to the extent that the Board of Directors of the Company determines in good
faith, after having received the advice of outside counsel, that it is
required to do so in order to comply with its fiduciary obligations.
Subject to the foregoing provisions of this Section 2.02(a), the Company
hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board of Directors of the Company described in the
first sentence of this Section 2.02(a) and represents that it has obtained
all necessary consents to permit the inclusion in its entirety of the
fairness opinion of Credit Suisse First Boston Corporation ("CSFB") in the
Schedule 14D-9 and, if necessary, the Company Proxy Statement (as defined
in Section 4.09). The Company has been advised that each of its directors
and executive officers intends to tender pursuant to the Offer all Shares
owned of record and beneficially by such director and executive officer.
(b) The Company shall file or cause to be filed with the SEC
on the date of commencement of the Offer a Solicitation/Recommendation
Statement on Schedule 14D-9 (as amended and supplemented from time to time,
the "Schedule 14D-9") that shall reflect the recommendation of the
Company's Board of Directors referred to above, and shall disseminate the
Schedule 14D-9 to shareholders of the Company as required by Rule 14d-9
promulgated under the Exchange Act. To the extent practicable, the Company
shall cooperate with Parent and Merger Subsidiary in mailing or otherwise
disseminating the Schedule 14D-9 with the appropriate Offer Documents to
the Company's shareholders. The Schedule 14D-9 shall comply in all material
respects with the provisions of applicable federal securities laws. Parent
and its counsel shall be given a reasonable opportunity to review and
comment on the Schedule 14D-9 before the filing thereof with the SEC. The
Company agrees to provide Parent and its counsel any comments or
communications, written or oral, which the Company or its counsel may
receive from the staff of the SEC with respect to the Schedule 14D-9
promptly upon receipt thereof. Each of the Company, on the one hand, and
Parent and Merger Subsidiary, on the other hand, shall promptly correct any
information provided by either of them for use in the Schedule 14D-9, if
and to the extent that it shall become false or misleading, and the Company
shall take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the SEC and disseminated to the shareholders of the
Company as and to the extent required by applicable laws.
(c) In connection with the Offer, the Company shall promptly
furnish Parent, or cause Parent to be furnished, with, 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, and of those persons becoming record holders after such
date, and shall furnish Parent with such information and assistance as
Parent or its agents may reasonably request in communicating the Offer to
the shareholders of the Company.
SECTION 2.03. Board of Directors Representation. (a)
Effective upon the acceptance for payment of, and payment for, any Shares
pursuant to the Offer, Parent shall be entitled to designate such number of
directors, rounded up to the next whole number, to serve on the Board of
Directors of the Company as will give Merger Subsidiary, subject to
compliance with Section 14(f) of the Exchange Act, representation on the
Board of Directors of the Company equal to at least that number of
directors which equals the product of (i) the total number of directors on
the Board of Directors (giving effect to the election of any additional
directors pursuant to this section) and (ii) a fraction, the numerator of
which shall be the number of Shares beneficially owned by Parent and/or
Merger Subsidiary (including Shares accepted for payment and for which
payment has been made) and the denominator of which shall be the number of
Shares then outstanding. The Company shall, upon request of Parent, take
all reasonable actions to cause Parent's designees to be elected or
appointed to the Company's Board of Directors, including without
limitation, increasing the size of the Board of Directors and/or securing
the resignations of incumbent directors. At such time, the Company shall,
if requested by Parent, also take all action reasonably necessary to cause
persons designated by Parent to constitute at least the same percentage
(rounded up to the next whole number) as is on the Company's Board of
Directors of (i) each committee of the Company's Board of Directors, (ii)
each board of directors (or similar body) of each Subsidiary of the Company
and (iii) each committee (or similar body) of each such board. At the
request of Parent, the Company shall take, at its expense, all action
required pursuant to Section 14(f) and Rule 14(f)-1 of the Exchange Act in
order to fulfill its obligations under this Section 2.03 and shall include
in the originally filed Schedule 14D-9 and otherwise timely mail to its
shareholders all necessary information to comply therewith. Parent and
Merger Subsidiary will supply to the Company, and will be solely
responsible for, all information with respect to themselves and their
officers, directors and affiliates required by such Section and such Rule.
(b) Following the election or appointment of Parent's
designees pursuant to Section 2.03(a) and until the Effective Time, the
parties shall use their respective reasonable best efforts to ensure that
the Company's Board of Directors shall have at least two directors who are
directors on the date of this Agreement and who are not officers of the
Company (the "Continuing Directors"); provided that in the event that the
number of the Continuing Directors shall be reduced below two for any
reason whatsoever, any remaining Continuing Directors (or Continuing
Director, if there shall be only one remaining) shall be entitled to
designate persons to fill such vacancies who shall be deemed to be
Continuing Directors for purposes of this Agreement. The approval of a
majority of the directors of the Company then in office who were not
designated by Parent shall be required to authorize (i) any termination of
this Agreement by the Company, (ii) any amendment of this Agreement or the
Support Agreement, (iii) any extension of time for performance of any
obligation of or action by Parent or Merger Subsidiary hereunder, (iv) any
enforcement of or any waiver of compliance with any of the agreements or
conditions contained herein for the benefit of the Company or (v) any
amendment to the Company's articles of incorporation or by-laws that
adversely affects the shareholders of the Company.
ARTICLE III
THE MERGER
SECTION 3.01. The Merger. (a) Upon the terms and subject to
the conditions hereof, and in accordance with the applicable provisions of
this Agreement and the VSCA, Merger Subsidiary shall be merged with and
into the Company as soon as practicable following the satisfaction or
waiver, if permissible, of the conditions set forth in Article VII.
Following the Merger, the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall continue its existence
under the laws of the Commonwealth of Virginia, and the separate corporate
existence of Merger Subsidiary shall cease.
(b) As soon as practicable following the satisfaction or
waiver of the conditions set forth in Article VII, the Merger shall be
consummated by filing with the State Corporation Commission of the
Commonwealth of Virginia, articles of merger incorporating this Agreement
(the "Articles of Merger"), in accordance with the VSCA. The Merger shall
become effective upon the issuance of a certificate of merger by the State
Corporation Commission of the Commonwealth of Virginia or as provided in
the Articles of Merger (the time the Merger becomes effective being the
"Effective Time").
(c) The Merger shall have the effects set forth in Section
13.1-721 of the VSCA. As of the Effective Time, the Company shall be a
direct or indirect wholly owned subsidiary of Parent and, without limiting
the generality of the foregoing, and subject thereto, all property, rights,
privileges, powers and franchises of the Company and Merger Subsidiary
shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Subsidiary shall become the debts,
liabilities and duties of the Surviving Corporation.
SECTION 3.02. Conversion of Shares. At the Effective Time,
by virtue of the Merger and without any action on the part of Parent,
Merger Subsidiary, the Company or the holders of any of the following
securities:
(a) each Share held by any wholly owned Subsidiary of the
Company and each Share owned by Parent, Merger Subsidiary or any other
Subsidiary of Parent shall be canceled and retired, and no payment or
consideration shall be delivered with respect thereto;
(b) each issued and outstanding Share, other than Shares
referred to in paragraph (a) above, shall be converted into the right to
receive from the Surviving Corporation an amount in cash, without interest,
equal to the price per share of Common Stock paid pursuant to the Offer
(the "Merger Consideration"). When so converted at the Effective Time, all
such Shares shall no longer be outstanding and shall automatically be
canceled and retired, 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, without interest, upon
the surrender of such certificate; and
(c) each issued and outstanding share of capital stock of
Merger Subsidiary shall be converted into one validly issued, 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.
SECTION 3.03. Surrender and Payment. (a) Prior to the
Effective Time, Parent shall appoint a bank or trust company organized
under the laws of the United States or any state thereof with capital,
surplus and undivided profits of at least $500,000,000 and reasonably
acceptable to the Company to act as disbursing agent (the "Disbursing
Agent") for the payment of the Merger Consideration upon surrender of
certificates representing the Shares. Parent will enter into a disbursing
agent agreement with the Disbursing Agent, in form and substance reasonably
acceptable to the Company, and Parent shall at or prior to the Effective
Time deposit or cause to be deposited with the Disbursing Agent cash in an
aggregate amount sufficient to make all of the payments pursuant to Section
3.02 to holders of Shares (such amounts being hereinafter referred to as
the "Exchange Fund").
(b) Promptly after the Effective Time, Parent and the
Surviving Corporation shall cause the Disbursing Agent to mail to each
person who was a record holder as of the Effective Time of an outstanding
certificate or certificates which immediately prior to the Effective Time
represented Shares (the "Certificates") and whose Shares were converted
into the right to receive Merger Consideration pursuant to Section 3.02, a
form of letter of transmittal, in form and substance reasonably
satisfactory to the Company (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Disbursing Agent), and
instructions for use in effecting the surrender of the Certificates in
exchange for payment of the Merger Consideration. Upon surrender to the
Disbursing Agent of a Certificate, together with such letter of transmittal
duly executed and such other customary documents as may be required, the
holder of such Certificate shall be paid promptly in exchange therefor cash
in an amount equal to the product of the number of Shares represented by
such Certificate multiplied by the Merger Consideration, and such
Certificate shall forthwith be canceled. No interest will be paid or
accrued on the cash payable upon the surrender of the Certificates.
(c) If payment is to be made to a person other than the
person in whose name the Certificate surrendered is registered, it shall be
a condition of payment that the Certificate so surrendered be properly
endorsed or otherwise be in proper form for transfer and that the person
requesting such payment pay any transfer or other taxes required by reason
of the payment to a person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable.
(d) Until surrendered in accordance with the provisions of
this Section 3.03, each Certificate (other than Certificates representing
Shares owned by Parent, Merger Subsidiary or any other Subsidiary of
Parent, or any wholly owned Subsidiary of the Company) shall represent for
all purposes only the right to receive the Merger Consideration in cash
multiplied by the number of Shares evidenced by such Certificate, without
any interest thereon.
(e) At and after the Effective Time, there shall be no
registration of transfers of Shares which were outstanding immediately
prior to the Effective Time on the stock transfer books of the Surviving
Corporation. From and after the Effective Time, all Shares issued and
outstanding prior to the Effective Time shall cease to be outstanding and
shall automatically be cancelled and cease to exist, and, the holders of
Shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such Shares except as otherwise provided in
this Agreement or by applicable law. All cash paid upon the surrender of
Certificates in accordance with the terms of this Article III shall be
deemed to have been paid in full satisfaction of all rights pertaining to
the Shares previously represented by such Certificates. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for
any reason, such Certificates shall be canceled and exchanged for cash as
provided in this Article III. At the close of business on the day of the
Effective Time, the stock ledger of the Company shall be closed.
(f) At any time more than 12 months after the Effective
Time, the Disbursing Agent shall upon demand of Parent deliver to it any
funds which had been made available to the Disbursing Agent and not
disbursed in exchange for Certificates (including, without limitation, all
interest and other income received by the Disbursing Agent in respect of
all such funds). Thereafter, holders of Certificates shall look only to
Parent (subject to the terms of this Agreement, abandoned property, escheat
and other similar laws) as general creditors thereof with respect to any
Merger Consideration that may be payable, without interest, upon due
surrender of the Certificates held by them. None of Parent, the Company,
the Surviving Corporation nor the Disbursing Agent shall be liable to any
holder of a Certificate for any Merger Consideration delivered in respect
of such Certificate of Shares to a public official pursuant to any
abandoned property, escheat or other similar law. Subject to applicable law
and public policy, if any Certificates shall not have been surrendered
prior to three years after the Effective Time (or immediately prior to such
earlier date on which any Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any
Governmental Entity), any amounts payable in respect of such Certificate
shall, to the extent permitted by applicable law and public policy, become
the property of the Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto.
SECTION 3.04. Stock Options. Immediately following the
acceptance for payment and purchase of Shares by Merger Subsidiary pursuant
to the Offer, each outstanding option to purchase Company Common Stock (an
"Option") granted under the Company's 1994 Stock Option and Stock Award
Plan and the Company's 1998 Directors' Stock Option Plan (collectively, the
"Company Option Plans") shall become fully exercisable and vested. On and
after such time, until immediately prior to the Effective Time, each holder
of an outstanding Option may surrender to the Company such Option, which
shall then be cancelled and of no further force and effect, in exchange for
payment to be made at the time of surrender by Parent or Merger Subsidiary
to the holder of the Option in an amount equal to the product of (x) the
Merger Consideration over the per share exercise price of the Option, and
(y) the number of Shares subject to the Option (such payment to be net of
taxes required to be withheld with respect thereto by applicable law) (the
"Option Consideration"). Immediately prior to the Effective Time, (i) the
Company shall terminate the Company Option Plan and (ii) each Option which
remains outstanding at such time shall be cancelled in consideration of a
payment made at the Effective Time by Parent or Merger Subsidiary to the
holder of each then outstanding Option of the relevant Option Consideration
with respect to such Option. Parent, Merger Subsidiary and the Company
shall cooperate and take all steps necessary to give effect to the
foregoing provisions of this Section 3.04. On and after the date hereof,
the Company shall grant no additional Options under the Company Option
Plans. The Company will use its best efforts to obtain all necessary
consents and take any further action necessary to effect the foregoing so
that as of the Effective Time no Options will be exercisable for stock of
the Surviving Corporation.
SECTION 3.05. Withholding Rights. Each of the Surviving
Corporation and Parent shall be entitled to deduct and withhold, or cause
the Disbursing Agent to deduct or withhold, from the consideration
otherwise payable to any Person pursuant to this Article such amounts as it
is required to deduct and withhold with respect to the making of such
payment under any provision of federal, state or local tax law. If the
Surviving Corporation or Parent, as the case may be, so withholds amounts,
such amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which the Surviving
Corporation or Parent, as the case may be, made such deduction and
withholding.
SECTION 3.06. Lost Certificates. If any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the recordholder claiming such Certificate to be lost, stolen
or destroyed and, if required by the Surviving Corporation, the posting by
such Person of a bond, in such reasonable amount as the Surviving
Corporation may direct, as indemnity against any claim that may be made
against it with respect to such Certificate, the Disbursing Agent will pay,
in exchange for such affidavit claiming such Certificate is lost, stolen or
destroyed, the Merger Consideration to be paid in respect of the Shares
represented by such Certificate, as contemplated by this Article.
SECTION 3.07. Articles of Incorporation. The parties shall
take all steps reasonably necessary so that the Articles of Incorporation
of the Company shall be amended in the form of the Articles of
Incorporation of Merger Subsidiary, as in effect immediately prior to the
Effective Time, shall be amended to change the name of Merger Subsidiary to
"Bush Boake Allen Inc." and, as so amended, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
SECTION 3.08. Bylaws. The bylaws of Merger Subsidiary, as in
effect immediately prior to the Effective Time, shall be the bylaws of the
Surviving Corporation until thereafter changed or amended as provided
therein or in the Articles of Incorporation and by applicable law.
SECTION 3.09. Directors and Officers. The directors and
officers of Merger Subsidiary immediately prior to the Effective Time shall
be the directors and officers, respectively, of the Surviving Corporation
as of the Effective Time until their successors are duly elected or
appointed and qualified in accordance with the certificate of incorporation
and bylaws of the Surviving Corporation and applicable law.
SECTION 3.10. Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New
York, New York 10036-6522, at 10:00 a.m., local time, as soon as
practicable following the satisfaction or waiver of the conditions set
forth in Article VII hereof or at such other time and place as Parent,
Merger Subsidiary and the Company shall agree.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as disclosed in the Company's most recent Form 10-K,
all subsequent Form 10-Qs and most recent proxy statement, in each case
filed prior to the date hereof, the Company represents and warrants to
Parent and Merger Subsidiary that:
SECTION 4.01. Corporate Existence and Power. The Company is
a corporation duly incorporated, validly existing and in good standing
under the laws of the Commonwealth of Virginia, and has all requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business substantially as now conducted. The Company is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so
qualified or in good standing would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. For
purposes of this Agreement, the term "Company Material Adverse Effect"
means any change or effect that is materially adverse to the business,
assets, liabilities, results of operations or financial condition of the
Company and its Subsidiaries taken as a whole or adversely affects the
ability of the Company to consummate the transactions contemplated by this
Agreement in any material respect or materially impairs or delays the
Company's ability to perform its obligations hereunder; provided, however,
that a Company Material Adverse Effect shall not include (i) changes in or
resulting from general economic or financial or market conditions,
including changes in the trading price of the Company's Shares, (ii)
changes in conditions or circumstances generally affecting the flavor,
fragrance and aroma chemical industries in which the Company and its
Subsidiaries operate, including any regulatory changes, or (iii) any effect
resulting from the Company's compliance with the terms of this Agreement.
SECTION 4.02. Corporate Authorization. The execution,
delivery and performance by the Company of this Agreement and the Support
Agreement, and the consummation by the Company of the transactions
contemplated hereby and thereby are within the Company's corporate power
and authority and, except for any required approval by the Company's
shareholders in accordance with the VSCA in connection with the
consummation of the Merger, have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement and the Support
Agreement have been duly executed and delivered by the Company and,
assuming the due authorization, execution and delivery thereof by Parent
and Merger Subsidiary, constitute legal, valid and binding agreements of
the Company enforceable against it in accordance with their terms. The
Company has heretofore furnished or otherwise made available to Parent
complete and correct copies of the certificates of incorporation and the
bylaws or the equivalent organizational documents, in each case as amended
or restated, of the Company and each of its Subsidiaries.
SECTION 4.03. Governmental Authorization. Except as
described in Section 4.03 of the Company Disclosure Letter, the execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not
require any consent, approval, compliance, exemption, authorization or
permit of or other action by, or filing with, any Governmental Entity,
other than (i) the filing of articles of merger in accordance with the
VSCA, (ii) compliance with the applicable requirements of the HSR Act or
any foreign antitrust laws, the Exchange Act, and any applicable state
securities or "blue sky" laws, (iii) filings and approvals which are not
required prior to the consummation of the Merger or where the failure to
take such action or make such filing would not be materially adverse to the
Company and (iv) any other consent, approval, authorization or permit or
action by or filing with any Governmental Entity the failure of which to be
made or obtained would not be materially adverse to the Company.
SECTION 4.04. Non-Contravention. Assuming compliance with
the matters referred to in Section 4.03, the execution, delivery and
performance by the Company of this Agreement and the Support Agreement, and
the consummation of the other transactions contemplated hereby and thereby
do not and will not (i) subject to satisfaction of the condition referred
to in Section 7.01(a), contravene or conflict with or result in any
violation or breach of any provision of the articles of incorporation or
bylaws of the Company, or other organizational documents of the Company or
any material Subsidiary, (ii) contravene or conflict with or result in a
violation or breach of any provision of any law, rule, regulation,
judgment, injunction, order or decree binding upon or applicable to the
Company or any of its Subsidiaries, (iii) require any consent or other
action by any Person under, constitute a default under or violation of or
give rise to a right of termination, cancellation, or acceleration of any
right or obligation (including an increase in the price paid by, or cost
to, the Company or any of its Subsidiaries or any other loss of benefit)
of, or under any provision of any agreement or other instrument to which
the Company or any of its Subsidiaries is a party or that is binding upon
the Company or any of its Subsidiaries or their properties or assets or any
license, franchise, permit or other similar authorization held by the
Company or any of its Subsidiaries, or (iv) result in the creation or
imposition of any Lien on any asset of the Company or any of its
Subsidiaries, except with respect to clauses (ii), (iii) and (iv) as set
forth in Section 4.04 of the Company Disclosure Letter and except for any
occurrences or results referred to in clauses (ii), (iii), and (iv) that
would not reasonably be expected to have a Company Material Adverse Effect.
SECTION 4.05. Capitalization. (a) The authorized capital
stock of the Company consists of 50,000,000 shares of Common Stock and
5,000,000 shares of Preferred Stock. As of the date hereof, 19,351,063
shares of Common Stock and no shares of Preferred Stock were issued and
outstanding and 1,401,714 shares of Common Stock were reserved for issuance
upon exercise of Options issued pursuant to the Company Option Plans.
Except as described in this Section 4.05 or in Section 4.05 of the Company
Disclosure Letter, no shares of capital stock of the Company are reserved
for issuance for any purpose. Except as disclosed in this Section 4.05 or
as set forth in Section 4.05 of the Company Disclosure Letter, the Company
has not granted any options for, or other rights to purchase, any shares of
capital stock of the Company or any securities convertible into or
exchangeable for capital stock of the Company. All of the outstanding
shares of capital stock of the Company have been, and all Shares that may
be issued pursuant to the exercise of Options will be, when issued and paid
for in accordance with the respective terms thereof, duly authorized,
validly issued and fully paid and nonassessable, and have not been (and
will not be) issued in violation of (nor are any of the authorized shares
of capital stock subject to) any preemptive or similar rights created by
statute, the articles of incorporation or bylaws of the Company, or any
agreement to which the Company is a party or by which it is bound.
(b) Except as set forth in paragraph (a) above, as of the
date hereof there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which the Company is a
party which obligate the Company to grant, issue or sell any shares of the
capital stock, or any securities convertible into or exchangeable for
capital stock, of the Company. As of the date hereof, there are no
obligations, contingent or otherwise, of the Company to (i) repurchase,
redeem or otherwise acquire any Shares or other capital stock or securities
of the Company, or the capital stock or other equity interests or
securities of any Subsidiary of the Company or any other Person; or (ii)
(other than advances to Subsidiaries in the ordinary course of business)
provide material funds to, or make any material investment in (in the form
of a loan, capital contribution or otherwise), or provide any guarantee
with respect to the obligations of, any Subsidiary of the Company or any
other Person. Except for the Support Agreement, there are no voting trusts,
proxies or similar agreements or understandings to which the Company or any
Subsidiary is a party or to which any of them are bound with respect to the
voting or transfer of any shares of capital stock of the Company or any
interest in any Subsidiary. There are no outstanding profit sharing or
participation interests, stock appreciation rights or similar equity-based
awards, derivative securities or rights of the Company or any of its
Subsidiaries. There are no bonds, debentures, notes or other securities or
indebtedness of the Company having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote) on any matters on
which shareholders of the Company may vote.
(c) The Company has delivered or otherwise made available to
Parent complete and correct copies of the Company Option Plans and all
forms of Options issued pursuant to the Company Option Plans, including all
amendments thereto.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary of the
Company, other than any immaterial Subsidiary, is a corporation,
partnership or limited liability company duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all requisite corporate, partnership or limited
liability company power and authority to carry on its business as now
conducted and is duly qualified to do business as a foreign corporation or
partnership and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except where failure to be
so qualified would not have, individually or in the aggregate, a Company
Material Adverse Effect. All Subsidiaries of the Company are set forth in
Section 4.06(a) of the Company Disclosure Letter.
(b) Except as set forth in Section 4.06(b) of the Company
Disclosure Letter, each Subsidiary of the Company is wholly-owned by the
Company, directly or indirectly, free and clear of any Lien. Except as set
forth in Section 4.06 of the Company Disclosure Letter, there are no
outstanding (i) securities of the Company or any of its Subsidiaries
convertible into or exchangeable for shares of capital stock or other
voting securities or ownership interests in any such Subsidiary of the
Company, or (ii) options, warrants or other rights to acquire from the
Company or any of its Subsidiaries, and no other obligation of the Company
or any of its Subsidiaries to issue, any capital stock, voting securities
or other ownership interests in, or any securities convertible into or
exchangeable for any capital stock, voting securities or ownership
interests in, any such Subsidiary of the Company (the items in clauses (i)
and (ii) being referred to collectively as the "Company Subsidiary
Securities"). There are no outstanding material obligations of the Company
or any of such Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding Company Subsidiary Securities.
(c) Except as disclosed in Section 4.06(c) of the Company
Disclosure Letter, the Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar interest in, any
Person other than its Subsidiaries.
SECTION 4.07. SEC Reports. Since January 1, 1998, the
Company has filed all forms, reports, schedules, statements and other
documents required to be filed with the SEC, including (1) all Annual
Reports on Form 10-K, (2) all Quarterly Reports on Form 10-Q, (3) all proxy
statements relating to meetings of shareholders (whether annual or
special), (4) all Current Reports on Form 8-K and (5) all registration
statements (collectively referred to as the "Company SEC Reports"). The
Company SEC Reports were prepared in all material respects in accordance
with the requirements of the Securities Act or the Exchange Act, as the
case may be, and did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
No Subsidiary of the Company is subject to periodic reporting requirements
of the Exchange Act or is otherwise required to file documents with the SEC
or any national securities exchange or quotation service.
SECTION 4.08. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial
statements of the Company and its consolidated Subsidiaries included or
incorporated by reference in the Company SEC Reports, including reports on
Forms 10-K and 10-Q, comply in all material respects with applicable
accounting requirements and rules and regulations published by the SEC,
were prepared in accordance with generally accepted accounting principles
in the United States ("GAAP") applied on a consistent basis (except as may
be indicated in the notes thereto), and fairly present in all material
respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their consolidated
results of operations and cash flows for the respective periods then ended
(subject, in the case of any unaudited interim financial statements, to
normal year-end adjustments). There are no material liabilities or
obligations of the Company or any of its Subsidiaries which are required to
be recorded or reflected on a balance sheet under GAAP of any nature,
whether accrued, contingent, absolute or otherwise, other than (i)
liabilities or obligations disclosed and provided for in the consolidated
balance sheet of the Company as of December 25, 1999 in the Company's Form
10-K for the fiscal year ended December 25, 1999, (ii) liabilities and
obligations incurred since December 25, 1999 in the ordinary course of
business or (iii) liabilities and obligations that would not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
SECTION 4.09. Proxy Statement; Schedule 14D-9. (a) Each
document filed by the Company with the SEC or distributed or otherwise
disseminated by the Company to the Company's shareholders in connection
with the transactions contemplated by this Agreement or the Support
Agreement (the "Company Disclosure Documents"), including the Schedule
14D-9, the proxy or information statement of the Company (the "Company
Proxy Statement"), if any, to be filed with the SEC in connection with the
Merger, and any amendments or supplements thereto, when filed, distributed
or disseminated, as applicable, will comply as to form in all material
respects with the applicable requirements of the Exchange Act.
(b) (i) The Company Proxy Statement, as supplemented or
amended, if applicable, at the time such Company Proxy Statement or any
amendment or supplement thereto is first mailed to shareholders of the
Company and at the time such shareholders vote on adoption of this
Agreement and at the Effective Time, and (ii) any Company Disclosure
Documents (other than the Company Proxy Statement), at the time of the
filing of such Company Disclosure Documents or any supplement or amendment
thereto and at the time of any distribution or dissemination thereof, will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in
the light of the circum stances under which they were made, not misleading.
The representations and warranties contained in this Section 4.09(b) will
not apply to any financial projection that may be included in the Proxy
Statement, Company Disclosure Documents or Offer Documents or any
statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company by or on behalf of Parent
intended for inclusion or incorporation by reference, or which may be
deemed incorporated by reference, therein.
(c) The information with respect to the Company or any of
its Subsidiaries that the Company furnishes to Parent in writing
specifically for use in the Offer Documents, at the time of the filing
thereof, at the time of any distribution or dissemination thereof and at
the time of the consummation of the Offer, will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
SECTION 4.10. Absence of Certain Changes or Events. (a)
Except as set forth in Section 4.10 of the Company Disclosure Letter, since
December 25, 1999, there has not occurred or arisen any change, effect,
event or occurrence that would reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(b) Except as set forth in Section 4.10 of the Company
Disclosure Letter or as permitted pursuant to Section 6.01, since December
25, 1999 and through the date hereof, the Company and its Subsidiaries have
conducted their respective businesses only in the ordinary course,
consistent with past practice, and without limitation, there has not been:
(i) 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 Company Subsidiary of any Company securities;
(ii) (A) any incurrence or assumption by the Company
or any of its Subsidiaries of any indebtedness for borrowed money or other
long-term indebtedness in excess of $5 million in the aggregate or (B) any
guarantee, endorsement or other incurrence or assumption of material
liability (whether directly, contingently or otherwise) by the Company or
any Company Subsidiary for the obligations of any other person, other than
with respect to any wholly-owned Subsidiary or in the ordinary course of
business consistent with past practice;
(iii) any creation or assumption by the Company or
any of its Subsidiaries of any Lien on any asset of the Company or any of
its Subsidiaries, which is material to the business of the Company and its
Subsidiaries, taken as a whole, other than in the ordinary course of
business, consistent with past practice and which would not reasonably be
expected to have a Company Material Adverse Effect;
(iv) any making of any loan, advance or capital
contribution to or investment in any Person (other than a Subsidiary of the
Company) by the Company or any Company Subsidiary, other than in the
ordinary course of business, consistent with past practice not in excess of
$500,000 individually or $5 million in the aggregate;
(v) (A) any contract or agreement entered into by the
Company or any of its Subsidiaries on or prior to the date hereof relating
to any material acquisition or disposition of any capital assets or
business having a value of $500,000 individually or $5 million in the
aggregate, (B) any modification, amendment, assignment or termination of or
relinquishment by the Company or any Company Subsidiary of any rights under
any material contract or (C) any modification, amendment, assignment or
termination of or relinquishment by the Company or any Company Subsidiary
of any rights under any other contract (including any insurance policy
naming it as a beneficiary or a loss payable payee) that does or would
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect;
(vi) any change in any method of accounting or
accounting principles or practice by the Company, except for any such
change required by reason of a change in GAAP; or
(vii) any (A) grant of any severance or termination
pay to (or amendment of any such existing arrangement with) any director,
officer or employee of the Company or any of its Subsidiaries; (B) 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; (C) increase
in benefits payable under any existing severance or termination pay
policies or employment agreements; or (D) increase in compensation, bonus
or other benefits payable to directors, officers or employees of the
Company or any of its Subsidiaries, other than, in the case of clauses (A)
through (D), with respect to any directors, officers and employees that are
not parties to employment agreements with the Company or any Company
Subsidiary, in the ordinary course of business consistent with past
practices or, in the case of clauses (A) through (D) with respect to any
directors, officers or employees who are parties to employment agreements,
in accordance with their respective employment agreements.
SECTION 4.11. Litigation. Except as described in Section
4.11 of the Company Disclosure Letter, there is (i) no action, suit,
investigation or Proceeding pending against or to the Company's Knowledge,
threatened against the Company or any of its material Subsidiaries, before
any court or arbitrator or any Governmental Entity which would reasonably
be expected to have a Company Material Adverse Effect or (ii) which, as of
the date hereof, challenges or seeks to prevent or delay the transactions
contemplated hereby.
SECTION 4.12. Employee Benefit Plans.
(a) The Company has furnished or made available to Parent
copies or descriptions of each written employment, severance or similar
contract or arrangement or any plan, policy, fund, program or contract
(whether in written form or otherwise) providing for compensation, bonus,
profit-sharing, stock option, or other equity related rights or other forms
of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life
insurance or other benefits) that (i) is entered into, maintained,
administered or contributed to, as the case may be, by the Company or any
Subsidiary, (ii) covers any employee or former employee of any Company or
Subsidiary (whether employed in the United States or otherwise) (each, an
"Employee Plan") and (iii) is material to the Company and its Subsidiaries
taken as a whole.
(b) The Company has furnished or made available to Parent
copies or current summaries of the Employee Plans (and, if applicable,
related trust agreements) and all amendments thereto and written
interpretations thereof. The Company has furnished or made available the
most recent determination letter with respect to each Employee Plan
intended to qualify under Section 401 of the Code.
(c) Except as set forth in Section 4.12(c) of the Company
Disclosure Letter, no Employee Plan is a multiemployer plan as defined in
Section 3(37) of ERISA or is a plan subject to Title IV of ERISA.
(d) Except as set forth in Section 4.12(d) of the Company
Disclosure Letter, neither the Company nor any Subsidiaries has any current
or projected material liability in respect of post-employment or
post-retirement health or medical or life insurance benefits for retired,
former or current employees of the Company, except as required to avoid
excise tax under Section 4980B of the Code.
(e) Other than as described in Section 4.12(e) of the
Company Disclosure Letter or otherwise made available to Parent, no
employee or former employee of the Company or any Subsidiary will become
entitled to any material bonus, retirement, severance, job security or
similar benefit or an enhancement of such benefit (including acceleration
of vesting or exercise of an incentive award) under any Employee Plan in
connection with the transactions contemplated hereby or by the Support
Agreement.
(f) No material liability under Title IV or section 302 of
ERISA has been incurred by the Company or any ERISA Affiliate that has not
been satisfied in full, and no condition exists that presents a material
risk to the Company or any ERISA Affiliate of incurring any such liability,
other than liability for premiums due the Pension Benefit Guaranty
Corporation (the "PBGC") (which premiums have been paid when due). Insofar
as the representation made in this section (f) applies to sections 4064,
4069 or 4204 of Title IV of ERISA, it is made with respect to any employee
benefit plan, program, agreement or arrangement subject to Title IV of
ERISA (such plans, the "Title IV Plans") to which the Company or any ERISA
Affiliate made, or was required to make, contributions during the five
(5)-year period ending on the last day of the most recent plan year ended
prior to the Closing.
(g) The PBGC has not instituted proceedings to terminate any
Title IV Plan and, to the Knowledge of the Company, no condition exists
that presents a material risk that such proceedings will be instituted.
(h) With respect to each Title IV Plan, the present value of
accrued benefits under such plan, based upon the actuarial assumptions used
for funding purposes in the most recent actuarial report prepared by such
plan's actuary with respect to such plan did not exceed, as of its latest
valuation date, the then current value of the assets of such plan allocable
to such accrued benefits by a material amount.
(i) No Title IV Plan or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, as of the last
day of the most recent fiscal year of each Title IV Plan ended prior to the
Closing.
(j) All contributions required to be made with respect to
any Employee Plan on or prior to the Effective Time have been timely made.
There has been no amendment to, written interpretation of or announcement
(whether or not written) by the Company or any Affiliate of the Company
relating to, or change in employee participation or coverage under, any
Employee Plan that would increase materially the expense of maintaining
such Employee Plan above the level or expense incurred in respect thereof
for the most recent fiscal year ended prior to the date hereof.
(k) No Title IV Plan is a "multiemployer pension plan," as
defined in section 3(37) of ERISA, nor is any Title IV Plan a plan
described in section 4063(a) of ERISA.
(l) Neither the Company nor any Subsidiary, any Employee
Plan, any trust created thereunder, nor any trustee or administrator
thereof has engaged in a transaction in connection with which the Company
or any Subsidiary, any Employee Plan, any such trust, or any trustee or
administrator thereof, or any party dealing with any Employee Plan or any
such trust could be subject to either a civil penalty assessed pursuant to
section 409 or 502(i) of ERISA or a tax imposed pursuant to section 4975 or
4976 of the Code.
(m) Each Employee Plan has been operated and administered in
all material respects in accordance with its terms and applicable law,
including ERISA and the Code.
(n) Each Employee Plan intended to be "qualified" within the
meaning of section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from taxation under section 501(a) of the
Code. Each Employee Plan intended to satisfy the requirements of Section
501(c)(9) has satisfied such requirements.
(o) Except as set forth in section 4.12(o) of the Company
Disclosure Letter, no Employee Plan provides medical, surgical,
hospitalization, death or similar benefits (whether or not insured) for
employees or former employees of the Company or any Subsidiary for periods
extending beyond their retirement or other termination of service, other
than (i) coverage mandated by applicable law, (ii) death benefits under any
"pension plan," or (iii) benefits the full cost of which is borne by the
current or former employee (or his beneficiary). No condition exists that
would prevent the Company or any Subsidiary from amending or terminating
any Employee Plan providing health or medical benefits in respect of any
active employee of the Company or any Subsidiary other than limitations
imposed under the terms of a collective bargaining agreement.
(p) There are no pending, threatened or anticipated material
claims by or on behalf of any Employee Plan, by any employee or beneficiary
covered under any such Employee Plan, or otherwise involving any such
Employee Plan (other than routine claims for benefits).
SECTION 4.13. Labor Relations. Except as set forth in
Section 4.13 of the Company Disclosure Letter, there is no unfair labor
practice complaint or charge against the Company or any of its Subsidiaries
pending, or to the Knowledge of the Company, threatened, before the
National Labor Relations Board, the Equal Employment Opportunity Commission
or any other similar state or federal agency, and there is no labor strike,
dispute, slowdown, stoppage, lock out, or any union organizing campaign,
actually pending or, to the Knowledge of the Company, threatened against
or, involving the Company or any of its Subsidiaries. Except as set forth
in Section 4.13 of the Company Disclosure Letter, neither the Company nor
any of its material Subsidiaries is a party to, or bound by, any collective
bargaining agreement, contract or other agreement or understanding with a
labor union, labor organization, trade union or works council. To the
Knowledge of the Company, there are no organizational efforts with respect
to the formation of a collective bargaining unit being made or threatened,
as of the date hereof, involving employees of the Company or any of its
Subsidiaries. Except as set forth in Section 4.13 of the Company Disclosure
Letter, there is no material grievance or pending arbitration arising out
of any collective bargaining agreement. True and correct copies of all
material written personnel policies, rules or procedures applicable to all
employees of the Company and its Subsidiaries have been made available to
Parent. Except as set forth in Section 4.13 of the Company Disclosure
Letter, to the Knowledge of the Company, no union claims to represent the
employees of the Company or any of its Subsidiaries with respect to any
facilities or operations which are material to the Company and its
Subsidiaries, taken as a whole. Except as set forth in Section 4.13 of the
Company Disclosure Letter, no trade union, work council or similar group
representing employees of the Company or any Subsidiary working at any
material facilities or involved with material operations of the Company or
any Subsidiary is entitled to any right of notification, consent or advice
in connection with this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 4.14. Compliance with Laws; Permits. The Company and
its Subsidiaries are in compliance with all laws, regulations and orders of
any Governmental Entity applicable to it or such Subsidiaries, except for
such failures to so comply which would not result in criminal liability or
otherwise reasonably be expected to have a Company Material Adverse Effect.
Each of the Company and its Subsidiaries is in possession of, and in
compliance with, all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and
orders (collectively, "Permits") necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted,
except for any such Permits the failure of which to possess, individually
or in the aggregate, would not reasonably be expected to have a Company
Material Adverse Effect. There are no proceedings pending or to the
Knowledge of the Company threatened, which are likely to result in the
revocation, cancellation or suspension of any Permit, except Permits, the
absence of which individually or in the aggregate, would not have a Company
Material Adverse Effect. The parties acknowledge and agree that the
representations contained in this Section 4.14 are not intended to address
any compliance issues related to environmental, tax or employee benefit
matters.
SECTION 4.15. Taxes. (a) Except as set forth in Section
4.15(a) of the Company Disclosure Letter or as would not reasonably be
expected to have a Company Material Adverse Effect:
(i) The Company and each of its Subsidiaries have
timely filed (or have had timely filed on their behalf) or, with respect to
Tax Returns not yet due, will file or cause to be timely filed, all
material Tax Returns required by applicable Law to be filed by any of them
prior to or as of the Effective Time. All such Tax Returns and amendments
thereto are, or with respect to Tax Returns not yet due, will be, true,
complete and correct in all material respects.
(ii) The Company and each of its Subsidiaries have
paid (or have had paid on their behalf), or have established (or have had
established on their behalf and for their sole benefit and recourse), or
where payment is not yet due, will establish or cause to be established on
or before the Effective Time, an adequate accrual for the payment of, all
Taxes due, with respect to any period ending prior to or as of the
Effective Time.
(iii) No federal, state, local or foreign audits,
assessments, collections, investigations or other administrative
proceedings or court proceedings are presently pending or have been
threatened in writing with regard to any Taxes or Tax Returns of the
Company or its Subsidiaries.
(iv) No deficiency or adjustment for any Taxes has
been proposed, asserted or assessed against the Company or any Company
Subsidiary that has not been paid or otherwise discharged or for which the
Company has taken adequate reserves. There are no material Liens for Taxes
upon the assets of the Company or any Company Subsidiary, except Liens for
current Taxes not yet due.
(v) Neither the Company nor any of its Subsidiaries
is a party to any Tax sharing agreement, Tax indemnity agreement or similar
contract, arrangement or agreement to with respect to Taxes of the Company
or any of its Subsidiaries.
(vi) Neither the Company nor any Subsidiary has
constituted either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of stock qualifying for tax-free treatment under Section 355
of the Code (i) in the two years prior to the date of this Agreement or
(ii) in a distribution which could otherwise constitute part of a "plan" or
"series of related transactions" (within the meaning of Section 355(e) of
the Code) in conjunction with the Merger.
(vii) The Company has, prior to the date hereof,
provided Parent with copies of all federal Tax Returns for the tax years
since 1997.
(viii) There are no outstanding agreements extending
or waiving the statutory period of limitation applicable to any claim for,
or the period for the collection or assessment of, Taxes due for any
taxable period with respect to any Tax for which the Company may be subject
or liable. The federal income tax years of the Company (or any consolidated
group of which the Company has been a member) are closed through December,
1996.
(ix) The Company has not agreed, nor is it required
to make, any material adjustment under sections 446(e) or 481(a) of the
Code nor has it entered into any closing agreement pursuant to section 7121
of the Code or any other agreement with similar Tax purposes.
(x) The Company and each of its Subsidiaries has
complied in all material respects with the provisions of the Code relating
to the payment and withholding of Taxes.
(b) For purposes of this Agreement, the following terms
shall have the following meanings:
(i) "Tax" or "Taxes" shall mean any tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever imposed by any Taxing Authority (including, but not limited to,
any federal, state, local, foreign or provincial income, gross receipts,
property, sales, use, gains, license, excise, franchise, employment, social
security, withholding, payroll, alternative or added minimum, ad valorem,
transfer or exercise tax or any disability insurance contributions,
unemployment insurance contributions or workers' compensation
contributions) together with any interest, addition or penalty imposed
thereon.
(ii) "Tax Authority" shall mean the Internal Revenue
Service and any other domestic or foreign governmental authority
responsible for the administration of any Taxes.
(iii) "Tax Returns" shall mean all Federal, state,
local and foreign tax returns, declarations, statements, reports,
schedules, forms and information returns and any amended tax return
relating to Taxes.
SECTION 4.16. Environmental Matters. Except as set forth in
Section 4.16 of the Company disclosure letter, and except as would not
reasonably be expected to have a Company Material Adverse Effect, (i) the
Company and its Subsidiaries are in compliance with all applicable
Environmental Laws (which compliance includes the possession by the Company
and each of its Subsidiaries of all permits and other governmental
authorizations required under applicable Environmental Laws, and compliance
with the terms and conditions thereof); (ii) there is no Environmental
Claim pending or threatened in writing against the Company or any of its
Subsidiaries; (iii) there is no civil, criminal or administrative judgment
against the Company or any of its Subsidiaries or, to the Knowledge of the
Company or any of its Subsidiaries, against any person or entity whose
liability for any Environmental Claim the Company or any of its
Subsidiaries has contractually or by operation of law retained or assumed
pursuant to Environmental Laws; (iv) the Company and its Subsidiaries have
all Permits required pursuant to Environmental Laws and the Company and its
Subsidiaries are in compliance with all terms and conditions thereof; (v)
the Company and its Subsidiaries have filed all notices required under
Environmental Laws indicating the past and present Release, generation,
treatment, storage or disposal of Hazardous Substances; (vi) there is not
at, on or in any of the real properties owned or leased by the Company or
any of its Subsidiaries any generation, use, handling, Release, treatment,
recycling, storage or disposal of any Hazardous Substances in a manner not
in compliance with Environmental Laws; and (vii) to the Knowledge of the
Company, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including the Release or presence of any
Hazardous Substances, which are reasonably likely to form the basis of any
Environmental Claim against the Company or any of its Subsidiaries or
against any person or entity whose liability for any Environmental Claim,
the Company or any of its Subsidiaries has retained or assumed either
contractually or by operation of law.
SECTION 4.17. Real Property. (a) Ownership of the Premises.
The Company or a Subsidiary has good and marketable title to the real
property described on Schedule 4.17(a) of the Company Disclosure Letter and
to all of the buildings, structures and other improvements located thereon
(collectively, the "Owned Real Property") free and clear of all Liens,
except for (i) the Liens described in said Schedule 4.17(a), (ii) Liens for
taxes not yet due and payable, or Liens for Taxes being contested in good
faith which are not material or for which adequate reserves have not been
taken in accordance with GAAP, (iii) mechanics' and materialmens' liens and
similar lien for amounts not more than 60 days overdue or which are being
contested in good faith for which final judgments have not been entered and
(iv) easements, rights-of-way and other non-monetary encumbrances and other
title defects that do not, individually or in the aggregate, materially
diminish the value of the Owned Real Property as currently used, occupied
and operated, or interfere in any material respect with, or materially
increase the cost of, the use, occupancy or operation of the applicable
parcel of Owned Real Property as currently used, occupied and operated
(collectively, the "Permitted Owned Real Property Exceptions"). The Owned
Real Property constitutes all of the real property owned by the Company and
its Subsidiaries, other than real property, the ownership of which is not
material to the business of the Company and its Subsidiaries, taken as a
whole. Except as would not reasonably be expected to have a Company
Material Adverse Effect, (i) neither the Company nor any of its
Subsidiaries is in violation of any building code, special use permit,
zoning ordinance, deed restriction, covenant, subdivision or urban
redevelopment plans, or other applicable law, rule or regulation relating
to the Owned Real Property; (ii) the Company and each of its Subsidiaries,
as the case may be, has a current, valid certificate of occupancy or the
equivalent thereof in the applicable jurisdiction ("CO"), for each of the
Owned Real Property where a CO is required and the use of the Owned Real
Property is in conformity with the relevant CO and (iii) no proceeding is
currently pending or, to the Knowledge of the Company, threatened regarding
the revocation or limitation of any CO issued for the Owned Real Property
or the Leased Real Property (as defined below), and there is no reasonable
basis or ground for any such revocation for any of the Owned Real Property
or Leased Real Property. To the Knowledge of the Company, no written notice
from any city, county or other Governmental Entity in the United States has
been received by the Company or any of its Subsidiaries requiring or
calling attention to the need for any material work, repair, construction,
alteration or installation on, or in connection with, the Owned Real
Property.
(b) Leased Properties. Schedule 4.17(b) of the Company
Disclosure Letter is a true, correct and complete schedule of all leases,
subleases, licenses and other agreements (collectively, the "Real Property
Leases") under which the Company or any Subsidiary uses or occupies or has
the right to use or occupy real property that is material to the business
of the Company and its Subsidiaries, taken as a whole, and that is not
Owned Real Property (the land, buildings and other improvements covered by
the Real Property Leases being herein called the "Leased Real Property").
Each Real Property Lease is valid, binding and in full force and effect
and, to the Knowledge of the Company, no notice of default or termination
under any Real Property Lease is outstanding. Except in each case where the
failure would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, to the Knowledge of the Company
all rent and other sums and charges payable by the Company or its
Subsidiaries as tenants under the Real Property Leases are current. The
Company or a Subsidiary owns the leasehold interest under each Real
Property Lease free and clear of all Liens, except as described in Schedule
4.17(b) of the Company Disclosure Letter or which would not materially
affect the use of such Leased Real Property. A true, correct and complete
copy of each Real Property Lease has been made available to Parent. The
Leased Real Property and the Owned Real Property are hereinafter
collectively referred to as the "Real Property."
(c) Condemnation and Casualty. There is not any pending, or
to the best Knowledge of the Company, threatened or contemplated
condemnation proceeding affecting the Real Property or any part thereof,
and no sale or other disposition of the Real Property or any part thereof
in lieu of condemnation. No portion of the Real Property has suffered any
material damage by fire or other casualty which has not heretofore been
repaired and restored.
SECTION 4.18. Intellectual Property. (a) To the Knowledge of
the Company, the Company and each of its Subsidiaries owns, is licensed or
otherwise has the legal right to use all Intellectual Property free and
clear of all Liens that is material to the conduct of the business of the
Company and its Subsidiaries, taken as a whole.
(b) To the Knowledge of the Company, no person is
challenging or questioning the validity or effectiveness of any
Intellectual Property, or of any license or agreement relating to the
Intellectual Property, or infringing on, misappropriating, diluting or
otherwise violating any right of the Company or its Subsidiaries, except
for such items that, individually or in the aggregate, have not had or
would not reasonably be expected to have a Company Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries has
received any written notice of any pending claim with respect to any
Intellectual Property and the Company and its Subsidiaries have no
Knowledge of any basis for such a claim.
(d) The Company and its Subsidiaries have taken all actions
reasonably necessary to maintain and protect each item of Intellectual
Property.
(e) No settlement agreements, consents, judgments, orders,
forbearance to sue or similar obligations limit or restrict the Company's
or any Subsidiaries' rights in and to any Intellectual Property, except as
would not reasonably be expected to have a Company Material Adverse Effect.
(f) To the Knowledge of the Company, the conduct of the
businesses of the Company and its Subsidiaries does not infringe, violate
or dilute any intellectual property rights of any Person, except as would
not reasonably be expected to have a Company Material Adverse Effect.
(g) The Company and its Subsidiaries are not, nor will be,
as a result of the consummation of this Agreement, in violation in any
material respect of any agreement relating to any Intellectual Property.
(h) The Company and its Subsidiaries have taken all
reasonable precautions to protect the secrecy, confidentiality, and value
of its trade secrets and the proprietary nature and value of the
Intellectual Property.
(i) Except as would not reasonably be expected to have a
Company Material Adverse Effect, the consummation of the transactions
contemplated hereby will not result in the loss or impairment of the
Company's and its Subsidiaries' rights to own or use any of the
Intellectual Property, nor will such consummation require the consent of
any third party in respect of any Intellectual Property.
(j) For the purposes of this Agreement, "Intellectual
Property" means all of the following as they exist in any jurisdiction
throughout the world, in each case, to the extent owned by, licensed to, or
otherwise used or held for use by the Company or its Subsidiaries:
(i) patents, patent applications and the inventions,
designs and improvements described and claimed therein, patentable
inventions, and other patent rights (including any provisional
applications, divisions, continuations, continuations-in-part,
substitutions, reexaminations, renewal, extensions or reissues thereof,
whether or not patents are issued on any such applications and whether or
not any such applications are amended, modified, withdrawn, or refiled);
(ii) trademarks, service marks, trade dress, trade
names, brand names, Internet domain names, designs, logos, slogans or
corporate names (including, in each case, the goodwill associated
therewith), whether registered or unregistered, and all registrations and
applications for registration thereof;
(iii) copyrights, including all renewals and
extensions, copyright registrations and applications for registration, and
non-registered copyrights;
(iv) trade secrets, formulae, confidential business
information, concepts, ideas, designs, research or development information,
processes, procedures, techniques, technical information, specifications,
operating and maintenance manuals, engineering drawings, methods, know-how,
data, mask works, discoveries, inventions, modifications, extensions,
improvements, and proprietary rights (whether or not patentable or subject
to copyright, trademark, or trade secret protection); and
(v) all licenses, and sublicenses, and other
agreements or permissions related to the Intellectual Property.
(k) Section 4.18 of the Company Disclosure Letter sets forth
a list of material trademarks, patents and patent applications owned,
applied for and/or registered by the Company and its Subsidiaries.
SECTION 4.19. Finders and Investment Bankers. Except for
CSFB, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of the Company
or any of its Subsidiaries who might be entitled to any fee or commission
in connection with the transactions contemplated by this Agreement. The
terms of the engagement of CSFB, including the fee payable thereto, have
previously been disclosed to Parent.
SECTION 4.20. Opinion of Financial Advisor. The Board of
Directors of the Company has received the opinion of CSFB, to the effect
that, as of the date of this Agreement, the consideration to be received in
the Offer and the Merger, by the holders of Shares (other than Parent) is
fair from a financial point of view to such holders.
SECTION 4.21. State Takeover Statutes; Required Vote.
Except for Articles 14 (Affiliated Transactions) and 14.1
(Control Share Acquisitions) of the VSCA (which have been rendered
inapplicable to the transactions contemplated by this Agreement and the
Support Agreement, including the Offer, the Merger and any purchase of
Shares pursuant to the Support Agreement as described in Section 2.02), no
Virginia takeover statute or similar statute applies or purports to apply
to the Offer or the Merger, or to this Agreement or the Support Agreement
or the transactions contemplated hereby or thereby. In the event the
Shareholders Meeting is required to approve the Merger and this Agreement,
the approval by the holders of more than two-thirds of the outstanding
Shares is the only vote of shareholders of the Company required to approve
the Merger and this Agreement.
SECTION 4.22. Affiliate Transactions. Except as set forth in
Section 4.22 of the Company Disclosure Letter, there are no current
contracts, agreements, arrangements or transactions between the Company and
its Subsidiaries, on the one hand, and the Principal Shareholder, on the
other hand, that are material to the Company and its Subsidiaries, taken as
a whole.
SECTION 4.23. Contracts. There is no contract, agreement or
understanding required to be described in or filed as an exhibit to any
Company SEC Report that is not described in or filed as required by the
Securities Act or the Exchange Act, as the case may be. Except as set forth
in Section 4.23 of the Company Disclosure Letter, neither the Company nor
any of its Subsidiaries is a party to or bound by any contract, agreement
or arrangement (including any lease of real property) (i) materially
restricting the ability of the Company or any of its Subsidiaries (or after
the Merger, Parent or any of its Subsidiaries) to compete in or conduct any
line of business or to engage in business in any geographic area, (ii)
containing covenants of any other Person not to compete in any material
respect with the Company or any of its Subsidiaries, (iii) relating to the
pending purchase or sale of any material amount of capital assets of the
Company or any of its Subsidiaries or (iv) involving the pending
acquisition, merger or purchase of all or substantially all of the assets
or the business of a third party involving aggregate consideration of
$100,000 per transaction or $1 million in the aggregate.
SECTION 4.24. No Other Representations. Except as
specifically set forth in this Article IV, the Company has not made, and
neither Parent nor Merger Subsidiary has relied upon, any other
representations or warranties, whether express or implied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent and Merger Subsidiary represent and warrant to the
Company that:
SECTION 5.01. Corporate Existence and Power. Parent is a
corporation and duly incorporated and is validly existing under the laws of
New York and has all requisite power and authority to own, lease and
operate its properties and conduct its business as now conducted by it and
is qualified to carry on business under the laws of each jurisdiction in
which it carries on a material portion of its business, and Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Virginia, and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business substantially as now conducted,
except where the failure of Parent to be so qualified to do business would
not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect. For purposes hereof, the term "Parent
Material Adverse Effect" means any change or effect that has been or is
materially adverse to the business, assets, liabilities, results of
operations or financial condition of Parent and its Subsidiaries taken as a
whole or adversely affects the ability of Parent to consummate the
transactions contemplated by this Agreement in any material respect or
materially impairs or delays Parent's ability to perform its obligations
hereunder; provided, however, that a Parent Material Adverse Effect shall
not include (i) changes in or resulting from general economic, financial or
market conditions, (ii) changes in conditions or circumstances generally
affecting the industry in which Parent (and its Subsidiaries) operate,
including regulatory changes, (iii) changes resulting from this Agreement
or from the announcement of the transactions contemplated hereby or (iv)
any effect resulting from Parent's compliance with the terms of this
Agreement. Merger Subsidiary was formed for the purpose of consummating the
transactions contemplated hereby. Merger Subsidiary does not directly or
indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any equity or similar
interest in any corporation, partnership, joint venture or other business
association, entity or person. Merger Subsidiary has not engaged and will
not engage in any activities other than in connection with or as
contemplated by this Agreement, the Support Agreement, and the transactions
contemplated hereby and thereby.
SECTION 5.02. Corporate Authorization. This Agreement has
been duly authorized, executed and delivered by each of Parent and Merger
Subsidiary and constitutes a legal, valid and binding obligation of each of
Parent and Merger Subsidiary enforceable against each of them in accordance
with its terms. The execution, delivery and performance by each of Parent
and Merger Subsidiary of this Agreement and the consummation of the Offer
and the Merger by each of Parent and Merger Subsidiary are within each of
their corporate powers and authority and have been duly authorized by all
necessary corporate action on the part of Parent and Merger Subsidiary.
Parent, as sole shareholder of Merger Subsidiary, and the Board of
Directors of Merger Subsidiary have approved the Merger and no further
corporate or shareholder action is required on the part of Merger
Subsidiary in connection with the consummation of the Merger other than the
filing of the Articles of Merger as contemplated by this Agreement. This
Agreement has been duly executed and delivered by Merger Subsidiary and,
assuming the due authorization, execution and delivery thereof by the
Company, constitutes a legal, valid and binding agreement of Merger
Subsidiary.
SECTION 5.03. Governmental Authorization. The execution,
delivery and performance by Parent and Merger Subsidiary of this Agreement
and the consummation by Parent and Merger Subsidiary of the transactions
contemplated by this Agreement (including the Merger) do not require any
consent, approval, authorization or permit of or other action by or filing
with, any Governmental Entity other than (i) the filing of appropriate
merger documents in accordance with the VSCA, (ii) compliance with any
applicable requirements of the HSR Act and any applicable foreign antitrust
laws, the Exchange Act, the Securities Act, any applicable state securities
or "blue sky" laws and (iii) any other consent, approval, authorization or
permit or action by or filing with any Governmental Entity, the failure to
make or obtain which would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation of the other transactions contemplated hereby do not and will
not (i) contravene or conflict with or result in any violation or breach of
any provision of the articles of incorporation or bylaws of Parent or
Merger Subsidiary or other documents of Parent or Merger Subsidiary (ii)
assuming compliance with the matters referred to in Section 5.03,
contravene or conflict with or result in a violation or breach of any
provision of any law, rule, regulation, judgment, injunction, order or
decree binding upon or applicable to Parent or to Merger Subsidiary or any
of their respective assets, (iii) require any consent or other action by
any Person under, constitute a default under or violation of or give rise
to a right of termination, cancellation or acceleration of any right or
obligation or to the loss of any benefit or otherwise result in any adverse
modification of the effect (including an increase in the price paid by, or
cost to, Parent or to Merger Subsidiary or any other loss of benefit) of,
or under any provision of any agreement or other instrument to which Parent
or Merger Subsidiary is a party or that is binding upon Parent or Merger
Subsidiary or their respective properties or assets or any license,
franchise, permit or other similar authorization held by Parent or Merger
Subsidiary, or (iv) result in the creation or imposition of any Lien on any
asset of Parent, except for any occurrences or results referred to in
clauses (ii), (iii), and (iv) that would not reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect or
prevent or materially delay consummation of the Merger or prevent or
materially delay Parent or Merger Subsidiary from performing their
obligations under this Agreement in any material respect.
SECTION 5.05. Disclosure Documents. The information with
respect to Parent and Merger Subsidiary that Parent and/or Merger
Subsidiary, as the case may be, furnishes to the Company in writing
specifically for use in the Company Disclosure Documents (including the
Company Proxy Statement), at the respective times of the filing thereof
with the SEC or such other Governmental Entity, and at the time of any
distribution or dissemination thereof, and in the case of the Company Proxy
Statement, at the date it or any amendment or supplement is mailed to
shareholders and at the time of the Shareholders Meeting, will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Offer
Documents will comply as to form in all material respects with the
requirements of the Exchange Act, except that no representation or warranty
is made by Parent or Merger Subsidiary as to any information supplied by
the Company to Parent or to Merger Subsidiary intended for inclusion or
incorporation by reference, or which may be deemed to be incorporated by
reference, therein.
SECTION 5.06. Financing. Parent and Merger Subsidiary have
received a commitment letter from Citibank N.A. and Salomon Smith Barney, a
copy of which is attached to Section 5.06 of the Parent Disclosure Letter,
whereby Citibank N.A. has committed, upon the terms and subject to the
conditions set forth therein, to provide financing, the proceeds of which
would be sufficient funds to enable them to consummate the Offer and the
Merger on the terms contemplated by this Agreement.
SECTION 5.07. Brokers. None of Parent, Merger Subsidiary, or
any of their respective subsidiaries, officers, directors or employees, has
employed any investment banker, broker, finder or other intermediary or
incurred any liability for any brokerage fees, commissions or finder's fees
in connection with the transactions contemplated by this Agreement for or
with respect to which the Company or any Subsidiary is or might be liable.
SECTION 5.08. Parent Not an Interested Shareholder. Prior to
the execution of this Agreement and the Support Agreement, neither Parent
nor any of its Affiliates "beneficially owns" any Shares or is an
"interested shareholder" of the Company as such terms are defined in
Section 13.1-725 of the VSCA.
SECTION 5.09. Litigation. As of the date hereof, there is no
action, suit, Proceeding or investigation pending, or to the Knowledge of
Parent and Merger Subsidiary, threatened involving Parent or any of its
affiliates, at law or in equity, by or before any court of governmental
entity which would reasonably be expected to have a material adverse effect
on the ability of Parent or Merger Subsidiary to consummate the
transactions contemplated this Agreement.
SECTION 5.10. No Other Representations. Except as
specifically set forth in this Article V and the Support Agreement, none of
Parent, Merger Subsidiary nor any Person on behalf of Parent or Merger
Subsidiary, has made, and the Company has not relied upon, any other
representations or warranties, whether express or implied.
ARTICLE VI
COVENANTS
SECTION 6.01. Conduct of the Company. Except as expressly
contemplated by this Agreement, from the date hereof until the Effective
Time, the Company and its Subsidiaries shall conduct their business in the
ordinary course consistent with past practice and shall use their
commercially reasonable efforts to preserve intact their business
organizations and relationships with third parties and to keep available
the services of their present officers and key employees and preserve the
goodwill of those engaged in material business relationships with the
Company. Except as otherwise approved in writing by Parent or as expressly
contemplated by this Agreement or as disclosed in Section 6.01 of the
Company Disclosure Letter, and without limiting the generality of the
foregoing, from the date hereof until the Effective Time:
(a) the Company shall not, and shall not permit any of its
Subsidiaries to, adopt or propose any change in its articles of
incorporation or bylaws or comparable charter or other organization
documents;
(b) the Company shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of the
equity or assets of any business or any corporation, partnership,
joint venture, association or other business organization or
division thereof that would be material to the Company and its
Subsidiaries, taken as a whole, or (ii) any assets except for
purchases of inventory and equipment in the ordinary course of
business consistent with past practice. The Company shall not, and
shall not permit any of its Subsidiaries to, directly or
indirectly, acquire, make any investment (other than short term
investments in the ordinary course of business or investments not
exceeding $1,000,000 individually or $10,000,000 in the aggregate)
in, or make any capital contributions to, any Person (other than a
Subsidiary of the Company) other than in the ordinary course of
business.
(c) the Company shall not, and shall not permit its
Subsidiaries to, sell, lease, license, pledge, mortgage or
otherwise encumber or subject to any Lien or otherwise dispose of
any of its properties or assets, or stock or other ownership
interest in any of its properties or subsidiaries other than (i) in
the ordinary course of business consistent with past practice, (ii)
pursuant to any agreements existing as of the date hereof and
entered into in the ordinary course of business consistent with
past practice, (iii) any Liens for taxes not yet due and payable or
being contested in good faith by appropriate proceedings, such
mechanics and similar Liens, if any, as do not materially detract
from the value of any material properties or assets or materially
interfere with the present use of any of such properties or assets
or (iv) which would not reasonably be expected to result,
individually or in the aggregate, in a Company Material Adverse
Effect;
(d) the Company shall not and shall not permit any of its
Subsidiaries to declare, set aside, or pay any dividends or make
any distributions on shares of capital stock other than dividends
or distributions by any wholly-owned Subsidiary of the Company to
the Company or another wholly-owned Subsidiary;
(e) the Company shall not, and shall not permit any of its
Subsidiaries to, (i) issue, deliver, grant or sell, or authorize or
propose the issuance, delivery, grant or sale of, any capital stock
of the Company or any Company Subsidiary Securities, or any
security, option or instrument convertible into or exercisable for
either of the foregoing, other than the issuance of Shares upon the
exercise of Options, (ii) split, combine or reclassify any capital
stock of the Company or any of its Subsidiaries or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of capital stock of the
Company or any of its Subsidiaries or (iii) except as required or
permitted by this Agreement, repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
Subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(f) (i) except as contemplated by Section 6.01(f) of the
Company Disclosure Letter, the Company shall not, and shall not
permit any of its Subsidiaries to, incur any indebtedness for
borrowed money or guarantee any such indebtedness of another Person
in an aggregate principal amount in excess of $10 million,
guarantee any debt securities of another person, enter into any
"keep well" or other agreement to maintain any financial statement
condition of another person, except for borrowings for working
capital purposes and the endorsement of checks in the ordinary
course of business consistent with past practice; or (ii) make any
material loans, advances or capital contributions to, or
investments in, any other Person, other than to the Company or any
direct or indirect wholly owned Subsidiary of the Company or as
otherwise made in the ordinary course of business consistent with
past practice;
(g) except for (A) increase in wages, salary and benefits of
officers or employees of the Company or its Subsidiaries in
accordance with past practice and (B) increases in salary, wages
and benefits granted to officers and employees of the Company or
its Subsidiaries in conjunction with promotions or other changes in
job status in the ordinary course of business consistent with past
practice, the Company shall not, and shall not permit any of its
Subsidiaries to, (i) increase the compensation payable or to become
payable to its officers, directors or key employees, (ii) grant any
severance or termination pay to officers, directors or key
employees (except pursuant to existing agreements, plans or
policies), (iii) enter into any employment, severance or consulting
agreement with any current or former director, officer or other
employee of the Company or any Subsidiary or (iv) establish, adopt,
enter into, amend or accelerate the payment, right to payment or
vesting (other than as permitted under this Agreement) of any
collective bargaining, bonus, profit sharing, thrift, compensation
stock option, restricted stock, pension, retirement, deferred
compensation, employment termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of
any current or former director, officer or employee (any of the
foregoing being an "Employee Benefit Arrangement"); provided,
however, that nothing herein will be deemed to prohibit (i) the
payment of benefits as they become payable under the terms of the
Employee Benefit Arrangements as in effect on the date hereof or
(ii) entering into any agreement in connection with new hires in
the ordinary course; and
(h) the Company shall not, and shall not permit any of its
Subsidiaries to, plan, announce, implement or effect any reduction
in force, lay-off, early retirement program, severance program or
other program or effort concerning the termination of employment of
employees of the Company or its Subsidiaries, provided, however,
that routine employee terminations shall not be considered subject
to this clause (h);
(i) the Company shall not, and shall not permit any of its
Subsidiaries to, (i) change any of the accounting methods used by
it unless required by GAAP or (ii) make any material election
relating to Taxes, change any material election relating to Taxes
already made, adopt or change any accounting method relating to
material Taxes unless required by GAAP, enter into any closing
agreement relating to material Taxes, settle any claim or
assessment relating to material Taxes or consent to any claim or
assessment relating to material Taxes or any waiver of the statute
of limitations for any such claim or assessment;
(j) the Company shall not, and shall not permit any of its
Subsidiaries to, make any capital expenditure or expenditures in
excess of $500,000 individually or $2.5 million in the aggregate,
other than as set forth in the Company's budget for capital
expenditures disclosed to Parent prior to the date hereof;
(k) the Company shall not, and shall not permit any of its
Subsidiaries to, enter into, materially amend or terminate, or
release or assign any material right in, any material contract,
other than contracts in the ordinary course of business consistent
with past practice or related to the purchase or sale of inventory,
involving payments to or by the Company of less than $7 million per
year;
(l) other than in connection with the licensing of the
Company's products, the Company shall not, and shall not permit any
of its Subsidiaries to, enter into any agreement, understanding or
commitment that materially restrains, limits or impedes the
Company's ability to compete with or conduct any material line of
business, including, but not limited to, geographic limitations on
the Company's activities;
(m) the Company shall not enter into, or modify any
existing, transaction with any Affiliate in a manner materially
adverse to the Company;
(n) the Company shall not, and shall not permit any of its
Subsidiaries to, waive any material non-compete, standstill or
non-disclosure obligations;
(o) except as contemplated by Section 6.01(o) of the Company
Disclosure Letter, the Company shall not, and shall not permit any
of its Subsidiaries to, adopt any plan of liquidation, dissolution,
winding-up or similar transaction; and
(p) the Company shall not, and shall not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
SECTION 6.02. Access to Information. (a) From the date
hereof until the Effective Time, the Company shall, and shall cause each of
its Subsidiaries to, (i) give Parent, its counsel, financial advisors,
auditors and other authorized representatives prompt and reasonable access
during normal business hours and, with reasonable advance notice to the
Company's general counsel, to the offices, properties, personnel, books and
records of the Company and its Subsidiaries as such Persons may reasonably
request, (ii) furnish to Parent, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and
other information as such Persons may reasonably request and (iii) instruct
the Company's employees, counsel and financial advisors to cooperate with
Parent in its investigation of the business of the Company and its
Subsidiaries. All nonpublic information provided to, or obtained by, Parent
pursuant to this Section 6.02 in connection with the transactions
contemplated hereby shall be treated in accordance with the terms of the
Confidentiality Agreement previously executed by or on behalf of Parent and
the Company (the "Confidentiality Agreement"). Notwithstanding the
foregoing, the Company shall not be required to provide any information
which it reasonably believes it may not provide to Parent by reason of
applicable law, rules or regulations, which constitutes information
protected by attorney/client privilege, or which the Company or any
Subsidiary is required to keep confidential by reason of contract,
agreement or understanding with third parties entered into prior to the
date hereof, provided, that the fact of its nondisclosure is communicated
to the general counsel of Parent, in which case the Company shall only
disclose such information to appropriate representatives of Parent under
appropriate arrangements, if available, which would not reasonably be
expected to result in a violation of applicable law, rules, regulations,
waive attorney/client privilege or violate any contract, agreement or
understanding.
(b) Notwithstanding Section 6.02(a) and in addition to the
restrictions imposed on Parent pursuant to the Confidentiality Agreement,
from the date hereof through the earlier of the Effective Time or the
termination of this Agreement, Parent and Merger Subsidiary and any of
their Affiliates shall not, directly or indirectly, (i) solicit or cause
others to solicit any employee of the Company or its Subsidiaries or
attempt to influence, persuade or induce any such employee to terminate his
employment with the Company or its Subsidiaries, or (ii) hire or make any
offer of employment, or cause others to hire or make any offer of
employment, to any such employee, other than the hiring, making any offer
of employment to or causing others to hire or make any offer of employment
to, any employee who seeks employment on an unsolicited basis or in
response to a general advertisement or solicitation.
SECTION 6.03. No Solicitation. (a) From the date hereof
until the termination of this Agreement, except as permitted hereby, the
Company shall not, and shall use its best efforts to cause its Subsidiaries
and any of its or its Subsidiaries' officers, directors, employees,
investment bankers, attorneys, accountants and other agents and advisors
not to, directly or indirectly, (i) solicit, initiate or knowingly
encourage inquiries relating to, or the submission of, any Acquisition
Proposal, (ii) engage in negotiations or discussions with, or in any other
way knowingly cooperate with, any Person (other than Parent, Merger
Subsidiary or their respective directors, officers, employees, agents and
representatives) that may be considering making, or has made, an
Acquisition Proposal, (iii) furnish to any person any information or data
with respect to or access to the properties of the Company or any of its
Subsidiaries to, or take any other action to, facilitate the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal or (iv) enter into any agreement with respect to any
Acquisition Proposal or approve or resolve to approve any Acquisition
Proposal. The Company shall as promptly as reasonably practicable (but in
no case later than 48 hours after receipt thereof) provide Parent with the
identity of such Person and a reasonable description of such Acquisition
Proposal. The Company shall keep Parent fully informed on a current basis
of the status and details of any such Acquisition Proposal. For purposes of
this Agreement, "Acquisition Proposal" means any offer or proposal for, or
any indication of interest in, (i) a merger, share exchange,
recapitalization, liquidation, reclassification or business combination or
similar transaction, (ii) any sale, lease, exchange, transfer or other
disposition of 10% or more of the assets of the Company and its
Subsidiaries, taken as a whole, or (iii) any tender offer or exchange offer
that, if consummated, would result in any Person beneficially owning 10% or
more of the outstanding shares of capital stock of the Company involving
the Company or any of its Subsidiaries, other than the transactions
contemplated by this Agreement. The Company shall, and shall cause its
Subsidiaries and the directors, employees and other agents and
representatives of the Company and its Subsidiaries to, immediately cease
and cause to be terminated, its existing solicitation activity, discussions
or negotiations with any parties conducted heretofore by the Company or any
of its representatives with respect to an Acquisition Proposal.
(b) Subject to the Company's compliance with Section
6.03(a), nothing contained in this Agreement shall prevent the Board of
Directors of the Company (or its authorized representatives) from, prior to
the purchase of Shares pursuant to the Offer, (i) furnishing non-public
information to, or entering into customary confidentiality agreements on
terms, taken as a whole, no less favorable to the Company than the terms of
the Confidentiality Agreement with, or entering into discussions or
negotiations with, any Person in connection with an unsolicited Acquisition
Proposal to the Company or its shareholders, but only if the Board of
Directors of the Company determines in good faith that such Acquisition
Proposal, if accepted, constitutes a Superior Proposal, (ii) entering into
a definitive agreement providing for the implementation of a Superior
Proposal if the Company is concurrently terminating this Agreement pursuant
to Section 8.1(g) and paying the Termination Fee and Expenses as required
to be paid pursuant to Section 9.04(b), (iii) taking and disclosing to its
shareholders a position with respect to such Acquisition Proposal
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or (iv)
making any disclosure to its shareholders which the Board of Directors of
the Company determines, after consultation with legal counsel, is required
to be taken or made under applicable law.
SECTION 6.04. Notices of Certain Events. (a) The Company
shall as promptly as is reasonably practicable notify Parent of (i) any
notice or other communication from any Person alleging that the consent of
such Person (or another Person) is or may be required in connection with
the transactions contemplated by this Agreement, (ii) any notice or other
communication from any governmental or regula tory agency or authority in
connection with the transactions contemplated by this Agreement, (iii) any
actions, suits, claims, investigations or proceedings commenced or, to the
best of its Knowledge threatened against, the Company or any of its
Subsidiaries that, if pending on the date of this Agreement, would
reasonably be expected to have been required to have been disclosed
pursuant to Section 4.11 or which would have a material adverse effect on
the consummation of the transactions contemplated by this Agreement and
(iv) any fact or the occurrence or non-occurrence of any event (in each
case of which the Company is aware) between the date of this Agreement and
the Effective Time which would reasonably be expected to cause (A) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time or (B)
any material failure of the Company to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the
obligations of any party hereunder.
(b) Each of Parent and Merger Subsidiary shall as promptly
as is reasonably practicable notify the Company of (i) any notice or other
communication from any Person alleging that the consent of such Person (or
other Person) is or may be required in connection with the transactions
contemplated by this Agreement, (ii) any notice or other communication from
any governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement, and (iii) any fact or
occurrence or non-occurrence of any event (in each case of which Parent or
Merger Subsidiary is aware) between the date of this Agreement and the
Effective Time which would cause (x) any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Effective Time or (y) any material failure of
Parent or Merger Subsidiary to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by each of them
hereunder; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the
obligations of any party hereunder.
SECTION 6.05. Merger Subsidiary. Parent will take all action
necessary (a) to cause Merger Subsidiary to perform its obligations under
this Agreement and to commence the Offer and consummate the Merger on the
terms and subject to the conditions set forth in this Agreement and in
accordance with the VSCA as promptly as is reasonably practicable following
completion of the Offer and (b) to ensure that, prior to the Effective
Time, Merger Subsidiary shall not conduct any business or make any
investments other than in connection with the transactions contemplated by
this Agreement.
SECTION 6.06. Indemnification and Insurance. (a) The
articles of incorporation and by-laws of the Surviving Corporation shall
contain provisions with respect to indemnification substantially to the
same effect as those set forth in the articles of incorporation and the
by-laws of the Company on the date hereof, which provisions shall not be
amended, modified or otherwise repealed for a period of six years after the
Effective Time in any manner that would adversely affect the rights
thereunder as of the Effective Time of individuals who at the Effective
Time were directors, officers, employees or agents of the Company, unless
such modification is required after the Effective Time by law.
(b) Parent shall cause the Surviving Corporation, to the
fullest extent permitted under applicable law or under the Surviving
Corporation's articles of incorporation or by-laws or any indemnification
agreement in effect as of the date hereof, to indemnify and hold harmless,
each present and former director, officer or employee of the Company or any
of its Subsidiaries (collectively, the "Indemnified Parties") against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, (x) arising out
of or pertaining to the transactions contemplated by this Agreement or (y)
otherwise with respect to any acts or omissions occurring at or prior to
the Effective Time ("Indemnification Liabilities"), to the same extent as
provided in the Company's articles of incorporation or by-laws or any
applicable contract or agreement as in effect on the date hereof, in each
case for a period of six years after the date hereof. In the event of any
such claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time) and subject to the specific terms of
any indemnification contract, (i) after the Effective Time, the Surviving
Corporation shall assume and direct all the defense thereof, including
settlement, and the Indemnified Parties shall cooperate in the defense of
any such matter. An Indemnified Party shall have a right to participate in
(but not control) the defense of any such matter with its own counsel and
at its own expense. Notwithstanding the right of the Surviving Corporation
to assume and control the defense of such litigation, claim or proceeding,
such Indemnified Party shall have the right to employ separate counsel and
to participate in the defense of such litigation, claim or proceeding, and
the Surviving Corporation shall bear the reasonable fees, costs and
expenses of such separate counsel and shall pay such fees, costs and
expenses promptly after receipt of an invoice from such Indemnified Party
if (i) the use of counsel chosen by the Surviving Corporation to represent
such Indemnified Party would present such counsel with a conflict of
interest, (ii) the defendants in, or targets of, any such litigation, claim
or proceeding shall have been advised by counsel that there may be legal
defenses available to it or to other Indemnified Parties which are
different from or in addition to those available to the Surviving
Corporation, or (iii) the Surviving Corporation shall not have employed
counsel satisfactory to such Indemnified Party, in the exercise of the
Indemnified Party's reasonable judgment, to represent such Indemnified
Party within a reasonable time after notice of the institution of such
litigation, claim or proceeding. The Surviving Corporation shall not settle
any such matter unless (i) the Indemnified Party gives prior written
consent, which shall not be unreasonably withheld or delayed, or (ii) the
terms of the settlement provide that the Indemnified Party shall have no
responsibility for the discharge of any settlement amount and impose no
other obligations or duties on the Indemnified Party and the settlement
discharges all rights against Indemnified Party with respect to such
matter. In no event shall the Surviving Corporation be liable for any
settlement effected without its prior written consent. Any Indemnified
Party wishing to claim indemnification under this Section 6.06(b), upon
learning of any such claim, action, suit, proceeding or investigation,
shall promptly notify Parent and the Surviving Corporation (but the failure
so to notify shall not relieve the Surviving Corporation from any liability
which it may have under this Section 6.06(b) except to the extent such
failure materially prejudices such Surviving Corporation). The Indemnified
Parties as a group will be represented by a single law firm (plus no more
than one local counsel in any jurisdiction) with respect to each such
matter unless there is, under applicable standards of professional conduct,
a conflict on any significant issue between the positions of any two or
more Indemnified Parties. Notwithstanding anything to the contrary, in the
event (i) that any claim or claims for indemnification are asserted or made
within such six-year period, all rights to indemnification in respect of
any such claim or claims shall continue until the disposition of any and
all such claims and (ii) that any determination required to be made with
respect to whether an Indemnified Party's conduct is entitled to
indemnification hereunder, or complies with the standards set forth under
the VSCA, the Company's articles of incorporation or by-laws or any such
agreement, as the case may be, such determination shall be made by
independent legal counsel of national reputation selected by such
Indemnified Party and reasonably acceptable to Parent.
(c) In addition, Parent will provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers an insurance
and indemnification policy that provides coverage for events occurring at
or prior to the Effective Time (the "D&O Insurance") that is no less
favorable than the existing policy pursuant to which such directors and
officers are covered or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that Parent
and the Surviving Corporation shall not be required to pay an annual
premium for the D&O Insurance in excess of two hundred percent (200%) of
the annual premium currently paid by the Company for such insurance, but in
such case shall purchase as much of such coverage as possible for such
amount.
(d) This Section shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Indemnified
Parties, shall be binding on all successors and assigns of the Surviving
Corporation and shall be enforceable by the Indemnified Parties.
SECTION 6.07. Employee Benefits. For a period of one year
after the Effective Time, Parent will (a) cause to remain in effect for the
benefit of the employees of the Company and its Subsidiaries (and, to the
extent applicable, former employees) all Employee Plans in effect on the
date of this Agreement or (b) provide each employee (and, to the extent
applicable, former employees) of the Surviving Corporation and its
Subsidiaries who was an employee prior to the Effective Time with benefits
that, with respect to such employee (or former employee), are at least
substantially equivalent on an aggregate basis to the benefits to which
they were entitled under such Employee Plans. Without limiting the
generality of the foregoing, all vacation, holiday, sickness and personal
days accrued by the employees of the Company and its Subsidiaries shall be
honored. In the event that any employee of the Surviving Corporation or one
of its Subsidiaries is at any time after the Effective Time transferred to
Parent or any affiliate of Parent or becomes a participant in an employee
benefit plan, program or arrangement maintained by or contributed by Parent
or any affiliate of Parent, Parent shall cause such plan, program or
arrangement to treat the prior service of such employee with the Company
and its Subsidiaries, to the extent prior service is generally recognized
under the comparable plan, program or arrangement of the Company, as
service rendered to Parent or such affiliates for purposes of eligibility,
vesting or entitlement to early retirement benefits, vacation time or
severance benefits under such plans. Parent shall cause to be waived any
pre-existing condition limitation under their welfare plans that might
otherwise apply to such employee or, to the extent applicable, a former
employee, other than limitations that are already in effect with respect to
such employees and that have not been satisfied or waived as of the
Effective Time under any Employee Plan maintained for such employees
immediately prior to the Effective Time. Parent agrees to recognize (or
cause to be recognized) the dollar amount of all expenses incurred by such
employees or, to the extent applicable, former employees, during the
calendar year in which the Effective Time occurs for purposes of satisfying
the calendar year deductibles, Contribution Obligation payment limitations
and lifetime maximums for such year under the relevant benefit plans of
Parent and its Subsidiaries. Nothing contained in this Section 6.07 shall
be construed as requiring Parent to continue any specific Employee Plans or
to continue the employment of any employee; provided, however, that any
changes that Parent may make to any such Employee Plans are consistent with
the prior parts of this Section 6.07 and are permitted by the terms of the
Employee Plans and under any applicable law. Notwithstanding anything
contained herein to the contrary, nothing in this Section 6.07 shall
require the duplication of benefits to any employees or former employees.
(b) With respect to any Employee Plan which is intended to
be a tax-qualified defined benefit pension plan (a "Defined Benefit Plan"),
benefits under each such Defined Benefit Plan shall be frozen and cease to
accrue as of the Effective Time. As of the Effective Time, all active
employees of the Company or any Subsidiary who were participants in the
Defined Benefit Plans immediately prior to the Effective Time, shall become
participants in the tax-qualified Defined Benefit Plan of Parent, which
plan shall recognize service with the Company or any Subsidiary prior to
the Effective Time for purposes of eligibility and vesting, but not for
purposes of benefit accrual.
SECTION 6.08. Meeting of the Company's Shareholders. (a) If
required by the Company's articles of incorporation and/or applicable law
in order to consummate the Merger, the Company shall take all action
necessary in accordance with the VSCA and its articles of incorporation and
bylaws to duly call, give notice of, convene and hold a meeting of the
Company's shareholders (the "Shareholders Meeting") as promptly as
practicable following the acceptance for payment of and purchase of Shares
by Parent pursuant to the Offer for purpose of considering and taking
action upon this Agreement. At the Shareholders Meeting, all of the Shares
then owned by Parent, Merger Subsidiary or any other subsidiary of Parent
shall be voted to approve the Merger and this Agreement (subject to
applicable law). Subject to the fiduciary obligations of the Board under
applicable law, the Board of Directors of the Company shall recommend that
the Company's shareholders vote to approve the Merger and this Agreement if
such vote is sought, shall use its reasonable best efforts to solicit from
shareholders of the Company proxies in favor of the Merger and shall take
all other action in its judgment necessary and appropriate to secure the
vote of shareholders required by the VSCA to effect the Merger. The Company
shall cause such recommendation to be included in the Company Proxy
Statement.
(b) Notwithstanding Section 6.08(a), in the event that
Parent, Merger Subsidiary or any other subsidiary of Parent shall acquire
at least 90% of the outstanding shares of each outstanding class of capital
stock of the Company pursuant to the Offer, the parties hereto agree to
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the acceptance for payment of any
payment for shares by Merger Subsidiary pursuant to the Offer without a
meeting of shareholders of the Company, in accordance with Section 13.1-719
of the VSCA.
SECTION 6.09. Proxy Statement. If required under applicable
law, the Company shall promptly prepare the Company Proxy Statement, file
it with the SEC under the Exchange Act as promptly as practicable after
Merger Subsidiary purchases Shares pursuant to the Offer, and use all
reasonable efforts to have the Company Proxy Statement cleared by the SEC.
Parent, Merger Subsidiary and the Company shall cooperate with each other
in the preparation of the Company Proxy Statement, and the Company shall
notify Parent of the receipt of any comments of the SEC with respect to the
Company Proxy Statement and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to
Parent promptly copies of all correspondence between the Company or any
representative of the Company and the SEC. The Company shall give Parent
and its counsel the opportunity to review the Company Proxy Statement prior
to its being filed with the SEC and shall give Parent and its counsel the
opportunity to review all amendments and supplements to the Company Proxy
Statement and all responses to requests for additional information and
replies to comments prior to their being filed with, or sent to, the SEC.
Each of the Company, Parent and Merger Subsidiary agrees to use its
reasonable best efforts, after consultation with the other parties hereto
to respond promptly to all such comments of and requests by the SEC. As
promptly as practicable after the Company Proxy Statement has been cleared
by the SEC, the Company shall mail the Company Proxy Statement to the
shareholders of the Company.
SECTION 6.10. Reasonable Best Efforts. Subject to the terms
and conditions of this Agreement, each party will use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to
be done, and to assist and cooperate with other parties hereto in doing, as
promptly as practicable, all things necessary, proper or advisable under
applicable laws and regulations to consummate the transactions contemplated
by this Agreement and to ensure that the conditions set forth in Article
VII and Annex A are satisfied.
In addition, if at any time prior to the Effective Time any
event or circumstance relating to either the Company or Parent or any of
their respective subsidiaries, should be discovered by the Company or
Parent, as the case may be, and which should be set forth in an amendment
to the Offer Documents or Schedule 14D-9, the discovering party will
promptly inform the other party of such event or circumstance. If at any
time after the Effective Time any further action is necessary or desirable
to carry out the purposes of this Agreement, including the execution of
additional instruments, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
SECTION 6.11. Public Announcements. So long as this
Agreement is in effect, Parent, Merger Subsidiary and the Company will use
reasonable efforts to consult with each other before issuing any press
release or making any public statement with respect to this Agreement and
the transactions contemplated hereby and, except as may be required by
applicable law or any listing agreement with the NYSE, will not issue any
such press release or make any such public statement prior to such
consultation.
SECTION 6.12. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of the Company
or Merger Subsidiary, any deeds, bills of sale, assignments or assurances
and to take and do, in the name and on behalf of the Company or Merger
Subsidiary, 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 6.13. Filings, Other Action. (a) Subject to the
terms and conditions herein provided, the Company, Parent and Merger
Subsidiary shall (i) cooperate with one another in (x) determining which
filings are required to be made prior to the Effective Time, and which
consents, approvals, permits or authorizations are required to be obtained
prior to the Effective Time from governmental or regulatory authorities of
the United States, the several states and foreign jurisdictions in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (y) timely making
all such filings and timely seeking all such consents, approvals, permits
or authorizations, and (ii) use all reasonable efforts to take, or cause to
be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement, subject to the proviso to the
first sentence of Section 6.13(b).
(b) In furtherance and not in limitation of the foregoing,
Parent shall use its reasonable best efforts to resolve such objections, if
any, as may be asserted with respect to the transactions contemplated by
this Agreement under any antitrust, competition or trade regulatory laws,
rules or regulations of any domestic or foreign government or governmental
authority ("Antitrust Laws"); provided, however, that Parent shall not be
required to agree to dispose of or hold separate any asset which is
material to Parent, on the one hand, or the Company and its Subsidiaries,
taken as a whole, on the other hand.
(c) Any party hereto shall promptly inform the others of any
material communication from the Federal Trade Commission, the Department of
Justice, or any other domestic or foreign government or governmental
authority regarding any of the transactions contemplated by this Agreement.
If any party or any Affiliate thereof receives a request for additional
information or documentary material from any such government or authority
with respect to the transactions contemplated by this Agreement, then such
party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other parties, an
appropriate response in compliance with such request. Parent will advise
the Company promptly in respect of any understandings, undertakings or
agreements (oral or written) which Parent proposes to make or enter into
with the Federal Trade Commission, the Department of Justice, or any other
domestic or foreign government or governmental authority in connection with
the transactions contemplated by this Agreement.
(d) Promptly after the date hereof, Parent, Merger
Subsidiary and the Company (as may be required pursuant to the HSR Act)
will complete all documents required to be filed with the Federal Trade
Commission and the Department of Justice in order to comply with the HSR
Act and, not later than 10 business days after the date hereof, together
with the Persons who are required to join in such filings, shall file the
same with the appropriate Governmental Entities. Parent, Merger Subsidiary
and the Company shall promptly furnish all materials thereafter required by
any of the Governmental Entities having jurisdiction over such filings, and
shall take all reasonable actions and shall file and use all reasonable
efforts to have declared effective or approved all documents and
notifications with any such Governmental Entities, as may be required under
the HSR Act or any other federal and applicable foreign antitrust laws for
the consummation of the Offer, the Merger and any other transactions
contemplated hereby, subject to the proviso to the first sentence of
Section 6.13(b).
SECTION 6.14. Confidentiality. Parent and Merger Subsidiary
acknowledge and agree that all information received from or on behalf of
the Company or any of the Company's Subsidiaries in connection with the
Merger shall be deemed received pursuant to the Confidentiality Agreement
and Parent and Merger Subsidiary shall, and shall cause their respective
Affiliates and representatives, to comply with the provisions of the
Confidentiality Agreement with respect to such information and the
provisions of the Confidentiality Agreement are hereby incorporated herein
by reference with the same effect as if fully set forth herein.
SECTION 6.15. State Takeover Laws. If any "fair price,"
"business combination" or "control share acquisition" statute or other
similar statute or regulation shall become applicable to the transactions
contemplated hereby or by the Support Agreement, including the purchases of
Shares in the Offer, the Merger or the acquisition of Shares pursuant to
the option set forth in the Support Agreement, the Company and its Board of
Directors shall take all such action as may be reasonably necessary or
advisable to obtain such approvals and take such actions as are necessary
or advisable so that the transactions contemplated hereby and by the
Support Agreement may be consummated as promptly as practicable on the
terms contemplated hereby and thereby and otherwise act to minimize the
effects of any such statute or regulation on the transactions contemplated
hereby and thereby.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party.
The obligations of the Company, Parent and Merger Subsidiary to consummate
the Merger are subject to the satisfaction of the following conditions:
(a) Shareholder Approval. If approval of the Merger by the
holders of Shares is required by applicable law, this Agreement and
the Merger shall have been approved by the requisite vote of the
shareholders of the Company in accordance with the VSCA;
(b) Purchase of Shares. Merger Subsidiary shall have
accepted for payment and paid for Shares pursuant to the Offer in
accordance with the terms hereof; provided, that this condition
shall be deemed to have been satisfied with respect to Parent and
Merger Subsidiary if Merger Subsidiary fails to accept for payment
or pay for Shares pursuant to the Offer in violation of the terms
of the Offer.
(c) Injunctions; Illegality. The consummation of the Merger
shall not be restrained, enjoined or prohibited by any order,
judgment, decree, injunction or ruling of a court of competent
jurisdiction or any Governmental Entity entered; provided that the
party invoking this condition shall have complied with its
obligations under Sections 6.10 and 6.13.
(d) Antitrust Waiting Periods. All necessary waiting periods
under the HSR Act and any foreign antitrust laws applicable to the
Merger shall have expired or been earlier terminated except, with
respect to any foreign antitrust laws, where the failure to so
expire or terminate would not materially adversely affect the
transactions contemplated hereby.
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination. This Agreement may be terminated
and the Offer and the Merger may be abandoned at any time prior to the
Effective Time (notwithstanding any approval of this Agreement by the
shareholders of the Company or Parent):
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent, if the Offer has not
been consummated on or before January 31, 2001 (the "Termination
Date"); provided, however, that the party seeking to terminate this
Agreement pursuant to this Section 8.01(b) shall not have breached
in any material respect its obligations under this Agreement; and
provided, further, that the Termination Date shall be extended for
an additional period of up to 30 days, if each of the conditions to
the consummation of the Offer, other than the conditions set forth
in clause (B)(a) of Annex A or clause (A)(y) of Annex A, shall have
been satisfied on or prior to the Termination Date;
(c) by either the Company or Parent, if there shall be any
applicable law, rule or regulation that makes consummation of the
Offer or the Merger illegal or otherwise prohibited or if any
judgment, injunction, order or decree of a court or governmental
agency or authority of competent jurisdiction shall restrain or
prohibit the consummation of the Offer or the Merger, and such
judgment, injunction, order or decree shall become final and
nonappealable;
(d) prior to the completion of the Offer, by either party,
if (x) there has been a breach by the other party of, or any
inaccuracy in, any representation or warranty (without regard to
any Company Material Adverse Effect or Parent Material Adverse
Effect, as the case may be, contained in such representations or
warranties) contained in this Agreement which would reasonably be
expected to have, individually or in the aggregate, a Parent
Material Adverse Effect or Company Material Adverse Effect, as the
case may be, or (y) there has been a material breach of any of the
covenants or agreements set forth in this Agreement on the part of
the other party which breach is, in the case of (x) or (y), not
cured within 30 days after written notice of such breach is given
by the terminating party to the other party;
(e) by the Company, if the Offer has not been timely
commenced as provided in Section 1.01 hereof, provided that the
Company may not so terminate if it is in material breach of its
obligations hereunder;
(f) by Parent, if the Board of Directors of the Company
shall have failed to recommend, or shall have withdrawn or modified
in a manner adverse to Parent, its approval or recommendation of
this Agreement, the Offer or the Merger or shall have recommended
or announced a neutral position with respect to, or entered into,
or publicly announced its intention to enter into, an agreement
with respect to an Acquisition Proposal (or shall have resolved to
do any of the foregoing);
(g) by the Company concurrently with or following payment of
the Termination Fee and Expenses pursuant to Section 9.04, if,
prior to the purchase of Shares pursuant to the Offer, the Board of
Directors of the Company shall concurrently approve and the Company
shall concurrently enter into, a definitive agreement providing for
the implementation of a Superior Proposal; provided, however, that
(x) the Company shall have notified Parent in writing that it
intends to enter into such an agreement, attaching the most current
version of such agreement to such notice and (y) during the 5
business day period after such notice, the Company shall have
offered to negotiate with and, if accepted, negotiate in good faith
with (and shall have caused its legal and financial advisors to do
the same) Parent to attempt to make such commercially reasonable
adjustments as would enable the Company to proceed with this
Agreement in lieu of the Superior Proposal, it being understood
that (A) the Company shall not enter into any such agreement during
such five-day period and (B) the Company agrees to notify Parent
promptly if its intention to enter into a written agreement
referred to in its notification shall change at any time after
giving effect to such notification;
(h) by Parent or the Company if as the result of the failure
of any of the conditions set forth in Annex A hereto to be
satisfied, the Offer shall have terminated or expired in accordance
with its terms without Merger Subsidiary having purchased any
Shares pursuant to the Offer; provided, however, that the right to
terminate this Agreement pursuant to this Section 8.01(h) shall not
be available to any party whose material breach of any of its
obligations under this Agreement results in the failure of any such
condition; and
(i) by Parent, if the Company shall have taken any action to
exempt any acquisition of Shares by any Person, other than Parent,
Merger Subsidiary or any of their respective Affiliates, from
Article 14 (Affiliated Transactions) or Article 14.1 (Control Share
Acquisitions) of the VSCA.
SECTION 8.02. Effect of Termination. If this Agreement is
terminated pursuant to Section 8.01, this Agreement shall become void and
of no force and effect with no liability on the part of any party (or any
shareholder, director, officer, employee, agent, consultant or
representative of such party) to the other party hereto; provided that, if
such termination shall result from the (i) willful failure of either party
to perform a material covenant or agreement of such party hereunder or (ii)
a material breach by either party hereto of any representation or warranty
contained herein, such party shall be fully liable for any and all
liabilities and damages incurred or suffered by the other party as a result
of such failure or breach. Notwithstanding the foregoing, the provisions of
Sections 6.14, 8.02 and Article IX hereof shall survive any termination
hereof.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
telecopy or similar writing) and shall be given,
if to Parent or Merger Subsidiary, to:
International Flavors & Fragrances Inc.
521 West 57th Street
New York, New York 10019
Telephone: (212) 765-5500
Telecopy: (212) 708-7132
Attention: Stephen A. Block, Esq.
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036-6522
Telephone: (212) 735-3000
Telecopy: (212) 735-2000
Attention: Roger S. Aaron, Esq.
Stephen F. Arcano, Esq.
if to the Company, to:
Bush Boake Allen Inc.
7 Mercedes Drive
Montvale, New Jersey 07645
Telephone: (201) 391-9870
Telecopy: (201) 782-3339
Attention: Dennis M. Meany, Esq.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Telecopy: (212) 757-3990
Attention: Robert B. Schumer, Esq.
or such other address or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties hereto. Each such
notice, request or other communication shall be effective when delivered
personally or sent by overnight courier (providing proof of delivery) at
the address specified in this Section, or if by telecopy, upon confirmation
of receipt.
SECTION 9.02. Survival of Representations and Warranties and
Agreements. The representations and warranties and agreements contained
herein and in any certificate or other writing delivered pursuant hereto
shall not survive the Effective Time, except Sections 6.06, 6.07 and 6.12
and Articles II, III and IX.
SECTION 9.03. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by the Company, Parent and Merger Subsidiary or, in the case
of a waiver, by the party against whom the waiver is to be effective;
provided that (i) any waiver or amendment shall be effective against a
party only if the Board of Directors of such party approves such waiver or
amendment and (ii) no such amendment or waiver following the vote of
shareholders at the Shareholders Meeting shall, without the approval of the
Company's shareholders and each party's Board of Directors alter or change
(A) the amount or kind of consideration to be received in exchange for any
shares of capital stock of the Company, (B) any term of the articles of
incorporation of the Surviving Corporation or (C) any of the terms or
conditions of this Agreement if such alteration or change would adversely
affect the holders of any shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.04. Fees and Expenses. (a) Except as otherwise
provided in this Section, all costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or
expense.
(b) In the event that the Company terminates this Agreement
pursuant to Section 8.01(g), or Parent terminates this Agreement pursuant
to Section 8.01(f) or Section 8.01(i), then, in each case, the Company will
pay, or cause to be paid, at or prior to the time of termination in the
case of a termination pursuant to Section 8.01(g) or as promptly as is
reasonably practicable (but in no event later than one business day)
following in the case of a termination pursuant to Section 8.01(f) or
Section 8.01(i) in same day funds to Parent (i) Parent's Expenses (as
defined below) up to a maximum amount of $1 million and (ii) an amount (the
"Termination Fee") equal to $29,100,000. In addition, so long as Parent has
complied with all its material obligations under this Agreement and the
Company is not entitled to terminate the Agreement pursuant to Section
8.01(c), 8.01(d) or 8.01(e), if (X) this Agreement shall have been
terminated pursuant to Section 8.01(b) or Section 8.01(h) as a result of
the non-satisfaction of the Minimum Condition (as defined in Annex A), (Y)
the shareholders shall have failed to approve the Agreement and the Merger
by the requisite vote in accordance with VSCA or (Z) Parent shall have
terminated this Agreement pursuant to Section 8.01(d); and
(1) at the time of the termination of the Offer,
termination of this Agreement, shareholder vote or breach, as the case may
be, any Person (other than Parent) shall have publicly announced, and not
withdrawn in good faith, an Acquisition Proposal; and
(2) within 12 months after termination of this
Agreement, the Company shall have entered into an agreement with respect to
an Acquisition Proposal or consummated an Acquisition Proposal; then the
Company shall pay to Parent (x) an amount equal to Parent's Expenses (not
in excess of $1 million) and (y) the Termination Fee in each case prior to
or concurrently with entering into any such agreement or consummating such
Acquisition Proposal, as the case may be. "Expenses" means documented
out-of-pocket fees and expenses incurred or paid by or on behalf of Parent
in connection with the Merger or the consummation of any of the
transactions contemplated by this Agreement, including without limitation
all regulatory filing fees, fees and expenses of counsel, commercial banks,
investment banking firms, accountants, experts, environmental consultants,
and other consultants to Parent.
(c) Any payments required to be made pursuant to this
Section 9.04 shall be made by wire transfer of same day funds to an account
designated by the recipient.
SECTION 9.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement, in whole or in part, by operation of law or otherwise
by any of the parties, without the consent of the other parties hereto;
provided that Merger Subsidiary may assign this Agreement or any of its
rights or obligations hereunder to any direct or indirect wholly owned
Subsidiary of Parent without the prior consent of the Company, so long as
such assignment will not adversely affect the rights of and benefits to the
Company and its shareholders hereunder; (and which transfer shall not
relieve Parent and Merger Subsidiary of their obligations hereunder in the
event of a breach by their transferee).
SECTION 9.06. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State of New
York except that matters governed or affected by the VSCA shall be governed
by the laws of the Commonwealth of Virginia.
SECTION 9.07. Jurisdiction. Each party to this Agreement
hereby irrevocably agrees that any legal action or proceeding arising out
of or relating to this Agreement or any agreements or transactions
contemplated hereby shall be brought exclusively in the United States
District Court for the Southern District of New York and hereby expressly
submits to the personal jurisdiction and venue of such courts for the
purposes thereof and expressly waives any claim of improper venue and any
claim that such courts are an inconvenient forum. Each party hereby
irrevocably consents to the service of process of any of the aforementioned
courts in any such suit, action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the address
set forth or referred to in Section 9.01, such service to become effective
10 days after such mailing.
SECTION 9.08. Counterparts; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the
other parties hereto.
SECTION 9.09. Entire Agreement; Third Party Beneficiaries.
This Agreement, the Support Agreement and the Confidentiality Agreement
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior agreements, understandings
and negotiations, both written and oral, between the parties with respect
to the subject matter of this Agreement. No representation, inducement,
promise, understanding, condition or warranty not set forth herein has been
made or relied upon by either party hereto. Neither this Agreement nor any
provision hereof is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder except for the provisions
of Section 3.04, which are intended for the benefit of the Company's
optionees, Section 6.06, which are intended for the benefit of the
Indemnified Parties, and Section 6.07 (but only as Section 6.07 relates to
severance), which are intended for the benefit of the Company's former and
present officers, directors and employees, in each such case as third party
beneficiaries of the provisions indicated.
SECTION 9.10. Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
SECTION 9.11. Severability. If any term or other provision
of this Agreement is invalid, illegal or unenforceable, all other
provisions of this Agreement shall remain in full force and effect so long
as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party.
SECTION 9.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
BUSH BOAKE ALLEN INC.
By: /s/ Julian W. Boyden
________________________________
Title: Julian W. Boyden
Chairman, President & CFO
INTERNATIONAL FLAVORS &
FRAGRANCES INC.
By: /s/ Stephen A. Block
________________________________
Title: Stephen A. Block
Senior Vice President
B ACQUISITION CORP.
By: /s/ Stephen A. Block
________________________________
Title: Stephen A. Block
Vice President
ANNEX A
Notwithstanding any other provision of the Offer, Parent and Merger
Subsidiary shall not be required to accept for payment or purchase or pay
for any tendered Shares, (A) if (x) the Minimum Condition (as defined
below) has not been satisfied by the expiration date of the Offer as
required to be extended pursuant to Section 2.01(c) or (y) the applicable
waiting periods under the HSR Act and any applicable foreign merger control
regulations enforced by Governmental Entities, individually or in the
aggregate, having jurisdiction over a material portion of the Company's
business or assets shall not have expired or been terminated by the
expiration date of the Offer, or (B) at any time on or after the date of
this Agreement and prior to the date Shares are first accepted for payment
under the Offer, if any of the following conditions exist:
(a) any order or preliminary or permanent injunction shall
be entered in any action or proceeding before any court of
competent jurisdiction or any statute, rule, judgment, regulation,
legislation, or order shall be enacted, entered, enforced,
promulgated, amended or issued by any United States Governmental
Entity, any other Governmental Entity or Entities having in the
aggregate jurisdiction over a material portion of the Company's
business or assets which shall (i) make illegal, restrain or
prohibit the acceptance for payment of, or payment for, any Shares
by Parent, Merger Subsidiary or any other Affiliate of Parent or
the consummation of the Merger; (ii) prohibit or limit materially
the ownership or operation by Parent or Merger Subsidiary or any of
their Subsidiaries of all or any material portion of the business
or assets of the Company or any of its Subsidiaries (taken as a
whole), or compel Parent, on the one hand, or the Company and its
Subsidiaries, taken as a whole, on the other hand, to dispose of or
hold separate all or any material portion of their respective
businesses or material assets, (iii) impose or confirm material
limitations on the ability of Parent or Merger Subsidiary or any
other Affiliate of Parent to exercise full rights of ownership of
any Shares in any material respect, including, without limitation,
the right to vote any Shares acquired by Merger Subsidiary pursuant
to the Offer or otherwise on all matters properly presented to the
Company's shareholders, including, without limitation, the approval
and adoption of this Agreement and the transactions contemplated by
this Agreement; (iv) require divestiture by Parent, Merger
Subsidiary or any other Affiliate of Parent of any Shares; or (v)
otherwise would have a Company Material Adverse Effect; provided
that with respect to any injunction issued by a Governmental Entity
in which the lead plaintiffs are not Governmental Entities, Parent
shall first be required to use its best efforts to defend against
any preliminary or permanent injunction;
(b) the Board of Directors of the Company or any committee
thereof shall have (i) withdrawn, modified or changed, in a manner
adverse to Parent or Merger Subsidiary, the recommendation by such
Board of Directors or such committee of the Offer, the Merger or
this Agreement, (ii) approved, recommended or announced a neutral
position with respect to, or proposed publicly to approve,
recommend or announce a neutral position with respect to, an
Acquisition Proposal, (iii) provided notice to Parent pursuant to
Section 8.01(g)(x) or (iv) resolved to do any of the foregoing;
(c) there shall have occurred, and continued to exist, (i)
any general suspension of, or limitation on prices for, trading in
securities on the New York Stock Exchange, (ii) a declaration of a
banking moratorium or any general suspension of payments in respect
of banks in the United States, (iii) a commencement of a war or
armed hostilities directly involving the United States (other than
an action involving United Nations' personnel or support of United
Nations' personnel) or (iv) in the case of any of the foregoing
clauses (i) through (iii) existing at the time of the commencement
of the Offer, a material acceleration or worsening thereof.
(d) (i) any of the representations and warranties (other
than Section 4.05) made by the Company in the Agreement shall not
have been true and correct when made, or shall thereafter have
ceased to be true and correct as if made as of such latter date
(other than representations and warranties made as of a specified
date) (without regard to any Company Material Adverse Effect
contained in such representations or warranties) except to the
extent that any such failure to be true and correct, individually
or in the aggregate, would not have a Company Material Adverse
Effect, (ii) Section 4.05 shall not have been true and correct in
all material respects when made, or (iii) the Company shall not in
all material respects have performed each material obligation and
agreement and complied with each material covenant to be performed
and complied with by it under the Agreement;
(e) this Agreement shall have been terminated in accordance
with its terms; or.
(f) there shall have occurred an event, change, occurrence,
or development of a state of facts or circumstances having a
Company Material Adverse Effect.
which in the reasonable judgment of Parent or Merger Subsidiary makes it
inadvisable to proceed with the Offer and/or with such acceptance for
payment of, or payment for, Shares.
For purposes of this Annex A, the term "Minimum Condition"
means that there shall have been validly tendered and not withdrawn prior
to the expiration of the Offer that number of Shares that would constitute
more than 662/3% of the voting power (determined on a fully-diluted basis)
on the date of purchase in the Offer of all the securities of the Company.
For purposes of this Agreement, the term "fully-diluted basis" shall mean
the number of Shares outstanding, together with the Shares which the
Company may be required to issue pursuant to warrants, options or
obligations outstanding at that date under any Employee Benefit
Arrangements or otherwise, whether or not vested or then exercisable.
The foregoing conditions are for the benefit of Parent and
Merger Subsidiary and may, subject to the terms of this Agreement, be
waived by Parent and Merger Subsidiary in whole or in part at any time and
from time to time in their discretion. The failure by Parent or Merger
Subsidiary at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances, and each such right
shall be deemed an ongoing right that may be asserted at any time and from
time to time prior to the Effective Time.
The capitalized terms used in this Annex A but not defined
herein shall have the meanings set forth in the Agreement to which it is
annexed.