Exhibit 99.1
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
BY
AND
AMONG
STEEL PARTNERS II, L.P.,
BZ ACQUISITION CORP.
AND
BAIRNCO CORPORATION
DATED AS OF FEBRUARY 23, 2007
TABLE OF CONTENTS
Page
ARTICLE I TERMS OF THE
MERGER................................................2
1.1.
The
Offer............................................................2
1.2.
Company
Actions......................................................4
1.3.
Directors of the
Company.............................................5
1.4.
The
Merger...........................................................6
1.5.
The Closing; Effective
Time..........................................6
1.6.
Conversion of
Securities.............................................7
1.7.
Tender of and Payment for
Certificates...............................7
1.8.
Options and Restricted
Stock.........................................9
1.9.
Dissenting
Shares...................................................10
1.10. Certificate of Incorporation and
Bylaws.............................10
1.11. Directors and
Officers..............................................10
1.12. Other Effects of
Merger.............................................11
1.13. Additional
Actions..................................................11
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE
COMPANY....................11
2.1.
Due Organization and Good
Standing..................................12
2.2.
Capitalization......................................................12
2.3.
Authorization; Binding
Agreement....................................14
2.4.
Governmental
Approvals..............................................14
2.5.
No
Violations.......................................................14
2.6.
SEC Filings; Company Financial
Statements...........................15
2.7.
Absence of Certain
Changes..........................................16
2.8.
Absence of Undisclosed
Liabilities..................................17
2.9.
Permits.............................................................18
2.10.
Litigation..........................................................18
2.11. Material
Contracts..................................................18
2.12. Intellectual
Property...............................................18
2.13. Employee Benefit
Plans..............................................19
2.14. Taxes and
Returns...................................................21
2.15. Finders and Investment
Bankers......................................21
2.16. Fairness
Opinion....................................................22
2.17. Vote Required; DGCL Section
203.....................................22
2.18. Environmental
Matters...............................................22
2.19. Schedule 14D-9; Offer Documents; and Proxy
Statement................23
2.20. Rights
Plan.........................................................23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
PURCHASER.....................23
3.1.
Due Organization and Good
Standing..................................23
3.2.
Authorization; Binding
Agreement....................................24
3.3.
Governmental
Approvals..............................................24
3.4.
No
Violations.......................................................24
3.5.
Finders and Investment
Bankers......................................25
3.6.
Disclosures.........................................................25
i
3.7.
Financing...........................................................26
3.8.
Litigation..........................................................26
3.9.
No Prior
Activities.................................................26
ARTICLE IV ADDITIONAL COVENANTS OF THE
COMPANY..............................26
4.1.
Conduct of Business of the
Company..................................26
4.2.
Notification of Certain
Matters.....................................29
4.3.
Access and
Information..............................................29
4.4.
Special Meeting; Proxy
Statement....................................30
4.5.
Reasonable
Efforts..................................................31
4.6.
Public
Announcements................................................31
4.7.
Compliance..........................................................31
4.8.
No
Solicitation.....................................................32
4.9.
SEC and Stockholder
Filings.........................................34
4.10. State Takeover
Laws.................................................34
ARTICLE V ADDITIONAL COVENANTS OF
PURCHASER.................................34
5.1.
Notification of Certain
Matters.....................................34
5.2.
Reasonable
Efforts..................................................35
5.3.
Compliance..........................................................35
5.4.
Indemnification.....................................................35
5.5.
Public
Announcements................................................37
5.6.
Employee
Matters....................................................37
ARTICLE VI
CONDITIONS.......................................................37
6.1.
Conditions to Each Party's
Obligations..............................37
6.2.
Condition to Obligations of
Purchaser...............................38
6.3.
Frustration of
Conditions...........................................38
ARTICLE VII TERMINATION AND
ABANDONMENT.....................................38
7.1.
Termination.........................................................38
7.2.
Effect of
Termination...............................................39
7.3.
Fees and
Expenses...................................................39
ARTICLE VIII
MISCELLANEOUS..................................................41
8.1.
Confidentiality.....................................................41
8.2.
Amendment and
Modification..........................................42
8.3.
Waiver of Compliance;
Consents......................................42
8.4.
Survival............................................................42
8.5.
Notices.............................................................42
8.6.
Binding Effect;
Assignment..........................................43
8.7.
Governing
Law.......................................................43
8.8.
Counterparts........................................................44
8.9.
Interpretation......................................................44
8.10. Entire
Agreement....................................................44
8.11.
Severability........................................................45
8.12. Specific
Performance................................................45
8.13. Attorneys'
Fees.....................................................45
8.14. Third
Parties.......................................................45
ii
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this
"AGREEMENT")
is made and entered
into as of February 23, 2007,
by and among Steel
Partners II, L.P., a Delaware
limited partnership ("PURCHASER"),
BZ Acquisition Corp., a Delaware corporation
and
wholly-owned
subsidiary
of
Purchaser
("MERGER
SUB"),
and
Bairnco
Corporation, a Delaware corporation (the "COMPANY").
WITNESSETH:
A. The respective Boards of Directors or other governing body or
entity of
Merger Sub,
Purchaser and the Company deem it advisable that Purchaser
acquire
the Company
upon the terms and subject to the
conditions
provided for in this
Agreement.
B. Merger Sub has
outstanding a cash tender offer (the "EXISTING
OFFER",
and,
as
amended
from
time to time in
accordance
with this
Agreement,
the
"OFFER") to purchase and acquire all shares of the issued and
outstanding common
stock,
par value
$0.01 per share
(the
"COMMON
STOCK"),
and the
associated
preferred stock purchase rights (the "RIGHTS",
and, together with the shares of
Common Stock,
the
"SHARES"),
of the Company,
on the terms and subject to the
conditions
set forth in the Offer to
Purchase,
dated June 22, 2006
(together
with all amendments and supplements thereto, the "OFFER TO
PURCHASE").
C. The Board of
Directors of the Company
(the
"BOARD") has
unanimously
approved the
Agreement,
the Offer and the Merger (as defined
below),
and the
Board has determined that such approval is sufficient to render
inapplicable to
this Agreement, the Offer, the Merger and the other transactions
contemplated by
this
Agreement
the
restriction
against the parties
hereto,
or any of their
affiliates,
engaging in any business combination as set forth in Section 203 of
the Delaware
General
Corporation
Law ("DGCL")
and has
determined
that this
Agreement,
the Offer and the
Merger
and the other
transactions
contemplated
hereby and thereby are
advisable to the Company and its
stockholders,
and has
resolved to
recommend
that
holders of Shares
accept the Offer,
tender their
Shares to Merger Sub pursuant to the Offer and adopt this
Agreement.
D. The Board of
Directors
or other
governing
body or entity of each of
Purchaser (on its own behalf and as the sole stockholder of Merger
Sub),
Merger
Sub and the Company have each approved
this
Agreement and the merger of Merger
Sub with and into the Company (the "MERGER"), with the Company
continuing as the
surviving
corporation
in the Merger in
accordance
with the DGCL and, in each
such case, upon the terms and conditions set forth in this
Agreement.
E. The Board has declared a quarterly cash dividend of $.10 per
Share (the
"DIVIDEND")
which will be payable to the
stockholders of the Company of record
on the close of business on March 5, 2007 (the "DIVIDEND RECORD
DATE"),
and has
approved the payment of one-time
bonuses to each officer,
director or employee
of the Company who owns any unexercised options to purchase stock
of the Company
as of the close of business on the
Dividend
Record
Date,
whether or not such
options are currently
exercisable or vested,
to account for the Dividend which
would not otherwise be payable to such optionholders.
1
F. Concurrently with the execution and delivery of this Agreement
and as a
condition
and
inducement
to
Purchaser's
willingness
to
enter
into
this
Agreement, Purchaser and certain executive officers and directors
of the Company
(the
"STOCKHOLDERS")
are entering
into a Tender and Support
Agreement in the
form attached hereto as EXHIBIT A (the "TENDER AND SUPPORT
AGREEMENT")
pursuant
to which such
Stockholders
are agreeing to take certain actions to support the
transactions contemplated by this Agreement.
NOW,
THEREFORE,
in
consideration
of the
representations,
warranties,
covenants and agreements contained in this Agreement and intending
to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
TERMS OF THE MERGER
1.1.
THE OFFER.
(a) Promptly
following
the
execution
and
delivery of this
Agreement,
Purchaser
shall
amend,
and
Purchaser
shall cause
Merger Sub to amend,
the
Existing
Offer to increase the purchase price for the Offer to $13.50 per
Share
(such
amount or any greater
amount per Share paid
pursuant to the Offer being
hereinafter
referred
to as the
"OFFER
PRICE"),
subject
to
any
applicable
withholding for Taxes (as such term is defined in Section
2.14(d)),
net to the
seller in cash.
For the
avoidance
of doubt,
the
parties
hereto
agree that
restricted
stock of the
Company
("RESTRICTED
STOCK")
may be tendered in the
Offer and be acquired by Merger Sub pursuant to the Offer.
(b)
Provided
that
this
Agreement
shall not have
been
terminated
in
accordance with Section 7.1,
Purchaser
shall amend,
and Purchaser shall cause
Merger Sub to amend, the Offer to Purchase as soon as practicable
after the date
hereof,
but in no event later than five (5)
business
days (as defined in Rule
14d-1(g)(3)
of the Securities
Exchange Act of 1934, as amended
(together with
the rules and regulations promulgated thereunder,
the "EXCHANGE ACT")) from the
date of this Agreement,
to reflect the terms set forth in this
Agreement,
the
Minimum Condition and the other conditions set forth in Annex A
hereto and other
related
terms and Purchaser and Merger Sub shall cause the Offer to remain
open
for a period through March 16, 2007 (the
"EXPIRATION
DATE"),
unless
extended
pursuant to the terms of this Agreement.
The obligation of Merger Sub to accept
for payment and to pay for any Shares validly
tendered and not withdrawn
prior
to the
expiration
of the Offer (as it may be extended in
accordance
with the
requirements of this Section
1.1(b)) shall be subject only to the
satisfaction
(or, in the case of clause (ii) below,
the
satisfaction or waiver by Purchaser
or Merger Sub) of the following conditions: (i) there being validly
tendered and
not
withdrawn
prior to the
expiration
of the Offer that
number of shares of
Common
Stock
which,
together
with any
shares of Common
Stock then owned by
Purchaser,
Merger Sub or any affiliates thereof, represents at least a
majority
of the total number of shares of Common
Stock
outstanding
on a
fully-diluted
basis (the
"MINIMUM
CONDITION");
and (ii) the other
conditions
set forth in
Annex A hereto.
Subject to the prior
satisfaction of the Minimum Condition and
the satisfaction or waiver by Purchaser or Merger Sub of the other
conditions of
the Offer set forth in Annex A hereto,
Merger Sub shall consummate the Offer in
accordance with its terms and accept for payment and pay for all
Shares tendered
and not
withdrawn
promptly
following
the
acceptance
of Shares for
payment
pursuant
to the
Offer.
The
Offer
shall
be made by
means
of the
Offer to
2
Purchase. Merger Sub expressly reserves the right to waive any of
the conditions
set forth in Annex A (other than the Minimum
Condition),
to increase the Offer
Price
and to make
any
other
changes
in the
terms of the
Offer;
PROVIDED,
HOWEVER, that Merger Sub shall not, and Purchaser shall cause
Merger Sub not to,
decrease the Offer Price, change the form of consideration payable
in the Offer,
decrease the number of Shares sought in the Offer, impose
additional
conditions
to the Offer,
extend the Offer beyond the Expiration Date,
purchase any Shares
pursuant
to the Offer
that when
added to Shares
owned by
Purchaser
and its
affiliates
would
represent less than the Minimum
Condition or amend any other
term or
condition
of the Offer in any
manner
adverse
to the
holders of the
Shares,
in each case
without the prior
written
consent of the Company
(such
consent to be authorized by the Board or a duly authorized
committee
thereof).
Notwithstanding
the
foregoing,
Merger
Sub may,
without
the
consent of the
Company,
prior to the termination of this
Agreement,
(i) if, at any scheduled
expiration
of the Offer any of the
conditions
to Merger Sub's
obligation
to
accept Shares for payment (including, without limitation, the
Minimum Condition)
shall not be
satisfied or waived,
extend the Offer beyond the then
applicable
expiration
date thereof for a time period
reasonably
necessary to permit such
condition to be
satisfied in
increments
of not more than five
business
days
each, but in no event shall such
extensions
exceed an aggregate of 20 business
days, or (ii) extend the Offer for any period
required by any rule,
regulation
or
interpretation
of the United
States
Securities
and
Exchange
Commission
("SEC"),
or the staff
thereof,
applicable
to the Offer,
or (iii) if, at any
scheduled
expiration
of the Offer,
the number of shares of Common
Stock that
shall
have been
validly
tendered
and not
withdrawn
pursuant
to the Offer,
together with any shares of Common Stock then owned by Purchaser,
Merger Sub or
any affiliates thereof, satisfies the Minimum Condition but
represents less than
90% of the
shares of Common
Stock
outstanding,
extend the Offer (one or more
times) for an aggregate
additional period of not more than twenty (20) business
days.
Merger
Sub may also,
without
the
consent of the
Company,
in lieu of
extending the Offer pursuant to clause (iii) above,
make available a subsequent
offering
period in
accordance
with Rule 14d-11
under the Exchange Act of not
less than ten business days nor more than 20 business days.
(c) As
promptly
as
practicable
following
the date of this
Agreement,
Purchaser and Merger Sub shall file with the SEC an amendment to
their
existing
Tender
Offer
Statement
on
Schedule
TO
(together
with all
amendments
and
supplements
thereto, the "SCHEDULE TO") with respect to the Offer. The Schedule
TO shall contain or
incorporate by reference the Offer to Purchase and forms of
the
related
letter of
transmittal
and all other
ancillary
Offer
documents
(collectively,
together with all amendments and supplements thereto, the "OFFER
DOCUMENTS").
Purchaser
and Merger Sub shall
cause the Offer
Documents
to be
disseminated
to the
holders
of the Shares as and to the
extent
required
by
applicable federal
securities laws.
Purchaser and Merger Sub, on the one hand,
and the
Company,
on the other hand,
will
promptly
correct
any
information
provided by it for use in the Offer Documents if and to the extent
that it shall
have become false or
misleading
in any material
respect,
and Merger Sub will
cause the Offer
Documents
as so
corrected
to be filed with the SEC and to be
disseminated
to
holders
of the
Shares,
in each
case
as and to the
extent
required by
applicable
federal
securities
laws.
The Company and its counsel
shall be given a reasonable opportunity to review and comment upon
the amendment
to the Schedule TO and the Offer to Purchase before they are filed
with the SEC.
In
addition,
Purchaser
and Merger Sub agree to provide
the
Company
and its
counsel with any comments, whether written or oral, that Purchaser
or Merger Sub
or their
counsel may
receive
from time to time from the SEC or its staff with
respect to the Offer
Documents
promptly after the receipt of such comments and
to consult
with the
Company and its counsel
prior to
responding
to any such
comments.
3
(d) As promptly as practicable after the date of this Agreement,
Purchaser
and Merger Sub shall terminate their
solicitation of written
consents from the
Company's
stockholders
in connection
with the Existing
Offer and amend their
Consent
Statement
filed
with
the
SEC on
January
12,
2007
(the
"CONSENT
STATEMENT") to provide for such
termination,
and in no event shall
Purchaser,
Merger Sub or any of their
affiliates take any action to replace the members of
the Board, by stockholder meeting, consent solicitation or
otherwise, other than
pursuant
to the
terms
of this
Agreement;
provided,
however,
that
nothing
contained in this Agreement shall prevent Purchaser,
Merger Sub or any of their
affiliates
from
taking any such
action to replace the members of the Board at
any time
following
the earlier of the
termination
of this
Agreement and the
First
Acceptance Time (as defined in Section 7.1 below).
The Company agrees to
take all
required
action to postpone its 2007 annual
meeting of
stockholders
until no earlier than May 10, 2007.
1.2.
COMPANY ACTIONS.
(a)
The
Company
hereby
approves
of
and
consents
to the
Offer
and
represents
and warrants that the Board,
at a meeting duly called and held, has
(i)
determined
that the terms of the Offer and the Merger are advisable to the
stockholders of the Company,
(ii) approved this Agreement and the
transactions
contemplated
hereby,
including the Offer and the Merger,
and (iii) subject to
Section 4.8,
resolved to recommend that the
stockholders of the Company accept
the
Offer,
tender
their
Shares
to Merger
Sub
thereunder
and
adopt
this
Agreement.
The Company hereby
consents to the inclusion in the Offer Documents
of the
recommendation
of the
Board
described
in the
immediately
preceding
sentence, and the Company shall not permit the recommendation of
the Board to be
modified
in any
manner
adverse
to
Purchaser,
Merger
Sub
or any of
their
respective
affiliates or to be withdrawn by the Board,
except as
specifically
provided in Section 4.8 hereof.
(b) As promptly as
practicable
following
the filing of the amendment to
the Schedule TO pursuant to Section 1.1(c), the Company shall file
with the SEC,
an amendment
to its
Solicitation/Recommendation
Statement
on Schedule
14D-9
(together with all amendments and
supplements
thereto,
the "SCHEDULE
14D-9")
with respect to the Offer, which shall contain the recommendation
referred to in
clause
(iii) of Section
1.2(a)
hereof,
subject to Section
4.8.
The Company
further
agrees
to take all
steps
necessary
to cause
the
amendment
to the
Schedule 14D-9 to be
disseminated to holders of the Shares as and to the extent
required by applicable
federal
securities laws. The Company,
on the one hand,
and each of Purchaser and Merger Sub, on the other hand,
will promptly
correct
any
information
provided
by it for use in the
Schedule
14D-9
if and to the
extent that it shall have become false or
misleading
in any material
respect,
and the Company will cause the
Schedule
14D-9 as so corrected to be filed with
the SEC and to be disseminated to holders of the Shares,
in each case as and to
the extent required by applicable
federal
securities
laws.
Purchaser and its
counsel shall be given a reasonable
opportunity
to review and comment upon the
amendment
to the
Schedule
14D-9 before it is filed with the SEC. In addition,
the Company agrees to provide
Purchaser,
Merger Sub and their counsel with any
comments,
whether
written or oral, that the Company or its counsel may receive
from time to time from the SEC or its staff with respect to the
Schedule
14D-9
promptly
after the
receipt of such
comments
and to consult
with
Purchaser,
Merger Sub and their counsel prior to responding to any such
comments.
4
(c) The Company
shall
promptly
furnish
Merger Sub with mailing
labels
containing
the names and
addresses
of all
record
holders of Shares and with
security
position listings of Shares held in stock
depositories,
each as of a
recent date,
together
with all other
available
listings
and computer
files
containing names, addresses and security position listings of
record holders and
non-objecting
beneficial owners of Shares. The Company shall furnish Merger Sub
with
such
additional
information,
including,
without
limitation,
updated
listings and computer
files of holders of Shares,
mailing
labels and security
position listings,
and such other assistance as Purchaser,
Merger Sub or their
agents
may
reasonably
require
in
communicating
the Offer to the record and
beneficial holders of Shares.
1.3.
DIRECTORS OF THE COMPANY.
(a) Immediately
upon the purchase of and payment for Shares by Merger Sub
or any of its affiliates
pursuant to the Offer
following
satisfaction
of the
Minimum
Condition,
Purchaser
shall be
entitled to
designate
such number of
directors,
rounded up to the next whole number, on the Board as is equal to
the
product
obtained by multiplying
the total number of directors on such Board by
the percentage
that the number of Shares so purchased and paid for bears to the
total number of Shares then outstanding, but in no event less than
a majority of
the number of
directors.
In
furtherance
thereof,
the
Company and its Board
shall,
after the purchase of and payment for Shares by Merger Sub or any
of its
affiliates
pursuant
to the
Offer,
upon
request of Merger
Sub,
immediately
increase the size of its Board of
Directors,
secure the
resignations
of such
number of directors or remove such number of directors,
or any
combination
of
the foregoing,
as is necessary to enable Purchaser's designees to be so elected
to the Company's
Board and shall cause
Purchaser's
designees to be so elected
and
shall
comply
with
Section
14(f)
of the
Exchange
Act and
Rule
14f-1
promulgated
thereunder
in connection
therewith.
In the event that Merger Sub
requests the resignation of directors of the Company pursuant to
the immediately
preceding
sentence,
the Company
shall cause such
directors of the Company to
resign as may be designated by Merger Sub in a writing delivered to
the Company.
Immediately
upon the first
purchase of and payment for Shares by Merger Sub or
any of its affiliates
pursuant to the Offer, the Company shall, if requested by
Purchaser,
also cause directors
designated by Purchaser to constitute at least
the same
percentage
(rounded up to the next whole number) of each committee of
the Board as is on the
Board.
Notwithstanding
the
foregoing,
if Shares
are
purchased pursuant to the Offer, the Company shall use its
reasonable efforts to
assure that there shall be until the Effective Time (as hereinafter
defined) at
least two of the members of the Board who are
directors
on the date hereof and
are not employees of the Company (each a "CONTINUING Director").
In addition to
any
indemnification
rights
pursuant
to
this
Agreement
or
the
Company's
Certificate of Incorporation,
as amended (the "CERTIFICATE OF
INCORPORATION"),
and Amended and Restated
Bylaws (the "Bylaws"),
the Continuing
Directors as a
group shall be entitled to retain
independent
legal counsel at Company expense
if and to the extent that issues are
presented
to them that involve a conflict
of interest for Company
counsel.
The Company and its Board shall promptly take
all
actions as may be
necessary
to comply with their
obligations
under this
Section
1.3(a).
If at any time prior to the
Effective
Time there shall be in
office only one Continuing
Director for any reason, the Board shall be entitled
to
appoint a person who is not an officer
or
employee
of the
Company or any
subsidiary
designated by the remaining Continuing Director to fill such
vacancy
5
(and such person shall be deemed to be a Continuing Director for
all purposes of
this
Agreement),
and if at any time prior to the Effective
Time no Continuing
Directors then remain,
the other
directors of the Company then in office shall
use their reasonable efforts to designate two persons to fill such
vacancies who
are not officers or employees or
affiliates of the Company,
its
subsidiaries,
Purchaser or Merger Sub or any of their respective
affiliates (and such persons
shall be deemed to be Continuing Directors for all purposes of this
Agreement).
(b) The
Company
shall
promptly
take all actions
required
pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order
to
fulfill
its
obligations
under
Section
1.3(a),
including
mailing
to
stockholders
together with the amendment to the Schedule 14D-9 the
information
required
by such
Section
14(f)
and Rule
14f-1
as is
necessary
to
enable
Purchaser's designees to be elected to the Board.
Purchaser and Merger Sub will
supply the Company and be solely responsible for any information
with respect to
them and their
nominees,
officers,
directors and affiliates
required by such
Section 14(f) and Rule 14f-1.
(c) Following the election of Purchaser's
designees to the Board pursuant
to this
Section
1.3 and prior to the
Effective
Time,
(i) any
amendment
or
termination
of this
Agreement by the Company,
(ii) any extension or waiver by
the Company of the time for the
performance of any of the
obligations or other
acts of Purchaser or Merger Sub under this Agreement, or (iii) any
waiver of any
of the
Company's
rights
hereunder
or any other
action that could
adversely
effect
in
any
material
respect
the
rights
of the
Company's
stockholders
hereunder shall, in any such case,
require the concurrence of a majority of the
directors of the Company then in office who neither were designated
by Purchaser
nor are employees of the Company (the "INDEPENDENT DIRECTOR
APPROVAL").
1.4.
THE MERGER.
Upon the terms and subject to the conditions of this Agreement, the
Merger
shall be consummated in accordance
with the DGCL. At the Effective
Time,
upon
the terms and subject to the conditions of this
Agreement,
Merger Sub shall be
merged with and into the Company in
accordance
with the DGCL and the
separate
existence of Merger Sub shall thereupon cease and the Company,
as the surviving
corporation
in the Merger (the
"SURVIVING
CORPORATION"),
shall
continue its
corporate
existence
under the laws of the State of Delaware as a
wholly-owned
subsidiary of the direct parent of Merger Sub immediately prior to
the Effective
Time. It is intended that the Merger shall
constitute a taxable purchase of the
Shares for federal, state and local tax purposes.
1.5.
THE CLOSING; EFFECTIVE TIME.
(a) Unless
this
Agreement
shall have been
terminated
previously,
the
closing of the Merger (the "CLOSING")
shall take place at the offices of Olshan
Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65
East 55th Street,
New York, New York 10022,
at 10:00 a.m. local time on a date to be specified by
the parties
which shall be no later than the third
business day after the date
that all of the closing
conditions
set forth in Article VI have been satisfied
or waived (if waivable),
unless
another time,
date or place is agreed upon in
writing by the parties hereto.
6
(b) Subject to the provisions of this
Agreement,
on the Closing Date the
parties
shall
file
with the
Secretary
of State of the State of
Delaware
a
certificate of merger in accordance with the DGCL (the
"CERTIFICATE OF Merger")
executed in accordance
with the relevant
provisions of the DGCL and shall make
all other filings or recordings
required
under the DGCL in order to effect the
Merger.
The Merger shall become effective upon the filing of the
Certificate of
Merger or at such other time as is agreed by the parties hereto and
specified in
the
Certificate of Merger.
The time when the Merger shall become
effective is
herein
referred to as the "EFFECTIVE
TIME" and the date on which the Effective
Time occurs is herein referred to as the "CLOSING DATE."
1.6.
CONVERSION OF SECURITIES.
At the
Effective
Time, by virtue of the Merger and without any action on
the part of the holders of any securities of Merger Sub or the
Company:
(a) Each Share that is owned by Merger Sub or the direct
parent of Merger
Sub, or that is owned by the Company as treasury stock,
shall
automatically be
cancelled and retired and shall cease to exist,
and no
consideration
shall be
delivered in exchange therefor.
(b) Each issued and
outstanding
Share (other than Shares to be cancelled
in accordance
with Section 1.6(a) hereof and
Dissenting
Shares (as defined in
Section 1.9 below)) shall
automatically
be converted into the right to receive
the Offer Price in cash (the "MERGER CONSIDERATION"), payable,
without interest,
to the holder of such Share upon
surrender,
in the manner
provided in Section
1.7 hereof,
of the
certificate
that formerly
evidenced such Share.
All such
Shares,
when
so
converted,
shall
no
longer
be
outstanding
and
shall
automatically be cancelled and retired and shall cease to exist,
and each holder
of a
certificate
representing
any such Shares
shall cease to have any rights
with
respect
thereto,
except
the right to receive
the Merger
Consideration
therefor upon the surrender of such
certificate in accordance
with Section 1.7
hereof.
(c) Each issued and outstanding
share of common stock of Merger Sub shall
be converted
into one validly
issued,
fully paid and
nonassessable
share of
common stock of the Surviving Corporation.
1.7.
TENDER OF AND PAYMENT FOR CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time, Purchaser shall
designate a
bank or trust company
reasonably
acceptable to the Company to act as agent for
the holders of the Shares (other than Shares to be cancelled in
accordance
with
Section 1.6(a) hereof and Dissenting
Shares) in connection with the Merger (the
"PAYING AGENT") to receive in trust the aggregate Merger
Consideration to which
holders of Shares
shall
become
entitled
pursuant to Section
1.6(b)
hereof.
Purchaser
shall deposit such
aggregate
Merger
Consideration
with the Paying
Agent promptly following the Effective Time. Such aggregate Merger
Consideration
shall be invested by the Paying Agent as directed by Purchaser.
(b) EXCHANGE PROCEDURES.
Promptly after the Effective Time, Purchaser and
the Surviving
Corporation shall cause to be mailed to each holder of record, as
of the Effective Time, of a certificate or certificates, which
immediately prior
to the Effective Time represented outstanding Shares (the
"CERTIFICATES"), whose
7
Shares
were
converted
pursuant
to Section
1.6(b)
hereof
into the right to
receive the Merger
Consideration,
a letter of transmittal (which shall specify
that delivery shall be effected,
and risk of loss and title to the Certificates
shall pass,
only upon proper
delivery of the
Certificates to the Paying Agent
and
shall be in such form and have
such
other
provisions
as
Purchaser
may
reasonably
specify) and
instructions for use in effecting the surrender of the
Certificates
in exchange
for the Merger
Consideration.
Upon
surrender
of a
Certificate
for
cancellation
to the Paying
Agent or to such
other
agent or
agents
as
may
be
appointed
by
Purchaser,
together
with
such
letter
of
transmittal,
properly
completed
and
duly
executed
in
accordance
with the
instructions
thereto,
the
holder of such
Certificate
shall be
entitled
to
receive in exchange
therefor the Merger
Consideration
for each Share formerly
represented
by such
Certificate,
and the
Certificate
so
surrendered
shall
forthwith be cancelled.
No interest will be paid or accrued on the cash payable
upon the surrender of the Certificates.
If payment of the Merger
Consideration
is to be made to a person
other than the
person in whose name the
surrendered
Certificate
is
registered,
it
shall
be a
condition
of
payment
that
the
Certificate so surrendered
shall be properly
endorsed or shall be otherwise in
proper form for transfer and that the person
requesting such payment shall have
paid all transfer and other Taxes required by reason of the
issuance to a person
other than the registered
holder of the
Certificate
surrendered or shall have
established
to the
satisfaction
of the
Surviving
Corporation
that such Tax
either has been paid or is not applicable.
Until surrendered as contemplated by
this
Section
1.7,
each
Certificate
shall be
deemed
at any time
after the
Effective Time to represent
only the right to receive the Merger
Consideration
for each Share in cash as contemplated by Section 1.6(b) hereof.
(c) TRANSFER
BOOKS;
NO FURTHER
OWNERSHIP
RIGHTS IN THE SHARES.
At the
Effective
Time, the stock
transfer
books of the Company shall be closed,
and
thereafter there shall be no further
registration of transfers of the Shares on
the records of the Company.
From and after the Effective
Time,
the holders of
Certificates evidencing ownership of the Shares outstanding
immediately prior to
the
Effective
Time shall cease to have any rights with respect to such Shares,
except as
otherwise
provided
for herein or by
applicable
law. If, after the
Effective Time,
Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this
Article I.
(d) TERMINATION OF FUND; NO LIABILITY. At any time following the
six-month
anniversary of the Effective Time, the Surviving
Corporation
shall be entitled
to require the Paying Agent to deliver to it any funds
(including
any interest
received
with
respect
thereto)
which had been made
available
to the Paying
Agent,
and
holders
shall be
entitled
to look to the
Surviving
Corporation
(subject to abandoned
property,
escheat or other similar laws) only as general
creditors
thereof
with
respect to the Merger
Consideration
payable upon due
surrender of their
Certificates
without any interest thereon.
Notwithstanding
the foregoing,
neither the Surviving
Corporation
nor the Paying Agent nor any
party
hereto
shall
be
liable
to any
holder
of a
Certificate
for
Merger
Consideration
delivered
to
a
public
official
pursuant
to
any
applicable
abandoned property, escheat or similar law.
(e)
LOST,
STOLEN
OR
DESTROYED
CERTIFICATES.
In
the
event
any
Certificate(s) shall have been lost, stolen or destroyed,
upon the making of an
affidavit of that fact by the person
claiming such
Certificate(s)
to be lost,
stolen or destroyed and, if required by Purchaser, the posting by
such person of
a bond in such sum as Purchaser may reasonably
direct as indemnity
against any
8
claim that may be made
against any party
hereto or the
Surviving
Corporation
with respect to such
Certificate(s),
the Paying Agent will disburse the Merger
Consideration
pursuant
to
Section
1.6(b)
payable
in
respect of the Shares
represented by such lost, stolen or destroyed Certificate(s).
(f) WITHHOLDING TAXES. Purchaser, Merger Sub and the Surviving
Corporation
shall be entitled to deduct and
withhold,
or cause the Paying
Agent to deduct
and withhold,
from the Offer Price, the Merger Consideration or the Cash Amount
(as defined below) payable to a holder of Shares
(including,
for the avoidance
of doubt,
Restricted
Stock) or Company
Options (as defined below) pursuant to
the Offer or the Merger,
as the case may be, any such
amounts as are
required
under the
Internal
Revenue
Code of 1986,
as
amended
(the
"CODE"),
or any
applicable
provision
of state,
local or foreign
Tax law.
To the extent that
amounts are so withheld by Purchaser or Merger Sub, such withheld
amounts shall
be treated for all purposes of this
Agreement as having been paid to the holder
of the Shares in respect of which such
deduction
and
withholding
was made by
Purchaser or Merger Sub.
1.8.
OPTIONS AND RESTRICTED STOCK.
(a) With
respect to all
outstanding
options
to
purchase
Shares
(the
"COMPANY
OPTIONS")
granted under the Company's
1990 Stock Plan and 2000 Stock
Incentive Plan (the "COMPANY
OPTION
PLANS") or otherwise,
whether or not then
vested, immediately prior to the consummation of the Offer, subject
to the terms
and conditions set forth below in this Section 1.8(a),
each holder of a Company
Option will be entitled
to receive
from the
Company,
and shall
receive,
in
settlement
of each Company
Option a Cash Amount.
The "CASH
Amount"
shall be
equal to the net amount of (A) the
product of (i) the
excess,
if any,
of the
Offer Price over the exercise price per share of such Company
Option immediately
prior to the consummation of the Offer,
multiplied by (ii) the number of shares
subject to such Company Option, less (B) any applicable
withholdings for Taxes.
If the
exercise
price per share of any
Company
Option
equals or exceeds the
Offer
Price,
the Cash
Amount
therefor
shall be
zero.
Notwithstanding
the
foregoing, payment of the Cash Amount is subject to written
acknowledgement,
in
a
form
reasonably
acceptable
to
Purchaser,
consenting
to
the
foregoing
arrangement
and that no further payment is due to such holder on account of any
Company Option and all of such holder's
rights under such Company
Options have
terminated.
(b) Immediately prior to the consummation of the Offer, except as
provided
in this Section 1.8,
all rights under any Company
Option and any
provision of
the Company Option Plans and any other plan,
program or
arrangement
providing
for the issuance or grant of any other
interest in respect of the capital stock
of the Company shall be cancelled.
The Company shall use reasonable
efforts to
ensure
that,
immediately
prior to, as of and
after the
consummation
of the
Offer,
except as provided in this
Section
1.8, no person shall have any right
under the Company Option Plans or any other plan,
program or
arrangement
with
respect
to
securities
of
the
Company,
the
Surviving
Corporation
or
any
subsidiary thereof.
(c)
Prior
to the
consummation
of the
Offer,
the
Company
shall
use
reasonable
efforts to cause to be
effected
any
necessary
amendments
to the
Company
Option Plans and any other
resolutions,
consents or notices,
in such
form
reasonably
acceptable
to
Purchaser,
required
under any of the Company
Option Plans or any Company
Options to give effect to the foregoing
provisions
of this Section 1.8.
9
(d) The Company
shall take all actions
necessary
to cause all shares of
Restricted Stock of the Company to become fully vested
immediately prior to the
consummation of the Offer and shall make all required withholdings
in connection
therewith under applicable Tax Laws.
1.9.
DISSENTING SHARES.
Notwithstanding
any
provision of this
Agreement to the
contrary,
each
outstanding
Share, the holder of which has demanded and perfected such holder's
right to dissent from the Merger and to be paid the fair value of
such Shares in
accordance
with the DGCL and, as of the
Effective
Time,
has not
effectively
withdrawn or lost such dissenters' rights
("DISSENTING
Shares"),
shall not be
converted
into or
represent a right to receive the Merger
Consideration
into
which Shares are converted
pursuant to Section
1.6(b)
hereof,
but the holder
thereof
shall be
entitled
only to such
rights
as are
granted
by the DGCL.
Notwithstanding the immediately
preceding sentence, if any holder of Shares who
demands dissenters' rights with respect to its Shares under the
DGCL effectively
withdraws or loses
(through
failure to perfect or otherwise)
its
dissenters'
rights, then as of the Effective Time or the occurrence of such
event, whichever
later occurs,
such holder's
Shares will
automatically
be converted
into and
represent
only the right to receive
the Merger
Consideration
as
provided in
Section
1.6(b)
hereof,
without
interest
thereon,
upon
surrender
of
the
certificate
or
certificates
formerly
representing
such
Shares.
After
the
Effective
Time,
Purchaser
shall
cause the
Company to make all
payments
to
holders of Shares with respect to such demands in accordance
with the DGCL. The
Company shall give
Purchaser (i) prompt
written notice of any notice of intent
to demand fair value for any Shares,
withdrawals of such notices, and any other
instruments
served
pursuant to the DGCL and received by the Company,
and (ii)
the
opportunity
to direct all
negotiations
and
proceedings
with respect to
demands for fair value for Shares under the DGCL. The Company shall
not,
except
with the prior written consent of Purchaser,
voluntarily
make any payment with
respect
to any
demands
for fair value for Shares or offer to settle or settle
any such demands.
1.10. CERTIFICATE OF INCORPORATION AND BYLAWS.
Subject to Section 5.4 hereof,
at and after the Effective
Time until the
same
have
been duly
amended,
(i) the
Certificate
of
Incorporation
of the
Surviving
Corporation shall be identical to the Certificate of Incorporation
of
Merger Sub in effect at the Effective
Time and (ii) the Bylaws of the Surviving
Corporation
shall be
identical
to the
Bylaws of Merger
Sub in effect at the
Effective Time.
1.11. DIRECTORS AND OFFICERS.
At and after the Effective
Time, the directors of Merger Sub
immediately
prior to the Effective Time shall be the directors of the Surviving
Corporation,
and the officers of Merger Sub immediately
prior to the Effective Time shall be
the officers of the Surviving Corporation,
except as Merger Sub shall otherwise
provide in writing, in each case until their successors are elected
or appointed
and qualified.
If, at the Effective Time, a vacancy shall exist on the Board of
Directors
or in any
office of the
Surviving
Corporation,
such
vacancy
may
thereafter be filled in the manner provided by law.
10
1.12. OTHER EFFECTS OF MERGER.
The Merger shall have all further
effects as specified in the
applicable
provisions of the DGCL.
1.13. ADDITIONAL ACTIONS.
If, at any time after the Effective Time, the Surviving
Corporation shall
consider or be advised that any deeds, bills of sale, assignments,
assurances or
any other
actions or things are
necessary
or
desirable
to vest,
perfect or
confirm of record or otherwise in the Surviving
Corporation its right, title or
interest in, to or under any of the rights,
properties
or assets of Merger Sub
or the Company or otherwise carry out this Agreement, the officers
and directors
of the Surviving
Corporation shall be authorized to execute and deliver, in the
name and on behalf of Merger Sub or the Company,
all such deeds, bills of sale,
assignments
and
assurances
and to take and do,
in the name and on
behalf of
Merger Sub or the Company, all such other actions and things as may
be necessary
or desirable to vest,
perfect or confirm any and all right,
title and interest
in, to and under such rights,
properties or assets in the Surviving Corporation
or otherwise to carry out this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The following
representations
and warranties by the Company to Purchaser
and Merger Sub are
qualified
by the Company
Disclosure
Schedule,
which sets
forth certain
disclosures
concerning
the Company,
its
subsidiaries
and its
business (the "COMPANY DISCLOSURE SCHEDULE").
The Company hereby represents and
warrants to Purchaser and Merger Sub as follows:
11
2.1.
DUE ORGANIZATION AND GOOD STANDING.
Each of the Company and its subsidiaries is a corporation or other
form of
entity duly organized,
validly
existing and in good standing under the laws of
the
jurisdiction of its
organization and has all requisite power and authority
to own,
lease and operate its
properties
and to carry on its
business as now
being
conducted.
Each of the Company and its subsidiaries is duly qualified or
licensed and in good standing to do business in each
jurisdiction
in which the
character of the property
owned,
leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing
necessary, except
where the failure to be so duly qualified or licensed and 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" shall mean a material
adverse effect on the business,
financial
condition
or
results
of
operations
of
the
Company
and
its
subsidiaries,
taken as a whole, or the ability of the Company to consummate the
transactions
contemplated by this
Agreement,
except in each case for any such
effects
resulting
from,
arising
out of or
relating to (a) the taking of any
action
or
incurring
of
any
expense
pursuant
to
this
Agreement
or
the
transactions
contemplated
hereby,
(b) the entry into or
announcement of this
Agreement and the other transactions
contemplated
hereby, (c) any change in or
interpretations of (i) U.S. generally accepted accounting
principles ("GAAP") or
(ii) any Law, (d) any change in interest rates or general economic
conditions in
the
industries
or
markets
in which the
Company
or any of its
subsidiaries
operates (which changes do not affect the Company or any of its
subsidiaries to
a materially
disproportionate
degree related to the entities operating in such
markets or industries or serving such markets) or affecting the
United States or
foreign
economies
in
general or in the
United
States or foreign
financial,
banking
or
securities
markets,
or (e) any
natural
disaster
or act of God.
Company Material Adverse Effect does not include any adverse change
in the stock
price of the
Company in and of itself or any
changes,
events,
conditions
or
effects
relating
solely
to
Purchaser
or any of
its
affiliates'
financial
condition,
results of operation or business.
The Company has
heretofore
made
available
to
Purchaser
accurate and
complete
copies of the
Certificate
of
Incorporation
and Bylaws or other
organizational
documents,
as
currently in
effect, of the Company and each of its subsidiaries.
2.2.
CAPITALIZATION.
(a) The
authorized
capital
stock of the Company
consists of 30,000,000
shares of Common Stock and 5,000,000
shares of preferred
stock, par value $.01
per share (the
"PREFERRED
STOCK"
and,
together
with the Common
Stock,
the
"COMPANY
CAPITAL STOCK").
As of the close of business on the date hereof,
(i)
7,293,978 shares of Common Stock were issued and outstanding,
(ii) no shares of
Preferred Stock were issued and outstanding,
and (iii) 348,061 shares of Common
Stock were reserved for issuance pursuant to outstanding Company
Options. All of
the
outstanding
shares of Company Capital Stock are, and all shares of Company
Capital
Stock
which may be issued
pursuant
to the
exercise
of
outstanding
Company
Options will be, when issued in accordance
with the
respective
terms
thereof, duly authorized, validly issued, fully paid and
non-assessable. None of
the
outstanding
securities
of the Company has been issued in violation of any
federal or state securities laws.
(b)
Except
as set
forth
above and on
SECTION
2.2(B)
of the
Company
Disclosure
Schedule,
as of the
date
hereof,
(i)
the
Company
directly
or
indirectly
owns all of the capital stock of, or other equity
interests in, its
12
subsidiaries,
free and clear of all
Encumbrances
(as defined below),
and all
such capital stock of, and other equity interests in, the Company's
subsidiaries
are duly
authorized,
validly
issued,
fully paid and
nonassessable
and were
issued free of preemptive
rights and in compliance with
applicable
Laws, (ii)
there are no existing
options,
warrants,
puts,
calls,
preemptive or similar
rights,
bonds,
debentures,
notes or other indebtedness
having general voting
rights or debt convertible into securities having such rights
("VOTING DEBT") or
subscriptions
or other rights,
agreements,
arrangements or commitments of any
character,
relating to the issued or unissued capital stock of, or other
equity
interests in, the Company or any of its
subsidiaries
obligating the Company or
any of its
subsidiaries
to
issue,
transfer
or sell or cause
to be
issued,
transferred,
sold or
repurchased
any
options or shares of
capital
stock or
Voting
Debt
of,
or
other
equity
interest
in,
the
Company
or any of its
subsidiaries or securities
convertible
into or exchangeable for such shares or
equity interests, or obligating the Company or any of its
subsidiaries to grant,
extend or enter
into any such
option,
warrant,
call,
subscription
or other
right,
agreement,
arrangement or commitment and (iii) there are no outstanding
contractual obligations of the Company or any of its subsidiaries
to repurchase,
redeem or otherwise
acquire any Company
Capital Stock,
or other capital stock
of, or equity interests in, the Company or any of its subsidiaries
or to provide
funds to make any investment
(in the form of a loan,
capital
contribution
or
otherwise) in any other entity.
(c) There are no voting trusts or other
agreements or
understandings
to
which the Company is a party with
respect to the voting of the Company
Capital
Stock.
(d) Following the Effective
Time, no holder of Company
Options will have
any right to receive
shares of common stock of the Surviving
Corporation
upon
exercise of Company Options.
(e) Except as set forth in the Company SEC Reports (as defined
below) and
as
set
forth
on
SECTION
2.2(E)
of
the
Company
Disclosure
Schedule,
no
Indebtedness of the Company or any of its subsidiaries
contains any restriction
upon (i) the
prepayment
of any of such
Indebtedness,
(ii) the
incurrence of
Indebtedness by the Company or any of its subsidiaries,
or (iii) the ability of
the Company or any of its
subsidiaries
to grant any lien on its
properties or
assets. As used in this Agreement, "INDEBTEDNESS" means (A) all
indebtedness for
borrowed money or for the deferred purchase price of property or
services (other
than current trade
liabilities
incurred in the ordinary course of business and
payable in accordance with customary practices), (B) any other
indebtedness that
is
evidenced
by a
note,
bond,
debenture
or
similar
instrument,
(C)
all
obligations
in respect of
acceptances
issued or created and (D) all guarantee
obligations.
(f)
SECTION
2.2(F)
of the
Company
Disclosure
Schedule
lists (i) all
Company
Options
outstanding
as of the date hereof,
the name of the holder of
each Company
Option,
the date of grant and the exercise
price of such Company
Option, the number of shares of Common Stock as to which such
Company Option has
vested and the vesting
schedule for such Company
Option and (ii) all shares of
Restricted Stock outstanding as of the date hereof,
the names of the holders of
the Restricted Stock and the vesting schedule for the Restricted
Stock.
13
2.3.
AUTHORIZATION; BINDING AGREEMENT.
The Company has all requisite corporate power and authority to
execute and
deliver
this
Agreement,
the
Tender
and
Support
Agreement
and the
Rights
Amendment (as defined below) (collectively, the "COMPANY
TRANSACTION Documents")
and
to
consummate
the
transactions
contemplated
hereby
and
thereby.
The
execution and delivery of the Company Transaction Documents and the
consummation
of the transactions contemplated hereby and thereby,
including, but not limited
to, the Offer and the Merger, have been duly and validly authorized
and approved
by the
Board,
such
approval
is
sufficient
to render
inapplicable
to this
Agreement, the Offer, the Merger and the other transactions
contemplated by this
Agreement
the
provisions
of Section 203 of the DGCL such that said
provision
will
not
apply
to this
Agreement,
the
Offer,
the
Merger
and
the
other
transactions
contemplated by this Agreement, and no other corporate proceedings
on the part of the Company are necessary to authorize the execution
and delivery
of
the
Company
Transaction
Documents
or
to
consummate
the
transactions
contemplated
hereby or thereby (other than the requisite approval of the Merger
by the
stockholders
of the Company in accordance
with the DGCL).
Each of the
Company
Transaction
Documents has been duly and validly executed and delivered
by the Company and
constitutes
the legal,
valid and binding
agreement of the
Company, enforceable against the Company in accordance with its
terms, except to
the extent that enforceability
thereof may be limited by applicable bankruptcy,
insolvency,
reorganization
or other similar laws affecting the
enforcement of
creditors'
rights
generally
and
by
principles
of
equity
regarding
the
availability of remedies ("ENFORCEABILITY EXCEPTIONS").
2.4.
GOVERNMENTAL APPROVALS.
No consent, approval, waiver or authorization of, notice to or
declaration
or
filing
with
("CONSENT"),
any
nation
or
government,
any state or other
political
subdivision
thereof,
any
entity,
authority
or
body
exercising
executive,
legislative,
judicial, regulatory or administrative functions of or
pertaining to government,
including,
without
limitation,
any governmental or
regulatory authority, agency, department,
board, commission,
administration or
instrumentality,
any
court,
tribunal
or
arbitrator
or any
self-regulatory
organization ("GOVERNMENTAL AUTHORITY") on the part of the Company
or any of its
subsidiaries is required to be obtained or made in connection with
the execution
or
delivery by the Company of any of the
Company
Transaction
Documents,
the
Offer, the Merger or the
consummation by the Company of the other
transactions
contemplated
hereby or thereby other than (i) the filing of the
Certificate of
Merger with the Secretary of State of the State of Delaware in
accordance
with
the DGCL, (ii) filings with the SEC and state
securities
laws
administrators,
(iii) such filings as may be required in any
jurisdiction
where the Company is
qualified
or
authorized
to do business as a foreign
corporation
in order to
maintain
such
qualification
or
authorization,
(iv)
pursuant to
applicable
requirements of the
Hart-Scott-Rodino
Antitrust
Improvements
Act of 1976, as
amended (the "HSR Act"),
and (v) those Consents that, if they were not obtained
or made,
would not
reasonably
be
expected
to have,
individually
or in the
aggregate, a Company Material Adverse Effect.
2.5.
NO VIOLATIONS.
Except as set forth on SECTION 2.5 of the Company Disclosure
Schedule, the
execution and delivery of each of the Company Transaction
Documents,
the Offer,
the Merger, the consummation of the other transactions
contemplated
hereby and
14
thereby and
compliance
by the Company
with any of the
provisions
hereof and
thereof will not (i) conflict
with or result in any breach of any
provision of
the Certificate of Incorporation or Bylaws or other governing
instruments of the
Company or any of its subsidiaries,
(ii) require any Consent under or result in
a material
violation or material breach of, or constitute
(with or without due
notice or lapse of time or both) a material
default
(or give rise to any right
of
termination,
cancellation
or
acceleration)
under,
any
of
the
terms,
conditions or provisions of any Company
Material
Contract (as defined
below),
(iii)
result in the
creation or
imposition
of any liens,
charges,
security
interests,
options, claims, mortgages,
pledges,
assessments,
adverse claims,
rights of others or restrictions (whether on voting, sale,
transfer, disposition
or otherwise) or other
encumbrances or
restrictions of any nature
whatsoever,
whether imposed by agreement,
understanding,
law or equity, or any conditional
sale
contract,
title
retention
contract or other contract to give or refrain
from giving any of the
foregoing
("ENCUMBRANCES")
of any kind upon any of the
material
assets of the Company or any of its
subsidiaries
or (iv)
subject to
obtaining the Consents from Governmental
Authorities referred to in Section 2.4
hereof,
contravene
in any
material
respect any
applicable
provision of any
statute,
law,
rule or
regulation
or any
legally
binding
order,
decision,
injunction,
judgment, award or decree ("LAW" or "LAWS") to which the Company or
any of its subsidiaries any of their respective assets or
properties is subject.
2.6.
SEC FILINGS; COMPANY FINANCIAL STATEMENTS.
(a) The Company has filed all forms,
reports,
schedules,
statements and
other documents
required to be filed by the Company with the SEC since December
31, 2004 under the Exchange Act or the
Securities
Act of 1933, as amended (the
"SECURITIES
ACT").
All such required forms,
reports and documents
(including
those that the Company may file
subsequent
to the date hereof) are referred to
herein as the
"COMPANY
SEC
REPORTS." At the time when filed (or if amended or
superseded
by a subsequent
filing prior to the date hereof then on the date of
such later
filing),
the Company SEC Reports (i) as amended to date complied in
all material respects with the applicable
requirements of the Securities Act or
the
Exchange
Act, as the case may be, the
Sarbanes-Oxley
Act of 2002 and the
rules and
regulations
of the SEC
thereunder
applicable
to such
Company SEC
Reports
and
(ii)
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.
Between
the date of this
Agreement and the Closing
Date,
the Company will timely file
with the SEC all documents required to be filed by it under the
Exchange Act.
(b) Each of the
consolidated
financial
statements
(including,
in each
case, any related notes thereto) contained in the Company SEC
Reports as amended
to date (the
"COMPANY
FINANCIALS"),
including
each
Company SEC Report filed
after the date hereof until the Closing,
(i) was prepared
from,
in accordance
with and accurately
reflects in all material
respects the Company's
books and
records as of the times and for the periods
referred to therein,
(ii) complied
in all material
respects with the published
rules and
regulations
of the SEC
with respect
thereto,
(iii) was prepared in accordance
with GAAP applied on a
consistent
basis throughout the periods involved (except as may be indicated
in
the notes thereto or, in the case of unaudited interim financial
statements,
as
may be
permitted
by the SEC on Form 10-Q
under the
Exchange
Act),
and (iv)
fairly
presented the consolidated
financial
position of the Company as at the
15
respective
dates
thereof
and
the
consolidated
results
of
the
Company's
operations and cash flows for the periods
indicated,
except that the unaudited
interim
financial
statements may not contain footnotes and were or are subject
to normal and recurring year-end
adjustments.
The balance sheet of the Company
contained in the Company SEC Report as of September 30, 2006 (the
"BALANCE SHEET
DATE") as filed with the SEC before the date hereof is
hereinafter
referred to
as the "COMPANY BALANCE SHEET."
(c) The Company has heretofore
made available to Purchaser a complete and
correct copy of any amendments or
modifications,
which have not yet been filed
with the SEC but which are
required to be filed,
to
agreements,
documents or
other
instruments
which
previously had been filed by the Company with the SEC
pursuant to the Securities Act or the Exchange Act.
(d)
Except
as set forth on
SECTION
2.6(D)
of the
Company
Disclosure
Schedule,
the Company has
established
and maintains
disclosure
controls and
procedures (as defined in Rules 13a-14 and 15d-14 promulgated under
the Exchange
Act)
designed to ensure that
material
information
relating to the Company is
made known to the Chief Executive
Officer and Chief Financial
Officer.
To the
Company's knowledge,
there is no fraud, whether or not material,
that involves
management
or other
employees
who have a
significant
role in the
Company's
internal controls.
2.7.
ABSENCE OF CERTAIN CHANGES.
Except as set forth in SECTION
2.7 of the
Company
Disclosure
Schedule,
from the Balance
Sheet Date to the date hereof,
neither the Company nor any of
its subsidiaries has:
(a) suffered any Company
Material
Adverse
Effect or any event or change
which is
reasonably
expected
to have or
constitute,
individually
or in the
aggregate, a Company Material Adverse Effect;
(b) paid,
discharged or satisfied any claims,
liabilities or obligations
(absolute,
accrued,
contingent or otherwise) other than the payment, discharge
or
satisfaction
in the ordinary
course of business and
consistent
with past
practice of claims, liabilities and obligations reflected or
reserved against in
the Company
Balance
Sheet or incurred in the
ordinary
course of business and
consistent with past practice since the Balance Sheet Date;
(c) permitted or allowed any of its
properties or assets (real,
personal
or mixed,
tangible or intangible) to be subjected to any
Encumbrances,
except
for liens for current
Taxes not yet due or liens the
incurrence of which would
not reasonably be expected to have,
individually or in the aggregate, a Company
Material Adverse Effect;
(d)
sold,
transferred
or
otherwise
disposed
of any
of its
material
properties or assets (real, personal or mixed,
tangible or intangible),
except
in the ordinary course of business, consistent with past practice;
(e) granted any material
increase in the compensation or benefits payable
or to become payable to any director, officer or employee, except
in the case of
employees
other than officers for such
increases in
compensation
or benefits
made in the ordinary course of business,
consistent with past practice, or made
any material change in severance policy or practices;
16
(f) other than
capital
expenditures
in
accordance
with the
Company's
capital expenditure budget for the 2007 fiscal year (the "CAPEX
BUDGETS"),
made
any capital expenditure or acquired any property,
plant or equipment for a cost
in excess of $250,000 in the aggregate;
(g)
declared,
paid or set
aside
for
payment
any
dividend
or
other
distribution (whether in cash, stock or property) in respect of
their respective
capital
stock or other equity
interests
or
redeemed,
purchased or otherwise
acquired,
directly
or
indirectly,
any
shares
of
capital
stock
or
other
securities or equity
interests,
other than dividends and
distributions to the
Company or one if its wholly-owned
subsidiaries or the Company's quarterly cash
dividend payments to stockholders;
(h) (i) made
any
changes
in any of the
accounting
methods
used by it
materially
affecting
its
assets,
liabilities
or
business,
except for such
changes required by GAAP; or (ii) made or changed any election
relating to Taxes
to the extent inconsistent with past practice, adopted or changed
any accounting
method relating to Taxes,
entered into any closing agreement relating to Taxes,
filed any amended Tax Return,
settled or consented
to any claim or
assessment
relating to Taxes,
but in each case in clauses (i) and (ii), only to the extent
such action
could
reasonably
be expected to have a Company
Material
Adverse
Effect, and in each case in clause (ii), except as required by
applicable Law;
(i) paid, loaned, modified or advanced any amount to, or sold,
transferred
or leased
any
properties
or assets
(real,
personal
or mixed,
tangible
or
intangible) to, or entered into any agreement or arrangement
with, any of their
respective officers,
directors or stockholders or any affiliate or associate of
any
of
their
respective
officers,
directors
or
stockholders,
except
for
directors'
fees,
expense
reimbursements
in the
ordinary
course of business
consistent with past practice and compensation and benefits to
officers at rates
not inconsistent with past practice;
(j) granted, issued,
accelerated,
paid, accrued or agreed to pay or make
any accrual or
arrangement
for
payments
or benefits
pursuant to any Company
Employee Plans (as defined in Section
2.13(a) below) except in accordance
with
the terms of the
respective
Company
Employee
Plans,
or adopted
any Company
Employee
Plan,
or amended any Company
Employee
Plan,
except in the ordinary
course of business
consistent
with past
practice
and except as
permitted or
contemplated by this Agreement; or
(k)
authorized or agreed,
whether in writing or
otherwise,
to take any
action described in this Section 2.7.
2.8.
ABSENCE OF UNDISCLOSED LIABILITIES.
As of the date
hereof,
except (a) as
disclosed
in the Company
Balance
Sheet or the Company SEC Reports or (b) for liabilities and
obligations incurred
in the
ordinary
course of business
consistent
with past
practice
since the
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