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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
SOVEREIGN HOLDINGS, INC.,
SOVEREIGN MERGER SUB, INC.
AND
SABRE HOLDINGS CORPORATION
DATED AS OF
DECEMBER 12, 2006
<PAGE>
TABLE OF CONTENTS
Article 1. Defined Terms and
Interpretation....................................1
Section 1.1 Certain
Definitions.........................................1
Section 1.2 Terms Defined
Elsewhere.....................................6
Section 1.3
Interpretation..............................................8
Article 2. The
Merger..........................................................9
Section 2.1 The
Merger..................................................9
Section 2.2
Closing.....................................................9
Section 2.3 Effective
Time.............................................10
Section 2.4 Effect of the
Merger.......................................10
Section 2.5 Certificate of Incorporation;
By-laws......................10
Section 2.6 Directors and
Officers.....................................10
Article 3. Conversion of Securities; Exchange of
Certificates.................10
Section 3.1 Conversion of
Securities...................................10
Section 3.2 Exchange of
Certificates...................................11
Section 3.3 Dissenters'
Rights.........................................13
Section 3.4 Stock Transfer
Books.......................................14
Section 3.5 Company Options and Stock-Based
Awards.....................14
Article 4. Representations and Warranties of the
Company......................15
Section 4.1 Organization and Qualification;
Subsidiaries...............15
Section 4.2 Capitalization;
Subsidiaries...............................16
Section 4.3
Authority..................................................17
Section 4.4 No Conflict; Required Filings and
Consents.................17
Section 4.5 Compliance with
Laws.......................................18
Section 4.6 SEC Filings; Financial
Statements..........................18
Section 4.7 Affiliate
Transactions.....................................20
Section 4.8 Absence of Certain Changes or
Events.......................20
Section 4.9 Benefit Plans; Employees and Employment
Practices..........21
Section 4.10 Contracts;
Indebtedness....................................23
Section 4.11
Litigation.................................................24
Section 4.12 Environmental
Matters......................................25
Section 4.13 Intellectual
Property......................................25
Section 4.14
Taxes......................................................26
Section 4.15
Insurance..................................................27
Section 4.16 Real
Estate................................................27
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Section 4.17 Board
Approval.............................................28
Section 4.18
Brokers....................................................28
Article 5. Representations and Warranties of Parent and Merger
Sub............28
Section 5.1 Organization and
Qualification.............................29
Section 5.2
Authority..................................................29
Section 5.3 No Conflict; Required Filings and
Consents.................29
Section 5.4
Litigation.................................................30
Section 5.5 Ownership of Merger Sub; No Prior
Activities...............30
Section 5.6
Financing..................................................30
Section 5.7 Vote
Required..............................................31
Section 5.8
Brokers....................................................31
Section 5.9 Ownership of Company Common
Stock..........................31
Section 5.10 Solvency of the Surviving
Corporation......................31
Article 6.
Covenants..........................................................32
Section 6.1 Conduct of Business by the Company Pending the
Closing.....32
Section 6.2 Proxy Statement; Company Stockholders'
Meeting.............35
Section 6.3 Access to Information;
Confidentiality.....................36
Section 6.4 No Solicitation of
Transactions............................37
Section 6.5 Best
Efforts...............................................39
Section 6.6 Certain
Notices............................................40
Section 6.7 Public
Announcements.......................................41
Section 6.8 Employee
Matters...........................................41
Section 6.9 Indemnification of Directors and
Officers..................42
Section 6.10 State Takeover
Statutes....................................44
Section 6.11 Section 16
Matters.........................................44
Section 6.12
NDA........................................................45
Section 6.13 Solvency of the Surviving
Corporation......................45
Section 6.14
Financing..................................................45
Section 6.15 Cooperation in Securing
Financing..........................46
Section 6.16 Subsequent
Filings.........................................48
Section 6.17 Cooperation in Obtaining
Consents..........................49
Article 7. Closing
Conditions.................................................49
Section 7.1 Conditions to Obligations of Each Party Under This
Agreement.................................................49
Section 7.2 Additional Conditions to Obligations of Parent and
Merger Sub................................................49
Section 7.3 Additional Conditions to Obligations of the
Company........50
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Section 7.4 Frustration of Closing
Conditions..........................50
Article 8. Termination, Amendment and
Waiver..................................51
Section 8.1
Termination................................................51
Section 8.2 Effect of
Termination......................................52
Section 8.3 Fees and
Expenses..........................................53
Section 8.4 Termination
Fee............................................53
Section 8.5 Business Interruption
Fee..................................53
Section 8.6 Extension;
Waiver..........................................54
Section 8.7
Amendment..................................................54
Article 9. General
Provisions.................................................54
Section 9.1 Non-Survival of Representations and
Warranties.............54
Section 9.2
Notices....................................................55
Section 9.3
Headings...................................................56
Section 9.4
Severability...............................................56
Section 9.5 Entire
Agreement...........................................56
Section 9.6
Assignment.................................................57
Section 9.7 Mutual
Drafting............................................57
Section 9.8 Governing Law; Consent to Jurisdiction; Waiver of
Trial
by Jury...................................................57
Section 9.9
Counterparts...............................................58
EXHIBIT A.1 - Equity Commitment Letter
EXHIBIT A.2 - Limited Guarantee
EXHIBIT B.1 - List of Company Executives
EXHIBIT B.2 - List of Parent and Merger Sub Executives
EXHIBIT C - Merger Sub Certificate of Incorporation and By-laws
EXHIBIT D - Company Representatives for Access to Information
iii
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AGREEMENT AND PLAN OF MERGER, dated as of December 12, 2006, by
and among Sovereign Holdings, Inc., a Delaware corporation
("Parent"), Sovereign
Merger Sub, Inc., a Delaware corporation and a wholly-owned direct
Subsidiary of
Parent ("Merger Sub"), and Sabre Holdings Corporation, a Delaware
corporation
(the "Company"). Each of Parent, Merger Sub and the Company are
referred to
herein as a "Party" and together as "Parties".
WHEREAS, the respective Boards of Directors of Parent, Merger
Sub and the Company have approved and declared advisable the merger
of Merger
Sub with and into the Company (the "Merger") upon the terms and
subject to the
conditions of this Agreement and Plan of Merger, including the
exhibits and
disclosure schedules attached hereto (the "Agreement") and in
accordance with
the General Corporation Law of the State of Delaware (the
"DGCL");
WHEREAS, the respective Boards of Directors of each of Parent,
Merger Sub and the Company have determined that the Merger is in
furtherance of,
and consistent with, their respective business strategies and is in
the best
interest of their respective stockholders, and have approved and
declared
advisable or adopted, in the case of the Board of Directors of the
Company, this
Agreement and the Merger;
WHEREAS, concurrently with the execution of this Agreement, and
as a condition to the willingness of the Company to enter into this
Agreement,
TPG Partners V, L.P. and Silver Lake Partners II, L.P. (each, a
"Fund") is
entering into an Equity Commitment Letter (the "Equity Commitment
Letter") and a
Limited Guarantee (the "Limited Guarantee") in the forms attached
as Exhibits
A.1 and A.2, respectively, pursuant to which such Fund is, among
other things,
guaranteeing certain obligations of Parent and Merger Sub in
connection with
this Agreement and agreeing to provide equity financing to Parent
in connection
with the transactions contemplated hereby; and
WHEREAS, Parent, Merger Sub and the Company wish to make
certain representations, warranties, covenants and agreements in
connection with
the Merger and also to prescribe certain conditions to the
Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements
set forth in
this Agreement and intending to be legally bound hereby, the
Parties agree as
follows:
Article 1.
Defined Terms and Interpretation
Section 1.1 Certain Definitions.
For purposes of this Agreement, the term:
"Affiliate" shall mean a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or
is under
common control with, the first-mentioned Person, where "control"
(including the
terms "controlled by" and "under common control with") shall mean
the
possession, directly or indirectly or as trustee or executor, of
the power to
direct or cause the direction of the management or policies of a
Person, whether
through the ownership of stock or as trustee or executor, by
Contract or
otherwise.
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"Benefit Plan" shall mean any employment, consulting,
severance, termination, retirement, profit sharing, bonus,
incentive or deferred
compensation, retention bonus or change in control agreement,
deferred
compensation, bonus, pension, stock option, restricted stock or
other
equity-based benefit, profit sharing, savings, retirement, life,
health,
disability, accident, medical, insurance, vacation, paid time off,
long term
care, executive or other employee allowance program, other welfare
fringe
benefit or other employee compensation or benefit plan, program,
arrangement,
agreement, fund or commitment, including any "employee benefit
plan" as defined
in Section 3(3) of ERISA, whether or not subject to ERISA.
"Blue Sky Laws" shall mean state securities or "blue sky" Laws.
"Business Day" shall mean any day other than a Saturday, Sunday
and any day which is a legal holiday under the Laws of the State of
New York or
the State of Texas or is a day on which banking institutions
located in the
State of New York or the State of Texas are authorized or required
by Law or
other governmental action to close.
"Code" shall mean the United States Internal Revenue Code of
1986, as amended.
"Company Benefit Plan" shall mean any Benefit Plan for the
benefit or welfare of any current or former director, officer,
employee or
independent contractor of the Company or any Company
Subsidiary.
"Company By-laws" shall mean the Amended and Restated Bylaws of
the Company, effective as of May 18, 2005.
"Company Certificate" shall mean the Third Restated Certificate
of Incorporation of the Company, as filed with the Secretary of
State of the
State of Delaware on May 17, 2005.
"Company Common Stock" shall mean the Class A Common Stock of
the Company, par value $.01 per share.
"Company Material Adverse Effect" shall mean a material adverse
effect on the business, properties, assets, results of operations
or financial
condition of the Company and the Company Subsidiaries taken as a
whole;
provided, that in no event shall any of the following be taken into
account in
determining whether a "Company Material Adverse Effect" has
occurred or is
likely or expected to occur: (a) any change in the Company's stock
price or
trading volume in and of itself; (b) the public announcement or the
pendency of
this Agreement or any of the transactions contemplated herein or
any actions
taken at the request or with the express consent of Parent,
including the impact
thereof on the relationships of the Company or the Company
Subsidiaries with
customers, suppliers, distributors, consultants, employees or
independent
contractors or other third parties with whom the Company or any
Company
Subsidiary has any relationship; (c) any failure by the Company to
meet any
projections or forecasts for any period occurring on or after the
date hereof,
in and of itself; (d) changes generally affecting any segment of
the industries
in which the Company or the Company Subsidiaries operate; (e)
changes generally
affecting the economy or financial markets generally; (f) acts of
God,
calamities, national or international political or social
conditions including
the engagement by any country in hostilities, whether commenced
before or after
the date hereof, and whether or not pursuant to the declaration of
a national
emergency or war, or the occurrence of any military or terrorist
attack; or (g)
changes in Law or GAAP (or any interpretation thereof); provided,
however, that
the foregoing clauses (d), (e) and (f) shall not apply to the
extent that the
adverse effect upon the Company and the Company Subsidiaries is
disproportionately greater to the Company and the Company
Subsidiaries taken as
a whole, relative to other companies (taking into account the
relative size of
their assets and businesses) engaged in the industries in which the
Company or
the Company Subsidiaries operate.
2
<PAGE>
"Company Permits" shall mean all permits, licenses,
authorizations, franchises, approvals, registrations,
qualifications, rights,
variances, certificates, certifications, consents and Orders of all
Governmental
Entities necessary to own, lease and operate the properties of the
Company
and/or the Company Subsidiaries and for the lawful conduct of their
business as
currently conducted.
"Continuing Employee" shall mean any Person who is employed by
the Company or any Company Subsidiary as of the Effective Time
(including
Persons on disability or leave of absence, whether paid or unpaid)
other than
any Person covered by a collective bargaining or similar labor
agreement.
"Contract" shall mean any note, bond, mortgage, indenture,
lease, license, permit, concession, franchise, guarantee, contract,
agreement or
other instrument or obligation.
"Environment" shall mean any ambient, workplace or indoor air,
surface water, drinking water, groundwater, land surface,
subsurface strata,
river sediment, plant or animal life, natural resources, and real
property and
the buildings, structures, improvements and fixtures thereon.
"Environmental Laws" shall mean any Law relating to: (a) the
protection, remediation, preservation, reclamation or cleanup of
the
Environment; (b) the management, handling, use, storage,
transportation,
treatment, disposal, recycling or Release or threatened Release of
any Hazardous
Materials; or (c) the protection of human health and safety,
including, without
limitation, occupational health and safety and exposure of
employees and other
persons to any Hazardous Materials.
"Equity Interest" shall mean any share, capital stock,
partnership, member or similar interest in any entity and any
option, warrant,
right or security convertible, exchangeable or exercisable
therefor.
"Exchange Act" shall mean the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
"GAAP" shall mean generally accepted accounting principles as
applied in the United States.
"Governmental Entity" shall mean any domestic, foreign,
multinational, central, local or municipal governmental,
administrative,
judicial or regulatory authority.
"Group" shall have the meaning provided in Section 13(d) of the
Exchange Act, except where the context otherwise requires.
"Guarantee" shall mean, with respect to any Person, (a) any
guarantee of the payment or performance of, or any contingent
obligation in
respect of, any Indebtedness or other liability of any other Person
and (b) any
other arrangement whereby credit is extended to any obligor (other
than such
Person) on the basis of any promise or undertaking of such Person
(i) to pay the
Indebtedness or other liability of such obligor, (ii) to purchase
any obligation
owed by such obligor, (iii) to purchase or lease assets under
circumstances that
are designed to enable such obligor to discharge one or more of its
obligations
or (iv) to maintain the capital, working capital, solvency or
general financial
condition of such obligor.
3
<PAGE>
"Hazardous Materials" shall mean (i) any petroleum or any
fraction thereof, petroleum products or byproducts, radioactive
materials,
asbestos or any asbestos-containing materials, polychlorinated
biphenyls, (ii)
any pollutant or contaminant, or (iii) any waste, material or
substance defined
as a "hazardous substance," "hazardous material," or "hazardous
waste" or
regulated or giving rise to liability under any Environmental
Law.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated
thereunder.
"Indebtedness" of any Person shall mean (a) all obligations or
indebtedness of such Person for or in respect of borrowed money or
the deferred
purchase price of property or services, including earn-outs but
excluding trade
payables on ordinary trade terms incurred in the ordinary course of
business,
(b) all obligations or indebtedness of such Person evidenced by
notes, bonds,
debentures or similar instruments, (c) reimbursement obligations
with respect to
all letters of credit, surety bonds and similar instruments issued
for the
account of such Person, (d) all payment obligations of such Person
under any
interest rate and currency protection agreement (including, without
limitation,
any swaps, forward contracts, caps, floors, collars and similar
agreements) and
commodity swaps, forward contracts and other hedging and similar
agreements
(including breakage and associated fees), (e) all obligations of
such Person
under capital leases (computed in accordance with GAAP) and (f) all
obligations
in the nature of Guarantees of the obligations described in clauses
(a) through
(e) above of any other Person, including principal, accrued
interest, premium
(if any), and prepayment penalties.
"Intellectual Property" shall mean, collectively, all patents,
patent rights, inventions and discoveries (whether or not
patentable or reduced
to practice), trademarks, trade names, corporate names, company
names, business
names, fictitious business names, trade styles, service marks,
logos and other
source or business identifiers, copyrights, trade secrets and all
other
confidential or proprietary information and know-how, whether or
not reduced to
writing or any other tangible form, and other proprietary
intellectual property
rights and computer programs arising under the laws of the United
States
(including any state or territory), any other country or group of
countries or
any political subdivision of any of the foregoing, whether
registered or
unregistered.
"Knowledge" shall mean (i) in the case of the Company, the
actual knowledge of the Persons listed on Exhibit B.1 and (ii) in
the case of
Parent, Merger Sub or any other member of the Parent Group, the
actual knowledge
of the Persons listed on Exhibit B.2.
"Law" shall mean any foreign, multinational or domestic law,
statute, code, ordinance, rule, regulation, or Order.
"Lien" shall mean any mortgage, deed of trust, pledge, security
interest, encumbrance, lien (statutory or not), easement,
right-of-way,
encroachment, third-party right or charge of any kind (including
any conditional
sale or other title retention agreement or lease in the nature
thereof).
"Multiemployer Plan" shall mean any "multiemployer plan" within
the meaning of Section 3(37) of ERISA.
4
<PAGE>
"Multiple Employer Plan" shall mean any "multiple employer
plan" within the meaning of Sections 4063/4064 of ERISA or Section
413(c) of the
Code.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Order" shall mean any order, judgment, writ, stipulation,
award, injunction, decree, determination, requirement, arbitration
award or
finding of any Governmental Entity.
"Parent Group" shall mean Parent and its Affiliates.
"Person" shall mean an individual, corporation, limited
liability company, partnership, association, trust, estate,
unincorporated
organization or other entity or organization.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping or
disposing into the Environment, including the abandonment or
discarding of
barrels, containers and other receptacles.
"Representative" shall mean any of the Company Representatives
or Parent Representatives.
"Sarbanes-Oxley Act" shall mean the United States
Sarbanes-Oxley Act of 2002, as amended, and the rules and
regulations
promulgated thereunder.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the United States Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder.
"Subsidiary" or "Subsidiaries" of the Company, the Surviving
Corporation or any other Person shall mean any corporation,
partnership, joint
venture or other legal entity of which the Company, the Surviving
Corporation or
such other Person, as the case may be (either alone or through or
together with
any other Subsidiary), owns, directly or indirectly, a majority of
the stock or
other Equity Interests, the holders of which are generally entitled
to vote for
the election of the board of directors or other governing body of
such
corporation or other legal entity.
"Superior Proposal" shall mean a bona fide written Takeover
Proposal (with all of the percentages included in the definition of
Takeover
Proposal increased to 50%) which the Company Board determines in
good faith
(after consultation with its financial advisors and legal counsel)
(i) is
reasonably likely to be consummated in accordance with its terms
and (ii) if
consummated, would result in a transaction more favorable (in each
case with
respect to clauses (i) and (ii), taking into account, among other
things, the
Person or Group making such Takeover Proposal and all legal,
financial,
regulatory, fiduciary and other aspects of this Agreement and such
Takeover
Proposal, including any conditions relating to financing,
regulatory approvals
or other events or circumstances beyond the control of the Party
invoking the
condition and taking into account any revisions made or proposed in
writing by
Parent or Merger Sub prior to the time of determination) to the
holders of
Company Common Stock than the transactions provided for in this
Agreement.
"Surviving Corporation Benefit Plan" shall mean any Benefit
Plan for the benefit or welfare of any Continuing Employee, whether
maintained
by Parent, the Surviving Corporation or any of their
Subsidiaries.
5
<PAGE>
"Takeover Proposal" shall mean any inquiry, proposal or offer
relating to (i) the acquisition of more than twenty-five (25)
percent of the
outstanding shares of Company Common Stock and any other voting
securities of
the Company by any Third Party, (ii) a merger, consolidation,
business
combination, reorganization, share exchange, sale of assets,
recapitalization,
liquidation, dissolution or similar transaction which would result
in any Third
Party acquiring twenty-five (25) percent or more of the fair market
value of the
assets of the Company and the Company Subsidiaries, taken as a
whole (including
capital stock of Company Subsidiaries), (iii) any other transaction
which would
result in a Third Party acquiring twenty-five (25) percent or more
of the fair
market value of the assets of the Company and the Company
Subsidiaries, taken as
a whole (including capital stock of Company Subsidiaries),
immediately prior to
such transaction (whether by purchase of assets, acquisition of
stock of a
Company Subsidiary or otherwise) or (iv) any combination of the
foregoing.
"Tax Returns" shall mean any report or return (including any
information return) or statement required to be filed with any
Governmental
Entity with respect to Taxes.
"Taxes" shall mean any and all taxes, duties, tariffs, imposts
and other similar charges (together with any and all interest,
penalties,
additions to tax and additional amounts imposed with respect
thereto) imposed by
any Governmental Entity, including those on or measured by or
referred to as
income, franchise, windfall or other profits, gross receipts,
property, sales,
use, net worth, capital stock, payroll, employment, social
security, workers'
compensation, unemployment compensation, excise, withholding, ad
valorem, stamp,
transfer, transient, occupancy, accommodation, sales or hotel room
taxes,
value-added and provider taxes.
"Third Party" shall mean any Person or Group other than the
Company, the Company Subsidiaries, the Parent Group or any Person
in the Parent
Group.
Section 1.2 Terms Defined Elsewhere. The following terms are
defined elsewhere in this Agreement, as indicated below:
"409A Authorities" Section 4.9.7
----------------
"Agreement" Recitals
---------
"AJCA" Section 4.9.7
----
"Antitrust Division" Section 6.5.1
------------------
"Bankruptcy and Equity Exception" Section 4.3.1
-------------------------------
"Business Interruption Fee" Section 8.5
-------------------------
"Certificate of Merger" Section 2.3
---------------------
"Certificates" Section 3.2.2
------------
"Closing" Section 2.2
-------
"Closing Date" Section 2.2
------------
"Commitments" Section 5.6
-----------
"Company" Preamble
-------
6
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"Company Adverse Recommendation Change" Section 6.4.2
-------------------------------------
"Company Board" Section 3.5.1
-------------
"Company Disclosure Schedule" Article 4
---------------------------
"Company Financial Advisors" Section 4.17
--------------------------
"Company Financial Statements" Section 4.6.2
----------------------------
"Company Leased Premises" Section 4.16
-----------------------
"Company Material Contract" Section 4.10
-------------------------
"Company Options" Section 3.5.1
---------------
"Company Owned Properties" Section 4.16
------------------------
"Company Preferred Stock" Section 4.2.1
-----------------------
"Company Properties" Section 4.16
------------------
"Company Recommendation" Section 4.17
----------------------
"Company Representatives" Section 6.3.1
-----------------------
"Company SEC Filings" Section 4.6.1
-------------------
"Company Stock-Based Award" Section 3.5.1
-------------------------
"Company Stockholders' Meeting" Section 6.2.3
-----------------------------
"Company Stock Plans" Section 3.5.1
-------------------
"Company Subsidiary" Section 4.1
------------------
"Debt Commitment Letters" Section 5.6
-----------------------
"D&O Insurance" Section 6.9.3
-------------
"DGCL" Recitals
----
"Dissenting Shares" Section 3.1.1
-----------------
"Dissenting Stockholders" Section 3.1.1
-----------------------
"ECMR" Section 6.5.1
----
"Effective Time" Section 2.3
--------------
"Equity Commitment Letter" Recitals
------------------------
"ERISA" Section 4.9.2
-----
"ERISA Affiliate" Section 4.9.4
---------------
"Exchange Fund" Section 3.2.1
-------------
"Executive Officer" Section 6.1(j)
-----------------
"Foreign Employees" Section 4.9.1
-----------------
"FTC" Section 6.5.1
---
7
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"Indemnified Parties" Section 6.9.2
-------------------
"IRS" Section 4.9.1
---
"Limited Guarantee" Recitals
-----------------
"Merger" Recitals
------
"Merger Consideration" Section 3.1.1
--------------------
"Merger Sub" Preamble
----------
"NDA" Section 6.3.2
---
"Nonqualified Deferred Compensation Plan" Section 4.9.7
---------------------------------------
"Option Payments" Section 3.5.1
---------------
"Parent" Preamble
------
"Parent Disclosure Schedule" Article 5
--------------------------
"Parent Representatives" Section 6.3.1
----------------------
"Paying Agent" Section 3.2.1
------------
"Permitted Liens" Section 4.16
---------------
"Property Restrictions" Section 4.16
---------------------
"Proxy Statement" Section 6.2.1
---------------
"Purchaser Welfare Benefit Plan" Section 6.8.4
------------------------------
"Regulatory Approvals" Section 6.5.1
--------------------
"Required Information" Section 6.14
--------------------
"Solvency Opinion" Section 6.13
----------------
"Solvent" Section 5.10
-------
"Spinoff Agreement" Section 4.14.7
-----------------
"Stockholder Approval" Section 4.3.1
--------------------
"Surviving Corporation" Section 2.1
---------------------
"Termination Date" Section 8.1(b)(ii)
----------------
"Termination Fee" Section 8.4.1
---------------
"WARN Act" Section 4.9.9
--------
Section 1.3 Interpretation. In this Agreement, unless
otherwise specified, the following rules of interpretation
apply:
(a) references to Sections, Schedules, Annexes, Exhibits,
Clauses and Parties are references to sections or sub-sections,
schedules, annexes, exhibits and clauses of, and parties to,
this
Agreement;
8
<PAGE>
(b) references to any Person include references to such
Person's successors and permitted assigns;
(c) words importing the singular include the plural and vice
versa;
(d) words importing one gender include the other gender;
(e) references to the word "including" do not imply any
limitation;
(f) references to months are to calendar months;
(g) the words "hereof", "herein" and "hereunder" and words
of similar import, when used in this Agreement, refer to this
Agreement as a whole and not to any particular provision of
this
Agreement;
(h) references to "$" or "dollars" refer to U.S. dollars;
(i) to the extent this Agreement refers to information or
documents having been made available (or delivered or provided)
to
Parent or Merger Sub, the Company shall be deemed to have
satisfied
such obligation if the Company or any Company Representatives
have
made such information or document available (or delivered or
provided
such information or document) to any of Parent, Merger Sub, or
any
Parent Representatives;
(j) a defined term has its defined meaning throughout this
Agreement and in each Exhibit and Schedule to this Agreement,
regardless of whether it appears before or after the place where it
is
defined; and
(k) references to any specific provisions of any Law shall
also be deemed to be references to any successor provisions or
amendments thereof.
Article 2.
The Merger
Section 2.1 The Merger. Upon the terms and subject to
satisfaction or waiver of the conditions set forth in this
Agreement, and in
accordance with the DGCL, Merger Sub shall be merged with and into
the Company.
As a result of the Merger, the separate corporate existence of
Merger Sub shall
cease and the Company shall continue as the surviving corporation
of the Merger
(the "Surviving Corporation").
Section 2.2 Closing. Subject to the terms and conditions of
this Agreement, the closing of the Merger (the "Closing") shall
take place on a
day that is a Business Day (i) at the offices of Latham &
Watkins LLP, 885 Third
Avenue, New York, New York 10022 at 10:00 a.m., New York City time,
no later
than the third Business Day following the satisfaction of the
conditions set
forth in Article 7 (other than (a) those conditions that are waived
in
accordance with the terms of this Agreement by the Party or Parties
for whose
benefit such conditions exist and (b) any such conditions, which by
their terms,
are not capable of being satisfied until the Closing) or (ii) at
such other
place, time and/or date as the Parties may otherwise agree;
provided, however,
that, notwithstanding the satisfaction or waiver of the conditions
set forth in
Article 7 as of any date, the Parties shall not be required to
effect the
Closing until the earlier of (a) a date during the Marketing Period
specified by
Parent on no less than three Business Days' notice to the Company
and (b) the
final day of the Marketing Period (subject in each case to the
satisfaction or
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waiver (by the party entitled to grant such waiver) of all of the
conditions set
forth in Article 7 as of the date determined pursuant to this
proviso);
provided, further, that this Agreement may be terminated pursuant
to and in
accordance with Section 8.1 hereof such that the Parties shall not
be required
to effect the Closing, regardless of whether the final day of the
Marketing
Period shall have occurred before such termination. The date upon
which the
Closing shall occur is referred to herein as the "Closing
Date".
Section 2.3 Effective Time. The Parties shall cause a
certificate of merger (the "Certificate of Merger") to be properly
executed and
filed in accordance with the DGCL and the terms of this Agreement.
The Merger
shall become effective at such time as the Certificate of Merger is
duly filed
with the Secretary of State of the State of Delaware or at such
other time as is
specified by the Parties as the Effective Time in the Certificate
of Merger (the
"Effective Time").
Section 2.4 Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable
provisions of the
DGCL. Without limiting the generality of the foregoing, at the
Effective Time,
except as otherwise provided herein, all the property, rights,
privileges,
powers and franchises of the Company and Merger Sub shall vest in
the Surviving
Corporation, and all debts, liabilities and duties of the Company
and Merger Sub
shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 2.5 Certificate of Incorporation; By-laws. At the
Effective Time, the Certificate of Incorporation and the By-laws of
the
Surviving Corporation shall, subject to Section 6.9 hereof, be
amended in their
entirety to contain the provisions set forth in the Certificate of
Incorporation
and the By-laws of Merger Sub, attached as Exhibit C hereto, except
that the
name of the Surviving Corporation shall at the Effective Time be
changed to the
name of the Company.
Section 2.6 Directors and Officers. The directors of Merger
Sub and the officers of the Company immediately prior to the
Effective Time
shall be the initial directors and officers of the Surviving
Corporation, each
to hold office in accordance with the Certificate of Incorporation
and By-laws
of the Surviving Corporation.
Article 3.
Conversion of Securities; Exchange of Certificates
Section 3.1 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of
Merger Sub, the
Company or its stockholders, the following shall occur.
Section 3.1.1 Conversion Generally. Each share of Company
Common Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Common Stock
to
be canceled pursuant to Section 3.1.2 and any shares of Company
Common Stock ("Dissenting Shares") which are held by
stockholders
exercising appraisal rights pursuant to Section 262 of the DGCL
("Dissenting Stockholders")), shall be converted, subject to
Section 3.2.4, into the right to receive $32.75 in cash,
payable
to the holder thereof, without interest (the "Merger
Consideration"). All such shares of Company Common Stock shall
no
longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each Certificate which
immediately prior to the Effective Time represented such shares
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shall thereafter represent the right to receive the Merger
Consideration therefor. Certificates previously representing
shares of Company Common Stock (other than any shares of
Company
Common Stock to be canceled pursuant to Section 3.1.2) shall be
exchanged for the Merger Consideration, without interest, upon
the surrender of such Certificates in accordance with the
provisions of Section 3.2.
Section 3.1.2 Cancellation of Certain Shares. Each share
of Company Common Stock held by Parent, Merger Sub, any
Subsidiary of Parent or Merger Sub, in the treasury of the
Company or by any Company Subsidiary immediately prior to the
Effective Time shall be canceled and extinguished without any
conversion thereof and no payment shall be made with respect
thereto. Following the Effective Time, each certificate
evidencing ownership of shares of Merger Sub common stock shall
evidence ownership of such shares of the Surviving Corporation.
Section 3.1.3 Merger Sub. Each share of common stock, par
value $0.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into
and be exchanged for one newly and validly issued, fully paid
and
nonassessable share of common stock of the Surviving
Corporation.
Section 3.1.4 Change in Shares. If between the date of
this Agreement and the Effective Time the outstanding shares of
Company Common Stock shall have been changed into a different
number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization,
split,
reverse split, combination or exchange of shares or any other
similar transaction, the Merger Consideration shall be
correspondingly adjusted to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, reverse
split, combination or exchange of shares and to provide to the
holders of Company Common Stock the same economic effect as
contemplated by this Agreement prior to such action, provided,
that nothing herein shall be construed to permit the Company to
take any action with respect to its securities that is
prohibited
or not expressly permitted by the terms of this Agreement.
Section 3.2 Exchange of Certificates.
Section 3.2.1 Paying Agent. At the Closing, Parent shall
deposit, or shall cause to be deposited, with a bank or trust
company designated by Parent and reasonably satisfactory to the
Company (the "Paying Agent"), for the benefit of the holders of
shares of Company Common Stock, for exchange in accordance with
this Article 3, through the Paying Agent, cash in U.S. dollars
in
an amount sufficient to pay the aggregate amount of the Merger
Consideration (such cash being hereinafter referred to as the
"Exchange Fund") payable pursuant to Section 3.1 in exchange
for
outstanding shares of Company Common Stock. The Paying Agent
shall, pursuant to irrevocable instructions, deliver the Merger
Consideration contemplated to be paid pursuant to Section 3.1
out
of the Exchange Fund. The Exchange Fund shall be invested by
the
Paying Agent as directed by Parent; provided, however, that:
(i)
no such investment or losses thereon shall affect the Merger
Consideration payable to the holders of Company Common Stock
and
following any losses Parent shall promptly provide additional
funds to the Paying Agent for the benefit of the holders of the
shares of the Company Common Stock in the amount of any such
losses; and (ii) such investments shall be in obligations of or
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<PAGE>
guaranteed by the United States of America or any agency or
instrumentality thereof and backed by the full faith and credit
of the United States of America, in commercial paper
obligations
rated A-1 or P-1 or better by Moody's Investors Service, Inc.
or
Standard & Poor's Corporation, respectively, or in
certificates
of deposit, bank repurchase agreements or banker's acceptances
of
commercial banks with capital exceeding $1 billion (based on
the
most recent financial statements of such bank that are then
publicly available). Any net profit resulting from, or interest
or income produced by, such investments shall be payable to the
Surviving Corporation or Parent, as Parent directs. The
Exchange
Fund shall not be used for any other purpose.
Section 3.2.2 Exchange Procedures. Promptly following the
Effective Time (but in no event later than three (3) Business
Days following the Effective Time), Parent shall instruct the
Paying Agent to mail to each holder of record of a certificate
or
certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the
"Certificates") (i) a letter of transmittal in customary form
(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
subject to the consent of the Company prior to the Effective
Time, such consent not to be unreasonably withheld) and (ii)
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
together with such letter of transmittal, properly completed
and
duly executed, and such other documents as may be reasonably
required pursuant to such instructions (or, if such shares are
held in book-entry or other uncertificated form, upon the entry
through a book-entry transfer agent of the surrender of such
shares on a book-entry account statement (it being understood
that any references herein to "Certificates" shall be deemed to
include references to book-entry account statements relating to
the ownership of shares of Company Common Stock)), the holder
of
such Certificate shall be entitled to receive in exchange
therefor the Merger Consideration which such holder has the
right
to receive in respect of the shares of Company Common Stock
formerly represented by such Certificate, and the Certificate
so
surrendered shall forthwith be canceled. No interest will be
paid
or accrued on any Merger Consideration payable to holders of
Certificates. In the event of a transfer of ownership of shares
of Company Common Stock which is not registered in the transfer
records of the Company, the Merger Consideration may be issued
to
a transferee if the Certificate representing such shares of
Company Common Stock is presented to the Paying Agent,
accompanied by all documents required to evidence and effect
such
transfer and by evidence that any applicable stock transfer
Taxes
have been paid. Until surrendered as contemplated by this
Section
3.2, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such
surrender the Merger Consideration or the right to demand to be
paid the "fair value" of the shares represented thereby as
contemplated by Section 3.3.
Section 3.2.3 Further Rights in Company Common Stock. All
Merger Consideration paid in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock.
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<PAGE>
Section 3.2.4 Termination of Exchange Fund. Any portion of
the Exchange Fund which remains undistributed to the holders of
Company Common Stock for one (1) year after the Effective Time
shall be delivered to the Surviving Corporation upon demand,
and
any holders of Company Common Stock who have not theretofore
complied with this Article 3 shall thereafter look only to the
Surviving Corporation for the Merger Consideration, without any
interest thereon.
Section 3.2.5 No Liability. None of Parent, the Company or
the Surviving Corporation shall be liable to any holder of
shares
of Company Common Stock for any cash from the Exchange Fund
delivered to a public official pursuant to any abandoned
property, escheat or similar Law.
Section 3.2.6 Lost Certificates. If any Certificate shall
have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate
to
be lost, stolen or destroyed and, if required by Parent, the
posting by such Person of a bond, in such reasonable and
customary amount as Parent may direct, as indemnity against any
claim that may be made against it with respect to such lost,
stolen or destroyed Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the
Merger Consideration without any interest thereon.
Section 3.2.7 Withholding. Parent, the Surviving
Corporation or the Paying Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of Company Common Stock, holder of
Company Options or holder of a Company Stock-Based Award such
amounts as Parent, the Surviving Corporation or the Paying
Agent
are required to deduct and withhold under the Code, or any
provision of state, local or foreign tax Law, with respect to
the
making of such payment. To the extent that amounts are so
withheld by Parent, the Surviving Corporation or the Paying
Agent, such withheld amounts shall be treated for all purposes
of
this Agreement as having been paid to the holder of Company
Common Stock, holder of Company Options or holder of a Company
Stock-Based Award in respect of whom such deduction and
withholding was made by Parent, the Surviving Corporation or
the
Paying Agent.
Section 3.3 Dissenters' Rights. Notwithstanding anything in
this Agreement to the contrary, if any Dissenting Stockholder shall
demand to be
paid the "fair value" of its Dissenting Shares, as provided in
Section 262 of
the DGCL, such Dissenting Shares shall not be converted into or
exchangeable for
the right to receive the Merger Consideration (except as provided
in this
Section 3.3) and shall entitle such Dissenting Stockholder only to
payment of
the fair value of such Dissenting Shares, in accordance with
Section 262 of the
DGCL, unless and until such Dissenting Stockholder withdraws (in
accordance with
Section 262(k) of the DGCL) or effectively loses the right to
dissent. The
Company shall not, except with the prior written consent of Parent,
voluntarily
make any payment with respect to, or settle or offer to settle, any
such demand
for payment of fair value of Dissenting Shares prior to the
Effective Time. The
Company shall give Parent notice thereof prior to the Effective
Time and Parent
shall have the right to participate at its own expense in all
negotiations and
proceedings with respect to any such demands. If any Dissenting
Stockholder
shall have effectively withdrawn (in accordance with Section 262(k)
of the DGCL)
or lost the right to dissent, then as of the later of the Effective
Time or the
occurrence of such event, the Dissenting Shares held by such
Dissenting
Stockholder shall be cancelled and converted into and represent the
right to
receive the Merger Consideration pursuant to Section 3.1.
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Section 3.4 Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed (after giving
effect to the
items contemplated by this Article 3) and thereafter, there shall
be no further
registration of transfers of shares of Company Common Stock
theretofore
outstanding on the records of the Company. From and after the
Effective Time,
the holders of Certificates shall cease to have any rights with
respect to such
shares of Company Common Stock except as otherwise provided herein
or by Law. On
or after the Effective Time, any Certificates presented to the
Paying Agent or
Parent for any reason shall be converted into the Merger
Consideration.
Section 3.5 Company Options and Stock-Based Awards.
Section 3.5.1 Prior to the Effective Time, the Board of
Directors of the Company (or, if appropriate, any committee
thereof) (the "Company Board") shall, in accordance with the
terms of the applicable Company Benefit Plan and consistent
with
the requirements of Section 409A of the Code, take all actions
necessary and appropriate to provide that, concurrent with the
Effective Time: (i) each outstanding, unexpired and unexercised
option to purchase Company Common Stock (the "Company Options")
granted under the employee and director stock plans of the
Company or under any individual consultant, employee or
director
agreement (the "Company Stock Plans"), whether or not then
exercisable, conditioned or vested, shall fully vest and be
deemed to be exercised and cancelled and each holder of a
Company
Option shall be entitled to receive at the Effective Time, in
consideration of the deemed exercise and cancellation of such
Company Option, a payment by the Surviving Corporation (or, at
Parent's option, Parent) in cash (subject to any applicable
withholding or other Taxes required by applicable Law to be
withheld), in an amount equal to the product of (x) the total
number of shares of Company Common Stock subject to such
Company
Option (determined on the basis that such Company Option is
fully
vested and currently exercisable) and (y) the excess, if any,
of
the Merger Consideration over the exercise price per share of
Company Common Stock subject to such Company Option (such
amounts
payable hereunder being referred to as the "Option Payments");
and (ii) each right of any kind, contingent or accrued, to
receive shares of Company Common Stock or benefits measured by
the value of a number of shares of Company Common Stock, and
each
award of any kind consisting of shares of Company Common Stock,
granted under Company Stock Plans (including stock appreciation
rights, restricted stock, restricted stock units, deferred
stock
units, performance shares and dividend equivalents), other than
Company Options (each, a "Company Stock-Based Award"), whether
or
not then vested, shall fully vest and each beneficiary of a
Company Stock-Based Award providing for such beneficiary to
receive shares of Company Common Stock shall, in lieu thereof,
be
entitled to, and shall be paid pursuant to Section 3.2, the
Merger Consideration pursuant to Section 3.1.1 of this
Agreement
in respect of such shares of Company Common Stock. At and after
the Effective Time, each Company Option shall be cancelled and
terminated and shall only entitle such holder to payment of the
Option Payment as described in this Section 3.5.
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<PAGE>
Article 4.
Representations and Warranties of the Company
Subject to (i) any information contained, or incorporated by
reference, in any of the Company's Annual Report on Form 10-K for
the year ended
December 31, 2005 and the Company's Quarterly Report on Form 10-Q
for the period
ended September 30, 2006, each as filed prior to the date hereof,
other than
information in the "Risk Factors" section of such Company SEC
Filings and any
other disclosures included in such filings that are predictive
or
forward-looking in nature (provided, that the exception under this
clause (i)
shall not apply to the representations and warranties set forth in
Sections 4.1,
4.2, 4.3, 4.4, 4.6 and 4.18) and to (ii) such exceptions as are
disclosed in the
disclosure schedule (the "Company Disclosure Schedule") delivered
by the Company
to Parent concurrently with the execution and delivery of this
Agreement (it
being understood that (a) the disclosure of any fact or item in any
section of
the Company Disclosure Schedule shall apply to the indicated
Section of this
Agreement and any other Section of this Agreement to the extent
that it is
reasonably apparent that such disclosure is relevant to such other
Section of
this Agreement, and (b) the disclosure of any matter or item in the
Company
Disclosure Schedule shall not be deemed to constitute an
acknowledgement that
such matter or item is required to be disclosed therein or is
material to a
representation or warranty set forth in this Agreement and shall
not be used as
a basis for interpreting the terms "material," "materially,"
"materiality" or
"Company Material Adverse Effect" or any word or phrase of similar
import and
does not mean that such matter or item would, alone or together
with any other
matter or item, reasonably be expected to have a Company Material
Adverse
Effect), the Company represents and warrants to Parent and Merger
Sub as
follows:
Section 4.1 Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in
good standing
under the Laws of the State of Delaware. Each Subsidiary of the
Company (each, a
"Company Subsidiary") has been duly organized, and is validly
existing and,
where such concept is recognized, in good standing under the Laws
of the
jurisdiction of its incorporation or organization, as the case may
be, except to
the extent the failure of any such Company Subsidiary to be in good
standing
would not, individually or in the aggregate, have a Company
Material Adverse
Effect. Section 4.1 of the Company Disclosure Schedule contains a
complete list
of all of the Company Subsidiaries. The Company and each Company
Subsidiary has
the requisite power and authority and all governmental approvals
and Company
Permits necessary to own, lease and operate its properties and to
carry on its
business as it is now being conducted, except for such government
approvals, the
absence of which, individually or in the aggregate, is not
reasonably expected
to have a Company Material Adverse Effect. The Company and each
Company
Subsidiary is duly qualified or licensed to do business, and is in
good
standing, in each jurisdiction where the character of the
properties owned,
leased or operated by it or the nature of its business makes such
qualification,
licensing or good standing necessary, except for such failures to
be so
qualified, licensed or in good standing that, individually or in
the aggregate,
are not reasonably expected to have a Company Material Adverse
Effect. The
Company has heretofore made available to Parent complete and
correct copies of
the certificate of incorporation and by-laws (or similar
organizational
documents) of the Company and each material Company Subsidiary, and
all
amendments thereto, as currently in effect.
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<PAGE>
Section 4.2 Capitalization; Subsidiaries.
Section 4.2.1 The authorized capital stock of the Company
consists of 250,000,000 shares of Company Common Stock and
20,000,000 shares of preferred stock, par value $0.01 per share
(the "Company Preferred Stock"). As of November 30, 2006, there
were (a) 132,904,449 shares of Company Common Stock (other than
treasury shares) issued and outstanding, of which 2,121,871 are
restricted pursuant to their issuance as Company Stock-Based
Awards, (b) 13,027,225 shares of Company Common Stock held in
the
treasury of the Company, (c) 16,942,258 shares of Company
Common
Stock issuable upon exercise of outstanding Company Options,
(d)
967,147 shares of Company Common Stock issuable pursuant to
Company Stock-Based Awards and (e) no shares of Company
Preferred
Stock issued and outstanding. Section 4.2.1 of the Company
Disclosure Schedule sets forth as of November 30, 2006, a list
of
the holders of Company Options and/or Company Stock-Based
Awards,
including (to the extent applicable) the date on which each
such
Company Option or Company Stock-Based Award was granted and the
fair market value of the Company's stock on such date, the
number
of shares of Company Common Stock subject to such Company
Option
or Company Stock-Based Award, the expiration date of such
Company
Option or Company Stock-Based Award, the price at which such
Company Option or Company Stock-Based Award may be exercised
under an applicable Company Stock Plan and the vesting
schedule/status of each such Company Option or Company
Stock-Based Award.
Section 4.2.2 All of the outstanding shares of capital
stock of the Company have been duly authorized and validly
issued
and are fully paid and nonassessable and free of preemptive
rights. Except as set forth in Section 4.2.1, there are no
options, warrants or other rights, agreements, arrangements or
commitments of any character to which the Company or any
Company
Subsidiary is a party or by which the Company or any Company
Subsidiary is bound relating to the issued or unissued Equity
Interests of the Company, or securities convertible into or
exchangeable for such Equity Interests, or obligating the
Company
to issue or sell any shares of its capital stock or other
Equity
Interests, or securities convertible into or exchangeable for
such capital stock of, or other Equity Interests in, the
Company.
Except as set forth in Section 4.2.1, there are no outstanding
contractual obligations of the Company or any Company
Subsidiary
affecting the voting rights of or requiring the repurchase,
redemption or disposition of, any Equity Interests in the
Company. Except as set forth in Section 4.2.1, since November
30,
2006 through the date hereof, the Company has not issued any
shares of its capital stock, or securities convertible into or
exchangeable for such capital stock or any other Equity
Interests
in the Company.
Section 4.2.3 Each outstanding share of capital stock or
other Equity Interest of each Company Subsidiary is duly
authorized, validly issued, fully paid, nonassessable and free
of
preemptive rights and is held, directly or indirectly, by the
Company or another Company Subsidiary free and clear of all
claims, liens and encumbrances. Except as set forth in Section
4.2.1, there are no subscriptions, options, warrants, rights,
calls, contracts or other commitments, understandings,
restrictions or arrangements relating to the issuance or sale
with respect to any shares of capital stock or other ownership
interests of any Company Subsidiary, including any right of
conversion or exchange under any outstanding security,
instrument
or agreement. Section 4.2.3 of the Company Disclosure Schedule
sets forth all material Equity Interests owned, directly or
indirectly, by the Company and the Company Subsidiaries in any
Person other than a Company Subsidiary.
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Section 4.3 Authority.
Section 4.3.1 The Company has all necessary corporate
power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation
by
the Company of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action
and
no other corporate proceedings on the part of the Company and
no
stockholder votes are necessary to authorize this Agreement or
to
consummate the transactions contemplated hereby other than,
with
respect to the Merger, the affirmative vote of holders of a
majority of outstanding shares of Company Common Stock to adopt
this Agreement and approve the transactions provided for herein
(the "Stockholder Approval"). This Agreement has been duly
authorized and validly executed and delivered by the Company
and,
assuming this Agreement is a valid and binding obligation of
Parent and Merger Sub, this Agreement constitutes a legal,
valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency (including all Laws relating to fraudulent
transfers),
reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors' rights and to
general equity principles (the "Bankruptcy and Equity
Exception").
Section 4.3.2 The Company has taken all appropriate
actions so that the restrictions on business combinations
contained in Section 203 of the DGCL will not apply with
respect
to or as a result of this Agreement and the transactions
contemplated hereby, including the Merger, without any further
action on the part of the stockholders or the Company Board.
Section 4.4 No Conflict; Required Filings and Consents.
Section 4.4.1 The execution, delivery and performance by
the Company of this Agreement does not (i) assuming the
Stockholder Approval is obtained, conflict with or violate any
provision of the Company Certificate or the Company By-laws or
any equivalent organizational documents of any Company
Subsidiary, (ii) assuming that all consents, approvals and
authorizations described in Section 4.4.2 will have been
obtained
prior to the Effective Time and all filings and notifications
described in Section 4.4.2 will have been made and any waiting
periods thereunder will have terminated or expired prior to the
Effective Time, conflict with or violate any Law applicable to
the Company or any Company Subsidiary or by which any property
or
asset of the Company or any Company Subsidiary is bound or
affected or (iii) require any consent or approval under, result
in any breach of or any loss of any benefit under, or
constitute
a default (or an event which with notice or lapse of time or
both
would become a default) under, or give to others any right of
termination, vesting, amendment, acceleration or cancellation
of,
or result in the creation of a Lien on any property or asset of
the Company or any Company Subsidiary pursuant to, any Contract
to which the Company or any Company Subsidiary is a party or by
which any of their respective properties or assets are bound,
except, with respect to clauses (ii) and (iii), for matters
that,
individually or in the aggregate, are not reasonably expected
to
have a Company Material Adverse Effect.
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Section 4.4.2 The execution, delivery and performance of
this Agreement by the Company does not require any consent,
approval or authorization of, or filing with or notification
to,
any Governmental Entity, except (i) under the Exchange Act, any
applicable Blue Sky Law, the rules and regulations of the NYSE,
the HSR Act, ECMR, or any other antitrust, competition, trade
or
other regulatory Laws, (ii) the filing and recordation of the
Certificate of Merger as required by the DGCL or (iii) where
the
failure to obtain such consents, approvals or authorizations,
or
to make such filings or notifications would not (a) prevent or
materially delay the consummation of the Merger, (b) otherwise
prevent or materially delay performance by the Company of any
of
its material obligations under the Agreement or (c)
individually
or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 4.5 Compliance with Laws. Except (i) with respect to
Tax matters (which are addressed in Section 4.14), Intellectual
Property (which
is addressed in Section 4.13), environmental matters (which are
addressed in
Section 4.12), benefits and employee matters (which are addressed
in Section
4.9) and (ii) for matters that, individually or in the aggregate,
are not
reasonably expected to have a Company Material Adverse Effect, (a)
the Company
and each Company Subsidiary holds all Company Permits necessary for
the lawful
conduct of its business or ownership, use, occupancy and operation
of its assets
and properties, (b) the Company and each Company Subsidiary is in
compliance, in
all respects, with the terms of such Company Permits, except for
such matters
for which the Company or Company Subsidiary has received written
notice from a
Governmental Entity, which notice asserts a lack of compliance with
a particular
Company Permit, but which permits the Company or Company Subsidiary
to cure such
non-compliance within a reasonable period of time following the
issuance of such
notice and which cure is being undertaken by the Company or Company
Subsidiary,
and (c) none of the businesses of the Company or any Company
Subsidiary is being
conducted in violation of, any Law applicable to the Company or
such Company
Subsidiary or by which any property or asset of the Company or such
Company
Subsidiary is bound, except where such violation is subject to a
cure within a
reasonable period of time by the Company or Company Subsidiary,
which cure is
being undertaken by the Company or Company Subsidiary.
Section 4.6 SEC Filings; Financial Statements.
Section 4.6.1 Company SEC Filings. The Company has timely
filed or furnished to or with the SEC all forms, reports,
statements, certification and other documents required to be
filed or furnished by it under the Securities Act or the
Exchange
Act, as the case may be, since December 31, 2005 (collectively,
the "Company SEC Filings"). Each Company SEC Filing, including
any information incorporated by reference therein, (i) as of
its
date, complied in all material respects with the applicable
requirements of the Securities Act, the Exchange Act and/or the
Sarbanes-Oxley Act, as the case may be and (ii) did not, at the
time it was filed (or, if amended, at the time of such
amendment), contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
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misleading. No Company Subsidiary is subject to the periodic
reporting requirements of the Exchange Act. No executive
officer
of the Company has failed in any respect to make the
certifications required of him or her under Section 302 or 906
of
the Sarbanes-Oxley Act with respect to any Company SEC Filing.
The Company has made available to Parent true, correct and
complete copies of all written correspondence between the SEC,
on
the one hand, and the Company and any of its Subsidiaries, on
the
other hand, occurring since December 31, 2005. As of the date
of
this Agreement, there are no outstanding or unresolved comments
in comment letters received from the SEC staff with respect to
the Company SEC Filing. To the Knowledge of the Company, none
of
the Company SEC Filing is the subject of ongoing SEC review or
outstanding SEC comments.
Section 4.6.2 Financial Statements. Each of the
consolidated financial statements (including, in each case, any
notes thereto) contained in the Company SEC Filings
(collectively, the "Company Financial Statements") was prepared
in accordance with GAAP applied (except as may be indicated in
the notes thereto and, in the case of unaudited quarterly
financial statements, as permitted by Form 10-Q under the
Exchange Act) on a consistent basis during the periods
indicated
(except as may be indicated in the notes thereto), and each
presented fairly, in all material respects, the consolidated
financial position of the Company as of the respective dates
thereof and the consolidated income, shareholders equity,
results
of operations and changes to consolidated financial position or
cash flows of the Company for the respective periods indicated
therein (subject, in the case of unaudited statements, to
normal
adjustments which, individually or in the aggregate, are not
reasonably expected to have a Company Material Adverse Effect).
All of the Company Subsidiaries are consolidated with the
Company
for accounting purposes.
Section 4.6.3 Availability of Cash. Other than temporary
restrictions on repatriation imposed by applicable Law or
obligations in connection with Indebtedness, to the Knowledge
of
the Company, there is no restriction that would materially
impair
the Company's ability to use its cash for payment of the Merger
Consideration at the time of Closing.
Section 4.6.4 No Undisclosed Liabilities. None of the
Company or any consolidated Company Subsidiary has any
liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, whether due or to become due
and whether or not required to be recorded or reflected on a
balance sheet or in the notes thereto prepared in accordance
with
GAAP, except for liabilities or obligations (i) which,
individually or in the aggregate, are not reasonably expected
to
have a Company Material Adverse Effect, (ii) that were incurred
under this Agreement or in connection with the transactions
contemplated hereby and consistent with Section 6.1 or (iii)
that
were disclosed or reserved against in the Company Financial
Statements.
Section 4.6.5 Internal Controls. Since January 1, 2004,
the Company's principal executive officer and its principal
financial officer have disclosed to the Company's auditors and
the audit committee of the Company Board (i) all significant
deficiencies and material weaknesses in the design or operation
of internal controls over financial reporting that are
reasonably
likely to adversely affect the Company's ability to record,
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process, summarize and report financial information and (ii)
any
fraud, whether or not material, that involves management or
other
employees who have a significant role in the Company's internal
controls and the Company has provided to Parent copies of any
material written materials relating to the foregoing. The
Company
has established and maintains disclosure controls and
procedures
(as such term is defined in Rule 13a-15 under the Exchange
Act);
such disclosure controls and procedures are designed to ensure
that material information relating to the Company required to
be
included in reports filed under the Exchange Act, including its
consolidated Subsidiaries, is made known to the Company's
principal executive officer and its principal financial officer
by others within those entities, particularly during the
periods
in which the periodic reports required under the Exchange Act
are
being prepared, and, to the knowledge of the Company, such
disclosure controls and procedures are effective in timely
alerting the Company's principal executive officer and its
principal financial officer to material information required to
be included in the Company's periodic reports required under
the
Exchange Act. Since the enactment of the Sarbanes-Oxley Act,
neither the Company nor any Company Subsidiary has made any
prohibited loans to any executive officer of the Company (as
defined in Rule 3b-7 under the Exchange Act) or director of the
Company or any Company Subsidiary.
Section 4.6.6 Since December 31, 2003, (i) neither the
Company nor the Company Subsidiaries nor, to the Knowledge of
the
Company, any director, officer, employee, auditor, accountant
or
representative of the Company or any of the Company
Subsidiaries
has received any material complaint, allegation, assertion or
claim regarding the accounting or auditing practices,
procedures,
methodologies or methods of the Company or any of the Company
Subsidiaries or their respective internal accounting controls
and
(ii) no attorney representing the Company or any of the Company
Subsidiaries, whether or not employed by the Company or any of
the Company Subsidiaries, has reported to the Company Board or
any committee thereof evidence of a material violation of
securities Laws, breach of fiduciary duty or similar violation
by
the Company or any of its officers, directors, employees or
agents.
Section 4.7 Affiliate Transactions. To the Knowledge of the
Company, there are no transactions, or series of related
transactions,
agreements, arrangements or understandings, nor are there any
currently proposed
transactions, or series of related transactions, that are required
to be
disclosed under Item 404 of Regulation S-K promulgated under the
Securities Act
that have not been otherwise disclosed in the Company SEC
Filings.
Section 4.8 Absence of Certain Changes or Events. Except in
connection with the transactions contemplated hereby, since
December 31, 2005
and prior to the date hereof, the Company and the Company
Subsidiaries have
conducted their respective businesses only in the ordinary course
consistent
with past practice. Since December 31, 2005, there has not been any
(i) Company
Material Adverse Effect, and there has not been any change,
condition, event or
development that would be reasonably likely to have, individually
or in the
aggregate, a Company Material Adverse Effect, (ii) any change in
accounting
methods, principles or practices affecting the Company or any
Company
Subsidiary, except as required or permitted by GAAP, (iii) material
change to
any material Tax election of the Company or any Company Subsidiary
effective
after December 31, 2005, or settlement of any Tax liability of the
Company or
any Company Subsidiary that resulted in a payment in excess of
$5,000,000, (iv)
material damage, destruction or other casualty loss with respect to
any material
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asset or property owned by the Company or any Company Subsidiary,
which is not
covered by insurance and that has resulted in damages or losses in
excess of
$1,000,000 in the aggregate, (v) issuance, reclassification,
combination, split,
reverse split, subdivision or redemption, purchase or other
acquisition,
directly or indirectly, of any of the Company's capital stock or
other Equity
Interests, except pursuant to the exercise of Company Options,
Company
Stock-Based Awards, warrants, conversion rights, employee
severance, retention,
termination, change of control and other contractual rights, (vi)
declaration,
set aside, creation or payment of any dividend or other
distribution (whether
payable in cash, stock, property or a combination thereof) with
respect to any
of the Company's capital stock (other than ordinary course
dividends consistent
with the Company's past practice and other than dividends paid by a
wholly-owned
Company Subsidiary to the Company or to any other wholly-owned
Company
Subsidiary), (vii) acquisition of (including, without limitation,
by merger,
consolidation, or acquisition of stock or assets) or investment in,
any interest
in any Person or any division thereof or any assets thereof,
outside of the
ordinary course of business consistent with past practice, (viii)
adoption or
amendment of any material Company Benefit Plan or Company
Stock-Based Award,
(ix) amendment to or change of the Company Certificate, the Company
By-laws or
equivalent organizational document of any material Company
Subsidiary, (x)
incurrence of Indebtedness or issuance of any debt security or
Guarantee, in
each case, outside the ordinary course of business consistent with
past
practice, (xi) payment, discharge, settlement or satisfaction of
any material
claims, liabilities or obligations (absolute, accrued, contingent
or otherwise)
outside the ordinary course of business consistent with past
practice or (xii)
adoption or entrance into a plan of complete or partial
liquidation,
dissolution, merger, consolidation, restructuring, recapitalization
or other
reorganization of the Company or any Company Subsidiary.
Section 4.9 Benefit Plans; Employees and Employment
Practices.
Section 4.9.1 Section 4.9.1 of the Company Disclosure
Schedule contains a true, correct and complete list of each
material Company Benefit Plan maintained or contributed to by
the
Company or any Company Subsidiary, or to which the Company or
any
Company Subsidiary is obligated to contribute, other than any
Company Benefit Plan that is maintained on behalf of employees
outside of the United States (such employees, "Foreign
Employees"). The Company has made available to Parent or its
agents or representatives copies of (i) each material Company
Benefit Plan, (ii) the most recent annual report (Form 5500),
if
any, filed with the U.S. Department of Labor with respect to
each
such Company Benefit Plan, including all schedules thereto
(iii)
the most recent summary plan description for each such Company
Benefit Plan for which a summary plan description is required
and
(iv) the most recent determination letter issued by the U.S.
Internal Revenue Service ("IRS") with respect to any such
Company
Benefit Plan that is intended to be qualified under Section
401(a) of the Code.
Section 4.9.2 Except for such exceptions that,
individually or in the aggregate, would not reasonably expected
to have a Company Material Adverse Effect, each Company Benefit
Plan is operated in compliance with its terms and any
applicable
Laws, including without limitation the provisions of the
Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
and/or the Code, and there are no material actions, suits or
claims pending (other than routine claims for benefits) or, to
the Knowledge of the Company or any Company Subsidiary,
threatened or anticipated with respect to any Company Benefit
21
<PAGE>
Plan or against the assets of such Company Benefit Plan. No
Company Benefit Plan is under audit or is the subject of an
investigation by the Internal Revenue Service, the U.S.
Department of Labor, the Pension Benefit Guaranty Corporation,
the SEC or any other Governmental Entity, nor, to the Knowledge
of the Company or any Company Subsidiary, is any such audit or
investigation pending or threatened.
Section 4.9.3 Each Company Benefit Plan that is intended
to be qualified under Section 401(a) of the Code has received a
determination letter from the IRS that it is so qualified, and,
to the Company's Knowledge, no fact or event has occurred since
the date of such determination letter that has or could
materially adversely affect the qualified status of any such
Company Benefit Plan.
Section 4.9.4 Neither the Company nor any trade or
business that, together with the Company, would be deemed a
single employer within the meaning of Section 4001 of ERISA (an
"ERISA Affiliate") maintains or contributes to, is obligated to
maintain or contribute to, or has maintained or contributed to,
any Multiemployer Plan, Multiple Employer Plan or any "defined
benefit plan" (as defined in Section 3(35) of ERISA) subject to
Section 302 of ERISA, Section 412 of the Code or Title IV of
ERISA. No notice of a "reportable event," within the meaning of
Section 4043 of ERISA for which the 30-day reporting
requirement
has not been waived, has been required to be filed for any
Company Benefit Plan within the past 36 months, nor will any
such
notice be required to be filed as a result of the transactions
contemplated by this Agreement. No Company Benefit Plan has an
"accumulated funding deficiency" (whether or not waived) within
the meaning of Section 412 of the Code or Section 302 of ERISA.
Section 4.9.5 No material deduction for federal income Tax
purposes has been or is expected by the Company or any Company
Subsidiary to be disallowed for remuneration paid by the
Company
or any Company Subsidiary by reason of Section 162(m) of the
Code, including by reason of the transactions contemplated
hereby.
Section 4.9.6 Except as set forth in Section 4.9.6 of the
Company Disclosure Schedule, neither the execution or delivery
of
this Agreement nor the consummation of the transactions
contemplated by this Agreement will, either alone or in
conjunction with any other event (whether contingent or
otherwise), (i) result in any payment or benefit becoming due
or
payable, or required to be provided, to any director, officer,
employee or independent contractor of the Company or any
Company
Subsidiary, (ii) increase the amount or value of any benefit or
compensation otherwise payable or required to be provided to
any
such director, officer, employee or independent contractor,
(iii)
result in the acceleration of the time of payment, vesting or
funding of any such benefit or compensation or (iv) result in
any
amount to fail to be deductible by reason of Section 280G of
the
Code.
Section 4.9.7 Each material Company Benefit Plan that is a
"nonqualified deferred compensation plan" within the meaning of
Section 409A(d)(1) of the Code (a "Nonqualified Deferred
Compensation Plan") subject to Section 409A of the Code has
been
operated in compliance with Section 409A of the Code since
January 1, 2005, based upon a good faith, reasonable
interpretation of (A) Section 409A of the Code and (B)(1) the
proposed regulations issued thereunder or (2) Internal Revenue
Service Notice 2005-1 (clauses (A) and (B), together, the "409A
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<PAGE>
Authorities"). No material Company Benefit Plan that would be a
Nonqualified Deferred Compensation Plan subject to Section 409A
of the Code but for the effective date provisions that are
applicable to Section 409A of the Code, as set forth in Section
885(d) of the American Jobs Creation Act of 2004, as amended
(the
"AJCA"), has been "materially modified" within the meaning of
Section 885(d)(2)(B) of the AJCA after October 3, 2004, based
upon a good faith reasonable interpretation of the AJCA and the
409A Authorities.
Section 4.9.8 Neither the Company nor Company Subsidiary
is a party to any collective bargaining or other labor
contracts
and no collective bargaining agreement or other labor contract
is
being negotiated by the Company or any Company Subsidiary.
There
is no pending, nor, to the Knowledge of the Company or any
Company Subsidiary, threatened, labor dispute, strike, lockout
or
work stoppage against the Company or any Company Subsidiary
which
may interfere with the respective business activities of the
Company or the Company Subsidiaries, except where such dispute,
strike or work stoppage, individually or in the aggregate, is
not
reasonably expected to have a Company Material Adverse Effect.
There is no pending charge or complaint against the Company or
any Company Subsidiary by the National Labor Relations Board or
any comparable Governmental Entity, except where such unfair
labor practice, charge or complaint, individually or in the
aggregate, is not reasonably expected to have a Company
Material
Adverse Effect.
Section 4.9.9 None of the Company nor any Company
Subsidiary has, within the last three years, effectuated (i) a
"plant closing" (as defined in the Worker Adjustment and
Retraining Notification Act (the "WARN Act") or any similar
Law)
affecting any site of employment or one or more facilities or
operating units within any site of employment or facility of
the
Company or any of its Subsidiaries or (ii) a "mass layoff" (as
defined in the WARN Act, or any similar Law) affecting any site
of employment or facility of the Company or any of its
Subsidiaries. None of the Company nor any Company Subsidiary
has
laid off any employees in the ninety (90) calendar days prior
to
the date hereof.
Section 4.10 Contracts; Indebtedness
Section 4.10.1 Except as disclosed in Section 4.9, Section
4.10.1 or Section 4.16.1 of the Company Disclosure Schedule,
none
of the Company or
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