Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
among
EIGER HOLDCO, LLC
EIGER MERGER CORPORATION
and
INDUSTRIAL DISTRIBUTION GROUP, INC.
Dated as of April 25, 2008
TABLE OF CONTENTS
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ARTICLE I
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THE MERGER
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Section 1.01.
The Merger
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Section 1.02.
Closing
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Section 1.03.
Effective Time
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Section 1.04.
Effect of the Merger
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Section 1.05.
Certificate of Incorporation; Bylaws
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Section 1.06.
Directors and Officers
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ARTICLE II
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CONVERSION OF SECURITIES;
EXCHANGE OF CERTIFICATES
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Section 2.01.
Conversion of Securities
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Section 2.02.
Treatment of Options and Other Equity Awards
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Section 2.03.
No Further Rights; Stock Transfer Books
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Section 2.04.
Exchange of Certificates
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Section 2.05.
Appraisal Rights
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
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Section 3.01.
Organization and Qualification; Subsidiaries
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Section 3.02.
Charter Documents
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Section 3.03.
Capitalization
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Section 3.04.
Corporate Authority Relative to This Agreement
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Section 3.05.
No Conflict; Required Filings and Consents
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Section 3.06.
Permits; Compliance
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Section 3.07.
SEC Filings; Financial Statements; Undisclosed Liabilities
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Section 3.08.
Absence of Certain Changes or Events
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Section 3.09.
Absence of Litigation
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Section 3.10.
Employee Benefit Plans
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Section 3.11.
Labor and Employment Matters
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Section 3.12.
Real Property
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Section 3.13.
Intellectual Property
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Section 3.14.
Taxes
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Section 3.15.
Environmental Matters
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Section 3.16.
Material Contracts
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Section 3.17.
Insurance
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Section 3.18.
Company Rights Agreement
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Section 3.19.
Takeover Statutes
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Section 3.20.
Affiliate Transactions
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Section 3.21.
Customers and Suppliers
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Section 3.22.
Guarantees, Bonds and Letters of Credit
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Section 3.23.
Opinion of Financial Advisor
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Section 3.24.
Brokers
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Section 3.25
Platinum Merger Agreement
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER CO
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Section 4.01.
Organization
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Section 4.02.
Authority Relative to This Agreement
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Section 4.03.
No Conflict; Required Filings and Consents
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Section 4.04.
Absence of Litigation
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Section 4.05.
Operations of Merger Co.
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Section 4.06.
Financing
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Section 4.07.
Capitalization of Merger Co
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Section 4.08.
No Vote of Parent Stockholders
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Section 4.09.
Finders or Brokers
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Section 4.10.
Lack of Ownership of Company Common Stock
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Section 4.11.
No Additional Representations
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Section 4.13.
Solvency
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ARTICLE V
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COVENANTS OF BUSINESS PENDING
MERGER
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Section 5.01.
Conduct of Business by the Company Pending the Merger
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Section 5.02.
Conduct of Business by Parent and Merger Co Pending the
Merger
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Section 5.03.
No Control of Other Party’s Business
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ARTICLE VI
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ADDITIONAL
AGREEMENTS
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Section 6.01.
Proxy Statement; Other Filings
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Section 6.02.
Information Supplied
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Section 6.03.
Company Stockholders’ Meeting
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Section 6.04.
Access to Books and Records; Confidentiality
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Section 6.05.
No Solicitation of Transactions
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Section 6.06.
Directors’ and Officers’ Indemnification, Advancement
of Expenses and Insurance
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Section 6.07.
Employee Benefits Matters
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Section 6.08.
Notification of Certain Matters
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Section 6.09.
Further Action; Reasonable Best Efforts
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Section 6.10.
Public Announcements
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Section 6.11.
Resignations
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Section 6.12.
State Takeover Statutes
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ARTICLE VII
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CONDITIONS TO THE
MERGER
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Section 7.01.
Conditions to the Obligations of Each Party
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Section 7.02.
Conditions to the Obligations of Parent and Merger Co
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Section 7.03.
Conditions to the Obligation of the Company
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Section 7.04.
Frustration of Closing Conditions
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ARTICLE VIII
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TERMINATION, AMENDMENT AND
WAIVER
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Section 8.01.
Termination
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Section 8.02.
Effect of Termination
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Section 8.03.
Fees and Expenses
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Section 8.04.
Amendment
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Section 8.05.
Waiver
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ARTICLE IX
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GENERAL PROVISIONS
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Section 9.01.
Non-Survival of Representations, Warranties and Agreements
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Section 9.02.
Notices
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Section 9.03.
Certain Definitions
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Section 9.04.
Severability
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Section 9.05.
Disclaimer of Other Representations and Warranties; Company
Disclosure Schedules
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Section 9.06.
Entire Agreement; Assignment
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Section 9.07.
Parties in Interest
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Section 9.08.
Governing Law
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Section 9.09.
Waiver of Jury Trial
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Section 9.10.
Headings
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Section 9.11.
Counterparts
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Exhibit A Form of Certificate of Merger
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF
MERGER, dated as of April 25, 2008 (this “
Agreement ”), is by and among Eiger Holdco, LLC, a
Delaware limited liability company (“ Parent ”),
Eiger Merger Corporation, a Delaware corporation and a wholly-owned
subsidiary of Parent (“ Merger Co ”), and
Industrial Distribution Group, Inc., a Delaware corporation (the
“ Company ”).
WHEREAS , the Company has
duly terminated the Agreement and Plan of Merger dated as of
February 20, 2008 (as amended, the “ Platinum Merger
Agreement ”) among Project Athena Holding Corporation, a
Delaware corporation (“ Platinum ”), Project
Athena Merger Corporation, a Delaware corporation, and the Company
in accordance with the terms thereof;
WHEREAS, the respective
Boards of Directors of each of the Company, Parent and Merger Co
deem it in the best interests of their respective companies and
stockholders to consummate the merger (the “ Merger
”), on the terms and subject to the conditions set forth in
this Agreement, of Merger Co with and into the Company, and each
such Board of Directors has adopted this Agreement (and, in the
case of the Board of Directors of the Company (the “
Company Board ”), recommended that this Agreement be
approved by the Company’s stockholders); and
WHEREAS, in order to induce
Parent and Merger Co to enter into this Agreement, the directors
and certain of the executive officers of the Company have entered
into and delivered to Parent and Merger Co, concurrently with the
execution and delivery of this Agreement, support agreements.
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound
hereby, Parent, Merger Co and the Company hereby agree, subject to
the conditions herein contained, as follows:
ARTICLE I
THE MERGER
Section 1.01. The
Merger . Upon the terms and subject to the
conditions set forth in Article VII , and in accordance
with the Delaware General Corporation Law (the “ DGCL
”), at the Effective Time, Merger Co shall be merged with and
into the Company, the separate corporate existence of Merger Co
shall cease and the Company shall continue as the surviving
corporation of the Merger (the “ Surviving Corporation
”).
Section 1.02.
Closing . Unless this Agreement shall have
been terminated in accordance with Section 8.01 , and
subject to the satisfaction or waiver of the conditions set forth
in Article VII , the closing of the Merger (the “
Closing ”) will take place at 11:00 A.M., Eastern
Time, on a date to be specified by the parties, which shall be no
later than the second Business Day following the satisfaction or
waiver of the conditions set forth in Article VII (other
than those that by their terms are to be satisfied or waived at the
Closing, but subject to satisfaction or waiver of those
conditions), at the offices of Kaye Scholer LLP, 425 Park Avenue,
New York, New York 10022, unless another time, date and/or place is
agreed to in writing by Parent and the Company (the date on which
the Closing occurs, the “ Closing Date ”).
Section 1.03.
Effective Time . Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, the
parties shall (a) file a certificate of merger in such form as
is required by, and executed and acknowledged in accordance with,
the relevant provisions of the DGCL, in substantially the form
attached hereto as Exhibit A (the “
Certificate of Merger ”), and (b) make all other
filings or recordings required under the DGCL to effect the Merger.
The Merger shall become effective at such
date and
time as is specified in the Certificate of Merger. The date and
time at which the Merger becomes effective is referred to in this
Agreement as the “ Effective Time ”.
Section 1.04.
Effect of the Merger . At the Effective Time,
the effect of the Merger shall be as provided in the applicable
provisions of the DGCL and this Agreement.
Section 1.05.
Certificate of Incorporation; Bylaws .
(a)
Certificate of Incorporation . At the Effective Time, the
Certificate of Incorporation of Merger Co, as in effect immediately
prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended
in accordance with the provisions thereof and as provided by
law.
(b)
Bylaws . At the Effective Time, the Bylaws of Merger Co, as
in effect immediately prior to the Effective Time, shall be the
Bylaws of the Surviving Corporation until thereafter amended as
provided by law, the Certificate of Incorporation of the Surviving
Corporation and such Bylaws.
Section 1.06.
Directors and Officers . At the Effective
Time, (a) the directors of Merger Co shall be the directors of
the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and Bylaws of the Surviving
Corporation, and (b) the officers of Merger Co shall be the
officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified
or until the earlier of their death, resignation or removal.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01.
Conversion of Securities . At the Effective
Time, by virtue of the Merger and without any action on the part of
Merger Co, the Company or the holders of any of the following
securities, the following shall occur:
(a)
Conversion of Company Common Stock . Each share of the
common stock, par value $0.01 per share, of the Company (the
“ Company Common Stock ”) (all issued and
outstanding shares of Company Common Stock being hereinafter
collectively referred to as the “ Shares ”)
issued and outstanding immediately prior to the Effective Time
(other than any Shares to be cancelled pursuant to
Section 2.01(b) and any Dissenting Shares) shall be
cancelled and shall be converted automatically into the right to
receive $12.10 per share in cash, without interest (the “
Per Share Merger Consideration ”), payable in the
manner provided in Section 2.04 . (The result of
(i) the number of Shares entitled to payment pursuant to this
Section 2.01(a) times (ii) the Per Share Merger
Consideration is referred to herein from time to time as the
“ Merger Consideration ”.)
(b)
Cancellation of Treasury Stock, Parent-Owned Stock and Unvested
Stock . The following Shares shall automatically be cancelled
at the Effective Time without any conversion thereof, and no
payment or distribution shall be made with respect thereto:
(i) Each Share held in the treasury of the Company;
(ii) each Share directly owned by Parent, Merger Co or any
direct or indirect wholly-owned subsidiary of Parent, Merger Co or
the Company immediately prior to the Effective Time; and
(iii) each Share held by the persons listed on
Schedule 3.03(a) that, in accordance with the terms of
the agreement pursuant to which such Shares were issued, has not
vested prior to, and will not vest as of, the Effective Time.
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(c)
Capital Stock of Merger Co . Each share of common stock, par
value $0.01 per share, of Merger Co issued and outstanding
immediately prior to the Effective Time shall be converted into and
become one validly issued, fully paid and nonassessable share of
common stock, par value $0.01 per share, of the Surviving
Corporation. Following the Effective Time, each certificate
evidencing ownership of shares of Merger Co common stock shall
evidence ownership of such shares of the Surviving
Corporation.
(d)
Adjustments . If, between the date of this Agreement and the
Effective Time, there is a reclassification, recapitalization,
stock split, stock dividend, subdivision, combination or exchange
of shares with respect to, or rights issued in respect of, the
Shares, the Per Share Merger Consideration shall be adjusted
accordingly, without duplication, to provide the holders of Shares
the same economic effect as contemplated by this Agreement prior to
such event.
Section 2.02.
Treatment of Options and Other Equity Awards
.
(a)
Options . As of the Effective Time, each option then
outstanding to purchase shares of Company Common Stock (each, a
“ Company Stock Option ”) granted under any
plan, arrangement or agreement, including without limitation those
set forth in Schedule 3.03(a) (collectively, the
“ Company Stock Option Plans ”), regardless of
whether vested or exercisable, shall fully vest and be deemed to be
exercised and cancelled. Each holder of a Company Stock Option with
respect to which the exercise price therefor is less than the Per
Share Merger Consideration (an “ In-the-Money Option
”) shall be entitled to receive, in consideration of the
deemed exercise and cancellation of such In-the-Money Option, a
payment of an amount of cash, without interest, equal to the
product of (i) the total number of shares of Company Common
Stock subject to such In-the-Money Option multiplied by
(ii) the excess, if any, of the Per Share Merger Consideration
over the exercise price per share of such In-the-Money Option, less
applicable Taxes, if any, required to be withheld with respect to
such payment. Any Company Stock Option that is not an In-the-Money
Option shall not be entitled to any payment in respect
thereof.
(b)
Restricted Shares . As of the Effective Time, each Share
then subject to vesting or other restrictions pursuant to any
Company Stock Option Plan or pursuant to any agreement with the
Company (collectively, “ Restricted Shares ”)
shall become vested or unrestricted to the extent provided in the
agreement pursuant to which such Restricted Shares were issued. The
Restricted Shares that so vest shall be converted into the right to
receive the Per Share Merger Consideration under
Section 2.01(a) , less any required withholding Taxes;
the Restricted Shares that do not so vest prior to or as of the
Effective Time shall be cancelled as provided in
Section 2.01(b) .
(c)
Company Action . Prior to the Effective Time, the Company
shall take or cause to be taken all actions necessary to
(i) effectuate the treatment of the Company Stock Options and
Restricted Shares set forth in this Section 2.02 (which
shall include, with respect to Company Stock Options, delivery of
at least 15 days’ prior written notice of the treatment
described in Section 2.02(a) ), and (ii) terminate
each of the Company Stock Option Plans (in each case, to the extent
not already terminated) effective as of or prior to the Effective
Time. Parent shall cause the Surviving Corporation to pay to the
holders of the Company Stock Options the cash payments to which
they are entitled pursuant to this Section 2.02 prior
to the later of (x) five (5) Business Days following the
Effective Time and (y) the next regularly scheduled payroll
date of the Surviving Corporation.
Section 2.03. No
Further Rights; Stock Transfer Books . At the
Effective Time, the stock transfer books of the Company shall be
closed, and there shall be no further registration of transfers on
the records of the Company of Shares issued and outstanding
immediately prior to the Effective Time. From and after the
Effective Time, the holders of Certificates representing Shares
outstanding
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immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares, except as otherwise provided in
this Agreement or by law. On or after the Effective Time, any
Certificates presented to the Paying Agent or Parent for any reason
shall be cancelled against delivery of the Per Share Merger
Consideration to which the holders thereof are entitled pursuant to
Section 2.01(a) , without interest.
Section 2.04.
Exchange of Certificates .
(a)
Paying Agent . Prior to the Effective Time, Parent shall
enter into a paying agent agreement, in form and substance
reasonably acceptable to the Company, with a bank or trust company
reasonably acceptable to the Company to act as agent for the
stockholders of the Company in connection with the Merger (the
“ Paying Agent ”). At the Closing, Parent shall
deposit with the Paying Agent, for the benefit of the holders of
Shares, cash in an amount sufficient to pay the aggregate Merger
Consideration required to be paid pursuant to
Section 2.01(a) (such cash being hereinafter referred
to as the “ Exchange Fund ”). The Exchange Fund
shall not be used for any other purpose. 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 Per Share Merger Consideration payable to
the holders of Company Common Stock entitled thereto, and,
following any losses, Parent shall promptly provide additional
funds to the Paying Agent for the benefit of the stockholders of
the Company in the amount of any such losses; and (ii) such
investments shall be in obligations of or 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 $10 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.
(b)
Exchange Procedures for Shares . As promptly as practicable,
but no later than three (3) Business Days, after the Effective
Time, Parent shall cause the Paying Agent to mail to each Person
who was, at the Effective Time, a holder of Shares entitled to
receive the Per Share Merger Consideration pursuant to
Section 2.01(a) : (i) a letter of transmittal
(which shall be in customary form and shall specify that delivery
shall be effected, and risk of loss and title to the certificates
evidencing such Shares (collectively, the “
Certificates ”) shall pass, only upon proper delivery
of the Certificates to the Paying Agent); and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Per Share Merger Consideration.
Upon surrender to the Paying Agent of a Certificate for
cancellation, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions
thereto, and such other documents as may be required pursuant to
such instructions (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)), the holder of such Certificate shall be entitled to
receive in exchange therefor the amount of cash that such holder
has the right to receive in respect of the Shares formerly
represented by such Certificate pursuant to
Section 2.01(a) , and the Certificate so surrendered
shall forthwith be cancelled. In the event of a transfer of
ownership of Shares that are not registered in the transfer records
of the Company, payment of the Per Share Merger Consideration with
respect thereto may be made to a Person other than the Person in
whose name the Certificate so surrendered is registered if the
Certificate representing such Shares is properly endorsed or
otherwise in proper form for transfer, and the Person requesting
such payment pays any transfer or other taxes required by reason of
the payment of the Per Share Merger Consideration applicable to
such Shares to a Person other than the registered holder of such
Certificate or establishes to the reasonable satisfaction
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of
Parent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.04(b) ,
each Certificate shall be deemed at all times after the Effective
Time to represent only the right to receive upon such surrender the
Per Share Merger Consideration to which the holder of such
Certificate is entitled pursuant to this Article II .
No interest shall be paid or will accrue on any cash payable to
holders of Certificates pursuant to the provisions of this
Article II .
(c)
Termination of Exchange Fund . Any portion of the Exchange
Fund that remains undistributed to the holders of Shares on the
date that is six (6) months after the Effective Time shall be
delivered to the Surviving Corporation, upon demand, and any
holders of Shares who have not theretofore complied with this
Article II shall thereafter look only to the Surviving
Corporation for, and the Surviving Corporation shall remain liable
for, payment of their respective claims for the Per Share Merger
Consideration. Any portion of the Exchange Fund remaining unclaimed
by holders of Shares as of a date which is immediately prior to
such time that such amounts would otherwise escheat to or become
property of any Governmental Entity shall, to the extent permitted
by applicable law, become the property of the Surviving Corporation
free and clear of any claims or interest of any Person previously
entitled thereto.
(d)
No Liability . None of the Paying Agent, Parent, Merger Co
or the Surviving Corporation shall be liable to any holder of
Shares or Company Stock Options for any such Shares or Company
Stock Options (or dividends or distributions with respect thereto),
or cash delivered to a public official pursuant to any abandoned
property, escheat or similar law.
(e)
Withholding Rights . Each of the Paying Agent, the Surviving
Corporation and Parent shall be entitled to deduct and withhold
from any amounts otherwise payable pursuant to this Agreement to
any holder of Shares or Company Stock Options such amounts as it is
required to deduct and withhold with respect to such payment under
all applicable Tax laws and pay such withholding amount over to the
appropriate taxing authority. To the extent that amounts are so
properly withheld by the Paying Agent, the Surviving Corporation or
Parent, as the case may be, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the
holder of the Shares or Company Stock Options in respect of which
such deduction and withholding was made by the Paying Agent, the
Surviving Corporation or Parent, as the case may be.
(f)
Lost Certificates . If any Certificate has been lost,
stolen, defaced or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost,
stolen, defaced or destroyed and, if required by the Surviving
Corporation, the posting by such Person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as
indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent shall pay in respect
of such lost, stolen, defaced or destroyed Certificate the Per
Share Merger Consideration to which the holder thereof is entitled
pursuant to Section 2.01(a) , without interest.
Section 2.05.
Appraisal Rights .
(a)
Treatment of Dissenting Shares . Notwithstanding any
provision of this Agreement to the contrary and to the extent
available under the DGCL, Shares that are outstanding immediately
prior to the Effective Time and that are held by any stockholder
who is entitled to exercise, and who properly exercises, appraisal
rights with respect to such Shares (the “ Dissenting
Shares ”) pursuant to, and who complies in all respects
with, the provisions of Section 262 of the DGCL, shall not be
converted into, exchangeable for or represent the right to receive,
the Per Share Merger Consideration. Any such stockholder shall
instead be entitled to receive payment of the fair value of such
stockholder’s Dissenting Shares in accordance with the
provisions of Section 262 of the DGCL; provided ,
however , that all Dissenting Shares held by any stockholder
who shall have failed to perfect or who otherwise shall
5
have
withdrawn, in accordance with Section 262 of the DGCL, or lost
such stockholder’s rights to demand payment in respect of
such Shares under Section 262 of the DGCL, shall thereupon be
deemed to have been converted into, and to have become exchangeable
for, as of the Effective Time, the right to receive the Per Share
Merger Consideration, without any interest thereon, upon surrender
of the Certificate or Certificates that formerly evidenced such
Shares. At the Effective Time, any holder of Dissenting Shares
shall cease to have any rights with respect thereto other than as
provided in Section 262 of the DGCL.
(b)
Notice and Participation . The Company shall give Parent:
(i) prompt notice of any such demands received by the Company
for payment for Dissenting Shares, withdrawals of such demands and
any other instruments served pursuant to the DGCL and received by
the Company; and (ii) the opportunity to participate in and direct
all negotiations and proceedings with respect to any such demands
for payment under the DGCL. The Company shall not, except with the
prior written consent of Parent, make any payment or agree to make
any payment with respect to any such demands for payment or offer
to settle or settle any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure
schedule delivered by the Company to Parent and Merger Co
concurrently with the execution and delivery of this Agreement (the
“ Company Disclosure Schedule ”), the Company
hereby represents and warrants to Parent and Merger Co as
follows:
Section 3.01.
Organization and Qualification; Subsidiaries
.
(a)
Organization and Qualification . Each of the Company and
each subsidiary of the Company (each, a “ Subsidiary
”) is a corporation, limited partnership, limited liability
company or other legal entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
organization (except, in the case of good standing, for legal
entities organized under the laws of any jurisdiction that does not
recognize such concept) and has the requisite corporate or entity
power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted. Each of the
Company and each Subsidiary is duly qualified or licensed to do
business, and is in good standing (where such concept is recognized
and applicable), in each jurisdiction where the character of the
properties owned, leased or operated by it, or the nature of its
business, makes such qualification or licensing necessary, except
where the failure to be so qualified or licensed and in good
standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each of the
jurisdictions where the character of the properties owned, leased
or operated by the Company or a Subsidiary, or the nature of its
business, makes such qualification or licensing necessary, is set
forth in Schedule 3.01(a) .
(b)
List of Subsidiaries . A true and complete list of all
Subsidiaries of the Company is set forth in
Schedule 3.01(b) , together with a description of each
Subsidiary’s (i) jurisdiction of organization,
(ii) outstanding capital stock (or other equity, membership,
partnership or economic interest) and the holders thereof, and
(iii) officers and directors. Except as set forth in
Schedule 3.01(b) , neither the Company nor any
Subsidiary directly or indirectly owns, beneficially or of record,
any capital stock (or other equity, membership, partnership or
economic interest) in any Person.
(c) The
term “ Material Adverse Effect ” means any
change, circumstance, effect, event or occurrence that is or would
be reasonably likely to be, individually or in the aggregate,
materially adverse to the assets, liabilities, business, financial
condition or results of operations of the Company and the
Subsidiaries taken as a whole, other than any such change,
circumstance, effect, event or occurrence
6
that the
Company is able to demonstrate resulted directly from
(i) changes in general economic conditions affecting any
geographic market in which the Company operates, (ii) general
changes or developments in the industries in which the Company or
the Subsidiaries operate, (iii) the announcement of this
Agreement and the transactions contemplated hereby, including any
termination of, reduction in or similar negative impact on
relationships, contractual or otherwise, with any customers,
suppliers, distributors, partners or employees of the Company or
the Subsidiaries to the extent due to the announcement or
performance of this Agreement or the identity of the parties to
this Agreement, or the performance of this Agreement and the
transactions contemplated hereby, including compliance with the
covenants set forth herein, (iv) any actions required under
this Agreement to obtain any approval or authorization under
applicable antitrust or competition laws for the consummation of
the Merger, or (v) changes in any tax laws or regulations or
applicable accounting regulations or principles, unless, in the
case of the foregoing clauses (i), (ii) and (v), such changes
referred to therein have a materially disproportionate effect on
the Company and the Subsidiaries taken as a whole relative to other
participants in the industries or markets, as the case may be, in
which the Company and the Subsidiaries operate.
Section 3.02.
Charter Documents . The Company has made
available to Parent a complete and correct copy of the certificate
of incorporation and the bylaws (or comparable organizational or
charter documents), each as amended to date, of the Company and
each Subsidiary. Such certificate of incorporation and bylaws (or
comparable organizational or charter documents) are in full force
and effect. Neither the Company nor any Subsidiary is in violation
of any of the provisions of its certificate of incorporation or
bylaws (or comparable organizational or charter documents).
Section 3.03.
Capitalization .
(a)
Generally . The authorized capital stock of the Company
consists of (i) 50,000,000 shares of Company Common Stock and
(ii) 10,000,000 shares of preferred stock, par value $0.10 per
share (“ Company Preferred Stock ”). As of
April 21, 2008 (the “ Measurement Date ”),
(i) 9,791,368 shares of Company Common Stock are issued and
outstanding (excluding shares of Company Common Stock held in the
treasury of the Company and including 123,333 shares of Company
Common Stock issued to Charles A. Lingenfelter that are subject to
restriction, do not vest and will be cancelled and not paid upon
the consummation of the transactions contemplated in this
Agreement), all of which are duly authorized, validly issued, fully
paid and nonassessable and were issued free of preemptive (or
similar) rights, (ii) no shares of Company Common Stock are
held in the treasury of the Company, (iii) no shares of
Company Common Stock are held by the Subsidiaries,
(iv) 619,951 shares of Company Common Stock are reserved for
issuance upon exercise of Company Stock Options outstanding as of
the Measurement Date and (v) 1,082,815 shares of Company
Common Stock are reserved for future grants under the Company Stock
Option Plans. Since the Measurement Date, other than in connection
with the issuance of Shares pursuant to the exercise of Company
Stock Options outstanding as of the Measurement Date, there has
been no change in the number of shares of outstanding capital stock
of the Company or the number of outstanding Company Stock Options.
Schedule 3.03(a) sets forth, as of the Measurement
Date, the number of shares of Company Common Stock issuable upon
exercise of outstanding Company Stock Options granted under each
Company Stock Option Plan and the holder, expiration date and
exercise price for each. Schedule 3.03(a) also sets
forth, as of the Measurement Date, the number of Restricted Shares
outstanding as of the Measurement Date, the number of such
Restricted Shares that are vested as of the Measurement Date, the
vesting schedule for all such Restricted Shares and the number of
such Restricted Shares that will vest at the Effective Time. No
shares of Company Preferred Stock are issued and outstanding.
(b)
Other Rights . Except as set forth in
Section 3.03(a) and except for the rights (the “
Rights ”) issued pursuant to the Rights Agreement,
dated as of August 28, 2000 (the “ Company
Rights
7
Agreement ”), between the Company and American Stock
Transfer & Trust Company, a New York corporation, as rights
agent, in respect of which no Distribution Date (as defined in the
Company Rights Agreement) has occurred, there are no
(i) subscriptions, calls, contracts, options, warrants or
other rights, agreements, arrangements, understandings,
restrictions or commitments of any character to which the Company
or any Subsidiary is a party or by which the Company or any
Subsidiary is bound relating to the issued or unissued capital
stock of the Company or any Subsidiary or obligating the Company or
any Subsidiary to issue or sell any shares of capital stock of,
other equity interests in or debt securities of, the Company or any
Subsidiary, (ii) securities of the Company or securities
convertible, exchangeable or exercisable for shares of capital
stock or voting securities of the Company, or (iii) equity
equivalents, restricted stock units, stock appreciation rights,
phantom stock, ownership interests in the Company or any Subsidiary
or similar rights. All shares of Company Common Stock subject to
issuance in connection with the Company Stock Option Plans (all of
which are reflected on Schedule 3.03(a) ) upon issuance
on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly
issued, fully paid and nonassessable and free of preemptive (or
similar) rights. There are no outstanding contractual obligations
of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any outstanding securities of the Company or any
Subsidiary, to vote or to dispose of any shares of Company Common
Stock or any capital stock of any Subsidiary or to make any
investment (in the form of a loan, capital contribution or
otherwise) in any Subsidiary or any other Person. None of the
Company or any Subsidiary is a party to any stockholders’
agreement, voting trust agreement or registration rights agreement
relating to any equity securities of the Company or any Subsidiary
or any other Contract relating to disposition, voting or dividends
with respect to any equity securities of the Company or of any
Subsidiary. No dividends on the Company Common Stock have been
declared or have accrued from December 31, 2006 through the
date hereof. To the knowledge of the Company, all of the Shares
have been issued by the Company in compliance with applicable
federal securities laws.
(c)
Validity of Issuance . Each outstanding share of capital
stock (or other equity interest) of each Subsidiary is duly
authorized, validly issued, fully paid and nonassessable and was
issued free of preemptive (or similar) rights, and each such share
is owned by the Company or another Subsidiary free and clear of all
options, rights of first refusal, agreements, limitations on the
Company’s or any Subsidiary’s voting, dividend or
transfer rights, charges and other encumbrances or Liens of any
nature whatsoever.
Section 3.04.
Corporate Authority Relative to This Agreement
.
(a)
Corporate Authority . The Company has all necessary
corporate power and authority to execute and deliver this
Agreement, and, subject to the receipt of Stockholder Approval, to
consummate the Merger and the other transactions contemplated by
this Agreement (the “ Other Contemplated Transactions
”) to be consummated by the Company.
(b)
Approval of Agreement by Company Board . The execution and
delivery of this Agreement and the consummation of the Merger and
the Other Contemplated Transactions have been duly and validly
authorized by the Company Board, pursuant to the recommendation of
the Strategic Alternatives Review Committee of the Company Board
(the “ Independent Committee ”) and, except for
(i) Stockholder Approval and (ii) the filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware, no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or the consummation of
the Merger and the Other Contemplated Transactions. The Independent
Committee has determined and resolved (i) that the Merger is
fair to, and in the best interests of, the Company and its
stockholders and (ii) to recommend that the Company Board
approve this Agreement, propose this Agreement to the
Company’s stockholders for adoption thereby and recommend
that the Company’s stockholders adopt this Agreement and the
transactions contemplated hereby (the “ Independent
Committee Recommendation ”). The Company Board has
determined and resolved (i) that
8
the
Merger is fair to, and in the best interests of, the Company and
its stockholders, (ii) to propose this Agreement for adoption
by the Company’s stockholders, and (iii) to recommend
that the Company’s stockholders adopt this Agreement and the
transactions contemplated by this Agreement (the “ Company
Board Recommendation ” and, together with the Independent
Committee Recommendation, the “ Recommendation
”), all of which determinations and resolutions have not been
rescinded, modified or withdrawn in any way as of the date of this
Agreement. This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization,
execution and delivery of this Agreement by Parent and Merger Co,
constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(c)
Required Stockholder Vote . The only vote of the holders of
any class or series of capital stock or other securities of the
Company necessary to adopt this Agreement or consummate the Merger
is the affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock in favor of the adoption
of this Agreement (the “ Stockholder Approval
”).
Section 3.05. No
Conflict; Required Filings and Consents .
(a)
No Conflict . The execution and delivery by the Company of
this Agreement does not, and, except as described in
Schedule 3.05(a) , the consummation of the Merger and
the Other Contemplated Transactions and compliance with the
provisions of this Agreement will not, (i) result in any violation
of, conflict with or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
modification, amendment, cancellation or acceleration of any
obligation or to the loss of a benefit under, or require any
consent, waiver, approval, authorization or permit of, action by,
registration, declaration or filing with or notification to any
Person pursuant to, any loan, guarantee of indebtedness or credit
agreement, note, bond, mortgage, indenture, lease, sublease,
assignment of lease or occupancy agreement, contract, obligation,
arrangement, understanding, undertaking, instrument, permit,
franchise or license agreement, or other material agreement,
whether oral or written (collectively, “ Contracts
”) binding upon the Company or any of the Subsidiaries, or to
which any of them is a party or any of their respective properties
or assets are bound, or result in the creation of any liens,
claims, mortgages, encumbrances, pledges, security interests,
equities, options, rights of first refusal, or charges of any kind
whatsoever (including any limitation on voting, sale, transfer or
other disposition, or exercise of any other attribute of ownership)
(each, a “ Lien ”) upon any of the Shares or any
of the properties or assets of the Company or any of the
Subsidiaries; (ii) conflict with or result in any violation of
any provision of the certificate of incorporation or bylaws or
other equivalent organizational or charter document, in each case
as amended, of the Company or any of the Subsidiaries; or
(iii) except as described in Section 3.05(b) , conflict
with or violate any applicable Laws, other than, in the case of
clauses (i) and (iii), any such violation, conflict, default,
termination, modification, amendment, cancellation, acceleration,
loss or Lien that would not have, individually or in the aggregate,
a Material Adverse Effect.
(b)
Consents and Approvals . Other than (i) the filing of
the Certificate of Merger with the Secretary of State of the State
of Delaware pursuant to the DGCL, (ii) such filings as are
required pursuant to the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”), (iii) the
filing of a pre-merger notification form pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the “ HSR Act ”), (iv) any filings
required to be made with the Nasdaq Global Market, Inc. (“
Nasdaq ”), and (v) the approvals set forth on
Schedule 3.05(b) (collectively, the “ Company
Approvals ”), and subject to the accuracy of the
representations and warranties of Parent and Merger Co in
Section 4.03 hereof, no authorization, consent, permit,
action or approval of, or filing with, or notification to, any
United States federal, state or local or foreign government or
regulatory agency, commission, court, body, entity, arbitral panel
or authority (each, a “ Governmental Entity ”)
is necessary, under applicable Law, in connection with the
execution, delivery and performance of this Agreement or the
consummation by the
9
Company
of the Merger and Other Contemplated Transactions, except for
authorizations, consents, permits, actions, approvals,
notifications or filings that, if not obtained or made, would not
have, individually or in the aggregate, a Material Adverse
Effect.
Section 3.06.
Permits; Compliance .
(a)
Permits . Each of the Company and each Subsidiary is in
possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for each
such entity to own, lease and operate its properties or to carry on
its business as it is now being conducted (collectively, the
“ Company Permits ”), except where the failure
to have, or the suspension or cancellation of, any Company Permit
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. To the knowledge of the Company,
neither it nor any Subsidiary has received any written notification
from any Governmental Entity threatening to revoke any material
Company Permit. Notwithstanding anything contained in this
Section 3.06(a) , no representation or warranty shall
be deemed to be made in this Section 3.06(a) in respect
of the matters specifically covered in Section 3.15
.
(b)
Compliance with Law . The Company and each Subsidiary is,
and since January 1, 2007 has been, in compliance with any Law
applicable to such entity or by which any property or asset of such
entity is bound or affected, except (i) where the failure to
be in such compliance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and
(ii) for compliance with Environmental Law, which compliance
is covered exclusively in Section 3.15 .
(c)
Compliance with the Sarbanes-Oxley Act . The Company and, to
the knowledge of the Company, each of its officers and directors
are in compliance with, and have complied in all material respects
with, all applicable provisions of the Sarbanes-Oxley Act of 2002
(the “ Sarbanes-Oxley Act ”).
(d)
Compliance with Economic and Trade Sanctions . (i) Each
of the Company and the Subsidiaries is in material compliance with
United States and international economic and trade sanctions,
including those administered by the Office of Foreign Asset Control
(“ OFAC ”) within the United States Department
of Treasury; and (ii) each of the Company and the Subsidiaries
is in material compliance with the anti-boycott regulations
administered by the United States Department of Commerce, the
Foreign Corrupt Practices Act, and all laws and regulations
administered by the Bureau of Customs and Border Protection in the
United States Department of Homeland Security.
(e)
Compliance with OFAC Listings . To the knowledge of the
Company, no director, officer or employee of the Company or any of
the Subsidiaries is identified on any of the following documents:
(i) the OFAC list of “Specially Designated Nationals and
Blocked Persons” (“ SDNs ”); (ii) the
Bureau of Industry and Security of the United States Department of
Commerce “Denied Persons List”; or (iii) the
Office of Defense Trade Controls of the United States Department of
State “List of Debarred Persons”. Neither the Company
nor any of the Subsidiaries are involved in business arrangements
or otherwise engage in transactions with or involving sanctioned
countries or SDNs in violation of the regulations maintained by the
OFAC.
Section 3.07. SEC
Filings; Financial Statements; Undisclosed Liabilities
.
(a)
SEC Filings . The Company has filed all forms, reports,
statements, schedules and other documents required to be filed by
it with the Securities and Exchange Commission (the “
SEC ”) since January 1, 2007 (collectively, the
“ SEC Reports ”). The SEC Reports (i) were
prepared in accordance with all of the then material applicable
requirements of the Securities Act of 1933, as
10
amended
(the “ Securities Act ”), the Exchange Act, the
Sarbanes-Oxley Act and, in each case, the rules and regulations
promulgated thereunder, and (ii) did not, at the time they
were filed, or, if amended, as of the date of such amendment, or in
the case of registration statements and proxy statements as of the
respective dates of effectiveness or mailing thereof, as
applicable, 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 misleading (including
any financial statements or other documentation incorporated by
reference therein). No Subsidiary is required to file any form,
report or other document with the SEC.
(b)
Financial Statements . Each of the consolidated financial
statements (including, in each case, any notes thereto) contained
in the SEC Reports was prepared in accordance with United States
generally accepted accounting principles (“ GAAP
”) applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto or, in
the case of unaudited statements, as permitted by the SEC) and each
fairly presents, in all material respects, the consolidated
financial position, results of operations and cash flows of the
Company and its consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein
(subject, in the case of unaudited statements, to normal and
recurring year-end adjustments and, in the case of any pro forma
financial statements, to the qualifications stated therein). All of
the Subsidiaries are consolidated for accounting purposes.
(c)
No Undisclosed Liabilities . Neither the Company nor any of
the Subsidiaries has any liabilities of a nature required by GAAP
to be reflected in a consolidated balance sheet or the notes
thereto, except liabilities that (i) are accrued or reserved
against in the most recent financial statements or the notes
thereto included in the SEC Reports filed prior to the date hereof,
(ii) were incurred in the ordinary course of business since
the date of such financial statements or otherwise in accordance
with Section 5.01 , (iii) are incurred pursuant to
or as expressly contemplated by this Agreement, (iv) have been
discharged or paid in full prior to the date of this Agreement in
the ordinary course of business consistent with past practice, or
(v) as would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
Section 3.08.
Absence of Certain Changes or Events .
(a)
Material Adverse Effect . Since September 30, 2007,
there has not been any Material Adverse Effect in the business of
the Company and the Subsidiaries.
(b)
Certain Changes or Events . Since September 30, 2007
and prior to the date hereof, except as expressly contemplated by
this Agreement, (i) the Company and the Subsidiaries have
conducted their businesses only in the ordinary course of business
and in a manner consistent with past practice, and
(ii) neither the Company nor any Subsidiary has:
(A) suffered any damage, destruction or loss (regardless of
whether covered by insurance), other than in the ordinary course of
business, that has had or would be reasonably expected to have a
Material Adverse Effect; or (B) taken any action that would be
prohibited by Section 5.01 if taken after the date
hereof.
Section 3.09.
Absence of Litigation .
Schedule 3.09 lists each litigation, suit, claim,
action, proceeding, hearing, arbitration, petition or investigation
(an “ Action ”) pending or, to the knowledge of
the Company, threatened in writing against the Company or any
Subsidiary, or any property or asset of the Company or any
Subsidiary, before any Governmental Entity or arbitrator. As of the
date of this Agreement, to the knowledge of the Company, no
executive officer or director of the Company is a defendant in any
Action in connection with his or her status as an executive officer
or director of the Company or any Subsidiary. Neither the Company
nor any Subsidiary nor any property or asset of the Company or any
Subsidiary is subject to any continuing order of, consent decree,
settlement agreement or
11
other
similar written agreement with, or, to the knowledge of the
Company, continuing investigation by, any Governmental Entity, or
any order, writ, judgment, injunction, decree, determination or
award of any Governmental Entity.
Section 3.10.
Employee Benefit Plans .
(a)
Benefit Plans . Schedule 3.10(a) lists:
(i) all employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ ERISA ”)) and all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental
retirement, severance, retention, stay or other benefit plans,
programs or arrangements; and (ii) all employment,
termination, severance, retention, stay or other contracts,
agreements or commitments to which the Company or any Subsidiary is
a party, with respect to which the Company or any Subsidiary has or
may reasonably be expected to have any material obligation or that
are maintained, contributed to or sponsored by the Company or any
Subsidiary for the benefit of any current or former employee,
consultant, officer or director of the Company or any Subsidiary
(collectively, the “ Plans ”). The Company has
made available to Parent a complete and correct copy (where
applicable) of (A) each Plan (or, where a Plan has not been
reduced to writing, a summary of all material Plan terms of such
Plan), (B) each trust or funding arrangement prepared in
connection with each such Plan, (C) the most recently filed
annual report on Internal Revenue Service (“ IRS
”) Form 5500, (D) the most recently received IRS
determination letter for each such Plan, (E) the most recently
prepared actuarial report and financial statement in connection
with each such Plan, and (F) the most recent summary plan
description, any summaries of material modifications and employee
handbooks.
(b)
Pension Plans; Multiemployer Plans . None of the Company or
any Subsidiary or any other Person that, together with the Company
or any Subsidiary, is or was treated as a single employer under
Section 414(b), (c), (m) or (o) of the United States
Internal Revenue Code of 1986, as amended (the “ Code
”) (each, together with the Company and any Subsidiary, an
“ ERISA Affiliate ”), has now or at any time
within the past three years (and in the case of any such other
Person, only during the period within the past three years that
such other Person was an ERISA Affiliate) contributed to,
sponsored, or maintained (i) a pension plan (within the
meaning of Section 3(2) of ERISA) subject to Section 412
of the Code or Title IV of ERISA; (ii) a multiemployer plan
(within the meaning of Section 3(37) or 4001(a)(3) of ERISA)
(a “ Multiemployer Plan ”); or (iii) a
single employer pension plan (within the meaning of
Section 4001(a)(15) of ERISA) for which an ERISA Affiliate
would reasonably be expected to incur liability under
Section 4063 or 4064 of ERISA (a “ Multiple Employer
Plan ”).
(c)
Change in Control Agreements . Schedule 3.10(c)
lists each Plan (each, a “ Change in Control Agreement
”) that would reasonably be expected to result in the payment
to any present or former employee, director or consultant of the
Company or any Subsidiary of any money or other property or
accelerate or provide any other rights or benefits to any current
or former employee, director or consultant of the Company or any
Subsidiary as a result of the consummation of the Merger or any
other transaction contemplated by this Agreement (whether alone or
in connection with any other event). Except as set forth on
Schedule 3.10(c) , there is no contract, plan or
arrangement (written or otherwise) covering any current or former
employee of the Company or any Subsidiary that, individually or
collectively, would reasonably be expected to give rise to the
payment of any amount that would not be deductible pursuant to the
terms of Section 280G of the Code.
(d)
Qualified Plans . Each Plan that is intended to be qualified
under Section 401(a) of the Code has received a favorable
determination letter from the IRS that the Plan is so qualified or
has adopted a prototype plan with an IRS opinion letter, and, to
the knowledge of the Company, no fact or circumstance exists that
would reasonably be expected to result in the revocation of such
letter.
12
(e)
Compliance . Each Plan has been established and administered
in accordance with its terms, and in material compliance with the
applicable provisions of ERISA, the Code and other applicable
laws.
(f)
Actions . With respect to any Plan, (i) no Actions
(other than routine claims for benefits in the ordinary course) are
pending or, to the knowledge of the Company, threatened, (ii) to
the knowledge of the Company, no facts or circumstances exist that
would reasonably be expected to give rise to any such Actions, and
(iii) no administrative investigation, audit or other
administrative proceeding by the Department of Labor, the IRS or
other Governmental Entity is pending, in progress or, to the
knowledge of the Company, threatened.
Section 3.11.
Labor and Employment Matters . Except as set
forth on Schedule 3.11 , neither the Company nor any
Subsidiary is a party to any collective bargaining agreement or
other labor union agreements applicable to persons employed by the
Company or any Subsidiary, nor to the knowledge of the Company, are
there any formal activities or proceedings of any labor union to
organize any such employees. Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect, there are no unfair labor practice complaints pending
against the Company or any Subsidiary before the National Labor
Relations Board or any other Governmental Entity or any current
union representation questions involving employees of the Company
or any Subsidiary. There is no strike, controversy, slowdown, work
stoppage or lockout, or, to the knowledge of the Company,
threatened in writing, by or with respect to any employees of the
Company or any Subsidiary.
Section 3.12. Real
Property .
(a)
Owned Real Property . Schedule 3.12(a) lists
each parcel of real property owned by the Company or any Subsidiary
(the “ Owned Real Property ”). The Company or
any Subsidiary has good, valid and marketable title to all of the
Owned Real Property, in each case free and clear of all Liens,
other than (i) Liens for current taxes and assessments not yet
past due, (ii) inchoate mechanics’ and
materialmen’s Liens for construction in progress, (iii)
workmen’s, repairmen’s, warehousemen’s and
carriers’ Liens arising in the ordinary course of business of
the Company or such Subsidiary consistent with past practice, and
(iv) all Liens and other imperfections of title (including
matters of record) and encumbrances that do not materially
interfere with the conduct of the business of the Company and the
Subsidiaries, taken as a whole, or, individually or in the
aggregate, have a Material Adverse Effect (collectively, “
Permitted Liens ”).
(b)
Leased Real Property . Schedule 3.12(b) lists by
address each parcel or tract of real property leased or subleased
by the Company or any Subsidiary that is currently used or held for
use in the conduct of the business of the Company and the
Subsidiaries (collectively, the “ Leased Real
Properties ”), with the name of the lessor and the title
and date of the lease or sublease, any guaranty given by the
Company or any Subsidiary in connection therewith and each material
amendment to any such lease or sublease. Except as set forth on
Schedule 3.12(b) , each of the Leased Real Properties is
subject to a written lease or sublease to which the Company or a
Subsidiary, as applicable, is party as a lessee or sublessee (each,
a “ Real Property Lease ”), and all such Real
Property Leases are valid and in full force and effect, in
accordance with their terms. There is not, with respect to any Real
Property Lease: (i) any default by the Company or a
Subsidiary, as the case may be, or any event of default or event
that with notice or lapse of time, or both, would constitute a
default by the Company or a Subsidiary, as the case may be; or
(ii) to the knowledge of the Company, any existing default by
any other party to any Real Property Lease, or event of default or
event that with notice or lapse of time, or both, would constitute
a default by any other party to any Real Property Lease.
13
(c)
Use of Real Property . Neither the Company nor any
Subsidiary occupies or uses, or has any inventory located at, any
parcel or tract of real property other than (i) the Owned Real
Property, (ii) the Leased Real Properties and (iii) the
real properties listed on Schedule 3.12(c) (which listing
shall include the address thereof and the name of the owner or
lessee or sublessee thereof, and shall identify the use thereof,
e.g., customer location, bailee, warehouseman, etc.).
Section 3.13.
Intellectual Property . Except as set forth on
Schedule 3.13 : (a) the Company and the
Subsidiaries own (free and clear of all Liens other than Permitted
Liens) or have the right to use all patents, inventions,
copyrights, software, trademarks, service marks, brand names,
logos, domain names, trade dress, trade secrets, know-how,
confidential or proprietary information (and all applications,
registrations, continuations, divisionals, renewals and reissues
relating thereto) and all other intellectual property rights of any
kind or nature arising under U.S. or foreign law (“
Intellectual Property ”) as are necessary or
appropriate and material for their businesses as currently
conducted; (b) to the knowledge of Company, such Intellectual
Property does not infringe, dilute or misappropriate the
Intellectual Property of any third party and is not being
infringed, misappropriated or diluted by any third party;
(c) neither the Company nor any of the Subsidiaries is a party
to any claim, suit or other action, and to the knowledge of the
Company, no claim, suit or other action is threatened, that
challenges the validity, enforceability, ownership, or right to
use, sell or license their Intellectual Property; and (d) to
the knowledge of the Company, neither the Company or any of the
Subsidiaries have suffered any material violation of the security
of their systems or software.
Section 3.14.
Taxes .
(a)
Payment and Filings . Except as set forth on
Schedule 3.14 , (i) the Company and the
Subsidiaries have timely filed or caused to be filed or will timely
file or cause to be filed (taking into account any extension of
time to file granted or obtained) all Tax Returns required to be
filed by them, and any such filed Tax Returns are true, correct and
complete; (ii) the Company and the Subsidiaries have timely paid or
will timely pay any Taxes due and payable, except to the extent
that such Taxes are being contested in good faith and for which the
Company or the appropriate Subsidiary has set aside adequate
reserves in accordance with GAAP; and (iii) without taking into
account any transactions contemplated by this Agreement and based
upon activities to date, adequate reserves in accordance with GAAP
have been established by the Company and the Subsidiaries for all
Taxes not yet due and payable in respect of taxable periods ending
on the date hereof. All material amounts of Tax required to be
withheld by the Company and the Subsidiaries have been or will be
timely withheld and paid over to the appropriate Governmental
Entity.
(b)
Deficiencies; Liens . No deficiency for any material amount
of Tax has been asserted or assessed by any Governmental Entity in
writing against the Company or any Subsidiary (or, to the knowledge
of the Company, has been threatened or proposed), except for
deficiencies that have been satisfied by payment, settled or been
withdrawn or that are being contested in good faith and are Taxes
for which the Company or the appropriate Subsidiary has set aside
adequate reserves in accordance with GAAP. There are no liens for a
material amount of Taxes, other than liens for current Taxes and
assessments not yet past due or that are being contested in good
faith and for which the Company or the appropriate Subsidiary has
set aside adequate reserves in accordance with GAAP, on the assets
of the Company or any Subsidiary.
(c)
Audits and Examinations . (i) There are no pending or,
to the knowledge of the Company, threatened audits, examinations,
investigations or other proceedings in respect of a material amount
of Taxes of the Company or any Subsidiary with respect to which the
Company or a Subsidiary has been notified in writing; and
(ii) neither the Company nor any Subsidiary has waived any
statute of limitations in respect of a material amount of Taxes or
agreed to any extension of time with respect to an
14
assessment or deficiency for a material amount of Taxes (other than
pursuant to extensions of time to file Tax Returns obtained in the
ordinary course).
(d)
Tax Sharing . Neither the Company nor any Subsidiary is a
party to any indemnification, allocation or sharing agreement with
respect to Taxes (other than agreements among the Company and the
Subsidiaries and other than customary Tax indemnifications
contained in credit or other commercial agreements the primary
purpose of which does not relate to Taxes).
(e)
Listed Transactions . Neither the Company nor any Subsidiary
is required to make any disclosure to the Internal Revenue Service
with respect to a “listed transaction” pursuant to
Section 1.6011-4(b)(2) of the Treasury Regulations promulgated
under the Code.
(f)
Tax Matters Definitions . For purposes of this
Agreement:
(i)
“ Tax ” or “ Taxes ” means
any and all federal, state, local and foreign income, gross
receipts, payroll, employment, excise, stamp, customs duties,
capital stock, franchise, profits, withholding, social security,
unemployment, real property, personal property, sales, use,
transfer, value added, alternative or add-on minimum, estimated, or
other taxes (together with interest, penalties and additions to tax
imposed with respect thereto) imposed by any Governmental
Entity.
(ii)
“ Tax Returns ” means returns, declarations,
claims for refund, or information returns or statements, reports
and forms relating to Taxes filed or required to be filed with any
Governmental Entity (including any schedule or attachment thereto)
with respect to the Company or the Subsidiaries, including any
amendment thereof.
Section 3.15.
Environmental Matters .
(a)
Compliance with Environmental Laws . Except as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect: (i) none of the Company or any of the
Subsidiaries is in violation of any applicable Environmental Law
or, except for any violation that has been fully resolved, has
violated in the past any applicable Environmental Law;
(ii) there is and has been no release of Hazardous Substances
that requires response action under applicable Environmental Law
at, on or under any of the properties currently owned, leased or
operated or, to the knowledge of the Company, otherwise occupied by
the Company or any of the Subsidiaries or, during the period of the
Company’s or the Subsidiaries’ ownership, lease or
operation thereof, formerly owned, leased or operated by the
Company or any of the Subsidiaries, that would reasonably be
expected to result in a liability to the Company or any of the
Subsidiaries; (iii) the Company and the Subsidiaries have
obtained and are in compliance with all required Environmental
Permits and, except for any noncompliance that has been fully
resolved, have been in the past in compliance with such permits;
and (iv) there are no written claims or notices pending or, to
the knowledge of the Company, issued to or threatened against the
Company or any of the Subsidiaries alleging violations of or
liability under any Environmental Law or otherwise concerning the
release or management of Hazardous Substances.
(b)
Environmental Matters Definitions . For purposes of this
Agreement:
(i)
“ Environmental Laws ” means any laws (including
common law) of the United States or any state or local Governmental
Entity within the United States, relating to: (A) releases or
threatened releases of Hazardous Substances or materials containing
Hazardous Substances; (B) the manufacture, handling,
transport, use, treatment, storage, emission, discharge or disposal
of Hazardous Substances or materials containing Hazardous
Substances; or (C)
15
pollution or
protection of the environment or of human health and safety as such
is affected by Hazardous Substances or materials containing
Hazardous Substances.
(ii)
“ Environmental Permits ” means any permit,
license, registration, approval, notification or any other
authorization required pursuant to applicable Environmental
Law.
(iii)
“ Hazardous Substances ” means: (A) those
substances, materials or wastes defined as toxic, hazardous,
acutely hazardous, pollutants or contaminants in, or regulated
under, the following United States federal statutes and any
analogous foreign or state statutes, and all regulations
thereunder: the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the
Federal Insecticide, Fungicide, and Rodenticide Act and the Clean
Air Act; (B) petroleum and petroleum products, including crude
oil and any fractions thereof; (C) natural gas, synthetic gas, and
any mixtures thereof; and (D) polychlorinated biphenyls,
asbestos, molds that would reasonably be expected to have an
adverse effect on human health and urea formaldehyde foam
insulation.
Section 3.16.
Material Contracts .
(a)
Status of Material Contracts . Except as set forth on
Schedule 3.16 , (i) each Material Contract is a legal,
valid and binding obligation of the Company or a Subsidiary, as
applicable, in full force and effect and enforceable against the
Company or a Subsidiary in accordance with its terms, subject to
the effect of any applicable bankruptcy, insolvency (including all
laws relating to fraudulent transfers), reorganization, moratorium
or similar laws affecting creditors’ rights generally and
subject to the effect of general principles of equity;
(ii) the Company has not received written notice, and has no
reason to believe, that any Material Contract is not a legal, valid
and binding obligation of the counterparty thereto, in full force
and effect and enforceable against such counterparty in accordance
with its terms; (iii) neither the Company nor any of the
Subsidiaries is and, to the Company’s knowledge, no
counterparty is in breach or violation of, or default under, any
Material Contract; (iv) none of the Company or any of the
Subsidiaries have received any claim of default under any Material
Contract; and (v) to the Company’s knowledge, no event
has occurred that would result in a breach or violation of, or a
default under, any Material Contract (in each case, with or without
notice or lapse of time or both).
(b)
Listing of Material Contracts . For purposes of this
Agreement, the term “ Material Contract ” means
any of the following Contracts (together with all amendments,
supplements, exhibits and schedules thereto) to which the Company
or any Subsidiary is a party or by which the Company or any
Subsidiary or any of their respective properties or assets are
bound or affected as of the date hereof:
(i)
any limited liability company agreement, joint venture or other
similar agreement or arrangement relating to the formation,
creation, operation, management or control of any partnership or
joint venture that is material to the business of the Company and
the Subsidiaries, taken as a whole, other than any such limited
liability company, partnership or joint venture that is a
Subsidiary and which has been made available to Parent pursuant to
Section 3.02 ;
(ii)
any Contract (other than with or between or among consolidated
Subsidiaries) relating to (A) indebtedness for borrowed money
and having an outstanding principal amount in excess of $500,000 or
(B) conditional sale arrangements, obligations secured
16
by a Lien, or
interest rate or currency hedging activities, in each case in
connection with which the aggregate actual or contingent
obligations of the Company or a Subsidiary, as the case may be,
under such Contract are greater than $500,000;
(iii)
any Contract filed or required to be filed as an exhibit to the
Company’s registration statements under the Securities Act or
periodic or current reports under the Exchange Act pursuant to
items (1), (2), (4), (9), (10) or (99) of the
Exhibit Table to Item 601 of Regulation S-K under the
Securities Act, other than Plans disclosed in Schedule
3.10(a) ;
(iv)
any Contract that purports to limit the right of the Company or the
Subsidiaries (A) to engage or compete in any line of business
or (B) to compete with any Person or operate in any location
in any respect material to the business of the Company and the
Subsidiaries, taken as a whole;
(v)
any Contract that has resulted in, or would be reasonably likely
over a twelve (12) month period to result in, aggregate payments to
the Company and any Subsidiary under such Contract of more than
$200,000 that (A) contains most favored customer pricing
provisions or (B) grants any exclusive rights, rights of first
refusal, rights of first negotiation or similar rights to any
Person;
(vi)
any Contract for the acquisition or disposition, directly or
indirectly (by merger or otherwise), of assets or capital stock or
other equity interests of another Person for aggregate
consideration under such Contract in excess of, individually or in
the aggregate with all such other Contracts, $1,000,000 with
respect to which the Company or any Subsidiary has any remaining
liabilities or obligations of any nature;
(vii)
any Contract that by its terms calls for aggregate payments by the
Company and any Subsidiary under such Contract of more than
$1,000,000 over the remaining term of such Contract;
(viii)
any Contract with an executive officer or director of the Company
(or, other than on arm’s length terms in the ordinary course
of business, any Person
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