Tender-Offer Statement — Third-Party Tender Offer — Schedule TO
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1: SC TO-T Tender-Offer Statement -- Third-Party Tender Offer 6 27K
2: EX-99.1(A)(1) Miscellaneous Exhibit 56 265K
10: EX-99.10(D)(2) Miscellaneous Exhibit 46 203K
11: EX-99.11(D)(3) Miscellaneous Exhibit 12 42K
12: EX-99.12(D)(4) Miscellaneous Exhibit 9 35K
3: EX-99.2(A)(2) Miscellaneous Exhibit 12 58K
4: EX-99.3(A)(3) Miscellaneous Exhibit 3 15K
5: EX-99.4(A)(4) Miscellaneous Exhibit 2 14K
6: EX-99.5(A)(5) Miscellaneous Exhibit 4 18K
7: EX-99.6(A)(6) Miscellaneous Exhibit 5± 17K
8: EX-99.8(A)(8) Miscellaneous Exhibit 5 28K
9: EX-99.9(D)(1) Miscellaneous Exhibit 4 19K
EXHIBIT 99(d)(2)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BETWEEN
LUXOTTICA GROUP S.P.A.,
SHADE ACQUISITION CORP.,
AND
SUNGLASS HUT INTERNATIONAL, INC.
DATED AS OF FEBRUARY 22, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I THE OFFER..........................................................2
Section 1.01. The Offer....................................................2
Section 1.02. Company Actions..............................................3
Section 1.03. Directors....................................................5
ARTICLE II THE MERGER........................................................6
Section 2.01. The Merger...................................................6
Section 2.02. Effective Time; Closing......................................6
Section 2.03. Effects of the Merger........................................6
Section 2.04. Articles of Incorporation and By-Laws of the Surviving
Corporation..................................................6
Section 2.05. Directors....................................................6
Section 2.06. Officers.....................................................7
Section 2.07. Conversion of Shares.........................................7
Section 2.08. Conversion of Purchaser Common Stock.........................7
Section 2.09. Company Option Plans.........................................7
Section 2.10. Warrants.....................................................7
Section 2.11. Shareholders' Meeting........................................8
Section 2.12. Merger Without Meeting of Shareholders.......................8
ARTICLE III PAYMENT FOR SHARES...............................................9
Section 3.01. Payment for Shares...........................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................10
Section 4.01. Organization and Qualification; Subsidiaries................10
Section 4.02. Articles of Incorporation and By-Laws.......................11
Section 4.03. Capitalization..............................................11
Section 4.04. Authority Relative to this Agreement........................12
Section 4.05. No Conflict; Required Filings and Consents; No
Dissenters' Rights..........................................12
Section 4.06. Compliance..................................................14
Section 4.07. SEC Reports and Financial Statements........................14
Section 4.08. Information.................................................15
Section 4.09. Litigation..................................................15
Section 4.10. Compliance with Applicable Laws.............................15
Section 4.11. Employee Benefit Plans and Arrangements.....................16
Section 4.12. Intellectual Property.......................................17
Section 4.13. Environmental Matters.......................................18
Section 4.14. Taxes.......................................................19
Section 4.15. Absence of Certain Material Adverse Changes.................19
Section 4.16. Affiliate Transactions......................................20
Section 4.17. Insurance...................................................20
Section 4.18. Real Property...............................................20
Section 4.19. Labor Matters...............................................21
Section 4.20. Material Contracts..........................................21
Section 4.21. Opinion of Financial Advisor................................21
Section 4.22. Brokers.....................................................21
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TABLE OF CONTENTS
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PAGE
ARTICLE V REPRESENTATIONS AND WARRANTIES....................................22
Section 5.01. Organization and Qualification..............................22
Section 5.02. Authority Relative to this Agreement........................22
Section 5.03. No Conflict; Required Filings and Consents..................23
Section 5.04. Information.................................................23
Section 5.05. Brokers.....................................................24
Section 5.06. Financial Capability........................................24
ARTICLE VI COVENANTS........................................................24
Section 6.01. Conduct of Business of the Company..........................24
Section 6.02. Access to Information.......................................27
Section 6.03. Further Assurances; Reasonable Best Efforts.................27
Section 6.04. Filings; Consents...........................................28
Section 6.05. Public Announcements........................................29
Section 6.06. Indemnification; Employees and Employee Benefits............29
Section 6.07. No Solicitation.............................................30
Section 6.08. Notification of Certain Matters.............................33
Section 6.09. State Takeover Laws.........................................33
Section 6.10. Shareholder Litigation......................................33
Section 6.11. Exemption from Liability Under Section 16(b)................33
Section 6.12. Financing Covenant of Parent................................34
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................34
Section 7.01. Conditions..................................................34
ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER................................34
Section 8.01. Termination.................................................34
Section 8.02. Effect of Termination.......................................36
Section 8.03. Fees and Expenses...........................................36
Section 8.04. Amendment...................................................36
Section 8.05. Extension; Waiver...........................................36
ARTICLE IX MISCELLANEOUS....................................................37
Section 9.01. Non-Survival of Representations and Warranties..............37
Section 9.02. Entire Agreement; Assignment................................37
Section 9.03. Validity....................................................37
Section 9.04. Notices.....................................................37
Section 9.05. Governing Law; Jurisdiction.................................38
Section 9.06. Waiver of Jury Trial........................................38
Section 9.07. Descriptive Headings........................................39
Section 9.08. Counterparts................................................39
Section 9.09. Parties in Interest.........................................39
Section 9.10. Certain Definitions.........................................39
Section 9.11. Specific Performance........................................39
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 22, 2001, by and among
Luxottica Group S.p.A., an Italian corporation ("Parent"), Shade Acquisition
Corp., a Florida corporation and a subsidiary of Parent (the "Purchaser"), and
Sunglass Hut International, Inc., a Florida corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, the Purchaser and
the Company have approved the acquisition of the Company by Purchaser on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause the
Purchaser to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all of the issued and
outstanding shares of Common Stock, $.01 par value, of the Company (the
"Shares") at a price per Share of $11.50 net to the Seller in cash (such price,
as it may hereafter be increased, the "Share Offer Price"), upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, the Board of Directors of the Company (the "Board") has approved
the Offer and the Merger (as hereinafter defined) and is recommending that the
Company's shareholders accept the Offer and tender their Shares to the
Purchaser;
WHEREAS, the respective Boards of Directors of Parent, the Purchaser and
the Company have approved the merger of the Purchaser with and into the Company,
as set forth below (the "Merger"), in accordance with the Florida Business
Corporation Act (the "FBCA") and upon the terms and subject to the conditions
set forth in this Agreement, whereby each issued and outstanding Share not owned
directly or indirectly by the Parent, the Purchaser or the Company will be
converted into the right to receive the Share Offer Price in cash;
WHEREAS, the Board of Directors of the Company has taken such action as is
necessary so that the restrictions on "affiliated transactions" set forth in
Section 607.0901 of the FBCA (the "Affiliate Transaction Statute") and the
restrictions on "control-share acquisitions" set forth in Section 607.0902 of
the FBCA (the "Control Share Statute") do not apply and will not apply to
Parent, the Purchaser or affiliates or associates of Parent as a result of the
transactions contemplated by this Agreement;
WHEREAS, Parent, the Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger; and
WHEREAS, as a condition and inducement to the willingness of Parent and
the Purchaser to enter into this Agreement (and effect the transactions
contemplated hereby), concurrently with the execution and delivery of this
Agreement, Parent and James N. Hauslein, Chairman of the Board of Directors and
Chief Executive Officer of the Company, are entering into a Consulting,
Nondisclosure and Noncompetition Agreement, dated as of the date of this
Agreement (the "Consulting and Non-Competition Agreement");
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
Section 1.01. THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII hereof and each of the conditions set forth in
Annex I hereto (as hereinafter provided) shall have been satisfied or waived
(collectively, the "Tender Offer Conditions"), the Purchaser shall, and Parent
shall cause the Purchaser to, commence (within the meaning of Rule 14d-2(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), promptly,
but in any event not later than March 5, 2001, the Offer for all outstanding
Shares at the Share Offer Price, net to the Seller in cash. The Company agrees
that no Shares held by the Company or any subsidiary of the Company will be
tendered pursuant to the Offer. The initial expiration date for the Offer (the
"Initial Expiration Date") shall be the twentieth (20th) business day from and
after the date the Offer is commenced, including the date of commencement as the
first business day in accordance with Rule 14d-2 under the Exchange Act, unless
the Purchaser shall have extended the period of time for which the Offer is open
pursuant to, and in accordance with, this Agreement or as may be required by
applicable law, in which case the expiration date of the Offer shall be the
latest time and date as the Offer, as so extended, may expire (the Initial
Expiration Date, as so extended, being hereinafter referred to as the
"Expiration Date"). Parent shall have the right, without the consent of the
Company, to extend the Offer beyond the Initial Expiration Date in the following
events: (i) from time to time if, at the Initial Expiration Date (or extended
Expiration Date of the Offer, if applicable), any of the conditions to the Offer
shall not have been satisfied or waived; (ii) for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer or any
period required by applicable law; (iii) for an aggregate period not to exceed
ten (10) business days (for all such extensions), if all of the conditions to
the Offer are satisfied or waived but the number of Shares validly tendered and
not withdrawn is insufficient to result in Purchaser owning at least eighty
percent of the then outstanding number of Shares and Parent and Purchaser
irrevocably and expressly waive all Tender Offer Conditions that may
subsequently fail to be satisfied during such extension of the Offer pursuant to
this clause (iii); or (iv) pursuant to an amendment to the Offer providing for a
"subsequent offering period" not to exceed twenty (20) business days to the
extent permitted under and in compliance with Rule 14d-11 under the Exchange
Act; PROVIDED, HOWEVER, that the Expiration Date shall not be extended by the
Parent beyond the Outside Date without the prior written consent of the Company.
Purchaser agrees that if any of the Tender Offer Conditions are not satisfied or
waived on any scheduled Expiration Date of the Offer, then Purchaser shall, and
Parent shall cause Purchaser to, extend the Offer for a period of not more than
ten (10) business days if requested to do so by the Company in writing prior to
such scheduled Expiration Date. The Purchaser expressly reserves the right to
waive any of the conditions to the Offer and to make any change in the terms or
conditions of the Offer; PROVIDED that without the prior written consent of the
Company, the Purchaser shall not, and Parent shall cause Purchaser not to, waive
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the Minimum Condition, extend the Expiration Date of the Offer except as
expressly provided above, decrease the price per Share or change the form of
consideration payable in the Offer, decrease the number of Shares sought to be
purchased in the Offer, impose conditions to the Offer in addition to those set
forth in Annex I or amend any other term of the Offer (including the Tender
Offer Conditions) in any manner adverse to the holders of any Shares. Subject to
the terms of the Offer and this Agreement and the satisfaction or waiver (to the
extent permitted by this Agreement) of all the Tender Offer Conditions as of any
Expiration Date, the Purchaser shall, and Parent shall cause Purchaser to,
accept for payment and pay for all Shares validly tendered and not withdrawn
pursuant to the Offer promptly after such Expiration Date of the Offer. Each of
Parent and the Purchaser shall use its reasonable best efforts to avoid the
occurrence of any Event specified in Annex I or to cure any such Event that
shall have occurred.
(b) Parent shall cause the Purchaser to file with the SEC on the date the
Offer is commenced a Tender Offer Statement on Schedule TO (together with any
supplements or amendments thereto, the "Offer Documents"), which shall contain
(as an exhibit thereto) the Purchaser's Offer to Purchase (the "Offer to
Purchase") which shall be mailed to the holders of Shares with respect to the
Offer. The Offer Documents will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
shareholders, shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Parent or the
Purchaser with respect to information supplied by the Company specifically for
inclusion or incorporation by reference in the Offer Documents. Each of Parent
and the Purchaser, on the one hand, and the Company, on the other hand, agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false or misleading in
any material respect and the Purchaser further agrees to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and to be disseminated to shareholders of the Company, in each case as and to
the extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review the Offer Documents
(including any amendments or supplements thereto) prior to such documents being
filed with the SEC.
Section 1.02. COMPANY ACTIONS.
(a) The Company hereby approves of, and consents to, the Offer. The
Company shall, contemporaneously with the commencement of the Offer and the
filing of the Purchaser's Schedule TO provided for in Section 1.01, file with
the SEC and mail to the holders of Shares a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Offer (together with any
amendments or supplements thereto, the "Schedule 14D-9") and shall disseminate
the Schedule 14D-9 as required by Rule 14d-9 promulgated under the Exchange Act.
The Schedule 14D-9 will set forth, and the Company hereby represents, that the
Board, at a meeting duly called and held, has unanimously: (i) determined that
this Agreement and the transactions contemplated hereby, including, without
limitation, the Offer and the Merger are fair to, advisable and in the best
interests of the Company and its shareholders; (ii) approved this Agreement, the
Offer and the Merger and has determined that such approval constitutes the valid
approval of this Agreement, the Offer and the Merger for purposes of (y) the
FBCA, including the Affiliate
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Transaction Statute and the Control Share Statute, and (z) the Company's
articles of incorporation and by-laws; (iii) taken all other action necessary to
render the Affiliate Transaction Statute and the Control Share Statute
inapplicable to the Offer, the Merger and all transactions contemplated by this
Agreement; and (iv) resolved to recommend acceptance of the Offer and approval
and adoption of the Merger and this Agreement by the Company's shareholders (in
accordance with the requirements of the Company's articles of incorporation,
by-laws and applicable law); PROVIDED, HOWEVER, that such recommendation and
approval may be withdrawn, modified or amended to the extent that the Board
determines in good faith (after having consulted with outside legal counsel)
that such action is necessary in order for its directors to comply with their
fiduciary duties to the Company's shareholders under applicable law. The Company
further represents that Morgan Stanley & Co. has rendered to the Board its
opinion that the consideration to be paid in the Offer and the Merger is fair to
the holders of Shares from a financial point of view. The Company hereby
consents to the inclusion in the Offer Documents of the recommendations and
approvals referred to in this Section 1.02.
(b) The Schedule 14D-9 will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
shareholders, shall not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by the
Company with respect to information supplied by Parent or the Purchaser
specifically for inclusion or incorporation by reference in the Schedule 14D-9.
Each of the Company, on the one hand, and Parent and the Purchaser, on the other
hand, agree promptly to correct any information provided by either of them for
use in the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect, and the Company further agrees to take
all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and to be disseminated to the holders of the Shares, in each case as and
to the extent required by applicable federal securities law. Parent, the
Purchaser and their counsel shall be given a reasonable opportunity to review
the Schedule 14D-9 (including any amendments or supplements thereto) prior to it
being filed with the SEC.
(c) In connection with the Offer, the Company shall, to the extent it
possesses, controls or has access to such information, promptly furnish the
Purchaser with mailing labels, security position listings, any available
non-objecting beneficial owner lists and any available listing or computer files
containing the names and addresses of the record holders of the Shares as of a
recent date, and shall promptly furnish the Purchaser with such additional
information (including, without limitation, updated lists of holders of Shares
and their addresses, mailing labels and lists of security positions) and
assistance as the Purchaser or its agents or representatives may reasonably
request in connection with communicating the Offer to the record and beneficial
holders of the Shares. Subject to the requirements of applicable law, and except
for such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer and the Merger, Parent and Purchaser
shall (i) hold in confidence the information contained in any of such labels and
lists; (ii) use such information only in connection with the Offer and the
Merger; and (iii) if this Agreement is terminated, shall, upon request, deliver
to the Company or destroy all copies of such information then in their
possession.
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Section 1.03. DIRECTORS.
(a) Effective upon the acceptance for payment of, and payment by Purchaser
in accordance with the Offer for, not less than a majority of the outstanding
Shares pursuant to the Offer, and from time to time thereafter, Parent shall be
entitled to designate such number of directors, rounded up to the next whole
number, on the Board as is equal to the product of (i) the total number of
directors on the Board (determined after giving effect to the directors elected
pursuant to this sentence) multiplied by (ii) the percentage that the aggregate
number of Shares beneficially owned by Parent or its affiliates (including
shares accepted for payment) bears to the total number of Shares then
outstanding, and the Company shall promptly take all actions necessary to cause
Parent's designees ("Purchaser Insiders") to be so elected, including, if
necessary, by increasing the number of directors or seeking the resignations of
one or more existing directors; PROVIDED, HOWEVER, that prior to the Effective
Time (as defined in Schedule 2.02), the Board shall always have at least two
members who are neither officers, directors, shareholders or designees of the
Purchaser or any of its affiliates and the Company shall continue to comply with
The Nasdaq Stock Market requirements with respect to independent directors.
During the period in which Parent shall be entitled to designate members of the
Board, the Company will use its best efforts to cause individuals designated by
Parent to constitute the same percentage as such individuals represent on the
Board of (A) each committee of the Board and (B) each board of directors (and
committee thereof) of each subsidiary of the Company. If the number of directors
who are not Purchaser Insiders is reduced below two for any reason prior to the
Effective Time, the remaining directors who are not Purchaser Insiders (or if
there is only one director who is not a Purchaser Insider, the remaining
director who is not a Purchaser Insider) shall be entitled to designate a person
(or persons) to fill such vacancy (or vacancies) who is not an officer,
director, shareholder or designee of the Purchaser or any of its affiliates and
who shall be a director not deemed to be a Purchaser Insider for all purposes of
this Agreement.
(b) The Company's obligations to appoint Parent's designees to the Board
shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
The Company shall promptly take all actions required pursuant to such Section
and Rule in order to fulfill its obligations under this Section 1.03 and shall
include in the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under such Section and Rule in order
to fulfill its obligations under this Section 1.03; PROVIDED, HOWEVER, that
Parent will supply and be responsible for any information with respect to itself
and its officers, directors and affiliates required by such Section and Rule to
the Company.
(c) From and after the election or appointment of Parent's designees
pursuant to this Section 1.03 and prior to the Effective Time, any amendment or
termination of this Agreement by the Company, any extension by the Company of
the time for the performance, or waiver, of any of the obligations or other acts
of Parent or the Purchaser or waiver of any of the Company's rights hereunder,
will require the concurrence of a majority of the directors of the Company then
in office who are not Purchaser Insiders. The Board shall not delegate any
matter set forth in this Section 1.03(c) to any committee of the Board.
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ARTICLE II
THE MERGER
Section 2.01. THE MERGER. Upon the terms and subject to the satisfaction
or waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement and the FBCA, at the Effective Time (as defined in
Section 2.02) the Purchaser shall be merged with and into the Company. Following
the Merger, the separate corporate existence of the Purchaser shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation"). At the option of Parent and provided that such amendment does not
delay the Effective Time, the Merger may be structured so that, and this
Agreement shall thereupon be amended to provide that, the Company shall be
merged with and into the Purchaser or another direct or indirect wholly-owned
subsidiary of Parent, with the Purchaser or such other subsidiary of Parent
continuing as the Surviving Corporation; PROVIDED, HOWEVER, that the Company
shall be deemed not to have breached any of its representations and warranties
herein if and to the extent such breach would have been attributable to such
election.
Section 2.02. EFFECTIVE TIME; CLOSING. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article VII, the parties
hereto shall cause the Merger to be consummated by filing articles of merger
(the "Articles of Merger") with the Secretary of State of the State of Florida,
in such form as is required by, and executed in accordance with, the relevant
provisions of Florida law. The time the Merger becomes effective in accordance
with applicable law is referred to as the "Effective Time." Immediately prior to
the filing of the Articles of Merger, a closing (the "Closing") will be held at
the offices of Winston & Strawn, 200 Park Avenue, New York, New York, or such
other place as the parties hereto may agree.
Section 2.03. EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in Section 607.1106 of the FBCA. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and the Purchaser shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and the Purchaser shall become the debts, liabilities and duties of the
Surviving Corporation.
Section 2.04. ARTICLES OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION.
(a) The articles of incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the articles of incorporation
of the Surviving Corporation, until thereafter amended in accordance with the
provisions thereof and hereof and applicable law.
(b) Subject to the provisions of Section 6.06 of this Agreement, the
by-laws of the Purchaser in effect at the Effective Time shall be the by-laws of
the Surviving Corporation, until thereafter amended in accordance with the
provisions thereof and hereof and applicable law.
Section 2.05. DIRECTORS. Subject to applicable law, the directors of the
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
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Section 2.06. OFFICERS. The individuals specified by Parent prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
Section 2.07. CONVERSION OF SHARES. At the Effective Time, by virtue of
the Merger and without any action on the part of the holders thereof, each Share
issued and outstanding immediately prior to the Effective Time (other than any
Shares held by Parent, the Purchaser, any wholly-owned subsidiary of Parent or
the Purchaser, in the treasury of the Company or by any wholly-owned subsidiary
of the Company, which Shares, by virtue of the Merger and without any action on
the part of the holder thereof, shall be cancelled and retired and shall cease
to exist with no payment being made with respect thereto) shall be converted
into the right to receive in cash the Share Offer Price (the "Merger Price"),
payable to the holder thereof, without interest thereon, upon surrender of the
certificate formerly representing such Share.
Section 2.08. CONVERSION OF PURCHASER COMMON STOCK. At the Effective Time,
each share of Common Stock, par value $.01 per share, of the Purchaser issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Surviving Corporation and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
Section 2.09. COMPANY OPTION PLANS. At the Effective Time, by virtue of
the Merger, all outstanding and unexpired options (regardless of whether or not
such options have vested) (the "Options"), including all options granted
pursuant to the Company's 1993 Amended and Restated Stock Option Plan and 1996
Executive Incentive Compensation Plan (collectively, the "Option Plans") shall
be cancelled and each holder of a cancelled Option shall be entitled to receive,
in consideration for the cancellation of such Option, an amount in cash equal to
the product of (x) the number of Shares previously subject to such Option and
(y) the excess, if any, of the Merger Price over the exercise price per Share
previously subject to such Option (such payment to be net of taxes and other
amounts required by law to be withheld with respect thereto), payable to such
holder, without interest thereon, upon surrender of the certificate or other
document evidencing such Option to the Surviving Corporation. Delivery of any
cash payment under this Section 2.09 to a holder of Options shall be conditioned
upon receipt by Parent or the Surviving Corporation of a waiver of all of that
holder's right, title and interest in and to his or her Options. Effective as of
the Effective Time, the Company shall take all action as is necessary prior to
the Effective Time to terminate all Option Plans so that on and after the
Effective Time no current or former employee, director, consultant or other
person shall have any option to purchase Shares or any other equity interests in
the Company under any Option Plan.
Section 2.10. WARRANTS. At the Effective Time, by virtue of the Merger,
all outstanding and unexpired warrants to purchase Shares (the "Warrants") shall
be cancelled and each holder of a cancelled Warrant shall be entitled to
receive, in consideration for the cancellation of such Warrant, an amount in
cash equal to the product of (x) the number of Shares previously subject to such
Warrant and (y) the excess, if any, of the Merger Price over the exercise price
per Share previously subject to such Warrant (such payment to be net of taxes
and other amounts required
7
by law to be withheld with respect thereto), payable to such holder, without
interest thereon, upon surrender of the certificate or other document evidencing
such Warrant to the Surviving Corporation. Delivery of any cash payment under
this Section 2.10 to a holder of Warrants shall be conditioned upon receipt by
Parent or the Surviving Corporation of a waiver of all of that holder's right,
title and interest in and to his or her Warrants.
Section 2.11. SHAREHOLDERS' MEETING.
(a) If required by the Company's articles of incorporation and/or
applicable law in order to consummate the Merger, the Company, acting through
the Board, shall, in accordance with applicable law and upon Parent's request:
(i) duly call, give notice of, convene and hold a special meeting of
its shareholders (the "Special Meeting") as soon as practicable following the
acceptance for payment of and payment for Shares by the Purchaser pursuant to
the Offer for the purpose of considering and taking action upon this Agreement;
(ii) subsequent to the acceptance for payment of and payment for
Shares by the Purchaser pursuant to the Offer, prepare and file with the SEC a
preliminary proxy statement relating to the Merger and this Agreement and use
its best efforts (x) to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, to respond promptly to any comments made by the SEC
with respect to the preliminary proxy statement and cause a definitive proxy
statement (the "Proxy Statement") to be mailed to its shareholders and (y) to
obtain the necessary approvals of the Merger and this Agreement by its
shareholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law as advised by outside counsel (as provided in Section 1.02(a)),
include in the Proxy Statement the recommendation of the Board that shareholders
of the Company vote in favor of the approval of the Merger and the adoption of
this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, the Purchaser or any of its other affiliates that it
controls in favor of the approval of the Merger and the adoption of this
Agreement.
Section 2.12. MERGER WITHOUT MEETING OF SHAREHOLDERS. Notwithstanding
Section 2.11, in the event that Parent, the Purchaser or any of Parent's other
direct or indirect subsidiaries shall acquire, in the aggregate, at least 80% of
the outstanding Shares, pursuant to the Offer or otherwise, the parties hereto
agree to take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the acceptance for payment of and payment
for Shares by the Purchaser pursuant to the Offer without a meeting of
shareholders of the Company, in accordance with Section 607.1104 of the FBCA.
8
ARTICLE III
PAYMENT FOR SHARES
Section 3.01. PAYMENT FOR SHARES.
(a) From and after the Effective Time, a bank or trust company mutually
acceptable to Parent and the Company shall act as paying agent (the "Paying
Agent") in effecting the payment of the Merger Price in respect of certificates
(the "Share Certificates") that, prior to the Effective Time, represented Shares
entitled to payment of the Merger Price pursuant to Section 2.07. Promptly
following the Effective Time, Parent or the Purchaser shall deposit, or cause to
be deposited, in trust with the Paying Agent the aggregate Merger Price to which
holders of Shares shall be entitled at the Effective Time pursuant to Section
2.07 (such funds being hereinafter referred to as the "Exchange Fund").
(b) Promptly after the Effective Time, the Paying Agent shall mail to each
record holder of Share Certificates that immediately prior to the Effective Time
represented Shares (other than Share Certificates representing Shares held by
Parent or the Purchaser, any wholly-owned subsidiary of Parent or the Purchaser,
in the treasury of the Company or by any wholly-owned subsidiary of the Company)
a form of letter of transmittal which shall specify that delivery shall be
effected, and risk of loss and title to the Share Certificates shall pass, only
upon proper delivery of the Share Certificates to the Paying Agent and
instructions for use in surrendering such Share Certificates and receiving the
aggregate Merger Price in respect thereof. Upon the surrender of each such Share
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, the Paying Agent shall pay the holder of such Share Certificate in
respect of Shares, the applicable Merger Price multiplied by the number of
Shares formerly represented by such Share Certificate in consideration therefor,
and such Share Certificate shall forthwith be cancelled. Until so surrendered,
each such Share Certificate (other than Share Certificates representing Shares
held by Parent or the Purchaser, in the treasury of the Company or by any
wholly-owned subsidiary of the Company) shall represent solely the right to
receive the aggregate Merger Price relating thereto. No interest or dividends
shall be paid or accrued on the Merger Price. If the Merger Price (or any
portion thereof) is to be delivered to any person other than the person in whose
name the Share Certificate formerly representing Shares surrendered therefor is
registered, it shall be a condition to such right to receive such Merger Price
that the Share Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person surrendering such
Share Certificates shall pay to the Paying Agent any transfer or other taxes
required by reason of the payment of the Merger Price to a person other than the
registered holder of the Share Certificate surrendered, or shall establish to
the satisfaction of the Paying Agent that such tax has been paid or is not
applicable.
(c) Promptly following the date which is 180 days after the Effective
Time, the Paying Agent shall deliver to the Surviving Corporation all cash,
Share Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Share Certificate formerly representing
a Share may surrender such Share Certificate to the Surviving Corporation and
9
(subject to the applicable abandoned property, escheat and similar laws) receive
in consideration therefor the aggregate Merger Price relating thereto, without
any interest or dividends thereon.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares which were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Share
Certificates formerly representing Shares are presented to the Surviving
Corporation or the Paying Agent, they shall be surrendered and cancelled in
return for the payment of the aggregate Merger Price as provided in this Article
III.
(e) None of Parent, the Purchaser, the Company nor the Surviving
Corporation shall be liable to any holder of Shares or other securities for any
consideration to be paid in the Merger delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(f) Each of the Surviving Corporation, Parent and the Paying Agent shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Shares or other securities such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended, or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by the Surviving Corporation, Parent or the Paying Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Shares or other securities in respect of which such
deduction and withholding was made by the Surviving Corporation, Parent or the
Paying Agent, as the case may be.
(g) If any Share 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 or the
Surviving Corporation, the posting by such person of a bond, in such reasonable
amount as Parent or the Surviving Corporation may direct, as indemnity against
any claim that may be made against it with respect to such Share Certificate,
the Paying Agent will issue in exchange for such lost, stolen or destroyed Share
Certificate, the Merger Price, without any interest thereon.
(h) The Paying Agent shall invest the funds constituting the Exchange Fund
as directed by Parent. Any interest or other income resulting from such
investment shall be paid to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser that:
Section 4.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida. Except as set forth in Section 4.01 of the
disclosure schedule delivered to Parent by the Company (the "Company Disclosure
Schedule"), each of the Company's subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization. The Company and each of its subsidiaries has the
requisite power
10
(corporate or otherwise) and authority to own, operate or lease its properties
and to carry on its business as it is now being conducted, and is duly qualified
or licensed to do business, and is in good standing, in each jurisdiction in
which the nature of its business or the properties owned, operated or leased by
it makes such qualification, licensing or good standing necessary, except where
the failure to be so qualified, licensed or in good standing, would not have a
Material Adverse Effect on the Company. The term "Material Adverse Effect on the
Company", as used in this Agreement, means any change or effect that, either
individually or in the aggregate with all other changes or effects, is or could
reasonably be expected to be materially adverse to the business, results of
operations or financial condition of the Company and its subsidiaries taken as a
whole, other than (x) a change or effect resulting from a change in general
economic conditions or (y) a change in vendor relationships resulting primarily
from the announcement of the Offer and the Merger.
Section 4.02. ARTICLES OF INCORPORATION AND BY-LAWS. The Company has
heretofore made available to Parent and the Purchaser a complete and correct
copy of the articles of incorporation and the by-laws, each as amended to the
date hereof, of the Company and each subsidiary of the Company. Such articles of
incorporation and by-laws are in full force and effect. Neither the Company nor
any of its subsidiaries is in violation of any provision of its articles of
incorporation or by-laws.
Section 4.03. CAPITALIZATION. The authorized capital stock of the Company
consists of 100,000,000 Shares. As of the close of business on February 3, 2001,
there were 40,136,132 Shares issued and outstanding, and no Shares were held in
treasury. The Company has no shares of capital stock reserved for issuance,
except that, as of February 3, 2001, there were 4,807,447 Shares reserved for
issuance pursuant to outstanding and unexpired Options, 136,152 Shares reserved
for issuance pursuant to outstanding Warrants and 3,801,652 Shares reserved for
issuance under the Company's outstanding 5 1/4% Convertible Subordinated Notes
due 2003 (the "Convertible Notes"). There are no other shares of capital stock
of the Company authorized, issued or outstanding. Section 4.03 of the Company
Disclosure Schedule sets forth the record and beneficial holders of all
outstanding Options and Warrants and the number, exercise prices, vesting
schedules and expiration dates of each grant to such holders. Since February 3,
2001, the Company has not issued any shares of capital stock or securities
exchangeable or convertible into capital stock except pursuant to the exercise
of Options or Warrants. All the outstanding Shares are, and all Shares which may
be issued pursuant to the exercise of outstanding Options, Warrants and
Convertible Notes will be, when issued in accordance with the respective terms
thereof, duly authorized, validly issued, fully paid and nonassessable and are
not subject to nor were they issued in violation of any preemptive rights.
Except as set forth in Section 4.03 of the Company Disclosure Schedule, there
are no bonds, debentures, notes or other indebtedness having general voting
rights (or convertible into, or exchangeable for, securities having such rights)
("Voting Debt") of the Company or any of its subsidiaries issued and
outstanding. Except as set forth in this Section 4.03 and except for the
transactions contemplated by this Agreement, there are no existing options,
warrants, calls, subscriptions or other rights, agreements, arrangements or
commitments of any character, relating to the issued or unissued capital stock
of the Company or any of its subsidiaries, obligating the Company or any of its
subsidiaries to issue, transfer or sell or cause to be issued, transferred or
sold any shares of capital stock or Voting Debt of, or other equity interest in,
the Company or any of its subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, nor are there any obligations
11
of the Company or any of its subsidiaries to grant, extend or enter into any
such option, warrant, call, subscription or other right, agreement, arrangement
or commitment. There are no outstanding contractual obligations of the Company
or any of its subsidiaries to repurchase, redeem or otherwise acquire any Shares
or other capital stock of the Company or any of its subsidiaries. Except as set
forth in Section 4.03 of the Company Disclosure Schedule, to the knowledge of
the Company, there are no outstanding proxies with respect to the Shares and
there are no agreements or understandings by or among any persons which affect
or relate to the voting of, or the execution of written consents with respect
to, any security of the Company or any of its subsidiaries. Each of the
outstanding shares of capital stock of each of the Company's subsidiaries is
duly authorized, validly issued, fully paid and nonassessable, and such shares
of the Company's subsidiaries are owned, beneficially and of record, by the
Company or by a subsidiary of the Company, in each case free and clear of any
lien, claim, option, charge, security interest, limitation, encumbrance and
restriction of any kind (any of the foregoing being a "Lien"), other than the
Liens in favor of the Company's senior lenders pursuant to the agreement that is
described in the Company's SEC Reports filed prior to the date of this
Agreement. Except as set forth in Section 4.03 of the Company Disclosure
Schedule, the Company does not directly or indirectly own capital stock of, or
any other interest in, any entity other than its wholly-owned subsidiaries
disclosed in Section 4.03 of the Company Disclosure Schedule.
Section 4.04. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and, except for any required approval by
the Company's shareholders in connection with the consummation of the Merger, to
consummate the transactions contemplated hereby. 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 and
approved by the Board and no other corporate proceedings on the part of the
Company are necessary to authorize or approve this Agreement (other than, with
respect to the Merger, the approval and adoption of the Merger and this
Agreement by holders of the Shares to the extent required by the Company's
articles of incorporation and by applicable law). This Agreement has been duly
and validly executed and delivered by the Company and, assuming the due and
valid authorization, execution and delivery of this Agreement by Parent and the
Purchaser, constitutes a legally valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) is subject to general principles of equity. The Board, at a
meeting duly called and held, has taken all actions necessary under the FBCA,
including approving the transactions contemplated by this Agreement, to ensure
that the restrictions set forth in the Affiliate Transaction Statute and the
Control Share Statute do not, and will not, apply to Parent or the Purchaser,
affiliates or associates of Parent or the Purchaser or the transactions
contemplated by this Agreement, including, without limitation, the Offer and the
Merger. No other state takeover statute or similar statute or regulation applies
or purports to apply to the Offer, the Merger or the other transactions
contemplated by this Agreement.
Section 4.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS; NO DISSENTERS'
RIGHTS.
(a) Assuming (i) compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) the requirements of
the Exchange Act and any
12
applicable state securities or "blue sky" laws are met and (iii) the filing of
the Articles of Merger and other appropriate merger documents, if any, as
required by the FBCA, is made, none of the execution and delivery of this
Agreement by the Company, the performance or consummation by the Company of the
transactions contemplated hereby or compliance by the Company with any of the
provisions hereof will (i) conflict with or violate the articles of
incorporation or by-laws of the Company or the comparable organizational
documents of any of its subsidiaries, (ii) conflict with or violate any law,
statute, ordinance, rule, regulation, order, judgment, decree, injunction or
other binding action or requirement of any Governmental Entity (as defined
below) applicable to the Company or its subsidiaries, or by which any of them or
any of their respective properties or assets may be bound or affected, except
for such conflicts or violations that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, (iii) other than the accelerated vesting of the Options, result in a
breach or violation of, a default under or the triggering of any payment or
other material obligations pursuant to, any of the Company's existing Employee
Benefit Arrangements (as hereinafter defined) or any grant or award made under
any of the foregoing, or (iv) result in a violation or breach of 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 rights of termination, amendment,
acceleration or cancellation of, or result in any loss of any benefit under, or
the creation of any Lien on any of the property or assets of the Company or any
of its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective assets or
properties may be bound or affected, except as disclosed in Section 4.05 of the
Company Disclosure Schedule and except for such violations, breaches or defaults
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company.
(b) None of the execution and delivery of this Agreement by the Company,
the performance or consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will
require any consent, waiver, approval, authorization, order or permit of, or
registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, domestic, foreign or
supranational, or any administrative, governmental or regulatory authority,
agency, commission, tribunal or body, domestic, foreign or supranational (a
"Governmental Entity"), except for (i) compliance with any applicable
requirements of the Exchange Act, (ii) the filing of the Articles of Merger
pursuant to the FBCA, (iii) compliance with the HSR Act, and (iv) Consents the
failure of which to obtain or make could not reasonably be expected to (A) have
a Material Adverse Effect on the Company or materially adversely affect the
ability of the Company to consummate the transactions contemplated hereby, (B)
impair in any material respect the ability of the Company to perform its
obligations under this Agreement or (C) prevent or materially delay consummation
of any transactions contemplated by this Agreement. Except (i) for the
accelerated vesting of Options, (ii) terminations and other detriments that
would not be material to the Company or any of its subsidiaries or, following
the consummation of the Offer or the Merger, Parent or the Purchaser, or (iii)
as set forth in Section 4.05 of the Company Disclosure Schedule, the
transactions contemplated by this Agreement will not constitute a "change of
control" under, require the Consent from or the giving of notice to a third
party pursuant to, permit a third party to terminate or accelerate vesting or
repurchase rights or create any other detriment under the terms, conditions or
provisions of, any note, bond, mortgage, indenture,
13
license, lease, contract, agreement, Employee Benefit Arrangement, or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
(except that this sentence does not apply to real estate leases, which are
covered by the representation and warrant set forth in Section 4.18).
(c) Section 607.1302 of the FBCA, providing for the right of shareholders
to dissent from the consummation of a plan of merger to which a corporation
incorporated under the FBCA is a party, does not and, assuming that the Shares
remain designated as a national market system security within the meaning of the
FBCA prior to the Merger, will not apply to the transactions contemplated by
this Agreement, including, without limitation, the Merger, by reason of: (i) the
fact that the articles of incorporation of the Company do not otherwise provide;
and (ii) the provisions of Section 607.1302(4) of the FBCA.
Section 4.06. COMPLIANCE. Except as set forth in Section 4.06 of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries is
in conflict with, or in default or violation of, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any property or
asset of the Company or any of its subsidiaries is bound or affected, except for
such conflicts, defaults and violations which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
Section 4.07. SEC REPORTS AND FINANCIAL STATEMENTS.
(a) Except as set forth in Section 4.07 of the Company Disclosure
Schedule, the Company has filed on a timely basis with the SEC all forms,
reports, schedules, registration statements, definitive proxy statements and
other documents (as they have been amended since the time of their filing, and
including any documents filed as exhibits thereto, collectively, the "SEC
Reports") required to be filed by the Company with the SEC since January 30,
1999. As of their respective dates, except as set forth in Section 4.07 of the
Company Disclosure Schedule, the SEC Reports (including, without limitation, any
financial statements or schedules included or incorporated by reference therein)
complied in all material respects with the requirements of the Exchange Act or
the Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations of the SEC promulgated thereunder applicable, as the case may be, to
such SEC Reports, and none of the SEC Reports contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. No subsidiary of the
Company is required to file any form, report or other document with the SEC.
(b) The consolidated balance sheets as of January 30, 1999 and January 29,
2000 and the related consolidated statements of income, shareholders' equity and
cash flows for each of the three years in the period ended January 29, 2000
(including the related notes and schedules thereto) of the Company contained in
the Company's Form 10-K for the year ended January 29, 2000 included in the SEC
Reports present fairly, in all material respects, the consolidated financial
position and the consolidated results of operations and cash flows of the
Company and its consolidated subsidiaries as of the dates or for the periods
presented therein in conformity
14
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved except as otherwise noted
therein.
(c) The Company's unaudited consolidated balance sheet as of October 28,
2000 and the related consolidated statements of income, shareholders' equity and
cash flows for the three months and nine months then ended, as applicable
(collectively, the "Most Recent Financial Statements"), contained in the
Company's Form 10-Q for the fiscal quarter ended October 28, 2000 present
fairly, in all material respects (subject to normal year-end adjustments that
will not be material), the consolidated financial position and the consolidated
results of operations and cash flows of the Company and its consolidated
subsidiaries as of the date or for the periods presented therein in conformity
with GAAP applied on a consistent basis during the periods involved except as
otherwise noted therein.
Section 4.08. INFORMATION. None of the information supplied by the Company
specifically for inclusion or incorporation by reference in (i) the Offer
Documents, (ii) the Schedule 14D-9, (iii) the Proxy Statement or (iv) any other
document filed or to be filed with the SEC or any other Governmental Entity in
connection with the transactions contemplated by this Agreement (the "Other
Filings") will, at the respective times filed with the SEC or other Governmental
Entity and, in addition, in the case of the Proxy Statement, at the date it or
any amendment or supplement is mailed to shareholders, at the time of the
Special Meeting and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, provided that no
representation is made by the Company with respect to information furnished by
Parent or the Purchaser specifically for inclusion therein. The Schedule 14D-9,
the Proxy Statement and the Other Filings made by the Company prior to the
acceptance for payment of Shares pursuant to the Offer will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made therein based on information supplied by Parent
or the Purchaser in writing specifically for inclusion in the Proxy Statement.
Section 4.09. LITIGATION. Except as set forth in Section 4.09 of the
Company Disclosure Schedule or in the SEC Reports filed by the Company prior to
the date of this Agreement, there is no legal action, suit, claim or legal,
administrative or other proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, or any property or
asset of the Company or any of its subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on the
Company or could reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated by this Agreement nor is there any
judgment, decree, injunction or order of any Governmental Entity or arbitrator
outstanding against the Company or any of its subsidiaries, or any property or
asset of the Company or any of its subsidiaries, that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company or could reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
Section 4.10. COMPLIANCE WITH APPLICABLE LAWS. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental
15
Entities required in connection with the ownership or occupancy of their
respective properties and assets and the operation of their respective
businesses, except for such permits, licenses, variances, exemptions, orders and
approvals the failure of which to hold could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company. The
operations of the Company and its subsidiaries are not being conducted in
violation of any law, rule, regulation or order of any Governmental Entity
applicable to the Company or its subsidiaries or by which any property or asset
of the Company or any of its subsidiaries is bound or affected (except that no
representation or warranty is made in this Section 4.10 with respect to
Environmental Laws (as defined in Section 4.13 below) which are dealt with
exclusively in Section 4.13), except for violations or possible violations which
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company.
Section 4.11. EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS.
(a) Section 4.11 of the Company Disclosure Schedule includes a complete
list of all severance, benefit, deferred compensation, incentive compensation,
stock option, bonus, welfare benefit and other employee benefit plans, programs
and policies providing benefits to any present or former director, officer or
employee of the Company or any of its subsidiaries, or any beneficiary or
dependent of any such person (whether or not written), sponsored or maintained
by the Company or any of its subsidiaries or to which the Company or any of its
subsidiaries contributes or is obligated to contribute (collectively, the
"Plans"), and includes a summary in reasonable detail of any unwritten Plans.
Without limiting the generality of the foregoing, the term "Plans" includes all
employee welfare benefit plans within the meaning of Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended, and the regulations
thereunder ("ERISA") and all employee pension benefit plans within the meaning
of Section 3(2) of ERISA.
(b) With respect to each Plan, the Company has made available to Parent a
true, correct and complete copy of all plan documents, benefit schedules, trust
agreements, insurance contracts and other funding vehicles and the most recent
annual financial report and Annual Report (Form 5500 Series), if any.
(c) The Company and each of its subsidiaries has complied, and is now in
compliance, in all material respects with all provisions of ERISA, the Code and
all laws and regulations applicable to the Plans. With respect to each Plan that
is intended to be a "qualified plan" within the meaning of Section 401(a) of the
Code ("Qualified Plans"), the IRS has issued a favorable determination letter.
(d) All contributions required to be made to any Plan by applicable law or
regulation or by any plan document or other contractual undertaking, and all
premiums due or payable with respect to insurance policies funding any Plan,
have been timely made or paid in full or, to the extent not required to be made
or paid on or before the date hereof, have been fully reflected in the financial
statements of the Company included in the SEC Reports and in the Most Recent
Financial Statements to the extent required under GAAP.
(e) No Plan is subject to Title IV or Section 302 of ERISA or Section 412
or 4971 of the Code. There does not now exist, nor do any circumstances exist
that could reasonably be
16
expected to result in, any material liability under (i) Title IV of ERISA, (ii)
section 302 of ERISA, (iii) sections 412 and 4971 of the Code, or (iv) the
continuation coverage requirements of section 601 ET SEQ. of ERISA and section
4980B of the Code, other than a liability that arises solely out of, or relates
solely to, the Plans, that would be a liability of the Surviving Corporation or
any of its subsidiaries following the Effective Time.
(f) No Plan is a multiemployer plan, as defined Section 3(37) of ERISA. No
claims are pending against the Plans, or the Company or any of its subsidiaries
with respect to the Plans except for benefit payments in the normal course of
business, and no employee, beneficiary, dependent, or governmental agency has
threatened any appeal or litigation regarding any matter with respect to the
Plans. No Plan provides benefits to current or former employees, beneficiaries,
or dependents of the Company or its subsidiaries which continue after
termination of employment, other than as required by Section 601 ET SEQ. of
ERISA.
Section 4.12. INTELLECTUAL PROPERTY.
(a) All patents, patent applications, patent disclosures, trademark
registrations and trademark applications, service mark registrations and service
mark applications, certification mark registrations and certification mark
applications, copyright registrations and copyright registration applications,
mask works registrations and mask works registration applications, both domestic
and foreign, internet domain names, computer software, trade secrets,
trademarks, trade names, service marks, certification marks, copyrights,
internet domain names, source codes, know-how, methods, processes, procedures,
apparatus, equipment, industrial property, discoveries, inventions, designs,
drawings, plans, specifications, engineering data, manuals, development
projects, research and development work in progress, technology or other
proprietary rights or confidential information which are owned or used by the
Company or any of its subsidiaries, or are necessary for the operation of their
respective businesses, are referred to as the "Intellectual Property." Except as
otherwise indicated on Section 4.12 of the Company Disclosure Schedule, the
Company and its subsidiaries own or have a valid right to use all the
Intellectual Property.
(b) Except for such exceptions as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, none of the licenses or other agreements relating to the Intellectual
Property to which the Company or any of its subsidiaries is a party is subject
to termination or cancellation or change in its terms or provisions as a result
of this Agreement or the transactions provided for in this Agreement.
(c) To the knowledge of the Company, there is no unauthorized use,
infringement or misappropriation of any Intellectual Property.
(d) Except as disclosed in Section 4.12 of the Company Disclosure
Schedule, no claim with respect to the Intellectual Property has been asserted
or, to the knowledge of the Company, is threatened by any person nor does the
Company know of any valid ground for any bona fide claims (i) to the effect that
the manufacture, sale or use of any product or process as used (currently or in
the past) or offered or proposed for use or sale by the Company or any of its
subsidiaries infringes on any copyright, trade secret, patent, trade name or
other intellectual property right of any person, (ii) against the Company or any
of its subsidiaries relating to the
17
use of any Intellectual Property, or (iii) challenging the ownership, validity
or effectiveness of any Intellectual Property, except for claims which could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect on the Company. To the Company's knowledge, all granted
and issued material patents, all material registered trademarks and service
marks and all material copyrights held by the Company and its subsidiaries are
valid, enforceable and subsisting.
(e) No Intellectual Property is subject to any outstanding order,
judgment, decree, stipulation or agreement restricting in any manner the
licensing, assignment or other transfer, use or enforceability thereof by the
Company that could reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect on the Company. The Company has not entered into
any agreement to indemnify any other person against any charge of infringement
of any Intellectual Property, except indemnities agreed to in the ordinary
course of business included as part of the Company's license agreements and
other indemnities that could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company.
Section 4.13. ENVIRONMENTAL MATTERS. Other than for those exceptions that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company, (i) there has been no Release of
Hazardous Substances by the Company or any of its subsidiaries on any real
property currently or formerly owned, leased or operated by the Company or any
of its subsidiaries, and to the knowledge of the Company, no real property
currently or formerly owned, leased or operated by the Company or any subsidiary
thereof is contaminated with any Hazardous Substances; (ii) no judicial or
administrative proceeding order, judgment, decree, settlement or investigation
is pending or, to the knowledge of the Company, threatened relating to alleged
violations of Environmental Laws, Releases or threatened Releases of Hazardous
Substances on real property currently or formerly owned, leased or operated by
the Company or any of its subsidiaries, or liability for any off-site disposal
of Hazardous Substances or contamination; (iii) the Company and its subsidiaries
have not received in writing any claims, notices or correspondence alleging
liability under any Environmental Law, and to the knowledge of the Company no
facts or circumstances exist that could reasonably be expected to result in such
claims; (iv) the business and operations of the Company and its subsidiaries
comply with all Environmental Laws and the Company and its subsidiaries have
obtained all material permits, authorizations and licenses relating to
Environmental Laws necessary for the operation of their businesses; all such
permits, authorizations and licenses are in full force and effect and the
Company and its subsidiaries are in compliance, in all material respects, with
all terms and conditions of such permits; and (v) to the knowledge of the
Company, any asbestos-containing material or presumed asbestos-containing
material which is on or part of any real property currently owned or operated by
the Company or any subsidiary is in good repair according to the current
standards and practices governing such material, and its presence or condition
does not violate any Environmental Law. "Environmental Law" means any applicable
federal, state or local law, regulation, order, decree or judicial opinion or
other agency requirement having the force and effect of law and relating to
noise, odor, Hazardous Substances or the environment. "Hazardous Substance"
means any toxic or hazardous substance or waste that is regulated by or under
authority of any Environmental Law, including any petroleum products, asbestos
or polychlorinated biphenyls. "Release" means spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Hazardous Substance into the
18
environment, including the abandonment or discarding of barrels, containers, and
other closed receptacles containing any Hazardous Substance.
Section 4.14. TAXES.
(a) The Company and each of its subsidiaries have timely filed with the
appropriate taxing authorities all material Tax Returns required to be filed.
All Taxes of the Company and each of its subsidiaries shown to be due and
payable on such Tax Returns have been paid and the Company has made adequate
provisions in the Company's financial statements for all payments of Taxes
anticipated to be payable for all relevant taxable periods (or portions
thereof).
(b) All material deficiencies and assessments asserted as a result of
examinations or audits by taxing authorities have been paid, settled, or
adequately provided for in the Company's financial statements.
(c) No issue or claim has been asserted in writing for Taxes (i) the
adverse determination of which would result in a material deficiency or (ii)
that has given rise to a material Lien against property of the Company or any of
its subsidiaries.
(d) There are no outstanding agreements or waivers extending the statutory
period of limitations applicable to any Tax Returns of the Company or any of its
subsidiaries.
(e) There is no contract, agreement, plan, or arrangement covering any
employee or former employee of the Company that could give rise, separately or
in the aggregate, to a payment that would not be deductible by reason of Section
280G of the Code or Section 162(m) of the Code.
(f) Neither the Company nor any of its subsidiaries (i) has been a member
of a group filing consolidated returns for federal income tax purposes (except
for a group that has the Company as its common parent) or (ii) is a party to a
Tax sharing or a Tax indemnity agreement or a similar agreement that remains in
effect.
(g) The term "Tax," as used in this Agreement, means any net income,
capital gains, gross income, gross receipts, sales, use, transfer, ad valorem,
franchise, profits, license, capital, withholding, payroll, employment, excise,
goods and services, severance, stamp, occupation, premium, property, windfall
profits or other tax, charge, fee, levy, custom duties, or other similar charge
imposed by a taxing authority of the United States or any state, local, or
foreign government or agency or subdivision thereof, including any interest,
penalties, additions to tax, or additional amounts accrued under applicable law
or charged by any taxing authority.
(h) The term "Tax Return," as used in this Agreement, means any return,
declaration, report, claim for refund, or information return or other statement
in relation to Taxes, including any schedule or attachment thereto or amendment
thereof.
Section 4.15. ABSENCE OF CERTAIN MATERIAL ADVERSE CHANGES. Other than as
previously disclosed in the SEC Reports, since January 29, 2000, (i) there has
not been an event which could reasonably be expected to have a Material Adverse
Effect on the Company, (ii) the business of the Company and its subsidiaries has
been conducted, in all material respects, only in
19
a manner consistent with past practice, and (iii) neither the Company nor any of
its subsidiaries has incurred any material liabilities (direct, contingent or
otherwise) or engaged in any material transactions or entered into any material
agreement or commitment outside the ordinary course of business. In addition,
except as set forth in Section 4.15 of the Company Disclosure Schedule and other
than as previously disclosed in the SEC Reports, since January 29, 2000, there
has not been (i) any change by the Company in its accounting methods, principles
and practices, (ii) except as previously disclosed to representatives of Parent,
any reevaluation by the Company of any asset (including, without limitation, any
write-down of inventory or write-off of accounts receivable) other than in the
ordinary course of business consistent with past practice, (iii) any damage,
destruction or loss (whether or not covered by insurance) with respect to any
material property or asset of the Company or any of its subsidiaries, (iv) any
failure by the Company to revalue any asset in accordance with GAAP applied
consistent with past practice, (v) except in the ordinary course of business,
any entry by the Company or any of its subsidiaries into any commitment or
transaction material to the Company and its subsidiaries, taken as a whole, (vi)
any declaration, setting aside or payment of any dividend or distribution in
respect of any capital stock of the Company or any redemption, purchase or other
acquisition of any of its securities, or (vii) any increase in or establishment
of any bonus, insurance, severance, deferred compensation, pension, retirement,
profit sharing, stock option, stock purchase or other employee benefit plan, or
any other increase in the compensation payable or to become payable to any
director or officer of the Company, PROVIDED, however, that nothing herein shall
require the listing on Section 4.15 of the Company Disclosure Schedule of
Options otherwise disclosed on Section 4.03 of the Company Disclosure Schedule
or of any item disclosed on Section 4.11 of the Company Disclosure Schedule.
Section 4.16. AFFILIATE TRANSACTIONS. Except as set forth in Section 4.16
of the Company Disclosure Schedule or as previously disclosed in the SEC
Reports, there have been no transactions, agreements, arrangements or
understandings between the Company or any of its subsidiaries, on the one hand,
and any affiliate thereof, on the other hand, that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act.
Section 4.17. INSURANCE. Except to the extent that the lack of a policy
could not reasonably be expected to have a Material Adverse Effect on the
Company, the Company and its subsidiaries have insurance policies, including,
without limitation, policies of fire and other casualty and liability insurance,
that the Company believes are sufficient for the respective businesses and
operations of the Company and its subsidiaries.
Section 4.18. REAL PROPERTY. Neither the Company nor any of its
subsidiaries owns any real property. No violation or default exists under any
lease of real property to which the Company or any of its subsidiaries is a
party, nor has the Company or any of its subsidiaries received notice alleging
that any such violation or default exists, except for such violations or
defaults, actual or alleged, which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company. The
consummation of the transactions contemplated by this Agreement will not create
or result in a violation or default under any such lease, whether pursuant to
any "change in control" or any other provisions thereof, except for such
violations or defaults which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
20
Section 4.19. LABOR MATTERS. No employee of the Company or of any of its
subsidiaries is represented by any labor union or any collective bargaining
organization. No labor organization or group of employees of the Company or any
of its subsidiaries has made a pending demand for recognition or certification,
and there are no representation or certification proceedings or petitions
seeking a representation proceeding presently pending or threatened to be
brought or filed, with the National Labor Relations Board or any other labor
relations tribunal or authority. The Company and each of its subsidiaries have
complied in all material respects with all labor agreements and all applicable
laws, regulations, decrees, orders, judgments and other requirements relating to
the employment of labor, including those related to equal employment
opportunity, wages, hours, occupational safety, and the payment of social
security and other payroll-related Taxes, and neither the Company nor any of its
subsidiaries has received any notice alleging a failure to comply in any
material respect with such laws, regulations, decrees, orders, judgments and
other requirements. No material controversies, disputes or proceedings are
pending or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries with respect to their employees. Except as set forth in
Section 4.19 of the Company Disclosure Schedule, there are no employment,
consulting or similar agreements covering employees or consultants of the
Company or any of its subsidiaries.
Section 4.20. MATERIAL CONTRACTS.
(a) Neither the Company nor any of its subsidiaries is (i) in violation of
or default under any contract or agreement that restricts its ability to compete
or otherwise conduct its business as presently conducted, except for such
violations or defaults which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company or (ii)
a party to, or bound by, any contract or agreement that restricts or would
restrict the ability of the Company or any of its affiliates from competing or
otherwise conducting their respective businesses as such businesses are
conducted on the date of this Agreement, except for such restrictions that could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(b) Except as set forth in Section 4.20 in the Company Disclosure
Schedule, there does not exist any contract to which the Company or any of its
subsidiaries is a party providing for its purchase from a third party of
products for resale by the Company or any of its subsidiaries at retail: (i)
under which a violation or default that would result in a material cost to the
Company would be caused by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby; or (ii) that cannot by
virtue of its terms be cancelled or terminated by the Company or any of its
subsidiaries, without a material penalty or other material financial cost to the
Company or any of its subsidiaries, on less than ninety (90) days' notice to the
other party to such contract.
Section 4.21. OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Morgan Stanley & Co. to the effect that the consideration to be
received by the holders of the Shares pursuant to the Offer and Merger is fair
to the holders of the Shares from a financial point of view. The Company shall
promptly deliver to Parent a copy of such opinion.
Section 4.22. BROKERS. Except for the engagement of Morgan Stanley & Co.,
whose fees will be paid by the Company, none of the Company, any of its
subsidiaries, or any of their
21
respective officers, directors, or employees has employed any investment banker,
financial advisor, broker, finder or other intermediary or incurred any
liability for any brokerage or investment banking fees, commissions, finder's
fees or similar fees in connection with the transactions contemplated by this
Agreement. The aggregate Merger Fees (as defined herein) owed or which will be
owing by the Company and its subsidiaries in connection with the Offer, the
Merger and the other transactions contemplated by this Agreement will not exceed
the amount set forth in the Company's agreement with Morgan Stanley & Co., a
copy of which has been made available to Parent. "Merger Fees" means all fees
and expenses paid or payable by or on behalf of the Company or any of its
subsidiaries to all investment bankers and financial advisors incident to the
negotiation, preparation, execution and consummation of this Agreement and the
transactions contemplated hereby.
When used in this Article IV, references to "the Company's knowledge" or
similar phrases shall mean to the actual knowledge of the officers and directors
of the Company after reasonable investigation.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as follows:
Section 5.01. ORGANIZATION AND QUALIFICATION. Parent is a corporation duly
organized, validly existing and in good standing under the laws of Italy. The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida. Each of Parent and the Purchaser has the
requisite corporate power and authority to own, operate or lease its properties
and to carry on its business as it is now being conducted, and is duly qualified
or licensed to do business, and is in good standing, in each jurisdiction in
which the nature of its business or the properties owned, operated or leased by
it makes such qualification, licensing or good standing necessary, except where
the failure to have such power or authority, or the failure to be so qualified,
licensed or in good standing, would not have a Material Adverse Effect on
Parent. The term "Material Adverse Effect on Parent", as used in this Agreement,
means any change in or effect on the business, results of operations or
financial condition of Parent or any of its subsidiaries that would materially
impair the ability of Parent or the Purchaser to timely satisfy its obligations
under this Agreement.
Section 5.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and the
Purchaser has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Parent and the Purchaser and the
consummation by Parent and the Purchaser of the transactions contemplated hereby
have been duly and validly authorized and approved by the Boards of Directors of
Parent and the Purchaser and by Parent as shareholder of the Purchaser and no
other corporate proceedings on the part of Parent or the Purchaser are necessary
to authorize or approve this Agreement or to consummate the transactions
contemplated hereby (other than, with respect to the Merger, the filing of the
appropriate merger documents as
22
required by the FBCA). This Agreement has been duly executed and delivered by
each of Parent and the Purchaser and, assuming the due and valid authorization,
execution and delivery by the Company, constitutes a legally valid and binding
obligation of each of Parent and the Purchaser enforceable against each of them
in accordance with its terms, except that such enforceability (i) may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally and (ii) is subject
to general principles of equity.
Section 5.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming (i) compliance with the HSR Act and any requirements of any
foreign or supranational antitrust laws, (ii) the requirements of the Exchange
Act and any applicable state securities or "blue sky" laws are met and (iii) the
filing of the Articles of Merger and other appropriate merger documents, if any,
as required by the FBCA is made, none of the execution and delivery of this
Agreement by Parent or the Purchaser, the consummation by Parent or the
Purchaser of the transactions contemplated hereby or compliance by Parent or the
Purchaser with any of the provisions hereof will (x) conflict with or violate
the organizational documents of Parent or the Purchaser, (y) conflict with or
violate any statute, ordinance, rule, regulation, order, judgment or decree
applicable to Parent or the Purchaser, or any of their subsidiaries, or by which
any of them or any of their respective properties or assets may be bound or
affected, or (z) conflict with or result in a violation of the terms of any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or the Purchaser, or
any of their respective subsidiaries, is a party or by which any of their
respective properties or assets may be bound or affected, which, in the case of
clauses (x), (y) or (z), would reasonably be expected to have a Material Adverse
Effect on Parent.
(b) None of the execution and delivery of this Agreement by Parent and the
Purchaser, the consummation by Parent and the Purchaser of the transactions
contemplated hereby or compliance by Parent and the Purchaser with any of the
provisions hereof will require Parent or the Purchaser to obtain any Consent of
any Governmental Entity, except for (i) compliance with any applicable
requirements of the Exchange Act, (ii) the filing of the Articles of Merger
pursuant to the FBCA, (iii) compliance with applicable state securities or "blue
sky" laws, (iv) compliance with the HSR Act and any requirements of any foreign
or supranational antitrust laws, and (v) Consents the failure of which to obtain
or make would not reasonably be expected to have a Material Adverse Effect on
Parent.
Section 5.04. INFORMATION. None of the information supplied or to be
supplied by Parent and the Purchaser specifically for inclusion or incorporation
by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Proxy Statement or (iv) the Other Filings will, at the respective times filed
with the SEC or other Governmental Entity and, in addition, in the case of the
Proxy Statement, at the date it or any amendment or supplement is mailed to
shareholders, at the time of the Special Meeting and the Effective Time, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they we made, not misleading.
The Offer Documents will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
23
Section 5.05. BROKERS. Except for the engagement of Rothschild, Inc.,
whose fees will be paid by the Purchaser, none of Parent, Purchaser, or any of
their respective subsidiaries, officers, directors or employees, has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement for or with respect to which the Company is or might be liable
prior to the Effective Time.
Section 5.06. FINANCIAL CAPABILITY.
(a) Parent has access to the funds necessary to purchase, or cause
Purchaser to purchase, all the Shares pursuant to the Offer and the Merger, to
fund the Option and Warrant payments contemplated hereby and to pay all fees and
expenses related to the transactions contemplated by this Agreement to be paid
by it. Parent will have readily available funds necessary to consummate the
Offer and the Merger on the terms contemplated by this Agreement and will
provide such funds to Purchaser at or prior to the consummation of the Offer or
the Merger, as applicable.
(b) Purchaser is not and has never been a party to any material agreements
and has not conducted any activities other than in connection with the
organization of Purchaser, the commencement of the Offer, the negotiation and
execution of this Agreement and the consummation of the transactions
contemplated hereby.
ARTICLE VI
COVENANTS
Section 6.01. CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated
by this Agreement or with the prior written consent of Parent, during the period
from the date of this Agreement to the earlier of (i) such time as Purchaser
Insiders shall constitute a majority of the Company's Board, (ii) such time as
this Agreement is terminated in accordance with Section 8.01, and (iii) the
Effective Time, the Company will, and will cause each of its subsidiaries to,
(i) conduct its operations only in the ordinary course of business consistent
with past practice, (ii) use its reasonable efforts to preserve intact the
business or organization of the Company and each of its subsidiaries and to keep
available the services of its and their present officers, consultants and key
employees, (iii) use its reasonable best efforts to preserve the goodwill of
those having business relationships with it, as well as with officials and
employees of government agencies and other entities which regulate the Company,
its subsidiaries and their respective businesses, and (iv) not take any action
which could reasonably be expected to materially and adversely affect the
ability of the parties to consummate the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing and except as
otherwise contemplated by this Agreement or as set forth in Section 6.01 of the
Company Disclosure Schedule, the Company will not, and will not permit any of
its subsidiaries to, prior to the Effective Time, without the prior written
consent of Parent, which consent will not be unreasonably withheld or delayed at
any time following sixty (60) days after the date of this Agreement:
24
(a) adopt any amendment to its article of incorporation or bylaws or
comparable organizational documents;
(b) sell, pledge or encumber any stock owned by it in any of its
subsidiaries;
(c) except for issuances of capital stock of the Company's subsidiaries to
the Company or a wholly-owned subsidiary of the Company, (i) issue, reissue,
sell, or convey, or authorize the issuance, reissuance, sale or conveyance of
(A) shares of capital stock (or other ownership interests) of any class
(including shares held in treasury), or securities convertible or exchangeable
into capital stock (or other ownership interests) of any class, or any rights,
warrants or options to acquire any such convertible or exchangeable securities
or capital stock (or other ownership interests), or any Voting Debt, other than
the issuance of Shares, in accordance with the terms of the instruments
governing such issuance on the date hereof, pursuant to the exercise of Options
or Warrants outstanding on the date hereof and set forth in Section 4.03 of the
Company Disclosure Schedule and the conversion of the Company's outstanding 5
1/4% Convertible Subordinated Notes due 2003, or (B) any other securities in
respect of, in lieu of, or in substitution for, Shares outstanding on the date
hereof; or (ii) make any other changes in the capital structure of the Company,
or in the case of clauses (i) and (ii) propose or agree to do any of the
foregoing;
(d) declare, set aside or pay any dividend or other actual, constructive
or deemed distribution (whether in cash, securities or property or any
combination thereof) in respect of any class or series of its capital stock or
otherwise make any payments to shareholders in their capacity as shareholders,
other than any distribution by a subsidiary of the Company to the Company or a
wholly-owned subsidiary of the Company;
(e) split, combine, subdivide, reclassify or redeem, purchase or otherwise
acquire, or propose to redeem or purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock, or any of its other securities;
(f) increase the compensation or fringe benefits payable or to become
payable to its present or former directors, officers, consultants or employees
(whether from the Company or any of its subsidiaries), or pay or award any
benefit not required by any existing plan or arrangement (including, without
limitation, the granting of stock options, stock appreciation rights, shares of
restricted stock or performance units pursuant to the Option Plans or otherwise)
or grant any severance or termination pay to, or enter into any employment,
severance or other compensation agreement with, any director, officer,
consultant or employee of the Company or any of its subsidiaries or establish,
adopt, enter into, amend or waive in any material respect any performance or
vesting criteria or accelerate vesting or exercisability under any collective
bargaining, bonus profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, savings, welfare, deferred compensation, employment,
termination, severance or other employee benefit plan, agreement, trust, fund,
policy or arrangement for the benefit or welfare of any present or former
director, officer, consultant or employee (any of the foregoing being an
"Employee Benefit Arrangement"), except in each case (i) to the extent required
by applicable law or regulation, (ii) to the extent required under existing
Employee Benefit Arrangements as described in Section 6.01 of the Company
Disclosure Schedule and (iii) for normal increases in salary, wages and benefits
of non-executive employees in the ordinary course of business
25
consistent with past practice that do not result in a material increase in
benefits or compensation expense to the Company or any of its subsidiaries;
(g) acquire, mortgage, encumber, license, sell, lease or dispose of any
assets (other than inventory) or securities which are material to the Company
and its subsidiaries, taken as a whole, or enter into any commitment to do any
of the foregoing or enter into any material commitment or transaction outside
the ordinary course of business;
(h) (i) incur, assume, guarantee or pre-pay any indebtedness, except that
the Company and its subsidiaries may incur, assume or pre-pay indebtedness in
the ordinary course of business consistent with past practice under existing
lines of credit, (ii) assume, guarantee, endorse or otherwise becomes liable or
responsible (whether directly, contingently or otherwise) for significant
obligations of any other person except in the ordinary course of business
consistent with past practice, (iii) pay, discharge or satisfy any significant
claims, liabilities or obligations (absolute, accrued, contingent or otherwise),
other than the payment, discharge or satisfaction of liabilities in the ordinary
course of business and consistent with past practice, (iv) make any loans,
advances or capital contributions to, or investments in, any other person,
except in the ordinary course of business consistent with past practice and
except for loans, advances, capital contributions or investments between any
wholly-owned subsidiary of the Company and the Company or another wholly-owned
subsidiary of the Company, (v) authorize or make any significant capital
expenditures other than in the ordinary course of business consistent with past
practice or (vi) vary the Company's business practices (including, without
limitation, its inventory practices) in any material respect from the Company's
past practices;
(i) settle or compromise any suit or claim or threatened suit or claim
where the uninsured amount to be paid is greater than $100,000 or where the
settlement or compromise would include an admission by the Company or any
subsidiary of its non-compliance with any securities or other applicable law;
(j) authorize, recommend, propose or announce an intention to adopt a plan
of complete or partial liquidation or dissolution of the Company or any of its
subsidiaries;
(k) make any tax election not required by law or settle or compromise any
material tax liability;
(l) other than in the ordinary course of business consistent with past
practice, (i) waive any rights of substantial value, (ii) cancel or forgive any
indebtedness owed to the Company or any of its subsidiaries or (iii) make any
payment, direct or indirect, of any material liability of the Company or any of
its subsidiaries before the same comes due in accordance with its terms;
(m) voluntarily permit any material insurance policy naming the Company or
any of its subsidiaries as a beneficiary or a loss payee to be canceled or
terminated, except in the ordinary course of business consistent with past
practice;
(n) enter into or amend any material contract or agreement other than in
the ordinary course of business consistent with past practice; PROVIDED,
HOWEVER, that the Company may not
26
under any circumstance waive or release any of its rights under any
confidentiality or standstill agreement to which it is a party;
(o) except as may be required as a result of a change in law or under
GAAP, make any change in its methods, principles and practices of accounting,
including tax accounting policies and procedures;
(p) acquire (by merger, consolidation or acquisition of stock or assets)
any corporation, partnership or other business organization or division thereof
or, except in the ordinary course of business consistent with past practice, any
material assets;
(q) enter into any joint venture, partnership or similar agreement;
(r) make any application or filing with any Governmental Entity outside
the ordinary course of business consistent with past practice; or
(s) agree in writing or otherwise to take any of the foregoing actions or
voluntarily take any action which could reasonably be expected to cause any
representation or warranty in this Agreement to be or become untrue or incorrect
in any material respect or could reasonably be expected to cause any condition
to the consummation of the transactions contemplated hereby not to be satisfied.
Section 6.02. ACCESS TO INFORMATION. From the date hereof until the
Effective Time, the Company shall, and shall cause its subsidiaries, to provide
Parent and the Purchaser and their respective officers, employees, counsel,
advisors, accountants, financial advisors, financial sources, affiliates and
representatives (collectively, the "Parent Representatives") full and complete
access during normal business hours and upon reasonable notice, to the offices
and other facilities and to the books and records of the Company and its
subsidiaries, as will permit Parent and the Purchaser to make inspections of
such as either of them may reasonably require, and will use its best efforts to
cause the officers, directors, employees, counsel, advisors and other
representatives and agents of the Company and the Company's subsidiaries
(collectively, the "Company Representatives") to furnish Parent, the Purchaser
and the Parent Representatives to the extent available with such financial and
operating data and other information with respect to the business and operations
of the Company and its subsidiaries as Parent and the Purchaser may from time to
time reasonably request. Parent and the Purchaser shall be subject to the terms
of the Confidentiality Agreement dated as of January 31, 2001 (the
"Confidentiality Agreement") with respect to any information obtained from the
Company and its subsidiaries and the Company Representatives pursuant to this
Section 6.02
Section 6.03. FURTHER ASSURANCES; REASONABLE BEST EFFORTS. (a) Subject to
the terms and conditions herein provided and to applicable legal requirements,
each of the Company, Parent and the Purchaser shall, and shall cause their
respective subsidiaries to, cooperate and use its reasonable best efforts to
take, or cause to be taken, all action, and to do, or cause to be done, in the
case of the Company, consistent with the fiduciary duties of the Company's Board
of Directors (as provided in Section 1.02(a)), and to assist and cooperate with
the other parties hereto in doing, as promptly as practicable, all things
necessary, proper or advisable under
27
applicable laws and regulations to consummate and make effective the
transactions contemplated by the Offer and this Agreement.
(b) If at any time prior to the Effective Time any event or circumstance
relating to either the Company or Parent or the Purchaser or any of their
respective subsidiaries, should be discovered by the Company or Parent, as the
case may be, and which should be set forth in an amendment to the Offer
Documents or Schedule 14D-9, the discovering party will promptly inform the
other party of such event or circumstance. If at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, including the execution of additional instruments, the proper
officers and directors of each party to this Agreement shall take all such
necessary or desirable action.
(c) Each of the parties agrees to cooperate with each other in taking, or
causing to take, at the direction of Parent, all actions necessary to delist the
Shares from the NASDAQ National Market System, provided that such delisting
shall not be effective until after the Effective Time.
Section 6.04. FILINGS; CONSENTS.
(a) Each of the parties will use its reasonable best efforts to obtain as
promptly as practicable all Consents of any Governmental Entity or, upon
Parent's reasonable request, any other person required in connection with, and
waivers of any breaches or violations of any Contracts, permits, licenses or
other agreements that may be caused by, the consummation of the transactions
contemplated by the Offer and this Agreement, PROVIDED, HOWEVER, that the
Company (y) need not use any effort to obtain the Consent of the Company's
senior lenders or the holders of Convertible Notes and (z) need not expend funds
to obtain Consents from persons other than Governmental Entities unless Parent
has agreed to reimburse the Company therefor.
(b) Without limiting the generality of Section 6.04(a), subject to the
terms and conditions herein provided, the Company and Parent shall (i) promptly
make their respective filings and thereafter make any other required submissions
under the HSR Act, and (ii) use reasonable efforts to cooperate with one another
in (A) determining whether any filings are required to be made with, or
consents, permits, authorizations or approvals are required to be obtained from,
the United States government or any agencies, departments or instrumentalities
thereof or other governmental or regulatory bodies or authorities of federal,
state, local and foreign jurisdictions in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and thereby, (B) timely making all such filings and timely seeking all
such consents, permits, authorizations or approvals, and (C) taking or
undertaking all such further action as may be necessary to resolve such
objections, if any, as the Federal Trade Commission, the Antitrust Division of
the Department of Justice, state antitrust enforcement authorities or
competition authorities of any other nation or other jurisdiction or any other
person may assert under relevant antitrust or competition laws with respect to
the transactions contemplated hereby.
(c) Without limiting the generality of the undertakings pursuant to
Section 6.04(b): (i) each of Parent and the Company shall provide promptly to
the Governmental Entities with regulatory jurisdiction over enforcement of any
applicable antitrust laws (each a, "Government
28
Antitrust Entity") information and documents requested by such Government
Antitrust Entity or necessary, or reasonably requested to permit consummation of
the transactions contemplated by this Agreement; (ii) without in any way
limiting the provisions of Section 6.04(b)(i) above, each of Parent and the
Company shall file any Notification and Report Form and related material
required under the HSR Act as soon as reasonably practicable after the date of
this Agreement, and thereafter use its commercially reasonable efforts to
certify as soon as reasonably practicable its substantial compliance with any
requests for additional information or documentary material that are required to
be made under the HSR Act; (iii) each of the Company and Parent will keep the
other informed of any material communication, and provide to the other copies of
all correspondence, between it (or its advisors) and any Government Antitrust
Entity relating to this Agreement or any of the matters described in this
Section 6.04(c); and (iv) each of the Company and Parent shall permit the other
to review any material communication to be given by it to, and shall consult
with each other in advance of any telephonic calls, meeting or conference with,
any Government Antitrust Entity and, to the extent permitted, give the other
party the opportunity to attend and participate in such telephonic calls,
meetings and conferences. Notwithstanding any of the foregoing, no failure to
obtain termination of the waiting period under the HSR Act shall be deemed to be
a breach hereunder by the Company or Parent. Notwithstanding the provisions of
Section 6.04(b) and 6.04(c), in the event that either Parent or the Company is
requested, as a condition to obtaining the approval of any Governmental
Antitrust Entity to the transactions contemplated hereunder, to divest assets or
take any action which if taken could reasonably be expected to have a Material
Adverse Effect on the combined consolidated businesses, assets, operations or
prospects of Parent and Company, then neither Parent nor the Company shall be
required to take such action and no failure by either Parent or the Company to
take such action shall be deemed a breach of this Section 6.04 or of any other
provision of this Agreement.
Section 6.05. PUBLIC ANNOUNCEMENTS. The initial press release announcing
the terms of this Agreement shall be a joint press release. Thereafter, Parent,
the Purchaser and the Company each agree to consult with each other before
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated by this Agreement, agree to provide to the
other party for review a copy of any such press release or public statement, and
shall not issue any such press release or make any such public statement prior
to such consultation and review, unless required by applicable law or any
listing agreement with a securities exchange.
Section 6.06. INDEMNIFICATION; EMPLOYEES AND EMPLOYEE BENEFITS.
(a) Parent agrees that all rights to indemnification now existing in favor
of any individual who at or prior to the Effective Time was a director, officer,
employee or agent of the Company or any of its subsidiaries (the "Indemnified
Parties") as provided in their respective charters, by-laws or indemnification
agreements, as in effect on the date hereof, shall survive the Merger and shall
continue in full force and effect for a period of not less than six years from
the Effective Time unless otherwise required by law, PROVIDED that in the event
any claim or claims are asserted or made within such six-year period, all rights
to indemnification in respect of any such claim or claims shall continue until
final disposition of any and all such claims.
(b) The Company agrees that, commencing on the date hereof and until the
Effective Time, it will engage (at no cost to the Company) a consultant
designated by the Parent. Such
29
consultant, who may be an officer or employee of Parent or one of its
affiliates, shall also be an advisor to Purchaser and accordingly be provided
the access to information provided for in Section 6.02 hereof. Such consultant
shall, in consultation with the Parent, provide the Company from time to time
with recommendations pertaining to the operations of the Company and its
subsidiaries. The Company, consistent with the fiduciary duties of the Company's
Board of Directors, shall review such recommendations and, to the extent the
Company deems advisable, adopt such recommendations and utilize its best efforts
to implement those recommendations it deems advisable.
(c) Parent agrees that the Company and, from and after the Effective Time,
the Surviving Corporation shall cause to be maintained in effect for not less
than six years (except as provided in the last proviso of this Section 6.06(b))
from the Effective Time the current policies of the directors' and officers'
liability insurance maintained by the Company; PROVIDED that the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions which are not significantly less advantageous to
the beneficiaries of the current policies and with carriers comparable in terms
of creditworthiness to those which have written the policies maintained by the
Company at the date hereof; and PROVIDED, HOWEVER, that such substitution shall
not result in any gaps or lapses in coverage with respect to matters occurring
prior to the Effective Time; and PROVIDED, FURTHER, that the Surviving
Corporation shall not be required to pay an annual premium in excess of 300% of
the last annual premium paid by the Company prior to the date hereof and if the
Surviving Corporation is unable to obtain the insurance required by this Section
6.06(b) it shall obtain as much comparable insurance as possible for an annual
premium equal to such maximum amount.
(d) For a period of two years following the Closing Date, Parent shall
cause the Surviving Corporation to provide employees of the Company as of the
Effective Time ("Employees") with benefits comparable (except for such changes
as may be required by law) in the aggregate to those provided under the
Company's benefit plans, programs and arrangements and compensation policies and
practices in effect at the Effective Time (excluding any incentive compensation
arrangements). The Surviving Corporation shall credit each Employee, for all
purposes under all benefit plans, programs and arrangements and compensation
policies and practices of the Surviving Corporation in which such Employee is
eligible to participate by virtue of his or her employment after the Effective
Time, with all previous service to the extent recognized by the Company, its
subsidiaries or its predecessors for benefit plan purposes, including, without
limitation, vacation time and sick days, except to the extent such credit would
result in a duplication of benefits. Notwithstanding anything to the contrary
set forth herein, nothing herein shall preclude the Surviving Corporation from
terminating any Employee for any reason for which the Company could have
terminated such person prior to the Effective Time.
Section 6.07. NO SOLICITATION.
(a) The Company shall not, and shall not permit or cause any of its
subsidiaries to, nor shall it authorize or permit any officer, director,
employee or agent of, or any investment banker, attorney, accountant or other
advisor or representative of, the Company or any of its subsidiaries or
affiliates (collectively, the "Company Representatives") to, directly or
indirectly, initiate, solicit, encourage (including by way of furnishing
non-public information or assistance), induce or take any other action to
facilitate any inquiries or the making of any proposal or offer
30
with respect to an Acquisition Proposal, or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal, whether made
before or after the date of this Agreement, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; PROVIDED, HOWEVER, that
prior to the acceptance for payment of the Shares pursuant to the Offer, the
Company may, and may authorize and permit the Company Representatives to,
furnish or cause to be furnished confidential information and may participate in
such negotiations and discussions or take any other action otherwise prohibited
by this Section 6.07(a) with any person (unless such other action is subject to
the restrictions of Section 6.07(b), in which case such other action shall only
be permitted in accordance with such restrictions) that, after the date hereof,
makes a bona fide unsolicited proposal to enter into a business combination with
the Company pursuant to an Acquisition Proposal that the Board of Directors of
the Company in good faith reasonably determines is likely to be more favorable
to the Company's shareholders than the transactions contemplated by this
Agreement, but only if and to the extent that (A) the Board determines in good
faith (after having consulted with outside legal counsel) that such action is
necessary in order for its directors to comply with their fiduciary duties under
applicable law, (B) prior to taking such action, the Company (x) provides
advance written notice to Parent that it intends to take such action and (y)
receives from such person an executed confidentiality agreement in reasonably
customary form and in any event containing terms at least as stringent as those
contained in the Confidentiality Agreement, (C) prior to furnishing any
nonpublic information to any such person, the Company furnishes such nonpublic
information to Parent (to the extent that such nonpublic information has not
been previously furnished by the Company to Parent), (D) neither the Company nor
any of its subsidiaries nor any of the Company Representatives shall have
violated any of the provisions set forth in this Section 6.07, and (E) unless
the Board determines in good faith after consulting the Company's outside
counsel that doing so would result in a violation of the Board's fiduciary
duties under applicable law, the Company promptly advises Parent of the identity
of such person and the terms, conditions and status of any such Acquisition
Proposal and provides Parent with copies of any written proposals and any
amendments or revisions thereto and all correspondence related thereto. The
Company shall immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. If not previously requested, the Company
also will promptly request each person that has heretofore executed a
confidentiality agreement in connection with its consideration of an Acquisition
Proposal to return or destroy all confidential information heretofore furnished
to such person by the Company or on the Company's behalf. Neither the Company
nor any of its subsidiaries shall terminate, amend, modify or waive any
provision of any confidentiality or standstill agreement to which it is a party
and shall use its best efforts to enforce, to the fullest extent permitted under
applicable law, the provisions of any such agreement, including, but not limited
to, by obtaining injunctions to prevent any breaches of such agreements and to
enforce specifically the terms and provisions thereof in any court having
jurisdiction. Notwithstanding the foregoing, nothing contained herein shall
prevent the Company from complying with Rule 14e-2 and Rule 14d-9 promulgated
under the Exchange Act with regard to an Acquisition Proposal.
The term "Acquisition Proposal," as used in this Agreement, shall mean any
offer or proposal (whether or not in writing and whether or not delivered to the
Company's shareholders generally), from any person relating to any (i) direct or
indirect acquisition or purchase of a business that constitutes 15% or more of
the net revenues, net income or assets of the Company
31
and its subsidiaries taken as a whole, (ii) direct or indirect acquisition or
purchase of 15% or more of any class of equity securities of the Company or any
of its subsidiaries whose business constitutes 15% or more of the net revenues,
net income or assets of the Company and its subsidiaries, taken as a whole,
(iii) tender offer or exchange offer that if consummated would result in any
person beneficially owning 15% more of any class of equity securities of the
Company or any of its subsidiaries whose business constitutes 15% or more of the
net revenues, net income or assets of the Company and its subsidiaries, taken as
a whole, or (iv) merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its subsidiaries whose business constitutes 15% or more of the net revenues, net
income or assets of the Company and its subsidiaries, taken as a whole, other
than the transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 6.07(b), the Board (or
any committee thereof) shall not approve any letter of intent, agreement in
principle, acquisition agreement or similar agreement relating to any
Acquisition Proposal (an "Acquisition Agreement"). The Company may, however,
terminate this Agreement pursuant to Section 8.01(e)(ii) if (i) the Board of
Directors of the Company has received a Superior Acquisition Proposal, (ii) in
light of such Superior Acquisition Proposal, the Board has determined in good
faith (after having consulted with outside legal counsel) that it would be
necessary for the Board to terminate this Agreement in order to comply with its
fiduciary obligations under applicable law, (iii) the Company has notified
Parent in writing of the terms of the Superior Acquisition Proposal and the
determinations described in clause (ii) above, (iv) at least five (5) business
days following receipt by Parent of the notice referred to in clause (iii)
above, and taking into account any revised proposal made by Parent in writing
since receipt of the notice referred to in clause (iii) above, such Superior
Acquisition Proposal (as the same may have been modified or amended, but
provided that Parent shall have received the requisite notice of any such
modification or amendment) remains a Superior Acquisition Proposal and the Board
of Directors of the Company has again made the determinations referred to in
clause (ii) above, (v) during the five (5) business day period referred to in
the preceding clause (iv), the Company and its advisors shall have negotiated in
good faith with Parent to make such adjustments in the terms and conditions of
this Agreement as would enable Parent to proceed with the transactions
contemplated by this Agreement, (vi) the Company shall not be in breach of the
provisions of Section 6.07(a) or 6.07(b), (vii) the Board concurrently or
previously approves, and the Company concurrently or previously enters into, a
definitive Acquisition Agreement providing for the implementation of such
Superior Acquisition Proposal, and (viii) the Company shall have paid the
Termination Fee and Parent Expenses required by Section 8.3(b), in the manner
contemplated thereby. The term "Superior Acquisition Proposal," as used in this
Agreement, shall mean any bona fide unsolicited written Acquisition Proposal to
acquire all or substantially all of the Shares or assets of the Company which
the Board determines in its good faith judgment (after consultation with the
Company's independent financial advisor) to be (x) on terms superior in value
from a financial point of view to the holders of Shares than the transactions
contemplated by this Agreement, taking into account all the terms and conditions
of such proposal and this Agreement (including any offer by Parent to amend the
terms of the transactions contemplated by this Agreement) and (y) reasonably
capable of being completed, taking into account all financial, regulatory, legal
and other aspects of such proposal.
32
Section 6.08. NOTIFICATION OF CERTAIN MATTERS. Parent and the Company
shall promptly notify each other of (a) any notice or other communication from
any person alleging that the consent of such person is or may be required in
connection with the transactions contemplated by this Agreement; (b) any notice
or other communication from any governmental or regulatory agency or authority
in connection with the transactions contemplated by this Agreement or regarding
any violation, or alleged violation of law; (c) any material actions, suits,
claims, investigations or proceedings commenced or, to the best of its
knowledge, threatened against, relating to or involving or otherwise affecting
the Company or any of its subsidiaries; (d) the occurrence or non-occurrence of
any fact or event which would be reasonably likely (i) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (ii) to cause any material covenant, condition or agreement
hereunder not to be complied with or satisfied in all material respects and (e)
any failure of the Company, Parent or the Purchaser, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder in any material respect; PROVIDED, HOWEVER, that no
such notification shall affect the representations or warranties of any party or
the conditions to the obligations of any party hereunder.
Section 6.09. STATE TAKEOVER LAWS. (a) If any "fair price," "moratorium,"
"control share acquisition," "interested shareholder" or other similar
anti-takeover statute or regulation (each a "Takeover Statute") (including the
Affiliate Transaction Statute and the Control Share Statute) is or becomes
applicable to the Offer, the Merger or the other transactions contemplated by
this Agreement, each of Parent and the Company shall grant such approvals and
take such actions as are necessary so that such transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement, and
otherwise act to eliminate or minimize the effects of such Takeover Statutes.
(b) Without limiting the terms of Section 6.07, the Company covenants and
agrees that it will not take any action that would make the Affiliate
Transaction Statute, the Control Share Statute or any other Takeover Statute
inapplicable to an Acquisition Proposal (other than the Offer and the Merger).
Section 6.10. SHAREHOLDER LITIGATION. The Company shall give Parent the
reasonable opportunity to participate in the defense of any shareholder
litigation against the Company and/or its officers or directors relating to the
transactions contemplated by this Agreement.
Section 6.11. EXEMPTION FROM LIABILITY UNDER SECTION 16(B). Parent and the
Company shall take all such steps as may be required or reasonably requested to
cause the transactions contemplated by this Agreement and any other dispositions
of Company equity securities (including derivative securities) in connection
with this Agreement by each individual who is a director or officer of the
Company to be exempt under Rule 16b-3 promulgated under the Exchange Act and the
rules and regulations promulgated thereunder, such steps to be taken in
accordance with the No-Action Letter dated January 12, 1999, issued by the SEC
to Skadden, Arps, Slate, Meagher & Flom LLP, or as may otherwise be reasonably
requested by the Company.
33
Section 6.12. FINANCING COVENANT OF PARENT. Parent will use its good faith
and reasonable commercial efforts to obtain all financing reasonably expected to
be required to accomplish the Offer, the Merger and payment for the Shares and
the Option and Warrant payments contemplated by this Agreement and to pay all
fees and expenses arising in connection with the transactions contemplated
hereby.
ARTICLE VII.
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.01. CONDITIONS. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the following
conditions:
(a) SHAREHOLDER APPROVAL. The shareholders of the Company shall have duly
approved the transactions contemplated by this Agreement (if required by the
FBCA), pursuant to the requirements of the Company's articles of incorporation
and by-laws, and applicable law.
(b) PURCHASE OF SHARES. The Purchaser shall have accepted for payment and
paid for Shares pursuant to the Offer in accordance with the terms hereof;
PROVIDED, that this condition shall be deemed to have been satisfied with
respect to Parent and the Purchaser if the Purchaser fails to accept for payment
or pay for Shares pursuant to the Offer in violation of the terms of the Offer.
(c) INJUNCTIONS; ILLEGALITY. The consummation of the Merger shall not be
restrained, enjoined, prohibited or materially restricted by any order,
judgment, decree, injunction or ruling of a court of competent jurisdiction or
any Governmental Entity and there shall not have been any statute, rule or
regulation enacted, promulgated or deemed applicable to the Merger by any
Governmental Entity which prevents or materially restricts the consummation of
the Merger or has the effect of making the Merger illegal; provided, however,
that each of the parties shall have used its commercially reasonable efforts
(subject to the other terms and conditions of this Agreement) to prevent the
entry of any such injunction or other order and to appeal as promptly as
practicable any injunction or other order that may be entered prior to it having
become final and nonappropriate.
(d) HSR. Any applicable waiting period (or any extension thereof) under
the HSR Act or under any other applicable statutes or regulations relating to
the Merger shall have expired or been terminated.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
Section 8.01. TERMINATION. This Agreement may be terminated and the Offer
and the Merger contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the shareholders of the
Company:
(a) by the mutual written consent of Parent and the Company;
34
(b) by the Company if (i) the Purchaser fails to commence the Offer within
the time period and as otherwise provided in Section 1.01 hereof, or (ii) the
Purchaser fails to purchase validly tendered Shares in violation of the terms of
the Offer or this Agreement; PROVIDED, HOWEVER, that the Company may not
terminate this Agreement pursuant to this Section 8.01(b) if it shall have
materially breached this Agreement;
(c) by Parent or the Company if (i) Offer is terminated or withdrawn
pursuant to its terms without any Shares being purchased thereunder or (ii) the
Purchaser shall not have accepted for payment Shares pursuant to the Offer in
accordance with the terms hereof on or before June 27, 2001 (the "Outside
Date"); PROVIDED, HOWEVER, that neither Parent nor the Company may terminate
this Agreement pursuant to this Section 8.01(c) if such party shall have
materially breached this Agreement; and PROVIDED FURTHER, that if the sole
reason the Offer shall not have been consummated by the Outside Date is that the
HSR Condition (as defined in Annex I) has not been satisfied, the Outside Date
shall be extended until August 27, 2001.
(d) by Parent or the Company if any court or other Governmental Entity
shall have issued, enacted, entered, promulgated or enforced any law, order,
judgment, decree, injunction or ruling or taken any other action (that has not
been vacated, withdrawn or overturned) restraining, enjoining or otherwise
prohibiting the Merger and such law, order, judgment, decree, injunction, ruling
or other action shall have become final and nonappealable;
(e) by the Company if, prior to the acceptance for payment of Shares
pursuant to the Offer in accordance with the terms of this Agreement, (i) there
shall have occurred, on the part of Parent or Purchaser, a material breach of
any representation, warranty, covenant or agreement contained in this Agreement
that would reasonably be expected to have a Material Adverse Effect on Parent
which is not curable or, if curable, is not cured within ten (10) calendar days
after written notice of such breach is given by the Company to the party
committing the breach, or (ii) a third party, including any group, shall have
made a Superior Acquisition Proposal and the requirements of Section 6.07(b)
have been satisfied in all respects; or
(f) by Parent if, prior to the purchase of Shares pursuant to the Offer in
accordance with the terms of this Agreement, (i) there shall have occurred, on
the part of the Company, (x) a material breach of any representation or warranty
in Section 4.01, Section 4.03 or Section 4.04 or (y) a breach of any other
representation, warranty, covenant or agreement contained in this Agreement
(determined without giving effect to any materiality or similar qualifications),
other than those breaches that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company, which
breach is not curable or, if curable, is not cured on or prior to the earlier of
(A) ten (10) calendar days after written notice of such breach is given by
Parent to the Company and (B) the date on which all conditions to the Offer not
related to such breach have been satisfied, (ii) the Company fails to perform
any of its obligations under, or otherwise breaches, Section 6.07, (iii) the
Board shall have withdrawn or modified (including by amendment of the Schedule
14D-9) in a manner adverse to Parent and the Purchaser its approval or
recommendation of the Offer, this Agreement or the Merger, shall have approved
or recommended an Acquisition Proposal, or shall have resolved to effect any of
the foregoing, (iv) the Company or any of its subsidiaries shall have entered
into an Acquisition Agreement obligating the Company or any of its subsidiaries
to engage in a transaction with a person other than Parent, the Purchaser or an
affiliate of either (an "Acquisition Transaction"), or shall have
35
consummated an Acquisition Transaction, or (v) the Board fails to publicly
reaffirm its approval or recommendation of the Offer, this Agreement or the
Merger, or fails to reaffirm its determination that the Offer, this Agreement
and the Merger are in the best interests of the Company's shareholders, within
ten (10) business days after Parent requests in writing that such recommendation
or determination be reaffirmed.
Section 8.02. EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers or shareholders, other than pursuant to the provisions of
the last sentence of Section 1.02(c), Section 4.22, Section 5.05, the last
sentence of Section 6.02, this Section 8.02, Section 8.03, Section 8.04, Section
9.04 and Section 9.05, which shall survive any such termination. Nothing
contained in this Section 8.02 shall relieve any party from liability for any
breach of this Agreement.
Section 8.03. FEES AND EXPENSES.
(a) Whether or not the Merger is consummated, except as otherwise provided
herein, all costs and expenses incurred in connection with the Offer, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) In the event this Agreement is terminated pursuant to Section
8.01(e)(ii) or Section 8.01(f), then the Company shall pay Parent in cash a
termination fee of $14 million (the "Termination Fee") and reimburse Parent for
the fees and expenses of Parent and the Purchaser related to this Agreement, the
transactions contemplated hereby and any related financing (subject to a maximum
of $1.0 million) (the "Parent Expenses"). The Termination Fee and Parent
Expenses shall be payable by wire transfer of immediately available funds upon
such termination.
Section 8.04. AMENDMENT. Subject to Section 1.03(c), this Agreement may be
amended by the Company, Parent and the Purchaser at any time before or after any
approval of this Agreement by the shareholders of the Company but, after any
such approval, no amendment shall be made which decreases the Merger Price or
which adversely affects the rights of the Company's shareholders hereunder
without the approval of such shareholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of all the parties.
Section 8.05. EXTENSION; WAIVER. Subject to the express limitations
herein, any time prior to the Effective Time, the parties hereto may (i) extend
the time for the performance of any of the obligations or other acts of any
other party hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein by any other party or in any document, certificate
or writing delivered pursuant hereto by any other party or (iii) waive
compliance with any of the agreements of any other party or with any conditions
to its own obligations. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
36
ARTICLE IX
MISCELLANEOUS
Section 9.01. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. Notwithstanding the foregoing, the agreements set forth in
Section 3.01, the last sentence of Section 6.03(c) and Section 6.06 shall
survive the Effective Time indefinitely (except to the extent a shorter period
of time is explicitly specified therein).
Section 9.02. ENTIRE AGREEMENT; ASSIGNMENT.
(a) This Agreement (including the documents and the instruments referred
to herein) constitutes the entire agreement and supercedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or obligations
hereunder will be assigned by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of the other party (except
that Parent may assign its rights, but not its obligations, and the Purchaser
may assign its rights, interests and obligations to any affiliate or direct or
indirect subsidiary of Parent without the consent of the Company, provided that
no such assignment shall relieve the Purchaser or Parent of liability for any
breach by such assignee). Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
Section 9.03. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
Section 9.04. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
If to Parent or the Purchaser:
Luxottica Group S.p.A.
Piazzale Lotto, 2
Milan 20148
Italy
Facsimile: 011-39-02-4399-5757
Attention: Roberto Chemello
with a copy to:
Winston & Strawn
200 Park Avenue
New York, New York 10166
37
Facsimile: 212-294-4700
Attention: Jonathan Goldstein
Daniel A. Ninivaggi
If to the Company:
Sunglass Hut International, Inc.
225 Alhombra Circle
Coral Gables, Florida 33134
Facsimile: 305-461-6332
Attention: James N. Hauslein
with a copy to:
Greenberg Traurig, LLP
One East Cambelback Road, Suite 1100
Phoenix, Arizona 85012
Facsimile: 602-633-2350
Attention: Bruce E. Macdonough
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
Section 9.05. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.06. WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
I NVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.06.
38
Section 9.07. DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.08. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 9.09. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and, except with respect
to Section 6.06, nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 9.10. CERTAIN DEFINITIONS. Certain terms used in this Agreement
are defined in Annex I hereto. In addition, as used in this Agreement:
(a) the term "affiliate," as applied to any person, shall mean any other
person directly or indirectly controlling, controlled by, or under common
control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise, and a person shall be
deemed to control another person if the controlling person owns 10% or more of
any class of voting securities (or other ownership interest) of the controlled
person;
(b) the term "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act); and
(c) the term "subsidiary" or "subsidiaries" means, with respect to Parent,
the Company or any other person, any corporation, partnership, joint venture or
other legal entity of which Parent, the Company or such other person, as the
case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, stock or other equity interests the holders of
which are generally entitled to more than 50% of the vote for the election of
the board of directors or other governing body of such corporation or other
legal entity.
Section 9.11. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
39
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officer thereunto duly authorized, all
as of the day and year first above written.
LUXOTTICA GROUP S.p.A.
By: /S/ Leonardo Del Vecchio
-------------------------------------
Name: Leonardo Del Vecchio
Title: Chairman
SHADE ACQUISITION CORP.
By: /s/ Roberto Chemello
-------------------------------------
Name: Roberto Chemello
Title: Chief Executive Officer
SUNGLASS HUT INTERNATIONAL, INC.
By: /s/ James N. Hauslein
-------------------------------------
Name: James N. Hauslein
Title: Chairman of the Board
Annex I
CONDITIONS TO THE OFFER. Notwithstanding any other provisions of the
Offer, the Purchaser shall not be required to accept for payment or pay for any
tendered Shares and, subject to the terms of the Agreement, may delay the
acceptance for payment of any tendered Shares, (A) unless (i) there shall have
been validly tendered and not withdrawn prior to the expiration date for the
Offer (the "Expiration Date") that number of Shares which represent at least a
majority of the outstanding Shares on a fully diluted basis, after giving effect
to the exercise or conversion of all options, warrants, rights and securities
outstanding exercisable or convertible into voting securities, on the date of
purchase (the "Minimum Condition"), (ii) any applicable waiting periods under
the HSR Act shall have expired or been terminated (the "HSR Condition"), (iii)
all Consents of, or notices to, Governmental Entities necessary for the
consummation of the Offer and the other transactions contemplated by the
Agreement shall have been obtained or made, other than those which, if not
obtained or made, would not in the aggregate reasonably be expected to have a
Material Adverse Effect on the Company or (B) if at any time on or after
February 22, 2001 and prior to the time of acceptance for payment or payment for
any tendered Shares, any of the following events (each, an "Event") shall have
occurred and be continuing:
(a) any statute, rule, regulation, legislation, interpretation,
order, judgment or injunction shall be enacted, entered, enforced,
promulgated, amended or issued by any legislative body, court, government
or governmental, administrative or regulatory authority or agency,
domestic or foreign (other than the waiting period provisions of the HSR
Act), which shall remain in effect and which shall have the effect of (i)
making illegal or restraining or prohibiting the making of the Offer, the
acceptance for payment of, or payment for, the Shares by Parent or the
Purchaser, or the consummation of the Offer or the Merger, (ii)
prohibiting or materially limiting the ownership or operation by Parent or
the Purchaser of all or a material portion of the business or assets of
the Company or any of its subsidiaries, taken as a whole, or compelling
Parent or the Purchaser to dispose of or hold separately all or a material
portion of the business or assets of Parent or the Purchaser or the
Company or any of its subsidiaries, or seeking to impose any material
limitation on the ability of Parent or the Purchaser to conduct its
business or own such assets, (iii) imposing material limitations on the
ability of Parent or the Purchaser to effectively acquire, hold or
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or owned by the
Purchaser or Parent on all matters properly presented to the Company's
shareholders or effectively to control in any material respect the
business, assets or operations of the Company or any of its subsidiaries,
or (iv) not permitting or allowing Parent to own all of the Company's
issued and outstanding Shares;
(b) there shall be instituted, pending or threatened any action or
proceeding by any Governmental Entity seeking, or that could reasonably be
expected to result in, any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above; or
(c) any change shall have occurred (or any development shall have
occurred involving prospective changes) in the business, results of
operations or financial condition of the Company or any of its
subsidiaries that has, or could reasonably be expected to have, a Material
Adverse Effect on the Company; or
(d) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified (including by amendment of the
Schedule 14D-9) in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, the Agreement or the Merger,
shall have approved or recommended an Acquisition Proposal, or shall have
resolved to effect any of the foregoing; (ii) the Company or any of its
subsidiaries shall have entered into an Acquisition Agreement obligating
the Company or any of its subsidiaries to engage in a transaction with a
person other than Parent, the Purchaser or an affiliate of either, or the
Company shall have consummated such a transaction; or (iii) the Board
shall have failed to publicly reaffirm its approval or recommendation of
the Offer, the Agreement or the Merger, or shall have failed to reaffirm
its determination that the Offer, this Agreement and the Merger are in the
best interests of the Company's shareholders, within ten (10) business
days after Parent requests in writing that such recommendation or
determination be reaffirmed; or
(e) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(f) (i) any of the representations and warranties of the Company set
forth in Section 4.01, Section 4.03 or Section 4.04 of the Agreement shall
not be true and correct in all material respects on and as of the
Expiration Date, or (ii) the other representations and warranties of the
Company set forth in the Merger Agreement shall not be true and correct,
except in the case of this clause (ii) where the failure to be true and
correct (without giving effect to any materiality or similar
qualifications) would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company, on and as of
the Expiration Date, as if any such representation and warranty were made
on and as of the Expiration Date (except as to any such representation or
warranty which speaks only as of a specific date, which must be untrue or
incorrect as of such specific date); or
(g) the Company shall have failed to perform or to comply in all
material respects with its obligations, covenants or agreements required
to be performed by it under the Merger Agreement at or prior to the
Expiration Date; or
(h) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) a commencement of
a war, armed hostilities or other national or international crisis
directly involving the United States (other than an action involving
United Nations' personnel or support of United Nations' personnel), (iv) a
material limitation by any Governmental Entity on the extension of credit
by banks or other lending institutions or
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(v) in the case of any of the foregoing clauses (i) through (iv) existing
at the time of the commencement of the Offer, a material acceleration or
worsening thereof.
The parties acknowledge that the Tender Offer Conditions set forth above
in this Annex I are for the sole benefit of Parent and Purchaser, that Parent or
Purchaser may assert the failure of any of the Tender Offer Conditions
regardless of the circumstances (other than any circumstances arising solely by
any action or inaction by Parent or Purchaser) giving rise to any such failure,
that the Company shall not assert the failure of, or waive, any such condition
without the prior written consent of Parent and Purchaser, and that if Parent or
Purchaser elects to waive any such condition to the Offer (which Parent or
Purchaser may do in whole or in part at any time and from time to time), the
Company shall cooperate and comply with such election. The failure by Parent or
the Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
appended.
Dates Referenced Herein and Documents Incorporated by Reference
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