Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9 Tender-Offer Solicitation/Recommendation Statement 32 169K
2: EX-1 Underwriting Agreement 43 181K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 17 57K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 11 25K
5: EX-4 Instrument Defining the Rights of Security Holders 9 24K
6: EX-5 Opinion re: Legality 3 11K
7: EX-6 Opinion re: Discount on Capital Shares 1 8K
8: EX-7 Opinion of Lazard Freres & Co. LLC 2 13K
9: EX-8 Opinion re: Tax Matters 1 6K
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
UNITED NEWS & MEDIA PLC,
MILLER FREEMAN WORLDWIDE PLC,
MFW ACQUISITION CORP.,
AND
CMP MEDIA INC.
DATED AS OF APRIL 28, 1999
TABLE OF CONTENTS
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ARTICLE 1A
THE TENDER OFFER
1A.1 The Offer.......................................................................................2
1A.2 Company Action..................................................................................3
1A.3 Directors.......................................................................................4
ARTICLE 1
THE MERGER
1.1 The Merger......................................................................................5
1.2 The Closing.....................................................................................5
1.3 Effective Time..................................................................................5
ARTICLE 2
CERTIFICATE OF INCORPORATION, BYLAWS, DIRECTORS AND OFFICERS OF
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation of the Surviving Corporation.......................................6
2.2 Bylaws of the Surviving Corporation.............................................................6
2.3 Directors of the Surviving Corporation..........................................................6
2.4 Officers of the Surviving Corporation...........................................................6
ARTICLE 3
EFFECT OF THE MERGER ON CAPITAL STOCK
3.1 Effect on Capital Stock.........................................................................6
3.2 Exchange of Certificates........................................................................8
3.3 Lost, Stolen or Destroyed Certificates..........................................................9
3.4 Dissenting Shares...............................................................................9
3.5 Taking of Necessary Action; Further Action......................................................9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Organization, Existence and Good Standing.......................................................9
4.2 Subsidiaries and Affiliated Partnerships.......................................................10
4.3 Organization, Existence and Good Standing of the Company Subsidiaries
and the Company Other Entities ................................................................10
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4.4 Company Capital Stock..........................................................................10
4.5 Power and Authority............................................................................11
4.5A Director Action................................................................................12
4.6 Legal Proceedings..............................................................................12
4.7 No Undisclosed Liabilities.....................................................................12
4.8 Absence of Changes.............................................................................12
4.9 No Violation; Consents and Approvals...........................................................12
4.10 Contracts......................................................................................13
4.11 Compliance With Law; Governmental Authorizations...............................................13
4.12 Insurance......................................................................................13
4.13 Tax Matters....................................................................................13
4.14 Employee Benefit Plans.........................................................................14
4.15 Licenses and Regulatory Approvals..............................................................14
4.16 SEC Filings....................................................................................15
4.17 Title to Properties............................................................................16
4.18 Intellectual Property..........................................................................16
4.19 Commissions and Fees...........................................................................16
4.20 Information....................................................................................16
4.21 Opinion of Financial Advisor...................................................................16
4.22 Company Stockholders' Approval.................................................................17
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND PARENT
5.1 Organization, Existence and Capital Stock......................................................17
5.2 Power and Authority............................................................................17
5.3 Legal Proceedings..............................................................................17
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UNITED AND PARENT
6.1 Organization, Existence and Good Standing......................................................17
6.2 Power and Authority............................................................................18
6.3 Financing......................................................................................18
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6.4 Legal Proceedings..............................................................................18
6.5 No Violation; Consents and Approvals...........................................................18
6.6 Compliance With Law; Governmental Authorizations...............................................19
6.7 Commissions and Fees...........................................................................19
6.8 Information....................................................................................19
6.9 Guaranty by United.............................................................................19
ARTICLE 7
ACCESS TO INFORMATION AND DOCUMENTS
7.1 Access to Information..........................................................................20
7.2 Return of Records..............................................................................20
ARTICLE 8
COVENANTS OF THE COMPANY
8.1 Preservation of Business.......................................................................21
8.2 Material Transactions..........................................................................21
8.3 Meeting of Stockholders........................................................................22
8.4 Accounting Methods.............................................................................23
8.5 No Solicitations...............................................................................23
8.6 Consents.......................................................................................23
ARTICLE 9
COVENANTS OF PARENT AND MERGER SUB
9.1 Employees......................................................................................23
9.2 Indemnification................................................................................24
9.3 Transaction Costs..............................................................................25
ARTICLE 10
COVENANTS OF THE COMPANY, PARENT AND MERGER SUB
10.1 Public Disclosures.............................................................................25
10.2 Other Actions..................................................................................25
10.3 Proxy Statement; Antitrust Filings.............................................................26
10.4 Other Filings and Consents.....................................................................27
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ARTICLE 11
TERMINATION, AMENDMENT AND WAIVER
11.1 Termination....................................................................................27
11.2 Effect of Termination..........................................................................28
11.3 Amendment......................................................................................28
11.4 Extension; Waiver..............................................................................29
11.5 Expenses and Fees..............................................................................29
ARTICLE 12
CONDITIONS TO CLOSING
12.1 Mutual Condition...............................................................................29
12.2 Conditions to Obligations of Parent and Merger Sub.............................................29
12.3 Conditions to Obligations of the Company.......................................................30
ARTICLE 13
MISCELLANEOUS
13.1 Nonsurvival of Representations and Warranties..................................................31
13.2 Scope of Representations and Warranties........................................................31
13.3 Notices........................................................................................31
13.4 Further Assurances.............................................................................32
13.5 Governing Law..................................................................................32
13.6 "Knowledge"....................................................................................32
13.7 "Material Adverse Effect"......................................................................33
13.8 "Taxes"........................................................................................33
13.9 Captions.......................................................................................33
13.10 Integration of Company Disclosure Schedule ....................................................33
13.11 Entire Agreement ..............................................................................33
13.12 Amendment .....................................................................................33
13.13 Counterparts ..................................................................................33
13.14 Binding Effect; No Third Party Beneficiaries ..................................................34
13.15 Assignment ....................................................................................34
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as
of April 28, 1999, by and among United News & Media plc, an English public
limited company ("United"), Miller Freeman Worldwide plc, an English public
limited company ("Parent"), MFW Acquisition Corp., a Delaware corporation and a
wholly owned affiliate of Parent ("Merger Sub"), and CMP Media Inc., a Delaware
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company each have determined that it is in the best interests of their
respective stockholders for Merger Sub to merge with and into the Company upon
the terms and subject to the conditions of this Agreement (the "Merger"), and
such Boards of Directors have approved such Merger, pursuant to which Merger Sub
will make a cash tender offer (the "Offer") to acquire all shares of the
Company's Class A Common Stock, par value $0.01 per share (the "Class A Common
Stock"), and the Company's Class B Common Stock, par value $0.01 per share (the
"Class B Common Stock" and, collectively with the Class A Common Stock, the
"Company Common Stock"), issued and outstanding for $39.00 per share, or such
higher price as may be paid if the Offer is amended, net to the seller in cash
(the "Cash Price");
WHEREAS, also in furtherance thereof, it is proposed that, following
the consummation of the Offer, Merger Sub will merge with and into the Company
and that the Company Common Stock not tendered and accepted pursuant to the
Offer will thereupon be converted into the right to receive the Cash Price;
WHEREAS, the holders of the Company's Class B Common Stock, who
represent in the aggregate at least 90% of the total voting power of the Company
Common Stock, have agreed to tender the Company Common Stock owned by such
holders to Merger Sub in accordance with the Offer and to vote the shares of
Company Common Stock owned by such holders in favor of the Merger subject to the
terms and conditions of a tender and voting agreement (the "Voting Agreement")
to be entered into by such holders concurrently with the execution and delivery
of this Agreement; and
WHEREAS, each of Parent, Merger Sub and the Company desires to make
certain representations, warranties, covenants and agreements in connection with
the Merger and to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing, and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto do hereby agree as follows:
ARTICLE 1A
THE TENDER OFFER
1A.1 THE OFFER. (a) Provided that this Agreement shall not have been
terminated in accordance with Section 11.1 hereof and none of the events set
forth in Annex I hereto shall have occurred and be existing, Parent shall cause
Merger Sub to, and Merger Sub shall, commence (within the meaning of Rule 13d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) the
Offer as promptly as practicable, but in no event later than May 6, 1999, and
shall use all reasonable efforts to consummate the Offer. The obligation of
Merger Sub to accept for payment any shares of Company Common Stock tendered
shall be subject to the satisfaction of only those conditions set forth in Annex
I. Merger Sub expressly reserves the right to waive any such condition or to
increase the Cash Price or, subject to Section 1A.1(b), to make other changes in
the terms and conditions of the Offer. The Cash Price shall be net to the seller
in cash, subject to reduction only for any applicable Federal back-up
withholding or stock transfer taxes payable by the seller. The Company agrees
that no shares of Company Common Stock held by the Company will be tendered
pursuant to the Offer. For purposes of this Agreement, Company Common Stock held
by the trust established pursuant to the 1999 Leeds Family/CMP Media Inc.
Employee Benefit Trust Agreement shall not be deemed to be Company Common Stock
held or owned by the Company.
(b) Without the prior written consent of the Company, Merger Sub
shall not (i) decrease the Cash Price or change the form of consideration
payable in the Offer, (ii) decrease the number of shares of Company Common Stock
sought, (iii) amend or waive satisfaction of the Minimum Condition (as defined
in Annex I) or (iv) impose additional conditions to the Offer or amend any other
term of the Offer in any manner adverse to the holders of Company Common Stock;
provided, however, that Merger Sub may extend the expiration date (x) in its
sole discretion from time to time, if on the initial scheduled expiration date
of the Offer which shall be twenty (20) business days after the date the Offer
is commenced, all conditions to the Offer shall not have been satisfied or
waived; or (y) for a period not to exceed ten (10) business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer, if, immediately prior to the initial expiration
date of the Offer (as it may be extended), after giving effect to the automatic
conversion of all tendered and not withdrawn shares of Class B Common Stock
pursuant to the certificate of incorporation of the Company, the shares of Class
A Common Stock tendered and not withdrawn pursuant to the Offer equal less than
90% of the outstanding shares of Class A Common Stock and, in either case,
Merger Sub expressly irrevocably waives any condition (other than the Minimum
Condition) that subsequently may not be satisfied during such extension of the
Offer; or (z) for any period required by any rule, regulation or interpretation
of the Securities and Exchange Commission (the "SEC") or the staff thereof
applicable to the Offer. Parent shall cause Merger Sub to, and Merger Sub shall,
on the terms and subject to the prior satisfaction or waiver of the conditions
of the Offer, accept for payment and purchase, as soon as permitted under the
terms of the Offer, all shares of Company Common Stock validly tendered and not
withdrawn prior to the expiration of the Offer as such expiration may be
extended in accordance with Section 1A.1(b).
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(c) The Offer shall be made by means of an offer to purchase (the
"Offer to Purchase") having only the conditions set forth in Annex I hereto. As
soon as practicable on the date the Offer is commenced, Parent shall cause
Merger Sub to, and Merger Sub shall, file with the SEC a Tender Offer Statement
on Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer that will comply in all material
respects with the provisions of, and satisfy in all material respects the
requirements of, such Schedule 14D-1 and all applicable Federal securities laws,
and will contain (including as an exhibit) or incorporate by reference the Offer
to Purchase and forms of the related letter of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto, and any other SEC schedule or form which is filed in connection with
the Offer and related transactions, are referred to collectively herein as the "
Offer Documents"). Each of Parent, Merger Sub and the Company agrees promptly to
correct any information provided by it for use in the Schedule 14D-1 or the
Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect and to supplement the information
provided by it specifically for use in the Schedule 14D-1 or the Offer Documents
to include any information that shall become necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and each of Parent and Merger Sub further agrees to take all
steps necessary to cause the Schedule 14D-1, as so corrected or supplemented, to
be filed with the SEC and the Offer Documents, as so corrected or supplemented,
to be disseminated to holders of Company Common Stock, in each case as and to
the extent required by applicable Federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment on any
Offer Documents before they are filed with the SEC.
1A.2 COMPANY ACTION. (a) The Company hereby approves of and consents to
the Offer and represents and warrants that its Board of Directors, at a meeting
duly called and held on April 28, 1999, at which all of the Directors were
present, duly approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, recommended that the
stockholders of the Company accept the Offer, tender their Company Common Stock
pursuant to the Offer and approve this Agreement and the transactions
contemplated hereby, including the Merger, and determined that this Agreement
and the transactions contemplated hereby, including the Offer and the Merger,
are fair to and in the best interests of the stockholders of the Company.
(b) The Company shall file with the SEC, as promptly as practicable
after the filing by Merger Sub of the Schedule 14D-1 with respect to the Offer,
a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together
with any amendments or supplements thereto, the "Schedule 14D-9") that will
comply in all material respects with the provisions of all applicable Federal
securities laws. The Company shall mail such Schedule 14D-9 to the stockholders
of the Company along with the Offer Documents promptly after the commencement of
the Offer. The Schedule 14D-9 and the Offer Documents shall contain the
recommendations of the Board of Directors described in Section 1A.2(a) hereof.
The Company agrees promptly to correct the Schedule 14D-9 if and to the extent
that it shall become false or misleading in any material respect (and Merger
Sub, with respect to written information supplied by it specifically for use in
the Schedule 14D-9, shall promptly notify the Company of any required
corrections of such information and cooperate with the Company with respect to
correcting such information) and to supplement the information contained in the
Schedule 14D-9
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to include any information that shall become necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and the Company shall take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the
Company's stockholders to the extent required by applicable Federal securities
laws. Merger Sub and its counsel shall be given a reasonable opportunity to
review and comment on the Schedule 14D-9 before it is filed with the SEC.
(c) In connection with the Offer, the Company shall promptly upon
execution of this Agreement furnish Merger Sub with mailing labels containing
the names and addresses of all record holders of Company Common Stock and
security position listings of Company Common Stock held in stock depositories,
each as of a recent date, and shall promptly furnish Merger Sub with such
additional information, including updated lists of stockholders, mailing labels
and security position listings, and such other information and assistance as
Merger Sub or its agents may reasonably request for the purpose of communicating
the Offer to the record and beneficial holders of Company Common Stock.
1A.3 DIRECTORS. (a) Promptly upon the purchase by Merger Sub of shares
of Company Common Stock pursuant to the Offer, and from time to time thereafter
as shares of Company Common Stock are acquired by Merger Sub, Merger Sub shall
be entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors as will give Merger Sub, subject to compliance
with Section 14(f) of the Exchange Act, representation on the Board of Directors
equal to at least that number of directors which equals the product of the total
number of directors on the Board of Directors (giving effect to the directors
appointed or elected pursuant to this sentence) multiplied by the percentage
obtained by dividing (i) the aggregate number of votes represented by the shares
of Company Common Stock beneficially owned by Merger Sub or any affiliate of
Merger Sub (including for purposes of this Section 1A.3 such shares of Company
Common Stock as are accepted for payment pursuant to the Offer, but excluding
shares of Company Common Stock held by the Company) by (ii) the number of votes
represented by all shares of Company Common Stock outstanding (excluding Company
Common Stock held by the Company). At such times, if requested by Merger Sub,
the Company will also cause each committee of the Board of Directors to include
persons designated by Merger Sub constituting the same percentage of each such
committee as Merger Sub's designees are of the Board of Directors. The Company
shall, upon request by Merger Sub, promptly increase the size of the Board of
Directors or exercise its best efforts to secure the resignations of such number
of directors as is necessary to enable Merger Sub designees to be elected to the
Board of Directors in accordance with the terms of this Section 1A.3 and shall
cause Merger Sub's designees to be so elected; provided, however, that prior to
the Effective Time (as defined in Section 1.3), the Company's Board of Directors
shall always have at least three members who are neither officers, directors,
stockholders or designees of Parent or Merger Sub or any of their affiliates
("Outside Directors"). If the number of directors who are Outside Directors is
reduced below three for any reason prior to the Effective Time, the remaining
directors who are Outside Directors (or if there is only one director who is an
Outside Director) shall be entitled to designate a person (or persons) to fill
such vacancy (or vacancies) who is an Outside Director and who shall be a
director deemed to be an Outside Director for all purposes of this Agreement.
(b) Subject to applicable law, the Company shall promptly take all
action necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder
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in order to fulfill its obligations under this Section 1A.3 and shall include in
the Schedule 14D-9 mailed to stockholders promptly after the commencement of the
Offer (or an amendment thereof or an information statement pursuant to Rule
14f-1 if Merger Sub has not theretofore designated directors) such information
with respect to the Company and its officers and directors as is required under
Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this
Section 1A.3.
(c) From and after the election or appointment of Merger Sub's
designees pursuant to this Section 1A.3 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 of any of the obligations or other acts
of Parent or Merger Sub or waiver of any of the Company's rights hereunder, or
any other action taken by the Company's Board of Directors in connection with
this Agreement, will require the concurrence of a majority of the directors of
the Company then in office who are Outside Directors.
ARTICLE 1
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions set forth in this
Agreement, and in accordance with the applicable provisions of the Delaware
General Corporation Law (the "DGCL"), Merger Sub shall be merged with and into
the Company at the Effective Time. Following the Effective Time, the separate
corporate existence of Merger Sub shall cease, and the Company shall continue as
the surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all of the rights and obligations of Merger Sub and the Company in
accordance with the DGCL. The effect of the Merger shall be as provided in this
Agreement and under the applicable provisions of the DGCL.
1.2 THE CLOSING. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. Eastern Time on a date to be specified by the parties, or as
soon thereafter as practicable following the satisfaction or waiver of all of
the conditions set forth in Article 12 hereof (the "Closing Date"), at the
offices of the Company, 600 Community Drive, Manhasset, New York 11030, unless
another date or place is agreed to in writing by the parties hereto.
1.3 EFFECTIVE TIME. Subject to the provisions of this Agreement, the
parties shall execute and file with the Secretary of State of the State of
Delaware a certificate of merger (the "Certificate of Merger") in accordance
with the relevant provisions of the DGCL and shall make all other filings or
recordings required under the DGCL as soon as practicable on or after the
Closing Date. The Merger shall become effective at such time as the Certificate
of Merger is duly filed with the Secretary of State of the State of Delaware, or
at such other time as the Company and Parent shall agree should be specified in
the Certificate of Merger (the "Effective Time").
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ARTICLE 2
CERTIFICATE OF INCORPORATION, BYLAWS, DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION OF THE SURVIVING CORPORATION. The
certificate of incorporation of Merger Sub, as in effect immediately prior to
the Effective Time and subject to Section 9.2(a) hereof, shall be the
certificate of incorporation of the Surviving Corporation from and after the
Effective Time and until thereafter amended as provided by law; provided,
however, that the name of the Surviving Corporation to be provided in its
certificate of incorporation shall be "CMP Media Inc."
2.2 BYLAWS OF THE SURVIVING CORPORATION. The Bylaws of Merger Sub, as
in effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation from and after the Effective Time and until thereafter
altered, amended or repealed in accordance with the laws of the State of
Delaware, the certificate of incorporation of the Company and the Bylaws;
provided, however, that the name of the Surviving Corporation to be provided in
its bylaws shall be "CMP Media Inc."
2.3 DIRECTORS OF THE SURVIVING CORPORATION. The Board of Directors of
the Surviving Corporation shall be comprised of the directors of Merger Sub.
2.4 OFFICERS OF THE SURVIVING CORPORATION. The initial executive
officers of the Surviving Corporation shall be those individuals designated by
Parent immediately prior to the Effective Time.
ARTICLE 3
EFFECT OF THE MERGER ON CAPITAL STOCK
3.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the
Merger and without any action on the part of any holder of any shares of Company
Common Stock or any holder of shares of capital stock of Merger Sub:
(a) CAPITAL STOCK OF MERGER SUB. Each issued and outstanding share
of capital stock of Merger Sub shall be converted into and become one fully paid
and nonassessable share of Common Stock, par value $.01 per share, of the
Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK. Each share of Company Common
Stock that is owned by the Company, by any subsidiary of the Company or by
Merger Sub shall automatically be canceled and retired and shall cease to exist
without payment of any consideration therefor.
(c) CONVERSION OF THE COMPANY SHARES. Each issued and outstanding
share of Company Common Stock (other than shares to be canceled in accordance
with Section 3.1(b)) shall be converted into the right to receive the Cash
Price. Shares of Company Common Stock to be exchanged for cash pursuant to this
Section 3.1(c) shall hereinafter be referred to as the "Exchanging Company
Shares." As of the Effective Time, all of the Exchanging Company
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Shares shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate representing
any Exchanging Company Shares shall cease to have any rights with respect
thereto, except the right to receive the Cash Price to be paid in consideration
therefor upon surrender of such certificate in accordance with Section 3.2,
without interest.
(d) STOCK OPTIONS AND WARRANTS. With respect to all outstanding
options or warrants (referred to collectively as the "Options" and individually
as an "Option") to purchase or to acquire Company Common Stock, a summary of
which is included in Section 4.4 of the Company Disclosure Schedule (as defined
in Section 4.2(a) hereof) (except for any vested or unvested Options held by
Michael S. Leeds or Daniel H. Leeds, which shall be canceled prior to the
expiration date of the Offer without payment therefor (except for any payments
to be made pursuant to their respective employment agreements)), each holder of
an Option which is surrendered by the holder for cancellation shall be entitled
to receive from the Company, immediately prior to and conditioned upon the
closing of the Offer, for each share of Company Common Stock purchasable under
each Option, an amount in cash in full cancellation of such Option equal to the
excess of the Cash Price over the per share exercise price of such Option (or
such greater amount as Merger Sub shall agree in writing), as such amount may be
reduced by any required withholding in accordance with applicable tax laws. The
Company agrees to use all commercially reasonable efforts to obtain prior to the
expiration date of the Offer written agreements of all holders of Options
legally binding such holders to cancellation of such Options consistent with the
foregoing. The Company's Board of Directors will adopt a resolution terminating
the Company's Stock Incentive Plan, the Directors' Stock Compensation Plan, the
1988 Equity Appreciation Plan and the Employee Stock Purchase Plan (the "ESPP")
(collectively, the "Plans"), effective as of the Effective Date; provided,
however, that with respect to the ESPP, the parties agree as follows: (i) the
Company's Board of Directors shall adopt a resolution providing that
participating employees may not make additional contributions under the ESPP for
any period after April 23, 1999 and the participating employees shall be
entitled to purchase Company Common Stock under the ESPP as of the closing of
the Offer only with respect to contributions made through April 23, 1999, (ii)
each participating employee in the ESPP shall be entitled to receive from the
Company, immediately prior to and conditioned upon the closing of the Offer, the
Cash Price for each share of Company Common Stock such employee is entitled to
purchase under the ESPP in full settlement of such employees' rights and
benefits under the ESPP and (iii) the actions set forth in subsections (i) and
(ii) above shall not be deemed to be a violation or breach of any other
provisions of this Agreement.
(e) RECLASSIFICATION, RECAPITALIZATION, etc. If, between the date
of this Agreement and the Effective Time, the outstanding Company Common Stock
shall have been changed into a different number of shares or a different class
by reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment or other similar transaction with respect to
Company Common Stock, or a stock dividend thereon shall be declared with a
record date within said period, the Cash Price shall be correspondingly
adjusted. The Company covenants and agrees not to take any action referred to in
the preceding sentence.
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3.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the Effective Time, Parent shall enter
into an agreement with such bank or trust company as may be designated by Parent
(and which institution otherwise shall be reasonably satisfactory to the
Company) (the "Exchange Agent") which provides that Parent shall deposit with
the Exchange Agent as of the Effective Time, for the benefit of the holders of
Exchanging Company Shares, for exchange in accordance with this Article III,
through the Exchange Agent, cash in an amount sufficient to make cash payments
(being hereinafter referred to as the "Exchange Fund") pursuant to Section 3.1
in exchange for outstanding shares of Company Common Stock.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after
the Effective Time, the Surviving Corporation shall cause the Exchange Agent to
deliver to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (a "Certificate" or the "Certificates") whose shares were
converted pursuant to Section 3.1, a form of letter of transmittal together with
instructions for use in effecting the surrender of the Certificates for payment
therefor. Upon surrender of a Certificate for cancellation to the Exchange 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 Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the Cash Price for each share
of Company Common Stock represented by such Certificate payable pursuant to the
provisions of this Article III, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of shares of
Company Common Stock which is not registered in the transfer records of the
Company, the appropriate Cash Price may be paid to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer, and the person requesting such payment shall pay any transfer or other
taxes required by reason of the Cash Price payment to a person other than the
registered holder of such Certificate or establish to the satisfaction of Parent
that such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 3.2, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Cash Price payment, as contemplated by this Section 3.2, without
interest.
(c) NO FURTHER OWNERSHIP RIGHTS IN EXCHANGING COMPANY SHARES. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they shall be canceled and
exchanged as provided in this Article III, except as otherwise provided by law.
(d) REQUIRED WITHHOLDING. Each of the Exchange Agent, Parent and
the Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock such amounts as may be required
to be deducted or withheld therefrom under the Internal Revenue Code of 1986, as
amended (the "Code"), or under any applicable provision of state, local or
foreign tax law. To the extent such amounts are so deducted or withheld, such
amounts shall be treated for all purposes under this Agreement as having been
paid to the person to whom such amounts would otherwise have been paid.
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3.3 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
be authorized to deliver the Cash Price to the holders of record of such lost,
stolen or destroyed Certificates, upon the making of an affidavit of that fact
by the holder thereof; PROVIDED, HOWEVER, that Parent may, in its discretion and
as a condition precedent to the delivery thereof, require the owner of such
lost, stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
3.4 DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, shares of Company Common Stock outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has demanded appraisal for such shares
in accordance with Section 262 of the DGCL, if such Section 262 provides for
appraisal rights for such shares in the Merger ("Dissenting Shares"), shall not
be converted into the right to receive the Cash Price as provided in Section
3.1(c), unless and until such holder fails to perfect or withdraws or otherwise
loses his right to appraisal and payment under the DGCL. If, after the Effective
Time, any such holder fails to perfect or withdraws or loses his right to
appraisal, such Dissenting Shares shall thereupon be treated as if they had been
converted as of the Effective Time into the right to receive the Cash Price, if
any, to which such holder is entitled, without interest or dividends thereon.
The Company shall give Parent prompt notice of any demands received by the
Company for appraisal of shares of Company Common Stock and, prior to the
Effective Time, Parent shall have the right to participate in all negotiations
and proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
3.5 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and directors of the
Company and Merger Sub will take all such lawful and necessary action, so long
as such action is consistent with this Agreement. Parent shall cause Merger Sub
to perform fully all of its obligations relating to this Agreement and the
transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub as
follows:
4.1 ORGANIZATION, EXISTENCE AND GOOD STANDING. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all necessary corporate power to own its
properties and assets and to carry on its business as presently conducted. The
Company is qualified to do business as a foreign corporation in all requisite
jurisdictions, except where failure to so qualify would not have a Material
Adverse Effect (as defined in Section 13.7 hereof) with respect to the Company.
The Company has
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heretofore made available to Parent complete and correct copies of its
certificate of incorporation and bylaws.
4.2 SUBSIDIARIES AND AFFILIATED PARTNERSHIPS.
(a) Section 4.2 of the disclosure schedule prepared and delivered
by the Company to Parent prior to the date hereof (the "Company Disclosure
Schedule") is a list of all subsidiaries (i.e., entities with respect to which
the Company owns at least a majority of the capital stock or other equity
interests) of the Company (individually, a "Company Subsidiary", and
collectively, the "Company Subsidiaries") and their respective jurisdictions of
incorporation or organization.
(b) Also set forth in Section 4.2 of the Company Disclosure
Schedule is a list of all general partnerships in which a general partner is the
Company, a Company Subsidiary or another Company Partnership (individually, a
"Company Partnership" and collectively, the "Company Partnerships"), and any
limited liability company in which the Company, a Company Subsidiary or a
Company Partnership is a member (a "Company LLC") (the Company Partnerships and
the Company LLCs being collectively called the "Company Other Entities") and
their respective jurisdictions of organization.
4.3 ORGANIZATION, EXISTENCE AND GOOD STANDING OF THE COMPANY
SUBSIDIARIES AND THE COMPANY OTHER ENTITIES.
(a) Each Company Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization; (ii) has all necessary corporate
power to own its properties and assets and to carry on its business as presently
conducted; and (iii) is qualified to do business as a foreign corporation in all
requisite jurisdictions, except where the failure to so qualify would not have a
Material Adverse Effect.
(b) Each Company Partnership has been duly organized and has all
necessary power to own its property and assets and to carry on its business as
presently conducted.
(c) Each Company LLC (i) is a limited liability company validly
formed and in good standing under the laws of its respective state of
organization; (ii) has all necessary power to own its property and assets and to
carry on its business as presently conducted; and (iii) is qualified to do
business as a foreign company in all requisite jurisdictions, except where the
failure to so qualify would not have a Material Adverse Effect.
4.4 COMPANY CAPITAL STOCK.
(a) The Company's authorized capital stock consists of (i)
70,000,000 shares of Common Stock, of which 50,000,000 shares are designated as
Class A Common Stock and 20,000,000 shares are designated as Class B Common
Stock, and (ii) 5,000,000 shares of Preferred Stock, par value $0.01 per share
(the "Company Preferred Stock"). As of April 28, 1999, 12,948,956 shares of
Class A Common Stock were issued and outstanding, 10,152,810 shares of Class B
Common Stock were issued and outstanding, and no shares of Company
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Preferred Stock were issued and outstanding. All of the issued and outstanding
shares of Company Common Stock are duly and validly issued, fully paid and
nonassessable.
(b) The Company has no shares of capital stock reserved for
issuance, except that, as of April 27, 1999, there were 266,311 shares of Class
A Common Stock reserved for issuance upon exercise of options under the
Company's Stock Incentive Plan, 25,827 shares of Class A Common Stock reserved
for issuance under the Directors' Stock Compensation Plan, and 1,446,835 shares
of Class A Common Stock reserved for issuance under the Company's Employee Stock
Purchase Plan. The aggregate number of shares of Company Common Stock employees
will be entitled to purchase under the ESPP with contributions made under the
ESPP through April 23, 1999, as contemplated by Section 3.1(d) hereof, will not
materially exceed 20,418. Since March 31, 1999, the Company has not issued any
shares of capital stock except pursuant to the exercise of options outstanding
as of such date. All shares of the Company Common Stock which may be issued
pursuant to the exercise of outstanding options will be, when issued in
accordance with the respective terms thereof, duly authorized, validly issued,
fully paid and nonassessable. There are no bonds, debentures, notes or other
indebtedness having general voting rights (or convertible into securities having
such rights) of the Company or any Company Subsidiary issued and outstanding.
Except as contemplated by this Agreement, and except for the Company's
obligations under its option plans, there are no outstanding contractual
obligations of the Company to repurchase, redeem, or otherwise acquire any
shares of Company Common Stock. Each of the outstanding shares of capital stock
or interests of each of the Company Subsidiaries and the Company Other Entities
is duly authorized, validly issued, fully paid and nonassessable, and the
Company's shares or interests in the Company Subsidiaries and the Company Other
Entities are owned by the Company or by a Company Subsidiary in each case free
and clear of any lien, claim, option, charge, security interest, limitation,
encumbrance and restriction of any kind, except as set forth in Section 4.4 of
the Company Disclosure Schedule. Section 4.4 of the Company Disclosure Schedule
sets forth a summary description of the number of Options outstanding including
the exercise price for such Options under the Company's Stock Incentive Plan and
the Directors' Stock Compensation Plan.
(c) There is no liability for dividends declared or accumulated but
unpaid with respect to any of the shares of Company Common Stock.
4.5 POWER AND AUTHORITY. The Company has the corporate power to
execute, deliver and perform this Agreement and all agreements and other
documents executed and delivered, or to be executed and delivered, by it
pursuant to this Agreement, and, subject to the satisfaction of the conditions
precedent set forth herein, has taken all action required by its certificate of
incorporation, bylaws or otherwise to authorize the execution, delivery and
performance of this Agreement and such related documents. This Agreement has
been duly executed and delivered by the Company and, assuming this Agreement
constitutes a valid and binding obligation of Parent and Merger Sub, as the case
may be, constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except that the enforcement
hereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors' rights generally and (b) general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law).
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4.5A DIRECTOR ACTION. The Board of Directors of the Company (at a
meeting duly called and held) has by the unanimous vote of all directors present
(i) determined that the Offer and the Merger are advisable and fair to and in
the best interests of the Company and its stockholders; (ii) approved the Merger
in accordance with the provisions of Section 251 of the DGCL; (iii) recommended
the approval of this Agreement, the tender of all Company Common Stock pursuant
to the Offer, and the approval of the Merger by the holders of Company Common
Stock and directed that the Merger be submitted for consideration by the
stockholders of the Company; and (iv) approved the Voting Agreement in
accordance with Section 203 of the DGCL.
4.6 LEGAL PROCEEDINGS. Except as set forth in Section 4.6 of the
Company Disclosure Schedule, there is no litigation, arbitration, governmental
investigation or other proceeding pending or, to the knowledge of the Company,
threatened against the Company, the Company Subsidiaries, the Company Other
Entities, or any of their properties or businesses, or the transactions
contemplated by this Agreement.
4.7 NO UNDISCLOSED LIABILITIES. Except as disclosed in Section 4.7 of
the Company Disclosure Schedule, as of the date hereof, none of the Company, the
Company Subsidiaries or the Company Other Entities has any liabilities or
obligations, whether accrued, absolute or contingent, other than (a) liabilities
and obligations that are fully reflected, accrued or reserved for in the
Company's consolidated balance sheet as of December 31, 1998 and (b) obligations
incurred in the ordinary course of business and consistent with past practice
since the date of such consolidated balance sheet.
4.8 ABSENCE OF CHANGES. Since December 31, 1998, there has been no
change in the financial condition, results of operation, assets, liabilities or
business of the Company, the Company Subsidiaries or the Company Other Entities
which, individually or in the aggregate, would have a Material Adverse Effect
with respect to the Company.
4.9 NO VIOLATION; CONSENTS AND APPROVALS.
(a) Except as set forth in Section 4.9 of the Company Disclosure
Schedule, neither the execution and delivery of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated hereby will
(a) violate, conflict with or result in any breach of any provisions of the
respective organizational documents of the Company, the Company Subsidiaries or
the Company Other Entities, (b) violate any order, injunction, judgment, ruling,
law or regulation of any court or governmental authority applicable to the
Company, the Company Subsidiaries or the Company Other Entities, or (c) conflict
with or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default),
require any third party consent or give rise to any third party right of
termination, purchase or sale under (i) any agreement, contract or other
instrument binding upon the Company, the Company Subsidiaries or the Company
Other Entities or (ii) any license, franchise, permit or other similar
authorization held by the Company, the Company Subsidiaries or the Company Other
Entities, except, with respect to clause (c) above, for violations, conflicts,
defaults, losses and other matters referred to in such clause which, in the
aggregate, would not have a Material Adverse Effect on the Company.
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(b) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated
hereby will require any material consent, waiver, approval, authorization or
permit of, or registration or filing with or notification to (any of the
foregoing being a "Consent"), any governmental or regulatory authority, agency,
commission or tribunal, domestic or foreign (a "Governmental Entity"), except
for (i) compliance with any applicable requirements of the Exchange Act, (ii)
the filing of the Certificate of Merger pursuant to the DGCL, (iii) compliance
with applicable state takeover statutes, (iv) compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (v) Consents required from any foreign Governmental Entity as a result of
the status of Parent or Merger Sub, and (vi) the Schedule 14D-1 and Schedule
14D-9 filings contemplated hereby.
4.10 CONTRACTS. Except as set forth in Section 4.10 of the Company
Disclosure Schedule, each of the material contracts and agreements to which the
Company, the Company Subsidiaries or the Company Other Entities is a party or by
which any of its assets or operations may be bound is in full force and effect
in all material respects, and there are no existing material defaults with
respect to such material contracts and agreements by the Company, the Company
Subsidiaries or the Company Other Entities. The Company has heretofore made
available to Parent complete and correct copies of all such material contracts
and agreements.
4.11 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. The Company, the
Company Subsidiaries and the Company Other Entities have operated their
respective businesses in compliance in all material respects with applicable law
and are not in material violation of any order, injunction, judgment, ruling,
law or regulation of any court or governmental authority applicable to the
Company, the Company Subsidiaries or the Company Other Entities.
4.12 INSURANCE. Section 4.12 of the Company Disclosure Schedule lists
all material insurance policies covering the assets, employees and operations of
the Company and the Company Subsidiaries as of the date hereof, showing the
insurers, limits, type of coverage, annual premiums, deductibles and expiration
dates. All such policies are in full force and effect.
4.13 TAX MATTERS. The Company, or a representative of the Company on
its behalf, has duly and timely filed (including within any applicable extension
period) with the appropriate federal, state, local and foreign taxing
authorities all material tax returns which are required to be filed by the
Company or the Company Subsidiaries. The Company and the Company Subsidiaries
have paid all material Taxes (as defined in Section 13.8 hereof) due, other than
Taxes appropriate reserves for which have been made in the Company's financial
statements (and, to the extent material, such reserves have been accurately
described in the Company SEC Reports (as defined in Section 4.16)). There are no
material assessments or adjustments that have been asserted in writing against
the Company or the Company Subsidiaries for any period for which the Company has
not made appropriate reserves in the Company's financial statements included in
the Company SEC Reports. There are no material "deferred intercompany
transactions" or "intercompany transactions" the gain or loss in which has not
yet been taken into account under the consolidated return Treasury Regulations
currently or previously in effect. There are no liens for Taxes on the assets of
the Company or any of the Company Subsidiaries, except for statutory liens for
current Taxes not yet due and payable (and except for liens which do not and
would not, individually or in the aggregate, have a Material Adverse Effect on
the
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Company). Except as set forth in Section 4.13 of the Company Disclosure
Schedule, the Company has not received written notice of any action, suit,
proceeding, audit, claim, deficiency or assessment pending with respect to any
material Taxes of the Company or the Company Subsidiaries.
4.14 EMPLOYEE BENEFIT PLANS.
(a) Except as set forth in Section 4.14(a) of the Company
Disclosure Schedule, the Company neither has established nor maintains nor is
obligated to make contributions to or under or otherwise participate in (i) any
bonus or other type of incentive compensation plan, program, agreement, policy,
commitment, contract or arrangement (whether or not set forth in a written
document), except for annual incentive compensation plans entered into in the
ordinary course of business on an individualized basis as part of the regular
compensation packages made available to salespersons and certain other Company
employees, (ii) any pension, profit-sharing, retirement or similar plan, program
or arrangement, or (iii) any other employee benefit plan, fund or program,
including, but not limited to, those described in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder ("ERISA"). All such plans (individually, a
"Plan" and collectively, the "Plans") have been operated and administered in all
material respects in accordance with, as applicable, ERISA, the Code, Title VII
of the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1967, as
amended, the Age Discrimination in Employment Act of 1967, as amended, and the
related rules and regulations adopted by those federal agencies responsible for
the administration of such laws. No act or failure to act by the Company has
resulted in a "prohibited transaction" (as defined in ERISA) with respect to the
Plans that is not subject to a statutory or regulatory exception. No "reportable
event" (as defined in ERISA) has occurred with respect to any of the Plans which
is subject to Title IV of ERISA other than an event for which the 30-day notice
thereof has been waived by regulation. The Company has not previously made, is
not currently making and is not obligated in any way to make any contributions
to any multi-employer plan within the meaning of the Multi-Employer Pension Plan
Amendments Act of 1980.
(b) Except as disclosed in Section 4.14(b) of the Company
Disclosure Schedule, the Company is not a party to any oral or written (i) union
or collective bargaining agreement, (ii) agreement with any executive officer or
other key employee the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction of the nature
contemplated by this Agreement and which provides for the payment of in excess
of $100,000, or (iii) agreement or plan, including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of the benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement. Section 9.3 of the Company Disclosure Schedule contains a reasonably
accurate estimate of the bonuses, benefits, fees and costs described in Section
9.3 of this Agreement.
4.15 LICENSES AND REGULATORY APPROVALS. The Company Subsidiaries and
the Company Other Entities hold all material licenses, permits and other
regulatory approvals which are needed or required by law with respect to their
businesses and operations, as they are
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currently or presently conducted (collectively, the "Licenses"). All such
Licenses are in full force and effect, and the Company is in compliance in all
material respects with all conditions and requirements of the Licenses and with
all rules and regulations relating thereto. Any and all past litigation
concerning Licenses and all claims and causes of action raised therein have been
finally adjudicated. No such License has been revoked, conditioned (except as
may be customary) or restricted and no action (equitable, legal or
administrative), arbitration or other process is pending, or to the Company's
knowledge, threatened in writing which in any way challenges the validity of, or
seeks to revoke, condition or restrict any such License.
4.16 SEC FILINGS.
(a) The Company has filed all forms, reports and documents
required to be filed by the Company with the SEC since July 24, 1997 and has
made available to Parent such forms, reports and documents in the form filed
with the SEC. All such required forms, reports and documents (including those
that the Company may file subsequent to the date hereof), as amended, are
referred to herein as the "Company SEC Reports." As of their respective dates,
the Company SEC Reports (i) were prepared in accordance and complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such Company SEC
Reports and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
the Company Subsidiaries or Company Other Entities is required to file any
forms, reports or other documents with the SEC.
(b) Each of the audited consolidated balance sheets of the Company
as of December 31, 1997 and 1998, and the consolidated statements of earnings,
stockholders' equity and cash flows of the Company for each of the years in the
three-year period ended December 31, 1998 (including, in each case, any related
notes thereto) contained in the Company SEC Reports (i) complied as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with generally accepted
accounting procedures ("GAAP") (applied on a consistent basis except as
disclosed in the notes thereto), and (iii) fairly presented in all material
respects the consolidated financial position of the Company and its consolidated
subsidiaries as at the respective dates thereof and the consolidated results of
the operations and cash flows of the Company and its consolidated subsidiaries
for the periods indicated. As of March 31, 1999, the Company and its
consolidated subsidiaries (the "Consolidated Group") had cash and cash
equivalents (including investments) of $23,908,503 (inclusive of 53,403 shares
of RealNetworks, Inc. stock at a carrying value of $6,522,711). On April 21,
1999, CMP sold its entire holdings of RealNetworks, Inc. stock for $9,965,014.
Between March 31, 1999 and the date hereof the Consolidated Group has not
expended cash outside the ordinary course of its business, and the Company
covenants and agrees that until the consummation of the Offer the Consolidated
Group will not expend cash outside of the ordinary course of business other than
for those expenses relating to or resulting from the transactions contemplated
hereby (a reasonably accurate estimate of the amounts of such expenditures being
included in Section 9.3 of the Company Disclosure Schedule).
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4.17 TITLE TO PROPERTIES. The Company and each of the Company
Subsidiaries has good and valid title to, or, in the case of leased properties
and assets, valid leasehold interests in, all of its tangible properties and
assets, real, personal and mixed, used or held for use in its business, free and
clear of any liens, pledges, charges, security interests or other encumbrances
of any sort ("Liens") except for Liens imposed by law in respect of obligations
not yet due which are owed in respect of taxes or which otherwise are owed to
carriers, warehousepersons or laborers, except as reflected in the Company
Financial Statements and except for such Liens or other imperfections of title
and encumbrances, if any, which would not have, individually or in the
aggregate, a Material Adverse Effect with respect to the Company.
4.18 INTELLECTUAL PROPERTY. The Company, directly or indirectly, owns,
or is licensed or otherwise possesses rights to use, all patents, trademarks,
trade names, service marks, copyrights and any applications therefor,
technology, know-how and tangible or intangible proprietary information that are
material to the business of the Company and the Company Subsidiaries as
currently conducted by the Company or the Company Subsidiaries, except where the
failure to own, license or possess such rights would not have, individually or
in the aggregate, a Material Adverse Effect with respect to the Company.
4.19 COMMISSIONS AND FEES. Except for fees payable to Lazard Freres &
Co. LLC, ("Lazard Freres") which fees and expenses are reflected in its
agreements with the Company, the Company has not employed any investment banker,
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to any investment
banking, brokerage, finder's or similar fees or commissions in connection with
this Agreement or the transactions contemplated hereby.
4.20 INFORMATION. None of the information supplied by the Company in
writing specifically for inclusion or incorporation by reference in (i) the
Proxy Statement (as defined in Section 10.3) or the Schedule 14D-1 and Schedule
14D-9 filings contemplated hereby, or (ii) any other document to be filed with
the SEC or other Governmental Entity in connection with the transactions
contemplated by this Agreement (the "Governmental Filings"), will, at the
respective times filed with the SEC or other Governmental Entity or, in the case
of the Proxy Statement, at the date it or any amendment or supplement is mailed
to stockholders, at the time of the Special Meeting (as defined in Section 8.3)
or 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. The Proxy Statement 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 Merger Sub in writing specifically for inclusion in the Proxy Statement.
4.21 OPINION OF FINANCIAL ADVISOR. The Company has received the written
opinion of Lazard Freres to the effect that the Cash Price is fair to the
holders of the Company Common Stock from a financial point of view.
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4.22 COMPANY STOCKHOLDERS' APPROVAL. The affirmative vote of
stockholders of the Company required for approval and adoption of this Agreement
and the Merger is a majority of the outstanding shares of Company Common Stock
entitled to vote thereon.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND PARENT
Merger Sub and Parent, jointly and severally, hereby represent and
warrant to the Company as follows:
5.1 ORGANIZATION, EXISTENCE AND CAPITAL STOCK. Merger Sub is a
corporation duly organized and validly existing and is in good standing under
the laws of the State of Delaware. The authorized capital of Merger Sub consists
of 1,000 shares of common stock, par value $.01 per share (the "Merger Sub
Common Stock"), all of which shares are issued and registered in the name of
Parent.
5.2 POWER AND AUTHORITY. Merger Sub has corporate power to execute,
deliver and perform this Agreement and all agreements and other documents
executed and delivered, or to be executed and delivered, by it pursuant to this
Agreement, and, subject to the satisfaction of the conditions precedent set
forth herein, has taken all actions required by law, its certificate of
incorporation, its bylaws or otherwise to authorize the execution and delivery
of this Agreement and such related documents. The execution and delivery of this
Agreement do not and, subject to the receipt of required stockholder and
regulatory approvals and any other required third-party consents or approvals,
the consummation of the Merger contemplated hereby will not, violate any
provisions of the certificate of incorporation or bylaws of Merger Sub, or any
provision of, or result in the acceleration of any obligation under, any
mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment
or decree to which Merger Sub is a party or by which it is bound, violate any
restrictions of any kind to which Merger Sub is subject, or result in the
creation of any lien, charge or encumbrances upon any of the property or assets
of Merger Sub. The execution and delivery of this Agreement have been approved
by the Board of Directors and by the sole stockholder of Merger Sub.
5.3 LEGAL PROCEEDINGS. There are no actions, suits or proceedings
pending or threatened against Merger Sub, at law or in equity, relating to or
affecting Merger Sub, including relating to the Merger. Merger Sub does not know
or have any reasonable grounds to know of any justification for any such action,
suit or proceeding.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UNITED AND PARENT
United and Parent, jointly and severally, hereby represent and warrant
to the Company as follows:
6.1 ORGANIZATION, EXISTENCE AND GOOD STANDING. United is a public
limited company duly organized and validly existing and is in good standing
under the laws of England. Parent is a public limited company duly organized and
validly existing and is in good standing under the
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laws of England. Each of United and Parent has all necessary corporate power to
own its properties and assets and to carry on its business as presently
conducted. Each of United and Parent is duly qualified to do business and is in
good standing in all jurisdictions in which the character of the property owned,
leased or operated or the nature of the business transacted by it makes
qualification necessary, except where the failure to so qualify would not have a
Material Adverse Effect with respect to United or Parent, as appropriate.
6.2 POWER AND AUTHORITY. Each of United and Parent has corporate power
to execute, deliver and perform this Agreement and all agreements and other
documents executed and delivered, or to be executed and delivered, by it
pursuant to this Agreement, and, subject to the satisfaction of the conditions
precedent set forth herein has taken all actions required by law, its
certificate of incorporation, its bylaws or otherwise to authorize the execution
and delivery of this Agreement and such related documents. The execution and
delivery of this Agreement do not and, subject to the receipt of required
stockholder and regulatory approvals and any other required third-party consents
or approvals, the consummation of the Merger contemplated hereby will not,
violate any provisions of the organizational documents of United or Parent, or
any provision of, or result in the acceleration of any obligation under, any
mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment
or decree to which United or Parent is a party or by which it is bound, violate
any restrictions of any kind to which United or Parent is subject or result in
the creation of any lien, charge or encumbrance upon any of the property or
assets of United or Parent. The execution and delivery of this Agreement have
been approved by the Board of Directors of United and Parent. This Agreement has
been duly executed and delivered by United, Parent and Merger Sub and, assuming
this Agreement constitutes a valid and binding obligation of the Company,
constitutes a valid and binding obligation of United, Parent and Merger Sub,
enforceable against United, Parent and Merger Sub in accordance with its terms
except that the enforcement hereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
6.3 FINANCING. United presently has and, as of the date of the
consummation of the Offer and the Closing Date, as appropriate, will have
delivered to Parent or Merger Sub, cash or cash equivalents on hand in an amount
sufficient to enable Parent or Merger Sub to pay in cash the full amount of the
Cash Price to each holder of shares tendered and not withdrawn pursuant to the
Offer and to each holder of Exchanging Company Shares and consummate the
transactions contemplated hereby.
6.4 LEGAL PROCEEDINGS. There is no litigation, governmental
investigation or other proceeding pending or, so far as is known to United or
Parent, threatened against United or Parent, its respective properties or
business, or the transactions contemplated by this Agreement which would have a
Material Adverse Effect with respect to United or Parent or the transactions
contemplated hereby.
6.5 NO VIOLATION; CONSENTS AND APPROVALS .
(a) Neither the execution and delivery of this Agreement nor the
consummation by United or Parent of the transactions contemplated hereby will
(a) violate,
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conflict with or result in any breach of any provision of the organizational
documents of United or Parent, (b) violate any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority applicable to
United or Parent, or (c) conflict with or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under (i) any agreement, contract or other
instrument binding upon United or Parent or (ii) any license, franchise, permit
or other similar authorization held by United or Parent, except, with respect to
clauses (b) or (c) above, for violations, conflicts, defaults, losses and other
matters referred to in such clauses which, in the aggregate, would not have a
Material Adverse Effect on Parent or would not materially impair United's or
Parent's ability to consummate the transactions contemplated by this Agreement.
(b) Neither the execution and delivery of this Agreement by United
or Parent or Merger Sub nor the consummation by United, Parent or Merger Sub of
the transactions contemplated hereby will require any Consent of any
Governmental Entity, except for (i) compliance with any applicable requirements
of the Exchange Act, (ii) the filing of the Certificate of Merger pursuant to
the DGCL, (iii) compliance with applicable state takeover statutes, (iv)
compliance with the HSR Act, and (v) the Schedule 14D-1 and Schedule 14D-9
filings contemplated hereby.
6.6 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. Each of United
and Parent has operated its business in compliance with applicable law and is
not in violation of any order, injunction, judgment, ruling, law or regulation
of any court or governmental authority applicable to United or Parent except
where such failure to comply or violation would not have a Material Adverse
Effect with respect to United or Parent.
6.7 COMMISSIONS AND FEES. Except for fees payable to Allen & Company
Incorporated, which fees and expenses are reflected in their agreements with
Parent, neither United nor Parent has employed any investment banker, broker,
finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to any investment
banking, brokerage, finder's or similar fees or commissions in connection with
this Agreement or the transactions contemplated hereby.
6.8 INFORMATION. None of the information supplied or to be supplied by
United, Parent and Merger Sub in writing specifically for inclusion in (i) the
Proxy Statement or the Schedule 14D-1 and Schedule 14D-9 filings contemplated
hereby or (ii) the Governmental Filings will, at the respective times filed with
the SEC or such other Governmental Entity or, in the case of the Proxy
Statement, at the date it or any amendment or supplement is mailed to
stockholders, at the time of the Special Meeting or at the Effective Time,
contains any untrue statement of a material fact or omits 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.
6.9 GUARANTY BY UNITED. Subject to the provisions of this Section 6.9,
United hereby fully, unconditionally and irrevocably guarantees to the Company
the due and punctual payment of the Cash Price in connection with the Offer and
the Merger and any other monetary obligations of Parent or Merger Sub and the
due and punctual performance of all other obligations of Parent or Merger Sub to
the Company, all in accordance with the terms of this
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Agreement. United hereby acknowledges that, with respect to all of the
obligations of Parent or Merger Sub, including those to pay the Cash Price in
connection with the Offer and the Merger, this guaranty shall be a guaranty of
payment and performance and shall not be conditioned or contingent upon the
pursuit of any remedies against Parent or Merger Sub. United hereby waives
diligence, demand of payment, filing of claims with a court in the event of
merger or bankruptcy of Parent or Merger Sub, any right to require a proceeding
first against Parent or Merger Sub, the benefit of discussion, protest or notice
and all demands whatsoever, and covenants that this guaranty will not be
discharged as to any obligation except by satisfaction of such obligation in
full. To the fullest extent permitted by applicable law, the obligations of
United hereunder shall not be affected by (a) the failure of the Company to
assert any claim or demand or to enforce any right or remedy against United
pursuant to the provisions of this Agreement or otherwise, and (b) any change in
the existence (corporate or otherwise) of Parent or Merger Sub or any
insolvency, bankruptcy, reorganization or similar proceeding affecting any of
them or their assets. United acknowledges that it will receive direct and
indirect benefits from the consummation of the transactions contemplated by this
Agreement and that the waivers set forth in this Section 6.9 are knowingly made
in contemplation of such benefits. Nothing contained in this Section 6.9 is
intended to or shall impair, as between United and the Company, the obligations
of United which are absolute and unconditional, upon failure by either of Parent
or Merger Sub, to perform its respective obligations under this Agreement,
including, without limitation, its obligation to pay the Cash Price in
connection with the Offer and the Merger and any other monetary obligations of
Parent or Merger Sub when payable in accordance with the terms of this
Agreement, nor shall anything herein prevent the Company from exercising all
remedies otherwise permitted by applicable law.
ARTICLE 7
ACCESS TO INFORMATION AND DOCUMENTS
7.1 ACCESS TO INFORMATION. Between the date hereof and the Closing
Date, each of the Company and Parent will give to the other party and its
counsel, accountants and other representatives full access to all the
properties, documents, contracts, personnel files and other records of such
party (and, in the case of the Company, the Company Subsidiaries and the Company
Other Entities) and shall furnish the other party with copies of such documents
and with such information with respect to the affairs of such party as the other
party may from time to time reasonably request. Each party will disclose and
make available to the other party and its representatives all books, contracts,
accounts, personnel records, papers, records, communications with regulatory
authorities and other documents relating to the business and operations of such
party (and, in the case of the Company, the Company Subsidiaries and the Company
Other Entities). All information disclosed by or on behalf of the Company shall
be deemed to be "Evaluation Material" under the terms of the letter agreement,
dated February 19, 1999, between the Company (or its agent, Lazard Freres) and
United (the "Confidentiality Agreement").
7.2 RETURN OF RECORDS. If the transactions contemplated hereby are not
consummated and this Agreement terminates, each party agrees to promptly return
all documents, contracts, records or properties of the other party and all
copies thereof furnished pursuant to this Article 7 or otherwise.
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ARTICLE 8
COVENANTS OF THE COMPANY
8.1 PRESERVATION OF BUSINESS. Between the date hereof and the Effective
Time, the Company will use all commercially reasonable efforts to preserve the
business organization of the Company intact and to preserve for Parent and the
Surviving Corporation the good will of the suppliers, customers and others
having business relations with the Company.
8.2 MATERIAL TRANSACTIONS. Between the date hereof and the Effective
Time, the Company will not (other than as required pursuant to the terms of this
Agreement and the related documents or with respect to transactions described in
Section 8.2 of the Company Disclosure Schedule which do not vary materially from
the terms set forth on such Section 8.2, and will not permit any Company
Subsidiary or Company Other Entity to, without first obtaining the written
consent of Parent, enter into any transactions outside of the ordinary course of
business of the Company or:
(a) encumber any asset or enter into any transaction or make any
contract or commitment relating to the properties, assets and business of the
Company or any Company Subsidiary or Company Other Entity, other than in the
ordinary course of business or as otherwise disclosed herein;
(b) enter into any employment contract which is not terminable at
will or upon notice of 30 days or less and without penalty to the Company or any
Company Subsidiary or Company Other Entity except as provided herein;
(c) issue or sell, or agree to issue or sell, any shares of capital
stock or other securities of the Company, except upon exercise of currently
outstanding stock options or warrants;
(d) except as set forth in Section 8.2(d) of the Company Disclosure
Schedule or as may be required to comply with applicable law, become obligated
under any new pension plan, welfare plan, multi-employer plan, employee benefit
plan, severance plan, benefit arrangement or similar plan or arrangement which
is not in existence on the date hereof, or amend any such plan or arrangement in
existence on the date hereof if such amendment would have the effect of
materially increasing the costs thereof to the Company or any of its affiliates;
(e) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in respect
of any class or series of its capital stock other than between the Company and
any of its wholly owned subsidiaries;
(f) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem, purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities;
(g) (i) incur, assume or pre-pay any long-term debt or incur or
assume any short-term debt, except that the Company and the Company Subsidiaries
may incur, assume or pre-pay debt in the ordinary course of business consistent
with past practice under existing lines
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of credit, (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person or entity except in the ordinary course of business, or (iii)
make any loans, advances or capital contributions to, or investments in, any
other person or entity except in the ordinary course of business and except for
loans, advances or capital contributions to or investments in any wholly owned
subsidiary of the Company;
(h) issue any stock option under any Plan or any other options,
warrants, convertible securities or other capital stock, and (except as
contemplated by Section 3.1(d) hereof) will not accelerate the vesting or
otherwise modify the terms of any option outstanding under any Plan;
(i) take any action to institute any severance or termination pay
practices with respect to any directors, officers, or employees of the Company
or any of the Company Subsidiaries or Company Other Entities other than those in
effect on the date hereof, or to increase the benefits payable under its
severance or termination pay practices in effect on the date hereof;
(j) adopt or amend, in any material respect, except as may be
required by applicable law or regulation, any collective bargaining, bonus,
profit sharing, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment or other employee benefit plan,
agreement, trust, fund, plan or arrangement for the benefit or welfare of any
directors, officers or employees of the Company, or any of the Company
Subsidiaries or Company Other Entities, or make any increase in the salaries,
compensation or pay scales of any such directors, officers or employees; or
(k) amend its certificate of incorporation or bylaws.
From the date of this Agreement through the Effective Time, the Company
will permit two designated representatives of Parent to be present on a
full-time basis at the principal offices of the Company to observe the conduct
of the business of the Company, and the Company will consult with such
representatives prior to taking any actions outside the ordinary course of the
Company's business in any material respect or any actions specified in Section
8.2.
8.3 MEETING OF STOCKHOLDERS.
(a) The Company, as soon as practicable after consummation of the
Offer, if a special meeting of Stockholders is required, will take all steps
necessary in accordance with its certificate of incorporation and bylaws to
call, give notice of, convene and hold a meeting of its stockholders (the
"Special Meeting") for the purpose of approving this Agreement and for such
other purposes as may be necessary or to seek to cause such action to be taken
by written consent to the extent permitted by the DGCL. Unless this Agreement
shall have been validly terminated as provided herein, the Board of Directors of
the Company, subject to its fiduciary duties, will (i) recommend to Company
stockholders the approval of this Agreement, the transactions contemplated
hereby and any other matters to be submitted to the stockholders in connection
therewith, to the extent that such approval is required by applicable law in
order to consummate
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the Merger, and (ii) use commercially reasonable, good faith efforts to obtain
the approval by Company stockholders of this Agreement and the transactions
contemplated hereby.
(b) Nothing contained herein shall affect the right of the Company
or its stockholders to take action by written consent in lieu of meeting to the
extent permitted by law and the certificate of incorporation and bylaws of the
Company.
8.4 ACCOUNTING METHODS. Prior to the Effective Time, the Company shall
not change, in any material respect, its methods of accounting in effect at its
most recent fiscal year end, except as required by changes in GAAP as concurred
in by the Company's independent accountants.
8.5 NO SOLICITATIONS. The Company agrees that, prior to the Effective
Time, it shall not, directly or indirectly, solicit, initiate or encourage any
inquiries or the making of any proposal with respect to any merger,
consolidation or other business combination involving the Company or the Company
Subsidiaries or acquisition of all or substantially all of the assets or capital
stock of the Company and the Company Subsidiaries taken as a whole (an
"ACQUISITION TRANSACTION") or negotiate, explore or otherwise engage in
substantive discussions with any person (other than Parent, Merger Sub or their
respective directors, officers, employees, agents and representatives) with
respect to any Acquisition Transaction or enter into any agreement, arrangement
or understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this Agreement.
8.6 CONSENTS. The Company shall obtain, no later than the date that is
twenty business days after the date hereof, all requisite consents to the
execution, delivery or performance by the Company of this Agreement from Fleet
National Bank or any other requisite lenders in connection with that certain
Credit Agreement, dated as of July 15, 1993, as amended, among the Company,
Fleet National Bank and The Chase Manhattan Bank and that certain Amended and
Restated Negative Pledge Agreement.
ARTICLE 9
COVENANTS OF PARENT AND MERGER SUB
9.1 EMPLOYEES.
(a) As of and after the Effective Time for a period of at least
three years, Parent shall cause the Surviving Corporation to provide to all
officers and employees of the Company, the Company Subsidiaries and the Company
Other Entities (individually, a "Company Employee" and collectively, the
"Company Employees") such retirement benefits, group health plan benefits,
employee benefit plans, programs, arrangements and policies as are no less
favorable, in the aggregate (rather than on an individual plan by plan basis),
than Parent provides to similarly situated employees; provided, however, that
Parent shall cause the Surviving Corporation, to the extent legally permitted,
to maintain and provide to the Company Employees through at least December 31,
1999 those particular employee benefit plans, programs, arrangements and
policies specified in Section 9.1(a) of the Company Disclosure Schedule or plans
substantially similar thereto. Parent shall take all actions required so that
each current and
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former Company Employee will receive credit for his or her service as credited
by the Company prior to the Effective Time (whether for service with the Company
or any predecessor in interest thereto or pursuant to obligations assumed by the
Company in connection with the prior acquisition of assets or capital stock of
other persons or entities) under any employee benefit plans, programs,
arrangements and policies established, maintained, continued or made available
by the Surviving Corporation in which any such current or former Company
Employee is eligible to participate. As soon as practicable after the execution
of this Agreement, Parent shall confer with the Company in good faith to agree
upon mutually acceptable employee benefit and compensation arrangements to be
made available hereunder to the Company Employees.
(b) Without limitation of any other provision of this Agreement,
if, at any time within the calendar year in which the Closing Date occurs, the
Company, any Company Subsidiary or any of the Company Other Entities terminates
the employment of a Company Employee without cause, or such Company Employee
rightfully terminates his or her employment for "good reason" within the meaning
of any agreement between such Company Employee and the Company, any Company
Subsidiary or any of the Company Other Entities, Parent shall pay, or shall
cause to be paid, to such terminated Company Employee, as soon as practicable
after such termination, a pro rata portion of the amount to which the Company
Employee would have been entitled, but for such termination, as an incentive
bonus for such year pursuant to his or her compensation plan for such year. Such
amount shall be prorated based on the number of full weeks of service of such
Company Employee during such year; provided, however, that to the extent the
amount of such incentive bonus is contingent on the attainment of financial
goals of the Company, any Company Subsidiary or any of the Company Other
Entities (and/or any of their respective business units), the amount that shall
be prorated hereunder shall be adjusted so that it bears the same relation to
the total amount of the incentive bonus that the Company Employee was budgeted
to receive for the attainment of such financial goals as the year-to-date
financial results of the Company, such Company Subsidiary or such Company Other
Entity (and/or such business unit, as the case may be) that were actually
attained as of the last day of the month preceding the date of such termination
bear to the year-to-date financial results that were budgeted to be attained as
of the last day of such month.
9.2 INDEMNIFICATION.
(a) From and after the Effective Time, Parent shall cause the
Surviving Corporation to fulfill and honor in all respects the obligations of
the Company pursuant to the indemnification agreements set forth in Section
9.2(a) of the Company Disclosure Schedule in favor of the directors and officers
of the Company (the "Indemnified Parties"). The certificate of incorporation and
bylaws of the Surviving Corporation shall contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in the certificate of incorporation and
bylaws of the Company as in effect on the date hereof, which provisions shall
not be amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who, immediately prior to the Effective Time, were
directors, officers, employees or agents of the Company, unless such
modification is required by law.
(b) For a period of six years after the Effective Time, Parent
shall cause the Surviving Corporation to use its commercially reasonable efforts
to maintain in effect, if
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available, directors' and officers' liability insurance and employed lawyers
professional liability insurance ("D&O Insurance") covering those persons who
are currently or at the Effective Time covered by the Company's policies for
such insurance on terms comparable to those applicable to the current policies
for such insurance; provided, however, that in no event shall Parent or the
Surviving Corporation be required to expend in excess of 200% of the annual
premium currently paid by the Company for such coverage (or obtain coverage in
excess of the coverage that is available for such 200% of such annual premium).
Promptly after the execution of this Agreement, the Company will consult with
its insurance agents as to the availability and cost of such six year D&O
Insurance extension and the availability and cost of increasing the coverage of
its D&O Insurance for events through the Effective Time to $50 million (or to
incremental amounts between $25 million and $50 million), and the Company will
consult with Parent as to the results of such discussions and obtain binders for
such extended and additional coverage as Parent shall approve, subject to and
effective upon consummation of the Offer.
9.3 TRANSACTION COSTS. Prior to the consummation of the Offer, Parent
shall have caused sufficient funds to be set aside in an escrow account to be
maintained with The Chase Manhattan Bank, N.A. (which is expected to serve as
the depositary for the Offer) under arrangements reasonably acceptable to the
Company to pay all retention bonuses and transaction-based bonuses associated
with the Merger contractually payable by the Company to Company Employees and to
pay the fees and costs of all financial and accounting advisors and legal
counsel retained by the Company in connection with the negotiation and/or
consummation of the Offer and the Merger (with any such funds not required for
such payments to be returned to Parent), a true and complete estimate of which
bonuses, benefits, fees and costs is set forth in Section 9.3 of the Company
Disclosure Schedule.
ARTICLE 10
COVENANTS OF THE COMPANY, PARENT AND MERGER SUB
10.1 PUBLIC DISCLOSURES. Promptly after the execution and delivery of
this Agreement, the Company and Parent will issue a joint press release in a
form that has been mutually approved by the Company and Parent. Parent and the
Company shall not issue any other press release or otherwise make any public
statement with respect to the transactions contemplated by this Agreement prior
to reaching an agreement with respect to the timing and content thereof unless
and only to the extent required to do so by applicable law or regulation or
under the requirements of the Nasdaq National Market system or any other stock
exchange, whether or not such exchange is located within the United States of
America.
10.2 OTHER ACTIONS. None of the Company, Parent and Merger Sub shall,
without the consent of the other party, knowingly or intentionally take any
action, or omit to take any action, if such action or omission would (a) result
in any of its representations and warranties set forth herein being or becoming
untrue in any material respect, or in any of the conditions to the Merger set
forth in this Agreement not being satisfied, (b) (unless such action or omission
is required by applicable law) have a Material Adverse Effect on the ability of
the Company or Parent to obtain any consents or approvals required for the
consummation of the Merger without imposition of a condition or restriction
which would have a Material Adverse Effect on the Surviving Corporation or (c)
otherwise materially impair the ability of the Company or Parent to
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consummate the Merger in accordance with the terms of this Agreement or
materially delay such consummation.
10.3 PROXY STATEMENT; ANTITRUST FILINGS.
(a) As promptly as practicable after consummation of the Offer, if
a special meeting of stockholders is required, the Company will prepare and file
with the SEC a form of proxy statement or other applicable information statement
relating to the Merger (the "Proxy Statement"). The Company will respond to any
comments of the SEC and the Company will cause the Proxy Statement to be mailed
to its stockholders at the earliest practicable time after the SEC has completed
its review of the Proxy Statement. Notwithstanding the foregoing, in the event
that Parent, Merger Sub or any other affiliate of Parent shall acquire at least
90% of the outstanding shares of Company Common Stock pursuant to the Offer, the
parties hereto agree to take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the acceptance for
payment of and payment for shares of Company Common Stock by Merger Sub pursuant
to the Offer without a meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
(b) As promptly as practicable after the date of this Agreement,
each of the Company and Parent will prepare and file (i) with the United States
Federal Trade Commission (the "FTC") and the Antitrust Division of the United
States Department of Justice (the "DOJ") Notification and Report Forms relating
to the transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by the
parties (the "Antitrust Filings") and (ii) any other filings required to be
filed by it under the Exchange Act, the Securities Act or any other federal,
state or foreign laws relating to the Merger and the transactions contemplated
by this Agreement (the "Other Filings").
(c) The Company and Parent each shall promptly supply the other
with any information which may be required in order to effectuate any filings
pursuant to this Section 10.3. Each of the Company and Parent will notify the
other promptly upon the receipt of any comments from the SEC, FTC or DOJ or
their respective staffs or any other government officials in connection with any
filing made pursuant hereto and of any request by the SEC, FTC or DOJ or their
respective staffs or any other government officials for amendments or
supplements to the Proxy Statement or any Antitrust Filings or Other Filing or
for additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the FTC, DOJ, SEC, or their respective staffs or any other
governmental officials, on the other hand, with respect to the Registration
Statement, the Prospectus/Proxy Statement, the Merger or any Antitrust Filing or
Other Filing. Each of the Company and Parent will cause all documents that it is
responsible for filing with the SEC, FTC or DOJ or other regulatory authorities
under this Section 10.3 to comply in all material respects with all applicable
requirements of law and the rules and regulations promulgated thereunder.
Whenever any event occurs which is required to be set forth in an amendment or
supplement to the Proxy Statement or any Antitrust Filing or Other Filing, the
Company or Parent, as the case may be, will promptly inform the other of such
occurrence and cooperate in filing with the SEC, FTC or DOJ or their respective
staffs or any other government officials, and/or mailing to stockholders of the
Company and/or Parent, such amendment or supplement.
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(d) If any suit is instituted challenging any of the transactions
contemplated hereby as violative of the HSR Act or any other antitrust or trade
regulatory laws or regulations of any Governmental Entity ("Antitrust Laws"),
Parent and the Company shall each cooperate to contest and resist any such
action or proceeding, and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the transactions contemplated by this Agreement, including,
without limitation, by pursuing all reasonable avenues of administrative and
judicial appeal.
10.4 OTHER FILINGS AND CONSENTS.
(a) Parent shall (i) determine whether any filings other than
those described in Section 10.3 are required to be made or consents required to
be obtained in any jurisdiction prior to the Effective Time in connection with
the consummation of the transactions contemplated hereby and make any such
filings promptly and seek to obtain timely any such consents and (ii) use its
best efforts to cause to be lifted any injunction prohibiting the Merger, or any
part thereof, or the other transactions contemplated hereby.
(b) Subject to the terms and conditions herein provided, and
unless this Agreement shall have been validly terminated as provided herein,
each of Parent and the Company shall use all commercially reasonable efforts (i)
to take, or cause to be taken, all actions necessary to comply promptly with all
legal requirements which may be imposed on such party (or any subsidiaries or
affiliates of such party) with respect to this Agreement and to consummate the
transactions contemplated hereby, subject to the votes of its stockholders
described above, and (ii) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any governmental entity and/or any other public or private third party which is
required to be obtained or made by such party or any of its subsidiaries or
affiliates in connection with this Agreement and the transactions contemplated
hereby. Each of Parent and the Company will promptly cooperate with and furnish
information to the other in connection with any such burden suffered by, or
requirement imposed upon, either of them or any of their subsidiaries or
affiliates in connection with the foregoing.
ARTICLE 11
TERMINATION, AMENDMENT AND WAIVER
11.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of matters presented in
connection with the Merger by the holders of shares of Company Common Stock:
(a) by mutual written consent of Parent and the Company; or
(b) by either Parent or the Company:
(i) if, upon a vote at a duly held meeting of stockholders or
any adjournment thereof, any required approval of the holders of shares of the
Company Common Stock shall not have been obtained;
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(ii) if the Merger shall not have been consummated on or
before the date which is six months after the date of this Agreement, unless the
failure to consummate the Merger is the result of a willful and material breach
of this Agreement by the party seeking to terminate this Agreement;
(iii) if any court of competent jurisdiction or other
governmental entity shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting the
Merger, and such order, decree, ruling or other action shall have become final
and nonappealable;
(iv) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained in this
Agreement which (A) would give rise to the failure of a condition set forth in
Article 12 and (B) cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party of such breach (a "Material
Breach"); provided that the terminating party is not then in Material Breach of
any representation, warranty, covenant or other agreement contained in this
Agreement; or
(v) if Merger Sub shall have terminated the Offer in
accordance with its terms and conditions, and otherwise not in violation of this
Agreement, without purchasing any shares of Company Common Stock pursuant
thereto; or
(c) by either Parent or the Company in the event that (i) all of
the conditions to the obligation of such party to effect the Merger set forth in
Section 12.1 shall have been satisfied and (ii) any condition to the obligation
of such party to effect the Merger set forth in Section 12.2 (in the case of
Parent) or Section 12.3 (in the case of the Company) is not capable of being
satisfied prior to the end of the period referred to in Section 11.1(b)(ii); or
(d) by Parent, if in violation of Section 8.5 the Company's Board
of Directors shall have (i) determined to withdraw its recommendation of the
Offer or the Merger to the holders of Company Common Stock or (ii) approved,
recommended or endorsed any Acquisition Transaction (as defined in Section 8.5)
other than this Agreement or (iii) resolved to do any of the foregoing.
11.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 11.1, this Agreement shall forthwith become
void and have no effect, without any liability or obligation on the part of any
party, other than liabilities and obligations under the provisions of Sections
7.1, 7.2 and 11.2, and except to the extent that such termination results from
the willful and material breach by a party of any of its representations,
warranties, covenants or other agreements set forth in this Agreement.
11.3 AMENDMENT. This Agreement may be amended only by a writing signed
on behalf of each of the parties, at any time before or after approval of this
Agreement and the Merger by the stockholders of the Company and prior to the
Effective Time; provided, however, that following approval by the stockholders
of the Company, there shall be no amendments or change to the provisions hereof
which by law requires further approval by such stockholders, without such
further approval.
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11.4 EXTENSION; WAIVER. At any time prior to the Effective Time of the
Merger, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso in
Section 11.3, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a 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. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
11.5 EXPENSES AND FEES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense.
ARTICLE 12
CONDITIONS TO CLOSING
12.1 MUTUAL CONDITION. The respective obligations of each party to
consummate the Merger shall be subject to the satisfaction, at or prior to the
Closing Date, of the following conditions (any of which may be waived in writing
by Parent and the Company):
(a) None of Parent, Merger Sub or the Company, nor any of their
respective subsidiaries, shall be subject to any order, decree or injunction by
a court of competent jurisdiction which (i) prevents or materially delays the
consummation of the Merger or (ii) would impose any material limitation on the
ability of Parent effectively to exercise full rights of ownership of the common
stock of the Surviving Corporation or any material portion of the assets or
business of the Company, the Company Subsidiaries and the Company Other Entities
taken as a whole.
(b) No statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) shall
have been enacted by the government (or any governmental agency) of the United
States or any other country, or any state, municipality or other political
subdivision thereof, that makes the consummation of the Merger and any other
transaction contemplated hereby illegal. All waiting periods, if any, under the
HSR Act relating to the transactions contemplated hereby shall have expired or
terminated early and all material foreign antitrust approvals required to be
obtained prior to the Merger in connection with the transactions contemplated
hereby shall have been obtained.
(c) The requisite holders of Company Common Stock shall have
approved the adoption of this Agreement and any other matters submitted to them
to the extent required by, and in accordance with the provisions of, Section 8.3
hereof.
12.2 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB. The
obligations of Parent and Merger Sub to consummate the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction, at or
prior to the Closing Date, of the following conditions (any of which may be
waived by Parent and Merger Sub):
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(a) Each of the agreements of the Company to be performed at or
prior to the Closing Date pursuant to the terms hereof shall have been duly
performed and the Company shall have performed all of the acts required to be
performed by it at or prior to the Closing Date by the terms hereof unless all
such failures together in their entirety, would not, individually or in the
aggregate, have a Material Adverse Effect with respect to the Company or the
consummation of the transactions contemplated by this Agreement.
(b) The representations and warranties of the Company set forth in
Article 4 of this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing except where failure to be so true and correct
would not (in the aggregate for all representations and warranties of the
Company) have a Material Adverse Effect (other than representations and
warranties that are already so qualified, which in each such case shall be true
and correct as written), and except for (i) changes specifically contemplated by
this Agreement and (ii) those representations and warranties that address
matters only as of a particular date (which shall remain true and correct as of
such date); provided, however, that the Company shall not be deemed to be in
breach of any such representations or warranties by taking any action permitted
(or approved by Parent) under Section 8.2. Parent and Merger Sub shall have been
furnished with a certificate, executed by a duly authorized officer of the
Company, dated the Closing Date certifying in such detail as Parent and Merger
Sub may reasonably request as to the fulfillment of the foregoing conditions.
12.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to consummate the Merger and the other transactions contemplated hereby
shall be subject to the satisfaction, at or prior to the Closing Date, of the
following conditions (any of which may be waived by the Company):
(a) Each of the agreements of Parent and Merger Sub to be
performed at or prior to the Closing Date pursuant to the terms hereof shall
have been duly performed, in all material respects, and Parent and Merger Sub
shall have performed, in all material respects, all of the acts required to be
performed by them at or prior to the Closing Date by the terms hereof.
(b) The representations and warranties of Merger Sub set forth in
Article 5 and of Parent set forth in Article 6 shall be true and correct, as of
the date of this Agreement and as of the Closing except where failure to be so
true and correct would not (in the aggregate for all representations and
warranties of the Company) have a Material Adverse Effect (other than
representations and warranties that are already so qualified, which in each such
case shall be true and correct as written), and except for (i) changes
specifically contemplated by this Agreement and (ii) those representations and
warranties that address matters only as of a particular date (which shall remain
true and correct as of such date). The Company shall have been furnished with a
certificate, executed by duly authorized officers of Parent and Merger Sub,
dated the Closing Date certifying in such detail as the Company may reasonably
request as to the fulfillment of the foregoing conditions.
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ARTICLE 13
MISCELLANEOUS
13.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time.
13.2 SCOPE OF REPRESENTATIONS AND WARRANTIES. The Company shall be not
be deemed to have made to Parent or Merger Sub any representation or warranty
other than as expressly made by the Company in Article 4 hereof. Without
limiting the generality of the foregoing, and notwithstanding any otherwise
express representations and warranties made by the Company in Article 4 hereof,
the Company makes no representation or warranty to Parent or Merger Sub with
respect to (a) any projections, estimates or budgets heretofore delivered or
made available to Parent of future revenues, expenses or expenditures, future
results of operations and other similar projections or estimates or (b) any
other information or documents made available to Parent or its counsel,
accountants or advisors with respect to the Company, the Company Subsidiaries or
the Company Other Entities, except as expressly covered by a representation and
warranty contained in Article 4 hereof.
13.3 NOTICES. All notices, requests, demands or other communications
required by or otherwise given with respect to this Agreement shall be in
writing and shall be deemed to have been duly given to any party when delivered
personally (by courier service or otherwise), or three business days after being
sent by registered or certified mail with postage prepaid, return receipt
requested (provided, however, that in the case of international mailings, such
time period shall instead be the seventh day after deposit by insured delivery
into the national postal system of the county of origin or on the second
business day after delivery to an overnight courier of recognized international
standing), in each case to the applicable addresses set forth below or to such
other address as such party shall have designated by notice so given to each
other party:
If to the Company:
CMP Media Inc.
600 Community Drive
Manhasset, NY 11030
Attention: Michael S. Leeds
Facsimile: (516) 562-5718
with a copy to:
CMP Media Inc.
600 Community Drive
Manhasset, NY 11030
Attention: Robert D. Marafioti, Esq.
Facsimile: (516) 562-7123
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with a copy to:
Dow, Lohnes & Albertson, PLLC 1200 New Hampshire
Avenue, N.W.
Suite 800
Washington, D.C. 20036
Attention: Richard L. Braunstein, Esq.
Facsimile: (202) 776-2222
If to United, Parent or Merger Sub:
Miller Freeman Worldwide plc
530 Chiswick High Road
London W4 5BG
England
Attention: Ms. Emma Lewis
Facsimile: 011-44-181-987-7756
with a copy to:
United News & Media plc
Ludgate House
245 Blackfriars Road
London SE1 9UY
England
Attention: Ms. Jane Stables
Facsimile: 011-44-171-921-5047
and a copy to:
Carter, Ledyard & Milburn
2 Wall Street
New York, NY 10005
Attention: James E. Abbott, Esq.
Facsimile: (212) 732-3232
13.4 FURTHER ASSURANCES. Each party hereby agrees to perform any
further acts and to execute and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement.
13.5 GOVERNING LAW. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of Delaware, applied without
giving effect to any conflicts-of-law principles.
13.6 "KNOWLEDGE". "To the knowledge," "to the best knowledge" or any
similar phrase shall be deemed to refer to the actual knowledge, after
reasonable investigation, of the Chief Executive Officer and Chief Financial
Officer of a party and also, in the case of the
-32-
Company, the Company's President of Publishing, President of International,
General Counsel, Chief Information Officer, Senior Vice President (Channel
Group), Vice President (OEM Group), Executive Vice President (BTG Group) and
other corporate officers primarily responsible for a business function relevant
to the issue in question.
13.7 "MATERIAL ADVERSE EFFECT". "Material Adverse Effect" means, when
used in connection with the Company or Parent, any change, effect, event or
occurrence that has, or would have, individually or in the aggregate, a material
adverse impact on the business, assets, liabilities, results of operations or
financial condition of such party and its subsidiaries taken as a whole;
provided, however, that "Material Adverse Effect" shall be deemed to exclude (i)
changes in general economic conditions or changes affecting the industries
generally in which such party operates, (ii) changes in trading prices for such
party's capital stock, (iii) stockholder litigation arising from allegations of
a breach of fiduciary duty relating to this Agreement, and (iv) the impact of
changes in GAAP.
13.8 "TAXES". For purposes of this Agreement, the term "Tax" or "Taxes"
shall mean all taxes, charges, fees, levies, penalties or other assessments
imposed by any United States federal, state, local or foreign taxing authority,
including, but not limited to, income, excise, property, sales, transfer,
franchise, payroll, withholding, Social Security or other taxes, including any
interest, penalties or additions attributable thereto. For purposes of this
Agreement, the term "tax return" shall mean any return, report, information
return or other document (including any related or supporting information) with
respect to Taxes.
13.9 CAPTIONS. The captions or headings in this Agreement are made for
convenience and general reference only and shall not be construed to describe,
define or limit the scope or intent of the provisions of this Agreement.
13.10 INTEGRATION OF COMPANY DISCLOSURE SCHEDULE. The Company
Disclosure Schedule attached to this Agreement is an integral part of this
Agreement as if fully set forth herein, and all statements appearing therein
shall be deemed disclosed for all purposes and not only in connection with the
specific representation in which they are explicitly referenced.
13.11 ENTIRE AGREEMENT. This instrument, including the Company
Disclosure Schedule, all Exhibits attached hereto, together with the
Confidentiality Agreement and the Voting Agreement, contains the entire
agreement of the parties and supersedes any and all prior to contemporaneous
agreements between the parties, written or oral, with respect to the
transactions contemplated hereby.
13.12 AMENDMENT. No provision of this Agreement may be waived, changed,
modified, extended, discharged or terminated, except in a writing signed by the
party or parties against whom enforcement of any waiver, change, modification,
extension, discharge or termination is sought.
13.13 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which, when so executed, shall be deemed to be any
original, and such counterparts shall, together, constitute and be one and the
same instrument.
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13.14 BINDING EFFECT; NO THIRD PARTY BENEFICIARIES. This Agreement
shall be binding on, and shall inure to the benefit of, the parties hereto and
their respective successors and assigns. Except for Sections 1A.3, 9.1, 9.2 and
10.3(a), this Agreement is not intended to be for the benefit of and shall not
be enforceable by any person or entity who or which is not a party hereto.
13.15 ASSIGNMENT. No party may assign any right or obligation hereunder
without the prior written consent of the other parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be executed by their respective duly authorized officers as of
the day and year first above written.
CMP MEDIA INC.
By: /s/ Michael S. Leeds
----------------------
Name: Michael S. Leeds
Title: President and Chief Executive Officer
MFW ACQUISITION CORP.
By: /s/ Donald A. Pazour
----------------------
Name: Donald A. Pazour
Title: Chief Executive Officer
UNITED NEWS & MEDIA PLC
By: /s/ C.R. Stern
----------------
Name: C.R. Stern
Title: Finance Director
MILLER FREEMAN WORLDWIDE PLC
By: /s/ A.M. Tillin
-----------------
Name: A.M. Tillin
Title: Chief Executive Officer
ANNEX I
Notwithstanding any other provision of this Agreement, Merger Sub shall
not be required to accept for payment or pay for any Company Common Stock
tendered, and may terminate or amend the Offer (subject to the provisions of
this Agreement) and may postpone the acceptance of, and payment for, subject to
Rule 14e-1(c) of the Exchange Act, any Company Common Stock tendered, (A) unless
the following conditions shall have been satisfied: (i) there shall be validly
tendered and not withdrawn prior to the expiration of the Offer a number of
shares of Company Common Stock which represent on a fully diluted basis
(including for purposes of such calculation all Company Common Stock issuable
upon exercise of all vested stock options and warrants and conversion of
convertible securities or other rights to purchase or acquire shares and after
giving effect to the conversion of the Class B Common Stock) at least 51% of the
number and voting power of the shares of Company Common Stock then outstanding
(the " Minimum Condition") and (ii) any applicable waiting period under the HSR
Act shall have expired or been terminated prior to the expiration of the Offer
or (B) if at any time after the date of this Agreement and before the time of
payment for any such Company Common Stock (whether or not any Company Common
Stock has theretofore been accepted for payment or paid for pursuant to the
Offer) any of the following conditions exists:
(a) there shall be in effect an injunction or other order,
decree, judgment or ruling by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission of
competent jurisdiction or a statute, rule, regulation, executive order
or other action or proceeding shall have been promulgated, enacted,
taken, initiated or instituted by a government or a governmental
authority or a governmental, regulatory or administrative agency or
commission of competent jurisdiction which in any such case (i) seeks
to restrain or prohibit the making or consummation of the Offer or the
consummation of the Merger, (ii) seeks to prohibit or restrict in any
material respect the ownership or operation by Merger Sub (or any of
its affiliates or subsidiaries) of any material portion of the
Company's business or assets, or seeks to compel Merger Sub (or any of
its affiliates or subsidiaries) to dispose of or hold separate any
material portion of the Company's business or assets, (iii) seeks to
impose material limitations on the ability of Merger Sub effectively to
acquire or to hold or to exercise full rights of ownership of the
Company Common Stock, including, without limitation, the right to vote
the Company Common Stock purchased by Merger Sub on all matters
properly presented to the stockholders of the Company, or (iv) seeks to
impose any material limitations on the ability of Merger Sub or any of
its affiliates or subsidiaries effectively to control in any material
respect the business and operations of the Company; or
(b) this Agreement shall have been terminated by the Company,
Merger Sub or Parent in accordance with its terms; or
(c) there shall have occurred and be continuing (i) any
general suspension of, or limitation on prices for, trading in
securities on any national securities exchange or the over-the-counter
market, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any limitation
(whether or not mandatory) by any government or Governmental Entity of
the United States on the
extension of credit by banks or other lending institutions, or (iv) in
the case of any of the foregoing existing at the time of the execution
of this Agreement, a material acceleration or worsening thereof; or
(d) (i) the Board of Directors or any committee thereof shall
have withdrawn, materially modified or changed in a manner adverse to
Parent or Merger Sub the approval or recommendation of the Offer, the
Merger or this Agreement, or approved or recommended any Acquisition
Transaction or any other acquisition of Company Common Stock other than
the Offer or the Merger, or (ii) the Board of Directors or any
committee thereof shall have resolved to do any of the foregoing; or
(e) the representations and warranties of the Company shall
not be true and correct as of the date of this Agreement or as of the
expiration of the Offer except where failure to be so true and correct
would not (in the aggregate for all representations and warranties of
the Company) have a Material Adverse Effect (other than representations
and warranties that are already so qualified, which in each such case
shall be true and correct as written), and except for (i) changes
specifically contemplated by this Agreement and (ii) those
representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such date);
or
(f) the Company shall have failed to perform any obligation or
to comply with any agreement or covenant of the Company to be performed
or complied with by it under this Agreement unless all such failures
together in their entirety, would not, individually or in the
aggregate, have a Material Adverse Effect; or
(g) the Company shall not have delivered to Parent binding
agreements signed by the holders of Options representing at least 95%
of the Company Common Stock issuable upon exercise of all of the
outstanding Options, agreeing to the cancellation of the Options of
such holders on the terms described in Section 3.1(d) of this
Agreement; or
(h) the Company shall not have delivered to Parent evidence of
binding agreements of the executive officers of the Company to make
payment in full within five business days after the closing of the
Offer (including the delivery of the Cash Price for any shares of
Company Common Stock tendered by such executive officers) of all
amounts of principal and accrued interest, whether or not then due and
owing, under all credit, loan or similar agreements as to which the
Company is a lender to or guarantor of such executive officers; or
(i) there shall since March 31, 1999 have occurred any event
that, individually or when considered together with any other matter,
has had or would have a Material Adverse Effect; or
(j) Merger Sub and the Company shall have agreed that Merger
Sub shall amend the Offer to terminate the Offer or postpone the
payment for Company Common Stock pursuant thereto.
The foregoing conditions are for the sole benefit of Merger Sub and may
be asserted by Merger Sub regardless of the circumstances giving rise to any
such condition or may be waived by Merger Sub in whole or in part at any time
and from time to time in its sole discretion, subject in each case to the terms
of this Agreement. The failure by Merger Sub at any time to execute any of the
foregoing rights shall not be deemed a waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
Dates Referenced Herein and Documents Incorporated by Reference
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