\n Action 4.09
\n Agreement Preamble
\n Blue Sky Laws 4.05(b)
\n Board Recitals
\n Certificate of Merger 3.02
\n Certificates 3.08(b)<\/p>\n 5<\/p>\n
Code 4.10(a)
\n Company Preamble
\n Company Licensed Intellectual Property 4.14(b)
\n Company Material Contracts 4.18(a)
\n Company Owned Intellectual Property 4.14(c)
\n Company Preferred Stock 4.03
\n Company Required Approvals 4.05
\n Company Stock Option 3.07
\n Company Stock Option Plans 3.07
\n Confidentiality Agreement 7.04(b)
\n Disclosure Schedule 4.01(b)
\n Effective Time 3.02
\n Environmental Permits 4.16
\n ERISA 4.10(a)
\n Exchange Act 2.01(a)
\n Expenses 9.03(a)
\n Fee 9.03(a)
\n GAAP 4.07(b)
\n Governmental Authority 4.05(b)
\n HSR Act 4.05(b)
\n IRS 4.10(a)
\n Law 4.05(a)
\n Liens 4.13(b)
\n Material Subsidiary 4.01(c)
\n Merger Recitals
\n Merger Consideration 2.01(a)
\n Minimum Condition 2.01(a)
\n Michigan Law Recitals
\n Multiemployer Plan 4.10(b)
\n Multiple Employer Plan 4.10(b)
\n New Plan 7.06(b)
\n Non-U.S. Benefit Plan 4.10(h)
\n Offer Recitals
\n Offer Documents 2.01(b)
\n Offer to Purchase 2.01(b)
\n Parent Preamble
\n Paying Agent 3.09(a)
\n Permits 4.06
\n Permitted Liens 4.13(b)
\n Per Share Amount Recitals
\n Plans 4.10(a)<\/p>\n
6<\/p>\n
Proxy Statement 4.12
\n Purchaser Preamble
\n Retained Employees 7.06
\n Rights 4.03
\n Rights Agreement 4.03
\n Schedule 14D-9 2.02(b)
\n Schedule TO 2.01(b)
\n SEC 2.01(a)
\n Securities Act 4.07(a)
\n Shares Recitals
\n Shareholder Agreements Recitals
\n Shareholders Recitals
\n Shareholders’ Meeting 7.01(a)
\n Subsidiary 4.01(a)
\n Superior Proposal 7.05
\n Surviving Corporation 3.03
\n Transactions 2.02(a)
\n 1999 Balance Sheet 4.07(c)
\n<\/c><\/s><\/caption>\n<\/table>\n
ARTICLE II<\/p>\n
THE OFFER<\/p>\n
SECTION 2.01. THE OFFER. (a) Provided that none of the events
\nset forth in Annex A hereto shall have occurred or be continuing, Purchaser
\nshall commence the Offer as promptly as reasonably practicable and in any event
\nwithin ten (10) business days after the date hereof. The obligation of Purchaser
\nto accept for payment, purchase and pay for any Shares tendered pursuant to the
\nOffer shall be subject to the condition (the “MINIMUM CONDITION”) that at least
\nthe number of Shares that shall constitute 51% of the then outstanding Shares on
\na fully diluted basis (including, without limitation, all Shares issuable upon
\nthe conversion of any convertible securities or upon the exercise of any
\noptions, warrants or rights (other than the Rights (as defined in Section 4.03))
\nshall have been validly tendered and not withdrawn prior to the expiration of
\nthe Offer and also shall be subject to the satisfaction of each of the other
\nconditions set forth in Annex A hereto. Purchaser expressly reserves the right
\nto waive any such condition other than the Minimum Condition, to increase the
\nprice per Share payable in the Offer, and to make any other changes in the terms
\nand conditions of the Offer; PROVIDED, HOWEVER, that no change may be made that
\ndecreases the price per Share payable in the Offer, changes the form of
\nconsideration payable in the Offer, reduces the maximum number of Shares to be
\npurchased in the Offer, imposes conditions to the Offer in addition to those set
\nforth in Annex A hereto, modifies or amends any condition to the Offer in any
\nmanner materially adverse<\/p>\n
7<\/p>\n
to the holders of Shares or, except as provided herein or required by any rule,
\nregulation, interpretation or position of the Securities and Exchange Commission
\n(the “SEC”) applicable to the Offer, change the expiration date of the Offer.
\nNotwithstanding the foregoing, Purchaser may, without the consent of the
\nCompany, (i) extend the Offer beyond the scheduled expiration date, which shall
\nbe 20 business days following the commencement of the Offer, if, at the
\nscheduled expiration of the Offer, any of the conditions to Purchaser’s
\nobligation to accept for payment Shares, shall not be satisfied or waived until
\nsuch conditions are satisfied or waived (except that the Minimum Condition may
\nnot be waived); PROVIDED, HOWEVER, that no such extension shall extend the Offer
\nbeyond October 31, 2000, (ii) extend the Offer for any period required by any
\nrule, regulation or interpretation of the SEC, or the staff thereof, applicable
\nto the Offer, or (iii) extend the Offer for one or more periods, each not to
\nexceed two business days and, in no event, in excess of an aggregate period of
\n10 business days beyond the latest applicable date that would otherwise be
\npermitted under clause (i) or (ii) of this sentence, if, as of such date, all of
\nthe conditions to Purchaser’s obligations to accept for payment Shares are
\nsatisfied or waived, but the number of Shares validly tendered and not withdrawn
\npursuant to the Offer equals 80% or more, but less than 90%, of outstanding
\nShares on a fully diluted basis. In addition, if, on the initial scheduled
\nexpiration date of the Offer, the sole condition remaining unsatisfied is that
\ncondition in clause (ii) of the introductory paragraph of Annex A, Purchaser
\nshall extend the Offer from time to time until the earlier to occur of (A)
\nDecember 31, 2000 and (B) the fifth business day after the satisfaction of such
\ncondition in clause (ii) of the introductory paragraph of Annex A. The Per Share
\nAmount shall, subject to applicable withholding of taxes, be net to the seller
\nin cash, upon the terms and subject to the conditions of the Offer. Purchaser
\nshall pay for all Shares validly tendered and not withdrawn promptly following
\nthe acceptance of Shares for payment pursuant to the Offer. Notwithstanding the
\nimmediately preceding sentence and subject to the applicable rules of the SEC
\nand the terms and conditions of the Offer, Purchaser expressly reserves the
\nright to delay payment for Shares in order to comply in whole or in part with
\napplicable laws. Any such delay shall be effected in compliance with Rule
\n14e-1(c) under the Securities Exchange Act of 1934, as amended (the “EXCHANGE
\nACT”). If the payment equal to the Per Share Amount in cash (the “MERGER
\nCONSIDERATION”) is to be made to a person other than the person in whose name
\nthe surrendered certificate formerly evidencing Shares is registered on the
\nstock transfer books of the Company, it shall be a condition of payment that the
\ncertificate so surrendered shall be endorsed properly or otherwise be in proper
\nform for transfer and that the person requesting such payment shall have paid
\nall transfer and other taxes required by reason of the payment of the Merger
\nConsideration to a person other than the registered holder of the certificate
\nsurrendered, or shall have established to the satisfaction of Purchaser that
\nsuch taxes either have been paid or are not applicable.<\/p>\n
(b) As promptly as reasonably practicable on the date of
\ncommencement of the Offer, Purchaser shall file with the SEC a Tender Offer
\nStatement on Schedule TO (together with all amendments and supplements thereto,
\nthe “SCHEDULE TO”) with respect to the Offer. The Schedule TO shall contain or
\nshall incorporate by reference an offer to purchase (the “OFFER<\/p>\n
8<\/p>\n
TO PURCHASE”) and forms of the related letter of transmittal and any related
\nsummary advertisement (the Schedule TO, the Offer to Purchase and such other
\ndocuments, together with all supplements and amendments thereto, being referred
\nto herein collectively as the “OFFER DOCUMENTS”). Parent and Purchaser further
\nagree to take all steps necessary to cause the Offer Documents to be
\ndisseminated to holders of Shares as and to the extent required by applicable
\nfederal securities laws. Parent, Purchaser and the Company agree to correct
\npromptly any information provided by any of them for use in the Offer Documents
\nthat shall have become false or misleading in any material respect, and Parent
\nand Purchaser further agree to take all steps necessary to cause the Schedule
\nTO, as so corrected, to be filed with the SEC, and the other Offer Documents, as
\nso corrected, to be disseminated to holders of Shares, in each case as and to
\nthe extent required by applicable federal securities laws. The Company and its
\ncounsel shall be given the opportunity to review the Schedule TO before it is
\nfiled with the SEC. In addition, Parent and Purchaser agree to provide the
\nCompany and its counsel in writing with any comments, whether written or oral,
\nParent, Purchaser or their counsel may receive from time to time from the SEC or
\nits staff with respect to the Offer Documents promptly after the receipt of such
\ncomments, and any written or oral responses thereto.<\/p>\n
SECTION 2.02. COMPANY ACTION. (a) The Company represents that
\n(i) the Board, at a meeting duly called and held on June 4, 2000, has
\nunanimously (A) determined that this Agreement and the transactions contemplated
\nhereby, including each of the Offer and the Merger (collectively, the
\n“TRANSACTIONS”), are fair to, and in the best interests of, the holders of
\nShares, (B) approved and adopted this Agreement and the Transactions (such
\napproval and adoption having been made in accordance with Michigan Law), (C)
\nresolved to recommend that the holders of Shares accept the Offer and tender
\nShares pursuant to the Offer, and approve and adopt this Agreement and the
\nTransactions, and (D) resolved to amend the Rights Agreement as contemplated
\nherein, and (ii) Deutsche Bank Securities, Inc. has delivered to the Board an
\nopinion, which will be confirmed promptly in writing, that the consideration to
\nbe received by the holders of Shares pursuant to each of the Offer and the
\nMerger is fair to the holders of Shares from a financial point of view. The
\nCompany hereby consents to the inclusion in the Offer Documents of the
\nrecommendation of the Board described in the immediately preceding sentence, and
\nthe Company shall not withdraw or modify such recommendation in any manner
\nadverse to Purchaser or Parent except as provided in Section 7.05(b). If so
\nrequested by the Purchaser, the Company will take all reasonable actions
\nnecessary in support of any consent solicitation and\/or tender offer for the
\nCompany’s outstanding 9.25% senior subordinated notes due 2008. The Company has
\nbeen advised by its directors and executive officers that they intend to tender
\nall Shares beneficially owned by them to Purchaser pursuant to the Offer.<\/p>\n
(b) As promptly as reasonably practicable on the date of
\ncommencement of the Offer, the Company shall file with the SEC a
\nSolicitation\/Recommendation Statement on Schedule 14D-9 (together with all
\namendments and supplements thereto, the “SCHEDULE 14D-9”) containing, except as
\nprovided in Section 7.05(b), the recommendation of the Board described in<\/p>\n
9<\/p>\n
Section 2.02(a), and shall disseminate the Schedule 14D-9 to the extent required
\nby Rule 14d-9 promulgated under the Exchange Act, and any other applicable
\nfederal securities laws. The Company, Parent and Purchaser agree to correct
\npromptly any information provided by any of them for use in the Schedule 14D-9
\nwhich shall have become false or misleading in any material respect, and the
\nCompany further agrees to take all steps necessary to cause the Schedule 14D-9,
\nas so corrected, to be filed with the SEC and disseminated to holders of Shares,
\nin each case as and to the extent required by applicable federal securities
\nlaws. Parent, Purchaser and their counsel shall be given the opportunity to
\nreview the Schedule 14D-9 before it is filed with the SEC. In addition, the
\nCompany agrees to provide Parent, Purchaser and their counsel in writing with
\nany comments, whether written or oral, the Company or its counsel may receive
\nfrom time to time from the SEC or its staff with respect to the Schedule 14D-9
\npromptly after the receipt of such comments, and any written or oral responses
\nthereto.<\/p>\n
(c) In connection with the Offer, the Company shall promptly
\nfurnish or cause to be furnished to Purchaser mailing labels containing the
\nnames and addresses of all record holders of Shares and with security position
\nlistings of Shares held in stock depositories, each as of a recent date,
\ntogether with all other available listings and computer files containing names,
\naddresses and security position listings of record holders and beneficial owners
\nof Shares. The Company shall promptly furnish or cause to be furnished to
\nPurchaser such additional information, including, without limitation, updated
\nlistings and computer files of shareholders, mailing labels and security
\nposition listings, and such other assistance in disseminating the Offer
\nDocuments to holders of Shares as Parent or Purchaser may reasonably request.
\nSubject to the requirements of applicable law, and except for such steps as are
\nnecessary to disseminate the Offer Documents and any other documents necessary
\nto consummate the Offer or the Merger, Parent and Purchaser shall hold in
\nconfidence the information contained in such labels, listings and files, shall
\nuse such information only in connection with the Transactions, and, if this
\nAgreement shall be terminated in accordance with Section 9.01, shall deliver or
\ncause to be delivered to the Company all copies of such information then in
\ntheir possession or the possession of their agents or representatives.<\/p>\n
ARTICLE III<\/p>\n
THE MERGER<\/p>\n
SECTION 3.01. THE MERGER. Upon the terms and subject to the
\nconditions set forth in Article VIII, and in accordance with Michigan Law,
\nPurchaser shall be merged with and into the Company.<\/p>\n
SECTION 3.02. EFFECTIVE TIME; CLOSING. As promptly as
\npracticable after the satisfaction or, if permissible, waiver of the conditions
\nset forth in Article VIII, the parties hereto shall cause the Merger to be
\nconsummated by filing a certificate of merger (the “CERTIFICATE OF<\/p>\n
10<\/p>\n
THE MERGER”) with the Administrator of the State of Michigan, in such forms as
\nare required by, and executed in accordance with, the relevant provisions of
\nMichigan Law (the date and time of such filing being the “EFFECTIVE TIME”).
\nPrior to such filing, a closing shall be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or such other place as
\nthe parties shall agree, for the purpose of confirming the satisfaction or
\nwaiver, as the case may be, of the conditions set forth in Article VIII.<\/p>\n
SECTION 3.03. EFFECT OF THE MERGER. As a result of the Merger,
\nthe separate corporate existence of Purchaser shall cease and the Company shall
\ncontinue as the surviving corporation of the Merger (the “SURVIVING
\nCORPORATION”). At the Effective Time, the effect of the Merger shall be as
\nprovided in the applicable provisions of Michigan Law. Without limiting the
\ngenerality of the foregoing, and subject thereto, at the Effective Time, all the
\nproperty, rights, privileges, powers and franchises of the Company and Purchaser
\nshall vest in the Surviving Corporation, and all debts, liabilities,
\nobligations, restrictions, disabilities and duties of the Company and Purchaser
\nshall become the debts, liabilities, obligations, restrictions, disabilities and
\nduties of the Surviving Corporation.<\/p>\n
SECTION 3.04. ARTICLES OF INCORPORATION; BY-LAWS. (a) At the
\nEffective Time, subject to Section 7.07(a), the Articles of Incorporation of
\nPurchaser, as in effect immediately prior to the Effective Time, shall be the
\nArticles of Incorporation of the Surviving Corporation until thereafter amended
\nas provided by law and such Articles of Incorporation; PROVIDED, HOWEVER, that,
\nat the Effective Time, Article I of the Articles of Incorporation of the
\nSurviving Corporation shall be amended to read as follows: “The name of the
\ncorporation is Primark Corporation.”<\/p>\n
(b) Unless otherwise determined by Parent prior to the
\nEffective Time, and subject to Section 7.07(a), the By-laws of Purchaser, as in
\neffect immediately prior to the Effective Time, shall be the By-laws of the
\nSurviving Corporation until thereafter amended as provided by law, the Articles
\nof Incorporation of the Surviving Corporation and such By-laws.<\/p>\n
SECTION 3.05. DIRECTORS AND OFFICERS. The directors of
\nPurchaser immediately prior to the Effective Time shall be the initial directors
\nof the Surviving Corporation, each to hold office in accordance with the
\nArticles of Incorporation and By-laws of the Surviving Corporation, and the
\nofficers of the Company immediately prior to the Effective Time shall be the
\ninitial officers of the Surviving Corporation, in each case until their
\nrespective successors are duly elected or appointed and qualified or until their
\nearlier death, resignation or approval.<\/p>\n
SECTION 3.06. CONVERSION OF SECURITIES. At the Effective Time,
\nby virtue of the Merger and without any action on the part of Purchaser, the
\nCompany or the holders of any of the following securities:<\/p>\n
11<\/p>\n
(a) Each Share issued and outstanding immediately prior to the
\n Effective Time (other than any Shares to be canceled pursuant to
\n Section 3.06(b) and any Dissenting Shares (as hereinafter defined))
\n shall be canceled and shall be converted automatically into the right
\n to receive an amount equal to the Merger Consideration payable, without
\n interest, to the holder of such Share, upon surrender, in the manner
\n provided in Section 3.08, of the certificate that formerly evidenced
\n such Share;<\/p>\n
(b) Each Share held in the treasury of the Company and each
\n Share owned by Purchaser, Parent or any direct or indirect wholly owned
\n subsidiary of Parent or of the Company immediately prior to the
\n Effective Time shall be canceled without any conversion thereof and no
\n payment or distribution shall be made with respect thereto;<\/p>\n
(c) Each share of common stock, no par value, of Purchaser
\n issued and outstanding immediately prior to the Effective Time shall be
\n converted into and exchanged for one validly issued, fully paid and
\n nonassessable share of common stock, no par value, of the Surviving
\n Corporation; and<\/p>\n
(d) Notwithstanding anything in this Agreement to the
\n contrary, Shares outstanding immediately prior to the Effective Time
\n and held by a holder who has not voted in favor of the Merger or
\n consented thereto in writing and who has complied with all of the
\n relevant provisions of Michigan Law (“DISSENTING SHARES”) shall not be
\n converted into a right to receive the Merger Consideration, unless such
\n holder fails to perfect or withdraws or otherwise loses his or her
\n right to appraisal. A holder of Dissenting Shares shall be entitled to
\n receive payment of the appraised value of such Shares held by him or
\n her in accordance with the provisions of Michigan Law, unless, after
\n the Effective Time, such holder fails to perfect or withdraws or loses
\n his or her right to appraisal, in which case such Shares shall be
\n converted into and represent only the right to receive the Merger
\n Consideration, without interest thereon, upon surrender of the
\n Certificate or Certificates representing such Shares pursuant to
\n Section 3.08.<\/p>\n
SECTION 3.07. EMPLOYEE STOCK OPTIONS. (a) Effective as of the
\nEffective Time, the Company shall take all necessary action, including obtaining
\nthe consent of the individual option holders, if necessary, to (i) terminate the
\nstock option plans listed in item 2 of Section 4.03 of the Disclosure Schedule,
\neach as amended through the date of this Agreement (the “COMPANY STOCK OPTION
\nPLANS”), and (ii) cancel, at the Effective Time, each outstanding option to
\npurchase shares of Company Common Stock granted under the Company Stock Option
\nPlans (each, a “COMPANY STOCK OPTION”) that is outstanding and unexercised as of
\nsuch time. Each holder of a Company Stock Option that is outstanding and
\nunexercised at the Effective Time, whether or not then exercisable or vested,
\nshall be entitled to receive from the Surviving Corporation immediately after
\nthe Effective Time, in exchange for the cancellation of such Company Stock
\nOption, an amount in cash equal to the excess, if any, of (x) the Per Share
\nAmount over (y) the per share exercise price of such Company Stock Option,
\nmultiplied by the <\/p>\n
12<\/p>\n
number of shares of Company Common Stock subject to such Company Stock Option as
\nof the Effective Time. Any such payment shall be subject to all applicable
\nfederal, state and local tax withholding requirements.<\/p>\n
(b) The Company shall take all action reasonably necessary to
\napprove the disposition of the Company Stock Options in connection with the
\ntransactions contemplated by this Agreement so as to exempt such dispositions
\nunder Rule 16b-3 of the Exchange Act.<\/p>\n
SECTION 3.08. SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a)
\nPrior to the Effective Time, Purchaser shall designate a bank or trust company
\nreasonably acceptable to the Company to act as agent (the “PAYING AGENT”) for
\nthe holders of Shares to receive the funds to which holders of Shares shall
\nbecome entitled pursuant to Section 3.06(a). Promptly after the Effective Time,
\nParent or Purchaser shall deposit, or cause to be deposited, with the Paying
\nAgent the aggregate amount payable pursuant to Section 3.06(a). Such funds shall
\nbe invested by the Paying Agent as directed by the Surviving Corporation.<\/p>\n
(b) Promptly after the Effective Time, the Surviving
\nCorporation shall cause to be mailed to each person who was, at the Effective
\nTime, a holder of record of Shares entitled to receive the Merger Consideration
\npursuant to Section 3.06(a) a form of letter of transmittal (which shall specify
\nthat delivery shall be effected, and risk of loss and title to the certificates
\nevidencing such Shares (the “CERTIFICATES”) shall pass, only upon proper
\ndelivery of the Certificates to the Paying Agent) and instructions for use in
\neffecting the surrender of the Certificates pursuant to such letter of
\ntransmittal. Upon surrender to the Paying Agent of a Certificate, together with
\nsuch letter of transmittal, duly completed and validly executed in accordance
\nwith the instructions thereto, and such other documents as may be required
\npursuant to such instructions, the holder of such Certificate shall be entitled
\nto receive in exchange therefor the Merger Consideration for each Share formerly
\nevidenced by such Certificate, and such Certificate shall then be canceled. No
\ninterest shall accrue or be paid on the Merger Consideration payable upon the
\nsurrender of any Certificate for the benefit of the holder of such Certificate.<\/p>\n
(c) At any time following the sixth month after the Effective
\nTime, the Surviving Corporation shall be entitled to require the Paying Agent to
\ndeliver to it any funds which had been made available to the Paying Agent and
\nnot disbursed to holders of Shares (including, without limitation, all interest
\nand other income received by the Paying Agent in respect of all funds made
\navailable to it), and, thereafter, such holders shall be entitled to look to the
\nSurviving Corporation (subject to abandoned property, escheat and other similar
\nlaws) only as general creditors thereof with respect to any Merger Consideration
\nthat may be payable upon due surrender of the Certificates held by them.
\nNotwithstanding the foregoing, neither the Surviving Corporation nor the Paying
\nAgent shall be liable to any holder of a Share for any Merger Consideration
\ndelivered in respect of such Share to a public official pursuant to any
\nabandoned property, escheat or other similar law.<\/p>\n
13<\/p>\n
(d) At the close of business on the day of the Effective Time,
\nthe stock transfer books of the Company shall be closed and thereafter there
\nshall be no further registration of transfers of Shares on the records of the
\nCompany. From and after the Effective Time, the holders of Shares outstanding
\nimmediately prior to the Effective Time shall cease to have any rights with
\nrespect to such Shares except as otherwise provided herein or by applicable law.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company hereby represents and warrants to Parent and
\nPurchaser that:<\/p>\n
SECTION 4.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
\n(a) Each of the Company and each subsidiary of the Company (“SUBSIDIARY”) is a
\ncorporation duly organized, validly existing and, to the extent applicable, in
\ngood standing under the laws of the jurisdiction of its incorporation and has
\nthe requisite corporate power and authority to own, lease and operate its
\nproperties and to carry on its business as it is now being conducted, except
\nwhere the failure to be so organized, existing and in good standing or to have
\nsuch power and authority would not, individually or in the aggregate, have a
\nMaterial Adverse Effect. The Company and each Subsidiary is duly qualified or
\nlicensed as a foreign corporation to do business, and is in good standing, in
\neach jurisdiction where the character of the properties owned, leased or
\noperated by it or the nature of its business makes such qualification or
\nlicensing necessary, except where the failure to be so duly qualified or
\nlicensed and in good standing would not have a Material Adverse Effect.<\/p>\n
(b) Except as disclosed in Section 4.01(b) of the Disclosure
\nSchedule (the “DISCLOSURE SCHEDULE”) and except for the Subsidiaries identified
\nin Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended
\nDecember 31, 1999 (other than Yankee Group Research, Inc.), the Company does not
\ndirectly or indirectly own any equity or similar interest in, or any interest
\nconvertible into or exchangeable or exercisable for any equity or similar
\ninterest in, any corporation, partnership, joint venture or other business
\nassociation or entity.<\/p>\n
SECTION 4.02. ARTICLES OF INCORPORATION AND BY-LAWS. The
\nCompany has heretofore made available to Parent a complete and correct copy of
\nthe Articles of Incorporation and the By-laws or equivalent organizational
\ndocuments, each as amended to date, of the Company each the Subsidiary. Such
\nArticles of Incorporation, By-laws or equivalent organizational documents are in
\nfull force and effect. Neither the Company nor any Subsidiary is in violation of
\nany of the provisions of its Articles of Incorporation, By-laws or equivalent
\norganizational documents.<\/p>\n
14<\/p>\n
SECTION 4.03. CAPITALIZATION. The authorized capital stock of
\nthe Company consists of 100,000,000 Shares and 4,000,000 shares of preferred
\nstock, par value $1.00 per share (“COMPANY PREFERRED STOCK”). As of May 31,
\n2000, (a) 20,282,597 Shares are issued and outstanding, all of which are validly
\nissued, fully paid and nonassessable, (b) no Shares are held in the treasury of
\nthe Company, (c) no Shares are held by any Subsidiary, and (d) 565,361 Shares
\nare reserved for future issuance pursuant to outstanding employee stock options
\nor stock incentive rights granted pursuant to the Company Stock Option Plans. As
\nof the date hereof, no shares of Company Preferred Stock are issued and
\noutstanding. Except as set forth in this Section 4.03, except for the
\nShareholder Agreements, and except for the rights (the “RIGHTS”) issued pursuant
\nto the Rights Agreement, dated as of May 29, 1997 (the “RIGHTS AGREEMENT”),
\nbetween the Company and BankBoston, N.A., as rights agent, there are no options,
\nwarrants or other rights, agreements, arrangements or commitments of any
\ncharacter relating to the issued or unissued capital stock of the Company or any
\nSubsidiary or obligating the Company or any Subsidiary to issue or sell any
\nshares of capital stock of, or other equity interests in, the Company or any
\nSubsidiary. All Shares subject to issuance as aforesaid, upon issuance on the
\nterms and conditions specified in the instruments pursuant to which they are
\nissuable, will be duly authorized, validly issued, fully paid and nonassessable.
\nThere are no outstanding contractual obligations of the Company or any
\nSubsidiary to repurchase, redeem or otherwise acquire any Shares or any capital
\nstock of any Subsidiary or to provide funds to, or make any investment (in the
\nform of a loan, capital contribution or otherwise) in, any Subsidiary or any
\nother person. Except as set forth in Section 4.03 of the Disclosure Schedule,
\neach outstanding share of capital stock of each Subsidiary is duly authorized,
\nvalidly issued, fully paid and nonassessable, and each such share is owned by
\nthe Company or another Subsidiary free and clear of all security interests,
\nliens, claims, pledges, options, rights of first refusal, agreements,
\nlimitations on the Company’s or any Subsidiary’s voting rights, charges and
\nother encumbrances of any nature whatsoever.<\/p>\n
SECTION 4.04. AUTHORITY RELATIVE TO THIS AGREEMENT. The
\nCompany has all necessary power and authority to execute and deliver this
\nAgreement, to perform its obligations hereunder and, subject, in the case of the
\nMerger, to obtaining approval of the shareholders of the Company, if required,
\nto consummate the Transactions. The execution and delivery of this Agreement by
\nthe Company and the consummation by the Company of the Transactions have been
\nduly and validly authorized by all necessary corporate action, and no other
\ncorporate proceedings on the part of the Company are necessary to authorize this
\nAgreement or to consummate the Transactions (other than, with respect to the
\nMerger, the approval and adoption of this Agreement by the holders of a majority
\nof the then-outstanding Shares, if and to the extent required by applicable law,
\nand the filing and recordation of appropriate merger documents as required by
\nMichigan Law). This Agreement has been duly executed and delivered by the
\nCompany and, assuming the due authorization, execution and delivery by Parent
\nand Purchaser, constitutes legal, valid and binding obligation of the Company,
\nenforceable against the Company in accordance with its terms, except that (i)
\nsuch enforcement may be subject to applicable <\/p>\n
15<\/p>\n
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
\nhereafter in effect, affecting creditors’ rights generally, and (ii) the remedy
\nof specific performance and injunctive and other forms of equitable relief may
\nbe subject to equitable defenses and to the discretion of the court before which
\nany proceeding therefor may be brought.<\/p>\n
SECTION 4.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a)
\nThe execution and delivery of this Agreement by the Company do not, and the
\nperformance of this Agreement by the Company will not, (i) conflict with or
\nviolate the Certificate of Incorporation or By-laws or equivalent organizational
\ndocuments of the Company or any Subsidiary, (ii) subject to obtaining the
\nCompany Required Approvals and, in the case of the Merger, the approval of the
\nshareholders of the Company, if required, conflict with or violate any United
\nStates or non-United States statute, law, ordinance, regulation, rule, code,
\nexecutive order, injunction, judgment, decree or other order (“LAW”) applicable
\nto the Company or any Subsidiary or by which any property or asset of the
\nCompany or any Subsidiary is bound or affected, or (iii) subject to obtaining
\nthe consents listed in Section 4.05 of the Disclosure Schedule, result in any
\nbreach of or constitute a default (or an event which, with notice or lapse of
\ntime or both, would become a default) under, or give to others any right of
\ntermination, amendment, acceleration or cancellation of, or result in the
\ncreation of a lien or other encumbrance on any property or asset of the Company
\nor any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
\nagreement, lease, license, permit, franchise or other instrument or obligation,
\nexcept, with respect to clauses (ii) and (iii), for any such conflicts,
\nviolations, breaches, defaults or other occurrences which would not prevent or
\nmaterially delay consummation of the Offer or the Merger and would not have a
\nMaterial Adverse Effect.<\/p>\n
(b) The execution and delivery of this Agreement by the
\nCompany do not, and the performance of this Agreement by the Company will not,
\nrequire any consent, approval, authorization or permit of, or filing with or
\nnotification to, any United States federal, state, county or local or other
\ngovernmental, regulatory or administrative authority, agency, instrumentality or
\ncommission or any court, tribunal, or judicial or arbitral body (a “GOVERNMENTAL
\nAUTHORITY”), except (i) for applicable requirements, if any, of the Exchange
\nAct, state securities or “blue sky” laws (“BLUE SKY LAWS”), state takeover laws,
\nthe pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
\nImprovements Act of 1976, as amended (the “HSR ACT”), and the requirements in
\nthe countries where a merger filing will be necessary, and filing and
\nrecordation of appropriate merger documents as required by Michigan Law (the
\n“COMPANY REQUIRED APPROVALS”), and (ii) where the failure to obtain such
\nconsents, approvals, authorizations or permits, or to make such filings or
\nnotifications, would not prevent or materially delay consummation of the Offer
\nor the Merger and would not have a Material Adverse Effect.<\/p>\n
SECTION 4.06. PERMITS; COMPLIANCE. Each of the Company and the
\nSubsidiaries is in possession of all franchises, grants, authorizations,
\nlicenses, permits, easements, variances, <\/p>\n
16<\/p>\n
exceptions, consents, certificates, approvals and orders of any Governmental
\nAuthority necessary for each of the Company or the Subsidiaries to own, lease
\nand operate its properties or to carry on its business as it is now being
\nconducted (the “PERMITS”), except where the failure to have, or the suspension
\nor cancellation of, any of the Permits would not prevent or materially delay
\nconsummation of the Offer or the Merger and would not have a Material Adverse
\nEffect. As of the date hereof, no suspension or cancellation of any of the
\nPermits is pending or, to the knowledge of the Company, threatened, except where
\nthe failure to have, or the suspension or cancellation of, any of the Permits
\nwould not prevent or materially delay consummation of the Offer or the Merger
\nand would not have a Material Adverse Effect. Neither the Company nor any
\nSubsidiary is in conflict with, or in default, breach or violation of, (a) any
\nLaw applicable to the Company or any Subsidiary or by which any property or
\nasset of the Company or any Subsidiary is bound or affected, or (b) any note,
\nbond, mortgage, indenture, contract, agreement, lease, license, Permit,
\nfranchise or other instrument or obligation to which the Company or any
\nSubsidiary is a party or by which the Company or any Subsidiary or any property
\nor asset of the Company or any Subsidiary is bound, except for any such
\nconflicts, defaults, breaches or violations that would not prevent or materially
\ndelay consummation of the Offer or the Merger and would not have a Material
\nAdverse Effect.<\/p>\n
SECTION 4.07. SEC FILINGS; FINANCIAL STATEMENTS. (a) The
\nCompany has filed all forms, reports and documents required to be filed by it
\nwith the SEC since January 1, 1997. The SEC Reports (x) complied as to form in
\nall material respects with the applicable requirements of the Securities Act of
\n1933, as amended (the “SECURITIES ACT”), or the Exchange Act, as the case may
\nbe, and the applicable rules and regulations promulgated thereunder, and (y) did
\nnot, at the time they were filed, or, if amended, as of the date of such
\namendment, contain any untrue statement of a material fact or omit to state a
\nmaterial fact required to be stated therein or necessary in order to make the
\nstatements made therein, in the light of the circumstances under which they were
\nmade, not misleading. Except as set forth in Section 4.07 (a) of the Disclosure
\nSchedule, no Subsidiary is required to file any form, report or other document
\nwith the SEC.<\/p>\n
(b) Each of the consolidated financial statements (including,
\nin each case, any notes thereto) contained in the SEC Reports was prepared in
\naccordance with United States generally accepted accounting principles (“GAAP”)
\napplied on a consistent basis throughout the periods indicated (except as may be
\nindicated in the notes thereto) and each fairly presents, in all material
\nrespects, the consolidated financial position, results of operations and cash
\nflows of the Company and its consolidated Subsidiaries as at the respective
\ndates thereof and for the respective periods indicated therein, except as
\notherwise noted therein (subject, in the case of unaudited statements, to normal
\nand recurring year-end adjustments) and except where the failure to so fairly
\npresent such financial position, results of operations or cash flows would not
\nhave a Material Adverse Effect).<\/p>\n
17<\/p>\n
(c) Except as and to the extent set forth on the consolidated
\nbalance sheet of the Company and the consolidated Subsidiaries as at December
\n31, 1999, including the notes thereto (the “1999 BALANCE SHEET”) or as set forth
\nin Section 4.07(c) of the Disclosure Schedule, neither the Company nor any
\nSubsidiary has any liability or obligation of any nature (whether accrued,
\nabsolute, contingent or otherwise), except for liabilities and obligations,
\nincurred in the ordinary course of business consistent with past practice since
\nDecember 31, 1999 that would not prevent or materially delay consummation of the
\nOffer or the Merger and would not have a Material Adverse Effect.<\/p>\n
(d) The Company has heretofore furnished to Parent complete
\nand correct copies of all amendments and modifications that have not been filed
\nby the Company with the SEC to all agreements, documents and other instruments
\nthat previously had been filed by the Company with the SEC and are currently in
\neffect.<\/p>\n
SECTION 4.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
\nDecember 31, 1999, except as set forth in Section 4.08 of the Disclosure
\nSchedule, or as expressly contemplated by this Agreement, (a) the Company and
\nthe Subsidiaries have conducted their businesses only in the ordinary course and
\nin a manner consistent with past practice, (b) there has not been any Material
\nAdverse Effect, and (c) neither the Company nor, to the knowledge of the
\nCompany, any Subsidiary has taken any action that if taken after the date of
\nthis Agreement, would constitute a breach of any of the covenants set forth in
\nSection 6.01, other than, in the case of clauses (a) and (c), any action
\nspecifically identified in the Company’s 2000-2004 business plan as an action to
\nbe taken during the first or second quarter of 2000, and any action disclosed in
\na press release issued by the Company after December 31, 1999 and prior to the
\ndate hereof.<\/p>\n
SECTION 4.09. ABSENCE OF LITIGATION. Except as disclosed in
\nSection 4.09 of the Disclosure Schedule, there is no litigation, suit, claim,
\naction, proceeding or investigation (an “ACTION”) pending or, to the knowledge
\nof the Company, threatened against the Company or any Subsidiary, or any
\nproperty or asset of the Company or any Subsidiary, before any Governmental
\nAuthority that (a) would have a Material Adverse Effect or (b) seeks to
\nmaterially delay or prevent the consummation of any Transaction. Neither the
\nCompany nor any Subsidiary nor any property or asset of the Company or any
\nSubsidiary is subject to any continuing order of, consent decree, settlement
\nagreement or similar written agreement with, or, to the knowledge of the
\nCompany, continuing investigation by, any Governmental Authority, or any order,
\nwrit, judgment, injunction, decree, determination or award of any Governmental
\nAuthority that would prevent or materially delay consummation of the Offer or
\nthe Merger or would have a Material Adverse Effect.<\/p>\n
SECTION 4.10. EMPLOYEE BENEFIT PLANS. (a) Section 4.10(a) of
\nthe Disclosure Schedule lists (i) all material employee benefit plans (as
\ndefined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
\nas amended (“ERISA”)) and all material bonus, stock option, stock purchase,
\nrestricted stock, incentive, deferred compensation, retiree medical or life<\/p>\n
18<\/p>\n
insurance, supplemental retirement, severance or other material benefit plans,
\nprograms or arrangements, and all material employment, termination, severance or
\nother contracts or agreements to which the Company or any ERISA Affiliate is a
\nparty, with respect to which the Company or any ERISA Affiliate has any
\nobligation or which are maintained, contributed to or sponsored by the Company
\nor any ERISA Affiliate for the benefit of any current or former employee,
\nofficer or director of the Company or any ERISA Affiliate, (ii) each material
\nemployee benefit plan for which the Company or any Subsidiary could incur
\nliability under Section 4069 of ERISA in the event such plan has been or were to
\nbe terminated, (iii) any material plan in respect of which the Company or any
\nSubsidiary could incur liability under Section 4212(c) of ERISA, and (iv) any
\nmaterial contracts, arrangements or understandings between the Company or any
\nSubsidiary and any employee of the Company or any Subsidiary including, without
\nlimitation, any contracts, arrangements or understandings relating in any way to
\na sale of the Company or any Subsidiary (collectively, with the exception of any
\nplans, programs or arrangements not subject to United States law, the “PLANS”).
\nThe Company has made available to Purchaser a true and complete copy of each
\nPlan and has made available to Purchaser a true and complete copy of each
\nmaterial document, if any, prepared in connection with each such Plan,
\nincluding, without limitation, as applicable (i) a copy of each trust or other
\nfunding arrangement, (ii) each most recent summary plan description and summary
\nof material modifications, (iii) the most recently filed Internal Revenue
\nService (“IRS”) Form 5500, (iv) the most recently received IRS determination
\nletter for each such Plan, and (v) the most recently prepared actuarial report
\nand financial statement in connection with each such Plan. Neither the Company
\nnor any Subsidiary has any express or implied commitment (i) to create, incur
\nliability with respect to or cause to exist any other material employee benefit
\nplan, program or arrangement, (ii) to enter into any contract or agreement to
\nprovide compensation or benefits to any individual other than in the ordinary
\ncourse of business, or (iii) to modify, change or terminate any Plan, other than
\nwith respect to a modification, change or termination required by ERISA, the
\nInternal Revenue Code of 1986, as amended (the “CODE”) or other applicable law.<\/p>\n
(b) Except as set forth in Section 4.10(b) of the Disclosure
\nSchedule, none of the Plans is a multiemployer plan (within the meaning of
\nSection 3(37) or 4001(a)(3) of ERISA) (a “MULTIEMPLOYER PLAN”) or a single
\nemployer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for
\nwhich the Company or any Subsidiary could incur liability under Section 4063 or
\n4064 of ERISA (a “MULTIPLE EMPLOYER PLAN”). Except as set forth in Section
\n4.10(b) of the Disclosure Schedule, none of the Plans (i) provides for the
\npayment of separation, severance, termination or similar-type benefits to any
\nperson, (ii) obligates the Company or any Subsidiary to pay separation,
\nseverance, termination or similar-type benefits solely or partially as a result
\nof any transaction contemplated by this Agreement, or (iii) obligates the
\nCompany or any Subsidiary to make any payment or provide any benefit as a result
\nof a “change in control”, within the meaning of such term under Section 280G of
\nthe Code. Except as set forth in Section 4.10(b) of the Disclosure Schedule,
\nnone of the Plans provides for or promises retiree medical, disability or life
\ninsurance benefits to any current or former employee, <\/p>\n
19<\/p>\n
officer or director of the Company or any Subsidiary. Except as set forth in
\nSection 4.10(b) of the Disclosure Schedule, each of the Plans is subject only to
\nthe Laws of the United States or a political subdivision thereof.<\/p>\n
(c) Each Plan is now and always has been operated in all
\nmaterial respects in accordance with its terms and the requirements of all
\napplicable Laws including, without limitation, ERISA and the Code. The Company
\nand the Subsidiaries have performed all material obligations required to be
\nperformed by them under and are not in any material respect in default under or
\nin violation of, and the Company has no knowledge of any material default or
\nviolation by any party to, any Plan. No Action is pending or, to the knowledge
\nof the Company, threatened with respect to any Plan (other than claims for
\nbenefits in the ordinary course) and, to the knowledge of the Company, no fact
\nor event exists that could give rise to any such Action.<\/p>\n
(d) Each Plan that is intended to be qualified under Section
\n401(a) of the Code or Section 401(k) of the Code has timely received a favorable
\ndetermination letter from the IRS covering all of the provisions applicable to
\nthe Plan for which determination letters are currently available that the Plan
\nis so qualified and each trust established in connection with any Plan which is
\nintended to be exempt from federal income taxation under Section 501(a) of the
\nCode has received a determination letter from the IRS that it is so exempt, and,
\nto the knowledge of the Company, no fact or event has occurred since the date of
\nsuch determination letter or letters from the IRS to adversely affect the
\nqualified status of any such Plan or the exempt status of any such trust.<\/p>\n
(e) There has not been any prohibited transaction (within the
\nmeaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any
\nPlan. Neither the Company nor any ERISA Affiliate has incurred any liability
\nunder, arising out of or by operation of Title IV of ERISA (other than liability
\nfor premiums to the Pension Benefit Guaranty Corporation arising in the ordinary
\ncourse), including, without limitation, any liability in connection with (i) the
\ntermination or reorganization of any employee benefit plan subject to Title IV
\nof ERISA, or (ii) the withdrawal from any Multiemployer Plan or Multiple
\nEmployer Plan, and, to the knowledge of the Company, no fact or event exists
\nwhich could give rise to any such liability.<\/p>\n
(f) All contributions, premiums or payments required to be
\nmade with respect to any Plan have been made on or before their due dates. All
\nsuch contributions are or were fully deductible for federal income tax purposes
\nand no such deduction has been challenged or disallowed by any Governmental
\nAuthority and, to the knowledge of the Company, no fact or event exists which
\ncould give rise to any such challenge or disallowance.<\/p>\n
(g) Except as set forth in Section 4.10(g) of the Disclosure
\nSchedule, all directors, officers, management employees, and technical and
\nprofessional employees of the Company and the Subsidiaries are under written
\nobligation to the Company and the Subsidiaries <\/p>\n
20<\/p>\n
to maintain in confidence all confidential or proprietary information acquired
\nby them in the course of their employment and to assign to the Company and the
\nSubsidiaries all inventions made by them within the scope of their employment
\nduring such employment and for a reasonable period thereafter.<\/p>\n
(h) In addition to the foregoing, with respect to each
\nmaterial plan, program or arrangement described in Section 4.10(a) that is not
\nsubject to United States law (a “NON-U.S. BENEFIT PLAN”):<\/p>\n
(i) all employer and employee contributions to each Non-U.S.
\n Benefit Plan required by law or by the terms of such Non-U.S. Benefit
\n Plan have been made, or, if applicable, accrued in accordance with
\n normal accounting practices, and a PRO RATA contribution for the period
\n prior to and including the date of this Agreement has been made or
\n accrued;<\/p>\n
(ii) the fair market value of the assets of each funded
\n Non-U.S. Benefit Plan, the liability of each insurer for any Non-U.S.
\n Benefit Plan funded through insurance or the book reserve established
\n for any Non-U.S. Benefit Plan, together with any accrued contributions,
\n is sufficient to procure or provide for the benefits determined on an
\n ongoing basis accrued to the date of this Agreement with respect to all
\n current and former participants under such Non-U.S. Benefit Plan
\n according to the actuarial assumptions and valuations most recently
\n used to determine employer contributions to such Non-U.S. Benefit Plan,
\n and no Transaction shall cause such assets or insurance obligations to
\n be less than such benefit obligations; and<\/p>\n
(iii) each Non-U.S. Benefit Plan required to be registered has
\n been registered and has been maintained in good standing with
\n applicable regulatory authorities and is approved by any applicable
\n taxation authorities to the extent such approval is available. Each
\n Non-U.S. Benefit Plan is now and always has been operated in material
\n compliance with all applicable non-United States laws and regulations.<\/p>\n
SECTION 4.11. LABOR AND EMPLOYMENT MATTERS. (a) Except as set
\nforth in Section 4.11 of the Disclosure Schedule, (i) to the knowledge of the
\nCompany, there are no controversies pending or threatened between the Company or
\nany Subsidiary and any of their respective employees, which controversies would
\nprevent or materially delay consummation of the Offer or the Merger or would
\nhave a Material Adverse Effect; (ii) neither the Company nor any Subsidiary is a
\nparty to any collective bargaining agreement, work council agreement, work force
\nagreement or any other labor union contract applicable to persons employed by
\nthe Company or any Subsidiary, nor, to the knowledge of the Company, are there
\nany activities or proceedings of any labor union to organize any such employees;
\n(iii) neither the Company nor any Subsidiary has breached or otherwise failed to
\ncomply with any provision of any such agreement or contract, and there are no
\ngrievances outstanding against the Company or any <\/p>\n
21<\/p>\n
Subsidiary under any such agreement or contract; (iv) there are no unfair labor
\npractice complaints pending against the Company or any Subsidiary before the
\nNational Labor Relations Board or any other court or tribunal or any current
\nunion representation questions involving employees of the Company or any
\nSubsidiary; and (v) there is no strike, slowdown, work stoppage or lockout, or,
\nto the knowledge of the Company, threat thereof, by or with respect to any
\nemployees of the Company or any Subsidiary. The consent of any labor union is
\nnot required to consummate the Transactions. There is no obligation to inform,
\nconsult or obtain consent whether in advance or otherwise of any works council,
\nemployee representatives or other representative bodies in order to consummate
\nthe Transactions.<\/p>\n
(b) The Company and the Subsidiaries are in compliance with
\nall applicable laws relating to the employment of labor, including those related
\nto wages, hours, collective bargaining, individual and collective consultation,
\nnotice of termination, redundancy and the payment and withholding of taxes and
\nother sums as required by the appropriate Governmental Authority and has
\nwithheld and paid to the appropriate Governmental Authority or are holding for
\npayment not yet due to such Governmental Authority all amounts required to be
\nwithheld from employees of the Company or any Subsidiary and are not liable for
\nany arrears of wages, taxes, penalties or other sums for failure to comply with
\nany of the foregoing except where the failure to be in compliance, withhold or
\npay any such liability would not prevent or materially delay consummation of the
\nOffer or the Merger and would not have a Material Adverse Effect. To the
\nknowledge of the Company, the Company and the Subsidiaries have paid in full to
\nall employees or adequately accrued for in accordance with GAAP consistently
\napplied all wages, salaries, commissions, bonuses, benefits and other
\ncompensation due to or on behalf of such employees and there is no claim with
\nrespect to payment of wages, salary or overtime pay that has been asserted or is
\nnow pending or threatened before any Governmental Authority with respect to any
\npersons currently or formerly employed by the Company or any Subsidiary other
\nthan claims that would not prevent or materially delay consummation of the Offer
\nor the Merger or have Material Adverse Effect. Neither the Company nor any
\nSubsidiary is a party to, or otherwise bound by, any consent decree with, or
\ncitation by, any Governmental Authority relating to employees or employment
\npractices, other than those that would not prevent or materially delay
\nconsummation of the Offer or the Merger or have Material Adverse Effect. There
\nis no charge or proceeding with respect to a violation of any occupational
\nsafety or health standards that has been asserted or is now pending or
\nthreatened with respect to the Company, other than charges or proceedings that
\nwould not prevent or materially delay consummation of the Offer or the Merger
\nand would not have a Material Adverse Effect. There is no charge of
\ndiscrimination in employment or employment practices, for any reason, including,
\nwithout limitation, age, gender, race, religion or other legally protected
\ncategory, which has been asserted or is now pending or threatened before the
\nUnited States Equal Employment Opportunity Commission, or any other Governmental
\nAuthority in any jurisdiction in which the Company or any Subsidiary have
\nemployed or employ any person, other than charges that would not prevent or
\nmaterially delay consummation of the Offer or the Merger and would not have a
\nMaterial <\/p>\n
22<\/p>\n
Adverse Effect. No inquiry or investigation affecting any Company or any
\nSubsidiary has been made or threatened by the Commission for Racial Equality,
\nthe Equal Opportunities Commission or any similar body other than inquiries or
\ninvestigations that would not prevent or materially delay consummation of the
\nOffer or the Merger and would not have a Material Adverse Effect.<\/p>\n
23<\/p>\n
(c) Except as disclosed in Section 4.11 of the Disclosure
\nSchedule, (i) all subsisting contracts of employment to which the Company or, to
\nthe knowledge of the Company, any Subsidiary is a party are terminable by the
\nCompany or any Subsidiary on three months’ notice or less without compensation
\n(other than in accordance with applicable legislation); (ii) there are no
\ncustoms, established practices or discretionary arrangements of the Company or,
\nto the knowledge of the Company, any Subsidiary in relation to the termination
\nof employment of any of its employees (whether voluntary or involuntary); (iii)
\nneither the Company nor, to the knowledge of the Company, any Subsidiary has any
\noutstanding liability to pay compensation for loss of office or employment or a
\nredundancy payment to any present or former employee or to make any payment for
\nbreach of any agreement listed in Section 4.10(a) of the Disclosure Schedule;
\n(iv) there is no term of employment of any employee of the Company or, to the
\nknowledge of the Company, any Subsidiary which shall entitle that employee to
\ntreat the consummation of the Transactions as amounting to a breach of his
\ncontract of employment or entitling him to any payment or benefit whatsoever or
\nentitling him to treat himself as redundant or otherwise dismissed or released
\nfrom any obligation.<\/p>\n
SECTION 4.12. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY
\nSTATEMENT. Neither the Schedule 14D-9 nor any information supplied by the
\nCompany for inclusion in the Offer Documents shall, at the times the Schedule
\n14D-9, the Offer Documents or any amendments or supplements thereto are filed
\nwith the SEC or are first published, sent or given to shareholders of the
\nCompany, as the case may be, contain any untrue statement of a material fact or
\nomit to state any material fact required to be stated therein or necessary to
\nmake the statements therein, in the light of the circumstances under which they
\nwere made, not misleading. Neither the proxy statement to be sent to the
\nshareholders of the Company in connection with the Shareholders’ Meeting (as
\nhereinafter defined) or the information statement to be sent to such
\nshareholders, as appropriate (such proxy statement or information statement, as
\namended or supplemented, being referred to herein as the “PROXY STATEMENT”),
\nshall, at the date the Proxy Statement (or any amendment or supplement thereto)
\nis first mailed to shareholders of the Company and at the time of the
\nShareholders’ Meeting, contain any untrue statement of material fact or omit to
\nstate any material fact required to be stated therein or necessary in order to
\nmake the statements therein, in light of the circumstances in which they were
\nmade, not misleading. The Schedule 14D-9 and the Proxy Statement shall comply in
\nall material respects as to form with the requirements of the Exchange Act and
\nthe rules and regulations thereunder.<\/p>\n
SECTION 4.13. PROPERTY AND LEASES. (a) The Company and the
\nSubsidiaries have sufficient title to all their properties and assets to conduct
\ntheir respective businesses as currently conducted, with only such exceptions as
\nwould not have a Material Adverse Effect.<\/p>\n
(b) The Company does not own any real property.<\/p>\n
(c) All leases of real property leased for the use or benefit
\nof the Company or any Subsidiary to which the Company or any Subsidiary is a
\nparty, and all amendments and <\/p>\n
24<\/p>\n
modifications thereto, are in full force and effect and have not been modified
\nor amended, and there exists no default under any such lease by the Company or
\nany Subsidiary, nor any event which, with notice or lapse of time or both, would
\nconstitute a default thereunder by the Company or any Subsidiary, except as
\nwould not prevent or materially delay consummation of the Offer or the Merger
\nand would not have a Material Adverse Effect.<\/p>\n
SECTION 4.14. INTELLECTUAL PROPERTY. Except as would not have
\na Material Adverse Effect (a) the conduct of the business of the Company and the
\nSubsidiaries as currently conducted, with respect to their owned Intellectual
\nProperty, does not infringe upon or misappropriate the Intellectual Property
\nrights of any third party, and no claim has been asserted to the Company that
\nthe conduct of the business of the Company and, to the knowledge of the Company,
\nthe Subsidiaries as currently conducted infringes upon or may infringe upon or
\nmisappropriates the Intellectual Property rights of any third party; (b) with
\nrespect to each item of Intellectual Property owned by the Company or a
\nSubsidiary and material to the business, financial condition or results of
\noperations of the Company and the Subsidiaries taken as a whole (“COMPANY OWNED
\nINTELLECTUAL PROPERTY”), the Company or a Subsidiary is the owner of the entire
\nright, title and interest in and to such Company Owned Intellectual Property and
\nis entitled to use such Company Owned Intellectual Property in the continued
\noperation of its respective business; (c) with respect to each item of
\nIntellectual Property licensed to the Company or a Subsidiary that is material
\nto the business of the Company and the Subsidiaries, taken as a whole, as
\ncurrently conducted (“COMPANY LICENSED INTELLECTUAL PROPERTY”), the Company or a
\nSubsidiary has the right to use such Company Licensed Intellectual Property in
\nthe continued operation of its respective business in accordance with the terms
\nof the license agreement governing such Company Licensed Intellectual Property;
\n(d) to the knowledge of the Company, the Company Owned Intellectual Property is
\nvalid and enforceable, and has not been adjudged invalid or unenforceable in
\nwhole or in part; (e) to the knowledge of the Company, no person is engaging in
\nany activity that infringes upon the Company Owned Intellectual Property; (f) to
\nthe knowledge of the Company, each license of the Company Licensed Intellectual
\nProperty is valid and enforceable, is binding on all parties to such license,
\nand is in full force and effect; (g) to the knowledge of the Company, no party
\nto any license of the Company Licensed Intellectual Property is in breach
\nthereof or default thereunder; and (h) neither the execution of this Agreement
\nnor the consummation of any Transaction shall adversely affect any of the
\nCompany’s rights with respect to the Company Owned Intellectual Property or the
\nCompany Licensed Intellectual Property.<\/p>\n
SECTION 4.15. TAXES. The Company and the Subsidiaries have
\nfiled all United States federal, state, local and United Kingdom and other
\nnon-United States Tax returns and reports required to be filed by them for tax
\nyears ended prior to the date of this Agreement or requests for extensions have
\nbeen timely filed and any such request shall have been granted and not expired
\nand have paid and discharged all Taxes required to be paid or discharged, other
\nthan (a) such payments as are being contested in good faith by appropriate
\nproceedings and (b) such <\/p>\n
25<\/p>\n
filings, payments or other occurrences that would not have a Material Adverse
\nEffect. Except as disclosed in Section 4.15 of the Disclosure Schedule, neither
\nthe IRS nor any other United States or non-United States taxing authority or
\nagency is now asserting or, to the knowledge of the Company, threatening to
\nassert against the Company or any Subsidiary any deficiency or claim for any
\nTaxes. Except as disclosed in Section 4.15 of the Disclosure Schedule, neither
\nthe Company nor any Subsidiary has granted any waiver of any statute of
\nlimitations with respect to, or any extension of a period for the assessment of
\nany Tax.<\/p>\n
SECTION 4.16. ENVIRONMENTAL MATTERS. Except as described in
\nSection 4.17 of the Disclosure Schedule or as would not prevent or materially
\ndelay consummation of the Offer or the Merger and would not have a Material
\nAdverse Effect, (a) the Company is in compliance with all applicable
\nEnvironmental Laws; (b) none of the properties currently or formerly owned,
\nleased or operated by the Company (including, without limitation, soils and
\nsurface and ground waters) are contaminated with any Hazardous Substance; (c)
\nthe Company has not received any written notice that it is liable for any
\ncontamination by Hazardous Substances at any site containing Hazardous
\nSubstances generated, transported, stored, treated or disposed by the Company;
\n(d) the Company is not actually, potentially or allegedly liable under any
\nEnvironmental Law (including, without limitation, pending or threatened liens);
\n(e) the Company is in compliance with all permits, licenses and other
\nauthorizations required under any Environmental Law (“ENVIRONMENTAL PERMITS”),
\nand, to the knowledge of the Company, all past non-compliance with Environmental
\nLaws or Environmental Permits has been resolved without any pending, ongoing or
\nfuture obligation, costs or liability; and (f) neither the execution of this
\nAgreement nor the consummation of the Transactions will require any
\ninvestigation, remediation or other action with respect to Hazardous Substances,
\nor any notice to or consent of Governmental Authorities or third parties,
\npursuant to any applicable Environmental Law or Environmental Permit.<\/p>\n
SECTION 4.17. AMENDMENT TO RIGHTS AGREEMENT. The Board has
\nauthorized an amendment to the Rights Agreement so that so long as this
\nAgreement has not been terminated (a) none of the execution or delivery of this
\nAgreement or the Shareholder Agreements, the making of the Offer, the acceptance
\nfor payment of Shares by Purchaser pursuant to the Offer, the consummation of
\nthe Merger or the consummation of any other Transaction will result in (i) the
\noccurrence of the “flip-in event” described under Section 11 of the Rights
\nAgreement, (ii) the occurrence of the “flip-over event” described in Section 13
\nof the Rights Agreement, or (iii) the Rights becoming evidenced by, and
\ntransferable pursuant to, certificates separate from the certificates
\nrepresenting Shares, and (b) the Rights will expire pursuant to the terms of the
\nRights Agreement at the Effective Time. The Company shall use its best efforts
\nto effect such amendment.<\/p>\n
SECTION 4.18. MATERIAL CONTRACTS. (a) Subsections (i) through
\n(x) of Section 4.19 of the Disclosure Schedule contain a list of the following
\ntypes of contracts and <\/p>\n
26<\/p>\n
agreements to which the Company or any Subsidiary is a party (such contracts,
\nagreements and arrangements as are required to be set forth in Section 4.19(a)
\nof the Disclosure Schedule being the “MATERIAL CONTRACTS”):<\/p>\n
(i) each contract and agreement which (A) is likely to involve
\n consideration of more than $1,000,000, in the aggregate, during the
\n calendar year ending December 31, 2000, (B) is likely to involve
\n consideration of more than $5,000,000, in the aggregate, over the
\n remaining term of such contract, and which, in either case, cannot be
\n canceled by the Company or any Subsidiary without penalty or further
\n payment and without more than 90 days’ notice;<\/p>\n
(ii) all material broker, distributor, dealer, manufacturer’s
\n representative, franchise, agency, sales promotion, market research,
\n marketing, consulting and advertising contracts and agreements to which
\n the Company or, to the knowledge of the Company, any Subsidiary is a
\n party except any such contract that can be canceled by the Company or
\n any Subsidiary without penalty or further payment and without more than
\n 90 days’ notice;<\/p>\n
(iii) all management contracts (excluding contracts for
\n employment) and contracts with other consultants, including any
\n contracts involving the payment of royalties or other amounts
\n calculated based upon the revenues or income of the Company or any
\n Subsidiary or income or revenues related to any product of the Company
\n or any Subsidiary to which the Company or any Subsidiary is a party;<\/p>\n
(iv) all contracts and agreements evidencing indebtedness for
\n borrowed money in excess of $1,000,000;<\/p>\n
(v) all material contracts and agreements with any
\n Governmental Authority to which the Company or to the knowledge of the
\n Company, any Subsidiary is a party;<\/p>\n
(vi) all contracts and agreements that limit, or purport to
\n limit, the ability of the Company or any Subsidiary to compete in any
\n line of business or with any person or entity or in any geographic area
\n or during any period of time;<\/p>\n
(vii) all material contracts or arrangements that result in
\n any person or entity holding a power of attorney from the Company or,
\n to the knowledge of the Company, any Subsidiary that relates to the
\n Company, any Subsidiary or their respective businesses; and<\/p>\n
(viii) all other contracts and agreements, whether or not made
\n in the ordinary course of business, the absence of which would have a
\n Material Adverse Effect.<\/p>\n
27<\/p>\n
(b) Except as would not prevent or materially delay
\nconsummation of the Offer or the Merger and would not have a Material Adverse
\nEffect, (i) each Material Contract is a legal, valid and binding agreement, and
\nnone of the Material Contracts is in default by its terms or has been canceled
\nby the other party; (ii) to the Company’s knowledge, no other party is in breach
\nor violation of, or default under, any Material Contract; (iii) the Company and,
\nto the knowledge of the Company, the Subsidiaries are not in receipt of any
\nclaim of default under any such agreement; and (iv) neither the execution of
\nthis Agreement nor the consummation of any Transaction shall constitute default,
\ngive rise to cancellation rights, or otherwise adversely affect any of the
\nCompany’s rights under any Material Contract. The Company has furnished or made
\navailable to Parent true and complete copies of all Material Contracts,
\nincluding any amendments thereto.<\/p>\n
SECTION 4.19. INSURANCE. (a) As of the date hereof, the
\nCompany and its Subsidiaries are, and continually since the later of 1997 or the
\ndate of acquisition by the Company have been, insured by insurers, reasonably
\nbelieved by the Company to be of recognized financial responsibility and
\nsolvency, against such losses and risks and in such amounts as are customary in
\nthe businesses in which they are engaged.<\/p>\n
(b) With respect to each such insurance policy: (i) the policy
\nis legal, valid, binding and enforceable in accordance with its terms and,
\nexcept for policies that have expired under their terms in the ordinary course,
\nis in full force and effect; (ii) neither the Company nor any Subsidiary is in
\nmaterial breach or default (including any such breach or default with respect to
\nthe payment of premiums or the giving of notice), and no event has occurred
\nwhich, with notice or the lapse of time, would constitute such a breach or
\ndefault, or permit termination or modification, under the policy; and (iii) to
\nthe knowledge of the Company, no insurer on the policy has been declared
\ninsolvent or placed in receivership, conservatorship or liquidation.<\/p>\n
(c) At no time subsequent to January 1, 1997 has the Company
\nor, to the knowledge of the Company, any Subsidiary (i) been denied any
\ninsurance or indemnity bond coverage which it has requested, (ii) made any
\nmaterial reduction in the scope or amount of its insurance coverage, or (iii)
\nreceived notice from any of its insurance carriers that any insurance premiums
\nwill be subject to increase in an amount materially disproportionate to the
\namount of the increases in the amount of coverage with respect thereto (or with
\nrespect to similar insurance) in prior years or that any current insurance
\ncoverage will not be available in the future, other than as a result of the
\nTransactions, substantially on the same terms as are now in effect.<\/p>\n
(d) BROKERS. No broker, finder or investment banker (other
\nthan Deutsche Bank Securities, Inc.) is entitled to any brokerage, finder’s or
\nother fee or commission in connection with the Transactions based upon
\narrangements made by or on behalf of the Company. The Company has heretofore
\nfurnished to Parent a complete and correct copy of all agreements between the
\nCompany and Deutsche Bank Securities, Inc. pursuant to which such firm would be
\nentitled to any payment relating to the Transactions.<\/p>\n
28<\/p>\n
ARTICLE V<\/p>\n
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER<\/p>\n
Parent and Purchaser hereby, jointly and severally, represent
\nand warrant to the Company that:<\/p>\n
SECTION 5.01. CORPORATE ORGANIZATION. Parent is a corporation
\nduly organized and validly existing under the laws of the Province of Ontario.
\nPurchaser is a corporation duly organized, validly existing and in good standing
\nunder the laws of the State of Michigan, except where the failure to be so
\norganized, existing and in good standing would not prevent or delay consummation
\nof the Transactions or otherwise prevent Parent or Purchaser from performing any
\nof their material obligations under this Agreement. Each of Parent and Purchaser
\nhas the requisite corporate power and authority and all necessary governmental
\napprovals to own, lease and operate its properties and to carry on its business
\nas it is now being conducted, except where the failure to have such power
\nauthority and government approvals would not prevent or materially delay
\nconsummation of the Transactions or otherwise prevent Parent and Purchaser from
\nperforming any of their material obligations under this Agreement.<\/p>\n
SECTION 5.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of
\nParent and Purchaser has all necessary corporate power and authority to execute
\nand deliver this Agreement, to perform its obligations hereunder and, subject,
\nin the case of the Merger, to obtaining approval of the shareholders of the
\nCompany, if required, to consummate the Transactions. The execution and delivery
\nof this Agreement by Parent and Purchaser and the consummation by Parent and
\nPurchaser of the Transactions have been duly and validly authorized by all
\nnecessary corporate action, and no other corporate proceedings on the part of
\nParent or Purchaser are necessary to authorize this Agreement or to consummate
\nthe Transactions (other than, with respect to the Merger, the filing and
\nrecordation of appropriate merger documents as required by Michigan Law). This
\nAgreement has been duly and validly executed and delivered by Parent and
\nPurchaser and, assuming due authorization, execution and delivery by the
\nCompany, constitutes a legal, valid and binding obligation of each of Parent and
\nPurchaser enforceable against each of Parent and Purchaser in accordance with
\nits terms.<\/p>\n
SECTION 5.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a)
\nThe execution and delivery of this Agreement by Parent and Purchaser do not, and
\nthe performance of this Agreement by Parent and Purchaser will not, (i) conflict
\nwith or violate the Certificate of Incorporation or By-laws of either Parent or
\nPurchaser, (ii) assuming that all consents, approvals, authorizations and other
\nactions described in Section 5.03(b) have been obtained and all filings and
\nobligations described in Section 5.03(b) have been made and, subject, in the
\ncase of the Merger, to obtaining approval of the shareholders, if required,
\nconflict with or violate any law, rule, regulation, order, judgment or decree
\napplicable to Parent or Purchaser or by which any property or asset of either of
\nthem is bound or affected, or (iii) result in any breach of, or <\/p>\n
29<\/p>\n
constitute a default (or an event which, with notice or lapse of time or both,
\nwould become a default) under, or give to others any rights of termination,
\namendment, acceleration or cancellation of, or result in the creation of a lien
\nor other encumbrance on any property or asset of Parent or Purchaser pursuant
\nto, any note, bond, mortgage, indenture, contract, agreement, lease, license,
\npermit, franchise or other instrument or obligation to which Parent or Purchaser
\nis a party or by which Parent or Purchaser or any property or asset of either of
\nthem is bound or affected, except, with respect to clauses (ii) and (iii), for
\nany such conflicts, violations, breaches, defaults or other occurrences which
\nwould not prevent or materially delay consummation of the Transactions or
\notherwise prevent Parent and Purchaser from performing any of their material
\nobligations under this Agreement.<\/p>\n
(b) The execution and delivery of this Agreement by Parent and
\nPurchaser do not, and the performance of this Agreement by Parent and Purchaser
\nwill not, require any consent, approval, authorization or permit of, or filing
\nwith, or notification to, any Governmental Authority, except (i) for applicable
\nrequirements, if any, of the Exchange Act, Blue Sky Laws, state takeover laws,
\nthe HSR Act and the requirements in the countries where a merger filing will be
\nnecessary or advisable, and the filing and recordation of appropriate merger
\ndocuments as required by Michigan Law, and (ii) where the failure to obtain such
\nconsents, approvals, authorizations or permits, or to make such filings or
\nnotifications, would not prevent or materially delay consummation of the
\nTransactions, or otherwise prevent Parent or Purchaser from performing their
\nmaterial obligations under this Agreement.<\/p>\n
SECTION 5.04. FINANCING. At the time of execution of this
\nAgreement, expiration of the Offer and at the Effective Time, either Purchaser
\nwill have available or Parent will make available or cause one or more of its
\naffiliates to make available the funds necessary to purchase all of the Shares
\npursuant to the Offer and the Merger and to pay all fees and expenses in
\nconnection therewith.<\/p>\n
SECTION 5.05. OFFER DOCUMENTS; PROXY STATEMENT; SCHEDULE
\n14D-9. The Offer Documents shall not, at the time the Offer Documents are filed
\nwith the SEC or are first published, sent or given to shareholders of the
\nCompany, as the case may be, contain any untrue statement of a material fact or
\nomit to state any material fact required to be stated therein or necessary in
\norder to make the statements made therein, in the light of the circumstances
\nunder which they were made, not misleading. The information supplied by Parent
\nfor inclusion in the Schedule 14D-9 and Proxy Statement, if any, shall not, at
\nthe date first mailed to shareholders of the Company, and at the time of the
\nShareholders’ Meeting, contain any untrue statement of a material fact, or omit
\nto state any material fact required to be stated therein or necessary in order
\nto make the statements therein, in light of the circumstances under which they
\nwere made, not false or misleading, or necessary to correct any statement in any
\nearlier communication with respect to the solicitation of proxies for the
\nShareholders’ Meeting which shall have become false or misleading.
\nNotwithstanding the foregoing, Parent and Purchaser make no representation or<\/p>\n
30<\/p>\n
warranty with respect to any information supplied by the Company or any of its
\nrepresentatives for inclusion in any of the foregoing documents or the Offer
\nDocuments. The Offer Documents shall comply in all material respects as to form
\nwith the requirements of the Exchange Act and the rules and regulations
\nthereunder.<\/p>\n
SECTION 5.06. VOTE REQUIRED. No vote of the holders of any of
\nthe outstanding shares of capital stock of Parent is necessary to approve this
\nAgreement and the transactions contemplated hereby.<\/p>\n
SECTION 5.07. OWNERSHIP OF SHARES. As of the date of this
\nAgreement, Parent does not beneficially own any Shares.<\/p>\n
SECTION 5.08. BROKERS. No broker, finder or investment banker
\n(other than Morgan Stanley Dean Witter and Compass Partners International, LLC)
\nis entitled to any brokerage, finder’s or other fee or commission in connection
\nwith the Transactions based upon arrangements made by or on behalf of Parent or
\nPurchaser.<\/p>\n
ARTICLE VI<\/p>\n
CONDUCT OF BUSINESS PENDING THE MERGER<\/p>\n
SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE
\nMERGER. The Company agrees that, between the date of this Agreement and the
\nEffective Time, unless Parent shall otherwise agree in writing, the businesses
\nof the Company and the Subsidiaries shall be conducted only in, and the Company
\nand the Subsidiaries shall not take any action except in, the ordinary course of
\nbusiness and in a manner consistent with past practice; and the Company shall
\nuse its reasonable best efforts to preserve substantially intact the business
\norganization of the Company and the Subsidiaries, to keep available the services
\nof the current officers, employees and consultants of the Company and the
\nSubsidiaries and to preserve the current relationships of the Company and the
\nSubsidiaries with customers, suppliers and other persons with which the Company
\nor any Subsidiary has significant business relations. By way of amplification
\nand not limitation, except as expressly contemplated by this Agreement and
\nSection 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary
\nshall, between the date of this Agreement and the Effective Time, directly or
\nindirectly, do, or propose to do, any of the following without the prior written
\nconsent of Parent, which consent shall not be unreasonably withheld:<\/p>\n
(a) amend or otherwise change its Articles of Incorporation or
\n By-laws or equivalent organizational documents;<\/p>\n
31<\/p>\n
(b) issue, sell, pledge, dispose of, grant, encumber, or
\n authorize the issuance, sale, pledge, disposition, grant or encumbrance
\n of, (i) any shares of any class of capital stock of the Company or any
\n Subsidiary, or any options, warrants, convertible securities or other
\n rights of any kind to acquire any shares of such capital stock, or any
\n other ownership interest (including, without limitation, any phantom
\n interest), of the Company or any Subsidiary (except for the issuance of
\n a maximum of 4,933,628 Shares issuable pursuant to the Company Stock
\n Option Plans outstanding on the date hereof) or (ii) any material
\n assets of the Company or any Subsidiary, except in the ordinary course
\n of business and in a manner consistent with past practice;<\/p>\n
(c) declare, set aside, make or pay any dividend or other
\n distribution, payable in cash, stock, property or otherwise, with
\n respect to any of its capital stock, except that a direct or indirect
\n wholly owned Subsidiary may declare and pay a dividend or make an
\n advance to its parent or the Company;<\/p>\n
(d) reclassify, combine, split, subdivide or redeem, or
\n purchase or otherwise acquire, directly or indirectly, any of its
\n capital stock;<\/p>\n
(e) (i) acquire (including, without limitation, by merger,
\n consolidation, or acquisition of stock or assets or any other business
\n combination) any corporation, partnership, other business organization
\n or any division thereof or any material amount of assets, other than
\n pending acquisitions or minority investments, in each case publicly
\n announced prior to the date hereof; (ii) incur any indebtedness for
\n borrowed money or issue any debt securities or assume, guarantee or
\n endorse, or otherwise become responsible for, the obligations of any
\n person, or make any loans or advances, except in the ordinary course of
\n business and consistent with past practice; (iii) authorize, or make
\n any commitment with respect to (A) any capital expenditures in excess
\n of $4,000,000 in the aggregate per month, (B) any single capital
\n expenditure which is in excess of $500,000 or (C) any single capital
\n project that is reasonably likely to cost $2,000,000 or more in the
\n aggregate for the Company and the Subsidiaries taken as a whole; (iv)
\n make or direct to be made any capital investments or equity investments
\n in any entity, other than investments in any wholly-owned Subsidiary,
\n in excess of $500,000 for a single transaction and $1,000,000 in the
\n aggregate; or (v) enter into or amend any contract, agreement,
\n commitment or arrangement with respect to any matter set forth in this
\n Section 6.01(e);<\/p>\n
(f) increase the compensation payable or to become payable or
\n the benefits provided to its directors, officers or employees, except
\n for increases in the ordinary course of business and consistent with
\n past practice in salaries or wages of employees of the Company or any
\n Subsidiary who are not directors or officers of the Company, or grant
\n any severance or termination pay to, or enter into any employment or
\n severance agreement with, any director, officer or other employee of
\n the Company or of any <\/p>\n
32<\/p>\n
Subsidiary, or establish, adopt, enter into or amend any collective
\n bargaining, bonus, profit-sharing, thrift, compensation, stock option,
\n restricted stock, pension, retirement, deferred compensation,
\n employment, termination, severance or other plan, agreement, trust,
\n fund, policy or arrangement for the benefit of any director, officer or
\n employee;<\/p>\n
(g) take any action, other than reasonable and usual actions
\n in the ordinary course of business and consistent with past practice,
\n with respect to accounting policies or procedures;<\/p>\n
(h) make any material tax election or settle or compromise any
\n material United States federal, state, local or other non-United States
\n income tax liability, except in the ordinary course of business or in a
\n manner consistent with past practice;<\/p>\n
(i) pay, discharge or satisfy any claim, liability or
\n obligation (absolute, accrued, asserted or unasserted, contingent or
\n otherwise), other than the payment, discharge or satisfaction, in the
\n ordinary course of business and consistent with past practice, of
\n liabilities reflected or reserved against in the 1999 Balance Sheet or
\n subsequently incurred in the ordinary course of business and consistent
\n with past practice;<\/p>\n
(j) amend, modify or consent to the termination of any Company
\n Material Contract, or amend, waive, modify or consent to the
\n termination of the Company’s or any Subsidiary’s rights thereunder,
\n other than in the ordinary course of business and consistent with past
\n practice;<\/p>\n
(k) commence or settle any material Action; or<\/p>\n
(l) announce an intention, enter into any formal or informal
\n agreement or otherwise make a commitment, to do any of the foregoing.<\/p>\n
ARTICLE VII<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
SECTION 7.01. SHAREHOLDERS’ MEETING. (a) If required by
\napplicable law in order to consummate the Merger, the Company, acting through
\nthe Board, shall, in accordance with applicable law and the Company’s Articles
\nof Incorporation and By-laws, (i) duly call, give notice of, convene and hold an
\nannual or special meeting of its shareholders as promptly as practicable
\nfollowing consummation of the Offer for the purpose of considering and taking
\naction on this Agreement and the Transactions (the “SHAREHOLDERS’ MEETING”), and
\n(ii) subject to the terms of this Agreement, include in the Proxy Statement, and
\nnot subsequently withdraw or modify in any manner adverse to the Purchaser or
\nParent, the unanimous recommendation of the <\/p>\n
33<\/p>\n
Board that the shareholders of the Company approve and adopt this Agreement and
\nthe Transactions and (B) use its reasonable best efforts to obtain such approval
\nand adoption. At the Shareholders’ Meeting, Parent and Purchaser shall cause all
\nShares then owned by them and their subsidiaries to be voted in favor of the
\napproval and adoption of this Agreement and the Transactions.<\/p>\n
(b) Notwithstanding the foregoing, in the event that Purchaser
\nshall acquire at least 90% of the then outstanding Shares, the parties shall
\ntake all necessary and appropriate action to cause the Merger to become
\neffective, in accordance with Section 450.1711(i) of Michigan Law, as promptly
\nas reasonably practicable after such acquisition, without a meeting of the
\nshareholders of the Company.<\/p>\n
SECTION 7.02. PROXY STATEMENT. If approval of the Company’s
\nshareholders is required by applicable law to consummate the Merger, promptly
\nfollowing consummation of the Offer, the Company shall file the Proxy Statement
\nwith the SEC under the Exchange Act, and shall use its reasonable best efforts
\nto have the Proxy Statement cleared by the SEC. Parent, Purchaser and the
\nCompany shall cooperate with each other in the preparation of the Proxy
\nStatement, and the Company shall notify Parent of the receipt of any comments of
\nthe SEC with respect to the Proxy Statement and of any requests by the SEC for
\nany amendment or supplement thereto or for additional information and shall
\nprovide to Parent promptly copies of all correspondence between the Company or
\nany representative of the Company and the SEC. The Company shall provide Parent
\nand its counsel the opportunity to review the Proxy Statement, including all
\namendments and supplements thereto, prior to its being filed with the SEC and
\nshall give Parent and its counsel the opportunity to review all responses to
\nrequests for additional information and replies to comments prior to their being
\nfiled with, or sent to, the SEC. Each of the Company, Parent and Purchaser
\nagrees to use its reasonable best efforts, after consultation with the other
\nparties hereto, to respond promptly to all such comments of and requests by the
\nSEC and to cause the Proxy Statement and all required amendments and supplements
\nthereto to be mailed to the holders of Shares entitled to vote at the
\nShareholders’ Meeting at the earliest practicable time.<\/p>\n
SECTION 7.03. COMPANY BOARD REPRESENTATION; SECTION 14(f). (a)
\nPromptly upon the purchase by Purchaser of Shares pursuant to the Offer and from
\ntime to time thereafter, Purchaser shall be entitled to designate up to such
\nnumber of directors, rounded up to the next whole number, on the Board as shall
\ngive Purchaser representation on the Board equal to the product of the total
\nnumber of directors on the Board (giving effect to the directors elected
\npursuant to this sentence) multiplied by the percentage that the aggregate
\nnumber of Shares beneficially owned by Purchaser or any affiliate of Purchaser
\nfollowing such purchase bears to the total number of Shares then outstanding,
\nand the Company shall, at such time, promptly take all actions within its power
\nreasonably necessary to cause Purchaser’s designees to be elected as directors
\nof the Company, including increasing the size of the Board or securing the
\nresignations <\/p>\n
34<\/p>\n
of incumbent directors, or both. At such times, the Company shall use its
\nreasonable best efforts to cause persons designated by Purchaser to constitute
\nthe same percentage as persons designated by Purchaser shall constitute of the
\nBoard of (i) each committee of the Board, (ii) the board of directors of each
\nSubsidiary, and (iii) each committee of each such board, in each case only to
\nthe extent permitted by applicable law. Notwithstanding the foregoing, until the
\nEffective Time, the Company shall use its reasonable best efforts to ensure that
\nat least two members of the Board (in addition to the Company’s Chief Executive
\nOfficer) and each committee of the Board and such boards and committees of the
\nSubsidiaries, as of the date hereof, who are not employees of the Company shall
\nremain members of the Board and of such boards and committees.<\/p>\n
(b) The Company shall promptly take all actions required
\npursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
\nthereunder to fulfill its obligations under this Section 7.03, and shall include
\nin the Schedule 14D-9 such information with respect to the Company and its
\nofficers and directors as is required under Section 14(f) and Rule 14f-1 to
\nfulfill such obligations. Parent or Purchaser shall supply to the Company, and
\nbe solely responsible for, any information with respect to either of them and
\ntheir nominees, officers, directors and affiliates required by such Section
\n14(f) and Rule 14f-1.<\/p>\n
(c) Following the election of designees of Purchaser pursuant
\nto this Section 7.03, prior to the Effective Time, any amendment of this
\nAgreement or the Articles of Incorporation or By-laws of the Company, any
\ntermination of this Agreement by the Company, any extension by the Company of
\nthe time for the performance of any of the obligations or other acts of Parent
\nor Purchaser, or waiver of any of the Company’s rights hereunder, shall require
\nthe concurrence of a majority of the directors of the Company then in office who
\nwere directors of the Company on the date hereof or designees of such directors.<\/p>\n
SECTION 7.04. ACCESS TO INFORMATION; CONFIDENTIALITY. (a) From
\nthe date hereof until the Effective Time, to the extent permitted by applicable
\nlaw, the Company shall, and shall cause the Subsidiaries and the officers,
\ndirectors, employees, auditors and agents of the Company and the Subsidiaries
\nto, afford the officers, employees and agents of Parent and Purchaser complete
\naccess at all reasonable times to the officers, employees, agents, properties,
\noffices, plants and other facilities, books and records of the Company and each
\nSubsidiary, and shall furnish Parent and Purchaser with such financial,
\noperating and other data and information as Parent or Purchaser, through their
\nofficers, employees or agents, may reasonably request.<\/p>\n
(b) All information obtained by Parent or Purchaser pursuant
\nto this Section 7.04 shall be kept confidential in accordance with the
\nconfidentiality agreement, dated April 4, 2000 (the “CONFIDENTIALITY
\nAGREEMENT”), between Parent and the Company.<\/p>\n
(c) No investigation pursuant to this Section 7.04 shall
\naffect any representation or warranty in this Agreement of any party hereto or
\nany condition to the obligations of the parties hereto or any condition to the
\nOffer.<\/p>\n
35<\/p>\n
SECTION 7.05. NO SOLICITATION OF TRANSACTIONS. (a) Neither the
\nCompany nor any Subsidiary shall, directly or indirectly, through any officer,
\ndirector, agent or otherwise, (i) solicit, initiate or encourage the submission
\nof, any Acquisition Proposal, including a Superior Proposal or (ii) participate
\nin any discussions or negotiations regarding, or furnish to any person, any
\ninformation with respect to, or otherwise cooperate in any way with respect to,
\nor assist or participate in, or facilitate, any Acquisition Proposal, except
\nthat the Company may take any action referred to in this clause (ii) if (A) the
\nBoard determines in good faith after having received advice from outside legal
\ncounsel that such action is required by the fiduciary duties of the Board under
\napplicable law, (B) the Board determines in good faith that the Acquisition
\nProposal constitutes, or may reasonably be expected to lead to, a Superior
\nProposal, and (C) after giving prior written notice to Parent and Purchaser and
\nentering into a customary confidentiality agreement on terms no less favorable
\nto the Company than those contained in the Confidentiality Agreement. For
\npurposes of this Agreement, a “SUPERIOR PROPOSAL” means any bona fide written
\nproposal, not solicited, initiated or encouraged in violation of this Section
\n7.05, made by a third person to acquire, directly or indirectly, for
\nconsideration consisting of cash and\/or securities, all of the equity securities
\nof the Company entitled to vote generally in the election of directors or all or
\nsubstantially all of the assets of the Company, if and only if, the Board
\nreasonably determines (after consultation with its financial advisor and outside
\ncounsel) (x) that the proposed transaction would be more favorable from a
\nfinancial point of view to its shareholders than the Offer and the Merger and
\nthe Transactions taking into account at the time of determination any changes to
\nthe terms of this Agreement that as of that time had been proposed by Parent,
\nand (y) that the person or entity making such Superior Proposal is capable of
\nconsummating such Acquisition Proposal (based upon, among other things, the
\navailability of financing and the degree of certainty of obtaining financing,
\nthe expectation of obtaining required regulatory approvals and the identity and
\nbackground of such person).<\/p>\n
(b) Except as set forth in this Section 7.05(b), neither the
\nBoard nor any committee thereof shall withdraw or modify, or propose to withdraw
\nor modify, in a manner adverse to Parent or Purchaser, the approval or
\nrecommendation by the Board or any such committee of this Agreement, the Offer,
\nthe Merger or any other Transaction. Notwithstanding the foregoing, in the event
\nthat, prior to the time of acceptance for payment of Shares pursuant to the
\nOffer, in connection with an Acquisition Proposal, the Board determines in good
\nfaith (i) after having received advice from outside counsel that such action is
\nrequired by the fiduciary duties of the Board under applicable law and (ii) that
\nthe Acquisition Proposal constitutes a Superior Proposal, the Board may withdraw
\nor modify its approval or recommendation of the Offer and the Merger.<\/p>\n
(c) The Company shall, and shall direct or cause its
\ndirectors, officers, employees, representatives and agents to, immediately cease
\nand cause to be terminated any discussions or negotiations with any parties that
\nmay be ongoing with respect to any Acquisition Proposal.<\/p>\n
36<\/p>\n
(d) The Company shall promptly advise Parent orally and in
\nwriting of (i) any Acquisition Proposal or any request for information with
\nrespect to any Acquisition Proposal, the material terms and conditions of such
\nAcquisition Proposal or request and the identity of the person making such
\nAcquisition Proposal or request and (ii) any changes in any such Acquisition
\nProposal or request.<\/p>\n
(e) Nothing contained in this Section 7.05 shall prohibit the
\nCompany from taking and disclosing to its shareholders a position contemplated
\nby Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or from making
\nany disclosure to the Company’s shareholders, if the Board determines in good
\nfaith, after having received advice from outside legal counsel, that such action
\nis required under applicable law; PROVIDED, HOWEVER, that neither the Company
\nnor the Board nor any committee thereof shall, except as permitted by Section
\n7.05(b), withdraw or modify, or propose publicly to withdraw or modify, its
\nposition with respect to this Agreement, the Offer, the Merger or any other
\nTransaction or shall approve or recommend, or propose publicly to approve or
\nrecommend, any Acquisition Proposal, including a Superior Proposal.<\/p>\n
(f) The Company agrees, except as required by the Board’s
\nfiduciary duties under applicable law after having received advice from outside
\nlegal counsel, not to release any third party from, or waive any provision of,
\nany confidentiality or standstill agreement to which the Company is a party.<\/p>\n
SECTION 7.06. EMPLOYEE BENEFITS MATTERS. (a) Parent and
\nPurchaser agree that following the Effective Time, the Surviving Corporation and
\nits Subsidiaries and successors shall provide those persons who, immediately
\nprior to the Effective Time, were employees of the Company or its Subsidiaries
\n(“RETAINED EMPLOYEES”) with employee plans and programs which provide benefits
\nthat are no less favorable in the aggregate than those provided to similarly
\nsituated employees of the Thomson Financial group of Parent. Employees of the
\nCompany or any Subsidiary shall receive credit for purposes of eligibility to
\nparticipate and vesting (but, except as required by applicable law, not for
\nbenefit accruals under any defined benefit pension plan) under any employee
\nbenefit plan, program or arrangement established or maintained by the Surviving
\nCorporation or any of its subsidiaries for service accrued or deemed accrued
\nprior to the Effective Time with the Company or any Subsidiary; PROVIDED,
\nHOWEVER, that such crediting of service shall not operate to duplicate any
\nbenefit or the funding of any such benefit. In addition, with respect to any
\nmedical, dental, pharmaceutical and\/or vision benefit plan of Parent in which
\nemployees of the Company may participate following the Effective Time (a “New
\nPlan”), Parent shall cause all pre-existing condition exclusion and
\nactively-at-work requirements to be waived for such employees and their covered
\ndependents (PROVIDED, HOWEVER, that such waiver shall not apply to any
\npre-existing condition that excluded any such employee or dependent prior to the
\nEffective Time from the corresponding Plan maintained by the Company) and shall
\nprovide that any covered expenses incurred on or before the Effective Time by an<\/p>\n
37<\/p>\n
employee or an employee’s covered dependents shall be taken into account for
\npurposes of satisfying applicable deductible, coinsurance and maximum
\nout-of-pocket provisions under the relevant New Plan after the Effective Time to
\nthe same extent as such expenses are taken into account for the benefit of
\nsimilarly situated employees of Parent and its Subsidiaries.<\/p>\n
(b) In addition, Parent and Purchaser shall provide severance
\narrangements to the individuals set forth in Exhibit 7.06(b) for the time
\nperiods and for the amounts contained therein.<\/p>\n
SECTION 7.07. DIRECTORS’ AND OFFICERS’ INDEMNIFICATION AND
\nINSURANCE. (a) The By-laws of the Surviving Corporation shall contain provisions
\nno less favorable with respect to indemnification than are set forth in Article
\nVII of the By-laws of the Company, which provisions shall not be amended,
\nrepealed or otherwise modified for a period of six years from the Effective Time
\nin any manner that would affect adversely the rights thereunder of individuals
\nwho, at or prior to the Effective Time, were directors, officers, employees,
\nfiduciaries or agents of the Company, unless such modification shall be required
\nby law.<\/p>\n
(b) Parent shall cause the Surviving Corporation, to the
\nfullest extent permitted under applicable law to indemnify, defend and hold
\nharmless, each present and former director, officer or employee of the Company
\nor any of its Subsidiaries (collectively, the “INDEMNIFIED PARTIES”) against any
\ncosts or expenses (including attorneys’ fees), judgments, fines, losses, claims,
\ndamages, liabilities and amounts paid in settlement in connection with any
\nactual or threatened claim, action, suit, proceeding or investigation, whether
\ncivil, criminal, administrative or investigative, (x) arising out of or
\npertaining to the Transactions or (y) otherwise with respect to any acts or
\nomissions occurring at or prior to the Effective Time, to the same extent as
\nprovided in the Company’s certificate of incorporation or by-laws or any
\napplicable contract or agreement as in effect on the date hereof, in each case
\nfor a period of six years after the date hereof. In the event of any such claim,
\naction, suit, proceeding or investigation (whether arising before or after the
\nEffective Time) and subject to the specific terms of any indemnification
\ncontract, (i) any counsel retained by the Indemnified Parties for any period
\nafter the Effective Time shall be reasonably satisfactory to the Surviving
\nCorporation, (ii) after the Effective Time, the Surviving Corporation shall pay
\nthe reasonable fees and expenses of such counsel, promptly after statements
\ntherefor are received and (iii) the Surviving Corporation will cooperate in the
\ndefense of any such matter; PROVIDED, HOWEVER, that the Surviving Corporation
\nshall not be liable for any settlement effected without its written consent
\n(which consent shall not be unreasonably withheld or delayed); and PROVIDED,
\nFURTHER, that, in the event that any claim or claims for indemnification are
\nasserted or made within such six-year period, all rights to indemnification in
\nrespect of any such claim or claims shall continue until the disposition of any
\nand all such claims. The Indemnified Parties as a group may retain only one law
\nfirm (plus local counsel, if applicable) to represent them with respect to any
\nsingle action unless there is, under applicable standards of professional
\nconduct, a conflict on any significant <\/p>\n
38<\/p>\n
issue between the positions of any two or more Indemnified Parties, in which
\ncase each Indemnified Person with respect to whom such a conflict exists (or
\ngroup of such Indemnified Persons who among them have no such conflict) may
\nretain one separate law firm.<\/p>\n
(c) The Surviving Corporation shall maintain in effect for six
\nyears from the Effective Time the current directors’ and officers’ liability
\ninsurance policies maintained by the Company (provided that the Surviving
\nCorporation may substitute therefor policies of at least the same coverage
\ncontaining terms and conditions that are not materially less favorable) with
\nrespect to matters occurring prior to the Effective Time; PROVIDED, HOWEVER,
\nthat in no event shall the Surviving Corporation be required to expend pursuant
\nto this Section 7.07(b) more than an amount per year equal to 200% of current
\nannual premiums paid by the Company for such insurance (which premiums the
\nCompany represents and warrants to be $215,000 per annum in the aggregate).<\/p>\n
(d) In the event the Company or the Surviving Corporation or
\nany of their respective successors or assigns (i) consolidates with or merges
\ninto any other person and shall not be the continuing or surviving corporation
\nor entity of such consolidation or merger or (ii) transfers all or substantially
\nall of its properties and assets to any person, then, and in each such case,
\nproper provision shall be made so that the successors and assigns of the Company
\nor the Surviving Corporation, as the case may be, or at Parent’s option, Parent,
\nshall assume the obligations set forth in this Section 7.07.<\/p>\n
SECTION 7.08. NOTIFICATION OF CERTAIN MATTERS. The Company
\nshall give prompt notice to Parent, and Parent shall give prompt notice to the
\nCompany, of (a) the occurrence, or non-occurrence, of any event the occurrence,
\nor non-occurrence, of which reasonably could be expected to cause any
\nrepresentation or warranty contained in this Agreement to be untrue or
\ninaccurate in any material respect and (b) any failure of the Company, Parent or
\nPurchaser, as the case may be, to comply with or satisfy any covenant or
\nagreement to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER,
\nthat the delivery of any notice pursuant to this Section 7.08 shall not limit or
\notherwise affect the remedies available hereunder to the party receiving such
\nnotice.<\/p>\n
SECTION 7.09. FURTHER ACTION; REASONABLE BEST EFFORTS. Upon
\nthe terms and subject to the conditions hereof, each of the parties hereto shall
\n(i) make promptly its respective filings, and thereafter make any other required
\nsubmissions, under the HSR Act and in the other countries where a merger filing
\nis necessary or advisable, including but not limited to the United Kingdom and
\nthe Federal Democratic Republic of Germany, with respect to the Transactions and
\n(ii) use its reasonable best efforts to take, or cause to be taken, all
\nappropriate action, and to do, or cause to be done, all things necessary, proper
\nor advisable under applicable laws and regulations to consummate and make
\neffective the Transactions, including, without limitation, using its reasonable
\nbest efforts to obtain all Permits, consents, approvals, authorizations,
\nqualifications and orders of Governmental Authorities and parties to contracts
\nwith the Company <\/p>\n
39<\/p>\n
and the Subsidiaries as are necessary for the consummation of the Transactions
\nand to inform or consult with any trade unions, works councils, employee
\nrepresentatives or any other representative body as required, and to fulfill the
\nconditions to the Offer and the Merger; PROVIDED that neither Purchaser nor
\nParent will be required by this Section 7.09 to take any action, including
\nentering into any consent decree, hold separate orders or other arrangements,
\nthat (A) requires the divestiture of any assets of any of the Purchaser, Parent,
\nCompany or any of their respective subsidiaries or (B) limits Parent’s freedom
\nof action with respect to, or its ability to retain, the Company and the
\nSubsidiaries or any portion thereof or any of Parent’s or its affiliates’ other
\nassets or businesses. In case, at any time after the Effective Time, any further
\naction is necessary or desirable to carry out the purposes of this Agreement,
\nthe proper officers and directors of each party to this Agreement shall use
\ntheir reasonable best efforts to take all such action.<\/p>\n
SECTION 7.10. PUBLIC ANNOUNCEMENTS. Parent and the Company
\nagree that no public release or announcement concerning the Transactions, the
\nOffer or the Merger shall be issued by either party without the prior consent of
\nthe other party (which consent shall not be unreasonably withheld), except as
\nsuch release or announcement may be required by Law or the rules or regulations
\nof any United States or non-United States securities exchange, in which case the
\nparty required to make the release or announcement shall use its best efforts to
\nallow the other party reasonable time to comment on such release or announcement
\nin advance of such issuance.<\/p>\n
ARTICLE VIII<\/p>\n
CONDITIONS TO THE MERGER<\/p>\n
SECTION 8.01. CONDITIONS TO THE MERGER. The obligations of
\neach party to effect the Merger shall be subject to the satisfaction, at or
\nprior to the Effective Time, of the following conditions:<\/p>\n
(a) SHAREHOLDER APPROVAL. If and to the extent required by
\n Michigan Law, this Agreement and the Transactions shall have been
\n approved and adopted by the affirmative vote of the shareholders of the
\n Company;<\/p>\n
(b) HSR ACT; OTHER COMPETITION ACTS. Any waiting period (and
\n any extension thereof) applicable to the consummation of the Merger
\n under the HSR Act and in the other countries where a merger filing was
\n necessary (including, but not limited to the Federal Democratic
\n Republic of Germany, and if deemed necessary, the European Commission)
\n shall have expired or been terminated;<\/p>\n
40<\/p>\n
(c) UK COMPETITION COMMISSION. The UK Office of Fair Trading
\n shall have indicated, in terms satisfactory to Parent and Purchaser in
\n their reasonable discretion, that it is not the intention of the
\n Secretary of State for Trade and Industry to refer the Transactions, or
\n any matter arising therefrom, to the Competition Commission.<\/p>\n
(d) NO ORDER. No Governmental Authority shall have enacted,
\n issued, promulgated, enforced or entered any Law (whether temporary,
\n preliminary or permanent) which is then in effect and has the effect of
\n making the acquisition of Shares by Parent or Purchaser or any
\n affiliate of either of them illegal or otherwise restricting,
\n preventing or prohibiting consummation of the Transactions; and <\/p>\n
(e) OFFER. Purchaser or its permitted assignee shall have
\n purchased all Shares validly tendered and not withdrawn pursuant to the
\n Offer.<\/p>\n
ARTICLE IX<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
SECTION 9.01. TERMINATION. This Agreement may be terminated
\nand the Merger and the other Transactions may be abandoned at any time prior to
\nthe Effective Time, notwithstanding any requisite approval and adoption of this
\nAgreement and the Transactions by the shareholders of the Company:<\/p>\n
(a) By mutual written consent of each of Parent, Purchaser and
\n the Company duly authorized by the Boards of Directors of Parent,
\n Purchaser and the Company; or<\/p>\n
(b) By either Parent, Purchaser or the Company if (i) the
\n Effective Time shall not have occurred on or before December 31, 2000;
\n PROVIDED, HOWEVER, that the right to terminate this Agreement under
\n this Section 9.01(b) shall not be available to any party whose failure
\n to fulfill any obligation under this Agreement has been the cause of,
\n or resulted in, the failure of the Effective Time to occur on or before
\n such date or (ii) any Governmental Authority shall have enacted,
\n issued, promulgated, enforced or entered any injunction, order, decree
\n or ruling (whether temporary, preliminary or permanent) which has
\n become final and nonappealable and has the effect of making
\n consummation of the Offer or the Merger illegal or otherwise preventing
\n or prohibiting consummation of the Offer or the Merger; or<\/p>\n
(c) By Parent if (i) due to an occurrence or circumstance that
\n would result in a failure to satisfy any condition set forth in Annex A
\n hereto, Purchaser shall have (A) failed to commence the Offer within
\n ten (10) business days following the date of this Agreement, or (B)
\n terminated the Offer, or the Offer shall have expired, without<\/p>\n
41<\/p>\n
Purchaser having accepted any Shares for payment thereunder, unless
\n such action or inaction under (A) or (B) shall have been caused by or
\n resulted from the failure of Parent or Purchaser to perform, in any
\n material respect, any of their material covenants or agreements
\n contained in this Agreement, or the material breach by Parent or
\n Purchaser of any of their material representations or warranties
\n contained in this Agreement or (ii) prior to the purchase of Shares
\n pursuant to the Offer, the Board or any committee thereof shall have
\n withdrawn or modified in a manner adverse to Purchaser or Parent its
\n approval or recommendation of this Agreement, the Offer, the Merger or
\n any other Transaction, or shall have recommended or approved any
\n Acquisition Proposal, or shall have resolved to do any of the
\n foregoing; or<\/p>\n
(d) By the Company if Purchaser shall have (A) failed to
\n commence the Offer within ten (10) business days following the date of
\n this Agreement, or (B) terminated the Offer, or the Offer shall have
\n expired, without Purchaser having accepted any Shares for payment
\n thereunder, unless such action or inaction under (A) or (B) shall have
\n been caused by or resulted from the failure of the Company to perform,
\n in any material respect, any of its material covenants or agreements
\n contained in this Agreement or the material breach by the Company of
\n any of its material representations or warranties contained in this
\n Agreement.<\/p>\n
SECTION 9.02. EFFECT OF TERMINATION. In the event of the
\ntermination of this Agreement pursuant to Section 9.01, this Agreement shall
\nforthwith become void, and there shall be no liability on the part of any party
\nhereto, except (a) as set forth in Section 9.03 and (b) nothing herein shall
\nrelieve any party from liability for any fraud or willful breach hereof prior to
\nthe date of such termination; PROVIDED, HOWEVER, that the Confidentiality
\nAgreement shall survive any termination of this Agreement.<\/p>\n
SECTION 9.03. FEES. (a) In the event that<\/p>\n
(i) any person (including, without limitation, the Company or
\n any affiliate thereof), other than Parent or any affiliate of Parent,
\n shall have become the beneficial owner of more than 15% of the
\n then-outstanding Shares, and this Agreement shall have been terminated
\n pursuant to Section 9.01(b)(i), 9.01(c) or 9.01(d); or<\/p>\n
(ii) any person shall have commenced, publicly proposed or
\n communicated to the Company an Acquisition Proposal that is publicly
\n disclosed and (A) the Offer shall have remained open for at least 20
\n business days, (B) the Minimum Condition shall not have been satisfied
\n and (C) this Agreement shall have been terminated pursuant to Section
\n 9.01; or<\/p>\n
(iii) this Agreement is terminated (A) pursuant to Section
\n 9.01(c)(ii) or (B) pursuant to Section 9.01(c)(i) or 9.01(d), to the
\n extent that the failure to commence, <\/p>\n
42<\/p>\n
the termination or the failure to accept any Shares for payment, as set
\n forth in Section 9.01(c)(i) or 9.01(d), as the case may be, shall
\n relate to the failure of the Company to perform, in any material
\n respect, any of its material covenants or agreements contained in this
\n Agreement or the material breach by the Company of any of its material
\n representations or warranties contained in this Agreement; or<\/p>\n
(iv) the Company enters into an agreement with respect to an
\n Acquisition Proposal, or an Acquisition Proposal is consummated, in
\n each case within 12 months after the termination of this Agreement
\n pursuant to Section 9.01(c) or (d), and the Company shall not therefore
\n have been required to pay the Fee to Parent pursuant to Section
\n 9.03(a)(i), 9.03(a)(ii) or 9.03(a)(iii);<\/p>\n
THEN, in any such event, the Company shall pay Parent promptly (but in no event
\nlater than one business day after the first of such events shall have occurred)
\na fee of $42,000,000 (the “FEE”), which amount shall be payable in immediately
\navailable funds. Notwithstanding the foregoing, the Company shall not be
\nrequired to pay Parent the Fee if this Agreement is terminated pursuant to
\nSection 9.01 if the failure to consummate the Offer is the result of the failure
\nof the conditions set forth in clause (ii) of the introductory paragraph or
\nclause (a) or (b) of Annex A to be satisfied. In addition, notwithstanding the
\nforegoing, the Company shall be required to pay to the Parent only $11,000,000
\nof the Fee in the event this Agreement is terminated due to the occurrence of
\nany event in clause (f) of Annex A; PROVIDED, that if the Company consummates a
\ntransaction that would be an Acquisition Proposal within 12 months of the date
\nof such Termination, the Company shall pay to the Parent the balance of the Fee.<\/p>\n
(b) Except as set forth in this Section 9.03, all costs and
\nexpenses incurred in connection with this Agreement, the Shareholder Agreements
\nand the Transactions shall be paid by the party incurring such expenses, whether
\nor not any Transaction is consummated.<\/p>\n
(c) In the event that the Company shall fail to pay the Fee
\nwhen due, the term “Fee” shall be deemed to include the costs and expenses
\nactually incurred or accrued by Parent and Purchaser (including, without
\nlimitation, fees and expenses of counsel) in connection with the collection
\nunder and enforcement of this Section 9.03, together with interest on such
\nunpaid Fee, commencing on the date that the Fee became due, at a rate equal to
\nthe rate of interest publicly announced by Citibank, N.A. from time to time, in
\nthe City of New York, as such bank’s Base Rate.<\/p>\n
SECTION 9.04. AMENDMENT. Subject to Section 7.03, this
\nAgreement may be amended by the parties hereto by action taken by or on behalf
\nof their respective Boards of Directors at any time prior to the Effective Time;
\nPROVIDED, HOWEVER, that, after the approval and adoption of this Agreement and
\nthe Transactions by the shareholders of the Company, no amendment may be made
\nthat would reduce the amount or change the type of consideration into <\/p>\n
43<\/p>\n
which each Share shall be converted upon consummation of the Merger. This
\nAgreement may not be amended except by an instrument in writing signed by each
\nof the parties hereto.<\/p>\n
SECTION 9.05. WAIVER. Subject to Section 7.03, at any time
\nprior to the Effective Time, any party hereto may (a) extend the time for the
\nperformance of any obligation or other act of any other party hereto, (b) waive
\nany inaccuracy in the representations and warranties of any other party
\ncontained herein or in any document delivered pursuant hereto and (c) waive
\ncompliance with any agreement of any other party or any condition to its own
\nobligations contained herein. Any such extension or waiver shall be valid if set
\nforth in an instrument in writing signed by the party or parties to be bound
\nthereby.<\/p>\n
ARTICLE X<\/p>\n
GENERAL PROVISIONS<\/p>\n
SECTION 10.01. NOTICES. All notices, requests, claims, demands
\nand other communications hereunder shall be in writing and shall be given (and
\nshall be deemed to have been duly given upon receipt) by delivery in person, by
\ntelecopy or by registered or certified mail (postage prepaid, return receipt
\nrequested) to the respective parties at the following addresses (or at such
\nother address for a party as shall be specified in a notice given in accordance
\nwith this Section 10.01):<\/p>\n
if to Parent or Purchaser:<\/p>\n
The Thomson Corporation
\n Metro Center
\n One Station Plaza
\n Stamford, Connecticut 06902
\n Telecopier No: (203) 348-5718
\n Attention: General Counsel<\/p>\n
with a copy to:<\/p>\n
Shearman & Sterling
\n 599 Lexington Avenue
\n New York, New York 10022
\n Telecopier No: (212) 848-7179
\n Attention: David W. Heleniak, Esq.<\/p>\n
if to the Company:<\/p>\n
Primark Corporation<\/p>\n
44<\/p>\n
1000 Winter Street
\n Suite 4300N
\n Waltham, MA 02451-1241
\n Telecopier No: (781) 890-6190
\n Attention: General Counsel<\/p>\n
with a copy to:<\/p>\n
Skadden, Arps, Slate, Meagher & Flom LLP
\n 1440 New York Avenue, NW
\n Washington, DC 20005
\n Telecopier No: (202) 393-5760
\n Attention: Stephen W. Hamilton, Esq.<\/p>\n
SECTION 10.02. SEVERABILITY. If any term or other provision of
\nthis Agreement is invalid, illegal or incapable of being enforced by any rule of
\nlaw, or public policy, all other conditions and provisions of this Agreement
\nshall nevertheless remain in full force and effect so long as the economic or
\nlegal substance of the Transactions is not affected in any manner materially
\nadverse to any party. Upon such determination that any term or other provision
\nis invalid, illegal or incapable of being enforced, the parties hereto shall
\nnegotiate in good faith to modify this Agreement so as to effect the original
\nintent of the parties as closely as possible in a mutually acceptable manner in
\norder that the Transactions be consummated as originally contemplated to the
\nfullest extent possible.<\/p>\n
SECTION 10.03. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement
\nand the Shareholder Agreements constitute the entire agreement among the parties
\nwith respect to the subject matter hereof and supersede all prior agreements and
\nundertakings, both written and oral, among the parties, or any of them, with
\nrespect to the subject matter hereof. This Agreement shall not be assigned
\n(whether pursuant to a merger, by operation of law or otherwise), except that
\nParent and Purchaser may assign all or any of their rights and obligations
\nhereunder to any affiliate of Parent, PROVIDED that no such assignment shall
\nrelieve the assigning party of its obligations hereunder if such assignee does
\nnot perform such obligations.<\/p>\n
SECTION 10.04. PARTIES IN INTEREST. This Agreement shall be
\nbinding upon and inure solely to the benefit of each party hereto, and nothing
\nin this Agreement, express or implied, is intended to or shall confer upon any
\nother person any right, benefit or remedy of any nature whatsoever under or by
\nreason of this Agreement, other than Section 7.07 (which is intended to be for
\nthe benefit of the persons covered thereby and may be enforced by such persons).<\/p>\n
SECTION 10.05. SPECIFIC PERFORMANCE. The parties hereto agree
\nthat irreparable damage would occur in the event any provision of this Agreement
\nwere not performed in <\/p>\n
45<\/p>\n
accordance with the terms hereof and that the parties shall be entitled to
\nspecific performance of the terms hereof, in addition to any other remedy at law
\nor equity.<\/p>\n
SECTION 10.06. GOVERNING LAW. This Agreement shall be governed
\nby, and construed in accordance with, the laws of the State of New York
\napplicable to contracts executed in and to be performed in that State (other
\nthan those provisions set forth herein that are required to be governed by
\nMichigan Law). All actions and proceedings arising out of or relating to this
\nAgreement shall be heard and determined exclusively in any New York state or
\nfederal court sitting in the County of New York. The parties hereto hereby (a)
\nsubmit to the exclusive jurisdiction of any state or federal court sitting in
\nthe County of New York for the purpose of any Action arising out of or relating
\nto this Agreement brought by any party hereto, and (b) irrevocably waive, and
\nagree not to assert by way of motion, defense, or otherwise, in any such Action,
\nany claim that it is not subject personally to the jurisdiction of the
\nabove-named courts, that its property is exempt or immune from attachment or
\nexecution, that the Action is brought in an inconvenient forum, that the venue
\nof the Action is improper, or that this Agreement or the Transactions may not be
\nenforced in or by any of the above-named courts.<\/p>\n
SECTION 10.07. WAIVER OF JURY TRIAL. Each of the parties
\nhereto hereby waives to the fullest extent permitted by applicable law any right
\nit may have to a trial by jury with respect to any litigation directly or
\nindirectly arising out of, under or in connection with this Agreement or the
\nTransactions. Each of the parties hereto (a) certifies that no representative,
\nagent or attorney of any other party has represented, expressly or otherwise,
\nthat such other party would not, in the event of litigation, seek to enforce
\nthat foregoing waiver and (b) acknowledges that it and the other hereto have
\nbeen induced to enter into this Agreement and the Transactions, as applicable,
\nby, among other things, the mutual waivers and certifications in this Section
\n10.07.<\/p>\n
SECTION 10.08. HEADINGS. The descriptive headings contained in
\nthis Agreement are included for convenience of reference only and shall not
\naffect in any way the meaning or interpretation of this Agreement.<\/p>\n
SECTION 10.09. COUNTERPARTS. This Agreement may be executed
\nand delivered (including by facsimile transmission) in one or more counterparts,
\nand by the different parties hereto in separate counterparts, each of which when
\nexecuted shall be deemed to be an original but all of which taken together shall
\nconstitute one and the same agreement.<\/p>\n
SECTION 10.10. DISCLOSURE SCHEDULE. Any information disclosed
\nin one Section of the Disclosure Schedule shall be deemed to be disclosed in all
\nSections of the Disclosure Schedule but only if such deemed disclosure is
\nreadily apparent based on the disclosure in such other Section. The disclosure
\nof any information in the Disclosure Schedule shall not be deemed to constitute
\nan acknowledgment that such information is required to be disclosed or that it
\nis material, nor shall such information be deemed to establish a standard of
\nmateriality.<\/p>\n
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
\ncaused this Agreement to be executed as of the date first written above by their
\nrespective officers thereunto duly authorized.<\/p>\n
THE THOMSON CORPORATION<\/p>\n
By
\n ———————————–
\n Title:<\/p>\n
MARQUEE ACQUISITION CORPORATION<\/p>\n
By
\n ———————————–
\n Title:<\/p>\n
PRIMARK CORPORATION<\/p>\n
By
\n ———————————–
\n Title:<\/p>\n
ANNEX A<\/p>\n
CONDITIONS TO THE OFFER<\/p>\n
Notwithstanding any other provision of the Offer, Purchaser
\nshall not be required to accept for payment any Shares tendered pursuant to the
\nOffer, and may extend, terminate or amend the Offer, if (i) immediately prior to
\nthe expiration of the Offer, the Minimum Condition shall not have been
\nsatisfied, (ii) any applicable waiting period under the HSR Act, the antitrust
\nlaws in the Federal Democratic Republic of Germany and the United Kingdom and in
\nthe other countries where a merger filing was necessary shall not have expired
\nor been terminated prior to the expiration of the Offer, or (iii) at any time on
\nor after the date of this Agreement and prior to the expiration of the Offer,
\nany of the following conditions shall exist:<\/p>\n
(a) there shall have been instituted, threatened or be pending
\n any Action before any Governmental Authority (i) challenging or seeking
\n to make illegal, materially delay, or otherwise, directly or
\n indirectly, restrain or prohibit or make materially more costly, the
\n making of the Offer, the acceptance for payment of any Shares by
\n Parent, Purchaser or any other affiliate of Parent, or the purchase of
\n Shares pursuant to any Shareholder Agreement, or the consummation of
\n any other Transaction, or seeking to obtain material damages in
\n connection with any Transaction; (ii) seeking to prohibit or limit
\n materially the ownership or operation by the Company, Parent or any of
\n their subsidiaries of all or any of the business or assets of the
\n Company, Parent or any of their subsidiaries that is material to either
\n Parent and its subsidiaries or the Company and the Subsidiaries, in
\n either case, taken as a whole, or to compel the Company, Parent or any
\n of their subsidiaries, as a result of the Transactions, to dispose of
\n or to hold separate all or any portion of the business or assets of the
\n Company, Parent or any of their subsidiaries that is material to either
\n Parent and its subsidiaries or the Company and the Subsidiaries, in
\n each case, taken as a whole; (iii) seeking to impose or confirm any
\n limitation on the ability of Parent, Purchaser or any other affiliate
\n of Parent to exercise effectively full rights of ownership of any
\n Shares, including, without limitation, the right to vote any Shares
\n acquired by Purchaser pursuant to the Offer or otherwise on all matters
\n properly presented to the Company’s shareholders, including, without
\n limitation, the approval and adoption of this Agreement and the
\n Transactions; (iv) seeking to require divestiture by Parent, Purchaser
\n or any other affiliate of Parent of any Shares; or (v) which otherwise
\n would prevent or materially delay consummation of the Offer or the
\n Merger or would have a Material Adverse Effect;<\/p>\n
(b) there shall have been any statute, rule, regulation,
\n legislation or interpretation enacted, promulgated, amended, issued or
\n deemed applicable to (i) Parent, the Company or any subsidiary or
\n affiliate of Parent or the Company or (ii) any Transaction, by any
\n United States or non-United States legislative body or Governmental
\n Authority with appropriate jurisdiction, other than the routine
\n application of the waiting period provisions of the HSR Act and in the
\n other countries where a merger filing was<\/p>\n
A-2<\/p>\n
necessary or advisable, to the Offer, the Shareholder Agreements or
\n the Merger, that is reasonably likely to result, directly or
\n indirectly, in any of the consequences referred to in clauses (i)
\n through (v) of paragraph (a) above;<\/p>\n
(c) any Material Adverse Effect shall have occurred;<\/p>\n
(d) there shall have occurred (i) any general suspension of
\n trading in, or limitation on prices for, securities on the New York
\n Stock Exchange or the Pacific Exchange, Inc. (other than a shortening
\n of trading hours or any coordinated trading halt triggered solely as a
\n result of a specified increase or decrease in a market index), (ii) a
\n declaration of a banking moratorium or any suspension of payments in
\n respect of banks in the United States or Canada, (iii) any limitation
\n (whether or not mandatory) by any government or Governmental Authority,
\n on the extension of credit by banks or other lending institutions, (iv)
\n a commencement of a war or armed hostilities or other national or
\n international calamity directly or indirectly involving the United
\n States or Canada or (v) in the case of any of the foregoing existing on
\n the date hereof, a material acceleration or worsening thereof;<\/p>\n
(e) (i) it shall have been publicly disclosed, or Purchaser
\n shall have otherwise learned, that beneficial ownership (determined for
\n the purposes of this paragraph as set forth in Rule 13d-3 promulgated
\n under the Exchange Act) of 15% or more of the then-outstanding Shares
\n has been acquired by any person, other than Parent or any of its
\n affiliates, or (ii) (A) the Board, or any committee thereof, shall have
\n withdrawn or modified, in a manner adverse to Parent or Purchaser, the
\n approval or recommendation of the Offer, the Merger, or the Agreement,
\n or approved or recommended any Acquisition Proposal other than the
\n Offer or the Merger or (B) the Board, or any committee thereof, shall
\n have resolved to do any of the foregoing;<\/p>\n
(f) the representations and warranties of the Company set
\n forth in the Merger Agreement shall not be true and accurate (without
\n giving effect to any qualification as to “materiality” or “Material
\n Adverse Effect” set forth therein) as of the date of consummation of
\n the Offer as though made on or as of such date or the Company shall
\n have breached or failed to perform or comply with any material
\n obligation, agreement or covenant required by the Merger Agreement to
\n be performed of complied with by it except, in each case, (A) those
\n representations and warranties that address matters only as of a
\n particular date or only with respect to a specified period of time
\n which need only be true and accurate as of such date or with respect to
\n such period or (B) where the failure of such representations and
\n warranties to be true and correct, or the failure to perform or comply
\n with such obligations, agreements or covenants, would not, individually
\n or in the aggregate, have a Material Adverse Effect; or<\/p>\n
A-3<\/p>\n
(g) the Agreement shall have been terminated in accordance
\nwith its terms.<\/p>\n
which, in the reasonable judgment of Purchaser in any such case, and regardless
\nof the circumstances (including any action or inaction by Parent or any of its
\naffiliates) giving rise to any such condition, makes it inadvisable to proceed
\nwith such acceptance for payment.<\/p>\n
The foregoing conditions are for the sole benefit of Purchaser
\nand Parent and may be asserted by Purchaser or Parent regardless of the
\ncircumstances giving rise to any such condition or may be waived by Purchaser or
\nParent in whole or in part at any time and from time to time in their sole
\ndiscretion. The failure by Parent or Purchaser at any time to exercise any of
\nthe foregoing rights shall not be deemed a waiver of any such right; the waiver
\nof any such right with respect to particular facts and other circumstances shall
\nnot be deemed a waiver with respect to any other facts and circumstances; and
\neach such right shall be deemed an ongoing right that may be asserted at any
\ntime and from time to time.<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9052],"corporate_contracts_industries":[9468],"corporate_contracts_types":[9622,9626],"class_list":["post-43127","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-thomson-corp","corporate_contracts_industries-media__other","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43127","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43127"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43127"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43127"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43127"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}