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Agreement and Plan of Merger
Dated as of June 29, 2001
among
TMP Worldwide Inc.,
TMP Tower Corp.
and
HotJobs.com, Ltd.
================================================================================
<PAGE>
Table of Contents
Page
ARTICLE I THE MERGER.......................................................1
Section 1.1. The Merger...............................................1
----------
Section 1.2. Closing..................................................1
-------
Section 1.3. Effective Time...........................................2
--------------
Section 1.4. Certificate of Incorporation and Bylaws..................2
---------------------------------------
Section 1.5. Directors and Officers...................................2
----------------------
Section 1.6. Effects of the Merger....................................2
---------------------
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.....................2
Section 2.1. Effect on Capital Stock..................................3
-----------------------
(a) Capital Stock of Sub........................................3
--------------------
(b) Cancellation of Treasury Stock and Parent-Owned Stock.......3
-----------------------------------------------------
(c) Conversion of Company Common Stock..........................3
----------------------------------
Section 2.2. Exchange of Certificates.................................3
------------------------
(a) Exchange Agent..............................................3
--------------
(b) Exchange Procedures.........................................4
-------------------
(c) Distributions with Respect to Unexchanged Shares............5
------------------------------------------------
(d) No Further Ownership Rights in Company Common Stock.........5
---------------------------------------------------
(e) No Fractional Shares........................................5
--------------------
(f) Withholding Rights..........................................6
------------------
(g) Termination of Exchange Fund................................6
----------------------------
(h) No Liability................................................6
------------
(i) Investment of Exchange Fund.................................6
---------------------------
(j) Lost Certificates...........................................7
-----------------
(k) Stock Transfer Books........................................7
--------------------
ARTICLE III REPRESENTATIONS AND WARRANTIES...................................7
Section 3.1. Representations and Warranties of the Company...........7
---------------------------------------------
(a) Organization, Standing and Corporate Power..................7
------------------------------------------
(b) Subsidiaries................................................8
------------
(c) Capital Structure...........................................8
-----------------
(d) Authority; Noncontravention.................................9
---------------------------
(e) Company SEC Documents......................................11
---------------------
(f) Information Supplied.......................................12
--------------------
(g) Absence of Certain Changes or Events.......................12
------------------------------------
(h) Litigation.................................................13
----------
(i) Contracts..................................................13
---------
(j) Compliance with Laws.......................................14
--------------------
-i-
<PAGE>
(k) Absence of Changes in Benefit Plans........................15
-----------------------------------
(l) ERISA Compliance...........................................15
----------------
(m) Labor Relations............................................18
---------------
(n) Taxes......................................................19
-----
(o) No Excess Parachute Payments; No Section 162(m)
------------------------------------------------
Payments..................................................20
--------
(p) Title to Properties........................................20
-------------------
(q) Intellectual Property......................................20
---------------------
(r) Voting Requirements........................................21
-------------------
(s) Brokers....................................................22
-------
(t) Opinion of Financial Advisor...............................22
----------------------------
(u) Accounting Matters.........................................22
------------------
(v) Certain Business Practices.................................22
--------------------------
Section 3.2. Representations and Warranties of Parent and Sub........22
------------------------------------------------
(a) Organization, Standing and Corporate Power.................22
------------------------------------------
(b) Subsidiaries...............................................23
------------
(c) Capital Structure..........................................23
-----------------
(d) Authority; Noncontravention................................24
---------------------------
(e) Parent SEC Documents.......................................26
--------------------
(f) Information Supplied.......................................27
--------------------
(g) Absence of Certain Changes or Events.......................27
------------------------------------
(h) Litigation.................................................27
----------
(i) Compliance with Laws.......................................27
--------------------
(j) Accounting Matters.........................................28
------------------
(k) Tax Matters................................................29
-----------
(l) Brokers....................................................29
-------
(m) Labor Relations............................................29
---------------
(n) No Stockholder Vote........................................29
-------------------
(o) Ownership of Company Capital Stock.........................29
----------------------------------
(p) Intellectual Property.......................................30
---------------------
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS.......................31
Section 4.1. Conduct of Business....................................31
-------------------
(a) Conduct of Business by the Company.........................31
----------------------------------
(b) Conduct of Business by Parent..............................34
-----------------------------
Section 4.2. No Solicitation.........................................35
---------------
ARTICLE V ADDITIONAL AGREEMENTS...........................................36
Section 5.1. Preparation of the Form S-4 and the Proxy
------------------------------------------
Statement; Stockholders Meetings..............................36
--------------------------------
Section 5.2. Letters of the Company's Accountants....................38
------------------------------------
Section 5.3. Letters of Parent's Accountants.........................38
-------------------------------
Section 5.4. Access to Information; Confidentiality..................39
--------------------------------------
Section 5.5. Reasonable Best Efforts.................................40
-----------------------
Section 5.6. Stock Options; Employee Benefits........................41
--------------------------------
Section 5.7. Indemnification, Exculpation and Insurance..............43
------------------------------------------
-ii-
<PAGE>
Section 5.8. Fees and Expenses......................................45
-----------------
Section 5.9. Public Announcements...................................46
--------------------
Section 5.10. Affiliates.............................................46
----------
Section 5.11. Nasdaq Listing.........................................47
--------------
Section 5.12. Pooling of Interests...................................47
--------------------
Section 5.14 Publication of Combined Financial Results..............47
-----------------------------------------
Section 5.13. Tax Treatment..........................................47
-------------
Section 5.15. Notices of Certain Events..............................48
-------------------------
Section 5.16. Conveyance Taxes.......................................48
----------------
Section 5.17. [RESERVED].............................................48
Section 5.18. Voting Agreements......................................48
-----------------
Section 5.19. Section 16 Matters.....................................49
------------------
ARTICLE VI CONDITIONS PRECEDENT............................................49
Section 6.1. Conditions to Each Party's Obligation to Effect the
----------------------------------------------------
Merger..........................................................49
------
(a) Stockholder Approval.......................................49
--------------------
(b) Nasdaq Listing.............................................49
--------------
(c) HSR Act....................................................49
-------
(d) No Injunctions or Restraints...............................49
----------------------------
(e) Form S-4...................................................49
--------
(f) Pooling Letters............................................49
---------------
(g) No Governmental Litigation.................................49
--------------------------
(h) Governmental and Regulatory Approvals......................50
-------------------------------------
Section 6.2. Conditions to Obligations of Parent and Sub............50
-------------------------------------------
(a) Representations and Warranties.............................50
------------------------------
(b) Performance of Obligations of the Company..................50
-----------------------------------------
(c) Letters from Company Affiliates............................51
-------------------------------
(d) Consents...................................................51
--------
(e) Tax Opinion................................................51
-----------
Section 6.3. Conditions to Obligation of the Company................51
---------------------------------------
(a) Representations and Warranties.............................51
------------------------------
(b) Performance of Obligations of Parent and Sub...............51
--------------------------------------------
(c) Tax Opinion................................................52
-----------
Section 6.4. Frustration of Closing Conditions......................52
---------------------------------
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.........................52
Section 7.1. Termination.............................................52
-----------
Section 7.2. Effect of Termination...................................54
---------------------
Section 7.3. Amendment...............................................54
---------
Section 7.4. Extension; Waiver.......................................54
-----------------
ARTICLE VIII GENERAL PROVISIONS........................................55
Section 8.1. Nonsurvival of Representations and Warranties...........55
---------------------------------------------
Section 8.2. Notices.................................................55
-------
Section 8.3. Definitions.............................................56
-----------
Section 8.4. Interpretation..........................................57
--------------
-iii-
<PAGE>
Section 8.5. Counterparts............................................58
------------
Section 8.6. Entire Agreement; Third-Party Beneficiaries.............58
-------------------------------------------
Section 8.7. Governing Law...........................................58
-------------
Section 8.8. Assignment..............................................59
----------
Section 8.9. Enforcement.............................................59
-----------
Section 8.10. Severability............................................59
------------
-iv-
<PAGE>
-v-
<PAGE>
Exhibit 5.10(a) Form of Company Affiliate Letter
Exhibit 5.10(b) Form of Parent Affiliate Letter
Exhibit 5.18 Form of Company Voting Agreement
-vi-
<PAGE>
INDEX OF DEFINED TERMS
---------------------
DEFINED TERM SECTION
------------ -------
Adjusted Option 5.6(a)
Affiliate 8.3(a)
Agreement Preamble
Benefit Plans 3.1(l)(i)
Business Day 8.3(b)
Certificate of Merger 1.3
Certificates 2.2(b)
Closing 1.2
Closing Date 1.2
Code Preamble
Commonly Controlled Entity 3.1(l)(i)
Company Preamble
Company Common Stock Preamble
Company Disclosure Memorandum 3.1
Company Preferred Stock 3.1(c)
Company Recommendation 5.1(b)
Company SEC Documents 3.1(e)
Company Stock Plans 5.6(a)
Company Stockholder Approval 3.1(r)
Company Stockholders Meeting 5.1(b)
Company Voting Agreement 5.18
Confidentiality Agreement 5.4
DGCL 1.1
DOJ 5.5(c)
Dow Jones News Release 3.1(e)
Effective Time 1.3
Employees 5.6(f)
Environmental Laws 3.1(j)(ii)
ERISA 3.1(l)(i)
Exchange Act 3.1(d)
Exchange Agent 2.2(a)
Exchange Fund 2.2(a)
Exchange Ratio 2.1(c)
Expenses 5.8(b)
Filed Company SEC Document 3.1(e)
Filed Parent SEC Document 3.2(e)
Form S-4 3.1(f)
FTC 5.5(c)
-vii-
<PAGE>
DEFINED TERM SECTION
------------ -------
GAAP Preamble
Governmental Entity 3.1(d)
Hazardous Materials 3.1(j)(ii)
HSR Act 3.1(d)
Indemnified Party 5.7(a)
Intellectual Property Rights 3.1(q)
IRS 3.1(l)(i)
Knowledge 8.3(c)
Legal Provisions 3.1(j)(i)
Liens 3.1(d)
Material Adverse Effect 8.3(d)
Material Contracts 3.1(i)
Merger Preamble
Merger Consideration 2.1(c)
Parent Preamble
Parent Common Stock Preamble
Parent Disclosure Memorandum 3.2
Parent Preferred Stock 3.2(c)
Parent SEC Documents 3.2(e)
Parent Stock Issuance 3.2(p)
Parent Stock Plans 3.2(c)
Pension Plans 3.1(l)(i)
Permits 3.1(j)(i)
Person 8.3(e)
Proxy Statement 3.1(d)
Regulatory Law 5.5(b)
Release 3.1(j)(ii)
Restraints 6.1(d)
SEC 3.1(d)
Significant Subsidiary 8.3(f)
Securities Act 3.1(e)
Stock Option 5.6(a)
Sub Preamble
Subsidiary 8.3(g)
Superior Proposal 8.3(h)
Surviving Corporation 1.1
Takeover Proposal 4.2(a)
Tax Returns 3.1(n)
Taxes 3.1(n)
Termination Fee 5.8(b)
-viii-
<PAGE>
DEFINED TERM SECTION
------------ -------
Welfare Plans 3.1(l)(i)
-ix-
<PAGE>
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of June 29,
---------
2001, among TMP Worldwide Inc., a Delaware corporation ("PARENT"), TMP Tower
------
Corp., a Delaware corporation and a newly formed, direct, wholly-owned
subsidiary of Parent ("SUB"), and HotJobs.com, Ltd., a Delaware corporation (the
---
"COMPANY").
-------
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved and declared advisable this Agreement and the merger of Sub with
and into the Company (the "MERGER"), upon the terms and subject to the
------
conditions set forth in this Agreement, whereby each issued and outstanding
share of common stock, par value $0.01 per share, of the Company ("COMPANY
-------
COMMON STOCK"), other than Company Common Stock owned by Parent, Sub or the
------------
Company, will be converted into the right to receive common stock, par value
$0.001 per share, of Parent ("PARENT COMMON STOCK") as set forth herein;
-------------------
WHEREAS, for U.S. Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "CODE"), and that this Agreement shall be, and is
----
hereby, adopted as a plan of reorganization for purposes of Sections 354 and 361
of the Code; and
WHEREAS, for financial accounting purposes, it is intended that the Merger
will be accounted for as a pooling of interests transaction under generally
accepted accounting principles ("GAAP").
----
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the conditions set
----------
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Sub shall be merged with and into the Company at the Effective
Time. Following the Effective Time, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the
"SURVIVING CORPORATION") and shall succeed to and assume all the rights and
---------------------
obligations of Sub in accordance with the DGCL.
Section 1.2. Closing. The closing of the Merger (the "CLOSING") will take
------- -------
place at 10:00 a.m. on a date to be specified by the parties (the "CLOSING
-------
DATE"), which shall be no later than the second Business Day after satisfaction
----
or waiver (subject to applicable law) of the conditions set forth in ARTICLE VI
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those conditions), at the
offices of Fulbright &
1
<PAGE>
Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103, unless another date
or place is agreed to by the parties hereto.
Section 1.3. Effective Time. Subject to the provisions of this Agreement,
--------------
as soon as practicable on the Closing Date, the parties shall file a certificate
of merger (the "CERTIFICATE OF MERGER") executed in accordance with the relevant
---------------------
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware, or at such other time as Parent and the Company shall agree and
specify in the Certificate of Merger (the time the Merger becomes effective
being the "EFFECTIVE TIME").
--------------
Section 1.4. Certificate of Incorporation and Bylaws.
---------------------------------------
(a) The Certificate of Incorporation of the Surviving Corporation shall be
amended in the Merger to read substantially as the Certificate of Incorporation
of Sub until thereafter amended as provided therein or by applicable law.
(b) The Bylaws of Sub, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving Corporation until thereafter amended
as provided therein or by applicable law.
Section 1.5. Directors and Officers.
----------------------
(a) The directors of Sub immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
(b) The officers of the Company immediately prior to the Effective Time
shall be the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
Section 1.6. Effects of the Merger. At and after the Effective Time, the
---------------------
Merger shall have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2
<PAGE>
Section 2.1. Effect on Capital Stock. As of the Effective Time, by virtue
-----------------------
of the Merger and without any action on the part of the holder of any shares of
Company Common Stock or any shares of capital stock of Parent or Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
--------------------
capital stock of Sub shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par value $.01
per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each
-----------------------------------------------------
share of Company Common Stock that is owned by the Company, Parent or Sub
shall automatically be canceled and retired and shall cease to exist, and
no Parent Common Stock or other consideration shall be delivered in
exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company Common
----------------------------------
Stock issued and outstanding immediately prior to the Effective Time
(other than shares to be canceled in accordance with Section 2.1(b)) shall
be converted into the right to receive a fraction of a validly issued,
fully paid and nonassessable share of Parent Common Stock equal to 0.2195
(the "EXCHANGE RATIO" and, together with any cash to be paid in lieu of
--------------
fractional shares of Parent Common Stock to be paid pursuant to Section
2.2(e), the "MERGER CONSIDERATION").
--------------------
As of the Effective Time, all such shares of Company Common Stock
shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate which
immediately prior to the Effective Time represented any such shares of
Company Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration upon surrender of
such certificate in accordance with Section 2.2, without interest.
Notwithstanding the foregoing, if between the date of this Agreement
and the Effective Time the outstanding shares of Parent Common Stock or
Company Common Stock shall have been changed into a different number of
shares or a different class, by reason of the occurrence or record date of
any stock dividend, subdivision, reclassification, recapitalization,
split, combination, exchange of shares or similar transaction, the
Exchange Ratio shall be appropriately adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split,
combination, exchange or similar transaction.
Section 2.2. Exchange of Certificates.
------------------------
(a) Exchange Agent. As of the Effective Time, Parent shall deposit
--------------
with The Bank of New York or such other bank or trust company as may be
designated by Parent (the "EXCHANGE AGENT") and which shall be reasonably
--------------
acceptable to the Company, for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance with this ARTICLE II,
through the Exchange Agent, certificates representing the shares of
3
<PAGE>
Parent Common Stock (such shares of Parent Common Stock, together with any
dividends or distributions with respect thereto with a record date after
the Effective Time and any cash payments in lieu of any fractional shares
of Parent Common Stock, being hereinafter referred to as the "EXCHANGE
--------
FUND") issuable pursuant to Section 2.1 in exchange for outstanding shares
----
of Company Common Stock. Parent agrees to make available to the Exchange
Agent from time to time, as needed, cash sufficient to pay cash in lieu of
fractional shares pursuant to Section 2.2(e) and any dividends and other
distributions pursuant to Section 2.2(c).
(b) Exchange Procedures. As soon as reasonably practicable after the
-------------------
Effective Time, Parent shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior
to the Effective Time represented outstanding shares of Company Common
Stock (the "CERTIFICATES") whose shares were converted into the right to
------------
receive the Merger Consideration pursuant to Section 2.1(c), (i) a letter
of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery
of the Certificates to the Exchange Agent and shall be in such form and
have such other provisions as Parent may reasonably specify and shall be
reasonably acceptable to the Company) and (ii) instructions for use in
surrendering the Certificates in exchange for certificates representing
the Merger Consideration. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with such letter of transmittal, duly
executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Certificate shall be entitled to
receive in exchange therefor (x) a certificate representing that number of
whole shares of Parent Common Stock which such holder has the right to
receive pursuant to the provisions of this ARTICLE II after taking into
account all the shares of Company Common Stock then held by such holder
under all such Certificates so surrendered, (y) cash in lieu of fractional
shares of Parent Common Stock to which such holder is entitled pursuant to
Section 2.2(e), and (z) any dividends or other distributions to which such
holder is entitled pursuant to Section 2.2(c) (in each case after giving
effect to any required withholding taxes), and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of
ownership of Company Common Stock which is not registered in the transfer
records of the Company, a certificate representing the proper number of
shares of Parent Common Stock may be issued to a Person other than the
Person in whose name the Certificate so surrendered is registered, if,
upon presentation to the Exchange Agent, such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the
Person requesting such issuance shall pay any transfer or other taxes
required by reason of the issuance of shares of Parent Common Stock to a
Person other than the registered holder of such Certificate or establish
to the reasonable satisfaction of Parent that such tax has been paid or is
not applicable. Notwithstanding anything to the contrary contained herein,
no certificate representing Parent Common Stock or cash in lieu of a
fractional share interest shall be delivered to a Person who is a
"affiliate" (as contemplated by Section 5.10(a) hereof) of the Company
unless such affiliate has theretofore executed and delivered to Parent the
agreement referred to in Section 5.10(a). Until surrendered as
contemplated by this Section 2.2(b), each Certificate shall be deemed at
any time after the Effective Time to represent only the right to
receive upon such surrender
4
<PAGE>
the Merger Consideration, cash in lieu of any fractional shares of Parent
Common Stock as contemplated by Section 2.2(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(c).
No interest will be paid or will accrue on any cash payable to holders of
Certificates pursuant to Section 2.2(c) or Section 2.2(e).
(c) Distributions with Respect to Unexchanged Shares. No dividends
------------------------------------------------
or other distributions with respect to Parent Common Stock with a record
date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent Common
Stock represented thereby, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 2.2(e) until
the holder of record of such Certificate shall surrender such Certificate
in accordance with this ARTICLE II. Subject to the effect of applicable
escheat or similar laws, following surrender of any such Certificate,
there shall be paid to the record holder of the certificate representing
whole shares of Parent Common Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and the amount of dividends
or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Parent Common Stock,
less the amount of any withholding taxes which may be required thereon,
and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable
with respect to such whole shares of Parent Common Stock, less the amount
of any withholding taxes which may be required thereon.
(d) No Further Ownership Rights in Company Common Stock. All shares
---------------------------------------------------
of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this ARTICLE II (including
any cash paid pursuant to Section 2.2(c) or Section 2.2(e)) shall be
deemed to have been issued (and paid) in full satisfaction of all rights
pertaining to the shares of Company Common Stock previously represented by
such Certificates, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a
record date prior to the Effective Time which may have been declared or
made by the Company on such shares of Company Common Stock in accordance
with the terms of this Agreement or prior to the date of this Agreement
and which remain unpaid at the Effective Time.
(e) No Fractional Shares.
--------------------
(i) No certificates or scrip representing fractional shares of
Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution of Parent shall relate to such
fractional share interests and such fractional share interests will not
entitle the owner thereof to vote or to any rights of a stockholder of
Parent.
5
<PAGE>
(ii) Notwithstanding any other provision of this Agreement, each
holder of shares of Company Common Stock exchanged pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of
Parent Common Stock (after taking into account all Certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in
an amount, less the amount of any withholding taxes, as contemplated by
Section 2.2(f) below, which may be required thereon, equal to such
fractional part of a share of Parent Common Stock multiplied by the per
share closing price of Parent Common Stock on the Nasdaq National Market
on the Closing Date, as such price is reported by THE WALL STREET JOURNAL
(or, if not reported thereby, any other authoritative source).
(f) Withholding Rights. Each of the Surviving Corporation and Parent
------------------
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code and the rules and
regulations promulgated thereunder, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the
Surviving Corporation or Parent, as the case may be, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to
the holder of the shares of Company Common Stock in respect of which such
deduction and withholding was made by the Surviving Corporation or Parent,
as the case may be.
(g) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to Parent, upon demand,
and any holders of the Certificates who have not theretofore complied with
this ARTICLE II shall thereafter look only to Parent for, and Parent shall
remain liable for, payment of their claim for Merger Consideration, any
cash in lieu of fractional shares of Parent Common Stock and any dividends
or distributions with respect to Parent Common Stock. Any such portion of
the Exchange Fund remaining unclaimed by holders of shares of Company
Common Stock immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Entity shall,
to the extent permitted by law, become the property of the Surviving
Corporation free and clear of any claims or interest of any Person
previously entitled thereto.
(h) No Liability. None of Parent, Sub, the Company or the Exchange
------------
Agent shall be liable to any Person in respect of any shares of Parent
Common Stock (or dividends or distributions with respect thereto) or cash
in lieu of fractional shares of Parent Common Stock or cash from the
Exchange Fund, in each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(i) Investment of Exchange Fund. The Exchange Agent shall invest any
---------------------------
cash included in the Exchange Fund, as directed by Parent, on a daily
basis, provided that no such investment or loss thereon shall affect the
amounts payable or the timing of the amounts
6
<PAGE>
payable pursuant to the provisions of this Article II. Any interest and
other income resulting from such investments shall be paid to Parent.
(j) Lost Certificates. If any Certificate shall have been lost,
-----------------
stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a
bond in such reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration and any cash in
lieu of fractional shares, and unpaid dividends and distributions on
shares of Parent Common Stock deliverable in respect thereof, in each case
pursuant to this Agreement.
(k) Stock Transfer Books. The stock transfer books of the Company
--------------------
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of shares of Company Common Stock
thereafter on the records of the Company. On or after the Effective Time,
any Certificates presented to the Exchange Agent or the Surviving
Corporation for any reason shall be converted into the Merger
Consideration with respect to the shares of Company Common Stock formerly
represented thereby (including any cash in lieu of fractional shares of
Parent Common Stock to which the holders thereof are entitled pursuant to
Section 2.2(e)) and any dividends or other distributions to which the
holders thereof are entitled pursuant to Section 2.2(c).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Company. Except as
---------------------------------------------
expressly set forth in the Filed Company SEC Documents filed since December 31,
2000 or on the disclosure memorandum delivered by the Company to Parent
immediately prior to the execution of this Agreement and initialed on behalf of
Parent and the Company, which disclosure memorandum specifies the section or
subsection of this Agreement to which the exception relates (the "COMPANY
-------
DISCLOSURE MEMORANDUM"), the Company represents and warrants to Parent and Sub
---------------------
as follows:
(a) Organization, Standing and Corporate Power. Each of the Company
------------------------------------------
and each of its Significant Subsidiaries is a corporation duly organized,
validly existing and, to the extent applicable, in good standing under the
laws of the jurisdiction in which it is organized and has all requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business as now being conducted. Each of the Company and
each of its Significant Subsidiaries is duly qualified or licensed to do
business and, to the extent applicable, is in good standing in each
jurisdiction in which the nature of its business or the ownership, leasing
or operation of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed
7
<PAGE>
individually or in the aggregate would not reasonably be expected to have
a Material Adverse Effect on the Company. The Company has made available
to Parent prior to the execution of this Agreement complete and correct
copies of its Certificate of Incorporation and Bylaws, and the comparable
organizational documents of each of its Significant Subsidiaries, in each
case as amended to the date hereof.
(b) Subsidiaries. All the outstanding shares of capital stock of, or
------------
other equity interests in, each Subsidiary have been validly issued and
are fully paid and nonassessable and are owned directly or indirectly by
the Company free and clear of all Liens, and free of any restriction on
the right to vote, sell or otherwise dispose of such capital stock or
other ownership interests. Other than such Subsidiaries of the Company,
neither the Company nor any Subsidiary owns a greater than 20% equity
interest or similar interest in, or any interest convertible into or
exchangeable or exercisable for a greater than 20% equity or similar
interest in, any Person. Neither the Company nor any of its Subsidiaries
is subject to any obligation or requirement to make any material loan,
capital contribution investment or similar expenditure to or in any Person
in excess of $500,000 individually or $1,000,000 to all Persons, except
for loans, capital contributions, investments or similar expenditures by
the Company or any Company Subsidiary to any Company Subsidiary. Except as
provided by applicable law, there are no restrictions of any kind which
prevent the payment of dividends by any Subsidiary.
(c) Capital Structure. The authorized capital stock of the Company
-----------------
consists of 100,000,000 shares of Company Common Stock and 10,000,000
shares of preferred stock, par value $.01 per share ("COMPANY PREFERRED
-----------------
STOCK"). At the close of business on June 25, 2001, (i) 37,653,461 shares
-----
of Company Common Stock were issued and outstanding, none of which shares
are subject to restrictions (other than with respect to Rule 144 of the
Securities Act) or forfeiture risks, (ii) no shares of Company Common
Stock were held by the Company in its treasury, (iii) 7,080,696 shares of
Company Common Stock were issuable pursuant to outstanding Company Stock
Options, and (iv) no shares of Company Preferred Stock were issued or
outstanding. Since June 25, 2001, except as permitted by Section
4.1(a)(ii) of this Agreement, (i) there have been no issuances of capital
stock of the Company (or securities convertible into or exchangeable or
exercisable for such capital stock) other than issuances of Company Common
Stock pursuant to the exercise of options outstanding on June 25, 2001
under Company Stock Plans, and (ii) no options, warrants, securities
convertible into, or commitments with respect to the issuance of shares of
Company Common Stock have been issued, granted or made. All outstanding
shares of capital stock of the Company are, and all shares which may be
issued pursuant to the Company Stock Plans will be, when issued in
accordance with the terms thereof, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. There are no
bonds, debentures, notes or other indebtedness of the Company having the
right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which stockholders of the Company may
vote. Except (i) as set forth above in this Section 3.1(c), and (ii) for
shares of Company Common Stock reserved for issuance
8
<PAGE>
under any plan or arrangement providing for the grant of options to
purchase shares of Company Common Stock to current or former officers,
directors, employees or consultants of the Company or its Subsidiaries or
resulting from the issuance of shares of Company Common Stock pursuant to
Stock Options outstanding as of the close of business on June 25, 2001,
(x) there are not issued, issuable, reserved for issuance or outstanding
(A) any shares of capital stock or other voting securities of the Company,
(B) any securities of the Company convertible into or exchangeable or
exercisable for shares of capital stock or voting securities of the
Company, (C) any warrants, calls, options or other rights to acquire from
the Company or any Subsidiary of the Company, and no obligation of the
Company or any Subsidiary of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable or
exercisable for capital stock or voting securities of the Company or (D)
stock appreciation rights or rights to receive shares of Company Common
Stock on a deferred basis granted under the Company Stock Plans or
otherwise; and (y) there are not any outstanding obligations of the
Company or any Subsidiary of the Company to repurchase, redeem or
otherwise acquire any such securities or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities. Neither the
Company nor any Subsidiary is a party to any voting agreement with respect
to the voting of any such securities. Except as set forth in this Section
3.1(c), there are no issued, issuable, reserved for issuance or
outstanding (A) securities of the Company or any Subsidiary of the Company
convertible into or exchangeable or exercisable for shares of capital
stock or other voting securities or ownership interests in any Subsidiary
of the Company, (B) warrants, calls, options or other rights to acquire
from the Company or any Subsidiary of the Company, and no obligation of
the Company or any Subsidiary of the Company to issue, any capital stock,
voting securities or other ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital stock,
voting securities or ownership interests in, any Subsidiary of the Company
or (C) obligations of the Company or any Subsidiary of the Company to
repurchase, redeem or otherwise acquire any such outstanding securities of
Subsidiaries of the Company or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities. Except as set forth above
in this Section 3.1(c), neither the Company nor any Subsidiary is a party
to or bound by any agreement regarding any securities of the Company or
any Subsidiary of the Company.
(d) Authority; Noncontravention. The Company has the requisite
---------------------------
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the Company
and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, subject, in the case of the Merger, to receipt of the
Company Stockholder Approval and the filing of the Certificate of Merger.
The Board of Directors of the Company has unanimously approved this
Agreement, determined that this Agreement and the transactions
contemplated hereby are fair to and in the best interests of the Company
and its stockholders and declared that the Merger is
9
<PAGE>
advisable, provided that after the date hereof, the Board of Directors
of the Company may withdraw its recommendation as provided in
Section 4.2 hereof. Assuming that the representation of Parent contained
in Section 3.2(n) is correct, the Board of Directors of the Company has
taken all action necessary to render inapplicable, as it relates to the
execution, delivery and performance of this Agreement and the Company
Voting Agreements and the consummation of the Merger and the other
transactions contemplated hereby and thereby, Section 203 of the DGCL. To
the Company's Knowledge, except for Section 203 of the DGCL (the
restrictions of which have been rendered inapplicable), no state takeover
statute is applicable to this Agreement, the Merger, or the other
transactions contemplated hereby or thereby. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by each of the other parties thereto, constitutes
legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with its terms (except insofar as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or
by principles governing availability of equitable remedies).
The execution and delivery of this Agreement does not, and the
consummation of the Merger and the other transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of
a benefit under, or result in the creation of any pledge, claim, lien,
charge, encumbrance or security interest of any kind or nature whatsoever
(collectively, "LIENS") in or upon any of the properties or assets of the
-----
Company or any Subsidiary of the Company under, (i) the Company's
Certificate of Incorporation or Bylaws or the comparable organizational
documents of any of its Subsidiaries, (ii) any loan or credit agreement,
bond, note, mortgage, indenture, lease or other contract, agreement,
obligation, commitment, arrangement, understanding, instrument, permit or
license applicable to the Company or any of its Subsidiaries or their
respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following paragraph, any (A)
statute, law, ordinance, rule or regulation or (B) judgment, order or
decree, in each case applicable to the Company or any of its Subsidiaries
or their respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
cancellations, accelerations, losses or Liens that individually or in the
aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company or to prevent or materially delay the consummation
of the transactions contemplated by this Agreement.
No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filing with, any
supranational, national, state, municipal, local or foreign government,
any instrumentality, subdivision, court, administrative agency or
commission or other authority thereof, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (each, a "GOVERNMENTAL
------------
ENTITY") is required by or with respect to the Company or any of
10
<PAGE>
its Subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the Merger
or the other transactions contemplated by this Agreement, except for (1)
the filing of a premerger notification and report form by the Company
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR ACT") and any applicable filings and approvals under similar
-------
foreign antitrust laws and regulations, (2) the filing with the Securities
and Exchange Commission (the "SEC") of (A) a proxy statement relating to
---
the meeting of the Company's stockholders to be held in connection with
the Merger (as amended or supplemented from time to time, the "PROXY
-----
STATEMENT") and (B) such reports under Section 13(a), 13(d), 15(d) or
---------
16(a) of the Securities Exchange Act of 1934 as amended, and the rules and
regulations promulgated thereunder (the "EXCHANGE ACT"), as may be
-------------
required in connection with this Agreement and the transactions
contemplated by this Agreement, (3) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business, (4) such filings with
Governmental Entities to satisfy the applicable requirements of state
securities or "blue sky" law and (5) such other consents, approvals,
orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect on the
Company or to prevent or materially delay the consummation of the
transactions contemplated by this Agreement.
(e) Company SEC Documents. The Company has timely filed all reports,
---------------------
schedules, forms, statements and other documents (including exhibits and
other information incorporated therein) with the SEC required to be filed
by the Company since January 1, 1999 (the "COMPANY SEC DOCUMENTS"). No
---------------------
Company Subsidiary is required to file any form, report, registration
statement, prospectus or other document with the SEC. As of their
respective dates (and, if amended or superseded by a filing prior to the
date of this Agreement or the Closing Date, then on the date of such
filing), (i) the Company SEC Documents complied in all material respects
with the requirements of the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (the "SECURITIES ACT") or the
--------------
Exchange Act, as the case may be, applicable to such Company SEC
Documents, and none of the Company SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
The Company SEC Documents filed since December 31, 2000, together with any
public announcements in a news release issued by the Dow Jones news
service, PR Newswire or any equivalent service (collectively, a "DOW JONES
---------
NEWS RELEASE") made by the Company after the date hereof taken as a whole,
------------
as of the Effective Time will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances existing as of the Effective Time, not misleading. The
financial statements (including the related notes) of the Company included
in the Company SEC Documents, as of their respective dates, complied in
all material respects with applicable accounting requirements
11
<PAGE>
and the published rules and regulations of the SEC with respect thereto,
were prepared in accordance with GAAP, applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and (except as amended or superseded by a filing prior to the
date of this Agreement) fairly presented the financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments not material in amount). Except (i) as set
forth in the Filed Company SEC Documents filed since December 31, 2000 or
(ii) for the transactions contemplated by this Agreement, neither the
Company nor any of its Subsidiaries has any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company. For purposes of this Agreement, a
"FILED COMPANY SEC DOCUMENT" shall mean a Company SEC Document filed by
---------------------------
the Company and publicly available prior to the date of this Agreement.
(f) Information Supplied. None of the information to be supplied by
--------------------
the Company specifically for inclusion or incorporation by reference in
the registration statement on Form S-4 to be filed with the SEC by Parent
in connection with the issuance of Parent Common Stock in the Merger (the
"Form S-4") will, at the time the Form S-4 is filed with the SEC, at any
--------
time it is supplemented or amended or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading and the Proxy Statement will
not, on the date it is first mailed to the Company's stockholders and at
the time of the Company Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading,
except that no representation or warranty is made by the Company with
respect to statements made or incorporated by reference therein based on
information supplied by Parent or Sub specifically for inclusion or
incorporation by reference in the Proxy Statement. The Proxy Statement
will comply in all material respects with the requirements of the Exchange
Act, as applicable to the Company, except that no representation or
warranty is made by the Company with respect to statements made or
incorporated by reference therein based on information supplied by Parent
or Sub specifically for inclusion or incorporation by reference in the
Proxy Statement.
(g) Absence of Certain Changes or Events. Except as set forth in the
------------------------------------
Filed Company SEC Documents filed after December 31, 2000 and for
transactions expressly contemplated or permitted by this Agreement, since
December 31, 2000 (i) the Company and its Subsidiaries have conducted
their businesses in the ordinary course consistent with past practice and
(ii) there has not been a Material Adverse Effect on the Company. Except
as set forth in the Filed Company SEC Documents and for actions in the
ordinary course of business, since December 31, 2000, neither the Company
nor any Company Subsidiary has
12
<PAGE>
taken any action, or failed to take any action, which if such action or
failure occurred during the period from the date of this Agreement to the
Effective Time would constitute a breach or violation of Section 4.1(a)
(i), (ii), (iv), (vi), (viii), (ix), (xi), (xii), (xiii) or (xiv), and
neither the Company nor any Company Subsidiary has authorized, or
committed or agreed, to take any of such actions.
(h) Litigation. There is no suit, action or proceeding pending or,
----------
to the Knowledge of the Company, overtly threatened against or affecting
the Company or any of its Subsidiaries or any of their respective
properties that individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect on the Company, nor is there
any judgment, decree, injunction, rule, order, action, demand or
requirement of any Governmental Entity or arbitrator outstanding against,
or, to the Knowledge of the Company, any investigation by any Governmental
Entity involving, the Company or any of its Subsidiaries that individually
or in the aggregate would reasonably be expected to have a Material
Adverse Effect on the Company.
(i) Contracts. Except as set forth in Section 3.1(i) of the Company
---------
Disclosure Memorandum or listed as an exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, neither the
Company nor any Company Subsidiary is a party to, and none of their
respective properties or assets are bound by, any "material contract" (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (the
contracts listed in Section 3.1(i) of the Company Disclosure Memorandum
being referred to as the "MATERIAL CONTRACTS"). Each such Material
------------------
Contract is a valid, binding and enforceable obligation of the Company or
its Subsidiaries and, to the Company's Knowledge, of the other party or
parties thereto, in accordance with its terms, and in full force and
effect, except where the failure to be valid, binding, enforceable and in
full force and effect would not reasonably be expected to have a Material
Adverse Effect on the Company and to the extent as may be limited by
applicable bankruptcy, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights generally or by general principles of
equity. The Company has not received any notice from any other party to
any such Material Contract, and otherwise has no Knowledge that such third
party intends to terminate, or not renew, any such Material Contract. As
of the date hereof, the Company has made available to Parent true and
correct copies of all such contracts. Neither the Company nor any of its
Subsidiaries, and, to the Knowledge of the Company, no other party
thereto, is in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice or both
would cause such a violation of or default under) any loan or credit
agreement, bond, note, mortgage, indenture, lease or other contract,
agreement, obligation, commitment, arrangement, understanding, instrument,
permit or license to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that
individually or in the aggregate would not reasonably be expected to have
a Material Adverse Effect on the Company. Neither the Company nor any of
its Subsidiaries is a party to or otherwise bound by any agreement or
covenant not to compete or by any agreement or covenant restricting the
development, marketing or distribution of the
13
<PAGE>
Company's or its Subsidiaries' products or services or the conduct of
their businesses in a manner that would be materially adverse to the
business of the Company and its Subsidiaries taken as a whole.
(j) Compliance with Laws.
--------------------
(i) Each of the Company and its Subsidiaries is in compliance with
all statutes, laws, ordinances, rules, regulations, judgments, orders and
decrees of any Governmental Entity (other than Environmental Laws)
(collectively, "LEGAL PROVISIONS") applicable to its business or
----------------
operations, except for instances of noncompliance that individually or in
the aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company. Since January 1, 1998, neither the Company nor any
of its Subsidiaries has received any written notice from any Governmental
Entity regarding any actual or possible violation of, or failure to comply
with, any Legal Provisions, except for such violations or failures to
comply that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect on the Company. Each of the
Company and its Subsidiaries has in effect all approvals, authorizations,
certificates, filings, franchises, licenses, notices, permits and rights
of or with all Governmental Entities, including all authorizations under
Environmental Laws ("PERMITS"), necessary for it to own, lease or operate
-------
its properties and assets and to carry on its business and operations as
now conducted, except for the failure to have such Permits that
individually or in the aggregate would not reasonably be expected to have
a Material Adverse Effect on the Company. There has occurred no default
under, or violation of, any such Permit, except for defaults under, or
violations of, Permits that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on the Company.
The Merger, in and of itself, would not cause the revocation or
cancellation of any such Permit that individually or in the aggregate is
reasonably likely to have a Material Adverse Effect on the Company.
(ii) Except for those matters that individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect on the
Company: (A) each of the Company and its Subsidiaries is, and has been, in
compliance with all applicable Environmental Laws; (B) during the period
of ownership or operation by the Company or its Subsidiaries of any of its
currently or previously owned, leased or operated properties, no Hazardous
Material has been treated or disposed of, and there have been no Releases
or threatened Releases of Hazardous Material at, in, on, under or
affecting such properties or any contiguous site; (C) prior to the period
of ownership or operation by the Company or its Subsidiaries of any of its
currently or previously owned, leased or operated properties, to the
Knowledge of the Company, no Hazardous Material was treated, stored or
disposed of, and there were no Releases of Hazardous Material at, in, on,
under or affecting any such property or any contiguous site; and (D)
neither the Company nor its Subsidiaries have received any written notice
of, or entered into or assumed by contract, judicial or administrative
settlement, or operation of law any indemnification obligation, order,
settlement or decree relating to: (1) any violation of any Environmental
Laws or the institution or pendency of
14
<PAGE>
any suit, action, claim, proceeding or investigation by any Governmental
Entity or any third party in connection with any alleged violation of
Environmental Laws or any Release of Hazardous Materials, (2) the response
to or remediation of Hazardous Material at or arising from any of the
Company's or its Subsidiaries' activities or properties or any other
properties or (3) payment for any response action relating to or
remediation of Hazardous Material at or arising from any of the Company's
or its Subsidiaries' properties, activities, or any other properties. The
term "ENVIRONMENTAL LAWS" means all applicable U.S., state, local and
-------------------
foreign laws, statutes, treaties, rules, codes, ordinances, regulations,
certificates, orders, directives, interpretations, licenses, permits and
other authorizations of any Governmental Entity and judgments, decrees,
injunctions, writs, orders or like action of any court, arbitrator or
other administrative, judicial or quasi-judicial tribunal or agency of
competent jurisdiction, including any thereof of the European Community or
the European Union having the force of law and being applicable to the
Company or any of its Subsidiaries, dealing with the protection of health,
welfare or the environment, including, without limitation, flood,
pollution or disaster laws and health and environmental protection laws
and regulations, and all other rules and regulations promulgated
thereunder and any provincial, municipal, water board or other local
statute, law, rule, regulation or ordinance relating to public or employee
health, safety or the environment; including all laws relating to Releases
to air, water, land or groundwater, relating to the withdrawal or use of
groundwater, and relating to the use, handling, transportation,
manufacturing, introduction into the stream of commerce or disposal of
Hazardous Materials.
The term "Hazardous Materials" means any chemical, material, liquid,
-------------------
gas, substance or waste, whether naturally occurring or man-made, that is
prohibited, limited or regulated by or pursuant to an Environmental Law
applicable to the Company, any Company Subsidiary or their respective
properties.
The term "Release" means the spilling, leaking, discharging,
-------
injecting, emitting and/or disposing and placement of a Hazardous Material
in any location that poses a threat thereof.
(k) Absence of Changes in Benefit Plans. There has not been, since
-----------------------------------
December 31, 2000, any adoption or amendment in any material respect by
the Company or any of its Subsidiaries of any collective bargaining
agreement or any Benefit Plan, or any material change in any actuarial or
other assumption used to calculate funding obligations with respect to any
Pension Plans, or any change in the manner in which contributions to any
Pension Plans are made or the basis on which such contributions are
determined.
(l) ERISA Compliance.
----------------
(i) Section 3.1(l)(i) of the Company Disclosure Memorandum contains
a list of each pension, retirement, savings, profit sharing, medical,
dental, health, disability, life, death benefit, group insurance, deferred
compensation, fringe, change in control, retiree, stock
15
<PAGE>
option, stock purchase, restricted stock, bonus or incentive, vacation,
sick leave, severance pay, employment or termination, and other material
employee benefit or compensation plan, arrangement, contract, agreement
(including pursuant to any collective bargaining agreement), policy,
practice or commitment, whether formal or informal, written or oral, in
each case that are binding commitments of the Company and its Subsidiaries
(but, for purposes hereof, excluding any non-material plan or program
maintained by the Company or its Subsidiaries for the benefit of non-U.S.
employees), under which (1) current or former employees, officers,
directors or independent contractors of the Company or any of its
Subsidiaries (or their beneficiaries) participate or are entitled to
participate by reason of their relationship with the Company or any of its
Subsidiaries, (2) to which the Company or any of its Subsidiaries is a
party or a sponsor or a fiduciary thereof or by which the Company or any
of its Subsidiaries (or any of their rights, properties or assets) is
currently bound or (3) with respect to which the Company or any of its
Subsidiaries has any obligation to make payments or contributions,
including, without limitation, all "employee pension benefit plans" (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (sometimes referred to herein as "PENSION
----- -------
PLANS"), "employee welfare benefit plans" (as defined in Section 3(1) of
-----
ERISA) (sometimes referred to herein as "WELFARE PLANS") (all of the
--------------
foregoing referred to collectively herein as "BENEFIT PLANS"), and all
--------------
other Benefit Plans maintained, or contributed to, by the Company, its
Subsidiaries or any Person or entity that, together with the Company, is
treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code (a "COMMONLY CONTROLLED ENTITY") for the benefit of any current or
----------------------------
former officers, directors, employees or independent contractors of the
Company and its Subsidiaries (or their beneficiaries) (including any such
plans maintained for current or former foreign employees). The Company has
made available to Parent true, complete and correct copies of (1) each
Benefit Plan (or, in the case of any unwritten Benefit Plans, descriptions
thereof), (2) the most recent annual report on Form 5500 required to be
filed with the Internal Revenue Service (the "IRS") with respect to each
---
Benefit Plan, (3) the most recent summary plan description for each
Benefit Plan for which such summary plan description is required and (4)
each trust agreement and group annuity contract relating to any Benefit
Plan. Each Benefit Plan has been administered in all material respects in
accordance with its terms. The Company, its Subsidiaries and all the
Benefit Plans are all in compliance in all material respects with the
applicable provisions of ERISA, the Code and all other applicable Legal
Provisions. Notwithstanding anything contained herein to the contrary,
with respect to any Benefit Plan maintained, sponsored or contributed to
primarily for the benefit of persons residing and providing services to
the Company or its Subsidiaries outside of the United States, the term
"Benefit Plan" as used herein shall only include such non-United States
Benefit Plans that are material Benefit Plans of the Company or its
Subsidiaries.
(ii) All Pension Plans are the subject of a determination letter
from the IRS to the effect that such Pension Plans are qualified (or has
time remaining to apply under applicable regulations or IRS pronouncements
to make any amendment necessary to obtain a favorable determination or
opinion letter) and exempt from United States Federal income taxes under
16
<PAGE>
Sections 401(a) and 501(a), respectively, of the Code, and no such
determination letter has been revoked nor to the Company's Knowledge, has
any event occurred since the date of its most recent determination letter
or application therefor that would adversely affect its qualification.
(iii) Neither the Company nor any Commonly Controlled Entity has (1)
at any time in the six years prior to the Closing Date maintained or
contributed to any Benefit Plan that is subject to Title IV of ERISA,
Section 302 of ERISA or Section 412 of the Code or (2) has any unsatisfied
liability under Title IV of ERISA, Section 302 of ERISA, Section 412 of
the Code or Section 4980B of the Code. None of the Company, its
Subsidiaries, or any Commonly Controlled Entity contributes to a
"multiemployer plan" as defined in Section 3(37) of ERISA.
(iv) With respect to any Benefit Plan (other than employment
agreements or any other individual contract), there are no understandings,
agreements or undertakings, written or oral, that would prevent any such
Benefit Plan (including any such plan covering retirees or other former
employees, other than agreements with individuals) from being amended or
terminated without material liability to the Company on or at any time
after the Effective Time.
(v) No pending or, to the Knowledge of the Company, overtly
threatened disputes, lawsuits, claims (other than routine claims for
benefits), investigations, audits or complaints to, or by, any Person or
Governmental Entity have been filed or are pending with respect to any
Benefit Plans of the Company or any of its Subsidiaries in connection with
any Benefit Plan or the fiduciaries or administrators thereof that could
reasonably be expected to give rise to a material liability. With respect
to each Benefit Plan, there has not occurred, and neither the Company, any
Subsidiary of the Company, the plan sponsor nor, to the Company's
Knowledge, a plan fiduciary that the Company has an obligation to
indemnify or is contractually bound to enter into, any nonexempt
"prohibited transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA, nor any transaction that would result in a material
civil penalty being imposed under Section 409 or 502(i) of ERISA.
(vi) There are no unfunded liabilities with respect to any Benefit
Plan other than those that would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on the Company.
(vii) Except as would not reasonably be expected to have a Material
Adverse Effect on the Company, all contributions to and payments with
respect to or under the Benefit Plans that are required to be made with
respect to periods ending on or before the Effective Time have been made
or accrued before the Effective Time by the Company in accordance with the
appropriate plan documents, financial statements, actuarial report,
collective bargaining agreements or insurance contracts or arrangements.
17
<PAGE>
(viii) No Welfare Plan providing medical or death benefits (whether
or not insured) with respect to current or former employees of the Company
or any Subsidiary continues such coverage or provides such benefits beyond
their date of retirement or other termination of service (except as
required by Code Section 4908B or applicable state healthcare continuation
law(s)).
(ix) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event
under any plan, policy, arrangement or agreement (including under any
collective bargaining agreement) or any trust or loan that will or would
reasonably be expected to result in any payment (whether of severance pay
or otherwise), acceleration of, forgiveness of indebtedness owing from,
vesting of, distribution of, or increase in or obligation to fund, any
benefits with respect to any current or former employee, director or
consultant of the Company.
(m) Labor Relations. Neither the Company nor any of its Subsidiaries
---------------
is a party to, or bound by, any collective bargaining agreement, contract
or other agreement or understanding with a labor union or labor
organization. There is no pending or, to the Knowledge of the Company,
overtly threatened (i) union organizational campaign effort, collective
bargaining negotiations, bargaining impasse, implementation of final
offer, work-to-rule or intermittent strike or (ii) labor dispute,
grievance or arbitration matter, economic or unfair labor practice strike,
boycott, work stoppage or slowdown involving, in each case of this clause
(ii), a material number of employees of the Company and its Subsidiaries,
against the Company or any of its Subsidiaries, no lockout is in effect
and no permanent or temporary strike replacements are currently employed
at any Company facility. Neither the Company nor any of its Subsidiaries,
nor their respective representatives or employees, has committed any
unfair labor practices in connection with the operation of the respective
businesses of the Company or any of its Subsidiaries, and there is no
pending or, to the Knowledge of the Company, threatened charge, complaint,
decision, order, notice-posting requirement, settlement agreement or
injunctive action or order against the Company or any of its Subsidiaries
by the National Labor Relations Board or any similar governmental or
adjudicatory agency or court, except in each case as would not reasonably
be expected to have a Material Adverse Effect on the Company. The Company
and its Subsidiaries have in the past been and are in compliance in all
respects with all applicable collective bargaining agreements and Legal
Provisions respecting employment, employment practices, employee
classification, labor relations, safety and health, wages, hours and terms
and conditions of employment, except where the failure to be in compliance
would not reasonably be expected to have a Material Adverse Effect on the
Company. The Company has complied in all material respects with its
payment obligations to all employees of the Company and its Subsidiaries
in respect of all wages, salaries, commissions, bonuses, benefits and
other compensation due and payable to such employees under any Company or
Company Subsidiary policy, practice, agreement, plan, program or any
statute or other law. Neither the Company nor any of its Subsidiaries has
experienced within the past 12 months
18
<PAGE>
a "plant closing" or "mass layoff" within the meaning of the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. ss.ss. 2101 et seq.
(n) Taxes. Each of the Company and its Subsidiaries has timely filed
-----
all Tax Returns required to be filed by it, or requests for extensions to
file such Tax Returns have been timely filed and granted and have not
expired, and all such filed Tax Returns are complete and accurate in all
respects, except for such failures to (i) file, (ii) have extensions
granted that remain in effect or (iii) be complete and accurate in all
respects, as applicable, as would not individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
The Company and each of its Subsidiaries has paid (or the Company has paid
on its behalf) all Taxes required to be paid by it, except for such
failures to pay as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company. The most
recent financial statements contained in the Filed Company SEC Documents
reflect an adequate reserve for all Taxes payable by the Company and its
Subsidiaries for all taxable periods and portions thereof accrued through
the date of such financial statements, except for such failures to reflect
such reserves as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company. No
deficiencies for any Taxes have been proposed, asserted or assessed
against the Company or any of its Subsidiaries that are not adequately
reserved for on the Company's financial statements in accordance with GAAP
except for such failures to so reserve as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company. Except as set forth in Section 3.1(n) of the Company
Disclosure Memorandum, no Company income or franchise Tax Return has ever
been examined or audited by any Governmental Entity. No requests for
waivers of the time to assess any Taxes against the Company or any of its
Subsidiaries have been granted that remain in effect. No claim has ever
been made in writing by a Governmental Entity in a jurisdiction where the
Company or any of its Subsidiaries does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction. There are no Liens for
Taxes upon any of the assets of the Company or its Subsidiaries except
Liens for current Taxes not yet due and payable or for Taxes that are
being disputed in good faith by appropriate proceedings and for which
appropriate reserves under GAAP exist on the books of the Company. Neither
the Company nor any of its Affiliates has taken or agreed to take any
action or has Knowledge of any fact or circumstance that is reasonably
likely to prevent the Merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Code. As used in this Agreement,
"TAXES" shall include all U.S. Federal, state and local, domestic and
-----
foreign, income, franchise, property, sales, use, excise and other taxes,
of any nature whatsoever, tariffs or similar governmental charges,
including any obligations for withholding taxes from payments due or made
to any other person, together with all interest, penalties or additions to
tax imposed with respect to such amounts and "TAX RETURNS" shall include
-----------
any return, report or similar statement (including attached schedules)
required to be filed with respect to any Tax, including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
19
<PAGE>
(o) No Excess Parachute Payments; No Section 162(m) Payments. There
--------------------------------------------------------
will be no payments or benefits to any "disqualified individual" (within
the meaning of Section 280G of the Code) that would constitute or result
in an "excess parachute payment" under Section 280G of the Code as a
direct or indirect consequence of the transactions contemplated by this
Agreement, including, without limitation, as a result of the acceleration
of vesting or exercisability of any options to purchase Company Common
Stock held by "disqualified individuals" as a direct or indirect
consequence of the transactions contemplated by this Agreement. No such
Person is entitled to receive any additional payment from the Company, the
Surviving Corporation or any other Person in the event that the excise tax
of Section 4999(a) of the Code is imposed on such Person. The Benefit
Plans and other Company employee compensation arrangements in effect as of
the date of this Agreement have been designed so that the disallowance of
a deduction under Section 162(m) of the Code for employee remuneration
will not apply to any amounts paid or payable by the Company or any of its
Subsidiaries under any such plan or arrangement.
(p) Title to Properties. (i) Each of the Company and its
-------------------
Subsidiaries has good and marketable title to, or valid leasehold
interests in, all its properties and assets except for such as are no
longer used or useful in the conduct of its businesses or as have been
disposed of in the ordinary course of business and except for failures to
have, or defects in title or interests, easements, restrictive covenants
and similar encumbrances that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on the Company.
All such material assets and properties, other than assets and properties
in which the Company or any of its Subsidiaries has a leasehold interest,
are free and clear of all Liens, except for Liens that individually or in
the aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company.
(ii) Each of the Company and its Subsidiaries has complied in all
respects with the terms of all leases to which it is a party and under
which it is in occupancy, and all such leases are in full force and
effect, except for such noncompliance or failure to be in full force and
effect that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect on the Company. Each of the
Company and its Subsidiaries enjoys peaceful and undisturbed possession
under all such leases, except for failures to do so that individually or
in the aggregate are not reasonably likely to have a Material Adverse
Effect on the Company.
(q) Intellectual Property.
---------------------
(i) Each of the Company and its Subsidiaries owns, or is validly
licensed or otherwise has the right to use (in each case free and clear of
all Liens) all patents, patent applications, trademarks, trademark rights,
trade names, trade name rights, service marks, service mark rights,
copyrights and other proprietary intellectual property rights and computer
programs (collectively, "INTELLECTUAL PROPERTY RIGHTS") which if the
----------------------------
Company or its Subsidiaries did not own or validly license or otherwise
have the right to use would
20
<PAGE>
reasonably be expected to have a Material Adverse Effect on the Company.
Section 3.1(q) of the Company Disclosure Memorandum sets forth, as of the
date hereof, a list of all granted patents, pending patent applications,
trademarks and applications therefor owned by the Company or any of its
Subsidiaries. Except as, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Company, (i) the use of
any Intellectual Property Rights by the Company and its Subsidiaries does
not infringe on or otherwise violate the rights of any Person and is in
accordance with any applicable license pursuant to which the Company or
any Subsidiary of the Company acquired the right to use any Intellectual
Property Rights; (ii) no Person is challenging or, to the Knowledge of the
Company, infringing on or otherwise violating any right of the Company or
any of its Subsidiaries with respect to any Intellectual Property Right
owned by and/or licensed to the Company or its Subsidiaries; and (iii)
neither the Company nor any of its Subsidiaries has received any written
notice or otherwise has Knowledge of any pending claim, order or
proceeding with respect to any Intellectual Property Right used by the
Company and its Subsidiaries and to its Knowledge no Intellectual Property
Right owned and/or licensed by the Company or its Subsidiaries is being
used or enforced in a manner that would reasonably be expected to result
in the abandonment, cancellation or unenforceability of such Intellectual
Property Right. The Company has no Knowledge that the use of its material
Intellectual Property Rights in the business of the Company and its
Subsidiaries as presently conducted or as presently contemplated does or
will infringe (i) any granted patent or existing trademark or (ii) any
patent granted from a pending patent application.
(ii) The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby will not (A) constitute a breach by the Company or its
Subsidiaries of any instrument or agreement governing any Company
Intellectual Property Rights, (B) pursuant to the terms of any license or
agreement relating to any Company Intellectual Property Rights, cause the
modification of any terms of any such license or agreement, including but
not limited to the modification of the effective rate of any royalties or
other payments provided for in any such license or agreement, (C) cause
the forfeiture or termination of any Company Intellectual Property Rights
under the terms thereof, (D) give rise to a right of forfeiture or
termination of any Company Intellectual Property Rights under the terms
thereof or (E) impair the right of the Company, its Subsidiaries, the
Surviving Corporation or Parent to make, have made, offer for sale, use,
sell, export or license any Company Intellectual Property Rights or
portion thereof pursuant to the terms thereof, except in each case for
those matters that individually or in the aggregate would not reasonably
be expected to have a Material Adverse Effect on the Company.
(r) Voting Requirements. The affirmative vote of a majority of the
-------------------
outstanding shares of Company Common Stock to adopt this Agreement (the
"COMPANY STOCKHOLDER APPROVAL") is the only vote of the holders of any
----------------------------
class or series of the Company's capital stock necessary to adopt this
Agreement and approve the transactions contemplated hereby.
21
<PAGE>
(s) Brokers. No broker, investment banker, financial advisor or
-------
other Person, other than Lazard Freres & Co., LLC, the fees and expenses
of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
(t) Opinion of Financial Advisor. The Company has received the
----------------------------
opinion of Lazard Freres & Co., LLC, dated the date hereof, to the effect
that, as of such date, the Exchange Ratio is fair from a financial point
of view to the holders of shares of Company Common Stock.
(u) Accounting Matters. Neither the Company nor any of its
------------------
Affiliates has taken or agreed to take any action or has Knowledge of any
fact or circumstance that is reasonably likely to prevent Parent from
accounting for the business combination to be effected by the Merger as a
pooling of interests. The Company's management has consulted with and has
made representations to its advisors regarding the Company's management's
conclusion that the Merger will qualify as a pooling of interests business
combination. Based upon the Company's management's consultations with its
advisors, nothing has come to the Company's management's attention that
would preclude the Merger from qualifying as a pooling of interests
business combination, subject to the occurrence of any events between (i)
the initiation and the consummation of the Merger and (ii) for a period of
two years subsequent to the consummation of the Merger that would preclude
Parent from accounting for the Merger as a pooling of interests business
combination.
(v) Certain Business Practices. Neither the Company nor any of its
--------------------------
Subsidiaries nor (to the Knowledge of the Company) any director, officer,
agent or employee of the Company or any of its Subsidiaries has, in
connection with the conduct of the business of the Company and its
Subsidiaries, (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns or
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or (iii) made any other unlawful payment.
Section 3.2. Representations and Warranties of Parent and Sub. Except as
------------------------------------------------
expressly set forth in the Filed Parent SEC Documents filed since December 31,
2000 or on the disclosure memorandum delivered by Parent to the Company
immediately prior to the execution of this Agreement and initialed on behalf of
the Company and Parent, which disclosure memorandum specifies the section or
subsection of this Agreement to which the exception relates (the "PARENT
------
DISCLOSURE MEMORANDUM"), Parent and Sub represent and warrant to the Company as
---------------------
follows:
(a) Organization, Standing and Corporate Power. Each of Parent and
------------------------------------------
each of its Subsidiaries is a corporation duly organized, validly existing
and, to the extent applicable, in good standing under the laws of the
jurisdiction in which it is organized and has all
22
<PAGE>
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Each of
Parent and each of its Significant Subsidiaries is duly qualified or
licensed to do business and, to the extent applicable, is in good standing
in each jurisdiction in which the nature of its business or the ownership,
leasing or operation of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to
be so qualified or licensed individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on Parent. Parent
has made available to the Company prior to the execution of this Agreement
complete and correct copies of its Certificate of Incorporation and
Bylaws, and the comparable organizational documents of each of its
Significant Subsidiaries, in each case as amended to the date hereof.
(b) Subsidiaries. All the outstanding shares of capital stock of, or
------------
other equity interests in, each Subsidiary have been validly issued and
are fully paid and nonassessable and are owned directly or indirectly by
Parent free and clear of all Liens, and free of any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other
ownership interests. Other than such Subsidiaries of Parent, neither
Parent nor any Subsidiary owns a greater than 20% equity interest or
similar interest in, or any interest convertible into or exchangeable or
exercisable for a greater than 20% equity or similar interest in, any
Person. Neither the Parent nor any of its Subsidiaries is subject to any
obligation or requirement to make any material loan, capital contribution
investment or similar expenditure to or in any Person, except for loans,
capital contributions, investments or similar expenditures by Parent or
any Parent Subsidiary to any Parent Subsidiary. Except as provided by
applicable law, there are no restrictions of any kind which prevent the
payment of dividends by any Subsidiary.
Parent owns all the outstanding capital stock of Sub. Sub was formed
solely for the purpose of effecting the Merger and, since the date of its
incorporation, Sub has not engaged in any activities and has not incurred
any liabilities or obligations other than in connection with its formation
and in connection with or as contemplated by this Agreement.
(c) Capital Structure. The authorized capital stock of Parent
-----------------
consists of 1,500,000,000 shares of Parent Common Stock 39,000,000 shares
of Parent Class B Common Stock and 1,000,000 shares of Preferred Stock,
par value $.001 per share ("PARENT PREFERRED STOCK"). At the close of
----------------------
business on June 25, 2001, (i) 103,820,962 shares of Parent Common Stock
were issued and outstanding, (ii) 4,762,000 shares of Parent Class B
Common Stock were issued and outstanding, (iii) no shares of Parent Common
Stock were held by Parent in its treasury, (iv) 16,536,718 shares of
Parent Common Stock were issuable pursuant to outstanding Parent Stock
Options, (v) no shares of Preferred Stock were issued or outstanding, and
(vi) no shares of 10.5% cumulative preferred stock, par value $10.00 per
share, were issued and outstanding. All outstanding shares of capital
stock of Parent Common Stock are, and all shares of Parent Common Stock
which may be issued pursuant
23
<PAGE>
to this Agreement will be, when issued in accordance with the terms
hereof, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. As of the date hereof there are no
bonds, debentures, notes or other indebtedness of Parent having the right
to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of Parent may vote.
Except (i) as set forth above in this Section 3.2(c), and (ii) for shares
of Parent Common Stock reserved for issuance under any plan or arrangement
providing for the grant of options to purchase shares of Parent Common
Stock to current or former officers, directors, employees or consultants
of Parent or its Subsidiaries (the "PARENT STOCK PLANS") or resulting from
------------------
the issuance of shares of Parent Common Stock pursuant to options or other
benefits issued or granted pursuant to the Parent Stock Plans outstanding
as of the close of business on June 25, 2001, as of the date hereof (x)
there are not issued, issuable, reserved for issuance or outstanding (A)
any shares of capital stock or other voting securities of Parent, (B) any
securities of Parent convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of Parent, (C) any warrants,
calls, options or other rights to acquire from Parent or any Parent
Subsidiary, and no obligation of Parent or any Parent Subsidiary to issue,
any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of
Parent, or (D) any stock appreciation rights or rights to receive shares
of Parent Common Stock on a deferred basis granted under the Parent Stock
Purchase Plans or otherwise; and (y) there are not any outstanding
obligations of Parent or any Parent Subsidiary to repurchase, redeem or
otherwise acquire any such securities or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities. Neither Parent
nor any Significant Subsidiary is a party to any voting agreement with
respect to the voting of any such securities. Except as set forth in this
Section 3.2(c) and in the Joint Venture Agreement among Parent, TMP
Worldwide Pty Limited, Monster.com A&NZ Pty Limited, ninemsn Pty Limited,
Turustar Pty Limited and Clycal Pty Limited, there are no issued,
issuable, reserved for issuance or outstanding (A) securities of Parent or
any Parent Significant Subsidiary convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities or
ownership interests in any Parent Significant Subsidiary, (B) warrants,
calls, options or other rights to acquire from Parent or any Significant
Subsidiary of Parent, and no obligation of Parent or any Significant
Subsidiary of Parent to issue, any capital stock, voting securities or
other ownership interests in, or any securities convertible into or
exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any Significant Subsidiary of Parent or (C)
obligations of Parent or any Significant Subsidiary of Parent to
repurchase, redeem or otherwise acquire any such outstanding securities of
the Significant Subsidiaries of Parent or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities.
(d) Authority; Noncontravention. Each of Parent and Sub has all
---------------------------
requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action on the part of Parent and Sub and no other
24
<PAGE>
corporate proceedings on the part of Parent or Sub are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby, subject, in the case of the Merger, to the filing of the
Certificate of Merger. The Board of Directors of each of Parent and Sub
have unanimously approved this Agreement, determined that this Agreement
and the transactions contemplated hereby are fair to and in the best
interests of Parent and Sub and their respective stockholders and declared
that the Merger is advisable. This Agreement has been duly executed and
delivered by Parent and Sub, as applicable, and, assuming the due
authorization, execution and delivery by each of the other parties
thereto, constitute legal, valid and binding obligations of Parent and
Sub, as applicable, enforceable against Parent and Sub, as applicable, in
accordance with its terms (except insofar as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by principles
governing availability of equitable remedies).
The execution and delivery of this Agreement does not, and the
consummation of the Merger and the other transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of
a benefit under, or result in the creation of any Lien in or upon any of
the properties or assets of Parent or any of its Subsidiaries under (i)
the Certificate of Incorporation or Bylaws of Parent or the comparable
organizational documents of any of its Subsidiaries, (ii) any loan or
credit agreement, bond, note, mortgage, indenture, lease or other
contract, agreement, obligation, commitment, arrangement, understanding,
instrument, permit or license applicable to Parent or any of its
Subsidiaries or their respective properties or assets or (iii) subject to
the governmental filings and other matters referred to in the following
paragraph, any (A) statute, law, ordinance, rule or regulation or (B)
judgment, order or decree, in each case applicable to Parent or any of its
Subsidiaries or their respective properties or assets, other than, in the
case of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights, cancellations, accelerations, losses or Liens that individually or
in the aggregate would not reasonably be expected to have a Material
Adverse Effect on Parent or to prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filings with, any Governmental
Entity is required by or with respect to Parent or any of its Subsidiaries
in connection with the execution and delivery of this Agreement by Parent
and Sub or the consummation by Parent and Sub of the Merger or the other
transactions contemplated by this Agreement, except for (1) the filing of
a premerger notification and report form under the HSR Act and any
applicable filings and approvals under similar foreign antitrust laws and
regulations, (2) the filing with the SEC of (A) the Form S-4 and (B) such
reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as
may be required in connection with this Agreement or the Company Voting
Agreements and the transactions contemplated by this Agreement or the
Company Voting
25
<PAGE>
Agreements, (3) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Parent is qualified to
do business, (4) such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws, (5) such
filings with and approvals of Nasdaq to permit the shares of Parent Common
Stock that are to be issued pursuant to the Merger to be traded on the
Nasdaq National Market and (6) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to be obtained or made individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Parent or to
prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
(e) Parent SEC Documents. Except as listed in Section 3.2(c) of the
--------------------
Parent Disclosure Memorandum, Parent has timely filed all reports,
schedules, forms, statements and other documents (including exhibits and
other information incorporated therein) with the SEC required to be filed
by the Parent since January 1, 1999 (the "PARENT SEC DOCUMENTS"). No
--------------------
Parent Subsidiary is required to file any form, report, registration
statement, prospectus or other document with the SEC. As of their
respective dates (and, if amended or superseded by a filing prior to the
date of this Agreement or the Closing Date, then on the date of such
filing), the Parent SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case
may be and none of the Parent SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Parent SEC Documents filed since December 31, 2000, together with any
public announcements in a Dow Jones News Release made by Parent after the
date hereof taken as a whole, as of the Effective Time will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light