AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
September 16, 1995, by and among BRW STEEL CORPORATION, a Delaware
corporation ("BarCo"), B & L ACQUISITION CORPORATION, a Delaware corporation
and a wholly owned subsidiary of BarCo ("Sub"), and BLISS & XXXXXXXX
INDUSTRIES INC., a Delaware corporation (the "Company"),
W I T N E S S E T H:
WHEREAS, the Board of Directors of BarCo has determined that it is in the
best interests of BarCo and its stockholders for Sub to acquire all of the
outstanding shares of the Company's common stock, $.01 par value per share
(the "Shares"), at a price of $7.75 per share, net to the stockholder of the
Company in cash, in accordance with the terms and conditions of this
Agreement; and
WHEREAS, the Board of Directors of the Company have received the opinion
of The Chicago Corporation that the price per share to be received by
stockholders of the Company in the Merger (as defined in Section 1.2) is fair
to such stockholders from a financial point of view; and
WHEREAS, the Board of Directors of the Company believes that the Merger
is in the best interests of its stockholders; and
WHEREAS, the respective Boards of Directors of BarCo, Sub and the Company
have each determined that it is advisable to merge Sub with and into the
Company pursuant to this Agreement with the result that the Company shall
become a wholly owned subsidiary of BarCo.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and covenants herein contained, BarCo, Sub and
the Company, intending to be legally bound, hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 COMPANY ACTION.
(a) The Company hereby consents to the Merger and represents that on
September 13, 1995, its board of directors (the "Board of Directors")
approved the Merger and approved recommending approval of the Merger and this
Agreement by the Company's stockholders. The Company further acknowledges and
represents that the Board of Directors' approval of the Merger, this
Agreement, the transactions contemplated hereby and the consummation thereof
do not and will not fall within paragraph (A) of Article Ninth of the
Company's Certificate of Incorporation or otherwise cause the stockholder
vote required for approval of the Merger and this Agreement and the
transactions contemplated hereby to be greater than the minimum vote required
under section 251(c) of the Delaware General Corporation Law (the "Delaware
Law") provided that Sub and BarCo have not taken and do not take any action
to make either of them an "Interested Stockholder" as defined in Article
Ninth.
1.2 THE MERGER.
(a) Subject to the terms and conditions hereof, at the Effective Time
(as such term is defined in Section 1.2(b)), Sub will be merged with and into
the Company (the "Merger") in accordance with Delaware Law, the separate
existence of Sub (except as may be continued by operation of law) shall cease
and the Company shall continue as the surviving corporation in the Merger
(the "Surviving Corporation").
(b) At the Closing, the parties hereto shall cause the Merger to be
consummated by filing with the Secretary of State of Delaware an appropriate
agreement or certificate of merger (the "Merger Document") in such form as is
required by, and executed in accordance with, the relevant provisions of the
Delaware Law and with this Agreement (the date and time of such filing being
referred to herein as the "Effective Time"). The Merger shall have the
effects set forth in section 259 of the Delaware Law.
A closing of the Merger (the "Closing") shall take place (i) at Veritas
Capital, Inc., Ten East Fiftieth Street, New York, New York, at 12:00 noon,
local time, on the date on which the last of the conditions set forth in
Section 5 is fulfilled or waived (subject to applicable law), or (ii) at such
other time and place and on such other date as BarCo and a majority of the
directors of the Company shall agree (the "Closing Date").
1.3 CONVERSION OF SHARES. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Sub, the Company or the holder of any of the following
securities:
(a) Each Share then issued and outstanding, other than (i) Shares then
held, directly or indirectly, by BarCo, Sub or any direct or indirect
subsidiary of BarCo, or (ii) Shares held in the Company's treasury, or (iii)
Dissenting Shares (as such term is defined in Section 1.4) shall be converted
into and represent the right to receive (as provided in Section 1.5) $7.75,
without any interest thereon (such amount of cash being referred to herein as
the "Merger Consideration");
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(b) Each Share then held, directly or indirectly, by BarCo, Sub or any
direct or indirect subsidiary of BarCo shall be canceled and retired without
payment of any consideration therefor;
(c) Each Share held in the Company's treasury shall be canceled and
retired without payment of any consideration therefor;
(d) Each issued and outstanding share of common stock, par value $.01 per
share, of Sub shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock of the Surviving Corporation;
(e) Each of the Company's issued and outstanding stock options shall be
converted into the right to receive at Closing cash representing the positive
difference (if any) of $7.75 and the exercise price of such option multiplied
by the number of Shares covered by such option; and
(f) Each outstanding stock equivalency account of the Company under the
Directors' Deferred Compensation Plan shall be converted into the right to
receive at Closing cash in the amount of $7.75 for each unit equivalent to
one Share.
1.4 DISSENTING SHARES. Shares held by a stockholder who has not voted
such Shares in favor of the Merger and with respect to which such stockholder
becomes entitled to payment of the fair value of his Shares pursuant to the
provisions of section 262 of the Delaware Law ("Dissenting Shares"), shall
not be converted into, or represent the right to receive, or be exchangeable
for, the Merger Consideration unless and until such holder shall have failed
to perfect or shall have effectively withdrawn or lost the right to appraisal
and payment of the fair value of such Shares pursuant to the provisions of
such section 262. If such holder shall have failed to perfect or shall have
effectively withdrawn or lost such right, then, as of the Effective Time, or
the occurrence of the event which causes the failure to perfect or the
effective withdrawal or loss of such right, whichever last occurs, such
holder's Dissenting Shares shall cease to be Dissenting Shares and shall be
converted into and represent the right to receive, and be exchangeable (as
provided in Section 1.5) for, the Merger Consideration.
1.5 PAYMENT.
(a) Pursuant to an agreement (the "Disbursing Agent Agreement") to be
entered into on or before the Closing Date between BarCo and Sub and a
disbursing agent (the "Disbursing Agent") which shall be a commercial bank
with capital of at least $100,000,000, Sub or the Surviving Corporation shall
from time to time deposit with the Disbursing Agent such cash as the
Disbursing Agent shall require pursuant to this Section 1.5.
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(b) As soon as practicable after the Effective Time, the Disbursing Agent
shall send a notice and a transmittal form to each holder of certificates
formerly evidencing Shares (other than certificates formerly representing
Shares to be canceled pursuant to Sections 1.3(b) and 1.3(c)) advising such
holder of the effectiveness of the Merger and the procedure for surrendering
to the Disbursing Agent (who may appoint forwarding agents with the approval
of BarCo) such certificates for exchange into the Merger Consideration. Each
holder of certificates theretofore evidencing Shares, upon proper surrender
thereof to the Disbursing Agent together with and in accordance with such
transmittal form, shall be entitled to receive in exchange therefor the
Merger Consideration deliverable in respect of the Shares theretofore
evidenced by the certificates so surrendered. Upon such proper surrender, the
Disbursing Agent shall promptly, but in any event no later than three (3)
business days after such proper surrender, deliver the Merger Consideration.
Until properly surrendered, certificates formerly evidencing Shares shall be
deemed for all purposes to evidence only the right to receive the Merger
Consideration.
(c) If the Merger Consideration (or any portion thereof) is to be
delivered to a person other than the person in whose name the certificates
surrendered in exchange therefor are registered, it shall be a condition to
the payment of such Merger Consideration that the certificates so surrendered
shall be properly endorsed or accompanied by appropriate stock powers and
otherwise in proper form for transfer and that such transfer otherwise be
proper. Sub shall pay to the Disbursing Agent any transfer or other taxes
payable by reason of the foregoing or establish to the satisfaction of the
Disbursing Agent that such taxes have been paid or are not required to be
paid. No interest will be paid or accrued on the Merger Consideration
payable on the surrender of any such certificates.
(d) In the event 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, the Surviving
Corporation will, subject to the following sentence, issue in exchange for
such lost, stolen or destroyed certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this Article
1. Sub may, in its sole discretion and as a condition precedent to the
issuance of the Merger Consideration in exchange therefor, require the owner
of such lost, stolen or destroyed certificate to give the Surviving
Corporation a bond in such sum as it may reasonably direct as indemnity
against any claim that may be made against the Surviving Corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
1.6 NO FURTHER RIGHTS. From and after the Effective Time, holders of
certificates formerly evidencing Shares shall cease
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to have any rights as stockholders of the Company, except as provided herein
or by law.
1.7 CLOSING OF COMPANY TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Shares shall
thereafter be made.
1.8 CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS. The Certificate of
Incorporation and Bylaws of the Company in effect immediately prior to the
Effective Time (except as such Certificate of Incorporation may be amended
pursuant to the Merger Document) shall be the Certificate of Incorporation
and Bylaws of the Surviving Corporation until thereafter amended as provided
therein and under the Delaware Law. The directors of the Company immediately
prior to the Effective Time shall be the directors of the Surviving
Corporation, in each case until their successors are duly elected and
qualified.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BARCO AND SUB
BarCo and Sub hereby jointly and severally represent and warrant to the
Company that:
2.1 ORGANIZATION. Each of BarCo and Sub is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted.
2.2 AUTHORIZATION AND VALIDITY OF AGREEMENTS. Each of BarCo and Sub has
all requisite corporate power and authority to enter into this Agreement and
to perform its respective obligations hereunder. The execution, delivery
and performance by each of BarCo and Sub of this Agreement and all other
agreements and documents contemplated hereby, and the consummation by each of
BarCo and Sub of the transactions contemplated hereby and thereby, have been
duly authorized by all necessary corporate action on the part of each of
BarCo and Sub. This Agreement and all other agreements and documents
contemplated hereby, have been or will be duly executed and delivered by
BarCo and Sub and are and will be valid and binding obligations of BarCo and
Sub enforceable against BarCo and Sub in accordance with their respective
terms.
2.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS TO
WHICH BARCO OR SUB IS PARTY. Neither the execution and delivery of this
Agreement and all other agreements and documents contemplated hereby, nor the
performance by BarCo or Sub of their respective obligations hereunder will
(a) violate the charter or bylaws of BarCo or Sub; (b) assuming satisfaction
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of the requirements set forth in clause (c) below, violate any provision of
law applicable to BarCo or Sub; (c) except for (i) requirements under the
Exchange Act, (ii) requirements, if any, arising out of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "Xxxx-Xxxxx Act"), and
(iii) the filing of the Merger Document in accordance with the Delaware Law,
require any consent, approval, filing or notice under any provision of law
applicable to BarCo or Sub or any of BarCo's other subsidiaries; or (d)
require any consent, approval or notice under, or violate or constitute a
default under, or permit the termination of any provision of, or result in
the acceleration of the maturity or performance of any obligation of, or
result in the creation or imposition of any lien upon any properties, assets
or businesses of, BarCo or Sub or any of BarCo's other subsidiaries under,
any note, bond, indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment, or any order, judgment or decree, to which BarCo or Sub or any of
BarCo's other subsidiaries is a party or by which it or any of its assets or
properties is bound or encumbered, which in any of the foregoing cases would
have a material adverse effect on BarCo and its subsidiaries taken as a whole
or would prohibit or interfere with the consummation of the Merger by BarCo
or Sub.
2.4 GUARANTY. BarCo hereby agrees to fully and unconditionally guarantee
the performance by Sub and by any assignee of Sub of all of Sub's
representations, warranties, covenants and undertakings set forth in this
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to BarCo and Sub that except
as previously furnished to BarCo in writing:
3.1 ORGANIZATION. The Company and each of its Subsidiaries (as such
term is defined in Section 3.3) is a corporation duly organized, validly
existing and, to the best of the Company's knowledge, in good standing under
the laws of its jurisdiction of incorporation 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
Subsidiaries is duly qualified as a foreign corporation to do business and is
in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified will not
have a material adverse effect on the financial condition, results of
operations or business of the Company and its Subsidiaries taken as a whole.
The Company has previously delivered to BarCo true and complete copies of its
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Certificate of Incorporation and Bylaws, as amended to the date hereof.
3.2 CAPITALIZATION. The authorized capital stock of the Company consists
of (a) 6,000,000 shares of the Company's Common Stock, $.01 par value per
share ("Company Common Stock"), of which 3,969,518 are issued and outstanding
and (b) 1,500,000 shares of the Company's Preferred Stock, $1.00 par value
per share, none of which are issued and outstanding. The Company has
reserved (i) 65,000 shares of Company Common Stock for issuance under its
Directors' Stock Option Plan, as amended to date, of which options to
purchase 45,000 shares have been granted, no options have been exercised, and
no options have expired or have been forfeited and (ii) 130,000 shares of
Company Common Stock for issuance under its Employee Incentive Stock Option
Plan, as amended to date, of which options to purchase 114,000 shares have
been granted, no options have been exercised and options to purchase 21,500
shares have expired or have been forfeited. Except for the foregoing, and
except for its obligations regarding stock equivalency accounts under the
Directors' Deferred Compensation Plan, there are not now, and at the Closing
Date, the Company will not have, any outstanding options, warrants,
convertible securities, calls, subscriptions or other rights or agreements or
commitments of any character obligating the Company or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock or other
securities of the Company or any of its Subsidiaries. All issued and
outstanding shares of Company Common Stock are validly issued, fully paid,
nonassessable and free of preemptive rights.
3.3 SUBSIDIARIES. As used herein, the term "Subsidiaries" shall mean
Canadian Drawn Steel Company Inc. and Bliss & Xxxxxxxx Steel Company. The
Company is, directly or indirectly, the record and beneficial owner of all of
the outstanding shares of capital stock of each of the Subsidiaries, there
are no irrevocable proxies with respect to such shares and no equity
securities of any of the Subsidiaries are or may become required to be issued
for any reason including, without limitation, by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any capital stock of any Subsidiary, and there
are no contracts, commitments, understandings or arrangements by which any
Subsidiary is bound to issue additional shares of its capital stock or
securities convertible into or exchangeable for such shares. All of such
shares so owned by the Company or any of its Subsidiaries are validly issued,
fully paid and nonassessable and, to the best of the Company's knowledge, are
owned by it free and clear of any material claim, lien, encumbrance or
agreement with respect thereto.
3.4 AUTHORIZATION AND VALIDITY OF AGREEMENTS. The Company has all
requisite corporate power and authority to enter into
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this Agreement and to perform its obligations hereunder (subject, in the
case of performance of this Agreement, to obtaining any necessary approval of
its stockholders). The execution, delivery and performance by the Company of
this Agreement and the consummation by it of the transactions contemplated
hereby have been duly authorized by the Board of Directors and no other
corporate action on the part of the Company is necessary to authorize the
execution and delivery by the Company of this Agreement and the consummation
by it of the transactions contemplated hereby (subject to obtaining the
necessary approval of its stockholders). This Agreement has been duly
executed and delivered by the Company and is a valid and binding obligation
of the Company.
3.5 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS TO
WHICH THE COMPANY IS PARTY. Neither the execution and delivery of this
Agreement nor the performance by the Company of its obligations hereunder
will (a) violate the charter documents, bylaws or other organizational
documents of the Company or any of its Subsidiaries; (b) assuming
satisfaction of the requirements set forth in clause (c) below, violate any
provision of law applicable to the Company or its Subsidiaries; (c) except
for (i) requirements under the Exchange Act, (ii) requirements, if any,
arising out of the Xxxx-Xxxxx Act, and (iii) the filing of the Merger
Document in accordance with the Delaware Law, require any consent, approval,
filing or notice under any provision of law applicable to the Company or its
Subsidiaries; (d) except as required under any existing bank loan agreement,
a copy of which has been provided to BarCo, require any consent, approval or
notice under, or violate, or be in conflict with or constitute a default
under or permit the termination of any provision of, or result in the
acceleration of the maturity or performance of or result in the creation or
imposition of any lien upon any properties, assets or businesses of the
Company or its Subsidiaries under any note, bond, indenture, mortgage, deed
of trust, lease, franchise, permit, authorization, license, contract,
instrument or other agreement or commitment, or any order, judgment or decree
to which the Company or any of its Subsidiaries is a party or by which any of
them or any of their assets or properties is bound or encumbered, which in
any of the foregoing cases would have a material adverse effect on the
Company and its Subsidiaries taken as a whole or would prohibit or materially
interfere with the consummation of the Merger by the Company.
3.6 LEGAL PROCEEDINGS. Except as set forth in the Company Commission
Filings (as such term is defined in Section 3.7) as of the date hereof and in
the Company's audited consolidated financial statements for the fiscal year
ended September 30, 1994, there is no suit, action, proceeding or
investigation pending or, to the best knowledge of the Company, threatened
against or involving the Company or any of its Subsidiaries, properties or
rights, which, if adversely determined, would
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have, either individually or in the aggregate, a material adverse effect on
the financial condition, results of operations or business of the Company and
its Subsidiaries taken as a whole, nor is there any judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or arbitrator outstanding against the Company or any
of its Subsidiaries having any such effect. Neither the Company nor any of
its Subsidiaries is in violation of any term of any judgment, decree,
injunction, rule or order outstanding against it which would have, either
individually or in the aggregate, a material adverse effect on the financial
condition, results of operations or business of the Company and its
Subsidiaries taken as a whole.
3.7 COMPANY COMMISSION FILINGS; FINANCIAL STATEMENTS. As of the
respective dates of their filing with the Commission, all reports, statements
(including the Proxy Statement), registration statements and other filings
(including all notes, exhibits and schedules thereto and documents
incorporated by reference therein) filed by the Company with the Commission
(such reports, statements, registration statements and other filings,
together with any amendments thereto, being sometimes collectively referred
to as the "Company Commission Filings") and the Company's audited
consolidated financial statements dated September 30, 1994 did not contain,
at the time of the filing thereof, 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 made therein, in light of the circumstances under which
they were made, not misleading, provided that the Company shall not be
responsible and shall have no liability for information provided to it by
BarCo or Sub for inclusion in any Company Commission Filing. Each of the
audited consolidated financial statements and unaudited interim financial
statements (including any related notes or schedules) included in the Company
Commission Filings was prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto) and fairly presented
the financial position of the Company and its consolidated Subsidiaries as at
the dates thereof and the results of their operations and changes in
financial position for the periods then ended, subject, in the case of
unaudited interim financial statements, to normal year-end adjustments.
Neither the Company nor any of its Subsidiaries has any liabilities or
obligations on a consolidated basis, either accrued or contingent (to the
extent required to be reflected or disclosed in financial statements in
accordance with generally accepted accounting principles), and whether due or
to become due, which, individually or in the aggregate, (a) have not been
reflected in the audited consolidated balance sheet for the year ended
September 30, 1994 (the "Balance Sheet") or disclosed in the notes to the
audited financial statements relating thereto; or (b) do not consist of
liabilities of the kind specified or
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referred to in the Company's audited financial statements for the fiscal year
ended September 30, 1994 which have been incurred by the Company and its
Subsidiaries in the ordinary course of business since the date thereof,
except for its liabilities or obligations undertaken in connection with this
Agreement.
3.8 CONDUCT OF BUSINESS IN THE ORDINARY COURSE; ABSENCE OF CERTAIN CHANGES
AND EVENTS. Except as disclosed in the Company Commission Filings filed as
of the date hereof and the Company's audited consolidated financial
statements for the fiscal year ended September 30, 1994 previously delivered
to BarCo and except for changes affecting the steel bar industry or the
economy generally, since September 30, 1994, there has not been, occurred or
arisen, whether or not in the ordinary course of business:
(a) any material adverse change in the financial condition, results
of operations or business of the Company and its Subsidiaries taken as a
whole; or
(b) any damage or destruction in the nature of a casualty loss,
whether covered by insurance or not, materially and adversely affecting
any property or business of the Company or its Subsidiaries taken as a
whole; or
(c) any declaration, setting aside or payment of a dividend
(whether in cash, stock or property) in respect of the capital stock of
the Company or any of its Subsidiaries (other than a wholly owned
Subsidiary); or
(d) any actual or, to the knowledge of the Company, threatened
strike (whether asserted or unasserted) or other labor trouble or dispute
involving employees of the Company or its Subsidiaries which materially
and adversely affects the financial condition, results of operations or
business of the Company and its Subsidiaries taken as a whole; or
(e) any borrowing or lending of money or guarantee of any obligation
by the Company or any of its Subsidiaries, except in the ordinary course
of business; or
(f) any application, amendment, termination, renewal based on false
and misleading disclosures or failure to renew with respect to, any
agreement or insurance policy which has a material adverse effect on the
financial condition, results of operations or business of the Company and
its Subsidiaries taken as a whole; or
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(g) any disposition of any material (on a consolidated basis)
properties or assets used in the business of the Company or its
Subsidiaries, except sales from inventory made in the ordinary course of
business; or
(h) to the best of the Company's knowledge, any violation of or
conflict with any applicable laws, statutes, orders, rules and regulations
promulgated or judgment entered by any federal, state, county, local or
foreign court or governmental authority which, individually or in the
aggregate, materially and adversely affects the financial condition,
results of operations or business of the Company and its Subsidiaries
taken as a whole; or
(i) except as previously disclosed in writing to BarCo, any notice
of any violation, inquiry or investigation by any governmental authority
that materially and adversely affects the financial condition, results
of operations or business of the Company and its Subsidiaries taken as
a whole.
3.9 PATENTS, TRADEMARKS, ETC. To the best of the Company's knowledge,
the Company or its Subsidiaries have sufficient right, title and interest in
all Intangible Property Rights necessary for the business of the Company and
its Subsidiaries as now conducted, or the Company is able to obtain such
rights on terms which will not adversely affect its business. When used in
this Agreement, the term "Intangible Property Rights" means all United States
and foreign letters patent and pending applications, patent and "know-how"
licenses (or similar agreements), trade name and trademark registrations and
pending applications, service xxxx registrations and pending applications
and copyright registrations, those trade names and common law trademarks
which are currently in use by the Company or any of its Subsidiaries, and
unregistered copyrights directed to publications in current circulation by
the Company or any of its Subsidiaries now owned in whole or in part by the
Company or any of its Subsidiaries or under which the Company or any of its
Subsidiaries is licensed and the trade secrets and other proprietary
information of the Company and its Subsidiaries.
3.10 TAX MATTERS. Except where the failure of one or more of the
following representations would not have a material adverse effect on the
financial condition, results of operations or business of the Company and its
Subsidiaries taken as a whole: (a) all returns, reports and declarations for
franchise or income taxes required to be filed by the Company and its
Subsidiaries with the Internal Revenue Service and each applicable State have
been so filed; (b) all sales, use or value added taxes or assessments
(including interest and penalties) have been fully paid or adequately
provided for in the audited
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financial statements for the fiscal year ended September 30, 1994, except
where the failure to have so paid or provided for such taxes or assessments
or any other irregularities with respect to such taxes or assessments would
not result in a monetary obligation of the Company or its Subsidiaries in
excess of $25,000 in the aggregate; (c) for tax periods not closed by the
applicable statute of limitations, no issues have been asserted against the
Company or its Subsidiaries in a revenue agent's report or other written
document by the Internal Revenue Service or by any taxing authority in any
State in connection with any of the returns, reports and declarations filed
with the Internal Revenue Service or appropriate governmental agencies in
such State; (d) no waivers of statutes of limitation are currently
outstanding nor are any requests for such waivers pending with respect to the
Company or its Subsidiaries; (e) all required payroll and employment taxes
and withholding of income, employment and payroll taxes attributable to
employees of the Company and its Subsidiaries have been properly determined,
withheld and paid on a timely basis to the appropriate federal, state or
local governmental agency or adequately provided for in the audited financial
statement for the fiscal year ended September 30, 1994; (f) the United States
federal income tax returns in respect to the Company and its Subsidiaries for
the fiscal year ended September 30, 1991 and thereafter have not been
examined by the Internal Revenue Service; nor is any such examination
pending; and (g) neither the Company nor its Subsidiaries has filed any
consent or agreement under section 341(f) of the Internal Revenue Code of
1986, as amended (the "Code") (or corresponding provisions of any applicable
foreign, state, county or local law).
3.11 INSURANCE. The Company maintains insurance policies for the assets
and operations of the Company and its Subsidiaries in amounts deemed adequate
by the Company, in each case issued by insurers of recognized national
standing. True and correct copies of the foregoing policies will be
delivered to BarCo within five (5) business days of the date hereof.
3.12 EMPLOYMENT RELATIONS. There (a) is no unfair labor practice
complaint against the Company pending before the National Labor Relations
Board, (b) is no labor strike, dispute, slowdown or stoppage pending or, to
the best knowledge of the Company, threatened against or involving the
employees of the Company, (c) except as set forth on Schedule 3.12, is no
labor union that claims to represent the employees of the Company, (d) is
pending no grievance that might have a material adverse effect upon the
Company and its Subsidiaries considered as a whole, and no pending
arbitration proceeding arising out of or under any collective bargaining
agreement of the Company and no claim therefor has been asserted which, in
either case, might have a material adverse effect upon the Company and its
Subsidiaries considered as whole, (e) except as set forth on Schedule 3.12,
is no collective bargaining agreement that is in
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effect or is currently being negotiated (or pending) by the Company with
respect to its employees, and (f) has not been any labor difficulty giving
rise to a material adverse effect experienced by the Company and its
Subsidiaries considered as whole during the last three calendar years. To
the best of its knowledge, the Company has not taken or failed to take any
action that could form the basis for a valid claim or charge of an unfair
labor practice or discriminatory employment practice under any federal, state
or local law or regulation relating to labor-management relations or
employment discrimination that could have a material adverse effect on the
Company and its Subsidiaries considered as a whole.
3.13 ENVIRONMENTAL MATTERS.
(a) To the best of its knowledge the Company possesses all necessary
permits, licenses and other approvals and authorizations for its operations
that are required under Environmental Laws and that it is in compliance with
such permits, licenses, approvals and authorizations. "ENVIRONMENTAL LAWS"
means all federal, state and local laws, ordinances, rules and regulations
relating to or regulating human health or safety or environmental matters, or
protection of the environment, or pollution or contamination of the air,
soil, surface water, or groundwater. The Company is and since October 30,
1984 has been in compliance with all applicable Environmental Laws except
where non-compliance would not have a material adverse effect on the
financial condition of the Company and its Subsidiaries considered as a whole.
(b) The Company is not subject to any outstanding order, demand, action
or claim from any person or entity pursuant to, nor has the Company received
any written notice from any person or entity of any violations of or alleged
violations of, any Environmental Law.
(c) Except as disclosed on Schedule 3.13(c), since October 30, 1984, the
Company has not owned or leased storage tanks (whether above ground or
underground).
(d) Since October 30, 1984, the Company has not caused or permitted the
Release of any Hazardous Substance onto and is unaware of any Hazardous
Substance present on the properties owned, operated or leased by the Company.
"HAZARDOUS SUBSTANCE" means those substances as defined by Section 101(14)
of Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), 42 U.S.C. Section 9601(14), and its implementing
regulations or any other applicable Environmental Law. "RELEASE" means any
spilling, leaking, pumping, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing into the environment of hazardous
substances into or through soil, air, surface water or groundwater that is
required to be reported pursuant to
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Section 103(a) of CERCLA, 42 U.S.C. Section 9603(a), and its implementing
regulations or any other applicable Environmental Law.
(e) There are no disposal sites for Hazardous Wastes under any
Environmental Law located on the real estate now or previously owned,
occupied or leased by the Company. "HAZARDOUS WASTE" means any waste as
defined by Section 1004(5) of the Resource Conservation and Recovery Act, 42
U.S.C. Section 6903(5), and its implementing regulations. To the best of its
knowledge, and except as disclosed on Schedule 3.13(e) the Company is not
liable or a responsible party or potentially liable or responsible party at
any Superfund site.
ARTICLE 4
COVENANTS
4.1 PROXY STATEMENT. As soon as practicable, the Company shall file
with the Commission under the Exchange Act, and shall use all reasonable
efforts to have cleared by the Commission, and as promptly as practicable
after such clearance shall mail to its stockholders, a proxy statement or
information statement, as appropriate, and all amendments and supplements
thereto required by law (the "Proxy Statement"), with respect to the Special
Meeting (as such term is defined in Section 4.2). Each of BarCo, Sub and the
Company represent that the information supplied or to be supplied for
inclusion by BarCo, Sub or the Company in the Proxy Statement, as the case
may be, will not, at the time the Proxy Statement is filed with the
Commission, at the time it is mailed to stockholders of the Company or at the
time of the Special Meeting be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make
the statements therein not misleading. The Proxy Statement shall contain the
recommendation of the Board of Directors that stockholders approve the
Merger; provided, however, that nothing in this Section 4.1 shall require the
Board of Directors to act, or refrain from acting, in any manner which, in
the opinion of the Board of Directors after consultation with its counsel
and/or investment advisors, could subject the Board of Directors to claims
that it failed to properly discharge its fiduciary duties under applicable
law.
4.2 MEETING OF STOCKHOLDERS OF THE COMPANY. As soon as practicable, the
Company shall take all action necessary, in accordance with Delaware Law and
its Certificate of Incorporation and Bylaws, to convene a meeting of its
stockholders (the "Special Meeting") as promptly as practicable to consider
and vote on the Merger and to vote on this Agreement. The stockholder vote or
consent required for approval of the Merger and this Agreement shall be no
greater than that provided for by Delaware Law, the Company's Certificate of
Incorporation or its Bylaws. The Company shall use its best efforts to
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solicit from stockholders of the Company proxies in favor of the approval of
this Agreement and to take all other action necessary or, in the reasonable
judgment of BarCo, helpful to secure a vote of stockholders in favor of the
Merger and to approve this Agreement; provided, however, that nothing in this
section 4.2 shall require the Board of Directors to act, or refrain from
acting, in any manner which, in the opinion of the Board of Directors after
consultation with its counsel and/or investment advisors, could subject the
Board of Directors to claims that it failed to properly discharge its
fiduciary duties under applicable law. At the Special Meeting, BarCo and
each subsidiary of BarCo shall vote, or cause to be voted, all of the Shares
then owned by BarCo or such affiliate in favor of the Merger and this
Agreement. The Company will notify BarCo both orally and in writing at least
24 hours prior to the mailing of the Proxy Statement to the stockholders of
the Company of its intent to mail the Proxy Statement. Anything to the
contrary contained herein notwithstanding, the Company shall not include in
the Proxy Statement any information with respect to BarCo or its affiliates
or associates, the form and content of which information shall not have been
approved by BarCo prior to such inclusion, subject to requirements of
applicable law (but in any event only after the Company has consulted with
BarCo in advance). If required by applicable law, BarCo and the Company
shall file with the Commission and make available to the Company's
stockholders, as required by applicable law, a joint Schedule 13E-3 (the
"Schedule 13E-3") with respect to the Special Meeting and the Merger. Each
of BarCo, Sub and the Company represent that information supplied or to be
supplied for inclusion by BarCo, Sub or the Company, as the case may be, in
any Proxy Statement and the Schedule 13E-3 will not, at the time of the
filing thereof with the Commission and at the time of the mailing thereof to
stockholders and at the date of the Special Meeting, be false or misleading
with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading and BarCo,
Sub and the Company agree promptly to correct any such information provided
by them for use in a Proxy Statement and/or a Schedule 13E-3 which shall have
become false or misleading in any material respect and take all steps
necessary to cause such documents as so corrected to be filed with the
Commission and to be disseminated to holders of Shares, in each case as and
to the extent required by applicable law. The Company agrees that any Proxy
Statement filed by it, and the Company and BarCo agree that any Schedule
13E-3 filed by them, shall comply as to form in all material respects with
the provisions of applicable law.
4.3 ACQUISITION PROPOSALS. The Company and its Subsidiaries shall
not, directly or indirectly, through any officer, director, agent or
otherwise, solicit, initiate or encourage submission of proposals or offers
from any person relating to any acquisition or purchase of all or
substantially all of the assets of, or any equity interest in, the Company or
any of its
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Subsidiaries or any merger, consolidation or business combination with the
Company or any of its Subsidiaries, or participate in any discussions or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist or participate
in, facilitate or encourage, any effort or attempt by any other person to do
or seek any of the foregoing. Notwithstanding the foregoing, however,
nothing in this Section 4.3 shall require the Board of Directors to act, or
refrain from acting, in any manner which, in the opinion of the Board of
Directors after consultation with its counsel and/or investment advisors,
could subject the Board of Directors to claims that it failed to properly
discharge its fiduciary duties under applicable law. The Company shall
promptly notify BarCo if any such proposal or offer, or any inquiry or
contact with any person with respect thereto, is made.
4.4 INTERIM OPERATIONS. During the period from the date of this
Agreement to the Effective Time, except as specifically contemplated by this
Agreement or otherwise as consented to or approved in writing by BarCo:
(a) The business of the Company and each of its Subsidiaries
shall be conducted only in the ordinary and usual course of business
and consistent with past practice;
(b) The Company shall use reasonable efforts to preserve
intact the business organization of the Company and each of its
Subsidiaries, to keep available the services of its and their
present officers and key employees in good standing, and to
preserve the goodwill of those having business relationships
with it and its Subsidiaries;
(c) Neither the Company nor any Subsidiary shall amend its
charter documents or similar governing documents;
(d) Except for Shares issuable upon exercise of currently
outstanding stock options under the Company's Directors' Stock
Option Plan and Employees' Incentive Stock Option Plan or issuable
pursuant to the Company's Directors' Deferred Compensation Plan,
neither the Company nor any Subsidiary shall authorize for issuance,
issue or deliver any additional debt or equity securities or any
class or series thereof or any securities convertible into the same
or issue or grant any right, option or other commitment for the
issuance of any of the foregoing securities;
(e) Neither the Company nor any Subsidiary shall split, combine,
reclassify or otherwise modify the
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terms and provisions of any of its debt or equity securities or declare, set
aside or pay any dividend (whether in cash, stock or property) in respect of
its debt or equity securities or redeem or otherwise acquire any of its debt
or equity securities except as contemplated hereby;
(f) Neither the Company nor any Subsidiary shall dispose of or
acquire any material properties or assets except in the ordinary course
of business;
(g) Neither the Company nor any Subsidiary shall enter into or
amend any consulting agreements or other agreements with employees,
increase the compensation payable or to become payable by it to any of
its officers, employees or agents over the amount payable as of the
date of this Agreement, adopt or amend any employee benefit plan or
arrangement, or make any advances to employees (other than advances for
reimbursable expenses) except with respect to any of the above, such as
are generally consistent with the Company's existing guidelines and are
made in the ordinary course of business; provided, however, the Company
shall be authorized to negotiate and execute the renewal of the union
contract or contracts at its Harvey, Illinois facility with such terms
as the Company, using its commercially reasonable judgment, may
determine;
(h) Neither the Company nor any Subsidiary shall borrow or enter
into any agreements to borrow money or guarantee or agree to guarantee
the obligations of others, excluding (i) any amounts borrowed, net of
any repayments, in the ordinary course of business pursuant to and in
accordance with the terms and conditions of its existing lines of
credit as the same may be reasonably amended, modified or extended
hereafter by the Company using its commercially reasonable judgment and
(ii) guarantees, net of the extinguishment of any existing guarantees,
of the debt of the Subsidiaries of the Company;
(i) Except as contemplated hereby, neither the Company nor any
Subsidiary shall directly or indirectly redeem, purchase or otherwise
acquire, commit to acquire or change the terms of any of its debt or
equity securities or any class or series thereof or any securities
convertible into the same or directly or indirectly terminate or reduce
or commit to terminate or reduce any bank line of credit or the
availability of any funds under any other loan or financing agreement;
provided, however, that the Company or any Subsidiary may exercise any
option or
-17-
right to repurchase securities issued pursuant to a Company
or Subsidiary benefit plan at a price at or below the Merger
Consideration for Shares; and provided, further, that the Company may
borrow under existing credit facilities under the terms existing as of
the date hereof as the same may be reasonably amended, modified or
extended hereafter by the Company using its commercially reasonable
judgment;
(j) Neither the Company nor any Subsidiary shall fail to pay or
otherwise satisfy its monetary obligations as they become due, except
where the consequences of failure to pay are not material to the
Company and its Subsidiaries considered as a whole;
(k) Neither the Company nor any Subsidiary shall cancel,
materially amend or fail to renew any insurance policy; and
(l) Neither the Company nor any Subsidiary shall agree in
writing or otherwise to take any of the foregoing actions set forth in
clauses (b) through (k) above or take any actions which would make any
representation or warranty in this Agreement untrue or incorrect in
any material respect.
4.5 ACCESS AND INFORMATION.
(a) Subject to and in accordance with the terms of those certain
letters dated July 24, 1995 and July 28, 1995 between BarCo and the Company
(the "Confidentiality Agreement"), relating to the exchange of information
between the parties and certain other matters, the Company has previously
afforded (and will afford prior to the termination of this Agreement) to
BarCo and to BarCo's accountants, counsel and other representatives full
access in a reasonable manner throughout the period prior to the Effective
Time to all of its properties, books, contracts, commitments and records, and
has furnished (and will furnish) to BarCo and BarCo's accountants, counsel
and other representatives all information concerning its business, properties
and personnel, including certain proprietary and confidential information of
the disclosing party, as BarCo has requested (or may reasonably request).
The Company shall furnish BarCo with drafts of any proposed filings with the
Commission as the same are distributed internally within the Company as well
as copies of such reports and documents concurrently upon their filing with
the Commission.
(b) Any furnishing of information pursuant hereto or any investigation
by either party shall not affect that party's right to rely on the
representations and warranties made by the other party in this Agreement.
Except as otherwise provided by law, BarCo, the Company and Sub each agrees
to maintain all
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information received pursuant to the terms of this Agreement and the
Confidentiality Agreement in accordance with the terms and conditions of
the Confidentiality Agreement.
(c) In the event that between the date hereof and the Effective Date
any federal, state, local or foreign governmental authority shall commence
any examination, review, investigation, action, suit or proceeding against
the Company or BarCo with respect to the Merger, the party as to which such
examination, review, investigation, action, suit or proceeding is commenced
shall give prompt notice thereof to the other party, shall keep the other
party informed as to the status thereof and have access to and be consulted
in connection with any document filed or provided to such governmental
authority in connection with such examination, review, investigation, action,
suit or proceeding.
4.6 CERTAIN ACTIONS, FILINGS AND CONSENTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts promptly to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement, including using all reasonable efforts promptly to obtain all
necessary waivers, consents and approvals and effect all necessary
registrations and filings, including, but not limited to, (a) filings under
the Xxxx-Xxxxx Act, including responses to requests for additional
information, and (b) submissions of information requested by government
authorities. Each of the parties hereto shall cooperate with one another in
determining whether any filings are required to be made or consents,
approvals, permits or authorizations are required to be obtained under any
other federal, state or foreign law or regulation or any consents, approvals
or waivers are required to be obtained from other parties to loan agreements
or other contracts material to the Company's business in connection with the
consummation of the Merger and in making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such consents, permits, authorizations, approvals or waivers; provided,
however, that nothing in this Section 4.6 shall require the Board of
Directors to act, or refrain from acting, in any manner which, in the opinion
of the Board of Directors after consultation with its counsel and/or
investment advisors, could subject the Board of Directors to claims that it
failed to properly discharge its fiduciary duties under applicable law.
4.7 EXPENSES. Except as set forth in Section 6.2, whether or not the
transactions contemplated by this Agreement are consummated and made
effective, all expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
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4.8 OPINION OF COUNSEL. Two (2) business days prior to the Effective
Date, BarCo and Sub shall have received from Wildman, Harrold, Xxxxx &
Xxxxx, counsel to the Company, an opinion, dated the date of delivery,
reasonably satisfactory to BarCo and Sub, substantially to the effect of
Section 3.2.
4.9 DIRECTORS' AND OFFICERS' INSURANCE AND INDEMNIFICATION. (a) With
respect to all losses, claims, damages or liabilities arising out of actions
or omissions occurring at or prior to the Effective Time (collectively
"Losses") arising under Environmental Laws, until the death of all
Indemnified Parties (as defined below), and (b) with respect to all other
Losses, until the later of (i) five (5) years after the Effective Time or
(ii) the final resolution of all Losses and payment of all expenses described
below, BarCo shall, and shall cause the Sub, the Company and the Surviving
Corporation to, jointly and severally, indemnify, defend and hold harmless
the present and former officers and directors of the Company and present and
former officers and directors of the Subsidiaries who presently would be
indemnified under the Bylaws of the Company or its Subsidiaries or who have
indemnity agreements with the Company and the estates, descendants, heirs and
beneficiaries of the estates, of all such officers and directors (an
"Indemnified Party" and collectively the "Indemnified Parties") against all
Losses to the full extent permitted under and in accordance with Delaware
law, or the law of the jurisdictions under which the Subsidiaries are
incorporated, as appropriate, or the Certificate of Incorporation or Bylaws
of the Company or the Subsidiaries, as applicable, or applicable
indemnification agreements in effect at the date hereof (to the extent
consistent with applicable law), including provisions relating to advances of
expenses incurred in the defense of any action or suit. BarCo shall use its
best efforts to include the Indemnified Parties in any directors' and
officers' insurance policy BarCo may obtain, provided the additional cost of
adding the Indemnified Parties does not equal or exceed the cost of such
officers' and directors' insurance policy without the Indemnified Parties.
4.10 BEST EFFORTS. Each of BarCo and Sub shall use its best efforts to
consummate the transactions contemplated hereby, including the Financing, as
defined in Section 5.2 below.
4.11 RESALE. Sub agrees that, if prior to the first anniversary of the
date of this Agreement, Sub or any assignee of Sub, the Company or the
Surviving Corporation enters into an agreement to (i) sell or exchange all or
substantially all of the Common Stock of the Company or the Surviving
Corporation to or with, (ii) merge or consolidate the Company or the
Surviving Corporation with, or (iii) sell substantially all the assets of the
Company or the Surviving Corporation to, an unaffiliated third party, Sub or
any assignee of Sub, the Company and the Surviving Corporation will jointly
promptly use their commer-
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cially reasonable efforts to jointly promptly pay each stockholder of the
Company whose Shares were converted pursuant to Section 1.3(a) hereof
(including any stockholder that enters into a Stock Option Agreement with
BarCo and Sub as provided in such Stock Option Agreement), each option holder
entitled to payment under Section 1.3(e) hereof and each person entitled to
payment under Section 1.3(f) hereof an amount equal to fifty percent (50%) of
the product of (y) the difference between the Aggregate Transaction Value (as
defined below) for such subsequent transaction and $55,000,000 and (z) a
fraction, the numerator of which is the number equal to the total of (A) the
number of Shares of the stockholder of the Company whose Shares were
converted pursuant to Section 1.3(a) hereof, plus (B) the number of Shares
covered by stock options for which such person (or an option holder not
included in (A) of this clause) was entitled to payment under Section 1.3(e),
plus (C) the number of Share equivalents for which such person (or a
participant in the Directors' Deferred Compensation Plan not included in (A)
of this clause) was entitled to payment under Section 1.3(f) and the
denominator of which is the number equal to the total of (1) the number of
Shares issued and outstanding as of the Effective Time plus (2) the number of
Shares underlying stock options for which the option holder is entitled to
payment under Section 1.3(e) hereof plus (3) the number of Share equivalents
for which the participant under the Directors' Deferred Compensation Plan is
entitled to payment under Section 1.3(f) hereof. For the purposes of this
Section 4.11, "Aggregate Transaction Value" shall mean the sum of the
aggregate consideration received by the sellers in the transaction (reduced
by the present value of any future or contingent obligations retained by the
sellers) plus the aggregate liabilities assumed by the acquiring party in the
transaction. If the consideration received by the Sub or any assignee of the
Sub, the Company or the Surviving Corporation is other than cash, the amount
due the stockholder under this Section 4.11 may be paid in like kind
consideration or in cash.
ARTICLE 5
CONDITIONS
5.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The respective
obligations of each party hereto under this Agreement to consummate the
Merger shall be subject to the fulfillment at or prior to the Effective Time
of the following conditions:
(a) APPROVAL OF STOCKHOLDERS. The approval of the stockholders of the
Company referred to in Section 4.2 shall have been obtained, if required by
applicable law or by the Company's Certificate of Incorporation or Bylaws.
(b) LEGAL PROCEEDINGS. No preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission nor any
statute, rule,
-21-
regulation or executive order promulgated or enacted by any governmental
authority shall be in effect, which would prevent the consummation of the
Merger; provided, however, that the parties shall use their best efforts to
seek to obtain the removal of any such order, decree or ruling.
(c) ANTITRUST. The Xxxx-Xxxxx Act waiting period has expired.
5.2 ADDITIONAL CONDITION TO THE OBLIGATIONS OF BARCO AND SUB. The
obligations of BarCo and Sub under this Agreement to consummate the Merger
shall be subject to the following condition: BarCo shall have consummated a
debt financing raising a minimum of $50,000,000 (the "Financing") by December
29, 1995.
5.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company under this Agreement to consummate the Merger
shall be subject to the following conditions: the fairness opinion issued by
the Company's investment advisors shall be re-confirmed as of the Effective
Time; and the Company shall have received a letter or letters from a
valuation firm acceptable to the Company (which acceptance shall not be
unreasonably withheld) as to the solvency of the Company and its Subsidiaries
and the Surviving Corporation on a consolidated basis after giving effect to
BarCo's proposed Financing and the transactions contemplated by this
Agreement.
ARTICLE 6
MISCELLANEOUS
6.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether or not it has been approved by the stockholders
of the Company:
(a) By the mutual written consent of a majority of the Board of
Directors of the Company and the Board of Directors of BarCo;
(b) By BarCo:
(i) if the Company shall have (A) withdrawn or modified
publicly its approval or recommendation of this Agreement or the Merger
including by the approval of any offer by any other person or (B) taken
any public position inconsistent with such approval or recommendation
or failed to reconfirm publicly such approval or recommendation within
ten (10) business days of a request for such reconfirmation by BarCo or
Sub; or if the Board of Directors shall have resolved to do any of the
foregoing; or
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(ii) if any corporation, partnership, person, other entity or
group (as defined in Section 13(d)(3) of the Exchange Act) other than
BarCo or Sub or any of their respective subsidiaries shall have become
the beneficial owner of forty-five percent (45%) or more of the Shares;
or
(iii) if Stelco Inc. shall have taken any legal action, or taken
any actions or engaged in transactions which have or in the reasonable
judgment of Purchaser will have the effect of preventing the Merger or
the transactions contemplated hereby from being consummated on or
before December 29, 1995, other than failing to vote for the
transaction; or
(iv) if a tender or exchange offer shall have been commenced by
any third party to acquire twenty percent (20%) or more of the capital
stock of the Company at a price in excess of $7.75 per share; or
(v) if on the date hereof or at any time prior to the Effective
Date, the representation and warranty of the Company contained in
Section 3.13 shall not be true and correct or the Company shall have
breached in any material respect or failed to perform in any material
respect any of its obligations, covenants or agreements under this
Agreement or any of the representations and warranties of the Company
set forth in this Agreement (other than the representation and warranty
contained in Section 3.13) shall not be true and correct in any
material respect; or
(vi) if as of December 29, 1995 BarCo shall not have raised a
minimum of $50,000,000 in a debt financing; or
(vii) if in BarCo's reasonable discretion the results of BarCo's
environmental due diligence review of the Company are unsatisfactory
and BarCo has so notified the Company within three (3) weeks from the
date hereof; or
(viii) the conditions to the obligations of BarCo set forth in
Article 5 have not been satisfied;
(c) By the Company:
(i) if the Closing shall not have taken place by December 29,
1995; or
(ii) if BarCo shall not have received a "highly confident" letter
substantially in the form of Annex I hereto within 3 weeks after the
date hereof; or
-23-
(iii) if the Board of Directors has determined, in its opinion
after consultation with its counsel and/or its investment advisors,
that its failure to terminate this Agreement could subject the Board of
Directors to claims that it failed to properly discharge its fiduciary
duties under applicable law; or
(iv) if the conditions to the obligations of the Company set
forth in Article 5 have not been satisfied; or
(v) if on the date hereof or at any time prior to the
consummation of the Merger or any amendment or extension thereof, the
representations and warranties of BarCo and Sub contained in this
Agreement shall not be true and correct which shall materially impair
BarCo's or Sub's ability to perform this Agreement or BarCo and Sub
shall have breached in any material respect or failed to perform in any
material respect any of their obligations, covenants or agreements
under this Agreement which shall materially impair BarCo's or the Sub's
ability to perform this Agreement;
(d) By either BarCo or the Company:
(i) if a court of competent jurisdiction or a governmental,
regulatory or administrative agency or commission shall have issued an
order, decree or ruling or taken any other action, in each case
restraining, enjoining or otherwise prohibiting the Merger which is
still in effect on December 29, 1995; or
(ii) if the Merger shall not have been consummated on or before
December 29, 1995, which date may be extended by the mutual written
consent of the Board of Directors of the Company and the Board of
Directors of BarCo; or
(iii) if Stelco Inc. shall have exercised all of its rights of
first refusal under Section 3.3 of that certain Bliss & Xxxxxxxx Right
of First Refusal and Standstill Agreement dated May 11, 1990 with
respect to all shares of Common Stock of the Company of the Management
Stockholders (as such term is defined in such agreement).
In the event of such termination and abandonment, no party to this
Agreement (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, other than pursuant
to Section 4.5(c) or 6.2 hereof, or in the case of signers thereto, the Stock
Option Agreement and the Confidentiality Agreement, except that nothing
-24-
herein will relieve any party from liability for any breach of this Agreement
prior to such termination.
6.2 EXPENSE AND CANCELLATION PAYMENT.
(a) If BarCo or Purchaser shall have terminated this Agreement pursuant
to Section 6.1(b)(iii) or (iv) or the Company shall have terminated this
Agreement pursuant to Section 6.1(c)(iii) hereof, then the Company shall
promptly pay Purchaser a cash cancellation fee (the "Cancellation Fee") of
one million dollars ($1,000,000) plus reimbursement for all out-of-pocket
expenses and fees incurred by Purchaser, BarCo or their affiliates or on
their behalf in connection with the Merger and the transactions contemplated
by this Agreement (provided that the amount of such expense reimbursement
shall not exceed four hundred thousand dollars ($400,000)).
(b) Each of the parties acknowledges that the agreement contained in
this Section 6.2 is an integral part of the transactions contemplated in this
Agreement, and that, without the agreement, BarCo and Purchaser would not
enter into this Agreement; accordingly, if the Company fails promptly to pay
the amount due pursuant to this Section 6.2, and, in order to obtain such
payment, BarCo or Purchaser commences a suit against the Company to collect
the fee provided for herein, the Company shall pay to BarCo or Purchaser its
reasonable costs and expenses (including reasonable attorneys' fees) in
connection with such suit, together with interest on the amount of such fee
at the prime rate publicly announced by Bank of America NT & SA on the date
such payment was required to be made, provided that BarCo or Purchaser
ultimately prevails by final judgment in such suit.
6.3 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party which is, or whose stockholders are, entitled
to the benefits hereof and this Agreement may be amended or supplemented at
any time; provided, however, that, (a) any such waiver, amendment or
supplement by the Company shall be effective as against the Company only if
approved by a majority of the Board of Directors of the Company and (b) after
this Agreement has been adopted by the stockholders of the Company, no such
amendment shall reduce the amount or change the consideration to be paid to
the stockholders or alter or change any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the
stockholders of the Company. No such waiver, amendment or supplement shall
be effective unless in writing and signed by the party or parties sought to
be bound thereby.
6.4 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement shall survive the
consummation of the Merger.
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6.5 AGREEMENT TO DEFEND. In the event any claim, action, suit,
investigation or any legal, administrative or other proceeding is commenced
by any governmental body or other person which questions the validity or
legality of the transactions contemplated by this Agreement, or seeks to
enjoin, restrain or prohibit such transactions, or seeks damages in
connection therewith, whether before or after the Effective Time, the parties
hereto agree as determined by their respective Boards of Directors in their
reasonable discretion, to the fullest extent permissible by law, to cooperate
and use their best efforts to vigorously defend against and respond thereto.
6.6 BROKERAGE FEES AND COMMISSIONS. Except for The Chicago
Corporation, the Company hereby represents and warrants to BarCo and Sub with
respect to the Company, and BarCo and Sub hereby represent and warrant to the
Company with respect to BarCo and Sub, that no person or entity is entitled
to receive from the Company or BarCo or Sub, respectively, any investment
banking, brokerage or finder's fee or fees for financial consulting or
financial advisory services in connection with this Agreement or the
transactions contemplated hereby.
6.7 PUBLIC ANNOUNCEMENTS. Neither BarCo nor Sub nor the Company will
issue any press release or otherwise make any public statement with respect
to the Merger without the prior approval of the other party (which approval
shall not be unreasonably withheld), except such as may be required by law or
by obligations pursuant to any listing agreement with any national securities
exchange or by NASDAQ (but only after BarCo, Sub or the Company, as the case
may be, shall have consulted with the other party in advance regarding the
form and substance of such press release or statement).
6.8 SECTION HEADINGS. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
6.9 FIDUCIARY DUTIES. Anything in this Agreement to the contrary
notwithstanding, nothing in this Agreement shall require the Board of
Directors to act, or refrain from acting, in the future in any manner which,
in the opinion of the Board of Directors after consultation with its counsel
and/or investment advisors, could subject the Board of Directors to claims
that it failed to properly discharge its fiduciary duties under applicable
law.
6.10 NOTICES. All notices or other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, postage prepaid, with
return receipt requested, addressed as follows:
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If to BarCo or Sub, to: BRW Steel Corporation
c/o Veritas Capital, Inc.
Xxx Xxxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Co-Chairman
With copies to: Pillsbury Madison & Sutro
0000 Xxxxxxxxxxx Xxxxxx, XX, #0000
Xxxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxx
If to the Company, to: Bliss & Xxxxxxxx Industries Inc.
000 Xxxx 000xx Xxxxxx
Xxxxxx, XX 00000
Attention: President
With copies to: Company's Counsel
Wildman, Harrold, Xxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxx, #0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
6.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of
which together shall be deemed to be one and the same instrument.
6.12 APPLICABLE LAW. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to the conflict of laws rules
thereof.
6.13 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, of the
parties with
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respect to such subject matter (other than the Confidentiality Agreement).
6.14 JURISDICTION. Any judicial proceeding brought against any of the
parties to this Agreement with respect to any dispute arising out of this
Agreement or any matter related hereto may be brought in the courts of the
State of Illinois located in Chicago, Illinois, or in the United States
District Courts in Chicago, Illinois, and, by execution and delivery of this
Agreement, each of the parties to this Agreement accepts the exclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. The foregoing
consents shall not constitute general consents to service of process in the
State of Illinois for any purpose except as provided above and shall not be
deemed to confer rights to any Person other than the respective parties to
this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto on the date first above
written.
BRW STEEL CORPORATION
By
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President and
Chief Executive Officer
B & L ACQUISITION CORPORATION
By
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Its
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BLISS & XXXXXXXX INDUSTRIES INC.
By
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President, Chief Executive
Officer and
Chairman of the Board