EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
XXXXXX CHEMICAL GROUP, INC.,
IMC GLOBAL INC.
and
IMC MERGER SUB INC.
Dated as of December 11, 1997
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1 Definitions 1
ARTICLE 2
FORMATION OF NEWCO AND THE MERGER
2.1 Reserved 4
2.2 The Merger 4
2.3 Closing 5
2.4 Effective Time 5
2.5 Effects of the Merger 5
2.6 Termination 5
2.7 Effect of Termination 6
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock 6
3.2 Treatment of Options 8
3.3 Exchange of Certificates 8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Organization of the Company and the Subsidiaries;
Authority. 11
4.2 Capitalization of the Company; Ownership. 11
4.3 Subsidiaries of the Company. 11
4.4 Ability to Carry Out the Agreement. 12
4.5 Consents and Approvals. 12
4.6 Financial Statements. 12
4.7 Title to Properties; Absence of Liens. 13
4.8 Litigation. 14
4.9 Compliance with Law. 14
4.10 Contracts. 14
4.11 Brokers and Intermediaries. 15
4.12 Tax Matters. 15
4.13 Employee Benefits. 16
4.14 Intellectual Property. 17
4.15 Environmental Matters. 18
4.16 Absence of Certain Changes. 18
4.17 Employees, Labor Matters, etc. 20
4.18 Affiliate Transactions. 21
4.19 Availability of Assets and Legality of Use. 21
4.20 Insurance. 21
4.21 HCNA SEC Documents. 21
4.22 Disclaimer of Other Representations and Warranties;
Knowledge; Disclosure. 22
4.23 Consent of Stockholders. 23
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE BUYER
5.1 Organization and Authority of the Buyer. 23
5.2 Ability to Carry Out the Agreement. 23
5.3 Consents and Approvals. 24
5.4 Financial Ability to Perform. 24
5.5 Brokers and Intermediaries. 24
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
OF THE COMPANY AND THE BUYER
6.1 Access and Information. 24
6.2 Regulatory Filings. 24
6.3 Conduct of Business. 25
6.4 Dividends; Changes in Stock. 25
6.5 Satisfaction of Conditions to the Merger. 25
6.6 Employee Matters. 26
6.7 Tax Matters. 27
6.8 Announcement. 27
6.9 Notice to Stockholders. 28
6.10 No Solicitation. 28
6.11 Certain Litigation. 28
6.12 Subsequent Financial Statements. 28
6.13 Name of Surviving Corporation. 28
6.14 Insurance. 29
ARTICLE 7
CONDITIONS PRECEDENT OF THE COMPANY
7.1 Representations and Warranties. 29
7.2 Agreements. 29
7.3 Buyer Certificate. 29
7.4 No Injunction. 29
7.5 Consents. 29
7.6 Miscellaneous Closing Deliveries. 30
7.7 Penrice Condition. 30
ARTICLE 8
CONDITIONS PRECEDENT OF THE BUYER
8.1 Representations and Warranties. 30
8.2 Agreements. 30
8.3 The Company's Certificate. 31
8.4 No Injunction. 31
8.5 Consents. 31
8.6 No Material Adverse Change. 31
8.7 Miscellaneous Closing Deliveries. 31
8.8 Penrice Condition. 31
ARTICLE 9
NONSURVIVAL OF REPRESENTATIONS AND
WARRANTIES; CERTAIN ACKNOWLEDGMENTS
9.1 Nonsurvival of Representations and Warranties. 31
9.2 Information. 32
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification. 32
ARTICLE 11
MISCELLANEOUS
11.1 Expenses. 34
11.2 Applicable Law. 34
11.3 Notices. 34
11.4 Entire Agreement. 36
11.5 Amendments. 36
11.6 Headings; References. 36
11.7 Counterparts. 36
11.8 Parties in Interest; Assignment. 36
11.9 Severability; Enforcement. 36
11.10 Waiver. 36
11.11 Relationship Between the Parties. 37
11.12 WAIVER OF CONSEQUENTIAL DAMAGES AND JURY TRIAL. 37
11.13 Approval of Company Stockholders. 37
11.14 Liquidated Damages. 37
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of December 11, 1997
(herein, together with the Schedules and Exhibits attached hereto,
referred to as the "Agreement") by and among Xxxxxx Chemical Group,
Inc., a Delaware corporation (the "Company"), IMC Global Inc., a
Delaware corporation ("Buyer") and IMC Merger Sub Inc., a Delaware
corporation ("Newco").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of the Buyer, Newco
and the Company have approved the business combination transaction
provided for herein in which Newco will merge with and into the Company
with the Company continuing as the surviving corporation (the
"Merger").
WHEREAS, the Buyer and the Company desire to make certain
representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the
parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following
terms shall have the meanings set forth below:
"Accounting Principles" means the accounting principles, policies
and procedures of the Company and its Subsidiaries, as employed by each
such company, which are in conformity with GAAP.
"Active Employees" shall have the meaning set forth in Section
6.6(a).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly Controlling, Controlled by, or under common
Control with, such other Person.
"Agreement" shall have the meaning set forth in the forepart of
this Agreement.
"Affiliate Transactions" shall have the meaning set forth in
Section 4.18.
"Applicable Interest Rate" shall have the meaning ascribed thereto
in Section 3.1(b).
"Certificate of Merger" shall have the meaning set forth in
Section 2.4.
"Claims" shall have the meaning set forth in Section 10.1(a).
"Closing" shall have the meaning set forth in Section 2.3.
"Closing Date" shall have the meaning set forth in Section 2.3.
"Code" means the Internal Revenue Code of 1986, as amended or, if
appropriate, any predecessor statute.
"Company Benefit Plans" shall have the meaning set forth in
Section 4.13.
"Company Common Stock" means, collectively, the Class A common
stock of the Company, par value $.01 per share, the Class B common
stock of the Company, par value $.01 per share, the Class C common
stock of the Company, par value $.01 per share, and the Class D common
stock of the Company, par value $.01 per share.
"Company Convertible Preferred Stock" means the Convertible
Preferred Stock of the Company, par value $.01 per share.
"Company Group" means any "affiliated group" (as defined in
Section 1504(a) of the Code without regard to the limitations contained
in Section 1504(b) of the Code) that, at any time on or before the
Effective Time, includes or has included the Company or any predecessor
of or successor to the Company (or another such predecessor or
successor), or any other group of corporations which, at any time on or
before the Effective Time, files or has filed Returns on a combined,
consolidated or unitary basis with the Company or any predecessor of or
successor to the Company (or another such predecessor or successor).
"Company Non-Convertible Preferred Stock" means the Non-
Convertible Preferred Stock of the Company, par value $.01 per share.
"Company Stock" means, collectively, Company Common Stock, Company
Convertible Preferred Stock, and Company Non-Convertible Preferred
Stock.
"Company Stock Option" shall have the meaning set forth in Section
3.2.
"Confidentiality Agreement" shall have the meaning set forth in
Section 6.1.
"Control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect
to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of such Person, whether through ownership of voting securities, by
contract or otherwise.
"DGCL" shall mean the Delaware General Corporation Law.
"Dissenting Shares" shall have the meaning set forth in Section
3.1(d).
"DOJ" shall mean the Department of Justice.
"Effective Time" shall have the meaning set forth in Section 2.4.
"Encumbrances" shall have the meaning set forth in Section 4.7.
"Environmental Law" means any federal, state, local or foreign
statute, law or regulation, in effect on the date hereof relating to
pollution or protection of the environment, health or safety.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Agent" shall have the meaning set forth in Section
3.3(a).
"Exchange Fund" shall have the meaning set forth in Section
3.3(a).
"Final Termination Date" shall have the meaning set forth in
Section 2.6(b).
"FTC" shall mean the Federal Trade Commission.
"GAAP" shall mean U.S. generally accepted accounting principles.
"Governmental Entity" shall mean any federal, state, local or
foreign government or any court, administrative agency or commissions
or other governmental authority or agency, domestic or foreign.
"Hazardous Materials" means any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances,
petroleum products (including crude oil or any fraction thereof),
defined or regulated as such in or under any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Information Memorandum" shall have the meaning set forth in
Section 4.22.
"Intellectual Property" shall have the meaning set forth in
Section 4.14(a).
"Losses" shall have the meaning set forth in Section 10.1.
"Material Adverse Effect" means a material adverse effect (either
individually or in the aggregate) on the financial condition or
operations of any of (i) the Company and the Subsidiaries, taken as a
whole or (ii) any Significant Business, taken as a whole.
"Merger Consideration" shall mean the cash payable upon the Merger
as provided in Section 3.1(b) after giving effect to any adjustment
provided for in Section 11.1(a) hereof.
"Penrice Agreement" shall mean the agreement referred to in
Section 7.7 and Section 8.8 hereof.
"Person" means an individual, corporation, partnership, trust or
unincorporated organization or a government or any agency or political
subdivision thereof.
"Property" and "Properties" shall have the meaning set forth in
Section 4.15.
"Reference Balance Sheet Date" shall have the meaning set forth in
Section 4.6.
"Reference Statement of Operations" shall have the meaning
ascribed thereto in Section 4.6.
"Reference Balance Sheet" shall have the meaning set forth in
Section 4.6.
"Retirement Plan" shall have the meaning set forth in Section
4.13(b)(i).
"Returns" means all returns, reports, estimates, information
returns and statements of any nature with respect to Taxes.
"Significant Business" means (i) the businesses of North American
Salt Company, Salt Union Limited and GSL Corporation, taken as a whole
or (ii) the businesses of North American Chemical Company, Xxxxxxx &
Xxxxx GmbH, Societa Chimica Larderello S.p.A. and Penrice Soda Products
Pty Ltd, taken as a whole.
"Stock Plan" shall have the meaning set forth in Section 3.2.
"Stockholders" means the holders of shares of Company Stock set
forth on Schedule 4.2.
"Stockholders Agreement" means the Stockholders Agreement dated as
of October 18, 1993, as amended among the Company and the persons
listed as stockholders on the Schedule of Stockholders attached to the
Stockholders Agreement.
"Subsidiary" (including "Subsidiaries") means any corporation,
joint venture, partnership, limited liability company or other entity
of which the Company, directly or indirectly, owns or controls capital
stock (or other equity interests) representing more than fifty percent
(50%) of the general voting power under ordinary circumstances of such
entity.
"Surviving Corporation" shall have the meaning set forth in
Section 2.2.
"Tax" or "Taxes" means any federal, state, local or foreign
income, gross receipts, profits, franchise, transfer, sales, use,
payroll, occupation, property (real or personal), excise and similar
taxes (including interest, penalties or additions to such taxes).
"WARN" shall have the meaning set forth in Section 6.6.
ARTICLE 2
FORMATION OF NEWCO AND THE MERGER
2.1 Reserved.
2.2 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, Newco
shall be merged with and into the Company at the Effective Time. At
the Effective Time the separate existence of Newco shall cease, and the
Company shall continue as the surviving corporation under the laws of
the State of Delaware and shall continue under the name "IMC Inorganic
Chemicals Inc." as a wholly owned subsidiary of Buyer (the Company as a
surviving corporation in the Merger is sometimes referred to herein as
the "Surviving Corporation").
2.3 Closing. The closing of the merger provided for herein (the
"Closing") will take place at the offices of Winthrop, Stimson, Xxxxxx
& Xxxxxxx at Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m.
(local time) on the date which is two (2) business days following the
satisfaction of the conditions provided in Sections 7.5 and 8.5, or at
such other time and place as the Company and the Buyer shall agree (the
date of the Closing being the "Closing Date").
2.4 Effective Time. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Articles 7 and 8,
the parties shall file with the Secretary of State of the State of
Delaware 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 is permissible in accordance with the DGCL and as
the Buyer and the Company shall agree and as specified in the
Certificate of Merger (the time the Merger becomes effective being the
"Effective Time").
2.5 Effects of the Merger. At the Effective Time:
(a) The separate existence of Newco shall cease and
Newco shall be merged with and into the Company with the
Company continuing as the surviving corporation. At the
Effective Time, and without any further action on the
part of Newco or the Company, the Certificate of
Incorporation and By-laws of Newco as in effect at the
Effective Time shall be the Certificate of Incorporation
and By-laws of the Surviving Corporation following the
Merger until thereafter changed or amended as provided
therein or by applicable law. The directors of Newco at
the Effective Time shall be the directors of the
Surviving Corporation following the Merger and until the
earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as
may be the case. The officers of the Company
immediately prior to the Effective Time shall be the
officers of the Surviving Corporation until their
respective successors are duly elected and qualified.
(b) The Merger shall have all the effects set forth in
the appropriate provisions of the DGCL and as set forth
in this Agreement.
2.6 Termination. This Agreement may be terminated and abandoned
at any time prior to the Effective Time:
(a) by the mutual written consent of the Buyer and the
Company;
(b) by either the Buyer or the Company, if the transactions
contemplated hereby are not consummated on or before
June 30, 1998 (or such later date as may be agreed upon
in writing by the parties hereto) (the "Final
Termination Date");
(c) by the Buyer, if the Company shall have breached any of
its representations, warranties or obligations
hereunder, but only if such breach is continuing on the
Final Termination Date and only if such breach shall
have a Material Adverse Effect; or
(d) by the Company, if the Buyer shall have breached in any
material respect any of its representations or
warranties or obligations hereunder, but only if such
breach is continuing on the Final Termination Date and
only if such breach shall have a material adverse effect
on Buyer's ability to perform its obligations under the
Agreement.
2.7 Effect of Termination. In the event of termination of this
Agreement by either the Company or the Buyer as provided in Section
2.6, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of the Company or the Buyer or
their respective officers or directors, except with respect to Sections
4.11, 5.5, 10.1 and 11.1. Notwithstanding the immediately preceding
sentence, no termination of this Agreement under paragraphs (c) and (d)
of Section 2.6 shall constitute a waiver of any rights of the party
exercising such right of termination.
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the Company,
the Buyer, or Newco:
(a) Capital Stock of Newco. The shares of common
stock of Newco, par value $.01 per share ("Newco Common
Stock"), which are issued and outstanding immediately
prior to the Effective Time, shall be converted into and
become shares of Company Common Stock at a rate of one
(1) share of Company Common Stock for each share of
Newco Common Stock.
(b) Capital Stock of Company.
(i) Subject to Section 3.1(c), (d) and (e),
each share of Company Common Stock shall be
converted into and become a right to receive
$246.90 in cash plus, if the Effective Time shall
not have occurred on or before April 1, 1998, an
amount, measured on a month by month basis, equal
to the result of the following formula:
X((P/365)Y), where X is the number of days after
March 31, 1998 that the Closing shall occur, P is
the Applicable Interest Rate and Y is $246.90. As
used herein, the term "Applicable Interest Rate"
shall mean, for the period from April 1, 1998
through April 30, 1998, 15%, for the period from
May 1, 1998 through May 31, 1998, 17% and for the
period commencing June 1, 1998, 19%;
(ii) Each share of Company Convertible
Preferred Stock shall be converted into the right
to receive (A) an amount in cash equal to accrued
and unpaid dividends in respect thereof as of the
Closing Date, and (B) the right to receive, for
each share of Company Common Stock into which such
share of Company Convertible Preferred Stock is
convertible, $246.90 in cash plus, if the Effective
Time shall not have occurred on or before April 1,
1998, an amount, measured on a month by month
basis, equal to the result of the following
formula: X((P/365)Y), where X is the number of
days after March 31, 1998 that the Closing shall
occur, P is the Applicable Interest Rate and Y is
$246.90; and
(iii) Each share of Company
Nonconvertible Preferred Stock shall be converted
into the right to receive in cash the liquidation
value thereof plus any accrued and unpaid dividends
in respect thereof as of the Closing Date.
(c) Cancellation of Treasury Stock and Certain Company
Stock.
Any shares of Company Stock that are owned immediately prior
to the Effective Time by any of the parties hereto or by any other
wholly owned subsidiary of the Company, including any such common
stock which constitutes treasury stock in the hands of the holder
thereof, shall be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor, and
each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto.
(d) Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, shares of Company Stock
issued and outstanding immediately prior to the
Effective Time held by a holder (if any) who has the
right to demand payment for and an appraisal of such
shares in accordance with Section 262 of the DGCL (or
any successor provision) ("Dissenting Shares") shall not
be converted into a right to receive Merger
Consideration (but shall have the rights set forth in
Section 262 of the DGCL (or any successor provision))
unless such holder fails to perfect or otherwise loses
such holder's right to such payment or appraisal, if
any. If, after the Effective Time, such holder fails to
perfect or loses any such right to appraisal, each such
share of such holder shall be treated as a share that
had been converted as of the Effective Time into the
right to receive Merger Consideration, without interest,
in accordance with this Section 3.1. The Company shall
give Buyer (i) prompt notice of any demands for
appraisal of Company Stock received by the Company and
(ii) the opportunity to participate in and direct all
negotiations and proceedings with respect to any such
demands. The Company shall not, without the prior
written consent of Buyer, make any payment with respect
to, or settle, offer to settle or otherwise negotiate,
any such demands.
(e) Cancellation and Retirement of Company Stock.
As of the Effective Time, all shares of Company Stock
(other than shares referred to in Section 3.1(d)) issued
and outstanding immediately prior to the Effective Time,
shall no longer be outstanding and shall automatically
be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such
shares of Company Stock shall, to the extent such
certificate represents such shares, cease to have any
rights with respect thereto, except the right to receive
the Merger Consideration allocable to the shares
represented by such certificate set forth above, to be
paid in consideration therefor, without interest, upon
surrender of such certificate in accordance with Section
3.3.
3.2 Treatment of Options
(a) Immediately prior to the Effective Time, each
outstanding stock option to purchase shares of Company
Stock (a "Company Stock Option") granted under the
Xxxxxx Chemical Group, Inc. 1995 Stock Option Plan (the
"Stock Plan"), whether or not then exercisable, shall be
canceled by the Company, and at the Effective Time, the
holder thereof shall be entitled to receive from the
Company in consideration for such cancellation a cash
value equal to (A) the product of (x) the number of
shares of Company Stock previously subject to such
Company Stock Option and (y) the excess, if any, of the
cash value of the Merger Consideration allocable to each
such share over the exercise price per share, previously
specified in such Company Stock Option, reduced by (B)
the amount of withholding or other taxes required by law
to be withheld. Prior to the Effective Time, the
Company shall use its best efforts to obtain all
necessary consents or releases from holders of Company
Stock Options and to take all such other lawful action
as may be necessary to give effect to the transactions
contemplated by this Section 3.2(a).
(b) Except as provided herein or as otherwise agreed by
Buyer and the Company, the Stock Plan and any other
plan, program or arrangement providing for the issuance
or grant of any other interest in respect of the capital
stock of Company shall terminate as of the Effective
Time.
(c) Prior to the Effective Time, the Board of Directors (or,
if appropriate, any committee administering the Stock Plan) shall
adopt such resolutions or take such actions as are necessary to
carry out the terms of this Section 3.2.
3.3 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Company
shall appoint Chase Manhattan Bank to act as exchange agent (the
"Exchange Agent") for the payment of the Merger Consideration. As
of the Effective Time, Buyer shall have deposited with the
Exchange Agent, for the benefit of the holders of shares of
Company Stock, for exchange in accordance with this Article 3, the
aggregate amount of cash payable, pursuant to Section 3.1 hereof
in exchange for outstanding shares of Company Stock (the "Exchange
Fund").
(b) Exchange Procedures.
(i) At the Effective Time or as soon as reasonably
practicable thereafter, the Exchange Agent shall mail (or at
the request of a holder of Company Stock, hand deliver) to
each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented
outstanding shares of Company Stock whose shares were
converted into the right to receive cash pursuant to Section
3.1:
(A) a letter of transmittal (which shall
specify that delivery shall be effected, and
risk of loss and title to the certificates
representing such shares of Company Stock
shall pass, only upon delivery of the
certificates representing such shares of
Company Stock, to the Exchange Agent and shall
be in such form and have such other provisions
as the Exchange Agent may reasonably specify),
and
(B) instructions for use in effecting the
surrender of the certificates representing
such shares of Company Stock, in exchange for
cash.
(ii) Upon surrender to the Exchange Agent of a
certificate or certificates representing shares of Company
Stock and acceptance thereof by the Exchange Agent, the
holder thereof shall be entitled to the amount of cash into
which the number of shares of Company Stock previously
represented by such certificate or certificates surrendered
shall have been converted pursuant to this Agreement. The
Exchange Agent shall accept such certificates upon compliance
with such reasonable terms and conditions as the Exchange
Agent may impose to effect an orderly exchange thereof in
accordance with normal exchange practices. After the
Effective Time, there shall be no further transfer on the
records of the Company or its transfer agent of certificates
representing shares of Company Stock and if such certificates
are presented to the Company for transfer, they shall be
canceled against delivery of the Merger Consideration
allocable to the Shares represented by such certificate or
certificates. If any Merger Consideration is to be remitted
to a name other than that in which the certificate for the
Company Stock surrendered for exchange is registered, it
shall be a condition of such exchange that the certificate so
surrendered shall be properly endorsed, with signature
guaranteed, or otherwise in proper form for transfer and that
the Person requesting such exchange shall pay to the Company,
or its transfer agent, any transfer or other taxes required
by reason of the payment of Merger Consideration to a name
other than that of the registered holder of the certificate
surrendered, or establish to the satisfaction of the Company
or its transfer agent that such tax has been paid or is not
applicable. Until surrendered as contemplated by this
Section 3.3(b), each certificate for shares of Company Stock
shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the
Merger Consideration allocable to the shares represented by
such certificate as contemplated by Section 3.1. No interest
wil be paid or will accrue on any amount payable as Merger
Consideration. Subject to completion of the documentation
referred to above, the Merger Consideration shall be paid at
the Effective Time to holders of Company Stock
(c) No Further Ownership Rights in Company Stock.
Merger Consideration paid upon the surrender for
exchange of certificates representing shares of Company
Stock in accordance with the terms of this Article 3
shall be deemed to have been paid in full satisfaction
of all rights pertaining to the shares of Company Stock
represented by such certificates.
(d) Termination of Exchange Fund. Any portion of the
Exchange Fund (including any interest and other income
received by the Exchange Agent in respect of all such
funds) which remains undistributed to the holders of the
certificates representing shares of Company Stock for
six months after the Effective Time shall be delivered
to the Company, upon demand, and any holders of shares
of Company Stock prior to the Merger who have not
theretofore complied with this Article 3 shall
thereafter look only to the Company and only as general
creditors thereof for payment of their claim for Merger
Consideration to which such holders may be entitled.
(e) No Liability. No party to this Agreement shall be
liable to any Person in respect of any amount from the
Exchange Fund delivered to a public official pursuant to
any applicable abandoned property, escheat or similar
law. If any certificates representing shares of Company
Stock shall not have been surrendered in exchange for
Merger Consideration prior to five years after the
Effective Time (or immediately prior to such earlier
date on which any Merger Consideration would otherwise
escheat to or become the property of any Governmental
Entity), any such amount shall, to the extent permitted
by applicable law, become the property of the Company,
free and clear of all claims or interest of any Person
previously entitled thereto.
(f) Investment of Exchange Fund. The Exchange Agent shall
invest the cash included in the Exchange Fund as
directed by the Buyer, provided that such investment
shall be (i) securities issued or directly and fully
guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities
of not more than six months from the Effective Time,
(ii) certificates of deposit, eurodollar time deposits
and bankers' acceptances with maturities not exceeding
six months and overnight bank deposits with any
commercial bank, depository institution or trust company
incorporated or doing business under the laws of the
United States of America, any state thereof or the
District of Columbia, provided that such commercial
bank, depository institution or trust company has, at
the time of investment, (A) capital and surplus
exceeding $250 million and (B) outstanding short-term
debt securities which are rated at least A-1 by Standard
& Poor's Rating Group Division of The XxXxxx-Xxxx
Companies, Inc. or at least P-1 by Xxxxx'x Investors
Services, Inc. or carry an equivalent rating by a
nationally recognized rating agency if both of the two
named rating agencies cease to publish ratings of
investment, (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the
types described in clauses (i) and (ii) above entered
into with any financial institution meeting the
qualifications specified in clause (ii) above, (iv)
commercial paper having a rating in the highest rating
categories from Standard & Poor's Rating Group Division
of The XxXxxx-Xxxx Companies, Inc. or Xxxxx'x Investors
Services, Inc. or carrying an equivalent rating by a
nationally recognized rating agency if both of the two
named rating agencies cease to publish ratings of
investments and in each case maturing within six months
of the Effective Time and (v) money market mutual or
similar funds having assets in excess of $1 billion.
Any interest and other income resulting from such
investments shall be paid to the Surviving Corporation.
(g) Lost Certificates. In the event any certificate or
certificates representing shares of Company Stock shall
have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the Person claiming such
certificate or certificates to be lost, stolen or
destroyed, the Exchange Agent will issue in exchange for
such lost, stolen or destroyed certificate the Merger
Consideration deliverable in respect thereof as
determined in accordance with this Article 3, provided
that the Person to whom the Merger Consideration is paid
shall, as a condition precedent to the payment thereof,
indemnify Buyer in an agreement reasonably satisfactory
to it against any claim that may be made against Buyer
or the Company with respect to the certificate claimed
to have been lost, stolen or destroyed.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise set forth in any Schedule attached hereto, the
Company represents and warrants to the Buyer with respect to itself and
its Subsidiaries:
4.1 Organization of the Company and the Subsidiaries; Authority.
The Company and each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization and has all the requisite corporate power
and authority to carry on its business as now being conducted and to
own and use the properties owned and used by it. Except as disclosed
on Schedule 4.1, the Company and each of its Subsidiaries is qualified
to do business in each jurisdiction in which the nature of its business
requires it to be so qualified, except to the extent the failure to so
qualify has not had, and would not reasonably be expected to have, a
Material Adverse Effect. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite corporate action on the part of the
Company. The Board of Directors of the Company has unanimously adopted
resolutions approving this Agreement and the Merger, determined that
the terms of the Merger are fair to, and in the best interests of, the
Company's stockholders and recommended that the Company's stockholders
approve and adopt this Agreement. Assuming the due authorization,
execution and delivery hereof by the Buyer, this Agreement has been
duly executed and delivered by the Company and constitutes the valid,
binding and enforceable obligation of the Company, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally or by general
equitable principles.
4.2 Capitalization of the Company; Ownership. The authorized,
issued and outstanding capital stock of the Company is set forth on
Schedule 4.2. All of the issued and outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid
and non-assessable. Except as disclosed on Schedule 4.2, there are no
outstanding options, warrants or other rights of any kind to acquire
any additional shares of capital stock of the Company or securities
convertible into or exchangeable for, or which otherwise confer on the
holder thereof any right to acquire, any such additional shares, nor is
the Company committed to issue any such option, warrant, right or
security. As of December 31, 1997, the aggregate of (i) the
liquidation value of the Company Non-Convertible Preferred Stock plus
(ii) the accrued and unpaid dividends in respect of the Company Non-
Convertible Preferred Stock plus (iii) the accrued and unpaid dividends
in respect of the Company Convertible Preferred Stock is equal to
$6,687,710.
4.3 Subsidiaries of the Company. Schedule 4.3 sets forth the
Subsidiaries of the Company and the Company's equity interest in each
such Subsidiary. Except as set forth on Schedule 4.3, all outstanding
capital stock or other equity interests of each Subsidiary owned by the
Company is owned free and clear of any and all liens, claims, security
interests or options, except for restrictions on transfer under federal
and state securities laws. All shares of capital stock of each
Subsidiary which is a corporation have been validly issued and are
fully paid and nonassessable. There are no outstanding options,
warrants or other rights of any kind to acquire any additional shares
of capital stock of any Subsidiary or securities convertible into or
exchangeable for any additional shares of capital stock of any
Subsidiary, nor is any Subsidiary committed to issue any such option,
warrant, right or security. There are no outstanding options, warrants
or other rights of any kind to acquire any additional equity interests
of any Subsidiary, nor is any Subsidiary committed to issue any such
option, warrant or right. Except as set forth on Schedule 4.3, the
Company does not have, directly or indirectly, any equity interest in
any other corporation, joint venture, partnership, limited liability
company or other entity.
4.4 Ability to Carry Out the Agreement. Except as disclosed on
Schedule 4.4, neither the Company nor any Subsidiary is subject to or
bound by any provision of:
(i) any law, statute, rule, regulation, or judicial or
administrative decision,
(ii) any articles or certificate of incorporation
or by-laws,
(iii) any mortgage, deed of trust, lease, note,
stockholders' agreement, partnership agreement, bond,
indenture, license, permit, trust, or other material
instrument or agreement, or
(iv) any judgment, order, writ, injunction, or decree of
any court, governmental body, administrative agency or
arbitrator,
that would prevent or be violated by or under which there would be a
conflict, breach or default as a result of, nor is there required any
consent of any Person under any contract or agreement required to be
disclosed on and actually disclosed on Schedule 4.10 which has not been
obtained for the execution, delivery and performance by the Company of
this Agreement and the transactions contemplated hereby, other than any
violations, defaults or failures to obtain consents which have not had
and are not reasonably likely to have a Material Adverse Effect or a
material adverse effect on the ability of the Company to perform its
obligations under this Agreement.
4.5 Consents and Approvals. Except as disclosed on Schedule
4.5, no consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required by or
with respect to the Company or any of its Subsidiaries in connection
with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby,
the failure of which to obtain would have a Material Adverse Effect.
No state anti-takeover statutes are applicable to the Merger, this
Agreement or the transactions contemplated hereby. The Company has not
adopted or executed, and is not a party or subject to, any "Shareholder
Rights Plan" or similar instrument, plan or agreement.
4.6 Financial Statements. (a) Attached hereto as Schedule 4.6 are
copies of (i) the audited balance sheet for the Company on a
consolidated basis with the Subsidiaries as of Xxxxx 00, 0000, (xx) the
interim balance sheet for the Company on a consolidated basis with the
Subsidiaries (the "Reference Balance Sheet") as of in the case of the
U.S. operations, September 27, 1997 and, in the case of the European
operations, September 30, 1997 (the "Reference Balance Sheet Date"),
(iii) the audited statements of operations (including the profit and
loss and income statements) for the Company on a consolidated basis
with the Subsidiaries for the fiscal year ended March 29, 1997, and
(iv) interim Statements of Operations for the Company on a consolidated
basis with the Subsidiaries ("Reference Statement of Operations").
Each of the Reference Balance Sheet and the Reference Statement of
Operations is attached hereto as part of Schedule 4.6 and has been
prepared in conformity with the Accounting Principles and fairly
present (subject, in the case of the unaudited statements, to normal
audit adjustments, none of which were or are expected, individually or
in the aggregate, to be material in amount) the consolidated financial
position of the Company and its Subsidiaries as at the dates thereof
and the consolidated results of their operations for the periods then
ended.
(b) Except for liabilities or obligations reflected or
reserved against in the Reference Balance Sheet or reflected in
the Schedules hereto, to the knowledge of the Company, neither the
Company nor any of the Subsidiaries has any material liabilities,
whether absolute, accrued, contingent or otherwise, that would be
required by the Accounting Principles to be reflected on the
balance sheets of the Company and the Subsidiaries, that is not
reflected or reserved against in the Reference Balance Sheet or
the Schedules hereto, except for liabilities or obligations
incurred in the ordinary course of business consistent with past
practice since the Reference Balance Sheet Date.
4.7 Title to Properties; Absence of Liens. Except as disclosed
on Schedule 4.7(a), the Company and each Subsidiary: (i) has good and
marketable title to all of its owned real properties; (ii) possesses a
valid leasehold interest in its leased real properties; and (iii) has
title to, or subsisting leasehold interests in, all of its personal
properties and assets used solely in the business of the Company or
such Subsidiary or reflected on the Reference Balance Sheet (except for
property and assets disposed of since the Reference Balance Sheet Date
or acquired since the Reference Balance Sheet Date and required by the
Accounting Principles to be recorded on the balance sheets of the
Company or the Subsidiaries), free and clear of any liens, security
interests and other encumbrances ("Encumbrances"), except for (a)
Encumbrances set forth on Schedule 4.7(b), (b) Encumbrances reflected
in the Reference Balance Sheet or created in the ordinary course of
business subsequent to the Reference Balance Sheet Date and which are
not material, (c) Encumbrances securing indebtedness of less than
$1,000,000 of record or otherwise that do not and will not materially
interfere with the present use by the Company or the Subsidiaries of
the property subject thereto or affected thereby or which otherwise
have not had a Material Adverse Effect, (d) Encumbrances for taxes,
assessments or governmental charges, or landlords', mechanics',
workmen's, materialmen's or similar liens, in each case that are not
delinquent or which are being contested in good faith, (e) Encumbrances
that are reflected in the title reports or surveys, if any, delivered
or otherwise made available to the Buyer in connection with the
transactions contemplated hereby and (f) Encumbrances incurred in the
ordinary course of business (such Encumbrances listed in clauses (a) -
(f) above being referred to herein as "Permitted Encumbrances").
Neither the whole nor any part of the owned real properties or any real
property leased, used or occupied by the Company is subject to any
pending suit for condemnation or other taking by any public authority
or other Person, and, to the knowledge of the Company, no such
condemnation or other taking is threatened or contemplated.
4.8 Litigation. Except as disclosed on Schedule 4.8, there is
no action, suit or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary at law, in
equity or otherwise, in, before, or by any court or governmental agency
or authority which is reasonably likely to have a Material Adverse
Effect.
4.9 Compliance with Law. Except as disclosed on Schedule 4.9,
to the knowledge of the Company, the business of the Company and the
Subsidiaries is being conducted in all material respects in compliance
with all laws, ordinances and regulations and other requirements of any
governmental entity applicable to the Company and the Subsidiaries.
All governmental approvals, permits and licenses required by the
Company and each Subsidiary in connection with the conduct of their
respective businesses have been obtained and are in full force and
effect and are being complied with in all material respects.
4.10 Contracts. (a) Schedule 4.10 sets forth each
written contract or agreement outstanding as of the date
hereof to which the Company or any Subsidiary is a party and
which
(i) involves future payment or receipt of in excess of
$1,000,000 or future performance or receipt of services or
delivery or receipt of goods and materials, in each case with
an aggregate value in excess of $1,000,000, including but not
limited to sale and purchase agreements, distributorship
agreements and loan agreements, notes and other financing
documents but excluding rock salt sales agreements which have
a term of less than twelve (12) months;
(ii) is a guarantee in respect of indebtedness of any
Person (other than the Company or its Subsidiaries) which may
involve future payment in excess of $1,000,000 or is a
mortgage, security agreement or other collateral arrangement
securing indebtedness of any Person (other than the Company
or its Subsidiaries) in excess of $1,000,000 and creating
Encumbrances on properties and assets of the Company or its
Subsidiaries with an aggregate value in excess of $1,000,000;
(iii) is a lease providing for monthly rental
payments in excess of $25,000 (exclusive of charges for
taxes, insurance, utilities, maintenance and repair);
(iv) is an employment or consulting contract pursuant to
which the Company or its Subsidiaries may reasonably be
expected to make payment in excess of $250,000 in 1997 or
thereafter;
(v) is a technology license agreement material to the
business of the Company and its Subsidiaries, taken as a
whole or any Significant Business;
(vi) (A) limits the Company's or any Subsidiary's
freedom to compete in any line of business or in any
geographical area or with any person or entity, or
(B) prohibits the Company or any of its Subsidiaries from
disclosing any confidential information where such
prohibition on disclosure is likely to have a Material
Adverse Effect;
(vii) is a contract or commitment to sell, lease or
otherwise dispose of any material asset other than in the
ordinary course of business consistent with past practice;
(viii) is any other material agreement, contract,
commitment or series of related agreements, contracts or
commitments which, in any case, is subject to change of
control provisions or involves payments or receipts of more
than $1,000,000 over the life of such agreements, contracts
or commitments; or
(ix) any contract or agreement (or other obligation) of
any third party pursuant to which the third party has agreed
to assume, retain or otherwise indemnify the Company against
any liability.
(b) Except as set forth in Schedule 4.10, each of the
leases, contracts and other agreements listed in Schedules 4.7,
4.10, 4.13, 4.17 and 4.18 constitutes a valid and binding
obligation of the parties thereto and is in full force and effect
other than as to certain provisions thereof, the aggregate effect
of which would not deprive any party thereto of the practical
realization of the benefits thereof and except as limited by (A)
applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance and other laws affecting creditors' rights generally,
(B) general equitable principles, (C) requirements of
reasonableness, good faith and fair dealing, and (D) additionally,
in the case of indemnities and exculpatory provisions (including
certain waivers), public policy, and (except for those leases,
contracts and other agreements which by their terms will expire
prior to the Effective Time) will, subject to the qualification
referred to above, continue in full force and effect after the
Effective Time, in each case without breaching the terms thereof
or resulting in the forfeiture or impairment of any rights
thereunder and without the consent, approval or act of, or the
making of any filing with, any other party. There is no default
by the Company or any of the Subsidiaries or, to the knowledge of
the Company, by any third party, under any contract or agreement
required to be described in and actually described on Schedule
4.10.
4.11 Brokers and Intermediaries. Other than Chase Securities
Inc., neither the Company nor any Subsidiary has employed any broker,
finder, advisor or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to a broker's,
finder's or similar fee or commission in connection therewith or upon
the consummation thereof. Any such fees due to Chase Securities Inc.
shall be paid by the Company. If the Company receives an opinion from
Chase Securities Inc. as to the fairness, from a financial point of
view, of the consideration to be received by the Company's stockholders
in the Merger, a copy of such opinion shall be delivered to Buyer after
the Effective Time.
4.12 Tax Matters. Except as disclosed on Schedule 4.12, (a) all
Returns required to be filed in respect of the business of the Company
and its Subsidiaries on or prior to the Closing Date have been or will
be filed when due in timely fashion and were or will be correct and
complete in all material respects; (b) all Taxes shown on such Returns
that are due on or prior to the Closing Date have been or will be paid
when due in timely fashion or adequate accruals have been or will be
established for the payment of such Taxes; (c) to the knowledge of the
Company, there is no action, suit, proceeding, investigation, audit or
claim now pending regarding any Taxes relating to the income,
properties or operations of the businesses of the Company and its
Subsidiaries; (d) there are no agreements for the extension of the
time for assessment of any Taxes relating to the income, properties or
operations of the businesses of the Company and its Subsidiaries; (e)
all Taxes relating to the income, properties or operations of the
business of the Company and its Subsidiaries, which Taxes the Company
or any Subsidiary is required by law to withhold or collect have been
duly withheld or collected, and have been timely paid over to the
proper authorities to the extent due and payable; and (f) there are no
Tax sharing or allocation agreements involving the Company or any
Subsidiary and any other entity other than the tax sharing agreement
among the Company and certain of its subsidiaries dated September 24,
1993. Except as disclosed on Schedule 4.12, neither the Company nor
any Subsidiary has been a member of any Company Group other than the
Company Group of which the Company is now a member (other than Company
Groups of which it may have been a member prior to it becoming a member
of a Company Group which includes the Company). As a result of the
transactions contemplated by this Agreement, none of the Company nor
any Subsidiary will be obligated to make a payment to an individual
that would be a "parachute payment" to a "disqualified individual" as
those terms are defined in Section 280G of the Code, without regard to
whether such payment is reasonable compensation for personal services
performed or to be performed in the future. Neither the Company nor
any Subsidiary has filed a consent under Section 341(f) of the Code,
concerning collapsible corporations.
4.13 Employee Benefits.
(a) Schedule 4.13 sets forth all employee benefit plans (as
defined in Section 3(3) of ERISA) and all bonus, deferred
compensation, incentive compensation, severance or termination
pay, change in control compensation and death benefit plans,
agreements or arrangements, maintained or contributed to by, and
applicable to, employees of the Company or any Subsidiary (the
"Company Benefit Plans") and all material fringe benefit plans or
programs maintained by the Company or any Subsidiary and
applicable to employees of any Company or any Subsidiary. Except
as provided in Schedule 4.13, true copies of each Company Benefit
Plan have been delivered to Buyer.
(b) All Company Benefit Plans have been administered in
substantial compliance with their terms and with the requirements
of all applicable laws, including for U.S. plans, but not limited
to, ERISA and the Code. Without limiting the generality of the
foregoing:
(i) with respect to any Company Benefit Plan that is an
"employee pension benefit plan" as such term is defined in
Section 3(2) of ERISA (each a "Retirement Plan"), neither the
Company nor any Subsidiary nor, to the knowledge of the
Company, any trustee or administrator of such Retirement
Plan, has engaged in a "prohibited transaction," as defined
in Section 4975 of the Code, or a transaction prohibited by
Section 406 of ERISA, that could give rise to any material
tax or penalty under such Section 4975;
(ii) except as disclosed on Schedule 4.13, no Retirement
Plan is subject to Title IV of ERISA or to the minimum
funding requirements of Section 412 of the Code or Part 3 of
Title I of ERISA; and
(iii) each Retirement Plan intended to be qualified
under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service, and
to the Company's knowledge nothing has occurred and no
condition exists that could reasonably be expected to cause
the loss of such qualification.
(c) Neither the Company nor the Subsidiaries nor any other
current or former member of the same controlled group of
organizations as the Company and the Subsidiaries (within the
meaning of Section 414(b), (c), (m) or (o) of the Code) has taken
any action, nor has any event occurred, which has resulted or will
likely result in any liability under Title IV of ERISA, including
any withdrawal liability with respect to any "multiemployer plan"
as defined in Section 4001(a) of ERISA, which liability will
become a liability of the Buyer or any Affiliate of the Buyer
(including but not limited to the Companies and their
Subsidiaries) following the Closing.
(d) Except as disclosed in Schedule 4.13, neither the
Company nor any Subsidiary has any current or projected liability
in respect of post-employment or post-retirement health, medical,
or life insurance benefits for retired, former, or current
employees, except as required to avoid excise tax under Section
4980B of the Code.
4.14 Intellectual Property.
(a) Set forth on Schedule 4.14 hereto is a list of all
material patents, trademarks, trade names, service marks and
copyrights that are owned or licensed by the Company or any of the
Subsidiaries and, except as set forth on Schedule 4.14, are
necessary for the operation of the Company's businesses as
presently conducted (the "Intellectual Property"). Except as
disclosed on Schedule 4.14, (i) to the knowledge of the Company,
the Company or its respective Subsidiaries owns or possesses, or
owns or possesses licenses or other valid rights to use, all
Intellectual Property used by it and set forth on Schedule 4.14;
and (ii) to the knowledge of the Company, the conduct of the
business of the Company and each Subsidiary as now being conducted
does not infringe or conflict with, nor has it been alleged to
infringe or conflict with, any patents, trademarks, trade names or
copyrights or other intellectual property rights of others.
(b) To the knowledge of the Company, there is no claim or
liability for trademark, trade name, patent or copyright
infringement as to any products manufactured or sold in the
businesses of the Company and the Subsidiaries.
(c) To the knowledge of the Company, except as set forth on
Schedule 4.14, on the date hereof (i) there are no pending re-
examination, opposition, interference, cancellation or other
administrative proceedings with respect to any of the Intellectual
Property, and (ii) no order, holding, decision or judgment has
been rendered by any court of law or authority, and no agreement,
consent or pending litigation in a court of law exists to which
the Company or any Subsidiary is a party, which would prevent the
Company, any Subsidiary or the Buyer from using any of the
Intellectual Property.
4.15 Environmental Matters. Except as set forth on Schedule
4.15, to the knowledge of the Company, each of the representations and
warranties set forth in subsections (a) through (e) of this Section
4.15 is true and correct with respect to each parcel of real property
owned or leased by the Company or any of the Subsidiaries
(individually, a "Property" and collectively, the "Properties"):
(a) The Properties do not contain, by activities or
operations of the Company or any Subsidiary, in, on, or under,
including, without limitation, the soil and groundwater
thereunder, any Hazardous Materials, except in compliance in all
material respects with all applicable Environmental Laws;
(b) The Properties and all operations and facilities at the
Properties are in compliance in all material respects with all
applicable Environmental Laws and all governmental approvals,
permits and licenses required for the Properties, and all
operations and facilities of the Company or the Subsidiaries under
applicable Environmental Laws have been obtained and are in full
force and effect and are being complied with in all material
respects;
(c) Neither the Company nor any Subsidiary, nor any of their
respective Affiliates has received any written governmental
complaint, notice of violation, alleged violation, or
investigation or notice of potential liability or of potential
responsibility regarding environmental protection or any health or
safety matters or permit compliance with regard to the Properties;
(d) Hazardous Materials have not been generated, stored,
transported, treated or disposed of on the Properties or
transferred from the Properties to any other location except in
compliance in all material respects with all applicable
Environmental Laws in effect at the time of such activities;
(e) There are no governmental, administrative actions or
judicial proceedings pending or threatened under any applicable
Environmental Laws to which the Company or any Subsidiary is named
as a party with respect to the Properties or any Hazardous
Materials transferred from the Properties, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, under any applicable Environmental Law
with respect to any of the Properties; and
(f) The water use rights of the Company and its Subsidiaries
are sufficient to conduct their respective businesses as currently
conducted in all material respects.
Anything in this Agreement to the contrary notwithstanding, this
Section 4.15 shall be the exclusive representation and warranty
relating to environmental matters.
4.16 Absence of Certain Changes. (a) Except as set
forth in Schedule 4.16(a), since the Reference Balance
Sheet Date, there has been:
(i) no material adverse change in the assets, business,
financial condition or operations of the Company and its
Subsidiaries taken as a whole or any Significant Business and
no fact or condition exists or to the Company's knowledge is
threatened which might reasonably be expected to cause such a
material adverse change in the future; and
(ii) no damage, destruction, loss or claim, whether or
not covered by insurance, or condemnation or other taking
which has a Material Adverse Effect.
(b) Except as set forth in Schedule 4.16(b) or as expressly
permitted by this Agreement, between the Reference Balance Sheet
Date and the date hereof, neither the Company nor any Subsidiary
has:
(i) purchased, sold, leased, transferred or assigned or
agreed to purchase, sell, lease, transfer or assign, any of
its assets, tangible or intangible involving more than
$1,000,000 except in the ordinary course of business
consistent with past practice;
(ii) entered into any contract, lease, sublease, license
or sublicense (or series of related contracts, leases,
subleases, licenses and sublicenses) involving more than
$1,000,000 except in the ordinary course of business
consistent with past practices;
(iii) accelerated, terminated, modified, or canceled
any contract, lease, sublease, license or sublicense (or
series of related contracts, leases, subleases, licenses and
sublicenses) involving more than $1,000,000 to which the
Company or any Subsidiary is a party or by which such company
is bound, except in the ordinary course of business
consistent with past practices;
(iv) imposed any Encumbrances (except for Permitted
Encumbrances) upon any of its real property;
(v) made any capital expenditure (or series of related
capital expenditures) involving more than $1,000,000, except
in the ordinary course of business consistent with past
practice;
(vi) made any capital investment in, any loan to, or any
acquisition of the securities or assets of any other person
(or series of related capital investments, loans, and
acquisitions) involving more than $1,000,000, except in the
ordinary course of business consistent with past practice;
(vii) created, incurred, assumed, or guaranteed any
indebtedness for borrowed money (including capitalized lease
obligations) involving more than $250,000 singly or
$1,000,000 in the aggregate, except in the ordinary course of
business consistent with past practice;
(viii) granted any license or sublicense of any
rights under or with respect to any material Intellectual
Property;
(ix) issued, sold, or otherwise disposed of any of its
capital stock or any capital stock of any subsidiary, or
granted any options, warrants, or other rights to purchase or
obtain (including upon conversion or exercise) any of its
capital stock or any capital stock of any Subsidiary;
(x) declared, set aside, or paid any dividend or
distribution with respect to its capital stock or redeemed,
purchased, or otherwise acquired any of its capital stock
(other than dividends on the Company Convertible Preferred
Stock and Company Non-Convertible Preferred Stock);
(xi) made any loan to, or entered into any other
transaction with, any of its directors, officers, or
employees outside the ordinary course of business giving rise
to any claim or right on its part against the person or on
the part of the person against such Company;
(xii) entered into any employment contract or
collective bargaining agreement, written or oral, or modified
the terms of any existing such contract or agreement outside
the ordinary course of business consistent with past
practice;
(xiii) granted any increase in the base compensation
of any of its directors, officers, and key employees;
(xiv) adopted any (A) bonus, (B) profit-sharing, (C)
incentive compensation, (D) pension, (E) retirement, (F)
medical, hospitalization, life, or other insurance or (G)
severance plan;
(xv) made any other material change in employment terms
for any of its directors, officers, and employees outside the
ordinary course of business consistent with past practice;
(xvi) made or pledged to make any capital
contribution (other than to a wholly owned subsidiary) or
made or pledged to make any charitable contribution or
contributions in excess of $10,000, individually, or $100,000
in the aggregate; or
(xvii) contractually committed to do any of the
foregoing.
4.17 Employees, Labor Matters, etc. Except as set forth on
Schedule 4.17, neither the Company nor any Subsidiary is a party to or
bound by any collective bargaining or other labor agreement, and there
are no labor unions or other organizations representing or, to the
knowledge of the Company, purporting to represent or attempting to
represent any employees employed by the Company or any Subsidiary.
Except as set forth on Schedule 4.17, since the Reference Balance Sheet
Date, there has not occurred or, to the knowledge of the Company, been
threatened any material strike, slowdown, picketing, work stoppage,
concerted refusal to work overtime or other similar labor activity with
respect to any employees of the Company or any Subsidiary. Except as
set forth on Schedule 4.17, there are no material labor disputes
currently subject to any grievance procedure, arbitration or litigation
and there is no representation petition pending or, to the knowledge of
the Company, threatened with respect to any employee of the Company or
any Subsidiary. To the knowledge of the Company, the Company and all
its Subsidiaries have complied in all material respects with all
applicable laws pertaining to the employment or termination of
employment of its employees, including, without limitation, all such
applicable laws relating to labor relations, equal employment
opportunities, fair employment practices, prohibited discrimination or
distinction and other similar employment activities.
4.18 Affiliate Transactions. Schedule 4.18 contains a list of
all contracts, agreements, transactions or commitments between any
officer, employee or director of the Company or any Subsidiary, any
family member of any of the foregoing or any other Affiliate of any of
the foregoing (other than the Company or a Subsidiary), on the one
hand, and the Company or any Subsidiary, on the other hand, other than
(i) compensation paid as part of the employment relationship for
services rendered (including directors' fees), (ii) contributions by
the Company or any Subsidiary or payments of benefits under any defined
benefit programs of the Company or any Subsidiary (collectively, the
"Affiliate Transactions"), that are currently in effect or that will
bind the Company or any Subsidiary after the Closing, (iii) the
Stockholders Agreement or (iv) any stock option grant pursuant to the
Stock Plan. Except as set forth in Schedule 4.18, no severance,
"change-in control", termination or other similar payment will be or
become due at the Effective Time.
4.19 Availability of Assets and Legality of Use. Except as set
forth in Schedule 4.19, the assets owned or leased by the Company
constitute all the assets used in its business and in all material
respects are in sufficient condition to operate the businesses
consistent with past practices.
4.20 Insurance. Schedule 4.20 sets forth a list and brief
description (including nature of coverage, limits, deductibles,
premiums and the loss experience for the most recent three years with
respect to each type of coverage) of all policies of insurance
maintained, owned or held by the Company during the period from April
1, 1995 (current insurance in the case of property and casualty
insurance) up to and including the date hereof. The Company has
complied with each of such insurance policies in all material respects
and has not failed to give any notice or present any claim, with
respect to claims in excess of $1,000,000 thereunder in a due and
timely manner.
4.21 HCNA SEC Documents. (a) The Company has furnished
or made available, (or, in the case of future filings
will furnish) to Buyer a true and complete copy of each
report, schedule, registration statement and definitive
proxy statement filed by Xxxxxx Chemical North America,
Inc., a wholly owned Subsidiary ("HCNA"), with the SEC
since January 1, 1996 (as such documents have since the
time of this Agreement been amended, the "HCNA SEC
Documents") which are all the documents (other than
preliminary material) that HCNA was required to file with
the SEC since such date.
(b) As of their respective dates, the HCNA SEC
Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act,
as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such HCNA SEC
Documents, and none of the HCNA SEC Documents contained
any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading. Except as set forth in Schedule 4.21, there
are no material changes to any of the statements
contained in the HCNA SEC Documents.
(c) The financial statements of HCNA included in
the HCNA SEC Documents comply as to form in all material
respects with applicable accounting requirements and with
the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with
GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto
or, in the case of the unaudited statements, as permitted
by Form 10-Q of the SEC) and fairly present (subject, in
the case of the unaudited statements, to normal,
recurring adjustments) the consolidated financial
position of HCNA and its consolidated subsidiaries as at
the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.
4.22 Disclaimer of Other Representations and Warranties;
Knowledge; Disclosure.
(a) Neither the Company nor any Subsidiary makes, or has
made, any representations or warranties relating to the Company, any
Subsidiary, or the business of the Company or any Subsidiary or
otherwise in connection with the transactions contemplated hereby other
than those expressly set forth herein which are made by the Company.
Without limiting the generality of the foregoing, neither the Company
nor any Subsidiary has made, nor shall be deemed to have made, any
representations or warranties in the Information Memorandum relating to
the businesses of the Companies and their Subsidiaries prepared by
Chase Securities Inc. on behalf of the Company and supplied to the
Buyer prior to the date hereof (the "Information Memorandum") or in any
presentation of the businesses of the Company and the Subsidiaries in
connection with the transactions contemplated hereby, and no statement
contained in the Information Memorandum or made in any such
presentation shall be deemed a representation or warranty hereunder or
otherwise. It is understood that any cost estimates, projections or
other predictions, any data, any financial information or any memoranda
or offering materials or presentations, including but not limited to
the Information Memorandum, are not and shall not be deemed to be or to
include representations or warranties of the Company or any Subsidiary.
No Person has been authorized by the Company or any Subsidiary to make
any representation or warranty relating to the Company or any
Subsidiary, the business of any Company or any Subsidiary or otherwise
in connection with the transactions contemplated hereby and, if made,
such representation or warranty must not be relied upon as having been
authorized by the Company or any Subsidiary.
(b) Whenever a representation or warranty made by the
Company herein refers to the knowledge of the Company, such knowledge
shall be deemed to consist only of the actual knowledge on the date
hereof and on the Closing Date, as applicable, of those persons listed
on Schedule 4.22.
(c) Notwithstanding anything to the contrary contained in this
Agreement or in any of the Schedules, any information disclosed in one
Schedule shall be deemed to be disclosed in all Schedules. Certain
information set forth in the Schedules is included solely for
informational purposes and may not be required to be disclosed pursuant
to this Agreement. The disclosure of any information shall not be
deemed to constitute an acknowledgment that such information is
required to be disclosed in connection with the representations and
warranties made by the Company in this Agreement or that it is
material, nor shall such information be deemed to establish a standard
of materiality.
4.23 Consent of Stockholders. As of the date hereof, the Company
has obtained the written consent of its stockholders (as described in
Section 11.13) approving this Agreement and the transactions
contemplated hereby pursuant to Section 228 of the DGCL.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Company that:
5.1 Organization and Authority of the Buyer. The Buyer is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, with the corporate power and
authority to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of the Buyer.
This Agreement has been duly executed and delivered by the Buyer and
constitutes the valid, binding and enforceable obligation of the Buyer,
subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally from
time to time in effect and to general equitable principles.
5.2 Ability to Carry Out the Agreement. The Buyer is not
subject to or bound by any provision of:
(i) any law, statute, rule, regulation or judicial or
administrative decision,
(ii) any articles or certificate of incorporation or by-
laws,
(iii) any mortgage, deed of trust, lease, note,
stockholders' agreement, partnership agreement, bond,
indenture, license, permit, trust, or other material
instrument or agreement, or
(iv) any judgment, order, writ, injunction or decree of
any court, governmental body, administrative agency or
arbitrator,
that would prevent or be violated by or under which there would be a
conflict, breach or default as a result of, nor is the consent required
of any Person under any material agreement which has not been obtained
for the execution, delivery and performance by the Buyer of this
Agreement and the transactions contemplated hereby other than any
violations, defaults or failures to obtain consents which have not had
a material adverse effect on the ability of the Buyer to perform its
obligations under this Agreement.
5.3 Consents and Approvals. Except as disclosed on Schedule
5.3, no consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required by or
with respect to the Buyer or any of its Subsidiaries in connection with
the execution and delivery of this Agreement by the Buyer or the
consummation by the Buyer of the transactions contemplated hereby, the
failure of which to obtain would have a material adverse effect on the
ability of the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby.
5.4 Financial Ability to Perform. The Buyer has, or has access
to, sufficient funds to pay the aggregate Merger Consideration on the
terms and conditions contemplated by this Agreement. The Buyer
acknowledges and agrees that the Buyer's performance of its obligations
under this Agreement is not in any way contingent upon the availability
of financing to the Buyer.
5.5 Brokers and Intermediaries. The Buyer has not employed any
broker, finder, advisor or intermediary other than Xxxxxxx Xxxxx Xxxxxx
in connection with the transactions contemplated by this Agreement
which would be entitled to a broker's, finder's, or similar fee or
commission in connection therewith or upon the consummation thereof.
Any such fees due Xxxxxxx Xxxxx Barney shall be paid by Buyer.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
OF THE COMPANY AND THE BUYER
6.1 Access and Information. The Company and its Subsidiaries
shall permit the Buyer and its representatives after the date of this
Agreement to have reasonable access during normal business hours, upon
reasonable advance notice, to the properties, contracts, books and
records of the Company and its Subsidiaries for the purpose of
verifying the representations and warranties of the Company hereunder,
provided that such access shall be conducted by the Buyer and its
representatives in such a manner as not to interfere unreasonably with
the businesses or operations of the Company or any Subsidiary. All
information provided to the Buyer pursuant hereto shall be subject to
that certain confidentiality agreement dated March 21, 1997 executed by
the Buyer (the "Confidentiality Agreement"). The Buyer shall notify
the Company promptly upon its discovery of any information which
constitutes or would indicate a material breach by the Company of any
representation, warranty or agreement of the Company hereunder.
6.2 Regulatory Filings. Each of the parties hereto will furnish
to the other party hereto such necessary information and reasonable
assistance as such other party may reasonably request in connection
with its preparation of necessary filings or submissions to any
Governmental Entity. The Buyer and the Company agree to file any
information required by the HSR Act, the Canadian Competition Act, the
Investment Canada Act, the requirements of the German Federal Cartel
Office, the Italian Merger Control Regulation and each other
governmental entity having jurisdiction over the transaction and each
party agrees promptly to supplement such information and promptly use
reasonable best efforts to effect compliance with the conditions
specified in Sections 7.5 and 8.5 hereof prior to the Final Termination
Time.
6.3 Conduct of Business. Prior to the Closing, and except as
otherwise expressly contemplated by this Agreement, the Company shall
operate the businesses conducted by it in all material respects in the
ordinary and usual course and cause the business operated by its
Subsidiaries to be operated in all material respects in the ordinary
and usual course. Without limiting the generality of the foregoing,
and except as expressly contemplated by this Agreement, the Company
shall not, and shall not permit any Subsidiary to, without the prior
written consent of the Buyer, engage in any act or transaction referred
to in clauses (i) through (xvii) of Section 4.16, except that for
purposes of this Section 6.3 all references in Section 4.16 to
$1,000,000 shall be deemed to be $500,000.
6.4 Dividends; Changes in Stock. The Company shall not, nor
shall it permit any of its Subsidiaries to (other than in the case of
wholly owned Subsidiaries):
(a) declare or pay any dividends on or make other
distributions in respect of any of its capital stock (other than
dividends on the Company's Non-Convertible Preferred Stock and
Convertible Preferred Stock payable in shares of the Company's Non-
Convertible Preferred Stock as provided in Article Third, Section
1(a) of the Certificate of Designation for such Convertible
Preferred Stock and Article Third, Section 1(a) of the Certificate
of Designation for such Non-Convertible Preferred Stock);
(b) split, combine or reclassify any of its
capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock,
(c) repurchase, redeem or otherwise acquire (other
than as required pursuant to the Stockholders
Agreement), or permit any subsidiary to purchase or
otherwise acquire, any share of its capital stock, or
issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any share of its capital
stock of any class or any securities convertible into,
or any rights, warrants or options to acquire, any such
shares or convertible securities, or
(d) enter into any transaction with any person
listed on Schedule 4.22 which results in an increase in
amounts otherwise currently being paid by the Company or
any Subsidiary to or for the benefit of any such person,
in each case except as otherwise provided for or
permitted by this Agreement.
6.5 Satisfaction of Conditions to the Merger.
(a) Each of the Buyer and the Company will take all
reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on itself with
respect to the Agreement.
(b) Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the
transactions contemplated by this Agreement, including
full cooperation with the other party and including the
provision of information and making of all necessary
filings in connection with, among other things, the
approvals under the HSR Act.
(c) Each of the Buyer and the Company will, and
will cause its Subsidiaries to, take all reasonable
actions necessary to obtain (and will cooperate with each
other in obtaining) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity
required to be obtained by the Buyer and the Company or
any of their Subsidiaries in connection with the Merger
or the taking of any action contemplated thereby or by
this Agreement.
6.6 Employee Matters.
(a) The Buyer shall ensure that all persons who were
employed by the Company or any Subsidiary immediately preceding
the Closing, including those on vacation, leave of absence or
disability, will be employed by the Buyer or an Affiliate of the
Buyer (including but not limited to the Surviving Corporation or
any Subsidiary) at the same base rate of pay and in a comparable
position on and after the Closing Date, except as otherwise
provided in this Section 6.6. Except as expressly provided in
this Agreement the foregoing shall not constitute any commitment,
contract, understanding or guarantee (express or implied) on the
part of the Buyer of a post-Effective Time employment
relationship. Employment of any of the employees by the Buyer
will be "at will" except as otherwise disclosed in this Agreement
and may be terminated by the Buyer at any time for any reason
(subject to any legally binding agreement other than this
Agreement, or any applicable laws or collective bargaining
agreement, or any other arrangement or commitment). The Buyer
shall not, at any time prior to 180 days after the Closing Date,
effectuate a "plant closing" or "mass layoff" as those terms are
defined in the Worker Adjustment and Retraining Notification Act
of 1988 ("WARN") affecting in whole or in part any facility, site
of employment, operating unit or employee of the Company or any
Subsidiary without complying fully with the requirements of WARN.
For purposes of this Section 6.6, the term "Active Employees"
shall mean any employees who are actively employed by the Company
or any Subsidiary as of the Closing Date, including those on
vacation and leave of absence (including maternity leave).
(b) During the period from the Closing Date through the
second anniversary of the Closing Date and subject to
subparagraph (c) below, the Buyer shall maintain, or cause to be
maintained the employee benefit plans, policies and arrangements
described on Schedule 4.13, or take such other actions described
therein so as to provide benefits to the Active Employees which
are in the aggregate substantially equivalent to, and provided
pursuant to substantially equivalent terms and conditions as, the
Company Benefit Plans as in effect immediately prior to the
Closing Date, provided, however, that, subject to the Buyer's
obligation to provide benefits to the Active Employees which are
in the aggregate substantially equivalent to, and provided
pursuant to substantially equivalent terms and conditions as, the
Company Benefit Plans as in effect immediately prior to the
Closing Date, the Buyer shall not be obligated to maintain any
specific employee benefit plan, policy or arrangement. The Buyer
shall cause each of its employee benefit plans, policies and
arrangements covering the Active Employees on or after the Closing
Date (each a "Buyer Benefit Plan"), to recognize for eligibility
and vesting purposes all service of the Active Employees counted
for such purposes under the corresponding Company Benefit Plan.
In addition, if such Buyer Benefit Plan is a "group health plan"
within the meaning of Section 5000(b)(1) of the Code, the Buyer
shall cause such plan to give credit to the Active Employees for
amounts paid under the corresponding Company Benefit Plan toward
any applicable deductibles, co-payments and out-of-pocket limits
as though such amounts had been paid in accordance with the terms
and conditions of such Buyer Benefit Plan.
(c) Buyer shall be responsible for and assume and honor the
obligations referred to in Schedule 6.6.
6.7 Tax Matters.
(a) The Buyer shall be liable for, and shall pay when
due, any transfer, gains, documentary, sales, use,
registration, stamp, value added or other similar Taxes
payable by reason of the transactions specified by this
Agreement or attributable to the sale, transfer or
delivery of the Shares hereunder (other than any capital
gains or other income tax payable by any stockholder of
the Company), and the Buyer shall, at its own expense,
file all necessary Tax returns and other documentation
with respect to all such Taxes.
(b) After the Closing Date, Buyer shall, and shall cause
the Company to, provide each party hereto and each
stockholder thereof with such cooperation and information
relating to the Company and each Subsidiary as such party
reasonably may request in filing any Return, amended
Return or claim for refund, determining any Tax liability
or a right to refund of Taxes, or conducting or defending
any audit or other proceeding in respect of Taxes. Buyer
shall cause the Company and each Subsidiary to retain all
Returns, schedules and work papers, and all material
records and other documents relating thereto, until the
expiration of the statute of limitations (and, to the
extent notified by any party, any extensions thereof) of
the taxable years to which such Returns and other
documents relate and until the final determination of any
Tax in respect of such years. Any information obtained
under this Section 6.7(b) shall be kept confidential,
except as may be otherwise necessary in connection with
filing any Return, amended Return, or claim for refund,
determining any Tax liability or right to refund of
Taxes, or in conducting or defending any audit or other
proceeding in respect of Taxes. Notwithstanding the
foregoing, neither Buyer, nor any of its affiliates,
shall be required unreasonably to prepare any document,
or determine any information not then in its possession,
in response to a request under this Section 6.7(b).
6.8 Announcement. Neither the Company nor the Buyer will issue
any press release or otherwise make any public statement with respect
to this Agreement and the transactions contemplated hereby without the
prior consent of the other (which consent shall not be unreasonably
withheld), except as may be required by applicable law or stock
exchange regulation. Notwithstanding anything in this Section 6.8 to
the contrary, the Buyer and the Company will, to the extent
practicable, consult with each other before issuing, and provide each
other the opportunity to review and comment upon, any such press
release or other public statements with respect to this Agreement and
the transactions contemplated hereby whether or not required by law.
6.9 Notice to Stockholders. The Company will, as promptly as
practicable following the date of this Agreement, give notice to any
holders of Company Stock who have not heretofore consented in writing
to the Merger.
6.10 No Solicitation. The Company shall, and shall direct and
use its best efforts to cause its officers, directors, employees,
representatives and agents to, immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to an
Acquisition Proposal (as hereinafter defined). The Company shall not,
nor shall it authorize or permit any of its Subsidiaries or any
officer, director, employee, investment banker, attorney or other
adviser or representative of the Company or any of its Subsidiaries to,
(i) solicit, initiate, or encourage the submission of, any Acquisition
Proposal, (ii) enter into any agreement with respect to any Acquisition
Proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information for the purpose of
facilitating the making of, or take any other action to facilitate any
inquiries or the making of, any proposal that constitutes, or can
reasonably be expected to lead to, any Acquisition Proposal. Without
limiting the foregoing, it is understood that any violation of which
the Company or any of its Subsidiaries had knowledge at the time of
such violation of the restrictions set forth in the immediately
preceding sentence by any officer, director, employee, investment
banker, attorney, employee, or other adviser or representative of the
Company or any of its Subsidiaries, whether or not such Person is
purporting to act on behalf of the Company or any of its Subsidiaries
or otherwise, shall be deemed to be a breach of this Section 6.10 by
the Company and its Subsidiaries. For purposes of this Agreement,
"Acquisition Proposal" means any proposal for a merger or other
business combination involving the Company or any of its Subsidiaries
or any proposal or offer to acquire in any manner, directly or
indirectly, an equity interest in the Company or any of its
Subsidiaries, any voting securities of the Company or any of its
Subsidiaries or a substantial portion of the assets of the Company.
Anything contained herein to the contrary notwithstanding, this Section
6.10 shall have no force and effect after April 30, 1998.
6.11 Certain Litigation. The Company agrees that it shall not
settle any litigation commenced after the date hereof against the
Company or any of its directors by any stockholder of the Company
relating to the Merger or this Agreement without the prior written
consent of Buyer, which consent shall not be unreasonably withheld.
6.12 Subsequent Financial Statements. Prior to the Effective
Time, the Company shall deliver to the Buyer, not later than 45 days
after the end of each quarterly period and in the form customarily
prepared by the Company, the unaudited internal financial statements of
the Company, including an income statement, for the monthly period then
ended and for the period from the beginning of the current fiscal year
to the end of such monthly period.
6.13 Name of Surviving Corporation. Buyer shall have the right
to use the Xxxxxx name on a non-exclusive royalty free basis in
connection with the operation of the business of the Subsidiaries of
the Company for a period of one year from the Effective Time, whereupon
such right to use such name shall cease.
6.14 Insurance. The Company shall use commercially reasonable
efforts to keep or cause the insurance policies set forth on Schedule
4.20 (or insurance policies comparable thereto), to be kept in full
force and effect through the Effective Time.
ARTICLE 7
CONDITIONS PRECEDENT OF THE COMPANY
The obligation of the Company to consummate the transactions
described in Article 2 hereof is subject to the fulfillment of each of
the following conditions prior to or at the Closing:
7.1 Representations and Warranties. None of the representations
and warranties of the Buyer contained or referred to herein that is
qualified as to materiality shall be untrue or incorrect in any respect
and at the Effective Time such representations and warranties shall be
true and correct as though made at the Effective Time, except for
changes specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by the Company; none of
such representations or warranties that are not so qualified shall be
untrue or incorrect in any material respect and at the Effective Time
such representations and warranties shall be true and correct in all
material respects as though made at the Effective Time, except for
changes specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by the Company.
7.2 Agreements. The Buyer shall have performed and complied in
all material respects with all its undertakings and agreements required
by this Agreement to be performed or complied with by the Buyer prior
to or at the Closing.
7.3 Buyer Certificate. The Company shall have been furnished
with a certificate of an authorized officer of the Buyer, dated the
Closing Date, certifying to the effect that the conditions contained in
Sections 7.1 and 7.2 have been fulfilled and confirming the
acknowledgement set forth in Section 9.2.
7.4 No Injunction. No injunction, restraining order or decree
of any nature of any court or governmental or regulatory authority
shall exist against the Buyer, the Company, any Subsidiary or any of
their respective Affiliates, or any of the principals, officers or
directors of any of them, that restrains, prevents or materially
changes the transactions contemplated hereby.
7.5 Consents. All material consents, approvals and
authorizations of Governmental Entities, and all material filings with
and notifications of Governmental Entities or other entities which
regulate the businesses of the Company, the Subsidiaries or the Buyer,
necessary on the part of the Company, any Subsidiary or the Buyer, or
their respective Affiliates, to the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
are listed on Schedule 7.5, and shall have been obtained or effected
(and all applicable waiting periods, if any, including any extensions
thereof, under any applicable law, statute, regulation or rule,
including but not limited to the HSR Act, if applicable, shall have
expired or terminated, as applicable).
7.6 Miscellaneous Closing Deliveries. The Company shall have
received each of the following:
(a)all documents, instruments and other closing deliveries
specified herein; and
(b)such evidence as the Company may reasonably request in
order to establish (i) the corporate power and authority
of the Buyer to consummate the transactions contemplated
by this Agreement and (ii) compliance with the conditions
of Closing set forth herein.
7.7 Penrice Condition.
The transactions contemplated by the Sale and Purchase Agreement-
Penrice Group of Companies dated the date hereof shall have been
consummated.
ARTICLE 8
CONDITIONS PRECEDENT OF THE BUYER
The obligation of the Buyer to consummate the transactions
described in Article 2 hereof is subject to the fulfillment of each of
the following conditions prior to or at the Closing:
8.1 Representations and Warranties. (x) None of the
representations and warranties of the Company contained or referred to
herein that are qualified as to Material Adverse Effect shall be untrue
or incorrect in any respect and at the Effective Time such
representations and warranties shall be true and correct at the
Effective Time as though made at the Effective Time, except for changes
therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by the Buyer; (y) none of
such representations or warranties that is not so qualified shall be
untrue or incorrect in such a manner as to cause a Material Adverse
Effect and at the Effective Time such representations and warranties
shall be true and correct as though made at the Effective Time except
for changes (i) specifically permitted by this Agreement or
(ii)resulting from any transaction expressly consented to in writing by
the Buyer or (iii)those that do not have a Material Adverse Effect (it
being understood that for purposes of this clause (y) qualifications in
the representations and warranties as to a materiality shall be
disregarded).
8.2 Agreements. The Company shall have performed and complied
in all respects with all of its undertakings and agreements required by
this Agreement to be performed or complied with by it prior to or at
the Closing provided that the non-compliance of an undertaking or
agreement, other than in the case of uncured or unremedied non-
compliance with Section 6.3 (insofar as it relates to Section
4.16(b)(ix), (b)(x) and (b)(xvi)), Section 6.4 and Section 6.11 hereof,
at any time shall not constitute a failure of the condition contained
in this Section 8.2 if such non-compliance is not a material breach of
such undertaking or agreement or if such non-compliance, both alone and
in conjunction with all other such non-compliances, has not had a
Material Adverse Effect.
8.3 The Company's Certificate. The Buyer shall have been
furnished with a certificate of an authorized officer of the Company,
dated the Closing Date, certifying to the effect that the conditions
contained in Sections 8.1, 8.2 and 8.6 have been fulfilled.
8.4 No Injunction. No injunction, restraining order or decree
of any court or governmental or regulatory authority shall exist
against the Buyer, the Company, any Subsidiary or any of their
respective Affiliates, or any of the principals, officers or directors
of any of them, that restrains, prevents or materially changes the
transactions contemplated hereby.
8.5 Consents. All material consents, approvals and
authorizations of Governmental Entities, and all material filings with
and notifications of Governmental Entities or other entities which
regulate the businesses of the Company, the Subsidiaries or the Buyer,
necessary on the part of the Company, any Subsidiary or the Buyer, or
their respective Affiliates, to the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
are listed on Schedule 7.5, and shall have been obtained or effected
(and all applicable waiting periods, if any, including any extensions
thereof, under any applicable law, statute, regulation or rule,
including but not limited to the HSR Act, if applicable, shall have
expired or terminated, as applicable).
8.6 No Material Adverse Change. Since the Reference Balance
Sheet Date, except as set forth on Schedule 8.6, there shall have been
no material adverse change in the financial condition or results of
operations of either (i) the Company and its Subsidiaries, taken as a
whole or (ii) any Significant Business.
8.7 Miscellaneous Closing Deliveries. The Buyer shall have
received each of the following:
(a) all documents, instruments and other closing deliveries
specified herein; and
(b) such evidence as the Buyer may reasonably request in
order to establish (i) the corporate power and authority of the
Company to consummate the transactions contemplated by this
Agreement and (ii) compliance with the conditions of Closing set
forth herein.
8.8 Penrice Condition.
The transactions contemplated by the Sale and Purchase Agreements
- Penrice Group of Companies dated the date hereof shall have been
consummated.
ARTICLE 9
NONSURVIVAL OF REPRESENTATIONS AND
WARRANTIES; CERTAIN ACKNOWLEDGMENTS
9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time
and all such representations and warranties will be extinguished on
consummation of the Merger and neither Company, any Subsidiary nor any
officer, director or employee or stockholder shall be under any
liability whatsoever with respect to any such representation or
warranty after such time. This Section 9.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
9.2 Information. On or immediately prior to the Closing Date,
the Buyer shall provide to the Company a certificate pursuant to which
the Buyer will acknowledge each of the following:
(a) The Buyer has received all materials relating to the business
of the Company and each Subsidiary which it has requested and has been
afforded the opportunity to obtain any additional information necessary
to verify the accuracy of any such information or of any representation
or warranty made by the Company hereunder or to otherwise evaluate the
merits of the transactions contemplated hereby; and
(b) The Company and its representatives have answered to the
Buyer's satisfaction all inquiries that the Buyer or its
representatives have made concerning the business of the Company and
each Subsidiary or otherwise relating to the transactions contemplated
hereby.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification.
(a) The Company will indemnify, defend and hold harmless,
and after the Effective Time, Buyer will indemnify, defend and
hold harmless, the present and former officers and directors of
the Company and its Affiliates and the Stockholders (each an
"Indemnified Party") against all losses, claims, demands, actions,
causes of action, damages or liabilities arising out of actions or
omissions occurring at or prior to the Effective Time
(individually, a "Claim" and collectively, "Claims") to the
fullest extent provided in the charters and by-laws of the Company
and its Subsidiaries, as the case may be, immediately prior to the
Effective Time. Without limiting the foregoing, the Company, and
after the Effective Time, Buyer, shall advance expenses incurred
with respect to Claims, including attorney's fees, as they are
incurred, to the fullest extent permitted under applicable law,
provided that the person on whose behalf the expenses are advanced
provides an undertaking (which need not be secured) to repay such
advances if it is ultimately determined by a court of competent
jurisdiction that indemnification of such Indemnified Party in the
manner contemplated hereby is prohibited by applicable law.
(b) The certificate of incorporation and the by-laws of the
Surviving Corporation (and its Subsidiaries referred to above)
shall contain the provisions with respect to indemnification and
exculpation from liability set forth in the Company's and such
Subsidiaries' certificates of incorporation and by-laws on the
date of this Agreement, which provisions shall not be amended,
repealed or otherwise modified for a period of seven years from
the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who on or prior to the Effective
Time were directors, officers, employees or agents of Company,
unless such modification is required by law.
(c) The Buyer or the Surviving Corporation shall maintain in
effect for six years from the Effective Time policies of
directors' and officers' liability insurance containing terms and
conditions which are not less advantageous to the insured than any
such policies of the Company or any such Subsidiary currently in
effect on the date of this Agreement (the "Company Insurance"),
with respect to matters occurring prior to the Effective Time, to
the extent available, and having the maximum available coverage
under any such Company Insurance policies; provided that (i) the
Surviving Corporation and such Subsidiaries following the Merger
shall not be required to spend in excess of 150% of the amount
spent on current annual premiums for the Company Insurance (the
"Premium Limit") per year therefor; provided further that if the
Surviving Corporation and such Subsidiaries following the Merger
would be required to spend in excess of the Premium Limit per year
to obtain insurance having the maximum available coverage under
Company Insurance policies, the Surviving Corporation and such
Subsidiaries will be required to spend up to such amount to
maintain or procure insurance coverage pursuant hereto, subject to
availability of such (or similar) coverage and (ii) such policies
may in the sole discretion of the Surviving Corporation be one or
more "tail" policies for all or any portion of the full six year
period, provided that such "tail" policies, contain terms and
conditions and provide coverage no less advantageous to the
insiders than the terms, conditions and coverage in the Company
Insurance. Buyer agrees that in the event that the Surviving
Corporation and such Subsidiaries would be required to spend in
excess of the Premium Limit per year to obtain insurance having
the maximum available coverage under Company Insurance policies,
the Surviving Corporation will notify the officers and directors
who are the beneficiaries thereof and permit such officers and
directors to pay any excess amount over the Premium Limit which
may be necessary to maintain such policies. The annual premium
for Company Insurance for calendar year 1997 was not greater than
$100,000.
(d) Any Indemnified Party wishing to claim indemnification
under this Section 10.1, upon learning of any claim, action, suit,
proceeding or investigation which may give rise to a right to
indemnification under this Section 10.1, shall promptly notify
Buyer thereof. In the event of any such claim, action, suit,
proceeding or investigation, (i) Buyer or the Surviving
Corporation shall have the right to assume the defense thereof
(with counsel engaged by Buyer or the Surviving Corporation to be
reasonably acceptable to the Indemnified Party) and Buyer shall
not be liable to such Indemnified Party for any legal expenses of
other counsel or any other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof provided
there is no conflict of interests between the Indemnified Party
and the Surviving Corporation or Buyer in the Indemnified Party's
good faith judgment based upon advice of counsel, (ii) the
Indemnified Party will cooperate in the defense of any such matter
and (iii) Buyer shall not be liable for any settlement effected
without its prior written consent.
(e) This Section 10.1 shall survive the closing of the
transactions contemplated hereby, is intended to benefit the
Company, the Surviving Corporation and each of the Indemnified
Parties (each of whom shall be entitled to enforce this Section
10.1 against the Company or the Surviving Corporation, as the case
may be) and shall be binding on all successors and assigns of the
Surviving Corporation.
(f) In the event the Surviving Corporation or any such
Subsidiary or the Buyer, as the case may be, or any of their
respective successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii)
transfers all or substantially all of its properties and assets to
any person, then, in each such case, the Buyer shall cause proper
provision to be made so that such resulting or surviving
corporation or entity or such transferee assumes the obligations
set forth in this Section 10.1.
(g) Buyer shall cause the Company to satisfy all of the
Company's obligations under this Article 10.
ARTICLE 11
MISCELLANEOUS
11.1 Expenses.
(a) The Company shall pay the fees and expenses of
its counsel, accountants, investment banking firms, and
other experts and consultants and shall pay all other
expenses incurred by it in connection with the
negotiation, preparation and execution of this Agreement
and the consummation of the transactions contemplated
hereby. Schedule 11.1 which shall be delivered promptly
after the date hereof will contain an estimate of the
fees and expenses of the counsel, accountants,
investment banking firms, change of control payments
(other than severance payments) and other experts and
consultants retained by the Company in connection with
the Merger and the transactions contemplated by the
Penrice Agreement. If such fees in the aggregate exceed
$22.5 million (exclusive of the closing related
obligations payable under the Management Services
Agreement with X.X. Xxxxxx and X.X. Xxxxxxxxxx referred
to in Schedule 6.6), then the aggregate Merger
Consideration shall be reduced pro-rata by the amount of
such excess.
(b) The Buyer shall pay the fees and expenses of
its counsel, accountants, investment banking firms, and
other experts and consultants and shall pay all other
expenses incurred by it in connection with the
negotiation, preparation and execution of this Agreement
and the consummation of the transactions contemplated
hereby.
11.2 Applicable Law. The rights and duties of the Buyer and the
Company under this Agreement shall, pursuant to the New York General
Obligations Law Section 5-1401, be governed by the law of the State of
New York except to the extent the laws of the State of Delaware shall
apply to the Merger.
11.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given or made
as follows: (a) if sent by registered or certified mail in the United
States return receipt requested, upon receipt; (b) if sent by reputable
overnight air courier (such as DHL or Federal Express), two business
days after being so sent; (c) if sent by telecopy transmission, with a
copy mailed on the same day in the manner provided in clauses (a) or
(b) above, when transmitted and receipt is confirmed by telephone; or
(d) if otherwise actually personally delivered, when delivered and
shall be sent or delivered as follows:
If to the Company, to:
Xxxxxx Chemical Group, Inc.
c/o D. Xxxxxx Xxxxxx & Associates, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
with a copy to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
If to the Buyer or Newco, to:
IMC Global Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Such names and addresses may be changed by such notice.
11.4 Entire Agreement. This Agreement (including the Schedules
attached hereto, all of which are a part hereof) and the
Confidentiality Agreement contains the entire understanding of the
parties hereto with respect to the subject matter contained herein,
supersedes and cancels all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or
written, respecting such subject matter, including but not limited to
the Confidential Memorandum. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party
hereto with respect to the transactions under this Agreement other than
those set forth herein or made hereunder.
11.5 Amendments. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors or
assigns.
11.6 Headings; References. The article, section and paragraph
headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement. All references herein to "Articles," "Sections,"
"Schedules" or "Exhibits" shall be deemed to be references to Articles
or Sections hereof or Schedules or Exhibits hereto unless otherwise
indicated.
11.7 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original.
11.8 Parties in Interest; Assignment. This Agreement shall inure
to the benefit of and be binding upon the Company and Buyer and their
respective successors. Except as provided in or contemplated by
Section 6.6 and Article 10 (each of which shall confer upon the
employees and other Persons referred to therein for whose benefit it is
intended the right to enforce such Section or Article, as applicable
notwithstanding any general releases that any such person may execute
in connection with a termination of employment), nothing in this
Agreement, express or implied, is intended to confer upon any Person
not a party to this Agreement any rights or remedies under or by reason
of this Agreement. No party to this Agreement may assign or delegate
all or any portion of its rights, obligations or liabilities under this
Agreement without the prior written consent of the other party to this
Agreement.
11.9 Severability; Enforcement. Any term or provision of this
Agreement that is invalid or unenforceable in any jurisdiction shall,
as to that jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or unenforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the
provisions shall be interpreted to be only so broad as is enforceable.
11.10 Waiver. Any of the conditions to Closing set forth in
this Agreement may be waived in writing at any time prior to or at the
Closing hereunder by the party entitled to the benefit thereof. The
failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a
waiver of any such provision, nor in any way to affect the validity of
this Agreement or any part hereof or the right of such party thereafter
to enforce each and every such provision. No waiver of any breach of
or non-compliance with this Agreement shall be held to be a waiver of
any other or subsequent breach or non-compliance.
11.11 Relationship Between the Parties. The parties agree
that this is an arm's length transaction in which the parties' rights,
undertakings and obligations are limited to those which are set forth
in this Agreement.
11.12 WAIVER OF CONSEQUENTIAL DAMAGES AND JURY TRIAL. THE
PARTIES TO THIS AGREEMENT EXPRESSLY WAIVE AND FOREGO ANY RIGHT TO
RECOVER CONSEQUENTIAL, EXEMPLARY, INDIRECT, INCIDENTAL, PUNITIVE, OR
SPECIAL DAMAGES IN ANY ARBITRATION, LAWSUIT, LITIGATION OR PROCEEDING
ARISING OUT OF OR RESULTING FROM ANY CONTROVERSY OR CLAIM ARISING OUT
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE EITHER OF THE FOREGOING WAIVERS, (ii) IT UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES
SUCH WAIVERS VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.12.
11.13 Approval of Company Stockholders. Prior to or
simultaneously with the execution of this Agreement, holders of 90% or
more of the Company Common Stock shall have entered into an amendment
of the Stockholders Agreement to amend Section 1K thereof in the manner
attached hereto as Annex 11.13. Each of the stockholders listed on
Schedule 11.13 is the beneficial owner of the number of shares of
Company Common Stock set forth opposite such stockholder's name and
such stockholder owns all such shares free and clear of all liens,
charges, encumbrances, restrictions and commitments of any kind. Such
stockholders have executed a written consent, which has been delivered
to Buyer upon execution of this Agreement.
11.14 Liquidated Damages. The parties hereto agree that, if
the Effective Date shall not have occurred under the circumstances
described below, because it is impossible to adequately measure actual
damages, in lieu of actual damages, the Company shall be entitled to
liquidated damages in the amount of $40 million (the "Liquidated
Damages"), which amount the parties hereby agree to be a reasonable
amount under the circumstances of the transaction contemplated hereby.
The Company agrees and acknowledges that, in the absence of the Buyer's
fraud or willful misconduct, such Liquidated Damages are in full
satisfaction of, and shall be in lieu of, any other claim, right, or
other cause of action which the Company might have with respect to the
circumstances described below, and the Company agrees that, in the
absence of the Buyer's fraud or willful misconduct, upon payment of
such Liquidated Damages, the Company shall release Buyer from any and
all such claims. The Liquidated Damages shall be payable to the
Company by Buyer on the Final Termination Date if (x) the Effective
Time shall not have occurred on or before the Final Termination Date,
(y) the conditions set forth in Sections 8.1, 8.2, 8.4, 8.5 and 8.6
shall not have been breached in any material respect as of the Final
Termination Date (other than, in the case of Sections 8.4 and 8.5, with
respect to antitrust matters) and (z) the Penrice closing contemplated
by Section 8.8 shall not have occurred under circumstances where
liquidated damages are not payable under the Penrice Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXXX CHEMICAL GROUP, INC.
By:
Name:
Title:
IMC GLOBAL INC.
By:
Name:
Title:
IMC MERGER SUB INC.
By:
Name:
Title:
