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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 4, 1995
("Agreement") among Xxxxx & Xxxxxxx United, Inc., a New York corporation
("Company") which was formed under the name "Xxxxx & Xxxxxxx", The
Xxxxxxx-Xxxxxxxx Company, an Ohio corporation ("Buyer"), and SWACQ, Inc., a New
York corporation and a wholly-owned subsidiary of Buyer ("Merger Subsidiary").
WHEREAS, the respective Boards of Directors of Buyer, Merger
Subsidiary and Company have each determined that it is in the best interests of
their respective shareholders for Buyer to acquire all of the outstanding
capital stock of Company upon the terms and subject to the conditions set forth
herein; and
WHEREAS, in furtherance of such acquisition, it is proposed that
Buyer, through Merger Subsidiary, shall make a cash tender offer ("Offer") to
acquire all of the issued and outstanding shares of the common stock, par value
$.01 per share, of Company ("Common Stock"), together with the Rights (as such
term is defined in Section 6.07) ("Share(s)") for $35.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions of this Agreement
and the Offer; and
WHEREAS, the Board of Directors of Company has approved the making of
the Offer and resolved and agreed to recommend that holders of Shares tender
their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Buyer, Merger Subsidiary and Company have each approved the merger
of Merger Subsidiary with and into Company in accordance with the Business
Corporation Law of the State of New York ("New York Law") following the
consummation of the Offer and upon the terms and subject to the conditions set
forth herein; and
WHEREAS, (a) Buyer and Merger Subsidiary are unwilling to enter into
this Agreement unless, simultaneously with the execution and delivery of this
Agreement, certain shareholders of Company enter into a stock option, pledge
and security agreement ("Stock Option Agreement") among Buyer, Merger
Subsidiary and certain shareholders of Company providing for, among other
things, (i) the grant to Buyer and Merger Subsidiary of an irrevocable option
to purchase the Shares specified in the Stock Option Agreement and all Shares
acquired by those shareholders in the future prior to the Effective Time (as
such term is defined in Section 2.01(b)) ("Option Shares"), and (ii) the tender
by such shareholders, in response to the Offer, of all Option Shares, all upon
the terms and subject to the conditions set forth in the Stock Option
Agreement, and (b) the Board of Directors of Company has approved Buyer and
Merger Subsidiary entering into the Stock Option Agreement, which is to be
executed simultaneously with the execution hereof.
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NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, Buyer, Merger Subsidiary and Company
hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions set
forth in Annex I hereto, Buyer, through Merger Subsidiary, shall, as promptly as
practicable after the date hereof, but in no event later than five business days
following the public announcement of the terms of this Agreement, commence the
Offer to purchase all of the outstanding Shares at a price of $35.00 per Share
("Offer Price"), net to the seller in cash, subject to any amounts required to
be withheld under applicable federal, state, local or foreign income tax laws
and regulations. The consummation of the Offer shall be subject only to (i) the
condition that there shall be validly tendered and not withdrawn, in accordance
with the terms of the Offer and prior to the expiration date of the Offer, a
number of Shares which represents at least two-thirds of the Shares outstanding
on a fully diluted basis ("Minimum Condition"), and (ii) the other conditions
set forth in Annex I hereto. Buyer expressly reserves the right to waive the
Minimum Condition or any of the other conditions to the Offer and to make any
change in the terms or conditions of the Offer (other than extending the Offer
except as expressly provided below in this Section 1.01(a)); provided that no
change may be made which (i) changes the form of consideration to be paid or
decreases the Offer Price or the number of Shares sought in the Offer, (ii)
imposes conditions to the Offer in addition to those set forth in Annex I or
(iii) is materially adverse to the holders of the Shares. Notwithstanding the
foregoing, Buyer shall extend the Offer at any time up to the Outside
Termination Date (as such term is defined in Section 10.01(iv)) for one or more
periods of not more than ten business days, if at the initial expiration date of
the Offer, or any extension thereof, the condition to the Offer requiring the
expiration or termination of any applicable waiting periods under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended ("HSR Act"), is
not satisfied. Except as set forth in the preceding sentence and the following
sentence or as otherwise may be required by law, Buyer shall either (i) accept
for payment, not later than 5:00 p.m. New York time on December 31, 1995 all
Shares validly tendered and not withdrawn on or prior to such date, or (ii)
cause the Offer to be extended so as to expire not earlier than 5:00 p.m. New
York time on January 5, 1996. In addition: (i) Buyer may extend the Offer, at
any time up to the Outside Termination Date for one or more periods of not more
than ten business days, if any condition of the Offer has not been satisfied;
(ii) Buyer shall have the right to extend the Offer at any time, for any reason,
for a period not to exceed ten business days provided such extension shall not
(y) extend beyond the Outside Termination Date or (z) be permitted if all
conditions to the Offer have been satisfied and at least 90% of the outstanding
Shares, on a fully diluted basis, have been validly tendered and not withdrawn;
and (iii) Buyer may extend the Offer for incremental periods of not more than
ten business days if at the time of any such extension
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an Acquisition Proposal (as such term is defined in Section 6.05) exists. In
addition, the Offer Price may be increased and the Offer may be extended to the
extent required by law in connection with such increase, in each case without
the consent of Company. Subject to the terms and conditions of the Offer,
Buyer shall pay, as promptly as practicable after expiration of the Offer, for
all Shares validly tendered and not withdrawn.
(b) As soon as practicable on the date of commencement of the Offer,
Buyer and Merger Subsidiary shall file (i) with the Securities and Exchange
Commission ("SEC"), a Tender Offer Statement on Schedule 14D-1 with respect to
the Offer which will contain the offer to purchase and form of the related
letter of transmittal and any other ancillary documents pursuant to which the
Offer shall be made (together with any supplements or amendments thereto,
collectively, the "SEC Offer Documents") and (ii) with the Attorney General of
the State of New York, a Registration Statement (together with any supplements
or amendments thereto, collectively, the "New York Disclosure Documents") in
accordance with Article 16 ("Security Takeover Disclosure Act") of the New York
Law. (The SEC Offer Documents and the New York Disclosure Documents are
collectively referred to herein as the "Offer Documents".) Buyer, Merger
Subsidiary and Company agree to correct promptly any information provided by
them for use in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect. Buyer and Merger
Subsidiary agree to take all steps necessary to cause the Offer Documents as so
amended and corrected to be filed with the SEC and the Attorney General for the
State of New York and to be disseminated to holders of Shares, in each case as
and to the extent required by applicable federal securities laws or the
Security Takeover Disclosure Act. Company and its counsel shall be given a
reasonable opportunity to review and comment on Schedule 14D-1 prior to it
being filed with the SEC and shall be promptly advised of any comments provided
or information requested by the staff of the SEC and afforded the opportunity
to comment on any related correspondence.
SECTION 1.02 Company Action. (a) Company hereby consents to the
Offer and the Merger and represents that its Board of Directors (at meetings
duly called and held ), has: (i) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger (as such
term is defined in Section 2.01), are fair to and in the best interest of
Company and its shareholders; (ii) approved, including by a majority of
Disinterested Directors (as such term is defined in Article Ninth of Company's
Restated Certificate of Incorporation), this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, which approval
satisfies in full the requirements of the New York Law and the provisions of the
Restated Certificate of Incorporation of Company subject to requisite
shareholder approval; (iii) resolved to recommend acceptance of the Offer and
approval and adoption of this Agreement and the Merger by its shareholders; and
(iv) taken all other action necessary to render (x) Section 912 of the New York
Law and any other state takeover statutes and (y) the Rights Agreement dated as
of January 31, 1989 between Company and Mellon Securities Trust Company as
Rights Agent ("Rights Agreement") inapplicable to this Agreement, the Offer, the
Merger, the Stock Option
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Agreement and any purchase of Shares by Buyer or Merger Subsidiary pursuant to
the Stock Option Agreement and this Agreement.
(b) Company represents that its Board of Directors (i) has, in
accordance with the Shareholder Agreement among certain former shareholders of
United Coatings, Inc., Xxxxx & Xxxxxxx, Inc., and Xxxxxxx X. Xxxxxxx, Xx.,
Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxx dated February 25, 1994 ("Shareholder
Agreement"), adopted a resolution approving the transactions contemplated in
this Agreement and the Stock Option Agreement, and (ii) approved Buyer's
commencement of negotiations with the parties to the Stock Option Agreement
with respect to the Stock Option Agreement and any subsequent purchase of
Option Shares pursuant to that agreement and this Agreement. Company further
represents that Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as
financial advisor to Company, has delivered to Company's Board of Directors its
oral opinion that, as of the date of such opinion, the cash consideration to be
received by the Shareholders of the Company pursuant to the Offer and the
Merger is fair to such shareholders from a financial point of view. In
connection with the Offer, Company will promptly furnish Buyer with a list of
Company's shareholders, mailing labels and any available listing or computer
file containing the names and addresses of all holders of record of Shares and
lists of securities positions of Shares held in stock depositories, and any
list of non-objecting beneficial holders of Shares maintained by Company, in
each case true and correct as of the most recent practicable date, and will
provide to Buyer such additional information (including, without limitation,
updated lists of shareholders, mailing labels and lists of securities
positions) and such other assistance as Buyer or Merger Subsidiary may
reasonably request in connection with the Offer.
(c) As soon as practicable on the day that the Offer is
commenced, Company will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 ("Schedule 14D-9") which, subject to the fiduciary
duties of Company's Board of Directors, shall reflect that Company's Board of
Directors recommends acceptance of the Offer and approval and adoption of this
Agreement and the Merger by its shareholders. Company, Buyer and Merger
Subsidiary agree to correct promptly any information provided by them for use
in the Schedule 14D-9 if and to the extent that such information shall have
become false or misleading in any material respect. Company agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Buyer and its counsel
shall be given a reasonable opportunity to review and comment on the Schedule
14D-9 prior to its being filed with the SEC, and shall be promptly advised of
any comments provided or information requested by the staff of the SEC and
afforded the opportunity to comment on any related correspondence and
participate in any discussion with the staff of the SEC.
SECTION 1.03 Directors. (a) Commencing upon the purchase of Shares
pursuant to the Offer or the Stock Option Agreement and from time to time
thereafter, Buyer shall be entitled to designate the number of directors,
rounded up to the next whole number, on Company's Board of Directors that equals
the product of (i) the total number of directors on
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Company's Board of Directors (giving effect to the election of any additional
directors pursuant to this Section) and (ii) the percentage that (A) the sum of
(x) the number of Shares owned by Buyer and Merger Subsidiary (including Shares
accepted for payment in the Offer, provided funds therefor have been deposited
with the Depositary (as such term is defined in Section 2.03(a)) and (y) the
number of Option Shares, represents of (B) the total number of Shares
outstanding, and Company shall take all action necessary to cause Buyer's
designees to be elected or appointed to Company's Board of Directors including,
without limitation, increasing the number of directors and seeking and
accepting resignations of incumbent directors. At such times, Company will use
its best efforts to cause individuals designated by Buyer to constitute the
same percentage as such individuals represent on Company's Board of Directors
on each committee of the Board (other than any committee of the Board
established to take action under this Agreement), and each board of directors,
and each committee thereof, of each Subsidiary (as such term is defined in
Section 4.01).
(b) Company's obligations to appoint designees to the Board of
Directors shall be subject to Section 14(f) of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder, as amended
("Exchange Act"), and Rule 14f-1 promulgated thereunder. Company shall
promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section and shall include in the
Schedule 14D-9 such information with respect to Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill its
obligations under this Section 1.03. Buyer will supply to Company in writing
and be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
(c) From and after the time, if any, that any of Buyer's designees
are appointed to Company's Board of Directors pursuant to this Section 1.03,
any amendment of this Agreement, any termination of this Agreement by Company,
any extension of time for performance of any of the obligations of Buyer or
Merger Subsidiary hereunder, any waiver of any condition to the obligations of
Company or any of Company's rights hereunder or other action by Company
hereunder may be effected only by the action of a majority of the directors of
Company then in office who were directors of Company on the date hereof (or
their successors designated as set forth below), which action shall be deemed
to constitute the action of the full Board of Directors; provided, that if
there shall be no such directors, such actions may be effected by majority vote
of the entire Board of Directors of Company. Notwithstanding the foregoing,
until the Effective Time, Company shall use reasonable efforts to retain as
members of its Board of Directors at least two directors who are directors of
Company on the date hereof ("Company Designees"); in the event of the
resignation of any or all of Company Designees, the remaining Company Designees
(or, if no other Company Designee shall remain on the Board, the last resigning
Company Designee) shall have the right to appoint a successor or successors to
serve as Company Designees. Buyer and Merger Subsidiary shall cause each such
appointment to become effective. Nothing in
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this Section 1.03(c) shall prohibit, or be construed to prohibit, any of
Buyer's designees from voting on any matter described in Section 10.02(b).
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. (a) Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time, Merger Subsidiary
shall be merged ("Merger") with and into Company in accordance with the New York
Law, whereupon the separate existence of Merger Subsidiary shall cease, and
Company shall be the surviving corporation ("Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, Company and Merger
Subsidiary will file a certificate of merger with the Department of State of
the State of New York and make all other filings or recordings required by the
New York Law in connection with the Merger. The Merger shall become effective
on the date the certificate of merger is duly filed with the Department of
State of the State of New York or at such later date as is specified in the
certificate of merger ("Effective Time").
(c) From and after the Effective Time, Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities, liabilities and duties of Company and Merger
Subsidiary, as provided in the New York Law.
SECTION 2.02 Conversion of Shares. At the Effective Time:
(i) each share of Company treasury stock and each Share
owned by Buyer, Merger Subsidiary or any other
subsidiary of Buyer immediately prior to the
Effective Time shall be cancelled, and no payment
shall be made with respect thereto;
(ii) each Share outstanding immediately prior to the
Effective Time shall, except as otherwise provided in
Section 2.02(i) or as provided in Section 2.04 with
respect to Shares as to which appraisal rights have
been exercised, be converted into the right to
receive $35.00 in cash or any higher price paid for
each Share in the Offer, without interest ("Merger
Consideration"); and
(iii) each share of common stock of Merger Subsidiary
outstanding immediately prior to the Effective Time
shall be converted into and become one share of
common stock of Surviving Corporation with the same
rights, powers and privileges as the shares so
converted and shall
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constitute the only outstanding shares of capital
stock of Surviving Corporation.
SECTION 2.03 Surrender and Payment. (a) Prior to the Effective Time,
Buyer shall appoint a depositary ("Depositary") for the purpose of exchanging
certificates representing Shares for the Merger Consideration. Depositary
shall at all times be a commercial bank having a combined capital and surplus of
at least $100,000,000. Buyer will pay to Depositary, immediately prior to the
Effective Time, the Merger Consideration to be paid in respect of the Shares.
For purposes of determining the Merger Consideration to be so paid, Buyer shall
assume that no holder of Shares will perfect his right to appraisal of his
Shares. Promptly after the Effective Time, Buyer will send, or will cause
Depositary to send, but in no event later than three business days after the
Effective Time, to each holder of Shares at the Effective Time a letter of
transmittal for use in such exchange (which shall specify that the delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery of the certificates representing Shares to Depositary).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to Depositary of a certificate
or certificates properly representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person (as hereinafter defined) other than the registered holder of the Shares
represented by the certificate or certificates surrendered in exchange
therefor, it shall be a condition to such payment that the certificate or
certificates so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such payment shall pay
to Depositary any transfer or other taxes required as a result of such payment
to a Person other than the registered holder of such Shares or establish to the
satisfaction of Depositary that such tax has been paid or is not payable. For
purposes of this Agreement, "Person" means an individual, a corporation, a
joint venture, a limited liability company, a partnership, an association, an
unincorporated organization, a group, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to Surviving Corporation, they
shall be canceled and exchanged for the consideration provided for, and in
accordance with the procedures set forth, in this Article II.
(e) Any portion of the Merger Consideration paid to Depositary
pursuant to Section 2.03(a) that remains unclaimed by the holders of Shares one
year after the Effective Time shall be returned to Surviving Corporation, upon
demand, and any such holder who has
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not exchanged his Shares for the Merger Consideration in accordance with this
Section prior to that time shall thereafter look only to Surviving Corporation
for payment of the Merger Consideration in respect of his Shares.
Notwithstanding the foregoing, Buyer, Merger Subsidiary and Surviving
Corporation shall not be liable to any holder of Shares for any amount paid to
a public official pursuant to applicable abandoned property laws. Any amounts
remaining unclaimed by holder of Shares on the day immediately prior to such
time as such amounts would otherwise escheat to or become property of any
governmental entity shall, to the extent permitted by applicable law, become
the property of Buyer, free and clear of any claims or interest of any Person
previously entitled thereto.
(f) Notwithstanding Section 2.03(e) to the contrary, any portion
of the Merger Consideration paid to Depositary pursuant to Section 2.03(a) in
respect of Shares for which appraisal rights have been perfected shall be
returned to Buyer upon demand.
SECTION 2.04 Dissenting Shares. Shares outstanding immediately prior
to the Effective Time and held by a holder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for such
Shares in accordance with the New York Law shall not be converted into the right
to receive the Merger Consideration, unless such holder fails to perfect or
withdraws or otherwise loses his right to appraisal. If after the Effective
Time such holder fails to perfect or withdraws or loses his right to appraisal,
such Shares shall be treated as if they had been converted as of the Effective
Time into the right to receive the Merger Consideration. Company shall give
Buyer prompt notice of any demands received by Company for appraisal of Shares,
and Buyer shall have the right to participate in all negotiations and
proceedings with respect to such demands. Company shall not, except with the
prior written consent of Buyer, make any payment with respect to, or settle or
offer to settle, any such demands.
SECTION 2.05 Stock Options. (a) Immediately prior to the Effective
Time, each outstanding employee stock option ("Option") to purchase Shares
granted under any employee stock option or compensation plan or arrangement of
Company shall be cancelled, and each holder of any such Option, whether or not
then vested or exercisable, shall be paid by Company at the Effective Time for
each such Option an amount (subject to applicable withholding taxes) determined
by multiplying (i) the excess, if any, of the price per Share paid in the Offer
over the applicable exercise price of such Option by (ii) the number of Shares
such holder could have purchased (assuming full vesting of all Options) had such
holder exercised such Option in full immediately prior to the Effective Time. In
the event any holder of an Option is terminated by Company subsequent to the
time a majority of Board of Directors of the Company consists of designees of
Buyer, Company shall provide to such employee the same payment specified above,
as if such employee had continued his employment through the Effective Time,
unless a majority of directors of the Company determines that such employee has
been terminated for Cause. For purposes of this Section 2.05(a), "Cause" shall
mean conviction of a felony involving moral turpitude or theft of Company
assets.
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(b) Prior to the Effective Time, Company shall (i) use its best
efforts to obtain any consents from holders of the Options and (ii) make any
amendments to the terms of such employee stock option or compensation plans or
arrangements, to the extent such consents or amendments are necessary to give
effect to the transactions contemplated by Section 2.05(a). Notwithstanding
any other provision of this Section 2.05 to the contrary, payment may be
withheld in respect of any Option until necessary consents are obtained.
SECTION 2.06 Merger Without Meeting of Shareholders. In the event
that Buyer, Merger Subsidiary or any other subsidiary of Buyer shall acquire at
least 90% of the outstanding Shares, pursuant to the Offer or otherwise, the
parties hereto agree to take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after such acquisition,
without a meeting of shareholders of Company, in accordance with Section 905 of
the New York Law.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01 Certificate of Incorporation. The certificate of
incorporation of Merger Subsidiary in effect at the Effective Time shall be the
certificate of incorporation of Surviving Corporation until amended in
accordance with applicable law, except that the name of Surviving Corporation
shall be "Xxxxx & Xxxxxxx United, Inc."
SECTION 3.02 Bylaws. The bylaws of Merger Subsidiary in effect at the
Effective Time shall be the bylaws of Surviving Corporation until amended in
accordance with applicable law.
SECTION 3.03 Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, the directors of Merger Subsidiary at the Effective Time
shall be the directors of Surviving Corporation and the officers of Merger
Subsidiary at the Effective Time shall be the officers of Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants to Buyer and Merger Subsidiary as
follows:
SECTION 4.01 Organization. Each of Company and the Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation and has all requisite power and
authority, corporate and other, and all
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necessary governmental approvals, licenses and permits to own, lease and
operate its properties and to carry on its business as now and heretofore being
conducted except where the failure to have any such approvals, licenses or
permits would have a Material Adverse Effect (as such term is defined below)
with respect to Company. Company and each Subsidiary are duly qualified or
licensed to do business and in good standing in each state in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, other than in
such states where the failure to so qualify would not have a Material Adverse
Effect with respect to Company. As used in this Agreement, a "Subsidiary(ies)"
shall mean (i) any "significant subsidiary" of Company as described in Rule
12b-1 of the Exchange Act and (ii) any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
at least fifty percent of the board of directors or other persons performing
similar functions are directly or indirectly owned by Company. True and
complete copies of Company's Restated Certificate of Incorporation and By-Laws
are attached hereto as Schedule 4.01. As used in this Agreement, the term
"Material Adverse Effect" shall mean, with respect to any party, the result of
one or more events, changes or effects which, individually or in the aggregate,
would have a materially adverse effect on the business, operations, assets,
condition (financial or otherwise) or prospects of such party and its
Subsidiaries, taken as a whole.
SECTION 4.02 Capital Stock. The authorized capital stock of Company
consists of: (i) 100,000,000 shares of common stock, par value $.01 per share,
of which, at the date of this Agreement, 10,704,276 shares were issued and
outstanding (each of which is entitled to one vote) and 2,823,113 shares were
held in treasury; and (ii) 1,500,000 shares of preferred stock, par value $10.00
per share, of which none are issued and outstanding. At the date of this
Agreement, 1,038,100 shares of Company common stock were reserved for issuance
upon exercise of outstanding Options pursuant to Company's stock options plans
("Company Stock Plans") and 15,270,339 shares of common stock were reserved for
issuance in accordance with Company's Rights Agreement (as such term is defined
in Section 1.02(a)). At November 3, 1995, 704,850 Options were outstanding. All
outstanding Shares of Company's common stock are duly authorized, validly
issued, fully paid and non-assessable and free of any preemptive rights with
respect thereto. There are no bonds, debentures, notes or other indebtedness
having the right to vote (or convertible into securities having the right to
vote) on any matters on which shareholders of Company may vote ("Voting Debt")
issued or outstanding. Except for: the Shareholder Agreement; that certain
Registration Agreement made as of August 4, 1994 by and among the signing former
shareholders of United Coatings, Inc. and Company; that certain Right of First
Offer Agreement, between Xxxxx X. Xxxxx and Company, dated August 4, 1994;
certain Affiliate Agreements made as of August 4, 1994 between Company and
certain former shareholders of United Coatings, Inc.; Sections 5.02(b) of the
1994 Merger Agreement (as such term is defined in Section 4.28); the outstanding
Options; certain former United Coatings, Inc. employee notes and stock pledge
agreements dated August 4, 1994; that certain agreement of the Company's Board
dated August 4, 1994 regarding transfers of Shares by certain United Coatings,
Inc. employees; and the Company's Rights Agreement, there are no existing
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options, warrants, calls, subscriptions or other rights or other agreements or
commitments of any character obligating Company or any Subsidiary to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interests in, Company or any
Subsidiary or securities convertible into or exchangeable for such shares or
equity interests or obligating Company or any Subsidiary to grant, extend or
enter into any such option, warrant, call, subscription or other right,
agreement or commitment. Except as indicated on Schedule 4.02, Company has no
agreement, obligation or commitment to purchase or redeem Company common stock.
Except as set forth on Schedule 4.02, all Subsidiaries of Company are
wholly-owned by Company and none of the shares of capital stock of such
Subsidiaries are subject to a pledge. To the best of Company's knowledge and
except as set forth on Schedule 4.02, no shareholder beneficially owns more
than three percent of the Shares.
SECTION 4.03 Corporate Authority. Company has all requisite corporate
power and authority, corporate and other, to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the Merger and of the
other transactions contemplated hereby have been duly and effectively authorized
by all necessary corporate action on the part of Company, and no other corporate
proceedings on the part of Company are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (other than the "Shareholder
Approval Requirement" as defined in Section 4.09). Assuming due execution and
delivery by other parties hereto, this Agreement constitutes the valid and
binding agreement of Company, enforceable against Company except that
enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
creditor's rights generally.
SECTION 4.04 No Violation. (a) Except as described on Schedule 4.04
or as contemplated by Section 4.05, the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not result in
any violation of: (i) any provision of the Restated Certificate of
Incorporation, as amended, or By-Laws, as amended, of Company; or (ii) any
judgment, order or decree.
(b) Except as described on Schedule 4.04 or as contemplated by
Section 4.05, the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not result in any violation of:
(i) any provision of any loan or credit agreement, note, mortgage, indenture,
lease, benefit plan or other agreement, obligation, instrument, permit,
concession, franchise or license applicable to Company or any Subsidiary; (ii)
any statute, law, ordinance, rule or regulation applicable to Company or any
Subsidiary, or their respective properties or assets; (iii) any other
restrictions of any kind or nature nor result in the creation of any lien,
mortgage, pledge, loan, charge or encumbrance on the Shares and/or any assets
of Company or any Subsidiary, nor the loss of any license or contractual right
with respect to Company's or any Subsidiary's business; or (iv) any
acceleration or termination provision of any loan, indenture, note or security
interest agreement to which Company or any Subsidiary is a party or to which
any of their respective
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assets are subject or bound, except where any such violation or loss would not
have a Material Adverse Effect with respect to Company.
SECTION 4.05 Government Authorization. No consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
entity or regulatory authority is required by or with respect to Company or any
Subsidiary in connection with the execution and delivery of this Agreement or
the consummation by Company of the transactions contemplated hereby, the failure
of which to obtain would have a Material Adverse Effect with respect to Company
or the transactions contemplated hereby, except for: (i) the filing of a
pre-merger notification report by Company under the HSR Act and the expiration
or termination of the applicable waiting period thereunder; (ii) the filing of
the Certificate of Merger with the Department of State of the State of New York
in accordance with the requirements of the New York Law and the filing of
appropriate documents with the relevant authorities of other states in which
Company is qualified to transact business; and (iii) compliance with any
applicable requirements of the Exchange Act or state securities laws.
SECTION 4.06 SEC Reports and Financial Statements. (a) Company has
filed with the SEC and has delivered or made available to Buyer true and
complete copies of all forms, reports, schedules, statements and other documents
required to be filed by it with the SEC since March 1, 1993 under the Exchange
Act or the Securities Act of 1933, as amended ("Securities Act"), including,
without limitation, the annual reports on Form 10-K for its fiscal years ended
December 31, 1992, 1993 and 1994, the quarterly reports on Form 10-Q for its
fiscal quarters ended March 31, June 30 and September 30, 1993, 1994 and 1995
(other than the Form 10-Q for its fiscal quarter ended September 30, 1995), and
the proxy or information statements relating to meetings of, or actions taken
without a meeting by, the shareholders of Company since March 1, 1993 (as such
documents have been amended since the time of their filing, collectively, the
"SEC Documents"). The financial statements of Company included in the SEC
Documents comply with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, and such financial
statements have been prepared in accordance with generally accepted accounting
principles 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) and fairly present (subject in the case
of the unaudited statements to normal, recurring audit adjustments) the
consolidated financial position of Company and its consolidated Subsidiaries,
taken as a whole, at the date thereof and the consolidated results of their
operations and cash flows (or changes in financial position prior to the
adoption of FASB 95) for the periods then ended. The books of account and other
financial records of Company have been maintained in accordance with sound
business practices.
(b) In addition, Company has delivered or made available to Buyer
true and complete copies of the audited balance sheets of the former United
Coatings, Inc. (which company was merged with and into Company effective
August 4, 1994, hereinafter "UCI") at December 31, 1990, December 31, 1991,
December 31, 1992 and December 31, 1993 and
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the related statements of earnings, shareholder's investment and changes in
financial position for the years then ended (including the notes thereto),
which present fairly the financial position of UCI as of such dates and the
results of its operations and changes in its financial position for such
periods, and have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent with that of similar
periods for preceding years. The balance sheets and financial statements
identified in this Section 4.06(b) accurately reflect the basis for the
financial condition and results of operations of UCI set forth in such
financial statements.
SECTION 4.07 Absence of Certain Changes or Events. Except as
disclosed on Schedule 4.07 or as otherwise contemplated by this Agreement or
reflected in the SEC Documents, since December 31, 1994, Company and each
Subsidiary have operated only in the ordinary course of business and consistent
with past practices, and there have been no events, changes or circumstances
having, individually or in the aggregate, a Material Adverse Effect with respect
to Company. Specifically, and without limiting the generality of the foregoing,
since December 31, 1994 (except as set forth on Schedule 4.07 or as otherwise
contemplated by this Agreement or reflected in the SEC Documents), neither
Company nor any Subsidiary has: (i) declared, set aside or paid any dividend or
other distribution in respect of its capital stock, other than quarterly
dividends paid by Company on its common stock of not more than $0.16 per share;
(ii) made any payment (other than dividends) to any of its shareholders (in
their capacity as shareholders); (iii) issued or sold any shares of its capital
stock or any options, warrants or other rights to purchase any such shares or
any securities convertible into or exchangeable for such shares or taken any
action to reclassify or recapitalize or split up its capital stock, except for
Shares issued pursuant to the exercise of Options; (iv) mortgaged, pledged or
subjected to any lien, lease, security interest, encumbrance or other
restriction, any of its properties or assets except in the ordinary course of
business; (v) except for compromises of trade accounts receivable in the
ordinary course of business, forgiven or cancelled any debt or claim, waived any
right of material value; (vi) adopted or amended any plan or arrangement
described in Section 4.17 (other than amendments that were made to comply with
laws or regulations) for the benefit of any director, officer or employee, or
changed the compensation (including bonuses) to be paid to any director, officer
or employee, except for changes made in the ordinary course of business and
consistent with past practices, and which are consistent with Company's
corporate policies and procedures; (vii) suffered any damage, destruction or
loss (whether or not covered by insurance) which has a Material Adverse Effect
with respect to Company; (viii) sold, leased or otherwise transferred, or
contracted to sell, lease or otherwise transfer (except as contemplated in this
Agreement), any assets material to the operations or business of Company or any
Subsidiary which has not been replaced with a comparable substitute except for
the sale, lease or transfer of assets in the ordinary course of business; (ix)
sold, licensed, assigned or otherwise transferred exclusive rights to any
material patents, copyrights, trademarks, trade names or other similar
intangible assets; (x) agreed to guarantee, secure or act as a surety with
respect to any debt, liability or obligation of any third party which in the
aggregate does not exceed $ 500,000.00; or (xi) agreed to, permitted
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or suffered any of the acts, transactions or other things described in clauses
(i) through (x) of this Section 4.07.
SECTION 4.08 Taxes. (a)(i) All income and other material Tax (as such
term is defined in Section 4.08(b)) returns, statements, reports and forms
(including estimated Tax returns and reports and information returns and
reports) required to be filed with any taxing authority with respect to any
Pre-Closing Tax Period (as such term is defined in Section 4.08(b)) by or on
behalf of Company or any Subsidiary (including any predecessors of any of them
including, without limitation, UCI) (collectively, the "Return(s)") were filed
when due (including any applicable extension periods) in accordance with all
applicable laws; (ii) as of the time of filing, such Returns correctly reflected
in all material respects the facts regarding the income, business, assets,
operations, activities and status of Company, any Subsidiary and any other
information required to be shown therein; (iii) Company and each Subsidiary has
timely paid, or withheld and remitted to the appropriate taxing authority, all
Taxes (as such term is defined in Section 4.08(b)) shown as due and payable on
the Returns that have been filed; (iv) the charges, accruals and reserves for
Taxes with respect to Company and any Subsidiary for any Pre-Closing Tax Period
(including any Pre-Closing Tax Period for which no Return has yet been filed)
reflected in the financial statements of Company in the SEC Documents are
adequate; (v) since 1976 neither the Company nor any Subsidiary has been a
member of an affiliated group (as defined in Section 1504 of the Internal
Revenue Code of 1986, as amended ("Code")) other than one of which Company or a
Subsidiary was the common parent, or filed or been included in a combined,
consolidated or unitary Return other than one filed by Company or a Subsidiary;
(vi) Company is not and has not been within five years of the date hereof a
"United States real property holding corporation" as defined in Section 897 of
the Code; (vii) there is no claim, action, suit or proceeding now pending or
threatened in writing against or in respect of any Tax or Tax Asset (as such
term is defined in Section 4.08(b)) of Company or any Subsidiary the resolution
of which would as proposed, or audit or investigation now pending or threatened
in writing against or in respect of any Tax or Tax Asset of Company or any
Subsidiary the resolution of which Company believes would (taking into account
any changes, accruals and reserves referred to in clause (iv) above)
individually or in the aggregate, have a material adverse effect on the
financial position of Company and its Subsidiaries taken as a whole, and there
has not occurred any extension or waiver of any applicable statute of
limitations with respect to any Return.
(b) (i) As used in this Agreement, "Tax" or "Taxes" mean: (A)
federal, state, local and foreign income, franchise,
alternative or add-on minimum tax, gross receipts,
transfer, withholding on amounts paid to or by
Company or any Subsidiary, payroll, employment,
license, property, sales, use, excise and other
taxes, tariffs or governmental charges of any nature
whatsoever, together with any interest, penalty or
additional tax attributable to such taxes; (B) any
liability of Company or any Subsidiary for the
payment of any amounts of the type described in
clause (i) of this paragraph (b) as a result of being
a member of an affiliated, consolidated, combined or
unitary group, or being a party to
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any agreement or arrangement whereby liability of
Company or any Subsidiary for payments of such
amounts was determined or taken into account with
reference to the liability of any other person; and
(C) any liability of Company or any Subsidiary for
the payment of any amounts as a result of being party
to any tax sharing agreement or with respect to the
payment of any amounts of the type described in
clauses (A) or (B) of this paragraph as a result of
any express or implied obligation to indemnify any
other person.
(ii) As used in this Agreement, "Pre-Closing Tax Period"
means any Tax period (or portion thereof) ending on
or before the Effective Time.
(iii) As used in this Agreement, "Tax Asset" means any net
operating loss, net capital loss, investment tax
credit, foreign tax credit, charitable deduction or
any other credit or tax attribute which could reduce
Taxes.
SECTION 4.09 Vote Required. Unless the Merger is consummated in
accordance with the provisions of Section 905 of the New York Law, the
affirmative vote of the holders of two-thirds of all outstanding Shares at a
meeting at which there is a quorum approving this Agreement, the Merger and
other transactions contemplated hereby ("Shareholder Approval Requirement") is
the only vote of the holders of any class or series of capital stock necessary
to approve this Agreement, the transactions contemplated hereby and the Merger,
other than approvals already obtained.
SECTION 4.10 Finders' Fees. Except for Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated, whose fees and expenses will be paid by Company, no person
acting on behalf of Company has claims to, or is entitled to, under any contract
or otherwise, any payment as a broker, finder or intermediary in connection with
the origin, negotiation, execution or consummation of the transactions provided
for in this Agreement.
SECTION 4.11 Transactions with Certain Persons. Except as disclosed
on Schedule 4.11 or in the SEC Documents, to Company's knowledge, no current or
former director, officer, employee or shareholder of Company or any Subsidiary,
or any of their affiliates or family members or trusts for the benefit of any
such person or persons, has any interest in any property, real or personal,
tangible or intangible, material to the business of Company or any Subsidiary,
and since December 31, 1994 there have been no material transactions between
Company or any Subsidiary and any director, officer or shareholder of Company or
any Subsidiary other than employment or compensation arrangements entered into
in the ordinary course of business.
SECTION 4.12 Litigation and Claims. Except as identified on Schedule
4.12 or in the SEC Documents, there is no pending or, to the knowledge of
Company, threatened action, suit, proceeding, claim, investigation or notice by
or against Company or any Subsidiary which, if adversely determined, would have
a Material Adverse Effect with
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respect to Company, whether or not covered by insurance, and there is no
outstanding order, notice, writ, injunction or decree of any court, government
or governmental agency against or, to the knowledge of Company, directly
affecting Company or any Subsidiary. To the best knowledge of Company and
except as identified on Schedule 4.12, there are no claims asserted against
Company or any Subsidiary (whether or not covered by insurance) and no
incidents or occurrences of any kind which Company or any Subsidiary believes
may give rise to any claims against Company or any Subsidiary, whether or not
covered by insurance, which will, in the aggregate, have a Material Adverse
Effect with respect to Company.
SECTION 4.13 Contracts; No Defaults; Major Customers. Except as
disclosed in the SEC Documents and except for the customer contracts described
in clauses (i) - (iv) below which are delivered to Buyer within ten business
days following the execution of this Agreement, Schedule 4.13 contains a
complete and accurate list of all written agreements, contracts and commitments
consisting of any guarantee by Company or any Subsidiary of any obligation(s)
of third parties, loans, mortgages and other financing arrangements under which
Company or any Subsidiary is indebted, as well as all licenses to Company of
proprietary information and/or rights which are related to a significant amount
of sales or significant in the operation of the business, customer contracts
(for each of: (i) the twenty largest customers for 1994 and for the nine month
period ending September 30, 1995 listed on Schedule 4.13, (ii) any customer with
purchases in excess of $750,000, during 1994 and for the nine month period
ending September 30, 1995, (iii) any such contracts with mass merchandisers and
home centers, and (iv) any such contract which provided for cooperative
advertising, merchandising aids and programs, rebates, stock lifts and other
similar incentives where the amount of which exceeded $100,000 in 1994 or is
expected to exceed $100,000 in 1995) and all other agreements, contracts and
commitments entered into by Company or any Subsidiary not usual or customary for
a company engaged in the type of businesses which Company or any Subsidiary
conducts. All such agreements, contracts and commitments are valid, binding and
in full force and effect and neither Company nor any Subsidiary is in material
default or alleged to be in material default thereunder and, to the best
knowledge of Company or any Subsidiary, no other party thereto is in default.
Nothing has occurred which, with or without the passage of time or giving of
notice or both, would constitute a material default by Company or any Subsidiary
or, to the knowledge of Company, any other party under any such agreement,
contract or commitment. Company has no knowledge that any such agreement,
contract or commitment will not be renewed and neither Company nor any
Subsidiary has received any notification that any such agreement, contract or
commitment is not likely to be renewed. Except as otherwise provided on
Schedule 4.13, the Merger contemplated by this Agreement will not create a
material default under or permit the termination of or otherwise adversely
affect any such agreement, contract or commitment in a manner that will have a
Material Adverse Effect with respect to Company. Except as described on
Schedule 4.13, neither Company nor any Subsidiary is required to give any notice
to any party to any such agreement, contract or commitment regarding this
Agreement or the transactions contemplated hereby . Schedule 4.13 includes a
complete and correct list of the twenty largest customers of Company and the
Subsidiaries, on a consolidated basis, in terms of revenue recognized in respect
of such customers during
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the fiscal period ended December 31, 1994 and for the nine month period ending
September 30, 1995, showing the amount of revenue recognized for each such
customer during such period. Except as described on Schedule 4.13, neither
Company nor any Subsidiary has been notified that any of the customers listed
on Schedule 4.13 will terminate or reduce in any material respect, or otherwise
materially and adversely change, the business or relationship between such
customer and Company or any Subsidiary.
SECTION 4.14 Proprietary Rights. Schedule 4.14 lists all significant
U.S. and foreign names, patents, patent applications, marks, symbols, trade
names, trademarks, service marks, copyrights, copyright applications and logos
used in the business of Company or any Subsidiary. Schedule 4.14 identifies
which of the foregoing are owned by either Company or any Subsidiary and which
are owned by any other Person. Except as provided on Schedule 4.14, since
December 31, 1994 neither Buyer nor any Subsidiary has sold or transferred any
exclusive rights to such proprietary rights to any third party.
SECTION 4.15 Title to and Condition of Real Estate. The real property
owned or leased by Company and each Subsidiary is identified on Schedule 4.15
("Real Estate"). With respect to owned Real Estate, either Company or a
Subsidiary owns title to such Real Estate in fee simple. The Real Estate leases
referred to on Schedule 4.15 constitute all of the leases under which Company
and any Subsidiary holds a leasehold interest in real estate and such leases are
valid, binding and in full force and effect. Neither Company, any Subsidiary
nor, to the best of Company's knowledge, any third party is in material breach
or material default of any payments due under such leases or any material term
of such leases. Schedule 4.15 identifies those real estate leases between
Company or any Subsidiary and any affiliated owner or affiliated owners.
SECTION 4.16 Environmental Compliance. Except as disclosed in
Schedule 4.16 and except where the failure to have any of the following would
result in a loss, liability or obligation to Company and the Subsidiaries, taken
as a whole, of less than Five Million and 00/100 Dollars ($5,000,000), in the
aggregate (a) Company and each Subsidiary has in full force and effect, and has
made all necessary filings in relation to, (i) all governmental permits,
licenses, authorizations or approvals necessary or required pursuant to the
Federal Comprehensive Environmental Response Compensation and Liability Act
(CERCLA), the Superfund Amendments and Reauthorization Act (XXXX), the Federal
Water Pollution Control Act, the Federal Clean Air Act, the Federal Resource
Conservation and Recovery Act ("RCRA"), the Hazardous and Solid Waste Amendments
to RCRA (HSWA), the Federal Solid Waste Disposal Act, the Federal Toxic
Substances Control Act (TSCA), the Federal Insecticide, Fungicide and
Rodenticide Act (FIFRA), each as amended, and under all statutes enacted by any
state, local and/or foreign governments and authorities (including, but not
limited to, municipal sewage authorities) and under any and all rules,
regulations, ordinances or requirements promulgated thereunder and any other
federal, state, local or foreign laws (codified or common law), executive
orders, ordinances, rules and regulations relating to
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pollution, the preservation of the environment and/or the release of material
into the environment ("Environmental Laws") and (ii) all such permits,
licenses, authorization and approvals are in good standing and Company has made
timely application for renewal of such permits where necessary and (b) there
are no pending or, to the knowledge of Company, threatened proceedings to
revoke, suspend and/or limit any such permit, license, authorization or
approval.
(b) Except as consistent with applicable Environmental Laws and
except as identified on Schedule 4.16, to the best of Company's knowledge, no
Hazardous Substances (as hereinafter defined) are emitted, discharged or
released from the Real Estate, directly or indirectly, into the atmosphere,
soil, ground water or surface water, the effect of which would have a Material
Adverse Effect with respect to Company. Except for those matters identified on
Schedule 4.16, to the best of Company's knowledge, neither Company nor any
Subsidiary, nor any predecessor thereof nor any present or former owner or
operator of all or a portion of the Real Estate, has been determined to be
liable for cleanup or response costs with respect to the emission, discharge,
or release of any Hazardous Substance or for any other matter arising under the
Environmental Laws due to its ownership, lease, use or operation of all or a
portion of the Real Estate or any other premises or the generation, handling,
treatment, storage, transportation or disposal of any Hazardous Substance
which, in the aggregate, would have a Material Adverse Effect with respect to
Company. Any "underground storage tank" (as that term is defined in the
Environmental Laws) that is located in or at the Real Estate is identified on
Schedule 4.16 and, except as identified on such Schedule, all such tanks are in
compliance with the Environmental Laws. Any removal of underground storage
tanks by Company or any Subsidiary prior to the date of this Agreement has been
completed in accordance with applicable Environmental Laws. As used in this
Agreement "Hazardous Substances" shall mean any and all wastes, substances,
materials, pollutants, contaminants, chemical substances, smoke, gas or
particulate matter defined or regulated as hazardous, toxic or dangerous under
any Environmental Law.
(c) Except as set forth on Schedule 4.16, neither Company nor any
Subsidiary has been notified by any regulatory authority that Company or any
Subsidiary was, may be or is in violation of or has liability or potential
liability under the Environmental Laws. Except as set forth on Schedule 4.16,
neither Company nor any Subsidiary is in violation of or has potential
liability under the Environmental Laws which, individually or in the aggregate,
would have a Material Adverse Effect with respect to Company.
(d) Except as set forth on Schedule 4.16, there are no claims,
notices of potential responsibility or violations, demand letters, requests for
information, actions, litigation, proceedings or, to the knowledge of Company,
investigations (including, without limitation, any of such which have been
initiated by private parties), pending or, to the knowledge of Company,
threatened, administrative, governmental or judicial, arising out of, in
connection with or resulting from a violation or alleged violation of, or
related to, the Environmental Laws which, individually or in the aggregate,
would have a Material Adverse Effect with respect to Company.
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(e) (i) Company has not knowingly withheld from Buyer any
environmental investigation, study, audit, test, review or other analysis in
the possession of Company or any Subsidiary conducted in relation to the
business of Company or any Subsidiary or any property or facility now or
previously owned, operated or leased by Company or any Subsidiary; and (ii)
Company has not withheld from Buyer any consent decree, consent order or
similar document in force to which Company or any Subsidiary is a party or
relating to any property currently owned, leased or operated by the Company or
any Subsidiary.
4.17 Employee Benefit Matters. (a) For purposes of this Section
4.17, the following terms shall have the meanings set forth below:
(i) Benefit Arrangement: Any contract (other than the
Employee Agreements), arrangement or policy, or any
plan or arrangement (whether or not written)
providing for severance benefits, insurance coverage
(including any self-insured arrangement), workers'
compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement
benefits, deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights or
other forms of incentive compensation or
post-retirement insurance compensation or benefits
that (A) is not an Employee Plan (as such term is
defined in Section 4.17(a)(iii)), (B) is entered into
or maintained, as the case may be, by Company or any
Subsidiary or affiliated entities and (C) covers any
employee or former employee of Company or any
Subsidiary or affiliated entities.
(ii) Employee Agreement: All written employment
agreements and severance agreements with employees of
Company or any Subsidiary or affiliated entities.
(iii) Employee Plan: Any "employee benefit plan" as
defined in Section 3(3) of ERISA that is (A) subject
to any provision of ERISA, (B) is maintained,
administered or contributed to by Company, any
Subsidiary or any of their ERISA Affiliates (as such
term is defined in Section 4.17(a)(v))for employees
or former employees of Company or any Subsidiary or
any of their ERISA Affiliates and (C) covers any
employee or former employee of Company, any
Subsidiary or any of their ERISA Affiliates.
(iv) ERISA: The Employee Retirement Income Security Act
of 1974, as amended, and any successor statute
thereto, and the rules and regulations promulgated
thereunder.
(v) ERISA Affiliate: Any entity which, together with
Company or any Subsidiary or affiliated entities,
would be treated as a single employer
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under Section 4001(b)(1) of ERISA or Section 414(b),
(c), (m) or (o) of the Code.
(vi) Multiemployer Plan: Each Employee Plan that is a
multiemployer plan, as defined in Section 3(37) of
ERISA.
(vii) Title IV Plan: An Employee Plan, other than any
Multiemployer Plan, subject to Title IV of ERISA.
(b) Subject to the last sentence of this paragraph (b), Schedule
4.17 identifies each Employee Plan. Except as permitted by the last sentence
of this paragraph (b), Company has furnished or made available to Buyer copies
of the Employee Plans (and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof, together with (i) the
three most recent annual reports prepared in connection with any material
Employee Plan (Form 5500 including, if applicable, Schedule B thereto) and (ii)
the most recent actuarial valuation report prepared in connection with any
Employee Plan. No Employee Plan is, except as set forth on Schedule 4.17, (i)
a Multiemployer Plan, (ii) a Title IV Plan or (iii) maintained in connection
with any trust described in Section 501(c)(9) of the Code. Except as set forth
on Schedule 4.17, no Employee Plan is a plan described in Section 401(a)(1) of
ERISA. With respect to welfare benefit plans as defined in Section 3(1) of
ERISA, Company shall furnish or make available Employee Plan documentation and
annual reports as soon as reasonably possible, and to the extent such Employee
Plans are not listed on Schedule 4.17, a list of such omitted Employee Plans
shall be provided as soon as reasonably possible.
(c) With respect to each Employee Plan, except as disclosed on
Schedule 4.17: (i) no "prohibited transaction", as defined in Section 406 of
ERISA or Section 4975 of the Code, has occurred with respect to any Employee
Plan, (excluding transactions effected pursuant to a statutory or
administrative exemption); (ii) no disputes in the ordinary course, or outside
the ordinary course, of the operation of an Employee Plan, or obligations
imposed on the operation of an Employee Plan or any fiduciary of an Employee
Plan as a result of any governmental audit or action of any court, arbitrator
or other tribunal that might reasonably be expected to have a Material Adverse
Effect with respect to Company are pending or to the knowledge of Company or
any of its ERISA Affiliates threatened; (iii) all contributions required to be
made to each Employee Plan as of the date hereof (taking into account any
extensions permitted by the Code or the Internal Revenue Service) have been
made in full; (iv) all contributions, premiums or claim payments due or owing
with respect to each Employee Plan have been properly accrued and reflected in
Company's or its ERISA Affiliates' (as applicable) financial statements as of
the close of its most recent fiscal year; (v) subject to applicable collective
bargaining agreements, the Employee Plans may be amended or terminated by
Company or its ERISA Affiliates on or at any time after the Effective Time,
without liability to any person or entity; (vi) if the Employee Plan is a Title
IV Plan, it has not been subject to a "reportable event" (as defined in Section
4043(b) of ERISA), the reporting of which has not been waived by regulation;
(vii) if the Employee Plan is a Title IV Plan, all premiums due to the Pension
Benefit Guaranty Corporation for
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plan termination insurance have been paid in full on a timely basis; and (viii)
the funded status of each Employee Plan is not materially different from what
was reflected on the most recent financial statements of such Employee Plan.
(d) No material liability under Title IV of ERISA has been
incurred by Company or any ERISA Affiliate that has not been satisfied in full
and except as disclosed on Schedule 4.17, to the knowledge of Company and its
ERISA Affiliates, no condition exists that presents a material risk to Company
or its ERISA Affiliates of incurring any liability to the Pension Benefit
Guaranty Corporation, the Department of Labor or the plan participants. No
Employee Plan has incurred an accumulated funding deficiency, as defined in
Section 302 of ERISA or Section 312 of the Code, whether or not waived.
(e) Neither Company, any Subsidiary nor any ERISA Affiliate has
incurred, or expects to incur, either directly or indirectly, any withdrawal
liability within the meaning of Title IV of ERISA with respect to any
Multiemployer Plan.
(f) Except as disclosed on Schedule 4.17, each Employee Plan that
is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified and no event has
occurred since the date of such determination that, to the knowledge of
Company, would adversely affect such qualification, and each trust created
under any such Employee Plan has been determined by the Internal Revenue
Service to be exempt from tax under Section 501(a) of the Code and no event has
occurred since the date of such determination that, to the knowledge of
Company, would adversely affect such exemption. Company has provided Buyer
with the most recent determination letter from the Internal Revenue Service
relating to each such Employee Plan. Each Employee Plan and each trust created
under an Employee Plan has been maintained in substantial compliance with its
terms and with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations, including, but not limited to, ERISA and the
Code.
(g) Schedule 4.17 identifies each Benefit Arrangement that
represents a material obligation of the Company. Company has furnished or made
available to Buyer copies or descriptions of each such Benefit Arrangement that
represents a material obligation of the Company. Each such Benefit Arrangement
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable statutes, orders, rules and
regulations.
(h) Schedule 4.17 identifies by name all Employee Agreements in
effect or committed to be put in effect as of the Effective Time.
(i) Except as disclosed on Schedule 4.17, neither Company, any
Subsidiary nor any of its ERISA Affiliates has any current or projected
liability with respect to post-employment or post-retirement health or medical
or life insurance benefits for retired or former employees of Company, any
Subsidiary or ERISA Affiliates, except as required to avoid excise tax under
Section 4980B of the Code.
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(j) Except as disclosed on Schedule 4.17, there has been no
amendment or announcement by Company or any of its ERISA Affiliates relating
to, or change in, benefits, employee participation or coverage under, any
Employee Plan or Benefit Arrangement, that would materially increase the
expense of maintaining such Employee Plan or Benefit Arrangement above the
level of expense incurred with respect thereto for the fiscal year ended prior
to the date hereof.
(k) Except as disclosed on Schedule 4.17, Company is not aware of
any Employee Agreement or other contract, agreement, plan or arrangement
covering any employee or former employee of Company or any Subsidiary that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to the terms of Section 280G of the Code.
(l) Except as disclosed on Schedule 4.17, no excise tax of a
material amount under Section 4980B or other provision of the Code has been
incurred by Company or an ERISA Affiliate in respect of any Employee Plan.
SECTION 4.18 Liabilities. Except as reflected on Schedule 4.18 or in
the SEC Documents, neither Company nor any Subsidiary, has incurred or suffered
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which exist at the date of this Agreement and,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect with respect to Company.
SECTION 4.19 Compliance with Applicable Laws. Except as indicated on
Schedule 4.19 or in the SEC Documents, Company and each Subsidiary holds all
permits, licenses, variances, exemptions, orders and approvals of all
governmental entities which are necessary to the operation of its business
("Permits"), except where the failure to have such Permits would not have a
Material Adverse Effect with respect to Company. Company and each Subsidiary
are in compliance with the terms of the Permits. Except as disclosed on
Schedule 4.19, neither Company nor any Subsidiary is in violation of any law,
ordinance or regulation of any governmental entity to the extent any such
violation reasonably could have a Material Adverse Effect with respect to
Company.
SECTION 4.20 Insurance. Schedule 4.20 is a list of all policies of
property, fire, liability, life (including but not limited to life insurance
contracts within the meaning or intended to be within the meaning of Section
7702 of the Code), and other forms of insurance (including self-insurance), and
indemnity bonds, carried by Company or any Subsidiary (including any
predecessors of any of them including, without limitation, UCI) identifying the
nature of risks covered and the amount of coverage in each case, and specifying
any year or years since 1980 when any such insurance or other similar insurance
was not in effect. Schedule 4.20 shall designate which insurance is currently
in effect. All such policies designated as currently in effect on Schedule 4.20
are in full force and all premiums due and payable on such policies have been
paid or will be paid without causing a lapse of coverage. Company believes it
is adequately insured against the kind of risks usually insured against by
corporations engaged in the same or similar business. No
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insurance policy of Company has been terminated by the insurance carrier during
the past five years.
SECTION 4.21 Labor Matters. As of the date of this Agreement, there
are no union organizational drives or other major labor disputes at any
manufacturing or distribution facility pending or, to the best knowledge of
Company, threatened between Company or any Subsidiary and any of their
respective employees. Except as referred to on Schedule 4.21, neither Company
nor any Subsidiary is a party to any union, collective bargaining or other
similar agreements.
SECTION 4.22 Financial Advisor Advice. Company has received the
opinion of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated to the effect
that, as of a date proximate to the date of this Agreement, the cash
consideration to be received by the shareholders of Company pursuant to the
Offer and the Merger is fair, from a financial point of view, to such
shareholders, and that opinion has not been modified or withdrawn.
SECTION 4.23 Investments. Except as disclosed on Schedule 4.23, (i)
neither Company nor any Subsidiary, directly or indirectly, owns any shares or
has any ownership interest in any other Person or is a partner with any other
Person and (ii) neither Company nor any Subsidiary has an obligation to purchase
any shares of stock, other securities or any other form of investment in any
other Person.
SECTION 4.24 Disclosure Documents. (a) The information with respect
to Company, any Subsidiary and any of their respective subsidiaries that Company
furnishes to Buyer in writing specifically for use in the Offer Documents will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(b) Each document required to be filed by Company with the SEC in
connection with the transactions contemplated by this Agreement, including,
without limitation, the Schedule 14D-9 will, when filed, comply as to form in
all material respects with the applicable requirements of all applicable law,
including, without limitation, the Exchange Act.
SECTION 4.25 State Takeover Statutes. The Board of Directors of
Company has approved the Offer, the Merger, this Agreement and the entering
into, and performance, by Buyer and Merger Subsidiary of the Stock Option
Agreement, and such approval is sufficient to render the provisions of Section
912 of the New York Law inapplicable to this Agreement, the Offer, the Merger,
and the entering into, and performance, by Buyer and Merger Subsidiary of the
Stock Option Agreement and the other transactions contemplated by this
Agreement and the Stock Option Agreement.
SECTION 4.26 Rights Agreement. Company and its Board of Directors
have taken and will, until the termination, if any, of this Agreement pursuant
to Section 10.01, maintain
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in effect all necessary action (i) to render the Rights Agreement inapplicable
with respect to the Offer, the Merger, the entering into, and performance, by
Buyer and Merger Subsidiary of the Stock Option Agreement and the other
transactions contemplated by this Agreement and (ii) to ensure that (y) neither
Buyer nor Merger Subsidiary nor any of their Affiliates (as defined in the
Rights Agreement) or Associates (as defined in the Rights Agreement) is
considered to be an Acquiring Person (as defined in the Rights Agreement) and
(z) the provisions of the Rights Agreement, including the occurrence of a
Distribution Date (as defined in the Rights Agreement), are not and shall not
be triggered by reason of the announcement or consummation of the Offer, the
Merger, the Stock Option Agreement or the consummation of any of the other
transactions contemplated by this Agreement. Company has delivered to Buyer a
complete and correct copy of the Rights Agreement, as amended and supplemented
to the date of this Agreement.
SECTION 4.27 General Representation and Warranty. This Agreement, and
the Schedules taken together with the SEC Documents, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements contained herein or therein not misleading.
SECTION 4.28 1994 Agreement and Plan of Merger. Schedule 4.28 sets
forth all notices, claims and demands ("Claim") for indemnification made by any
party pursuant to ARTICLE X: Survival and Indemnification of that certain
Agreement and Plan of Merger, dated as of February 25, 1994, by and among
Company, UCI and certain shareholders of UCI ("1994 Merger Agreement").
Specifically, Schedule 4.28 identifies: (i) the amount of the Claim; (ii) the
basis upon which such Claim was made (including the provision of the 1994 Merger
Agreement which was alleged to have been breached); (iii) the resolution of
such Claim; and (iv) the dates on which such Claim was made and resolved.
Schedule 4.28 also identifies the aggregate amount of damages which have been
applied against and are subject to the indemnification thresholds and ceiling
amounts described in Sections 10.01 (c) (i) and (ii) of the 1994 Merger
Agreement.
SECTION 4.29 Shareholders' Agreement. The Board of Directors of
Company has taken all action under the Shareholders' Agreement to approve the
Offer, the Merger , this Agreement and the Stock Option Agreement, and the
entering into and performance by Buyer and Merger Subsidiary of the same.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
Buyer and Merger Subsidiary represent and warrant to the Company that:
SECTION 5.01 Organization. Each of Buyer and Merger Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation and has all requisite power and authority,
corporate and other, and all
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government approvals to own, lease, and operate its properties and carry on its
business as now and heretofore being conducted except where the failure to have
any such approval would not have a Material Adverse Effect with respect to Buyer
and Merger Subsidiary. The authorized capital stock of Merger Subsidiary
consists of 1,000 shares of common stock, par value $.01 per share, of which, at
the date of this Agreement, 1,000 shares were issued and outstanding, and each
such share is entitled to one vote.
SECTION 5.02 Corporate Authority. Buyer and Merger Subsidiary have all
requisite corporate power and authority, corporate and other, to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the consummation
of the Merger and of the transactions contemplated hereby have been duly and
effectively authorized by all necessary corporate action on the part of Buyer
and Merger Subsidiary and no other corporate proceedings on the part of Buyer or
Merger Subsidiary are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. Assuming due execution and delivery by the
other parties hereto, this Agreement constitutes the valid and binding agreement
of each of Buyer and Merger Subsidiary, enforceable against each of them except
that enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally.
SECTION 5.03 Government Authorization. No consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
entity or regulatory authority is required by or with respect to Buyer or Merger
Subsidiary in connection with the execution and delivery of this Agreement or
the consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby, the failure to obtain which would have a Material Adverse Effect with
respect to Buyer or the transactions contemplated hereby, except for: (i) the
filing of a pre-merger notification report by Buyer under the HSR Act and the
expiration or termination of the applicable waiting period thereunder; (ii) the
filing of the Certificate of Merger with the Department of State of the State of
New York in accordance with the requirements of the New York Law; (iii) the
filing of the New York Disclosure Documents; and (iv) compliance with any
applicable requirements of the Exchange Act.
SECTION 5.04 Non-Contravention. The execution, delivery and performance
by Buyer and Merger Subsidiary of this Agreement and the consummation by Buyer
and Merger Subsidiary of the transactions contemplated hereby do not and will
not: (i) contravene or conflict with the certificate of incorporation or bylaws
of Merger Subsidiary or similar documents of Buyer; (ii) assuming compliance
with the matters referred to in Section 5.03, contravene or conflict with any
provision of law, regulation, judgment, order or decree binding upon Buyer or
Merger Subsidiary; or (iii) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or obligation of Buyer
or Merger Subsidiary or to a loss of any benefit to which Buyer or Merger
Subsidiary is entitled under any agreement, contract or other instrument binding
upon Buyer or Merger Subsidiary,
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except in the case of clauses (ii) and (iii) as would not materially impair the
ability of Buyer and Merger Subsidiary to consummate the Offer or the Merger.
SECTION 5.05 Disclosure Documents. (a) The information with respect to
Buyer and its subsidiaries and Merger Subsidiary that Buyer and Merger
Subsidiary furnish to Company in writing specifically for use in the Schedule
14D-9 or pursuant to Section 14(f) or Rule 14f-1 under the Exchange Act will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(b) The SEC Offer Documents, when filed, will comply as to form in all
material respects with the applicable requirements of the Exchange Act and the
New York Disclosure Documents, when filed, will comply as to form in all
material respects with the applicable requirements of the New York Law. The
Offer Documents will not at the time of the filing thereof, at the time of any
distribution thereof or at the time of consummation of the Offer contain any
untrue statement of a material act or omit to state any material fact necessary
to make the statements made therein, in the light of the circumstances under
which they were made, not misleading; provided that this representation and
warranty will not apply to statements or omissions in the Offer Documents based
upon information furnished to Buyer or Merger Subsidiary in writing by Company
specifically for use therein.
SECTION 5.06 Finders' Fees. There is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission from
the Buyer or Merger Subsidiary upon consummation of the transactions
contemplated by this Agreement.
SECTION 5.07 Financing. Buyer and Merger Subsidiary have or will have,
prior to the expiration of the Offer, sufficient funds available to purchase all
of the Shares outstanding on a fully diluted basis and to pay all related fees
and expenses pursuant to the Offer and this Agreement.
SECTION 5.08 Share Ownership. As of the date hereof, Buyer and Merger
Subsidiary do not beneficially own any Shares.
SECTION 5.09 Merger Subsidiary's Operations. Merger Subsidiary was
formed solely for the purpose of engaging in the transactions contemplated
hereby and has not engaged in any business activities or conducted any
operations other than in connection with the transactions contemplated hereby.
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ARTICLE VI
COVENANTS OF COMPANY
SECTION 6.01 Conduct of Business. During the period from the date of
this Agreement and continuing until the Effective Time, Company and each
Subsidiary shall carry on its business in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted and in substantial
compliance with all applicable laws and regulations and, to the extent
consistent therewith, use all reasonable efforts to preserve intact its present
business organization, keep available the services of its present officers and
employees and preserve its relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with it to the end
that its goodwill and ongoing business shall not be adversely impaired at the
Effective Time. Specifically, and without limiting the generality of the
foregoing, except as expressly permitted or contemplated by this Agreement or,
as of the date of this Agreement, set forth on Schedule 6.01, during the period
from the date of this Agreement and continuing to the Effective Time, neither
Company nor any Subsidiary shall, in each case without the prior written consent
of Buyer, which consent (except as regards (v) and (vi) below, which consent
shall not be unreasonably withheld by Buyer subsequent to January 31, 1996
provided any extension beyond January 31, 1996 is not a result of any act or
failure to act on the part of Company or any Subsidiary) may be granted or
withheld in the sole discretion of Buyer:
(i) (A) declare, set aside or pay any dividends on or make other
distributions in respect of any of its capital stock, except
that Company may continue the declaration and payment of
regular quarterly cash dividends on its common stock of not
more than $0.16 per share; (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; or (C)
purchase, redeem or otherwise acquire any shares of capital
stock of Company or any Subsidiary or any other securities
thereof or any rights, warrants or options to acquire any such
shares or other securities;
(ii) issue, grant, deliver or sell, or authorize or propose the
issuance, delivery or sale of, pledge or otherwise encumber any
shares of its capital stock of any class, any Voting Debt or
any securities convertible into, or any rights, warrants,
calls, subscriptions or options to acquire, any such shares,
Voting Debt or convertible securities other than to Merger
Subsidiary pursuant to this Agreement and the Offer, except for
the issuance of shares of common stock upon the exercise of
Options which are outstanding on the date hereof pursuant to
the terms of such Options and the Company Stock Plans;
(iii) amend or propose to amend its Restated Certificate of
Incorporation, as amended, or By-Laws, as amended, or any other
organizational and/or charter documents;
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(iv) directly or indirectly, acquire or agree to acquire by merging
or consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by
any other manner, any Person or acquire or agree to acquire
any assets other than in the ordinary course of business and
consistent with past practices;
(v) except in the ordinary course of business and consistent with
past practices, neither Company nor any Subsidiary shall sell,
lease, license, encumber or otherwise dispose of any of their
assets, other than as may be required by law or to consummate
the transactions contemplated hereby;
(vi) incur any indebtedness for borrowed money under existing
credit facilities exceeding in the aggregate $135,000,000.00
or guarantee any such indebtedness or issue or sell any debt
securities or warrants or rights to acquire any debt
securities of such party or guarantee any debt securities of
others, other than the extension of trade credit in the
ordinary course of business and consistent with past
practices;
(vii) without the prior written consent of the Buyer, (A) enter
into, adopt, amend (except as may be required by law or
regulation) or terminate any Benefit Plan or other employee
benefit plan, or any agreement, arrangement, plan or policy
between Company or any Subsidiary and one or more of its
directors, officers or employees, or (B) except for normal
compensation increases in the ordinary course of business and
consistent with past practices (1) increase in any manner the
compensation or fringe benefits of any director, officer or
employee, (2) pay any benefit not required by any plan and
arrangement as in effect as of the date hereof, (3) grant any
options, stock appreciation rights, phantom stock or
performance units or (4) enter into any contract, agreement,
commitment or arrangement to do any of the foregoing;
(viii) make or agree to make any capital expenditure in excess of
$8,000,000.00;
(ix) make any material Tax election or settle or compromise any
material Tax liability; or
(x) willfully and or knowingly (A) take or agree or commit to take
any action that would make any representation and warranty of
Company herein inaccurate at, or as of any time prior to, the
Effective Time, or (B) omit or agree to omit to take any
action necessary and prudent to prevent any such
representations or warranty from being inaccurate at any such
time.
SECTION 6.02 Advice of Changes; Filings. Company shall, on a regular
and frequent basis, report to Buyer on operational matters and promptly advise
Buyer orally and in writing of any change or event having or which, insofar as
can reasonably be foreseen,
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would have a material adverse effect on Buyer or Merger Subsidiary. Company
shall promptly provide Buyer (or Buyer's counsel) with copies of all filings
made by Company with any state or federal governmental entity in connection with
this Agreement and the transactions contemplated hereby.
SECTION 6.03 Shareholder Meeting; Proxy Material. Company shall cause a
meeting of its shareholders ("Company Shareholder Meeting") to be duly called
and held as soon as reasonably practicable following the purchase of Shares
pursuant to the Offer for the purpose of voting on the approval and adoption of
this Agreement and the Merger unless a vote of shareholders of Company is not
required by the New York Law. The Board of Directors of Company shall recommend
approval and adoption of this Agreement and the Merger by Company's
shareholders. In connection with such meeting, Company will: (i) promptly after
the consummation of the Offer, prepare and file with the SEC, use its best
effort to have cleared by the SEC, and thereafter mail to its shareholders as
promptly as practicable, a proxy statement and all other proxy materials for
such meeting; (ii) use its best efforts to obtain the necessary approvals by its
shareholders of this Agreement and the transactions contemplated hereby; and
(iii) otherwise comply with all legal requirements. If requested by Buyer or
Merger Subsidiary, Company will file a proxy statement and all other proxy
materials with the SEC that are prepared by Buyer and reasonably acceptable to
Company and call a special meeting of shareholders, in anticipation of (and
prior to) the purchase of Shares in response to the Offer. The actions required
to be taken by Company and its Board of Directors pursuant to this Section 6.03
shall be subject to Company's Board of Director's fiduciary duties.
SECTION 6.04 Access to Information. Company and each Subsidiary: (i)
upon reasonable notice will give Buyer, its counsel, financial advisors,
auditors and other authorized representatives reasonable access during normal
business hours to the offices, properties, books and records of Company and each
Subsidiary; (ii) upon reasonable notice will furnish to Buyer, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may reasonably request;
and (iii) will instruct Company's and each Subsidiary's employees, counsel and
financial advisors to cooperate with Buyer in its investigation of the business
of Company and each Subsidiary; provided that no investigation pursuant to this
Section shall affect any representation or warranty given by Company to Buyer or
Merger Subsidiary hereunder and any information received by Buyer or its
representatives shall remain subject to the Confidentiality Agreement dated
August 22, 1995, between Buyer and Company (the "Confidentiality Agreement").
SECTION 6.05 Other Offers. (a) Neither Company, any Subsidiary, nor any
officer, director, employee, financial advisor, investment banker, attorney or
other advisor or representative of Company or any Subsidiary will, directly or
indirectly, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal (as hereinafter defined) or (ii) engage in negotiations or
discussions regarding or disclose any information relating to Company or any
Subsidiary or afford access to the properties, books or records of Company
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or any Subsidiary to any Person that may be considering making, or has made, an
Acquisition Proposal. Company will promptly notify Buyer after receipt of any
Acquisition Proposal or any indication that any Person is considering making an
Acquisition Proposal or any request for nonpublic information relating to
Company or any Subsidiary or for access to the properties, books or records of
Company or any Subsidiary by any Person that may be considering making, or has
made, an Acquisition Proposal and will keep Buyer fully informed of the status
and details of any such Acquisition Proposal, indication or request. For
purposes of this Agreement, "Acquisition Proposal" means any offer or proposal
for, or any indication of interest in, a merger, consolidation or other business
combination involving Company or any Subsidiary or any proposal or offer to
acquire in any manner, directly or indirectly, 10% or more of any class of
voting securities of Company or any Subsidiary or a substantial portion of the
assets of Company or any Subsidiary, other than the transactions contemplated by
this Agreement. Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations by Company or any of its
directors, officers, employees, financial advisors, investment bankers,
attorneys or other advisors or representatives with any parties conducted
heretofore with respect to any of the foregoing, and Company shall immediately
demand that any such parties return to Company any confidential information
and/or materials such parties may have received from Company during the course
of any such activities, discussions or negotiations. Neither the Board of
Directors of Company nor any Committee thereof shall withdraw or modify in any
manner adverse to Buyer the approval and recommendation of this Agreement, the
Offer, the Merger, the Stock Option Agreement or any of the transactions
contemplated hereby and thereby, or approve or recommend any Acquisition
Proposal.
(b) Notwithstanding the foregoing provisions of Section 6.05(a), (i)
Company may participate in discussions or negotiations with or furnish
information to any third party which makes a written Acquisition Proposal that
either (x), is not subject to a financing contingency and involves the purchase
for cash of 100% of Company's common stock at a price per Share greater than the
Merger Consideration or (y) provides for the acquisition of 100% of Company's
common stock for consideration, not consisting entirely of cash, which Company's
Board of Directors, based on the advice of its financial advisor, determines is
financially superior to the Merger Consideration (in the case of either (x) or
(y), a "Superior Proposal"), and (ii) the Board of Directors of Company or any
Committee thereof may withdraw or modify in a manner adverse to Buyer the
approval or recommendation of this Agreement, the Offer, the Merger, the Stock
Option Agreement or any of the transactions contemplated hereby and thereby, and
may approve or recommend any such Superior Proposal, if, in the case of both (i)
and (ii), the Board of Directors of Company determines (and is advised by its
outside counsel) that failure to take such action would constitute a breach of
its fiduciary duties. Furthermore, nothing contained in Section 6.05(a) shall
prohibit Company or its Board of Directors from taking and disclosing to
Company's shareholders a position with respect to a tender offer or exchange
offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under
the Exchange Act or from making such disclosure to Company's shareholders or
otherwise which, in the judgment of the Board of Directors with the advice of
independent legal counsel, may be required under applicable law or rules of any
stock exchange.
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SECTION 6.06 Notices of Certain Events. Company shall promptly notify
Buyer of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be
required in connection with the transactions
contemplated by this Agreement;
(ii) any notice or other communication from any
governmental or regulatory agency or authority in
connection with the transactions contemplated by this
Agreement;
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its
knowledge, threatened against, relating to or
involving or otherwise affecting Company or any
Subsidiary which, if pending on the date of this
Agreement, would have been required to have been
disclosed pursuant to Section 4.12 or which relate to
the consummation of the transactions contemplated by
this Agreement; and
(iv) any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which, if
existing on the date of this Agreement, would have
been required to be disclosed pursuant to Section
4.18.
SECTION 6.07 Amendment of Rights Agreement. Company agrees that upon
the reasonable request by Buyer or Merger Subsidiary, Company promptly: (i) will
take any and all further action requested by Buyer or Merger Subsidiary to
ensure that (y) neither Buyer nor Merger Subsidiary nor any of their Affiliates
(as defined in the Rights Agreement) or Associates (as defined in the Rights
Agreement) is considered to be an Acquiring Person (as defined in the Rights
Agreement) and (z) the provisions of the Rights Agreement, including the
occurrence of a Distribution Date (as defined in the Rights Agreement), are not
and shall not be triggered by reason of the announcement or consummation of the
Offer, the Merger, the Stock Option Agreement or the consummation of any of the
other transactions contemplated by this Agreement; and (ii) will redeem, in
accordance with the terms of the Rights Agreement, all outstanding rights issued
pursuant to the Rights Agreement ("Rights") at a redemption price of $.01 per
Right, or otherwise take such action as may be requested by Buyer in order to
render the Rights Agreement inapplicable to any of the transactions contemplated
by this Agreement, including the Offer and the Merger.
ARTICLE VII
COVENANTS OF BUYER
During the period from the date of this Agreement and continuing until
the Effective Time, Buyer agrees that:
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SECTION 7.01 Obligations of Merger Subsidiary. Buyer will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
SECTION 7.02 Voting of Shares. Buyer agrees to vote all Shares
beneficially owned by it or by its subsidiaries in favor of adoption of this
Agreement at the Company Shareholder Meeting.
SECTION 7.03 Notice of Certain Events. Buyer shall promptly notify
Company of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be
required in connection with the transactions
contemplated by this Agreement; and
(ii) any notice or other communication from any
governmental or regulatory agency or authority in
connection with the transactions contemplated by this
Agreement.
SECTION 7.04 Indemnification; Directors' and Officers' Insurance. (a)
From and after the Effective Time, Buyer and Surviving Corporation shall
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date hereof, an officer or director of Company or any of its
Subsidiaries ("Indemnified Parties") against all losses, claims, damages, costs,
expenses (including attorneys' fees and expenses), liabilities or judgments or
amounts that are paid in settlement with the approval of the indemnifying party
(which approval shall not be unreasonably withheld) of or in connection with any
threatened or actual claim, action, suit, proceeding or investigation based in
whole or in part on, or arising in whole or in part out of, the fact that such
person is or was a director , officer, employee or agent of Company or any of
its Subsidiaries (including service as a fiduciary of any employee benefit plan)
whether pertaining to (i) any matter existing or occurring at or prior to the
Effective Time or (ii) based in whole or in part on, or arising in whole or in
part out of, or pertaining to this Agreement or the transactions contemplated
hereby, and whether asserted or claimed prior to, or at or after, the Effective
Time ("Indemnified Liabilities"), in the case of clause (i) above, to the full
extent a corporation is permitted under the New York Law to indemnify its own
directors or officers as the case may be (and Buyer and Surviving Corporation,
as the case may be, will pay expenses in advance of the final disposition of any
such action or proceeding to each Indemnified Party to the full extent permitted
by law). Without limiting the foregoing, in the event any such claim, action,
suit, proceeding or investigation is brought against any Indemnified Parties
(whether arising before or after the Effective Time), (A) the Indemnified
Parties may retain counsel satisfactory to them and Buyer and Surviving
Corporation and Buyer and Surviving Corporation shall pay all fees and expenses
of such counsel for the Indemnified Parties promptly as statements therefor are
received; and (B) Buyer and Surviving Corporation will use all reasonable
efforts to assist in the defense of any such matter, provided that neither Buyer
nor Surviving
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Corporation shall be liable for any settlement effected without its prior
written consent which consent shall not unreasonably be withheld. Any
Indemnified Party wishing to claim indemnification under this Section 7.04, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify Buyer and Surviving Corporation (but the failure so to notify shall not
relieve a party from any liability which it may have under this Section 7.04
except to the extent such failure prejudices such party), and shall deliver to
Buyer and Surviving Corporation the undertaking contemplated by Section 723(c)
of the New York Law. The Indemnified Parties as a group may retain only one law
firm to represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties. Buyer and
Merger Subsidiary agree that all rights to indemnification, including provisions
relating to advances of expenses incurred in defense of any action or suit,
existing in favor of the Indemnified Parties with respect to matters occurring
through the Effective Time, shall survive the Merger and shall continue in full
force and effect for a period of not less than six years from the Effective
Time; provided, however, that all rights to indemnification in respect of any
Indemnified Liabilities asserted or made within such period shall continue until
the disposition of such Indemnified Liabilities.
(b) For a period of six years after the Effective Time, Buyer shall
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by Company and its Subsidiaries
(provided that Buyer may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are no less
advantageous in any material respect to the Indemnified Parties) with respect to
matters arising before the Effective Time, provided that Buyer shall not be
required to pay an annual premium for such insurance in excess of 150% of the
last annual premium paid by Company prior to the date hereof, but in such case
shall purchase as much coverage as possible for such amount ("Maximum Premium").
Company represents to Buyer that the Maximum Premium is $202,944.00.
(c) The provisions of this Section 7.04 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his heirs and
his personal representatives and shall be binding on all successors of Buyer,
Merger Subsidiary, and Surviving Corporation.
SECTION 7.05 Availability of Funds. Buyer agrees to make available to
Merger Subsidiary sufficient funds to enable Merger Subsidiary to consummate the
transactions contemplated hereby.
SECTION 7.06. Notice of Breach. Buyer shall promptly notify Company of
a breach, known to Buyer, of any representation, warranty or covenant of Company
contained herein and permit Company to cure a breach of any representation or
warranty as soon as reasonably practicable from Company's receipt of notice of
such breach and permit Company to cure a breach of a covenant within five
business days from Company's receipt of such notice.
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ARTICLE VIII
COVENANTS OF BUYER AND COMPANY
The parties hereto agree that:
SECTION 8.01 Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate the transactions contemplated by this Agreement;
provided that Buyer shall not be required to agree to any consent decree or
order in connection with any objections of the United States Department of
Justice or United States Federal Trade Commission (each an "HSR Authority") to
the transactions contemplated by this Agreement.
SECTION 8.02 Certain Filings. Company and Buyer shall, within five
business days from the date of this Agreement, file Notification and Report
Forms under the HSR Act with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") and
shall use their best efforts to respond as promptly as practicable to all
inquiries received from the FTC or the Antitrust Division for additional
information or documentation. In addition, Company and Buyer shall cooperate
with each other (i) in connection with the preparation of the Schedule 14D-9 and
the Offer Documents, (ii) in determining whether any action by or in respect of,
or filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts in connection with the
consummation of the transactions contemplated by this Agreement and (iii) in
seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection with the preparation of
the Schedule 14D-9 and the Offer Documents and seeking to timely obtain any such
actions, consents, approvals or waivers.
SECTION 8.03 Public Announcements. Buyer and Company will consult with
each other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and, except
as may be required by applicable law or any listing agreement with any national
securities exchange or foreign securities exchange, will not issue any such
press release or make any such public statement prior to such consultation.
SECTION 8.04 Conveyance Taxes. Buyer and Company shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications,
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated hereunder that are required or
permitted to be filed on or before the Effective Time.
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SECTION 8.05 Further Assurances. At and after the Effective Time, the
officers and directors of Surviving Corporation will be authorized to execute
and deliver, in the name and on behalf of Company or Merger Subsidiary, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of Company or Merger Subsidiary, any other actions and things to
vest, perfect or confirm of record or otherwise in Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of Company acquired or to be acquired by Surviving Corporation as a
result of, or in connection with, the Merger.
SECTION 8.06 Leases. Company shall cause the real estate leases
identified on Schedule 8.06 to continue to be in full force and effect at the
Effective Time, except that Company shall cause such leases to be amended to
include the substance of the provisions contained on Schedule 8.06, such
amendments to become effective on or before the Effective Time. Company shall
obtain from each owner and/or lessor of leased Real Estate set forth in Schedule
8.06, an estoppel certificate in form and substance reasonably acceptable to
Buyer.
SECTION 8.07 Employee Loans. Company shall not surrender any stock
certificates, which Company represents and warrants it has in its possession,
pledged by employees to secure the notes from employees identified on Schedule
8.07.
SECTION 8.08 Noncompetition Agreement. Within fifteen business days
following the execution of this Agreement, Xxxxx X. Xxxxx shall enter into and
deliver the Noncompetition Agreement with Company, in the form attached hereto
as Schedule 8.08.
SECTION 8.09 Expenses. Except as set forth in Section 10.2, whether or
not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense.
SECTION 8.10 Indemnification. Notwithstanding any provision in this
Agreement to the contrary, Company and Buyer agree that Company shall have the
right to terminate all of the indemnification rights and obligations set forth
in Article X of the 1994 Merger Agreement so long as any such termination is
effective to terminate all of the indemnity obligations for each party obligated
under such Article X.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01 Conditions to the Obligations of Each Party. The
obligations of Company, Buyer and Merger Subsidiary to consummate the Merger are
subject to the satisfaction of the following conditions:
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(i) if required by the New York Law, this Agreement shall have
been adopted by the shareholders of Company in accordance with
the New York Law;
(ii) any applicable waiting period under the HSR Act relating to
the Merger shall have expired or have been terminated;
(iii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall be issued which
would prohibit the consummation of the Merger; and
(iv) Buyer or Merger Subsidiary shall have purchased Shares
pursuant to (a) the Offer or (b) the Stock Option Agreement.
ARTICLE X
TERMINATION AND AMENDMENT
SECTION 10.01 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the matters
presented in connection with the Merger by the shareholders of Company:
(i) by the mutual consent of Company and Buyer;
(ii) by Company (A) if there has been a material breach of any
representation, warranty, covenant or agreement on the part of
the Buyer set forth in this Agreement which breach has not
been cured, in the case of a representation or warranty, prior
to the Effective Time or, in the case of a covenant or
agreement, within thirty days following receipt by Buyer of
notice of such breach (provided that the right to terminate
hereunder shall expire (x) on the date which Buyer or Merger
Subsidiary beneficially owns a majority of the Shares and (y)
Buyer's designees constitute the percentage required pursuant
to Section 1.03, but in no event less than a majority of the
members, of the Board of Directors of Company), or (B) if
there shall be any law or regulation that makes consummation
of the Merger illegal or if any judgment, injunction or other
order of a court or other authority having jurisdiction
preventing the consummation of the Merger shall have become
final and non-appealable;
(iii) by the Buyer (A) if there has been a material breach of any
representation, warranty, covenant or agreement on the part of
Company set forth in this Agreement which breach has not been
cured, in the case of a representation or warranty, prior to
the Effective Time or, in the case of a covenant or agreement,
within thirty days following receipt by Company of notice of
such breach (provided that the right to terminate hereunder
shall expire (x) on the date which Buyer or Merger Subsidiary
beneficially owns a majority of the
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Shares and (y) Buyer's designees constitute the percentage
required pursuant to Section 1.03, but in no event less than a
majority of the members, of the Board of Directors of
Company), (B) if there shall be any law or regulation that
makes consummation of the Merger illegal or if any judgment,
injunction or other order of a court or other competent
authority preventing the consummation of the Merger shall have
become final and non-appealable, or (C) if the covenant
contained in Section 8.08 has not been performed;
(iv) by either Company or the Buyer if the Offer has not been
consummated by January 31, 1996 ("Outside Termination Date");
provided, that if an HSR Authority shall have requested
additional information from any of the parties hereto or any
of their affiliates pursuant to 15 U.S.C. Section 18a(e)(1) or
the rules and regulations thereunder on or prior to January
31, 1996, Buyer may elect to change the Outside Termination
Date from time to time, to the extent necessary to satisfy the
requirements of the HSR Act, provided that (w) the Outside
Termination Date will not be later than June 30, 1996 and (x)
this Agreement has not been terminated by Company pursuant to
the terms of this Agreement prior to the date of such election
and; further provided that, notwithstanding the preceding
proviso to the contrary, if an Acquisition Proposal is made
prior to the consummation of the Offer, Buyer may elect to
extend the Outside Termination Date in increments of not more
than ten business days, provided that (y) at the time of any
such election an Acquisition Proposal continues to exist and
(z) this Agreement has not been terminated by Company pursuant
to the terms of this Agreement prior to the date of such
election;
(v) by Buyer, upon the occurrence of any Triggering Event (as such
term is defined in Section 10.02(b)) (provided that the right
to terminate hereunder shall expire (x) on the date which
Buyer or Merger Subsidiary beneficially owns a majority of
Shares and (y) Buyer's designees constitute the percentage
required pursuant to Section 1.03, but in no event less than a
majority of the members, of the Board of Directors of the
Company);
(vi) by Buyer, if Buyer shall have received any communication from
an HSR Authority (which communication shall be confirmed to
Company) that causes Buyer to reasonably believe that any HSR
Authority has authorized the initiation of litigation or an
administrative proceeding challenging the transactions
contemplated by this Agreement under U.S. antitrust laws,
which litigation or administrative proceeding will include a
motion seeking an order or injunction prohibiting the
consummation of any of the transactions contemplated by this
Agreement;
(vii) by Company, if Buyer does not commence the Offer within five
business days following the public announcement of the terms
of this Agreement or if the
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Offer expires by its terms and Buyer shall not have purchased
any Shares pursuant hereto; and
(viii) by Buyer, if (A) the Stock Option Agreement is breached by a
shareholder or (B) if the Stock Option Agreement (or any
material provisions thereof) is terminated or held by a court
to be unenforceable for any reason or if Company or any
shareholder asserts or states an intention to assert any such
enforceability and, in any such case, as a result thereof,
Buyer concludes in its reasonable discretion that its ability
to consummate the transactions contemplated by the Merger
Agreement has been materially impaired or such consummation
will be materially delayed or rendered materially more
expensive.
The party desiring to terminate this Agreement pursuant to clauses (ii), (iii),
(iv), (v), (vi), (vii) and (viii) shall give written notice of such termination
to the other party.
SECTION 10.02 Effect of Termination. (a) Except as set forth in Section
10.02(b) and 10.02(c), if this Agreement is terminated pursuant to Section
10.01, this Agreement shall become void and of no effect with no liability on
the part of any party hereto.
(b) If this Agreement is terminated pursuant to Section 10.01(iii)(A) ,
10.01(v) or 10.01(viii) following the occurrence of any of the following events
("Triggering Events") or if this Agreement is terminated pursuant to Section
10.01(iii)(A) and within six months thereafter a Triggering Event (other than an
event described in clause (ii)) with respect to any Person with whom Company or
any of its directors, officers, employees, financial advisors, investment
bankers, attorneys or other advisors engaged in negotiations, or discussions
regarding, or disclosed any information regarding, a possible Acquisition
Proposal, since June 30, 1995 occurs, then Company agrees to pay Buyer, not
later than two business days after the termination of this Agreement or, in the
case this Agreement is terminated pursuant to Section 10.01(iii)(A) and such
Triggering Event (other than an event described in clause (ii)) occurs within
six months thereafter, not later than two business days after the occurrence of
such Triggering Event, in respect of Buyer's expenses and lost opportunity
costs, an amount in immediately available funds equal to $ 15,000,000:
(i) Company shall have entered into, or shall have
publicly announced its intention to enter into, an
agreement or agreement in principle with respect to
any Acquisition Proposal or similar business
combination or transaction other than the
transactions contemplated hereby;
(ii) Company's Board of Directors or any Committee thereof
shall have withdrawn or materially and adversely
modified its approval or recommendation of the Offer
or this Agreement;
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(iii) Company's Board of Directors or any Committee thereof
shall have made any recommendation with respect to an
Acquisition Proposal by any Person (other than Buyer)
other than a recommendation rejecting or against such
Acquisition Proposal;
(iv) Company receives any Acquisition Proposal by any
Person (other than Buyer), and Company's Board of
Directors takes a neutral position or makes no
recommendation with respect to such Acquisition
Proposal after a reasonable amount of time (and in no
event more than five business days) has elapsed for
Company's Board of Directors to review and make a
recommendation with respect to such Acquisition
Proposal consistent with its fiduciary duties; or
(v) (A) any person or group (as defined in Section
13(d)(3) of the Exchange Act) (other than Buyer or any
of its affiliates) shall have become the beneficial
owner (as defined in Rule 13d-3 promulgated under the
Exchange Act) of at least 20% of any class or shares
of capital stock of Company (including the Shares), or
shall have acquired, directly or indirectly, at least
20% of the assets or earning power of Company other
than acquisitions of securities for bona fide
arbitrage purposes only and other than the signatories
to the Stock Option Agreement.
(c) In the event this Agreement is terminated and Buyer or Merger
Subsidiary subsequently purchases Shares pursuant to the Stock Option Agreement,
then, Buyer and Merger subsidiary agree to commence a cash tender offer, as soon
as reasonably practical following the purchase of such Shares, at $35.00 per
Share for all of the Shares not owned by Buyer or Merger Subsidiary, and Buyer
and Merger Subsidiary agree to accept all Shares tendered into such offer,
subject only to the conditions set forth in paragraphs (a) and (b) to the
conditions to the Offer attached as Annex I.
SECTION 10.03 Amendments. Any provision of this Agreement may be
amended or waived prior to the Effective Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by Company, Buyer
and Merger Subsidiary or in the case of a waiver, by the party against whom the
waiver is to be effective; provided that after the adoption of this Agreement by
the shareholders of Company, no such amendment or waiver shall, without the
further approval of such shareholders, alter or change (i) the amount or kind of
consideration to be received in exchange for any shares of capital stock of
Company or (ii) any of the terms or conditions of this Agreement if such
alteration or change could adversely affect the holders of any shares of capital
stock of Company.
SECTION 10.04 Extension; Waiver. (a) Company. At any time prior to the
Effective Time, Company, by action duly taken, may, to the extent legally
allowed: (i) extend the time for the performance of any of the obligations or
other acts of the other
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parties hereto; (ii) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered pursuant hereto; and (iii) waive compliance of the other parties
hereto with any of the agreements or conditions contained herein.
(b) Buyer. At any time prior to the Effective Time, Buyer, by action
duly taken, may, to the extent legally allowed: (i) extend the time for the
performance of any of the obligations or other acts of Company; (ii) waive any
inaccuracies of the representations and warranties of Company contained herein
or in any document delivered pursuant thereto; and (iii) waive compliance of
Company with respect to any of the agreements or conditions contained herein.
(c) Form of Waiver or Extension. (i) Any agreement on the part of
Company or Buyer hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party and no party
can assert a claim with respect to a matter so waived, (ii) no failure or delay
by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any other rights or remedies provided by law.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), delivered by overnight courier (which is
confirmed) or mailed by registered or certified mail (return receipt requested)
to the parties at the following address for a party or such other addresses as
shall be specified by like notice):
if to Company, to:
Xxxxx & Xxxxxxx United, Inc.
X.X. Xxx 00
Xxxxxxx, Xxx Xxxx 00000
Attention: X. X. Xxxxxxxxx, President and
Chief Executive Officer
Telecopy No.: (000) 000-0000
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with a copy to:
Xxxxxxxxx X. Xxxxx, Esq.
Phillips, Lytle, Xxxxxxxxx, Xxxxxx & Xxxxx
0000 Xxxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
and
Xxxxxxx Xxxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
and
if to the Buyer or Merger Subsidiary, to:
The Xxxxxxx-Xxxxxxxx Company
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxxx, Xxxx 00000
Attention: Vice President - Corporate Planning and Development
Telecopy No.: (000) 000-0000
with a copy to:
The Xxxxxxx-Xxxxxxxx Company
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxxxx, Xxxx 00000
Attention: Vice President, General Counsel and Secretary
Telecopy No.: (000) 000-0000
SECTION 11.02 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation". Inclusion of or reference to any information or
item in a Schedule does not constitute an admission of what is material or the
materiality of such matter.
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SECTION 11.03 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
SECTION 11.04 Entire Agreement; No Third Party Beneficiaries;
Schedules. This Agreement (including the schedules, documents and the
instruments referred to herein) and the Confidentiality Agreement dated August
22, 1995: (a) together constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; and (b) are not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder except
for the benefits conferred by Section 7.04.
SECTION 11.05 Governing Law. This Agreement shall be governed and
construed in accordance with the internal laws of the State of New York without
regard to any applicable conflicts of law.
SECTION 11.06 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Any purported assignment or delegation in
violation of this Section 11.06 shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors.
SECTION 11.07 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon any such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto will negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner, to the end that the transactions contemplated by this
Agreement are consummated to the extent possible.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first above written.
Xxxxx & Xxxxxxx United, Inc.
By: /s/ X. X. Xxxxxxxxx
-------------------------------------
X. X. Xxxxxxxxx
Title: President and Chief Executive Officer
The Xxxxxxx-Xxxxxxxx Company
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Xxxxxx X. Xxx
Title: Vice President - Corporate Planning
& Development
SWACQ, Inc.
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Xxxxxx X. Xxx
Title: Vice President
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ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) Buyer's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger Agreement),
Buyer shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to the Buyer's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for, and may delay
the acceptance for payment of or, subject to the restriction referred to above,
to pay for, any tendered Shares, and may terminate the Offer if (i) any
applicable waiting period under the HSR Act has not expired or terminated prior
to the expiration of the Offer, (ii) the Minimum Condition has not been
satisfied, (iii) the Rights under the Rights Agreement shall have become
exercisable, or (iv) at any time on or after the date of the Merger Agreement
and at or before the time of payment for such Shares (whether or not any Shares
have theretofore been accepted for payment or paid for pursuant to the Offer)
pursuant to the Offer, any of the following conditions shall occur:
(a) (i) there shall be threatened, instituted or pending any
action or proceeding by any government or governmental
authority or agency (A) challenging or seeking to make
illegal, impede, materially delay or otherwise directly or
indirectly restrain, prohibit or make materially more costly
the Offer or the Merger or seeking to obtain material damages
relating to the transactions contemplated under the Offer and
the Merger, (B) seeking to prohibit or materially limit the
ownership or operation by Buyer or Merger Subsidiary of all or
any material portion of the business or assets of Company or
any of its Subsidiaries taken as a whole or to compel Buyer or
Merger Subsidiary to dispose of or hold separately all or any
material portion of the business or assets of Buyer or Merger
Subsidiary or Company or any of its Subsidiaries taken as a
whole, or seeking to impose any material limitation on the
ability of Buyer or Merger Subsidiary to conduct its business
or own such assets, (C) seeking to impose material limitations
on the ability of Buyer or Merger Subsidiary effectively to
exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or
owned by Merger Subsidiary or Buyer on all matters properly
presented to Company's shareholders, (D) seeking to require
divestiture by Buyer or Merger Subsidiary of any Shares, or
(E) otherwise materially adversely affecting the condition of
Company and its Subsidiaries taken as a whole; or (ii) any
court shall have entered an order which is in effect and which
(A) makes illegal, impedes, materially delays or otherwise
directly or indirectly restrains, prohibits or makes
materially more costly the Offer or the Merger, (B) prohibits
or materially limits the ownership or operation by Buyer or
Merger Subsidiary of all or any material portion of the
business or assets of Company or any of its Subsidiaries taken
as a whole or compels Buyer or Merger Subsidiary to dispose of
or hold separately all or any material portion
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of the business or assets of Buyer or Merger Subsidiary or
Company or any of its Subsidiaries taken as a whole, or
imposes any material limitation on the ability of Buyer or
Merger Subsidiary to conduct its business or own such assets,
(C) imposes material limitations on the ability of Buyer or
Merger Subsidiary effectively to exercise full rights of
ownership of the Shares, including, without limitation, the
right to vote any Shares acquired or owned by Merger
Subsidiary or Buyer on all matters properly presented to
Company's shareholders, (D) requires divestiture by Buyer or
Merger Subsidiary of any Shares, or (E) otherwise materially
adversely affects the condition of the Company and its
Subsidiaries taken as a whole; provided, however, that in the
case of a preliminary injunction to the effect described in
this subparagraph (ii), the provisions of this subparagraph
(ii) shall not be deemed to have been triggered until the
earlier of (y) the date on which such injunction becomes final
or (z) Company ceases its efforts to have such preliminary
injunction dissolved;
(b) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or
injunction enacted, enforced, promulgated, amended, issued or
deemed applicable to (i) Buyer, Merger Subsidiary, Company or
any Subsidiary or (ii) the Offer or the Merger, by any
legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or
foreign, other than the routine application of the waiting
period provisions of the HSR Act to the Offer or to the
Merger, which could reasonably be expected to directly or
indirectly, result in any of the consequences referred to in
clauses (A) through (E) of paragraph (a) (i) above;
(c) any change shall have occurred (or any condition, event or
development shall have occurred involving a prospective
change), that would have a Material Adverse Effect with
respect to Company;
(d) there shall have occurred any of the following which would
reasonably be expected to have a Material Adverse Effect with
respect to Company (i) any general suspension of trading in,
or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (ii)
any decline in either the Dow Xxxxx Industrial Average or the
Standard & Poor's Index of 400 Industrial Companies or in the
New York Stock Exchange Composite Index in excess of 20%
measured from the close of business on the trading day next
preceding the date of the Merger Agreement, (iii) any material
change in United States or any other currency exchange rates
or a suspension of, or limitation on, the markets therefor,
(iv) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, or (v) a
commencement or escalation of a war or armed hostilities or
other national or international calamity directly or
indirectly involving the United States;
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(e) the representations and warranties of Company set forth in the
Merger Agreement shall not be true and correct as of the date
of consummation of the Offer as though made on or as of such
date or Company shall have breached or failed to perform or
comply with any obligation, agreement or covenant, except in
each case, (i) for changes permitted by the Merger Agreement
and (ii) (A) those representations and warranties that address
matters only as of a particular date which are true and
correct as of such date or (B) where the failure of such
representations and warranties to be true and correct, or the
performance or compliance with such obligations, agreements or
covenants, individually or in the aggregate, would not have a
material adverse effect with respect to Company or a Material
Adverse Effect on the ability of Buyer to consummate the Offer
or the Merger;
(f) all consents, registrations, approvals, permits,
authorizations, notices, reports or other filings required to
be obtained or made by Company, Buyer or Merger Subsidiary
with or from any governmental or regulatory entity in
conjunction with the execution, delivery and performance of
the Merger Agreement, the Offer and the consummation of the
transactions contemplated by the Merger Agreement shall not
have been made or obtained and such failure would reasonably
be expected to have a Material Adverse Effect with respect to
Company or would prevent or materially delay consummation of
the transactions contemplated by the Merger Agreement;
(g) the Merger Agreement shall have been terminated in accordance
with its terms;
(h) (i) any person, entity or "group" (as defined in Section
(d)(3) of the Exchange Act), shall have become the beneficial
owner (determined pursuant to Rule 13d-3 promulgated under the
Exchange Act) of at least 20% of any class or series of
capital stock of Company (including the Shares), or shall have
acquired, directly or indirectly, at least 20% of the assets
or earning power of Company other than the signatories to the
Stock Option Agreement, or (ii) Company shall have entered
into, or shall have publicly announced its intention to enter
into, an agreement or agreement in principle with respect to
an Acquisition Proposal or similar business combination other
than the transactions contemplated in the Merger Agreement and
the Offer; or
(i) (i) Company's Board of Directors or any Committee thereof
shall have withdrawn, or modified or changed in a manner
adverse to Buyer or Merger Subsidiary (including by amendment
of the Schedule 14D-9) its recommendation of the Offer, the
Merger Agreement, or the Merger; (ii) Company's Board of
Directors or any Committee thereof shall have made any
recommendation with respect to any Acquisition Proposal by any
Person (other than Buyer or Merger Subsidiary) other than a
recommendation rejecting or against such Acquisition Proposal;
or (iii) Company shall have received any Acquisition Proposal
by any Person (other than Buyer or Merger Subsidiary)
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and Company's Board of Directors is neutral or makes no
recommendation with respect to such Acquisition Proposal after
a reasonable amount time (and in no event more than five
business days) has elapsed for Company's Board of Directors to
review and make a recommendation with respect to such
Acquisition Proposal consistent with its fiduciary duties;
which in the reasonable judgment of Buyer or Merger Subsidiary, in any
such case and regardless of the circumstances giving rise to such
condition, makes it inadvisable to proceed with such acceptance for
payment or payment.
The foregoing conditions are for the sole benefit of Merger
Subsidiary and Buyer and may be waived by Merger Subsidiary in whole or
in part at any time and from time to time in the sole discretion of
Merger Subsidiary. The failure by Merger Subsidiary at any time to
exercise any of the foregoing rights shall not be deemed a waiver of
any such right; the waiver of any such right with respect to particular
facts and other circumstances shall not be deemed a waiver with respect
to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time
to time. Any determination by Merger Subsidiary concerning the events
described above will be final and binding on all parties.
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