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EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DOREL INDUSTRIES INC.
HORIZON ACQUISITION, INC.
AND
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
MARCH 27, 1998
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TABLE OF CONTENTS
PAGE
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ARTICLE I
THE OFFER...................................................................... 1
Section 1.1 The Offer................................................... 1
Section 1.2 Company Action.............................................. 2
ARTICLE II
THE MERGER..................................................................... 3
Section 2.1 The Merger.................................................. 3
Section 2.2 Effective Time.............................................. 3
Section 2.3 Effects of the Merger....................................... 3
Articles of Incorporation and By-Laws of the Surviving
Section 2.4 Corporation................................................. 3
Section 2.5 Directors and Officers...................................... 4
Section 2.6 Closing..................................................... 4
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS...... 4
Section 3.1 Effect on Capital Stock..................................... 4
Section 3.2 Options; Stock Plans........................................ 4
Section 3.3 Exchange and Retention of Common Stock...................... 5
Section 3.4 Distributions with Respect to Unexchanged Shares............ 5
Section 3.5 No Liability................................................ 6
Section 3.6 Lost Certificates........................................... 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................. 6
Section 4.1 Organization................................................ 6
Section 4.2 Capitalization.............................................. 7
Section 4.3 Authorization; Validity of Agreement; Necessary Action...... 7
Section 4.4 Consents and Approvals; No Violations....................... 7
Section 4.5 SEC Reports and Financial Statements........................ 8
Section 4.6 No Undisclosed Liabilities.................................. 8
Section 4.7 Absence of Certain Changes.................................. 8
Section 4.8 Disclosure Documents........................................ 9
Section 4.9 Employee Benefit Plans; ERISA............................... 9
Section 4.10 Litigation.................................................. 10
Section 4.11 Compliance with Applicable Laws............................. 10
Section 4.12 Taxes....................................................... 10
Section 4.13 Real Property............................................... 11
Section 4.14 Intellectual Property....................................... 11
Section 4.15 Contracts................................................... 11
Section 4.16 Environmental Laws and Regulations.......................... 11
Section 4.17 Labor Matters............................................... 12
Section 4.18 Brokers or Finders.......................................... 12
Section 4.19 Opinion of Financial Advisors............................... 12
Section 4.20 Board Recommendation........................................ 12
Section 4.21 Insurance................................................... 12
Section 4.22 Permits..................................................... 12
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PAGE
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND THE MERGER SUB.................. 12
Section 5.1 Organization................................................ 12
Section 5.2 Authorization; Validity of Agreement; Necessary Action...... 13
Section 5.3 Consents and Approvals; No Violations....................... 13
Section 5.4 Brokers or Finders.......................................... 13
Section 5.5 Interim Operations of the Merger Sub........................ 14
Capitalization of the Merger Sub; Interests in the
Section 5.6 Company..................................................... 14
Section 5.7 Disclosure Documents........................................ 14
ARTICLE VI
COVENANTS...................................................................... 14
Section 6.1 Interim Operations of the Company........................... 14
Section 6.2 Access to Information....................................... 15
Section 6.3 Employee Benefit Matters.................................... 16
Section 6.4 No Solicitation............................................. 17
Section 6.5 Publicity................................................... 18
Section 6.6 Directors' and Officers' Insurance and Indemnification...... 18
Section 6.7 Proxy Statement............................................. 19
Section 6.8 Shareholders' Meetings...................................... 19
Section 6.9 Approvals and Consents; Cooperation......................... 20
Section 6.10 Further Assurances.......................................... 20
Section 6.11 Rights Agreement............................................ 20
Section 6.12 Company Board Representation; Section 14(f)................. 20
ARTICLE VII
CONDITIONS..................................................................... 21
Section 7.1 Conditions to Each Party's Obligations...................... 21
ARTICLE VIII
TERMINATION.................................................................... 22
Section 8.1 Termination................................................. 22
Section 8.2 Effect of Termination....................................... 23
ARTICLE IX
MISCELLANEOUS.................................................................. 24
Section 9.1 Amendment and Modification.................................. 24
Section 9.2 Nonsurvival of Representations and Warranties............... 24
Section 9.3 Notices..................................................... 24
Section 9.4 Interpretation.............................................. 25
Section 9.5 Counterparts................................................ 25
Section 9.6 Entire Agreement; Third Party Beneficiaries................. 25
Section 9.7 Severability................................................ 26
Section 9.8 Governing Law............................................... 26
Section 9.9 Specific Performance........................................ 26
Section 9.10 Assignment.................................................. 26
Section 9.11 Expenses.................................................... 26
Section 9.12 Headings.................................................... 26
Section 9.13 Waivers..................................................... 26
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (collectively, this "Agreement"), dated as of
March 27, 1998, by and among Dorel Industries Inc., a Quebec corporation
("Acquiror"), Horizon Acquisition, Inc., a Delaware corporation and a wholly
owned subsidiary of Acquiror ( the "Merger Sub"), and Ameriwood Industries
International Corporation, a Michigan corporation (the "Company").
WHEREAS, the respective Boards of Directors of the Merger Sub and the
Company have approved the Offer and the Merger (each as hereinafter defined), in
accordance with the Michigan Business Corporation Act (the "MBCA") and the
General Corporation Law of the State of Delaware (the "DGCL") and upon the terms
and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that the Merger Sub shall
make a cash tender offer (the "Offer") to acquire all the issued and outstanding
shares of common stock, par value $1.00 per share (the "Common Stock"), of the
Company (such shares of Common Stock, including the associated Rights (as
hereinafter defined), being hereinafter collectively referred to as "Shares")
for $9.625 per Share (such amount, or any greater amount per Share paid pursuant
to the Offer, being hereinafter referred to as the "Per Share Amount") net to
the seller in cash, upon the terms and subject to the conditions of this
Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (the "Company Board") has,
in light of and subject to the terms and conditions set forth herein, (i)
determined that each of the Offer and the Merger is in the best interests of the
Company and its shareholders, and (ii) approved and adopted this Agreement and
the transactions contemplated hereby and resolved to recommend that shareholders
of the Company accept the Offer, tender their Shares pursuant to the Offer and
approve and adopt this Agreement and the Merger;
WHEREAS, Acquiror, the Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger, and also to set forth various conditions to the Merger;
WHEREAS, Acquiror, the Merger Sub and each of Xxxx X. Xxxxx, Xxxxx X. Xxxxx
and Xxxxx Xxxxxxx (each a "Director Shareholder") have entered into a Tender and
Option Agreement, dated as of the date hereof (each a "Tender and Option
Agreement" and, collectively, the "Tender and Option Agreements"), obligating
each Director Shareholder to tender his Shares pursuant to the Offer and
granting Acquiror an option with respect to such Shares, substantially in the
form of Exhibit 1 attached hereto;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein,
Acquiror, the Merger Sub and the Company agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 and none of the events set forth in Annex A
hereto shall have occurred or be existing, the Merger Sub shall commence
the Offer as promptly as reasonably practicable after the date hereof, but
in no event later than five business days after the initial public
announcement of the Merger Sub's intention to commence the Offer. The
obligation of the Merger Sub to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject to the condition (the
"Minimum Condition") that at least the number of Shares that, when added to
the Shares already owned by Acquiror, shall constitute a majority of the
then outstanding Shares on a fully diluted basis (including, without
limitation, all Shares issuable upon the conversion of any convertible
securities or upon the exercise of any outstanding options, warrants or
rights) shall have been validly tendered and not withdrawn prior to the
expiration of the Offer, which shall be 20 business days after the date the
Offer is commenced, and also shall be subject to the satisfaction of the
other conditions set forth in Annex A hereto. The Merger Sub expressly
reserves
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the right to waive any such condition, to increase the price per Share
payable in the Offer, and to make any other changes in the terms and
conditions of the Offer; provided, however, that no change may be made
which decreases the price per Share payable in the Offer, which reduces the
minimum number of Shares to be purchased in the Offer or, which amends or
imposes conditions to the Offer in addition to those set forth in Annex A
hereto. The Per Share Amount shall, subject to applicable withholding of
taxes, be net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Subject to the terms and conditions of the Offer
(including, without limitation, the Minimum Condition), the Merger Sub
shall pay, as soon as practicable after it is legally permitted to do so
under applicable law after expiration of the Offer, for all Shares validly
tendered and not withdrawn; provided, however, that if, immediately prior
to the expiration date of the Offer, the Shares tendered and not withdrawn
pursuant to the Offer, when added to the Shares already owned by Acquiror,
equal less than 90% of the then outstanding Shares, the Merger Sub may
extend the Offer one time for a period not to exceed 20 business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Merger Sub shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 (together
with all amendments and supplements thereto, the "Schedule 14D-1") with
respect to the Offer. The Schedule 14D-1 shall contain or shall incorporate
by reference an offer to purchase (the "Offer to Purchase") and forms of
the related letter of transmittal and any related summary advertisement
(the Schedule 14D-1, the Offer to Purchase and such other documents,
together with all supplements and amendments thereto, being referred to
herein collectively as the "Offer Documents"). Acquiror, the Merger Sub and
the Company agree to correct promptly any information provided by any of
them for use in the Offer Documents which shall have become false or
misleading, and Acquiror and the Merger Sub further agree to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given the
opportunity to review the Schedule 14D-1 before it is filed with the SEC.
In addition, Acquiror and the Merger Sub will provide the Company and its
counsel in writing with any comments, whether written or oral, Acquiror,
the Merger Sub or their counsel may receive from time to time from the SEC
or its staff with respect to the Offer Documents promptly after the receipt
of such comments.
Section 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and
represents that (i) the Company Board, at a meeting duly called and held on
March 27, 1998, has unanimously (A) determined that this Agreement and the
transactions contemplated hereby, including each of the Offer and the
Merger, are fair to and in the best interests of the holders of Shares, (B)
approved and adopted this Agreement and the transactions contemplated
hereby and (C) resolved to recommend that the stockholders of the Company
accept the Offer and approve and adopt this Agreement and the transactions
contemplated hereby; provided, that such recommendation may be withdrawn,
modified or amended if, in the good faith opinion of the Company's Board,
based upon the receipt of advice from outside independent legal counsel,
failure to withdraw, modify or amend such recommendation is reasonably
likely to result in the Company's Board violating its fiduciary duties to
the Company's shareholders under applicable law and (ii) ABN-AMRO
Incorporated, formerly known as ABN-AMRO Chicago Corporation ("ABN-AMRO"),
has delivered to the Company Board a written opinion that the consideration
to be received by the holders of Shares pursuant to each of the Offer and
the Merger is fair to the holders of Shares from a financial point of view.
The Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board described in the immediately preceding
sentence. On or before the date hereof, the Company will use its reasonable
best efforts to obtain and deliver to Acquiror the Tender and Option
Agreements, in the form attached as Exhibit 1 hereto, executed by the
Director Shareholders.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
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amendments and supplements thereto, the "Schedule 14D-9") containing,
subject to the fiduciary duties of the Company Board under applicable law
as advised in writing by independent counsel, the recommendation of the
Company Board described in Section 1.2(a) and shall disseminate the
Schedule 14D-9 to the extent required by Rule 14d-9 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any
other applicable federal securities laws. The Company, Acquiror and the
Merger Sub agree to correct promptly any information provided by any of
them for use in the Schedule 14D-9 which shall have become false or
misleading, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Acquiror and its counsel
shall be given the opportunity to review the Schedule 14D-9 before it is
filed with the SEC. In addition, the Company agrees to provide Acquiror,
the Merger Sub and their counsel with any comments, whether written or
oral, that the Company or its counsel may receive from time to time from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments or other communications.
(c) The Company shall promptly furnish the Merger Sub with mailing
labels containing the names and addresses of all record holders of Shares
and with security position listings of Shares held in stock depositories,
each as of a recent date, together with all other available listings and
computer files containing names, addresses and security position listings
of record holders and beneficial owners of Shares. The Company shall
furnish the Merger Sub with such additional information, including, without
limitation, updated listings and computer files of stockholders, mailing
labels and security position listings, and such other assistance as
Acquiror, the Merger Sub or their agents may reasonably request. Subject to
the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents
necessary to consummate the Offer or the Merger, Acquiror and the Merger
Sub shall hold in confidence the information contained in such labels,
listings and files, shall use such information only in connection with the
Offer and the Merger, and, if this Agreement shall be terminated in
accordance with Section 8.1, shall deliver to the Company all copies of
such information then in their possession.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the satisfaction or
waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement, the DGCL and the MBCA, at the Effective Time the
Merger Sub shall be merged with and into the Company (the "Merger"). Following
the Merger, the separate corporate existence of the Merger Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation").
Section 2.2 Effective Time. On the Closing Date (as defined) the Company
shall execute, in the manner required by the MBCA and the DGCL, and deliver to
the Corporation, Securities and Land Development Bureau of the Michigan
Department of Corporations and Industries Services and the Secretary of State of
the State of Delaware, Articles of Merger or a Certificate of Merger, as
appropriate (collectively, the "Certificate of Merger"), duly executed and
verified by the appropriate parties hereto, and the parties shall take such
other and further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accordance with applicable
law is referred to herein as the "Effective Time."
Section 2.3 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the MBCA and the DGCL and as set forth
herein. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time, all the properties, rights, privileges, powers and
franchises of the Company and the Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and the Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
Section 2.4 Articles of Incorporation and By-Laws of the Surviving
Corporation.
(a) The Certificate of Incorporation of the Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter
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amended in accordance with the provisions thereof and hereof and applicable
law, or as otherwise contemplated hereby.
(b) The By-Laws of the Merger Sub in effect at the Effective Time
shall be the By-Laws of the Surviving Corporation until thereafter amended,
in accordance with the provisions thereof, hereof and applicable law.
Section 2.5 Directors and Officers. Subject to applicable law, the
directors of the Merger Sub shall be the initial directors of the Surviving
Corporation and the officers of the Company shall be the initial officers of the
Surviving Corporation and each shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
Section 2.6 Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. on a date to be specified by the parties, which shall be no
later than the second business day after satisfaction or waiver of all of the
conditions set forth in Article VI (the "Closing Date"), at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, unless another date or place is agreed to in writing by the
parties hereto.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
Section 3.1 Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Common Stock or any shares of capital stock of the Merger Sub:
(a) Common Stock of the Merger Sub. All of the shares of common stock,
par value $.01 per share, of the Merger Sub (the "Merger Sub Common
Stock"), issued and outstanding immediately prior to the Effective Time
shall be converted into 1000 shares of Common Stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock. Each share of Common Stock that is
owned by any affiliate of the Merger Sub, the Company or by any wholly
owned subsidiary of the Company shall automatically be cancelled and
retired and shall cease to exist, and no cash or other consideration shall
be delivered or deliverable in exchange therefor.
(c) Retention or Exchange of Shares of Common Stock. Except as
otherwise provided herein, each share of Common Stock issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be
converted into the right to receive $9.625 in cash per share (the "Cash
Consideration").
Section 3.2 Options; Stock Plans.
(a) Each option held by an employee, officer or director of the
Company and other eligible holders to acquire shares of Common Stock
("Company Option") that is outstanding immediately prior to the Merger,
whether or not then vested or exercisable, shall, simultaneously with the
Merger, be cancelled in exchange for a single lump sum cash payment equal
to the product of (1) the number of shares of Common Stock subject to such
Company Option and (2) the excess, if any, of the Cash Consideration over
the exercise price per share of such Company Option, subject to any
required withholding of taxes.
(b) Each stock appreciation right held by an employee, officer or
director of the Company (an "SAR") that is outstanding immediately prior to
the Merger, whether or not then vested or exercisable, shall,
simultaneously with the Merger, be cancelled in exchange for a single lump
sum cash payment equal to the product of (1) the number of SAR's held by
such employee, officer or director and (2) the excess, if any, of the Cash
Consideration over $4.00, the fair market value on the date the SAR's were
granted.
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(c) Prior to the Effective Time, if necessary, the Company shall use
all reasonable efforts to (i) obtain consents from appropriate holders of
Company Options and SAR's and (ii) make any amendments to the terms of such
Company Options, SAR's, or the compensation plans or arrangements related
thereto that are necessary to give effect to the transactions contemplated
by Sections 3.2 (a) and 3.2(b). Notwithstanding any other provision of this
Section, payment pursuant to this Section 3.2 may be withheld in respect of
any employee stock option or SAR until necessary or appropriate consents
are obtained.
Section 3.3 Exchange and Retention of Common Stock.
(a) Immediately following the Effective Time, Acquiror and the Merger
Sub shall take all steps necessary to cause to be deposited on a timely
basis with the bank or trust company as shall be mutually acceptable to the
Merger Sub and the Company, acting as the exchange agent (the "Exchange
Agent") in an account (the "Exchange Fund") the aggregate Cash
Consideration to which holders of shares of Common Stock shall be entitled
at the Effective Time pursuant to Section 3.1(c).
(b) Promptly after the Effective Time, Acquiror shall cause the
Exchange Agent to mail to each record holder of certificates (the
"Certificates") that immediately prior to the Effective Time represented
shares of Common Stock a form of letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to
the Exchange Agent and instructions for use in surrendering such
Certificates and receiving the Cash Consideration in respect thereof.
(c) In effecting the payment of the Cash Consideration in respect of
shares of Common Stock represented by Certificates entitled to payment of
the Cash Consideration pursuant to Section 3.1(c), upon the surrender of
each such Certificate, the Exchange Agent at the time of such surrender
shall pay the holder of such Certificate the Cash Consideration multiplied
by the number of shares of Common Stock represented by such Certificate, in
consideration therefor. Upon such payment, such Certificate shall forthwith
be cancelled.
(d) Until surrendered in accordance with paragraph (c) above, each
Certificate (other than Certificates representing shares of Common Stock
held by any affiliate of the Merger Sub, in the treasury of the Company or
by any wholly owned subsidiary of the Company) shall represent solely the
right to receive the aggregate Cash Consideration relating thereto. No
interest shall be paid or accrued on the Cash Consideration. If the Cash
Consideration (or any portion thereof) is to be delivered to any person
other than the person in whose name the Certificate formerly representing
shares of Common Stock surrendered therefor is registered, it shall be a
condition to such right to receive such Cash Consideration that the
Certificate so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person surrendering such shares of
Common Stock shall pay to the Exchange Agent any transfer or other taxes
required by reason of the payment of the Cash Consideration to a person
other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable.
(e) Promptly following the date which is six months after the
Effective Time, the Exchange Agent shall deliver to the Surviving
Corporation all cash and other documents in its possession relating to the
transactions described in this Agreement, and the Exchange Agent's duties
shall terminate. Thereafter, each holder of a Certificate formerly
representing a share of Common Stock entitled to the payment of Cash
Consideration may surrender such Certificate to the Surviving Corporation
and (subject to applicable abandoned property, escheat and similar laws)
receive in consideration therefor the applicable aggregate Cash
Consideration relating thereto, without any interest thereon.
(f) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any shares of Common Stock
which were outstanding immediately prior to the Effective Time and which
are entitled to the payment of Cash Consideration.
Section 3.4 Distributions with Respect to Unexchanged Shares. No dividends
or other distributions with respect to shares of Common Stock entitled to the
payment of Cash Consideration with a record date after the
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Effective Time shall be paid to the holder of any such unsurrendered Certificate
with respect to the shares of Common Stock represented thereby. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificate representing whole shares of
Common Stock issued in exchange therefor, without interest, at the time of such
surrender, the Cash Consideration.
Section 3.5 No Liability. None of the Merger Sub, Acquiror, the Company,
the Surviving Corporation or the Exchange Agent shall be liable to any person in
respect of any Cash Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificates shall
not have been surrendered prior to seven years after the Effective Time (or
immediately prior to such earlier date on which the Cash Consideration would
otherwise escheat to or become the property of any Governmental Entity (as
hereinafter defined)) any such distributions or cash in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
Section 3.6 Lost Certificates. In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Company or the Surviving Corporation, the posting by such person
of a bond in such reasonable amount as the Company or the Surviving Corporation,
as the case may be, may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificate the amount to which such
person is entitled pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed to the Merger Sub in a letter delivered to it
at or prior to the execution of this Agreement (the "Company Disclosure
Letter"), the Company represents and warrants to the Merger Sub as follows:
Section 4.1 Organization.
(a) Each of the Company and the Company Subsidiaries (as defined in
Section 4.1(b)) is a corporation or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where failure to be in good
standing or to have such power and authority would not, individually or in
the aggregate, have a Company Material Adverse Effect (as defined in this
Section 4.1). Each of the Company and the Company Subsidiaries is duly
qualified or licensed to do business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the business
conducted by it makes such qualification or licensing necessary, except
where the failure to be so duly qualified, licensed and in good standing
would not, individually or in the aggregate, have a Company Material
Adverse Effect. The Company has heretofore delivered to Acquiror a complete
and correct copy of each of its articles of incorporation and By-Laws, as
currently in effect. As used in this Agreement, "Company Material Adverse
Effect" means any material adverse change in or effect on the business,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole; provided, however, that the effects of
changes that are generally applicable to (i) the North American ready-to-
assemble furniture industry (the "Industry"), (ii) the United States
economy, or (iii) the United States securities markets shall be excluded
from such determination; and provided, further that any adverse effect on
the Company and its subsidiaries resulting from the execution of this
Agreement and the announcement of this Agreement and the transactions
contemplated hereby shall also be excluded from such determination.
(b) Section 4.1 to the Company Disclosure Letter lists all
subsidiaries of the Company (individually, a "Company Subsidiary," and
collectively, the "Company Subsidiaries") and their states of
incorporation. Except as set forth in Section 4.1 to the Company Disclosure
Letter, the Company does
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not own an equity interest in or control, directly or indirectly, any other
corporation, association, partnership or business organization other than
the Company Subsidiaries.
Section 4.2 Capitalization.
(a) As of the date hereof, the authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock, no par value per share (the "Preferred Stock"). As of
March 27, 1998, (i) 4,349,606 shares of Common Stock were issued and
outstanding, (ii) no shares of Common Stock were issued and held in the
treasury of the Company, and (iii) no shares of Preferred Stock were issued
and outstanding. Since such date, no additional shares of capital stock
have been issued except shares issued upon the exercise of the Company
Options pursuant to the Company's stock option and employee stock purchase
plans, pension plans and other similar employee benefit plans, all as
described in the Company Disclosure Letter (the "Company Stock Plans"). All
the outstanding shares of the Company's capital stock are duly authorized,
validly issued, fully paid, non-assessable and free of preemptive rights.
Section 4.2(a) of the Company Disclosure Letter sets forth (i) the number
of outstanding Company Options and SARs on the date hereof pursuant to the
Company Stock Plans, (ii) the identity of the holders of such Company
Options or SARs, and (iii) the vesting schedules and the exercise prices
for such Company Options and SARs. Except as provided herein or as
disclosed in Section 4.2(a) of the Company Disclosure Letter and, except
for the Company Stock Plans as of the date hereof, there are no existing
(i) options, warrants, calls, subscriptions or other rights, convertible
securities, agreements or commitments of any character obligating the
Company or any of its subsidiaries to issue, transfer or sell any shares of
capital stock or other equity interest in, the Company or any of its
subsidiaries or securities convertible into or exchangeable for such shares
or equity interests, (ii) contractual obligations of the Company or any of
its subsidiaries to repurchase, redeem or otherwise acquire any capital
stock of the Company or any of its subsidiaries of the Company or (iii)
voting trusts or similar agreements to which the Company is a party with
respect to the voting of the capital stock of the Company.
(b) Except as disclosed in Section 4.2(b) of the Company Disclosure
Letter, all of the outstanding shares of capital stock (or equivalent
equity interests of entities other than corporations) of each of the
Company Subsidiaries are beneficially owned, directly or indirectly, by the
Company, free and clear of all liens, pledge, security interests, claims or
other encumbrances.
Section 4.3 Authorization; Validity of Agreement; Necessary Action. The
Company has the requisite corporate power and authority to execute and deliver
this Agreement and, subject to obtaining the necessary approval of its
shareholders, to consummate the transactions contemplated hereby. The execution,
delivery and performance by the Company of this Agreement, and the consummation
by it of the transactions contemplated hereby, have been duly authorized by the
Company Board and no other corporate action no the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the transactions contemplated hereby
(other than, with respect to the Merger, the affirmative vote by holders of a
majority of the issued and outstanding shares of Common Stock). This Agreement
has been duly executed and delivered by the Company and, assuming due and valid
authorization, execution and delivery hereof by Acquiror and the Merger Sub, is
a valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 4.4 Consents and Approvals; No Violations. Except as disclosed in
Section 4.4 of the Company Disclosure Letter and except for (a) filings pursuant
to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (b) applicable requirements under the Securities Act of 1933, as
amended ("Securities Act") and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (c) the filing of the Certificate of Merger, (d)
applicable requirements under corporation or "blue sky" laws of various states
or (e) as contemplated by this Agreement, neither the execution, delivery or
performance of this
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Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) violate any provision of the Articles of
Incorporation or By-Laws of the Company, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of a lien or other encumbrance on any property
or asset of the Company or any Company Subsidiary, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which any of them or any of their properties or
assets may be bound (the "Company Agreements"), (iii) violate any order, writ,
judgment, injunction, decree, law, statute, rule or regulation applicable to the
Company, any of the Company Subsidiaries or any of their properties or assets,
or (iv) require on the part of the Company any filing or registration with,
notification to, or authorization, consent or approval of, any court,
legislative, executive or regulatory authority or agency (a "Governmental
Entity"); except in the case of clauses (ii), (iii) or (iv) for such violations,
breaches or defaults which, or filings, registrations, notifications,
authorizations, consents or approvals the failure of which to obtain, (A) would
not, individually or in the aggregate, have a Company Material Adverse Effect
and would not, individually or in the aggregate, materially adversely affect the
ability of the Company to consummate the transactions contemplated by this
Agreement, or (B) would become applicable solely as a result of any acts or
omissions by, or the status of any facts pertaining to, Acquiror or the Merger
Sub.
Section 4.5 SEC Reports and Financial Statements. The Company has filed all
reports required to be filed by it with the SEC pursuant to the Exchange Act and
the Securities Act since January 1, 1995 (as such documents have been amended
since the date of their filing, collectively, the "Company SEC Documents"). The
Company SEC Documents, as of their respective filing dates, or if amended, as of
the date of the last such amendment, (i) complied in all material respects at
the time filed with the requirements of the Securities Act or the Exchange Act,
as applicable and (ii) did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Each of the consolidated balance sheets
(including the related notes) included in the Company SEC Documents and the
Company Balance Sheet (as defined below) fairly presents in all material
respects the financial position of the Company and its consolidated subsidiaries
as of the respective dates thereof, and the other related statements (including
the related notes) included therein fairly present in all material respects the
results of operations and cash flows of the Company and its consolidated
subsidiaries for the respective periods or as of the respective dates set forth
therein. Each of the financial statements (including the related notes) included
in the Company SEC Documents has been prepared in all material respects in
accordance with GAAP applied on a consistent basis during the periods involved,
except as otherwise noted therein and subject, in the case of unaudited interim
financial statements, to normal year-end adjustments. The consolidated balance
sheet of the Company at December 31, 1997, included in the Annual Report on Form
10-K for the fiscal year ended December 31, 1997 of the Company, is herein
sometimes referred to as the "Company Balance Sheet."
Section 4.6 No Undisclosed Liabilities. Except (a) for liabilities incurred
in the ordinary course of business and consistent with past practice since
December 31, 1997, (b) for liabilities disclosed in the Company Balance Sheet or
specifically disclosed in the Company SEC Documents, (c) for liabilities
incurred in connection with the Merger or otherwise as contemplated by this
Agreement and (d) as disclosed in Section 4.6 of the Company Disclosure Letter,
since December 31, 1997, neither the Company nor any of the Company Subsidiaries
has incurred any liabilities that would be required to be reflected or reserved
against in a consolidated balance sheet of the Company and its consolidated
subsidiaries prepared in accordance with GAAP as applied in preparing the
consolidated balance sheet of the Company and its consolidated subsidiaries as
of December 31, 1997, except for liabilities that would not have a Company
Material Adverse Effect.
Section 4.7 Absence of Certain Changes. Except as (a) specifically
disclosed in the Company SEC Documents, (b) disclosed in Section 4.7 of the
Company Disclosure Letter or (c) contemplated by this Agreement, since December
31, 1997, the Company has conducted its business only in the ordinary course
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and in a manner consistent with past practice and has not suffered any change or
changes constituting, individually or in the aggregate, a Company Material
Adverse Effect.
Section 4.8 Disclosure Documents. Neither the Schedule 14D-9 nor any
information supplied by the Company for inclusion in the Offer Documents shall,
at the respective times the Schedule 14D-9, the Offer Documents or any
amendments or supplements thereto are filed with the SEC or are first published,
sent or given to stockholders of the Company, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they are made, not misleading.
None of the information supplied or to be supplied by the Company for inclusion
in the proxy statement relating to the meeting of the Company's shareholders
(the "Special Meeting") to be held in connection with the Merger, as the same
may be amended or supplemented from time to time (the "Proxy Statement"), if
such Proxy Statement is required by law to be filed, will, either at the time of
mailing of the Proxy Statement to shareholders of the Company or at the time of
the Special Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement, if any, and Schedule 14D-9 will
comply as to form in all material respects with the provisions of the Exchange
Act, except that no representation or warranty is made by the Company with
respect to information supplied in writing for inclusion in the Proxy Statement
or the Schedule 14D-9 by Acquiror or the Merger Sub.
Section 4.9 Employee Benefit Plans; ERISA.
(a) Section 4.9 of the Company Disclosure Letter sets forth a list of
all material employee benefit plans (including but not limited to plans
described in section 3 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) maintained by the Company or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), which
together with the Company would be deemed a "single employer" within the
meaning of section 4001(b)(15) of ERISA ("Benefit Plans") and all material
employment and severance agreements with employees of the Company
("Employee Agreements"). True and complete copies of all Benefit Plans and
Employee Agreements, including all amendments to date, have been made
available to Acquiror or its representatives by the Company.
(b) With respect to each Benefit Plan, except as otherwise disclosed
to Acquiror: (i) if intended to qualify under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), such plan has
received a determination letter from the Internal Revenue Service stating
that it so qualifies and that its trust is exempt from taxation under
section 501(a) of the Code; (ii) such plan has been administered in all
material respects in accordance with its terms and applicable law; (iii) no
breaches of fiduciary duty have occurred which might reasonably be expected
to give rise to material liability on the part of the Company; (iv) no
disputes are pending, or, to the knowledge of the Company, threatened that
might reasonably be expected to give rise to material liability on the part
of the Company (other than routine claims for benefits); (v) no prohibited
transaction (within the meaning of section 406 of ERISA) has occurred that
might reasonably be expected to give rise to material liability on the part
of the Company; and (vi) all contributions required to be made to such plan
as of the date hereof (taking into account any extensions for the making of
such contributions) have been made in full.
(c) No Benefit Plan is a "multiemployer pension plan," as defined in
section 3(37) of ERISA, nor is any Benefit Plan a plan described in section
4063(a) of ERISA.
(d) No liability under Title IV of ERISA has been incurred by the
Company or any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to the Company or any ERISA
Affiliate of incurring a material liability under such Title.
(e) No Benefit Plan has incurred an accumulated funding deficiency, as
defined in section 302 of ERISA or section 412 of the Code, whether or not
waived.
(f) With respect to each Benefit Plan that is a "welfare plan" (as
defined in section 3(1) of ERISA), no such plan provides medical or death
benefits with respect to current or former employees of
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the Company or any of its Significant Subsidiaries beyond their termination
of employment (other than to the extent required by applicable law).
Section 4.10 Litigation. Except as disclosed in Section 4.10 of the Company
Disclosure Letter or as specifically disclosed in the Company SEC Documents, as
of the date hereof, there is no action, suit, proceeding or, to the best
knowledge of the Company, investigation pending or, to the best knowledge of the
Company, action, suit, proceeding, audit or investigation threatened, involving
the Company or any of its subsidiaries, by or before any court, governmental or
regulatory authority or by any third party that (i) individually or in the
aggregate, would have a Company Material Adverse Effect or (ii) seeks to delay
or prevent the consummation of the transactions contemplated by this Agreement.
Except as disclosed in Section 4.10 of the Company Disclosure Letter, neither
the Company nor any of the Company Subsidiaries is subject to any continuing
order of, consent decree, settlement agreement or other similar written
agreement with any court, governmental or regulatory authority, or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental or regulatory authority or arbitrator having, individually or in
the aggregate, a Company Material Adverse Effect.
Section 4.11 Compliance with Applicable Laws. Neither the Company nor any
of the Company Subsidiaries is in default or violation of any term, condition or
provision of any statute, law, rule, regulation, judgment, decree, order,
concession, grant, franchise, permit or license or other governmental
authorization or approval applicable to the Company or any of the Company
Subsidiaries, excluding defaults or violations which would not, individually or
in the aggregate, have a Company Material Adverse Effect or which become
applicable as a result of any acts or omissions by, or the status of any facts
pertaining to, Acquiror or the Merger Sub.
Section 4.12 Taxes.
(a) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, the Company and each of its subsidiaries has (i) timely filed all
material Tax Returns required to be filed by any of them for tax years
ended prior to the date of this Agreement or requests for extensions have
been timely filed and any such request shall have been granted and not
expired and all such returns are complete in all material respects, (ii)
have paid or accrued all Taxes shown to be due and payable on such returns
other than such Taxes as are being contested in good faith by the Company
or its subsidiaries, and (iii) have properly accrued in all material
respects all such Taxes for such periods subsequent to the periods covered
by such returns, except in the case of the foregoing clauses (i), (ii) and
(iii) where any such failure would not have a Company Material Adverse
Effect.
(b) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, there are no ongoing federal, state or local audits or examinations
of any Tax Return of the Company or its subsidiaries.
(c) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, there are no outstanding written requests, agreements, consents or
waivers to extend the statutory period of limitations applicable to the
assessment of any material Taxes or deficiencies against the Company or any
of its subsidiaries, and no power of attorney granted by either the Company
or any of its subsidiaries with respect to any Taxes is currently in force.
(d) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, neither the Company nor any of its subsidiaries is a party to any
agreement providing for the allocation or sharing of Taxes.
(e) "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including, without limitation, income, gross receipts,
excise, real or personal property, sales, withholding, social security,
occupation, use, service, service use, license, net worth, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the
United States Internal Revenue Service or any taxing authority (whether
domestic or foreign including, without limitation, any state, county, local
or foreign government or any subdivision or taxing agency thereof
(including a United States possession)), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall
include any interest, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies or
other assessments. "Tax Return" shall mean any report, return, document,
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declaration or other information or filing required to be supplied to any
taxing authority or jurisdiction (foreign or domestic) with respect to
Taxes.
Section 4.13 Real Property. The Company (including, as applicable, the
Company Subsidiaries) owns all of the real and personal property included in the
Company Balance Sheet (except assets recorded under capital lease obligations
and such property as has been disposed of during the ordinary course of the
Company's business since the date of the Company Balance Sheet), free and clear
of any liens, claims, charges, exceptions or encumbrances, except for those (i)
if any, which in the aggregate are not material and which do not materially
affect continued use of such property, or (ii) which are set forth in Section
4.13 to the Company Disclosure Letter or in the Company SEC Documents.
Section 4.14 Intellectual Property. Except as disclosed in Section 4.14 of
the Company Disclosure Letter or as specifically disclosed in the Company SEC
Documents, and except for such claims which would not, individually or in the
aggregate, have a Company Material Adverse Effect, as of the date hereof, there
are no pending or threatened claims of which the Company or any of the Company
Subsidiaries is aware, to the best of its knowledge, by any person against their
use of any trademarks, trade names, service marks, service names, xxxx
registrations, logos, assumed names and copyright registrations, patents and all
applications therefor which are owned by the Company or the Company Subsidiaries
or used in their respective operations as currently conducted (collectively, the
"Company Intellectual Property"). The Company and the Company Subsidiaries have
such ownership of or such rights by license, lease or other agreement to the
Company Intellectual Property as are necessary to permit them to conduct their
respective operations as currently conducted, except where the failure to have
such rights would not, individually or in the aggregate, have a Company Material
Adverse Effect.
Section 4.15 Contracts. Except as set forth in Section 4.15 of the Company
Disclosure Letter, each Company Agreement is in full force and effect except
where the failure to be in full force and effect would not, individually or in
the aggregate, have a Company Material Adverse Effect and, to the knowledge of
the Company, is valid and enforceable by the Company or a subsidiary of the
Company, as the case may be, in accordance with its terms except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. Except as set forth in Section 4.15 of the Company Disclosure
Letter, neither the Company nor any of its subsidiaries is in default in the
observance or the performance of any term or obligation to be performed by it
under any Company Agreement except for such defaults the effect of which would
not, individually or in the aggregate, have a Company Material Adverse Effect.
To the knowledge of the Company, no other person is in material default in the
observance or the performance of any term or obligation to be performed by it
under any Company Agreement.
Section 4.16 Environmental Laws and Regulations. Except as set forth in
Section 4.16 of the Company Disclosure Letter, (a) the Company and each of its
subsidiaries is in compliance with all applicable federal, state, local and
foreign laws and regulations relating to protection of the environment
(collectively, "Environmental Laws"), except for non-compliance which would not,
individually or in the aggregate, have a Company Material Adverse Effect, which
compliance includes, but is not limited to, the possession by the Company and
its subsidiaries of material permits and other governmental authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof; (b) neither the Company nor any of its subsidiaries has
received notice of, or to the knowledge of the Company, is the subject of, any
actions, causes of action, claims, investigations, demands, or notices by any
Person alleging liability under or non-compliance with any Environmental Law
("Environmental Claims") which would, individually or in the aggregate, have a
Company Material Adverse Effect; and (c) the Company is not aware of and has not
received notice of any event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to interfere with or prevent
continued compliance with or which would give rise to any common law or
statutory liability, or otherwise form the basis of any claim, action, suit or
proceeding under any Environmental Laws, except where the interference or
failure to comply with common law or statutes or
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other claim, action, suit or proceeding under Environmental Law would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Section 4.17 Labor Matters. Except as set forth in Section 4.17 of the
Company Disclosure Letter or as specifically disclosed in the Company SEC
Documents, (a) neither the Company nor any of the Company Subsidiaries is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, and (b)
there is no unfair labor practice or labor arbitration proceedings pending or,
to the knowledge of the Company, threatened against the Company or the Company
Subsidiaries, except for any such proceeding which would not, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 4.18 Brokers or Finders. The Company represents, as to itself, the
Company Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except ABN-AMRO,
whose fees and expenses will be paid by the Company. The Company has heretofore
made available to Acquiror a complete and correct copy of all agreements between
the Company and ABN-AMRO pursuant to which such firm would be entitled to any
payment relating to the transaction.
Section 4.19 Opinion of Financial Advisors. The Company has received the
opinion of ABN-AMRO to the effect that, as of the date hereof, the Cash
Consideration is fair, from a financial point of view, to the shareholders of
the Company.
Section 4.20 Board Recommendation. The Company Board, at a meeting duly
called and held, has (a) determined that this Agreement and the transactions
contemplated hereby, taken together, are advisable and in the best interests of
the Company and its shareholders, and (b) resolved to recommend that the holders
of the shares of Common Stock approve this Agreement and the transactions
contemplated hereby, including the Merger.
Section 4.21 Insurance. The Company and the Company Subsidiaries have
obtained and maintained in full force and effect insurance with responsible and
reputable insurance companies or associations in such amounts, on such terms and
covering such risks, as is customarily carried by reasonably prudent persons
conducting businesses or owning or leasing assets similar to those conducted,
owned or leased by the Company or any of the Company Subsidiaries, except where
the failure to obtain or maintain such insurance would not, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 4.22 Permits. The Company and the Company Subsidiaries are in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any court, governmental or regulatory authority necessary for the Company and
its subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Company Material Adverse Effect, and, as of the date hereof,
no suspension or cancellation of any of the Company Permits is pending or, to
the knowledge of the Company threatened, except where the suspension or
cancellation of any of the Company Permits would not, individually or in the
aggregate, have a Company Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
AND THE MERGER SUB
Acquiror and the Merger Sub represent and warrant to the Company as
follows:
Section 5.1 Organization. Each of Acquiror and the Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power
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and authority would not have an Acquiror Material Adverse Effect (as defined in
this Section 5.1). Each of Acquiror and the Merger Sub is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing would not have an
Acquiror Material Adverse Effect. Acquiror has heretofore delivered to Company a
complete and correct copy of each of its certificate of incorporation and
by-laws, as currently in effect. As used in this Agreement, "Acquiror Material
Adverse Effect" means any material adverse change in or effect on the business,
financial condition or results of operations of Acquiror and its subsidiaries,
taken as a whole; provided, however, that the effects of changes that are
generally applicable to (i) the United States economy or (ii) the United States
securities markets shall be excluded from such determination; and provided,
further that any adverse effect on Acquiror or the Merger Sub resulting from the
execution of this Agreement and the transactions contemplated hereby shall also
be excluded from such determination.
Section 5.2 Authorization; Validity of Agreement; Necessary Action. Each of
Acquiror and the Merger Sub has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by Acquiror and the Merger Sub
of this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by their respective board of directors and no other
corporate action on the part of Acquiror or the Merger Sub is necessary to
authorize the execution and delivery by Acquiror or the Merger Sub of this
Agreement and the consummation by it of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Acquiror and the Merger
Sub and, assuming due and valid authorization, execution and delivery hereof by
the Company, is a valid and binding obligation of each of Acquiror and the
Merger Sub, enforceable against them in accordance with its terms, except that
(i) such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 5.3 Consents and Approvals; No Violations. Except for (a) filings
pursuant to the HSR Act, (b) applicable requirements under the Securities Act
and the Exchange Act, (c) the filing of the Certificate of Merger, (d)
applicable requirements under corporation or "blue sky" laws of various states
or (e) as contemplated by this Agreement, neither the execution, delivery or
performance of this Agreement by either Acquiror or the Merger Sub nor the
consummation by either Acquiror or the Merger Sub of the transactions
contemplated hereby will (i) violate any provision of the certificate of
incorporation or articles of incorporation, as the case may be, or by-laws of
either Acquiror or the Merger Sub, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
either Acquiror or the Merger Sub is a party or by which it or any of its
properties or assets may be bound (the "Acquiror Agreements"), (iii) to the best
knowledge of either Acquiror or the Merger Sub, violate any order, writ,
judgment, injunction, decree, law, statute, rule or regulation applicable to
either Acquiror or the Merger Sub or any of their respective properties or
assets, or (iv) require on the part of either Acquiror or the Merger Sub any
filing or registration with, notification to, or authorization, consent or
approval of, any Governmental Entity; except in the case of clauses (ii), (iii)
or (iv) for such violations, breaches or defaults which, or filings,
registrations, notifications, authorizations, consents or approvals the failure
of which to obtain, (A) would not have an Acquiror Material Adverse Effect and
would not materially adversely affect the ability of either Acquiror or the
Merger Sub to consummate the transactions contemplated by this Agreement, or (B)
become applicable as a result of any acts or omissions by, or the status of any
facts pertaining to, the Company.
Section 5.4 Brokers or Finders. Each of Acquiror and the Merger Sub
represents, as to itself and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finders' fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement.
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Section 5.5 Interim Operations of the Merger Sub. The Merger Sub was formed
solely for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations only as
contemplated hereby.
Section 5.6 Capitalization of the Merger Sub; Interests in the Company. The
authorized capital stock of the Merger Sub consists of the Merger Sub Common
Stock. As of the close of business on March 27, 1998, 1,000 shares of the Merger
Sub Common Stock were issued and outstanding, all of which are entitled to vote,
and no shares of the Merger Sub Common Stock were held in the Merger Sub's
treasury. All the outstanding shares of the Merger Sub's capital stock are duly
authorized, validly issued, fully paid and non-assessable. Except as set forth
above, there will be, at the Effective Time, (a) no shares of capital stock or
other voting securities of the Merger Sub, (b) no securities of the Merger Sub
convertible into or exchangeable for shares of capital stock or voting
securities of the Merger Sub and (c) no options or other rights to acquire from
the Merger Sub, and no obligation of the Merger Sub to issue any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Merger Sub (the items referred to in clauses
(a), (b) and (c) being referred to collectively as the "Merger Sub Securities").
There are no outstanding obligations of the Merger Sub to repurchase, redeem or
otherwise acquire any the Merger Sub Securities. As of the date hereof, Acquiror
and the Merger Sub do not beneficially hold any shares of Common Stock.
Section 5.7 Disclosure Documents. The Offer Documents will not, at the time
the Offer Documents are filed with the SEC or are first published, sent or given
to stockholders of the Company, as the case may be, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they are made, not misleading. Notwithstanding
the foregoing, Acquiror and the Merger Sub make no representation or warranty
with respect to any information supplied by the Company or any of its
representatives in writing, expressly for inclusion in the Offer Documents,
which is contained in any of the foregoing documents or the Offer Documents. The
Offer Documents shall comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder. None
of the information supplied or to be supplied by Acquiror for inclusion in the
Proxy Statement will, either at the time of mailing of the Proxy Statement to
shareholders of the Company, or at the time of the Special Meeting, contain any
untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations of the Company. The Company covenants and
agrees that the Company shall, and shall cause each of its subsidiaries to,
conduct its operations in the ordinary and usual course of business consistent
with past practice and use all reasonable efforts to preserve intact their
respective business organizations' goodwill, keep available the services of
their respective present officers and key employees, and preserve the goodwill
and business relationships with suppliers, distributors, customers and others
having business relationships with them. Without limiting the generality of the
foregoing, and except as otherwise permitted by this Agreement or as
specifically contemplated by the Company Disclosure Letter, or as required by
applicable law, rule or regulation prior to the Effective Time, without the
consent of Acquiror, which consent shall not be unreasonably withheld, the
Company will not, and will cause each of its subsidiaries not to:
(a) amend or propose to amend their respective charters or bylaws; or
split, combine or reclassify their outstanding capital stock or declare,
set aside or pay any dividend or distribution in respect of any 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, except for cash dividends and cash distributions paid by
subsidiaries to other subsidiaries or to the Company;
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(b) (i) issue or authorize or propose the issuance of, sell, pledge or
dispose of, or agree to issue or authorize or propose the issuance of,
sell, pledge or dispose of, any additional shares of, or any options,
warrants or rights of any kind to acquire any shares of, their capital
stock of any class, any debt or equity securities convertible into or
exchangeable for such capital stock or any other equity related right
(including any phantom stock or SAR rights), other than any such issuance
pursuant to options, warrants, rights or convertible securities outstanding
as of the date hereof; (ii) 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 business
or any corporation, partnership, association or other business organization
or division thereof or otherwise acquire or agree to acquire any assets in
each case which are material, individually or in the aggregate, to the
Company and its subsidiaries taken as a whole; (iii) sell (including by
sale-leaseback), lease, pledge, dispose of or encumber any assets or
interests therein, which are material, individually or in the aggregate, to
the Company and its subsidiaries taken as a whole, other than in the
ordinary course of business and consistent with past practice; (iv) incur
or become contingently liable with respect to any material indebtedness for
borrowed money or guarantee any such indebtedness or issue any debt
securities or otherwise incur any material obligation or liability
(absolute or contingent) other than short-term indebtedness in the ordinary
course of business and consistent with past practice; (v) redeem, purchase,
acquire or offer to purchase or acquire any (x) shares of its capital stock
or (y) long-term debt other than as required by governing instruments
relating thereto; (vi) other than in the ordinary course of business,
neither the Company nor any Company Subsidiary shall modify, amend or
terminate any material contract or agreement to which the Company or any
Company Subsidiary is a party or waive, release or assign any material
rights or claims; or (vii) enter into any contract, agreement, commitment
or arrangement with respect to any of the foregoing;
(c) enter into or amend any employment, severance, special pay
arrangement with respect to termination of employment or other arrangements
or agreements with any directors, officers or key employees except for (i)
normal salary increases and merit bonuses, (ii) arrangements in connection
with employee transfers or (iii) agreements with new employees, in each
case, in the ordinary course of business consistent with past practice;
(d) adopt, enter into or amend any, or become obligated under any new
bonus, profit sharing, compensation, stock option, pension, retirement,
deferred compensation, healthcare, employment or other employee benefit
plan, agreement, trust, fund or arrangement for the benefit or welfare of
any employee or retiree, except as required to comply with changes in
applicable law occurring after the date hereof; provided, however, the
Company shall not be prevented from amending the Company ESOP (as defined
in Section 6.3(c) hereof) as contemplated by Section 6.3(c) hereof;
(e) except as may be required as a result of a change in law or in
GAAP after the date hereof, change any of the accounting principles or
practices used by it;
(f) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business of liabilities reflected or reserved against
in, or contemplated by, the financial statements (or the notes thereto) of
the Company incurred in the ordinary course of business consistent with
past practice;
(g) authorize, commit to or make any equipment purchases or capital
expenditures other than in the ordinary course of business and consistent
with past practice (provided, that such purchases and/or expenditures
shall, in the aggregate, be no more than $250,000) or as shown on Schedule
6.1(g); or
(h) take or agree to take any of the foregoing actions or any action
that would, or is reasonably likely to, result in any of its
representations and warranties set forth in this Agreement becoming untrue,
or in any of the conditions to the Merger set forth in Article VII not
being satisfied.
Section 6.2 Access to Information. Upon reasonable notice, the Company
shall (and shall cause each of its subsidiaries to) afford to Acquiror and its
officers, employees, accountants, counsel, financing sources and other
representatives, access, during normal business hours during the period prior to
the earlier of the
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Effective Time or the date of termination of this Agreement, to all its
properties, books, contracts, commitments and records and, during such period,
the Company shall (and shall cause each of the Company Subsidiaries to) furnish
promptly to Acquiror (a) a copy of each report, schedule, registration statement
and other document filed or received by it during such period pursuant to the
requirements of federal securities laws and (b) all other information concerning
its business, properties and personnel as Acquiror may reasonably request;
provided, however, that nothing herein shall require the Company or any of its
subsidiaries to disclose any information to Acquiror if such disclosure would be
in violation of applicable laws or regulations of any Governmental Entity or the
provisions of any confidentiality agreement to which the Company is a party.
Unless otherwise required by law and until the Effective Time Acquiror and its
representatives will hold any such information which is non-public in confidence
in accordance with the provisions of the Confidentiality Agreements between the
Company and Acquiror, dated as of November 19 and November 25, 1998 (the
"Confidentiality Agreements").
Section 6.3 Employee Benefit Matters.
(a) Effective as of the Effective Time and for a two-year period
thereafter, the Company and the Company Subsidiaries and successors shall
(i) provide those Persons who, immediately prior to the Effective Time,
were employees ("Company Employees") of the Company or the Company
Subsidiaries on the Closing Date with employee benefits that are
substantially similar in the aggregate as those provided to such Company
Employees pursuant to the Benefit Plans immediately prior to the Effective
Time.
(b) Following the Effective Time, the Company will continue to honor,
pursuant to the terms thereof, all Employee Agreements for the benefit of
any employees and former employees of the Company or any Company
Subsidiary, including, without limitation, those Employee Agreements set
forth in Section 6.3(b) of the Company Disclosure Letter.
(c) As of the Effective Time, the Ameriwood Industries Employee Stock
Ownership and Savings Plan and Trust Agreement (the "Company ESOP") will be
amended to provide that the Company ESOP will be frozen with respect to
participation and benefit accrual in the part of the Company ESOP that is
an employee stock ownership plan and that no further contributions will be
made to or distributions will be made from such portion of the Company
ESOP; provided, however, that immediately prior to the Effective Time, the
Company shall make a pro rata contribution to the Company ESOP in respect
of the plan year, which plan year shall be deemed to have ended at the
Effective Time, in accordance with the terms of the Company ESOP and
applicable law. The amendment to the Company ESOP will further provide that
following the Effective Time, each participant in the Company ESOP will be
entitled to direct the investment of the balance in his or her Company ESOP
account into one or more of the investment alternatives provided under the
401(k) portion of the Company ESOP (other than Shares), in accordance with
the terms of the Company ESOP and applicable law.
(d) For purposes of this Section 6.3, the term "Company Employees"
shall mean all employees of the Company and the Company Subsidiaries
immediately prior to the Effective Time, including those on disability or
leave of absence, paid or unpaid.
(e) The Company shall pay all bonuses earned for fiscal year 1997 in
accordance with the Company's past practice.
(f) In the event the Company or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, to the
extent necessary to effectuate the purposes of this Section 6.3, proper
provision shall be made so that the successors and assigns of Company,
assume the obligations set forth in this Section 6.3 and none of the
actions described in clauses (i) or (ii) of this Section 6.3(f) shall be
taken until such provision is made.
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Section 6.4 No Solicitation.
(a) The Company will not, and will cause any officers, directors,
employees and investment bankers, attorneys or other agents retained by the
Company or any of its subsidiaries not to, (i) directly or indirectly
solicit, initiate or knowingly encourage (including by way of furnishing
non-public information), or take any other action knowingly to facilitate
any inquiries or the making of any Acquisition Proposal (as hereinafter
defined), or (ii) except as permitted below, engage in negotiations or
discussions with, or furnish any information or data to any third party
relating to, or that may reasonably be expected to lead to, an Acquisition
Proposal (other than the transactions contemplated hereby). Notwithstanding
anything to the contrary contained in this Section 6.4 or in any other
provision of this Agreement, the Company, and its officers, directors,
investment bankers, attorneys or agents, may:
(i) participate in discussions or negotiations (including, as a
part thereof, making any counterproposal) with or furnish information to
any third party making an unsolicited Acquisition Proposal (a "Potential
Acquiror") if: (A) the Company Board determines in good faith, after
consultation with ABN-AMRO or another financial advisor of nationally
recognized standing, that such third party is reasonably likely to
submit an Acquisition Proposal which is a Superior Proposal (as
hereinafter defined), and (B) the Company Board determines in good
faith, based upon advice of outside legal counsel, that the failure to
participate in such discussions or negotiations or to furnish such
information is reasonably likely to be inconsistent with the Company
Board's fiduciary duties under applicable law, or
(ii) following receipt of an Acquisition Proposal, disclose to its
shareholders the Company's position contemplated by Rules 14d-9 and
14e-2 under the Exchange Act or otherwise make any other necessary
disclosure to its shareholders related to an Acquisition Proposal.
The Company agrees that any non-public information furnished to a Potential
Acquiror will be pursuant to a confidentiality agreement substantially similar
to the confidentiality provisions of the confidentiality agreement entered into
between the Company and Acquiror. In the event that the Company shall receive
any Acquisition Proposal, it shall promptly inform Acquiror in writing as to the
terms of such Acquisition Proposal, and if the Acquisition Proposal is in
writing the Company shall provide the Acquiror a true and complete copy thereof,
and will keep Acquiror reasonably informed of the status (including amendments
or proposed amendments) of any such Acquisition Proposal, except to the extent
that the Company Board determines in good faith, after consultation with its
outside legal counsel, that any such action with respect to a Superior Proposal
that by its terms expressly prohibits any disclosure of the terms of such
Superior Proposal and described in this sentence is reasonably likely to be
inconsistent with Company Board's fiduciary duties under applicable law.
(b) For purposes of this Agreement, "Acquisition Proposal" shall mean
any bona fide proposal made by a third party to acquire (i) beneficial
ownership (as defined under Rule 13(d) of the Exchange Act) of a 15% or
greater equity interest in the Company pursuant to a merger, consolidation
or other business combination, sale of shares of capital stock, tender
offer or exchange offer or similar transaction involving the Company
including, without limitation, any single or multi-step transaction or
series of related transactions which is structured in good faith to permit
such third party to acquire beneficial ownership of a 15% or greater equity
interest in the Company or (ii) all or a substantial part of the business
or assets or any equity interest in, or voting securities of, of the
Company (other than the transactions contemplated by this Agreement).
(c) The term "Superior Proposal" shall mean any Acquisition Proposal
which the Company Board, determines in good faith, after consultation with
ABN-AMRO or another financial advisor of nationally recognized standing, to
be more favorable to such party and its shareholders than the transactions
contemplated hereby.
(d) The Company shall immediately cease and cause to be terminated any
discussions or negotiations existing as of the date hereof with any parties
(other than the Acquiror and the Merger Sub)
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conducted heretofore with respect to any of the foregoing. The Company
agrees not to release any third party from any confidentiality or
standstill agreement to which the Company is a party.
Section 6.5 Publicity. The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to
Acquiror and the Company. Thereafter, so long as this Agreement is in effect,
neither the Company, Acquiror nor any of their respective affiliates shall issue
or cause the publication of any press release or other announcement with respect
to the Merger, this Agreement or the other transactions contemplated hereby
without the prior consultation of the other party, except as may be required by
law or by any listing agreement with a national securities exchange.
Section 6.6 Directors' and Officers' Insurance and Indemnification.
(a) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless any person who is now, or has been at
any time prior to the date hereof, or who becomes prior to the Effective
Time, an officer, director, employee and agent (the "Indemnified Party") of
the Company and its subsidiaries against all losses, claims, damages,
liabilities, costs and expenses (including attorney's fees and expenses),
judgments, fines, losses, and amounts paid in settlement in connection with
any actual or threatened action, suit, claim, proceeding or investigation
(each a "Claim") to the extent that any such Claim is based on, or arises
out of, (i) the fact that such person is or was a director, officer,
employee or agent of the Company or any of its subsidiaries or is or was
serving at the request of the Company or any of its subsidiaries as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or (ii) this Agreement, or any of
the transactions contemplated hereby, in each case to the extent that any
such Claim pertains to any matter or fact arising, existing, or occurring
prior to or at the Effective Time, regardless of whether such Claim is
asserted or claimed prior to, at or after the Effective Time, to the full
extent permitted under Michigan law or the Company's Articles of
Incorporation, By-laws or indemnification agreements in effect at the date
hereof, including provisions relating to advancement of expenses incurred
in the defense of any action or suit; provided, however, that the Surviving
Corporation shall not be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld). Without
limiting the foregoing, in the event any Indemnified Party becomes involved
in any capacity in any Claim, then from and after the Effective Time, the
Surviving Corporation shall periodically advance to such Indemnified Party
its legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the provision by
such Indemnified Party of an undertaking to reimburse the amounts so
advanced in the event of a final non-appealable determination by a court of
competent jurisdiction that such Indemnified Party is not entitled thereto.
The Indemnified Parties as a group may retain only one law firm with
respect to each related matter except to the extent there is or is
reasonably likely to be, in the opinion of counsel to the Indemnified
Party, under applicable standards of professional conduct, a conflict on
any significant issue between positions of any two or more Indemnified
Parties.
(b) The Company agrees that all rights to indemnification and all
limitations or liability existing in favor of the Indemnified Party as
provided in the Company's Articles of Incorporation and By-laws as in
effect as of the date hereof shall continue in full force and effect,
without any amendment thereto; provided that any determination required to
be made with respect to whether an Indemnified Party's conduct complies
with the standards set forth under Michigan law, the Company's Articles of
Incorporation or By-laws or such agreements, as the case may be, shall be
made by independent legal counsel selected by the Indemnified Party and
reasonably acceptable to Company; and provided further, that nothing in
this Section 6.6 shall impair any rights or obligations of any present or
former directors or officers of the Company.
(c) In the event the Company or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, to the
extent necessary to effectuate the purposes of this Section 6.6, proper
provision shall be made so that the successors and assigns of the Company
assume the obligations set
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forth in this Section 6.6 and none of the actions described in clauses (i)
or (ii) shall be taken until such provision is made.
(d) The Surviving Corporation shall maintain the Company's existing
officers' and directors' liability insurance policy ("D&O Insurance") for a
period of not less than six years after the Effective Time; provided,
however, that in no event shall the Surviving Corporation be required to
expend in any one year an amount in excess of 150% of the last annual
premium paid by the Company for such insurance and if the annual premiums
exceed such amount, the Surviving Corporation shall be obligated to obtain
a policy with the greatest coverages available for a cost not exceeding
such amount; provided further the Surviving Corporation may substitute
therefor policies of substantially similar coverage and amounts containing
terms no less advantageous to such former directors or officers with
respect to acts or omissions occurring prior to the Effective Time or
individual coverage and provided that such substitution shall not result in
any gaps or lapses in coverage with respect to acts or omissions occurring
prior to the Effective Time; provided further, if the existing D&O
Insurance expires, is terminated or cancelled during such period, the
Surviving Corporation will use its best efforts to obtain substantially
similar D&O Insurance.
Section 6.7 Proxy Statement.
(a) If required by applicable law, the Company shall prepare as soon
as practicable, following the date of this Agreement, and shall file with
the SEC the Proxy Statement. The Company will cause the Proxy Statement to
comply as to form in all material respects with the applicable provisions
of the Exchange Act and the rules and regulations thereunder.
(b) The Proxy Statement will be mailed to the shareholders of the
Company as promptly as practicable after the effectiveness of this
Agreement. The Company shall include in the Proxy Statement the
recommendation of the Company Board that its shareholders vote in favor of
the approval of the Merger and the adoption of this Agreement; provided,
however, that the Company Board may withdraw, modify or change such
recommendation to the extent that the Company Board determines in good
faith, upon advice of outside legal counsel, that the failure to withdraw,
modify or change such recommendation is reasonably likely to be
inconsistent with the Company Board's fiduciary duties under applicable
law.
(c) (i) The information supplied by the Company for inclusion in the
Proxy Statement shall not, at the time that the Proxy Statement is mailed
to the shareholders of the Company, include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(ii) The information supplied in writing by the Acquiror or the
Merger Sub for inclusion in the Proxy Statement shall not, at the time
that the Proxy Statement is mailed to the shareholders of the Company,
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(d) No amendment or supplement to the Proxy Statement will be made
without the approval of each of the Company and Acquiror, which approval
will not be unreasonably withheld or delayed.
Section 6.8 Shareholders' Meetings.
(a) As soon as practicable after the consummation of the Offer, the
Company, acting through the Company Board, shall, in accordance with
applicable law and its Articles of Incorporation, and for the purpose of
approving this Agreement and the transactions contemplated hereby, duly
call, give notice of, convene and hold a special meeting of the
shareholders of the Company.
(b) Notwithstanding the foregoing, in the event that the Merger Sub
shall acquire at least 90% of the then outstanding Shares, the parties
hereto agree, at the request of the Merger Sub, subject to Article VII, to
take all necessary and appropriate action to cause the Merger to become
effective, in
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accordance with Section 253 of the DGCL and Section 711 of the MBCA, as
soon as reasonably practicable after such acquisition, without a meeting of
the stockholders of the Company.
Section 6.9 Approvals and Consents; Cooperation.
(a) The parties hereto shall use all reasonable efforts, and cooperate
with each other, to obtain as promptly as practicable all governmental and
third party authorizations, approvals, consents or waivers, including,
without limitation, pursuant to the HSR Act, required in order to
consummate the transactions contemplated by this Agreement, including,
without limitation, the Merger.
(b) The Company and Acquiror shall take all actions necessary to file
as soon as practicable all notifications, filings and other documents
required to obtain all governmental authorizations, approvals, consents or
waivers, including, without limitation, under the HSR Act, and to respond
as promptly as practicable to any inquiries and requests received from the
Federal Trade Commission, the Antitrust Division of the Department of
Justice and any other Governmental Entity for additional information or
documentation in connection therewith.
(c) The Company shall give prompt notice to Acquiror of the occurrence
of any Company Material Adverse Effect, and Acquiror shall give prompt
notice to the Company of the occurrence of any Acquiror Material Adverse
Effect. Each of the Company and Acquiror shall give prompt notice to the
other of the occurrence or failure to occur of an event that would, or,
with the lapse of time would, cause any condition contained in Article VII
not to be satisfied.
Section 6.10 Further Assurances. Each of the parties hereto agrees to use
its reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, the Offer and the
Merger, which efforts shall include, without limitation, (a) Company, Acquiror
and the Merger Sub using their reasonable efforts to prevent any preliminary or
permanent injunction or other order by a court of competent jurisdiction or
Governmental Entity relating to consummating the transactions contemplated by
this Agreement, including, without limitation, under the antitrust laws, and, if
issued, to appeal any such injunction or order through the appellate court or
body for the relevant jurisdiction and (b) Company, Acquiror and the Merger Sub
using their reasonable efforts to satisfy any objections of, and accept any
conditions imposed by, any Governmental Entity, except where such objection or
condition would have a Company or Acquiror Material Adverse Effect. If at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the parties hereto shall take or cause
to be taken all such necessary action, including, without limitation, the
execution and delivery of such further instruments and documents as may be
reasonably requested by the other party for such purposes or otherwise to
consummate and make effective the transactions contemplated hereby.
Section 6.11 Rights Agreement. The Company shall take all necessary action
prior to the Effective Time to cause the dilution provisions of the Rights
Agreement, dated April 4, 1996, between the Company and Xxxxxx Trust and Savings
Bank (the "Company Rights Agreement") to be inapplicable to the transactions
contemplated by this Agreement, without any payment to holders of common share
purchase rights ("Rights") issued pursuant to such Company Rights Agreement.
Section 6.12 Company Board Representation; Section 14(f). (a) Promptly upon
the purchase by the Merger Sub of Shares pursuant to the Offer, and from time to
time thereafter, the Merger Sub shall be entitled to designate up to such number
of directors, rounded up to the next whole number, on the Company Board as shall
give the Merger Sub representation on the Company Board equal to the product of
the total number of directors on the Company Board (giving effect to the
directors elected pursuant to this sentence) multiplied by the percentage that
the aggregate number of Shares beneficially owned by the Merger Sub or any
affiliate of the Merger Sub following such purchase bears to the total number of
Shares then outstanding, and the Company shall, at such time, promptly take all
actions necessary to cause the Merger Sub's designees to be elected as directors
of the Company, including increasing the size of the Company Board or securing
the resignations of incumbent directors or both. At such times, the Company
shall use its best efforts to cause
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persons designated by the Merger Sub to constitute the same percentage as is on
the Company's Board of (i) each committee of the Company Board, (ii) each board
of directors of each Company Subsidiary and (iii) each committee of each such
board, in each case only to the extent permitted by applicable law.
Notwithstanding the foregoing, until the earlier of (i) the time the Merger Sub
acquires a majority of the then outstanding Shares on a fully diluted basis and
(ii) the Effective Time, the Company shall use its best efforts to ensure that
all the members of the Company Board and each committee of the Company Board and
such boards and committees of the Subsidiaries as of the date hereof who are not
employees of the Company shall remain members of the Company Board and of such
boards and committees; provided however, the Company shall maintain at least one
non-employee director until the Effective Time.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.12 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Acquiror or the Merger Sub shall supply to the Company and be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election of designees of the Merger Sub pursuant to this
Section 6.12, prior to the Effective Time, any amendment of this Agreement or
the Articles of Incorporation or By-laws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Acquiror or the Merger
Sub or waiver of any of the Company's rights hereunder shall require the
concurrence of a majority of the directors of the Company then in office who
neither were designated by the Merger Sub nor are employees of the Company.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligations. The respective
obligation of each party to effect the Merger shall be subject to the
satisfaction (or, if permissible, waiver by the party for whose benefit such
conditions exist) at or prior to the Effective Time of the following conditions:
(a) this Agreement, the Merger and the transactions contemplated
hereby shall, if necessary, have been approved and adopted by the requisite
vote of the shareholders of the Company in accordance with applicable law
and regulatory requirements and the Company's Articles of Incorporation;
(b) any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated;
(c) no order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger or any of the other transactions
contemplated by this Agreement shall be in effect, and no statute, rule,
regulation, order, injunction or decree shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits,
restricts or makes illegal the consummation of the Merger, provided,
however, that the parties shall have used reasonable efforts to prevent any
such rule, regulation, injunction, decree or other order, and to appeal as
promptly as possible any injunction, decree or other order that may be
entered;
(d) all authorizations, approvals or consents required to permit the
consummation of the Merger shall have been obtained and be in full force
and effect, except where the failure to have obtained any such
authorizations, approvals or consents would not have a Company Material
Adverse Effect; and.
(e) The Merger Sub or its permitted assignee shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that this condition shall not be applicable to the obligations of
Acquiror or the Merger Sub if, in breach of this Agreement or the terms of
the Offer, the Merger Sub fails to purchase any Shares validly tendered and
not withdrawn pursuant to the Offer.
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ARTICLE VIII
TERMINATION
Section 8.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time, whether before
or after stockholder approval thereof:
(a) By the mutual consent of the Company, Acquiror and the Merger Sub.
(b) By either of the Company, on the one hand, or Acquiror and the
Merger Sub, on the other hand:
(i) if the Effective Time shall not have occurred on or prior to
September 30, 1998; provided, however, that the right to terminate this
Agreement under this Section 8.1(b)(i) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the Merger to occur on
or prior to such date;
(ii) if there shall have been issued an order, decree or ruling or
taken any other action (which order, decree, ruling or other action the
parties hereto shall use their respective best efforts to lift), in each
case permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree,
ruling or other action shall have become final and non-appealable;
provided, however, if the party seeking termination is Acquiror,
Acquiror shall have complied fully with its obligations under Section
6.9; or
(iii) if, at the Special Meeting (including any adjournment or
postponement thereof) called pursuant to Section 6.8, the requisite vote
of the shareholders of the Company for the Merger shall not have been
obtained.
(c) By the Company:
(i) upon two days prior written notice if the Company Board shall
have (A) withdrawn, or modified or changed in a manner adverse to
Acquiror its approval or recommendation of this Agreement, the Offer or
the Merger, or resolved to do any of the foregoing, and (B) (x)
determined in good faith, after consultation with ABN-AMRO or another
financial advisor of nationally recognized standing, that a third party
has submitted to the Company an Acquisition Proposal which is a Superior
Proposal, and (y) determined in good faith, upon the advice of outside
legal counsel, that the failure to take such action as set forth in the
preceding clause (A) is reasonably likely to be inconsistent with the
Company Board's fiduciary duties under applicable law;
(ii) if Acquiror or the Merger Sub (x) breaches or fails in any
material respect to perform or comply with any of its material covenants
and agreements contained herein or (y) breaches its representations and
warranties in any material respect and such breach would have a Acquiror
Material Adverse Effect, in each case such that the conditions set forth
in Section 7.1 or Section 7.2 would not be satisfied; provided, however,
that if any such breach is curable by the breaching party through the
exercise of the breaching party's best efforts and for so long as the
breaching party shall be so using its best efforts to cure such breach,
the Company may not terminate this Agreement pursuant to this Section
8.1(c)(ii); or
(iii) upon approval of the Company Board, if due to an occurrence
or circumstance that would result in a failure to satisfy any of the
conditions set forth in Annex A hereto, the Merger Sub shall have failed
to commence the Offer on or prior to five days following the date of
initial public announcement of this Agreement; provided, however, the
Company may not terminate this Agreement pursuant to Section 8.1(c)(iii)
if the Company is at such time in breach of its obligations under this
Agreement.
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(d) By Acquiror and the Merger Sub:
(i) if the Company (x) breaches or fails in any material respect to
perform or comply with any of its material covenants and agreements
contained herein or (y) breaches its representations and warranties in
any material respect and such breach would have a Company Material
Adverse Effect, in each case such that the conditions set forth in
Section 7.1 or Section 7.3 would not be satisfied; provided, however,
that if any such breach is curable by the Company through the exercise
of the Company's best efforts and for so long as the Company shall be so
using its best efforts to cure such breach, Acquiror may not terminate
this Agreement pursuant to this Section 8.1(d)(i);
(ii) if the Company Board shall have withdrawn, modified or changed
in a manner adverse to Acquiror its approval or recommendation of this
Agreement, the Offer or the Merger or shall have recommended an
Acquisition Proposal involving the Company or shall have executed an
agreement in principle or definitive agreement relating to an
Acquisition Proposal involving the Company or similar business
combination with a person or entity other than Acquiror or its
affiliates (or the Company Board resolves to do any of the foregoing);
or
(iii) if due to an occurrence or circumstance that would result in
a failure to satisfy any condition set forth in Annex A hereto, the
Merger Sub shall have failed to commence the Offer on or prior to five
days following the initial public announcement of this Agreement;
provided, however, Acquiror and the Merger Sub may not terminate this
Agreement pursuant to Section 8.1(d)(iii) if the Acquiror or the Merger
Sub is at such time in breach of its obligations under this Agreement.
Section 8.2 Effect of Termination.
(a) In the event of the termination of this Agreement as provided in
Section 8.1, written notice thereof shall forthwith be given to the other
party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and
void, and there shall be no liability on the part of Acquiror or the
Company or their respective directors, officers, employees, shareholders,
representatives, agents or advisors other than, with respect to Acquiror
and the Company, the obligations pursuant to this Section 8.2, and the last
sentence of Section 6.2. Nothing contained in this Section 8.2 shall
relieve Acquiror or the Company from liability for willful breach of this
Agreement.
(b) If this Agreement is terminated:
(A) by either the Acquiror or the Company pursuant to Section
8.1(b)(iii) or by the Acquiror pursuant to Section 8.1(d)(i) and any
person (other than Acquiror or any of its affiliates) shall have made a
bona fide Acquisition Proposal to the Company that becomes disclosed to
the public prior to the Special Meeting, and within one year after the
effective date of such termination the Company is the subject of a Third
Party Acquisition Event (as defined below) with such person,
(B) by the Company pursuant to Section 8.1(c)(i), or
(C) by Acquiror pursuant to Section 8.1(d)(ii),
then at the time of termination with respect to (B) or (C) above or the
time of execution of a definitive agreement regarding such a Third Party
Acquisition Event with respect to (A) above, the Company shall pay to the
Acquiror a fee of $1,500,000 in cash (the "Fee") and reimburse the Acquiror
for its reasonable out-of-pocket costs incurred by Acquiror or on behalf of
Acquiror in connection with this Agreement and the transactions
contemplated hereby up to an amount not to exceed $1,500,000. The Company
shall not enter into any agreement with respect to any Third Party
Acquisition Event which does not, as a condition precedent to the execution
of such agreement, require such reimbursement of expenses and the Fee to be
paid to Acquiror upon such execution.
(c) As used herein, the term "Third Party Acquisition Event" shall
mean either of the following:
(i) the Company shall agree to, consummate, or announce its
intention to enter into any agreement relating to an Acquisition
Proposal; or
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(ii) any person (other than a party hereto or its affiliates) shall
have acquired beneficial ownership (as such term is defined in Rule
13d-3 under the Exchange Act) or the right to acquire beneficial
ownership of, or a new group has been formed which beneficially owns or
has the right to acquire beneficial ownership of, 15% or more of the
outstanding Common Stock.
(d) The obligations of the Company and Acquiror under this Section 8.2
shall survive any termination of this Agreement. In the event of an
occurrence pursuant to Sections 8.2(b)(A), 8.2(b)(B), or 8.2(b)(C) which
shall give rise to the payment of the Fee and expenses pursuant to Section
8.2(b), the payment of the Fee and any such expenses shall be the sole and
exclusive remedy of Acquiror.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in any and all respects,
whether before or after any vote of the shareholders of the Company contemplated
hereby, by written agreement of the parties hereto, by action taken by their
respective Boards of Directors, at any time prior to the Closing Date with
respect to any of the terms contained herein; provided, however, that after the
approval of this Agreement by the shareholders of the Company, no such
amendment, modification or supplement shall reduce or change the Cash
Consideration or adversely affect the rights of the Company's shareholders
hereunder without the approval of such shareholders.
Section 9.2 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time or the termination of this Agreement. This Section 9.2 shall not
limit any covenant or agreement contained in this Agreement which by its terms
contemplates performance after the Effective Time or termination.
Section 9.3 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by an overnight courier service, such as Federal
Express, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to Acquiror or the Merger Sub, to:
Dorel Industries Inc.
0000 Xxxxxxxxx xxx Xxxxxx Xxxxxxxx
Xx. Xxxxxxx, Xxxxxx X0X 0X0
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with a copy to:
Shearman & Sterling
Commerce Court West, Suite 4405
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx, Esq.
and
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(b) if to the Company, to:
Ameriwood Industries
International Corporation
000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Section 9.4 Interpretation. The words "hereof", "herein" and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement,
and article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified. The word "or" shall be construed to refer to "and/or."
Whenever the words "include", "includes" or "including" are used in this
Agreement they shall be deemed to be followed by the words "without limitation".
The words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa. The phrase "to the best knowledge of" or any similar phrase shall mean
such facts and other information which as of the date of this Agreement are
actually known to any executive officer of the referenced party. The phrase
"made available" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available. The phrases "the date of this Agreement", "the date hereof"
and terms of similar import, unless the context otherwise requires, shall be
deemed to refer to March 27, 1998. As used in this Agreement, the term
"affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the Exchange
Act. The parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
Section 9.5 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 9.6 Entire Agreement; Third Party Beneficiaries. This Agreement,
the Tender and Option Agreements and the Confidentiality Agreements (including
the documents and the instruments referred to herein and therein) constitute the
entire agreement and supersede all prior agreements and understandings,
including, without limitation, all representations and warranties made by the
parties in connection herewith, both written and oral, among the parties with
respect to the subject matter hereof. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
other than (i) Section 6.6 (which is intended to be for the benefit of the
directors and officers of the Company and Indemnified Parties, as applicable,
and may be enforced by such directors, officers and Indemnified Parties) and
(ii) Sections 3.2 and 6.3 (which are intended to be for the benefit of the
directors, officers and employees of the Company and its subsidiaries and may be
enforced by such persons).
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29
Section 9.7 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory policy,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 9.8 Governing Law.
(a) This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware without giving effect to the principles
of conflicts of law thereof or of any other jurisdiction.
(b) Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (iii) agrees that it
will not bring any action relating to this Agreement or any of the
transactions contemplated hereby in any court other than a Federal or state
court sitting in the State of Delaware.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.8.
Section 9.9 Specific Performance. Each of the parties hereto acknowledges
and agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (a) will
waive, in any action for specific performance, the defense of adequacy of a
remedy at law and (b) shall be entitled, in addition to any other remedy to
which they may be entitled at law or in equity, to compel specific performance
of this Agreement in any action instituted in a court of competent jurisdiction.
Section 9.10 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. 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 permitted successors and assigns.
Section 9.11 Expenses. Except as set forth in Section 8.2, all costs and
expenses incurred in connection with this Agreement and the consummation of the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses, whether or not any of the transactions contemplated hereby is
consummated.
Section 9.12 Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
Section 9.13 Waivers. Except as otherwise provided in this Agreement, any
failure of any of the parties to comply with any obligation, covenant, agreement
or condition herein may be waived by the party or parties entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such
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waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
IN WITNESS WHEREOF, Acquiror, the Merger Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
AMERIWOOD INDUSTRIES
INTERNATIONAL CORPORATION
By: /s/ XXXX X. XXXXX
------------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman of the Board
DOREL INDUSTRIES INC.
By: /s/ XXXXXX XXXXXXXX
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive
Officer
HORIZON ACQUISITION, INC.
By: /s/ XXXXXX XXXXXXXX
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, the Merger Sub shall not
be required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for Shares tendered, if (i) the Minimum Condition shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer,
or (iii) at any time on or after the date of this Agreement, and prior to the
acceptance for payment of Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding before any court or governmental, administrative or regulatory
authority or agency, domestic or foreign, (i) challenging or seeking to
make illegal, materially delay or otherwise directly or indirectly restrain
or prohibit or make materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Acquiror, the
Merger Sub or any other affiliate of Acquiror or the consummation of any
other transaction contemplated hereby or thereby, or seeking to obtain
material damages in connection with any transaction contemplated hereby or
thereby; (ii) seeking to prohibit or limit materially the ownership or
operation by the Company, Acquiror or any of their subsidiaries of all or
any material portion of the business or assets of the Company, Acquiror or
any of their subsidiaries, or to compel the Company, Acquiror or any of
their subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of the Company, Acquiror or any of their
subsidiaries, as a result of the transactions contemplated hereby; (iii)
seeking to impose or confirm limitations on the ability of Acquiror, the
Merger Sub or any other affiliate of Acquiror to exercise effectively full
rights of ownership of any Shares, including, without limitation, the right
to vote any Shares acquired by the Merger Sub pursuant to the Offer or
otherwise on all matters properly presented to the Company's stockholders,
including, without limitation, the approval and adoption of this Agreement
and the transactions contemplated hereby; (iv) seeking to require
divestiture by Acquiror, the Merger Sub or any other affiliate of Acquiror
of any Shares; or (v) which otherwise has an Acquiror Material Adverse
Effect;
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Acquiror, the Company or any subsidiary or affiliate of
Acquiror or the Company or (ii) any transaction contemplated hereby, 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
the Merger, which is reasonably likely to result, directly or indirectly,
in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above;
(c) there shall have occurred any change, condition, event or
development that has a Company Material Adverse Effect, provided, however,
that no event, change or effect that primarily results from this Agreement,
the Merger, the Offer and the transactions contemplated thereby or the
announcement thereof shall be deemed to cause either individually or in the
aggregate a Company Material Adverse Effect;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on NASDAQ for the Company
for a period in excess of 24 hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchange
not related to market conditions), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or Canada, (iii) any limitation (whether or not mandatory) by any
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, on, or other event that, in the reasonable
judgment of the Merger Sub, might affect, the extension of credit by banks
or other lending institutions, (iv) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States or Canada or (v) in the case of any
of the foregoing existing on the date hereof, a material acceleration or
worsening thereof;
A-1
32
(e) (i) it shall have been publicly disclosed or the Merger Sub shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 15% or more of the then outstanding Shares has been
acquired by any person, other than Acquiror or any of its affiliates or
(ii) the Company Board shall have withdrawn or modified in an manner
adverse to Acquiror or the Merger Sub the approval or recommendation of the
Offer, the Merger or this Agreement, or approved or recommended any
takeover proposal or any other acquisition of Shares other than the Offer
and the Merger (or resolved to do any of the foregoing);
(f) any representation or warranty of the Company in this Agreement
which is qualified as to materiality shall not be true and correct or any
such representation or warranty that is not so qualified shall not be true
and correct in any material respect, in each case as if such representation
or warranty was made as of such time on or after the date of this Agreement
(except for a representation or warranty which references a particular
date);
(g) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement;
(h) this Agreement shall have been terminated in accordance with its
terms; or
(i) The Merger Sub and the Company shall have agreed in writing that
the Merger Sub shall terminate the Offer or postpone the acceptance for
payment of or payment for Shares thereunder;
which, in the sole judgment of the Merger Sub in any such case, and regardless
of the circumstances (including any action or inaction by Acquiror or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Merger Sub and
Acquiror and may be asserted by the Merger Sub or Acquiror regardless of the
circumstances giving rise to any such condition or may be waived by the Merger
Sub or Acquiror in whole or in part at any time and from time to time in their
sole discretion. The failure by Acquiror or the Merger Sub 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.
A-2
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DEFINED TERMS INDEX
The following defined terms have the meaning defined in the indicated
Section of the Agreement and Plan of Merger:
DEFINED TERM SECTION
------------ -------
Acquisition Proposal........................................ 6.5(a)
ABN-AMRO.................................................... 1.2
Acquiror.................................................... Preamble
Acquiror Material Adverse Effect............................ 5.1
Acquiror Agreements......................................... 5.3
Articles of Incorporation................................... 2.4(a)
Agreement................................................... Preamble
Benefit Plans............................................... 4.9(a)
Cash Consideration.......................................... 3.1(c)
Certificates................................................ 3.3(b)
Claim....................................................... 6.7(a)
Closing..................................................... 2.6
Closing Date................................................ 2.6
Code........................................................ 4.9(b)
Common Stock................................................ Preamble
Company..................................................... Preamble
Company Affiliates.......................................... 6.8
Company Agreements.......................................... 4.4
Company Balance Sheet....................................... 4.5
Company Board............................................... Preamble
Company Disclosure Letter................................... Article IV
Company Employees........................................... 6.4(a), 6.4(d)
Company Intellectual Property............................... 4.14
Company LLC(s).............................................. 4.1(c)
Company Material Adverse Effect............................. 4.1(a)
Company Option.............................................. 3.2(a)
Company Partnership(s)...................................... 4.1(c)
Company Rights Agreement.................................... 6.11
Company SEC Documents....................................... 4.5
Company Stock Plans......................................... 4.2(a)
Company Subsidiaries........................................ 4.1(b)
Company Subsidiary.......................................... 4.1(b)
Confidentiality Agreement................................... 6.2
D&O Insurance............................................... 6.8(d)
Director Shareholders....................................... Preamble
Effective Time.............................................. 2.2
Employee Agreements......................................... 4.9(a)
Environmental Claims........................................ 4.16
Environmental Laws.......................................... 4.16
ERISA....................................................... 4.9(a)
ERISA Affiliate............................................. 4.9(a)
Exchange Act................................................ 1.2
Exchange Agent.............................................. 3.3(a)
Exchange Fund............................................... 3.3(a)
Fair Market Value........................................... 3.2(b)
GAAP........................................................ 4.1(a)
Governmental Entity......................................... 4.4
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DEFINED TERM SECTION
------------ -------
HSR Act..................................................... 4.4
Indemnified Party........................................... 6.7(a)
Industry.................................................... 4.1(a)
MBCA........................................................ Preamble
Merger...................................................... 2.1
Merger Sub.................................................. Preamble
Merger Sub Common Stock..................................... 3.1(a)
Merger Sub Disclosure Letter................................ Article IV
Merger Sub Securities....................................... 5.6
Minimum Condition........................................... 1.1
NASDAQ...................................................... 3.2(b)
Offer....................................................... Preamble
Offer to Purchase........................................... 1.1
Per Share Amount............................................ Preamble
Potential Acquiror.......................................... 6.5(a)(i)
Preferred Stock............................................. 4.2(a)
Proxy Statement............................................. 4.8
Rights...................................................... 6.11
SAR......................................................... 3.2(b)
Schedule 14D-1.............................................. 1.1
SEC......................................................... 1.1
Securities Act.............................................. 4.4
Significant Subsidiary...................................... 4.1(a)
Special Meeting............................................. 4.8
Superior Proposal........................................... 6.5(c)
Surviving Corporation....................................... 2.1
Tax Return.................................................. 4.12(e)
Taxes....................................................... 4.12(e)
Tender and Option Agreements................................ Preamble
Third Party Acquisition Event............................... 8.2(d)
2
