EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
BETWEEN
G-I HOLDINGS INC.
USI ACQUISITION COMPANY
AND
U.S. INTEC, INC.
Dated: September 15, 1995
Table of Contents
Section Page
------- ----
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . 2
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 The Offer. . . . . . . . . . . . . . . . . . . 2
1.2 Offer Documents. . . . . . . . . . . . . . . . 3
1.3 Company Actions. . . . . . . . . . . . . . . . 3
1.4 Directors. . . . . . . . . . . . . . . . . . . 5
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . 6
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 The Merger. . . . . . . . . . . . . . . . . . 6
2.2 Closing. . . . . . . . . . . . . . . . . . . . 6
2.3 Effective Time of the Merger. . . . . . . . . 6
2.4 Effects of the Merger. . . . . . . . . . . . . 6
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . 7
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . 7
3.1 Effect on Capital Stock. . . . . . . . . . . . 7
3.2 Conversion of Securities. . . . . . . . . . . 8
3.3 Payment for Shares. . . . . . . . . . . . . . 8
3.4 Stock Transfer Books. . . . . . . . . . . . . 10
3.5 Stock Options. . . . . . . . . . . . . . . . . 10
3.6 Dissenting Shares. . . . . . . . . . . . . . . 11
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . 12
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . 12
4.1 Representations and Warranties of the
Company. . . . . . . . . . . . . . . . . . . . 12
(a) Organization, Standing and Power. . . . . 12
(b) Capital Structure. . . . . . . . . . . . 12
(c) Authority; No Violations; Consents and
Approvals. . . . . . . . . . . . . . . . 13
(d) SEC Documents. . . . . . . . . . . . . . 15
(e) Information Supplied. . . . . . . . . . . 16
(f) Compliance with Applicable Laws. . . . . 16
(g) Litigation. . . . . . . . . . . . . . . . 16
(h) Taxes. . . . . . . . . . . . . . . . . . 17
(i) Pension And Benefit Plans; ERISA. . . . . 18
(j) No Material Change. . . . . . . . . . . . 20
(k) Opinion of Financial Advisor. . . . . . . 21
(l) Vote Required. . . . . . . . . . . . . . 21
. . . . . . . . . . . . . . . . . . . . . . . 21
(m) Intangible Property. . . . . . . . . . . 21
(n) Environmental Matters. . . . . . . . . . 22
. . . . . . . . . . . . . . . . . . . . . . . 24
(o) Material Contracts. . . . . . . . . . . . 24
(p) Related Party Transactions. . . . . . . . 27
(q) Liens, etc. . . . . . . . . . . . . . . . 27
(r) Finder's Fees. . . . . . . . . . . . . . 27
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . 28
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . 28
5.1 Representations and Warranties of Parent and
Sub. . . . . . . . . . . . . . . . . . . . . . 28
(a) Organization, Standing and Power. . 28
(b) Authority; No Violations; Consents
and Approvals. . . . . . . . . . . . . . 28
(c) Information Supplied. . . . . . . . . . . 29
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . 30
COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . . 30
6.1 Covenants of the Company. . . . . . . . . . . 30
(a) Ordinary Course. . . . . . . . . . . . . 30
(b) No Solicitation. . . . . . . . . . . . . 30
(c) Advice of Changes; SEC Filings. . . . . . 31
(d) Other Actions. . . . . . . . . . . . . . 31
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . 32
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . 32
7.1 Preparation of the Proxy Statement; Offer
Documents; Company Stockholders Meeting;
Merger without a Company Stockholders
Meeting. . . . . . . . . . . . . . . . . . . . 32
7.2 Access to Information. . . . . . . . . . . . . 33
7.3 Current Information. . . . . . . . . . . . . . 33
7.4 Legal Conditions to Merger. . . . . . . . . . 34
7.5 Fees and Expenses. . . . . . . . . . . . . . . 34
7.6 Indemnification. . . . . . . . . . . . . . . 34
7.7 Publicity. . . . . . . . . . . . . . . . . . . 36
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . 36
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 36
8.1 Conditions to Each Party's Obligation to
Effect the Merger. . . . . . . . . . . . . . . 36
(a) Stockholder Approval. . . . . . . . . . . 36
(b) HSR Act. . . . . . . . . . . . . . . . . 36
(c) No Injunctions or Restraints. . . . . . . 36
8.2 Conditions of Obligations of Parent and Sub. . 37
(a) Payment for Shares. . . . . . . . . . . . 37
(b) Representations and Warranties. . . . . . 37
(c) Performance of Obligations of the
Company. . . . . . . . . . . . . . . . . 37
(d) Consents, etc. . . . . . . . . . . . . . 37
8.3 Conditions of Obligations of the Company. . . 37
(a) Representations and Warranties. . . . . . 37
(b) Performance of Obligations of Parent and
Sub. . . . . . . . . . . . . . . . . . . 38
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . 38
TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . 38
9.1 Termination. . . . . . . . . . . . . . . . . . 38
9.2 Effect of Termination. . . . . . . . . . . . . 39
9.3 Amendment. . . . . . . . . . . . . . . . . . . 39
9.4 Extension; Waiver. . . . . . . . . . . . . . . 40
ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . . 40
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 40
10.1 Nonsurvival of Representations, Warranties
and Agreements. . . . . . . . . . . . . . . . 40
10.2 Notices. . . . . . . . . . . . . . . . . . . . 40
10.3 Interpretation. . . . . . . . . . . . . . . . 41
10.4 Counterparts. . . . . . . . . . . . . . . . . 41
10.5 Entire Agreement; No Third Party
Beneficiaries; Rights of Ownership. . . . . . 41
10.6 Governing Law. . . . . . . . . . . . . . . . . 42
10.7 No Remedy in Certain Circumstances. . . . . . 42
10.8 Assignment. . . . . . . . . . . . . . . . . . 43
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated September 15, 1995,
(the "Agreement"), among G-I HOLDINGS INC., a Delaware
corporation ("Parent"), USI ACQUISITION COMPANY, a Texas
corporation and a direct wholly-owned subsidiary of Parent
("Sub"), and U.S. INTEC, INC., a Texas corporation (the
"Company").
WHEREAS, the respective Boards of Directors of Parent,
Sub and the Company have unanimously approved the acquisition of
the Company by Parent, by means of the merger of the Sub with and
into Company, upon the terms and subject to the conditions set
forth in the Agreement;
WHEREAS, to effectuate the acquisition, Parent and the
Company each desire that Parent cause Sub to commence a cash
tender offer to purchase all of the outstanding shares of common
stock, par value $.02 per share, of the Company (the "Shares" or
the "Company Common Stock"), upon the terms and subject to the
conditions set forth in this Agreement and the Offer Documents
(as defined in Section 1.2), and the Board of Directors of the
Company has unanimously approved such tender offer and is
recommending to its stockholders that they accept the tender
offer and tender their shares of Company Common Stock pursuant
thereto;
WHEREAS, Parent and Sub are willing to enter into this
Agreement (and effect the transactions contemplated hereby) based
in part on the prior execution and delivery by certain beneficial
and record holders of the Company Common Stock of agreements
(collectively, the "Stockholders Agreement") providing for
certain matters with respect to their Shares, the granting of
options with respect to their Shares, the tender of their Shares
and certain other actions relating to the Offer (as defined in
Section 1.1) and the other transactions contemplated by this
Agreement and, in order to induce Parent and Sub to enter into
this Agreement, such stockholders have executed and delivered the
Stockholders Agreement; and
WHEREAS, Parent, Sub and the Company desire to make
certain representations, warranties, covenants and agreements in
connection with the Offer and the Merger and also to prescribe
various conditions to consummation thereof;
NOW, THEREFORE, in consideration of the foregoing and
the mutual premises, representations, warranties, covenants and
agreements herein contained, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
THE OFFER
1.1 The Offer. (a) Provided that none of the events set
forth in Exhibit A hereto shall have occurred and be continuing,
as promptly as practicable (but in any event not later than five
business days after the public announcement of the execution and
delivery of this Agreement; provided that such announcement
occurs within one business day of such execution and delivery),
Parent shall cause Sub to commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), an offer to purchase (the "Offer") all
outstanding shares of the Company Common Stock at a price of
$9.05 per share, net (subject to any applicable withholding tax)
to the seller in cash (the "Offer Consideration"). The
obligation of Parent and Sub to commence the Offer, consummate
the Offer, accept for payment and to pay for shares of Company
Common Stock validly tendered in the Offer and not withdrawn
shall be subject only to those conditions set forth in Exhibit A
hereto.
(b) Without the prior written consent of the
Company, Sub shall not (and Parent shall not cause Sub to) (i)
decrease the Offer Consideration or modify the form of
consideration therefor or decrease the number of Shares sought
pursuant to the Offer, (ii) change the conditions to the Offer,
(iii) impose additional conditions to the Offer, (iv) extend the
expiration date of the Offer except as required by law and except
that Sub may extend the expiration date of the Offer for up to
(x) 180 calendar days from the date of commencement in order to
comply with the requirements of the HSR Act (as defined in
Section 4.1(c)(iii), and (y) 90 calendar days from the date of
commencement with respect to any other condition set forth on
Exhibit A in the event that any condition to the Offer is not
satisfied, or (v) amend any term of the Offer in any manner
materially adverse to holders of shares of Company Common Stock;
provided, however, that, except as set forth above, Sub may waive
-------- -------
any other condition to the Offer in its sole discretion; and
provided further, that the Offer may be extended in connection
-------- -------
with an increase in the consideration to be paid pursuant to the
Offer so as to comply with applicable rules and regulations of
the United States Securities and Exchange Commission (the "SEC").
Assuming the prior satisfaction or waiver of the conditions to
the Offer, Sub shall accept for payment, and pay for, in
accordance with the terms of the Offer, all shares of Company
Common Stock validly tendered and not withdrawn pursuant to the
Offer as soon as legally permitted after the commencement
thereof.
2
1.2 Offer Documents. As soon as practicable on the date of
commencement of the Offer, Parent and Sub shall file or cause to
be filed with the SEC a Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1") with respect to the Offer which shall
contain the offer to purchase and related letter of transmittal
and other ancillary Offer documents and instruments pursuant to
which the Offer will be made (collectively with any supplements
or amendments thereto, the "Offer Documents") and shall contain
(or shall be amended in a timely manner to contain) all
information which is required to be included therein in
accordance with the Exchange Act and the rules and regulations
thereunder and any other applicable law, and shall conform in all
material respects with the requirements of the Exchange Act and
any other applicable law; provided, however, that no agreement or
-------- -------
representation hereby is made or shall be made by Parent or Sub
with respect to information supplied by the Company in writing
expressly for inclusion in, or with respect to Company
information derived from the Company's public SEC filings which
is incorporated by reference in, the Offer Documents. Parent,
Sub and the Company each agree promptly to correct any
information provided by them for use in the Offer Documents if
and to the extent that it shall have become false or misleading
in any material respect and Parent and Sub further agrees to take
-
all lawful action necessary to cause the Offer Documents as so
corrected to be filed promptly with the SEC and to be
disseminated to holders of Company Common Stock, in each case as
and to the extent required by applicable law. In conducting the
Offer, Parent and Sub shall comply in all material respects with
the provisions of the Exchange Act and any other applicable law.
The Company and its counsel shall be given the opportunity to
review and comment on the Offer Documents and any amendments
thereto prior to the filing thereof with the SEC.
1.3 Company Actions. The Company hereby consents to
the Offer and represents that (a) its Board of Directors (at a
meeting duly called and held) has (i) unanimously determined that
each of this Agreement, the Offer and the Merger, taken together,
are fair to and in the best interests of the stockholders of the
Company, (ii) approved this Agreement, and the transactions
contemplated hereby including the Offer and the Merger, and (iii)
after considering its fiduciary duties under applicable law upon
the advice of counsel, resolved to recommend acceptance of the
Offer, approval and adoption of this Agreement and approval of
the Merger by the holders of Company Common Stock, and (b) First
Southwest Company ("First Southwest") has delivered to the Board
of Directors of the Company its written opinion that the Offer
Consideration to be received by the holders of Company Common
Stock in the Offer and the Merger, taken together, is fair, from
a financial point of view, to such holders, subject to the
assumptions and qualifications contained in such opinion. The
Board of Directors of the Company shall not withdraw or modify
its approval or recommendation of the Offer, this Agreement, or
3
the Merger unless the Board of Directors of the Company shall
conclude in good faith, based upon advice of counsel, that such
action is required under applicable law for the discharge of such
Board's fiduciary duties. The Company hereby consents to the
inclusion in the Offer Documents of the recommendation referred
to in this Section 1.3. The Company hereby agrees to file with
the SEC simultaneously with the filing by Parent and Sub of the
Schedule 14D-1, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D-9") containing such recommendations of
the Board of Directors of the Company in favor of the Offer and
the Merger and otherwise complying with Rule 14d-9 under the
Exchange Act. The Schedule 14D-9 shall comply in all material
respects with the Exchange Act and any other applicable law and
shall contain (or shall be amended in a timely manner to contain)
all information which is required to be included therein in
accordance with the Exchange Act and the rules and regulations
thereunder and any other applicable law. The Company, Parent and
Sub each agree promptly to correct any information provided by
them for use in the Schedule 14D-9 if and to the extent that it
shall have become false or misleading in any material respect and
the Company further agrees to take all lawful action necessary to
cause the Schedule 14D-9 as so corrected to be filed promptly
with the SEC and disseminated to the holders of Company Common
Stock, in each case as and to the extent required by applicable
law. Parent, Sub and their counsel shall be given an opportunity
to review the Schedule 14D-9 and any amendments thereto prior to
the filing thereof with the SEC. In connection with the Offer,
the Company shall promptly furnish Parent with mailing labels,
security position listings and all available listings or computer
files containing the names and addresses of the record holders of
the Company Common Stock as of the latest practicable date and
shall furnish Parent with such information and assistance
(including updated lists of stockholders, mailing labels and
lists of security positions) as Parent or its agents may
reasonably request in communicating the Offer to the record and
beneficial holders of Company Common Stock. Subject to the
requirements of applicable law, and except for such actions as
are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer and the Merger,
Parent and Sub and each of their affiliates, associates,
partners, employees, agents and advisors shall hold in confidence
the information contained in such labels and lists, shall use
such information only in connection with the Offer and the
Merger, and, if this Agreement is terminated, in accordance with
its terms, shall deliver promptly to the Company all copies of
such information then in their possession. The Company has been
advised or reasonably believes that each of its directors and
executive officers and the stockholders whose identities are
listed on Schedule 1.3 hereto intend to tender pursuant to the
Offer all shares of the Company Common Stock owned of record and
beneficially by him or it and which he or it may sell without
4
liability pursuant to Section 16(b) of the Exchange Act.
1.4 Directors. (a) Promptly upon the purchase by
Parent or any of its subsidiaries of such number of shares of
Company Common Stock which represents at least two-thirds of the
outstanding shares of Company Common Stock (on a fully diluted
basis), and from time to time thereafter, Parent shall be
entitled to designate such number of directors, rounded up to the
next whole number as will give Parent, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Board of
Directors of the Company equal to the product of (x) the number
of directors on the Board of Directors of the Company (giving
effect to any increase in the number of directors pursuant to
this Section 1.4) and (y) the percentage that such number of
Shares so purchased bears to the aggregate number of Shares
outstanding (such number being, the "Board Percentage"), and the
Company shall, upon request by Parent, promptly satisfy the Board
Percentage by (i) increasing the size of the Board of Directors
of the Company or (ii) accepting resignations of such number of
directors as is necessary to enable Parent's designees to be
elected to the Board of Directors of the Company and shall cause
Parent's designees promptly to be so elected; provided that
simultaneously with the execution of this Agreement, Company
shall have secured written resignations of the directors of the
Board, with such resignations conditioned on the Company's
accepting such resignations as and when required to effectuate
the terms of this Section 1.4. At the request of Parent, the
Company shall take, at the Company's expense, all lawful action
necessary to effect any such election, including, without
limitation, mailing to its stockholders the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, unless such information has previously been provided
to the Company's stockholders in the Schedule 14D-9. Parent and
Sub will supply to the Company any information with respect to
either of them and their nominees, officers, directors and
affiliates required by Section 14(f) of the Exchange Act and Rule
14f-1 of the Exchange Act.
(b) Following the election or appointment of Parent's
designees pursuant to this Section 1.4 and prior to the Effective
Time of the Merger, any amendment or termination of this
Agreement, extension for the performance or waiver of the
obligations or other acts of Parent or Sub or waiver of the
Company's rights thereunder, shall require the concurrence of a
majority of directors of the Company then in office who are
directors on the date hereof and who voted to approve this
Agreement, provided any such director remains in office.
5
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the Texas Business Corporation Act ("TBCA"), the Sub shall be
merged with and into the Company at the Effective Time. At the
Effective Time, the separate corporate existence of the Sub shall
cease, and the Company shall continue as the surviving
corporation and a direct wholly owned subsidiary of Parent (Sub
and the Company are sometimes hereinafter referred to as
"Constituent Corporations" and, as the context requires, the
Company is sometimes hereinafter referred to as the "Surviving
Corporation").
2.2 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have
been abandoned pursuant to Section 9.1, and subject to the
satisfaction or waiver of the conditions set forth in Article
VIII, the closing of the Merger (the "Closing") shall take place
at 10:00 a.m., New York time, on the second business day after
satisfaction of the conditions set forth in Section 8.1 (or as
soon as practicable thereafter following satisfaction or waiver
of the conditions set forth in Sections 8.2 and 8.3) (the
"Closing Date"), at the offices of Weil, Gotshal & Xxxxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date, time
or place is agreed to in writing by the parties hereto.
2.3 Effective Time of the Merger. Subject to the
provisions of this Agreement, the parties hereto shall cause the
Merger to be consummated by filing a articles of merger (the
"Articles of Merger") with the Secretary of State of the State of
Texas, as provided in the TBCA, as soon as practicable on or
after the Closing Date. The Merger shall become effective upon
such filing of the Articles of Merger and the issuance by the
Secretary of State of the State of Texas of the Certificate of
Merger (the "Effective Time").
2.4 Effects of the Merger. (a) The Merger shall have
the effects as set forth in the applicable provisions of the
TBCA.
(b) The directors of Sub and the officers of the
Company immediately prior to the Effective Time shall, from and
after the Effective Time, be the initial officers and directors,
respectively, of the Surviving Corporation until their successors
have been duly elected or appointed and qualified, or until their
earlier death, resignation or removal in accordance with the
Surviving Corporation's Articles of Incorporation and Bylaws.
6
(c) The Articles of Incorporation of the Company
immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, until duly amended in
accordance with the terms thereof and the TBCA.
(d) The Bylaws of the Company as in effect
immediately prior to the Effective Time shall be the Bylaws of
the Surviving Corporation until thereafter amended as provided by
applicable law, the Articles of Incorporation or the Bylaws.
(e) The Merger shall have the effect on the
Constituent Corporations set forth in Article 5.06 of the TBCA.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the
holder of any shares of Company Common Stock or the holder of any
capital stock of Sub:
(a) Capital Stock of Sub. Each share of the
capital stock of Sub issued and outstanding immediately prior to
the Effective Time shall be converted into common stock, par
value $.02 per share, of the Company.
(b) Cancellation of Treasury Stock and Parent-
Owned Stock. Each share of Company Common Stock and all other
shares of capital stock of the Company that are owned by the
Company and all shares of Company Common Stock and other shares
of capital stock of the Company owned by Parent, Sub or any other
wholly-owned Subsidiary (as defined below) of Parent or the
Company shall be canceled and retired and shall cease to exist
and no consideration shall be delivered or deliverable in
exchange therefor. As used in this Agreement, the word
"Subsidiary", with respect to any party, means any corporation,
partnership, joint venture or other organization, whether
incorporated or unincorporated, of which: (i) such party or any
other Subsidiary of such party is a general partner; (ii) voting
power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation,
partnership, joint venture or other organization is held by such
party or by any one or more of its Subsidiaries, or by such party
and any one or more of its Subsidiaries; or (iii) at least 40% of
the equity, other securities or other interests is, directly or
indirectly, owned or controlled by such party or by any one or
more of its Subsidiaries, or by such party and any one or more of
its Subsidiaries.
7
3.2 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of
Sub, the Company or the holders of any of the shares thereof:
(a) (i) Subject to the other provisions of this
Section 3.2 and Section 3.1, each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time
excluding Dissenting Shares (as defined in Section 3.6) shall be
converted into the right to receive amount in cash, without
interest, equal to the highest price offered for each share of
Company Common Stock pursuant to the Offer, less any required
withholding taxes (the "Merger Consideration"), upon surrender
and exchange of the Certificates (as defined in Section 3.3(b)).
(ii) All such shares of Company Common Stock,
when converted as provided in Section 3.2(a)(i), no longer shall
be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each Certificate previously
evidencing Shares shall thereafter represent only the right to
receive the Merger Consideration. The holders of Certificates
previously evidencing Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to the
Company Common Stock except as otherwise provided herein or by
law and, upon the surrender of Certificates in accordance with
the provisions of Section 3.3, shall only represent the right to
receive for their Shares, the Merger Consideration, without any
interest thereon.
3.3 Payment for Shares. (a) Paying Agent. Prior to the
Effective Time, Sub shall appoint The Bank of New York (or if The
Bank of New York is unwilling or unable to act or to act upon
commercially reasonable terms, any other United States bank or
trust company mutually acceptable to the Company and Parent) to
act as paying agent (the "Paying Agent") for the payment of the
Merger Consideration, and Parent shall deposit or shall cause to
be deposited with the Paying Agent in a separate fund established
for the benefit of the holders of shares of Company Common Stock,
for payment in accordance with this Article III, through the
Paying Agent (the "Payment Fund"), immediately available funds in
amounts necessary to make the payments pursuant to Section
3.2(a)(i) and this Section 3.3 to holders, as and when requested
in writing by the Paying Agent in respect of shares of Common
stock received by the Paying Agent. The Paying Agent shall,
pursuant to irrevocable instructions, pay the Merger
Consideration out of the Payment Fund.
From time to time at or after the Effective Time,
Parent shall take all lawful action necessary to make the
appropriate cash payments, if any, to holders of Dissenting
Shares.
8
(b) Payment Procedures. As soon as reasonably
practicable after the Effective Time, Parent shall instruct the
Paying Agent to mail to each holder of record (other than the
Company or any Subsidiary of the Company or Parent, Sub or any
other Subsidiary of Parent) of a Certificate or Certificates
which, immediately prior to the Effective Time, evidenced
outstanding shares of Company Common Stock (the "Certificates"),
(i) 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 Paying Agent, and shall be in such form and
have such other provisions as Parent reasonably may specify) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment therefor. Upon surrender of
a Certificate for cancellation to the Paying Agent together with
such letter of transmittal, duly executed, and such other
customary documents as may be required pursuant to such
instructions, the holder of such Certificate shall be entitled to
receive in respect thereof cash in an amount equal to the product
of (x) the number of shares of Company Common Stock represented
by such Certificate and (y) the Merger Consideration, and the
Certificate so surrendered shall forthwith be canceled.
Absolutely no interest shall be paid or accrued on the Merger
Consideration payable upon the surrender of any Certificate. If
payment is to be made to a person other than the person in whose
name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be
promptly endorsed or otherwise in proper form for transfer and
that the person requesting such payment shall pay any transfer or
other taxes required by reason of the payment to a person other
than the registered holder of the surrendered Certificate or
established to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered
in accordance with the provisions of this Section 3.3(b), each
Certificate (other than Certificates representing Shares owned by
Parent or any subsidiary of Parent or held in the treasury of the
Company) shall represent for all purposes only the right to
receive the Merger Consideration.
(c) Termination of Payment Fund; Interest. Subject to
any applicable abandoned property, escheat or similar law, any
portion of the Payment Fund which remains undistributed to the
holders of Company Common Stock for six months after the
Effective Time shall be delivered to Parent, upon demand, and any
holders of Company Common Stock who have not theretofore complied
with this Article III and the instructions set forth in the
letter of transmittal mailed to such holder after the Effective
Time shall thereafter look only to Parent for payment of the
Merger Consideration to which they are entitled. All interest
accrued in respect of the Payment Fund shall inure to the benefit
of and be paid to Parent.
9
(d) No Liability. Neither Parent nor the Surviving
Corporation shall be liable to any holder of shares of Company
Common Stock for any cash from the Payment Fund delivered to a
public official pursuant to any applicable abandoned property,
escheat or similar law.
(e) Withholding Rights. Parent shall be entitled to
deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as Parent is required to deduct and
withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Parent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to
the holder of the shares of Company Common Stock in respect of
which such deduction and withholding was made by Parent.
3.4 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be
no further registration of transfers of shares of Company Common
Stock thereafter on the records of the Company. On or after the
Effective Time, any certificates presented to the Paying Agent or
Parent for any reason shall be converted into the Merger
Consideration.
3.5 Stock Options. At the Effective Time, each holder of a
then outstanding option to purchase Shares under the Company's
1985 Stock Option Plan and 1994 Long Term Incentive Plan (collec-
tively, the "Stock Option Plan"), whether or not then exercisable
(the "Option"), shall, in settlement thereof, represent the right
to receive for each Share subject to such Option an amount
(subject to any applicable withholding tax) in cash equal to the
difference between the Offer Consideration and the per Share
exercise price of such Option to the extent such difference is a
positive number (such amount being hereinafter referred to as,
the "Option Consideration"); provided, however, that with respect
-------- -------
to any person subject to Section 16(a) of the Exchange Act, any
such amount shall, at the written request of such Person, be paid
as soon as practicable after the first date payment can be made
without liability to such person under Section 16(b) of the
Exchange Act. Upon receipt of the Option Consideration, the
Option shall be canceled. The surrender of an Option to the
Company in exchange for the Option Consideration shall be deemed
a release of any and all rights the holder had or may have had in
respect of such Option. Prior to the Effective Time, the Company
shall use its commercially reasonable best efforts to obtain all
necessary consents or releases from holders of Options under the
Stock Option Plans and take all such other lawful action as may
be necessary to give effect to the transactions contemplated by
this Section 3.5 (except for such action that may require the
approval of the Company's stockholders). Except as otherwise
10
agreed to by the parties, (i) all Stock Option Plans shall
terminate as of the Effective Time and the provisions in any
other plan, program or arrangement providing for the issuance or
grant of any other interest in respect of the capital stock of
the Company any Subsidiary thereof, shall be canceled as of the
Effective Time, and (ii) the Company shall take all action
necessary to ensure that following the Effective Time no
participant in any Stock Option Plan or other plans, programs or
arrangements shall have any right thereunder to acquire equity
securities of the Company, the Surviving Corporation or any
Subsidiary thereof and to terminate all such plans.
3.6 Dissenting Shares. Notwithstanding any other
provisions of this Agreement to the contrary, shares of Company
Common Stock that are outstanding immediately prior to the
Effective Time and which are held by stockholders who shall have
not voted in favor of the Merger or consented thereto in writing
and who shall have demanded properly in writing appraisal for
such shares in accordance with Section 5.12 of the TBCA
(collectively, the "Dissenting Shares") shall not be converted
into or represent the right to receive the Merger Consideration.
Such stockholders instead shall be entitled to receive payment of
the appraised value of such shares of Company Common Stock held
by them in accordance with the provisions of such Section 5.12,
except that all Dissenting Shares held by stockholders who shall
have failed to perfect or who effectively shall have withdrawn or
lost their rights to appraisal of such shares of Company Common
Stock under such Section 5.12 shall thereupon be deemed to have
been converted into and to have become exchangeable, as of the
Effective Time, for the right to receive, without any interest
thereon, the Merger Consideration upon surrender in the manner
provided in Section 3.3, of the Certificate or Certificates that,
immediately prior to the Effective Time, evidenced such shares of
Company Common Stock.
11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company. The
Company represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Power. Each of the
Company and its Subsidiaries, which is a corporation, is duly
organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation, and the Company
and its Subsidiaries has all requisite power and authority to
own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in
good standing to conduct business in each jurisdiction in which
the business it is conducting, or the operation, ownership or
leasing of its properties, makes such qualification necessary,
other than in such jurisdictions where such failure to qualify
could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect (as defined below)
with respect to the Company. The Company has heretofore made
available to Parent complete and correct copies of its and its
corporate Subsidiaries' respective Articles of Incorporation and
Bylaws and Minutes of their respective Board of Directors'
meeting held since January 1, 1992. All Subsidiaries of the
Company and their respective jurisdictions of incorporation or
organization are identified on Schedule 4.1(a). As used in this
Agreement, a "Material Adverse Effect" shall mean, with respect
to any party, the result of one or more events, changes or
effects which would have a material adverse effect on the
business, operations, net assets, condition (financial or
otherwise) or prospects of such party and its Subsidiaries, taken
as a whole.
(b) Capital Structure. As of August 31, 1995, the
authorized capital stock of the Company consists of 10,000,000
Shares and 1,000,000 shares of Preferred Stock, $1.00 par value
("Preferred Stock"). As of the date hereof: (i) 3,040,911 Shares
and no shares of Preferred Stock are issued and outstanding,
450,000 Shares are reserved for issuance pursuant to the Stock
Option Plan under which options to acquire 158,250 shares of
Company Common Stock are outstanding, and, except for the
issuance of Shares pursuant to the exercise of the Options, there
are no employment, executive termination or similar agreements
providing for the issuance of Shares; (ii) no Shares were held by
the Company; (iii) no bonds, debentures, notes or other
instruments or evidence of indebtedness having the right to vote,
whether or not upon an event of default or otherwise, (or
convertible into, or exercisable or exchangeable for, securities
having the right to vote) on any matters on which the Company
12
stockholders may vote ("Company Voting Debt") were issued or
outstanding; and (iv) neither the Company nor any of its
corporate Subsidiaries is obligated to issue any of the foregoing
securities other than upon exercise of outstanding Options
disclosed pursuant to this Section 4.1(b). All outstanding
Shares are validly issued, fully paid and nonassessable and are
not subject to preemptive or other similar rights. Except as set
forth on Schedule 4.1(b), all outstanding shares of capital stock
or partnership interests of the Subsidiaries of the Company are
owned by the Company or a direct or indirect Subsidiary of the
Company, free and clear of all liens, charges, encumbrances,
claims and options of any nature, and except as set forth on
Schedule 4.1(b), neither the Company nor any Subsidiary holds any
equity interest, including, without limitation, a partnership
interest, in any entity. Except as set forth in this Section
4.1(b) and except for changes since August 31, 1995 resulting
from the exercise of employee stock options granted pursuant to
the Stock Option Plans, there are outstanding: (i) no shares of
capital stock, Company Voting Debt or other voting securities of
the Company; (ii) no securities of the Company or any Subsidiary
of the Company convertible into, or exchangeable or exercisable
for, shares of capital stock, Company Voting Debt or other voting
securities of the Company or any Subsidiary of the Company; and
(iii) no options, warrants, calls, rights (including preemptive
rights), commitments or agreements to which the Company or any
Subsidiary of the Company is a party or by which it is bound, in
any case obligating the Company or any Subsidiary of the Company
to issue, deliver, sell, purchase, redeem or acquire, or cause to
be issued, delivered, sold, purchased, redeemed or acquired,
additional shares of capital stock or any Company Voting Debt or
other voting securities of the Company or of any Subsidiary of
the Company, or obligating the Company or any Subsidiary of the
Company to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement. Since August 31, 1995, the
Company has not amended or repriced any Option or Stock Option
Plans and set forth on Schedule 4.1(b) is a list of all
outstanding options, warrants and rights to purchase shares of
Company Common Stock and the exercise prices relating thereto,
showing all changes to such information since August 31, 1995.
There are not as of the date hereof and there will not be at the
Effective Time any stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or
by which it is bound relating to the voting of any shares of the
capital stock of the Company which will limit in any way the
solicitation of proxies by or on behalf of the Company from, or
the casting of votes by, the stockholders of the Company with
respect to the Merger. There are no restrictions on the Company
to vote the stock of any of its Subsidiaries.
(c) Authority; No Violations; Consents and Approvals.
13
(i) The Company has all requisite corporate power
and authority to enter into this Agreement and, subject, if
required with respect to consummation of the Merger, to the
Company Stockholder Approval (as defined in Section 4.1(c)(iii)),
to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company,
subject, if required with respect to consummation of the Merger,
to the Company Stockholder Approval. This Agreement has been
duly executed and delivered by the Company and, subject, if
required with respect to consummation of the Merger, to the
Company Stockholder Approval under the TBCA, constitutes a valid
and binding obligation of the Company enforceable in accordance
with its terms.
(ii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by
the Company will not conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of any obligation, benefit, right or payment or the
loss of a material benefit under, or the creation of a lien,
pledge, security interest or other encumbrance ("Liens")on assets
or property, or right of first refusal with respect to any asset
or property (any such conflict, violation, default, right of
termination, cancellation or acceleration of any obligation,
benefit, right or payment, loss, creation or right of first
refusal, a "Violation") pursuant to, any provision of the
Certificate of Incorporation or Bylaws of the Company or any of
its Subsidiaries or, except as to which requisite waivers or
consents have been obtained and, except as set forth on Schedule
4.1(c)(ii) hereto and assuming the consents, approvals,
authorizations or permits and filings or notifications referred
to in paragraph (iii) of this Section 4.1(c) are duly and timely
obtained or made and, if required, the Company Stockholder
Approval has been obtained, result in any Violation of any loan
or credit agreement, note, mortgage, indenture, lease, or other
agreement, obligation, instrument, Company Permit (as defined in
Section 4.1(f)), concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
the Company or any of its Subsidiaries or their respective
properties or assets (collectively, "Laws"), which could
reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect with respect to the Company.
(iii) No consent, approval, order or
authorization of, or registration, declaration or filing with,
notice to, or permit from any court, administrative agency or
commission or other governmental authority or instrumentality,
domestic or foreign (a "Governmental Entity"), is required by or
with respect to the Company or any of its Subsidiaries in
14
connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the
transactions contemplated hereby, which if not obtained or made
could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect with respect to the Company,
except for: (A) the filing of a premerger notification and
report form by the Company under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and the
expiration or termination of the applicable waiting period
thereunder; (B) the filing with the SEC of (x), if required by
applicable law, a proxy or information statement in definitive
form relating to a meeting of the holders of Company Common Stock
to approve the Merger under the TBCA ("Company Stockholder
Approval") (such proxy statement as amended or supplemented from
time to time being hereinafter referred to as the "Proxy
Statement"), (y) the Schedule 14D-9 in connection with the Offer,
and (z) such reports under and such other compliance with the
Exchange Act and the rules and regulations thereunder, as may be
required in connection with this Agreement and the transactions
contemplated hereby; (C) the filing of the Articles of Merger
with the Secretary of State of the State of Texas ; (D) such
filings and approvals as may be required by any applicable state
securities, "blue sky" or takeover laws; and (E) such filings and
approvals as may be required by any foreign pre-merger
notification, securities, or corporate law, rule or regulation.
(d) SEC Documents. The Company has made available to
Parent a true and complete copy of each material report,
schedule, registration statement and definitive proxy statement
filed by the Company with the SEC since January 1, 1992 and prior
to the date of this Agreement (the "Company SEC Documents"),
which are all the material documents (other than preliminary
material) that the Company was required to file with the SEC
since such date. As of their respective dates, none of the
Company SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in
the Company SEC Documents complied as to form in all material
respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent
basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as
permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly
present in all material respects in accordance with applicable
requirements of GAAP (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which will
be material) the consolidated financial position of the Company
and its consolidated Subsidiaries as of their respective dates
and the consolidated results of operations and the consolidated
15
cash flows of the Company and its consolidated Subsidiaries for
the periods presented therein.
(e) Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or
incorporation by reference in (i) any of the Offer Documents
will, at the time the Offer Documents are first published, sent
or given to holders of Company Common Stock, and at any time they
are amended or supplemented, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not
misleading, and (ii) the Proxy Statement, on the date it is first
mailed to the holders of the Company Common Stock or at the time
of the Company's Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they are made, not misleading.
(f) Compliance with Applicable Laws. The Company and
its Subsidiaries hold all permits, licenses, variances,
exemptions, orders, franchises and approvals of all Governmental
Entities necessary for the lawful conduct of their respective
businesses (the "Company Permits"), except where the failure to
possess the same could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect with
respect to the Company. The Company and its Subsidiaries are in
compliance with the terms of the Company Permits, except where
the failure so to comply could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect with respect to the Company. The businesses of the
Company and its Subsidiaries are not being conducted in violation
in any material respect of any law, ordinance or regulation of
any Governmental Entity. As of the date of this Agreement, no
investigation or review by any Governmental Entity with respect
to the Company or any of its Subsidiaries is pending or, to the
knowledge of the Company, threatened, other than those the
outcome of which could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect with
respect to the Company.
(g) Litigation. As of the date hereof, except as set
forth on Schedule 4.1(g) hereto, there is no suit, action or
proceeding pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary of
the Company or any Company Employee Benefit Plan or Company
Employee Benefit Arrangement (as defined in Section 4.1 (i)
below) ("Company Litigation"). No Company litigation exists and
the Company and its Subsidiaries have no knowledge (after due
inquiry) of any facts which are reasonably likely to give rise to
any Company Litigation, which could reasonably be expected,
16
individually or in the aggregate, to have a Material Adverse
Effect with respect to the Company or any Company Employee
Benefit plan or Company Employee Benefit Arrangement, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company
or any Subsidiary of the Company or any Company Employee Benefit
Plan or Company Employee Benefit Arrangement ("Company Order"),
which could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect with respect to the
Company or any Company Employee Benefit Plan or Company Employee
Benefit Arrangement, or prevent, hinder or materially delay its
ability to consummate the transactions contemplated by this
Agreement. As of the date of this Agreement, except as set forth
on Schedule 4.1(g), the aggregate amount of all claims and
judgments pending, or to the knowledge of the Company, threatened
pursuant to all Company Litigation and Company Orders does not
exceed $250,000. This Section 4.1(g) shall not relate to any
environmental matters referred to in Section 4.1(n).
(h) Taxes. Each of the Company and each of its
Subsidiaries has filed all material tax returns required to be
filed by such party on a timely basis in accordance with all
applicable law in all material respects and has paid (or the
Company has paid on behalf of any such Subsidiary), or has set up
an adequate reserve for the payment of, all taxes required to be
paid as shown on such returns, and the most recent financial
statements contained in the Company SEC Documents reflect an
adequate reserve for all taxes payable by the Company and its
Subsidiaries accrued through the date of such financial
statements. The unpaid taxes, including any contingent tax
liabilities and net deferred tax liabilities, of the Company and
its Subsidiaries which have accrued as of the date of the most
recent financial statements contained in the Company SEC
Documents do not exceed the reserve for accrued tax liability set
forth or included in such financial statements except as set
forth on Schedule 4.1(b). The Company and its consolidated
Subsidiaries have consolidated net operating losses ("NOLs") of
at least $6,000,000 in the aggregate, arising from the 1994 tax
year and arising from so much of the 1995 tax year as if such
year were a short tax year ending on August 31, 1995 ("Short
Year"), which NOL may be used to offset income from prior years
under Section 172(b)(1)(A) of the Code. A detailed computation,
including all material assumptions used therein of the estimated
NOL for the Short Year will be provided to Parent on or before
the close of business on September 22, 1995. No federal income
tax returns that include the Company and each of its Subsidiaries
consolidated in such returns have been examined or currently are
under examination with the United States Internal Revenue Service
(the "IRS"), except for tax year 1991. Except for a waiver
granted with respect to the 1991 Federal income tax return, no
waiver of statute of limitations with respect to such returns has
been given by or requested from the Company and its Subsidiaries
17
for tax years beginning after December 31, 1988. The Company has
previously delivered or made available to Parent true and
complete copies of its federal income tax returns for each of the
fiscal years ended December 31, 1992 and December 31, 1993.
Neither the Company nor any of its Subsidiaries is a party to or
bound by any agreement providing for the allocation, sharing or
indemnification of taxes with any entity which is not, either
directly or indirectly, a Subsidiary of the Company. Neither the
Company nor any of its Subsidiaries has filed a consent pursuant
to or agreed to the application of Section 341(f) of the Code.
Neither the Company nor any Subsidiary will be liable for taxes
due on parachute payments under Section 4999 of the Code. The
Company is not a "United States real property holding
corporation" as defined in Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code. Neither of the Company, nor any of its Subsidiaries
ever has been a member of an affiliated group of corporations,
within the meaning of Section 1504 of the Code, other than the
present affiliated group comprised of the Company and its
Subsidiaries. Since January 1, 1991, the Company has not
adopted, revoked, rescinded or otherwise materially modified any
tax elections or tax accounting method. For the purpose of this
Agreement, the term "tax" (and, with correlative meaning, the
terms "taxes" and "taxable") shall include all federal, state,
local and foreign income, profits, franchise, gross receipts,
payroll, sales, employment, use, property, withholding, excise
and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with
respect to such amounts.
(i) Pension And Benefit Plans; ERISA.
(i) Set forth on Schedule 4.1(i) is a list of all
Company Employee Benefit Plans and Company Employee Benefit
Arrangements which are in writing, including any amendments
thereto, and a description of all unwritten Company Employee
Benefit Plans and Company Employee Benefit Arrangements. The
Company has delivered to Parent true and correct copies of (A)
all such plans which are in writing, including any amendments
thereto, and (B) the annual report, if required under the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), with respect to each such plan for the last three
years. None of the Company Employee Benefit Plans or Company
Employee Benefit Arrangements is subject to Title IV of ERISA or
Section 412 of the Code. Except as set forth in Schedule 4.1(i)
hereto:
(1) each Company Employee Benefit Plan and
Company Employee Benefit Arrangement, together with any related
trust, is in compliance in all material respects with the
requirements prescribed by all applicable statutes, orders or
18
governmental rules or regulations including, without limitation,
ERISA and the Code and with the terms and conditions of the
applicable plan;
(2) each pension plan which is or is
intended to be a pension plan as defined in Section 401(a) of the
Code is qualified under Section 401(a) of the Code and a
favorable determination letter from the Internal Revenue Service
with respect to such qualification has been issued with respect
thereto, copies of which have been delivered to Parent;
(3) none of the Company or any of its
Subsidiaries is or has ever been obligated to contribute to any
Company Employee Benefit Plan or Company Employee Benefit
Arrangement which constitutes a "multiemployer plan" as defined
in Section 3(37) of ERISA.
(4) no amounts payable under the Company
Employee Benefit Plans or Company Employee Benefit Arrangements
will fail to be deductible for federal income tax purposes by
virtue of Section 280G of the Code;
(5) neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby will (A) result in any payment becoming due
to any employee or group of employees of the Company or any of
its Subsidiaries, (B) increase any benefits otherwise payable
under any Company Employee Benefit Plan or Company Employee
Benefit Arrangement or (C) result in the acceleration of the time
of payment or vesting of any such benefits; and
(6) none of the Company or any of its
Subsidiaries has any contract, plan, or commitment, whether
legally binding or not, to create any additional Company Employee
Benefit Plan or Company Employee Benefit Arrangement or to modify
any existing Company Employee Benefit Plan or Company Employee
Benefit Arrangement.
(ii) As used herein:
(1) the term "Employees" shall mean all
current employees, former employees and retired employees of the
Company and its Subsidiaries.
(2) the term "Company Employee Benefit
Plans" shall mean each and all "employee benefit plans" as
defined in Section 3(3) of ERISA, maintained or contributed to by
the Company or the Subsidiaries or in which the Company or the
Subsidiaries participate or participated and which in any such
case provide benefits to Employees, including (a) any such plans
that are "employee welfare benefit plans" as defined in Section
19
3(1) of ERISA, including retiree medical and life insurance plans
and (b) any such plans that are "employee pension benefit plans"
as defined in Section 3(2) of ERISA ("Pension Plans").
(3) The term "Company Employee Benefit
Arrangements" shall mean any life and health insurance,
hospitalization, savings, bonus, deferred compensation, stock
option plan, stock incentive plan, incentive compensation,
holiday, vacation, severance pay, sick pay, sick leave,
disability, tuition refund, service award, company car,
scholarship, relocation, patent award, fringe benefit, contracts,
collective bargaining agreements, individual employment,
consulting or severance contracts and other policies or practices
of the Company or its Subsidiaries providing employee or
executive compensation or benefits to Employees, other than
Company Employee Benefit Plans.
(j) No Material Change. Except as disclosed on
Schedule 4.1(j), since June 30, 1995, neither the Company nor any
of its Subsidiaries (i) suffered any changes which have had or
could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect with respect to the Company,
(ii) incurred any obligation or liability whether absolute,
accrued, contingent or otherwise, including, without limitation,
liabilities as guarantor or otherwise with respect to obligations
of others, or incurred any obligations or liabilities except for
those incurred in the ordinary course of business and not
constituting Indebtedness for Borrowed Money (as defined in
Section 4.1(o)(vii)), (iii) acquired or disposed of assets or
properties, or entered into any agreement or other arrangement
for any such acquisition or disposition, other than the purchase
or sale of inventories in the ordinary course of business, (iv)
increased the wages, salaries, compensation, pension, severance
or other benefits payable to any employee, other than in
connection with normal compensation policies and consistent with
past compensation policies, or instituted any increase in,
merged, terminated or amended any Company Employees Benefit Plan
or Arrangement, (v) discharged or satisfied any Lien, forgiven or
paid or cancelled any debts or claims (absolute or contingent) or
waived any rights, in each case except in the ordinary course of
business and except for those which, individually or in the
aggregate, could not reasonably be expected to be material to the
operation or assets of the Company and its Subsidiaries, their
financial condition, results of operations or prospects, taken as
a whole, (vi) granted any rights or licenses under any Company
Intangible Property (as defined in Section 4.1(m)), (vii)
declared or paid any dividends or made any distribution in
respect of its capital stock (other than from a wholly-owned
Subsidiary of the Company), including by way of repurchase,
redemption or otherwise, (viii) transferred any assets by way of
contribution, loan or otherwise to any of its Subsidiaries other
than a wholly-owned subsidiary or otherwise made an investment by
20
way of purchase of equity, capital contribution, loan or
otherwise in any person other than a wholly-owned Subsidiary or
creation of account receivables resulting from the sale of
inventories in the ordinary course of business, (ix) merged or
consolidated with or into any entity, or obligated itself to do
so, (x) made or committed to make any capital expenditures in
excess of $240,000 in the aggregate, (xi) amended its Certificate
of Incorporation or By-Laws or changed its method or basis of
accounting, whether or not permitted under GAAP, (xii)
instituted, settled or agreed to settle any litigation, action or
proceeding before any court or governmental body, which could
reasonably be expected, individually or in the aggregate, to be
material to the operation or net assets of the Company and its
Subsidiaries, their financial condition, results of operations or
prospects, taken as a whole, (xiii) cancelled or terminated any
insurance policy, or (xiv) obligated itself to do any of the
foregoing.
Except as disclosed on Schedule 4.1(j), since June 30,
1995, the Company and its Subsidiaries have not experienced any
strike, work stoppage or unionization attempt and have conducted
their business in the ordinary course and in substantially the
same manner as conducted prior to such date and have preserved
their relationships with customers, suppliers and other with whom
deal.
(k) Opinion of Financial Advisor. The Company has
received the opinion of First Southwest, dated September 14,
1995, to the effect that, as of the date hereof, the Offer
Consideration to be received by the holders of Company Common
Stock in the Offer and the Merger Consideration to be received by
the holders of Company Common Stock in the Merger is fair from a
financial point of view to such holders, a signed, true and
complete copy of which opinion has been delivered to Parent, and
such opinion has not been withdrawn or modified.
(l) Vote Required. The affirmative vote of the
holders of two-thirds of the outstanding shares of Company Common
Stock is the only vote of the holders of any class or series of
the Company's capital stock necessary (under applicable law or
otherwise) to approve the Merger and this Agreement and the
transactions contemplated hereby.
(m) Intangible Property.
(i) Schedule 4.1(m) sets forth a list of each
material trademark, trade name, patent, service xxxx, brand xxxx,
brand name, computer program, database, industrial design and
copyright owned, used or useful in connection with the operation
of the businesses of each of the Company and its Subsidiaries as
well as a list of all registrations thereof by jurisdiction and
pending applications therefor, and each license or other contract
21
relating thereto (collectively, the "Company Intangible
Property"). Except as set forth on Schedule 4.1(m), all of the
Company Intangible Property is in good standing. Except as set
forth on Schedule 4.1(m), the use of the Company Intangible
Property by the Company or its Subsidiaries does not, in any
material respect, conflict with, infringe upon, violate or
interfere with or constitute an appropriation of any right,
title, interest or goodwill, including, without limitation, any
intellectual property right, trademark, trade name, patent,
service xxxx, brand xxxx, brand name, computer program, database,
industrial design, copyright or any pending application therefor
of any other person and there have been no claims made and
neither the Company nor any of its Subsidiaries has received any
notice of any claim or otherwise knows that any of the Company
Intangible Property is invalid or conflicts with the asserted
rights of any other person or has not been used or enforced or
has failed to be used or enforced in a manner that would result
in the abandonment, cancellation or unenforceability of any of
the Company Intangible Property. Each of the Company and its
Subsidiaries own or have a right to use all Company Intangible
Property necessary for the operation of its respective business.
(n) Environmental Matters.
(i) For purposes of this Agreement:
(1) "Environmental Law" means any applicable
law regulating or prohibiting Releases into any part of the
environment, or pertaining to the protection of natural
resources, the environment and public and employee health and
safety including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act
("CERCLA") (42 U.S.C. Sec. 9601 et seq.), the Hazardous Materials
-- ---
Transportation Act (49 U.S.C. Sec. 1801 et seq.), the Resource
-- ---
Conservation and Recovery Act (42 U.S.C. Sec. 6901 et seq.), the
-- ---
Clean Water Act (33 U.S.C. Sec. 1251 et seq.), the Clean Air Act
-- ---
(33 U.S.C. Sec. 7401 et seq.), the Toxic Substances Control Act
-- ---
(15 U.S.C. Sec. 7401 et seq.), the Federal Insecticide, Fungicide,
-- ---
and Rodenticide Act (7 U.S.C. Sec. 136 et seq.), and the
-- ---
Occupational Safety and Health Act (29 U.S.C. Sec. 651 et seq.)
-- ---
("OSHA") and the regulations promulgated pursuant thereto, and
any such applicable state or local statutes, and the regulations
promulgated pursuant thereto, as such laws have been amended or
supplemented through the Closing Date;
(2) "Hazardous Material" means any
substance, pollutant material or waste which is regulated by
Environmental Law, including, without limitation, coal tar,
asbestos and any material or substance which is defined as a
"hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste" or "restricted hazardous waste,"
"contaminant," "toxic waste" or "toxic substance" under any
22
provision of Environmental Law;
(3) "Release" means any release, spill,
effluent, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching, or migration into the
indoor or outdoor environment (whether on site or off site), or
into or out of any property owned, operated or leased by the
applicable party or its Subsidiaries; and
(4) "Remedial Action" means all actions,
including, without limitation, any capital expenditures, required
by a governmental entity or required under any Environmental Law,
or voluntarily undertaken to (I) clean up, remove, treat, or in
any other way ameliorate or address any Hazardous Materials,
other substance, or dust, odors, fumes or noise (whether or not
constituting Hazardous Materials) in the indoor or outdoor
environment (whether on site or off site); (II) prevent the
Release or threat of Release, or minimize the further Release of
any Hazardous Material, other substance, or dust, odor, fumes or
noise (whether or not constituting Hazardous Materials) so it
does not endanger or threaten to endanger the public health or
welfare of the indoor or outdoor environment (whether on site or
off site); (III) perform pre-remedial studies and investigations
or post-remedial monitoring and care pertaining or relating to a
Release; or (IV) bring the applicable party into compliance with
any Environmental Law.
(ii) Except as disclosed on Schedule 4.1(n)(ii),
the Company and its Subsidiaries are not currently parties to any
agreements, consent orders, decrees or judgments issued by a
Governmental Entity respecting (A) Environmental Laws, (B)
Remedial Action or (C) any Release or threatened Release of a
Hazardous Material, other substance or dust, odor, fumes or noise
(whether or not constituting Hazardous Materials;
(iii) Since January 1, 1992, the Company and its
Subsidiaries have not received any written communication
alleging, with respect to any such party, the violation of or
liability under any Environmental Law, which violation (whether
or not disclosed) or liability (whether or not disclosed) could
reasonably be expected, individually or in the aggregate, to be
material to the operation or net assets of the Company and its
Subsidiaries, their condition (financial or otherwise), results
of operations or prospects, taken as a whole, provided that the
parties hereto acknowledge that such liabilities, individually,
or in the aggregate, of $1,000,000 or less, would not be deemed
material;
(iv) Neither the Company nor any of its
Subsidiaries has any liability (whether or not disclosed) or
potential liability (whether or not disclosed), known or unknown,
in connection with the Release of any Hazardous Material, other
23
substance, or dust, odor, fumes or noise (whether or not
constituting Hazardous Materials) into the indoor or outdoor
environment (whether on-site or off-site) which could reasonably
be expected, individually or in the aggregate, to be material to
the operation or net assets of the Company and its Subsidiaries,
their condition (financial or otherwise), results of operations
or prospects, taken as a whole, provided that the parties hereto
acknowledge that such liabilities, individually or in the
aggregate, of $1,000,000 or less, would not be deemed material;
(v) Except as set forth on Schedule 4.1(n)(v),
there is not now on or in any property of the Company or its
Subsidiaries any of the following: (A) any underground storage
tanks or surface impoundments, (B) any asbestos-containing
materials, (C) any polychlorinated biphenyls, or (D) landfills or
disposal areas, in each case except in material compliance with
applicable Environmental Laws;
(vi) The Company has made available to Parent
copies of all environmental investigations, studies, audits,
tests, reviews and other analyses conducted by or on behalf of,
or that are in the possession of, the Company or any of its
Subsidiaries, in relation to any site or facility owned or
leased,at any time, by the Company or any of its Subsidiaries
(collectively the "Sites");
(vii) Except as disclosed on Schedule 4.1(n)(vii)
hereto, there are no pending applications for any Company Permits
under any Environmental Law in connection with the conduct of the
Company or any Subsidiary thereof;
(viii) Except as disclosed in Section
4.1(n)(viii), the Company and its Subsidiaries are in compliance
with all statutory land use regulation or prohibition under any
Environmental Law or any law of any Governmental Authority
relating to the protection of wetlands, woodlands and endangered
species and there are no environmental liens or deed restrictions
on any sites; and
(ix) Except as set forth on Schedule 4.1(n)(ix)
hereto, there have been no citations, notices or complaints
issued to any of the Company, or any Subsidiary by the
Occupational Safety and Health Administration or any state
occupational safety and health administration since January 1,
1992. Neither the Company, or any of its Subsidiaries, any of
their respective predecessors or their agents has engaged in any
act or omission which could give rise to liabilities (whether
known or unknown) under CERCLA or any equivalent state laws.
(o) Material Contracts. The Company has provided
Parent with a full and complete copy of all material arrangements
24
and contracts to which the Company, or any of its Subsidiaries,
is a party or is bound (collectively, the "Contracts"), a list of
which is set forth on Schedule 4.1(o), including, but not limited
to, the following:
(i) employment contracts, sales representative
agency contracts or contracts that are not terminable by the
Company, or a Subsidiary thereof, as applicable, by notice of not
more than sixty (60) days without payment or penalty, and
severance or termination contracts;
(ii) covenants not to compete;
(iii) leases or similar contracts under which the
Company or any Subsidiary thereof is a lessee or sublessee of any
real property or is a lessor or sublessor of, or makes available
for use by any third party, any real property owned or leased by
any of them or any portion of premises otherwise occupied by any
of them;
(iv) leases or similar contracts under which (A)
the Company, or any Subsidiary thereof is a lessee of, or holds
or uses, any machinery, equipment, vehicle or other tangible
personal property owned by a third party or (B) the Company or
any Subsidiary thereof is a lessor or sublessor of, or makes
available for use by any third party, any tangible personal
property owned or leased by such person, in any such case which
has an aggregate future liability in excess of $50,000 and is not
terminable by the Company, or a Subsidiary thereof, as
applicable, by notice of not more than sixty (60) days without
payment or penalty;
(v) (A) contracts for the future purchase of any
type of materials or fixed assets, (B) management, service,
consulting or other similar type of contracts, (C) computer
hardware and/or software contracts, (D) contracts with any
distributors, or (E) advertising contracts, in any such case
which has an aggregate future liability in excess of $50,000 and
is not terminable by the Company, or a Subsidiary thereof, as
applicable, by notice of not more than sixty (60) days without
payment or penalty;
(vi) licenses (if the Company, or any Subsidiary
thereof is the licensor or the licensee) or other contracts
relating in whole or in part to any of the Company Intangible
Property used or held for use by the Company or any Subsidiary
thereof (including any license or other agreement under which any
of them has the right to use any of the same owned or held by a
third party);
(vii) contracts or indentures or other evidence
of indebtedness under which the Company, or any of its
25
Subsidiaries, has borrowed or loaned any money, including without
limitation, relating to the deferred purchase price of property
or services or similar liabilities, agreed to indemnify, defend
or hold harmless any third party or issued any note, bond,
debenture or other evidence of indebtedness, or, directly or
indirectly, guaranteed (including, without limitation, through
so-called take-or-pay or keepwell agreements) indebtedness,
liabilities or obligations of others (other than endorsements for
the purpose of collection in the ordinary course of business)
(collectively "Indebtedness for Borrowed Money");
(viii) agreements or contracts under which any
other person has directly or indirectly guaranteed indebtedness,
liabilities or obligations of the Company or any Subsidiary
thereof (other than endorsements for the purpose of collection in
the ordinary course of business);
(ix) mortgages, pledges, security agreements,
deeds of trust or other documents granting a Lien, including, but
not limited to, Liens on any real or personal property owned or
leased by the Company, or any Subsidiary thereof or any real or
personal property acquired under conditional sales, capital
leases or other title retention or security devices;
(x) joint ventures or partnership contracts;
(xi) tax indemnity, tax allocation or tax-sharing
contracts;
(xii) confidentiality contracts given by the
Company, or any Subsidiary thereof;
(xiii) contracts or understandings with customers
for the supply of products having a remaining term in excess of
one year or obligations in excess of $50,000;
(xiv) other contracts, leases, licenses,
commitments or instruments to which the Company, or any
Subsidiary, thereof is a party or by or to which any of them or
any of their respective assets is bound or subject, which have an
aggregate future liability in excess of $50,000 and are not
terminable by the Company, or a Subsidiary thereof, as
applicable, by notice of not more than sixty (60) days without
payment or penalty; and
(xv) commitments to enter into any of the
foregoing types of contracts or arrangements.
Each of the Contracts is valid and binding and in full force
and effect and is enforceable by the Company, or the applicable
Subsidiary, in accordance with its terms. Each of the Company
and its Subsidiaries have performed all material obligations
26
required to be performed by them to date under the Contracts and
they are not in breach or default in any material respect
thereunder and, to the knowledge of each of them, no other party
is in default thereunder and there exists no condition or event
which, after notice or lapse of time or both, would constitute
any such breach or default.
(p) Related Party Transactions. Except as set forth
on Schedule 4.1(p) hereto, no director, officer, partner,
employee, "affiliate" or "associate" (as such terms are defined
in Rule 12b-2 under the Exchange Act) of the Company or any of
its Subsidiaries (i) has borrowed any monies from or has
outstanding any indebtedness or other similar obligations to the
Company or any of its Subsidiaries; (ii) owns any direct or
indirect interest of any kind in, or is a director, officer,
employee, partner, affiliate or associate of, or consultant or
lender to, or borrower from, or has the right to participate in
the management, operations or profits of, any person or entity
which is (1) a competitor, supplier, customer, distributor,
lessor, tenant, creditor or debtor of the Company or any of its
Subsidiaries, (2) engaged in a business related to the business
of the Company or any of its Subsidiaries or (3) participating in
any transaction to which the Company or any of its Subsidiaries
is a party or (iii) is otherwise a party to any contract,
arrangement or understanding with the Company or any of its
Subsidiaries.
(q) Liens, etc. Except as set forth on Schedule
4.1(q) and liens in respect of taxes not yet due or which are
being contested in good faith and for which adequate reserves
have been established on the books and records of the Company,
neither the Company nor any of its Subsidiaries has granted,
created or suffered to exist with respect to any of its assets
(owned or leased), any mortgage, pledge, charge, hypothecation,
collateral assignment, lien (statutory or otherwise), encumbrance
or security agreement of any kind or nature whatsoever, and the
Company and each Subsidiary has good and indefensible title (with
respect to real property) and good and ideal title (with respect
to other property). Such assets are all assets necessary for the
operation of the business of the Company and its Subsidiaries as
heretofore conducted. The fifteen (15) acres of real property
currently owned by Xxxxx Xxxxx in Port Xxxxxx, Texas and which
adjoins the twenty-five (25) acre plant of the Company therein is
vacant land not used by the Company or any Subsidiary thereof.
(r) Finder's Fees. Except as previously disclosed in
writing to Parent, neither the Company nor any of its
Subsidiaries has incurred any obligation for any finder's,
broker's or agent's fee in connection with the transaction
contemplated hereby.
27
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Parent and Sub.
Parent and Sub represent and warrant to the Company as follows:
(a) Organization, Standing and Power. Each of Parent
and Sub is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation or
organization, has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now
being conducted, and is duly qualified and in good standing to
conduct business in each jurisdiction in which the business it is
conducting, or the operation, ownership or leasing of its
properties, makes such qualification necessary, other than in
such jurisdictions where the failure so to qualify could not
reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect with respect to Parent. Parent and Sub
have heretofore made available to the Company complete and
correct copies of their respective Certificates of Incorporation
and Bylaws.
(b) Authority; No Violations; Consents and Approvals.
(i) Each of Parent and Sub has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Parent and Sub. This
Agreement has been duly executed and delivered by each of Parent
and Sub and constitutes a valid and binding obligation of Parent
and Sub enforceable in accordance with its terms.
(ii) The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by
each of Parent and Sub will not result in any Violation (as
defined in Section 4.1(c)(ii)) pursuant to any provision of the
respective Articles of Incorporation or Bylaws of Parent or Sub
or, except as to which requisite waivers or consents have been
obtained and assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in paragraph
(iii) of this Section 4.2(b) are duly and timely obtained or made
and, if required, the Company Stockholder Approval has been
obtained, result in any Violation of any loan or credit
agreement, note, mortgage, indenture, lease, or other agreement,
obligation, instrument, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or Sub or their respective properties or
assets, which could reasonably be expected, individually or in
28
the aggregate, to have a Material Adverse Effect with respect to
Parent.
(iii) No consent, approval, order or
authorization of, or registration, declaration or filing with,
notice to, or permit from any Governmental Entity, is required by
or with respect to Parent or Sub in connection with the execution
and delivery of this Agreement by each of Parent and Sub or the
consummation by each of Parent or Sub of the transactions
contemplated hereby, which the failure to obtain or make would
have a Material Adverse Effect with respect to Parent, except
for: (A) filings under the HSR Act; (B) the filing with the SEC
of (x) the Schedules 14D-1 and 14F-1, respectively, in connection
with the commencement and consummation of the Offer and (y) such
reports under and such other compliance with the Exchange Act and
the rules and regulations thereunder, as may be required in
connection with this Agreement and the transactions contemplated
hereby; (C) the filing of the Articles of Merger with the
Secretary of State of the State of Texas; (D) such filings and
approvals as may be required by any applicable state securities,
"blue sky" or takeover laws; (E) such filings and approvals as
may be required by any foreign pre-merger notification,
securities, corporate or other law, rule or regulation; (F) such
filings in connection with any Gains and Transfer Taxes; and
(G) such other such filings and consents as may be required under
any environmental, health or safety law or regulation pertaining
to any notification, disclosure or required approval necessitated
by the Merger or the transactions contemplated by this Agreement.
(c) Information Supplied. None of the information
supplied or to be supplied by Parent or Sub for inclusion or
incorporation by reference in (i) the Schedule 14D-9 will, at the
time the Schedule 14D-9 is filed with the SEC, and at any time it
is amended or supplemented, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not
misleading, and (ii) the Proxy Statement will, at the date it is
first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made,
not misleading.
29
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1 Covenants of the Company. During the period from the
date of this Agreement and continuing until the Effective Time,
the Company agrees as to the Company and its Subsidiaries that
(except as expressly contemplated or permitted by this Agreement,
or to the extent that Parent shall otherwise consent in writing):
(a) Ordinary Course. The Company and its Subsidiaries
shall carry on its businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted
and shall use all reasonable efforts to preserve intact its
present business organizations, keep available the services of
its current officers, employees and any sales representatives and
preserve its relationships with customers, suppliers and others
having business dealings with it to the end that its goodwill and
ongoing business shall not be impaired in any material respect at
the Effective Time.
(b) No Solicitation. From and after the date hereof
until the termination of this Agreement, the Company shall not,
nor shall it permit any of its Subsidiaries to, nor shall it
permit or authorize any of its respective officers, directors,
employees, representatives, agents or affiliates (including,
without limitation, any investment banker, attorney or accountant
retained by the Company or any of its Subsidiaries), directly or
indirectly, to initiate, solicit or encourage (including by way
of furnishing non-public information or assistance), or take any
other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal (as defined below), or enter into or
maintain or continue discussions or negotiate with any person or
entity in furtherance of such inquiries or to obtain an
Acquisition Proposal or agree to or endorse any Acquisition
Proposal, provided, however, that nothing contained in this
Section 6.1(b) shall prohibit the Board of Directors of the
Company from (i) furnishing information to, or entering into
discussions or negotiations with, any person or entity that makes
an unsolicited written, bona fide Acquisition Proposal if, and
only to the extent that, (A) the Board of Directors of the
Company, after consultation with and based upon the advice of
independent legal counsel, determines in good faith that such
action is necessary for the Board of Directors of the Company to
comply with its fiduciary duties to stockholders under applicable
law and (B) prior to taking such action, the Company (x) provides
reasonable notice to Parent to the effect that it is taking such
action and (y) receives from such person or entity an executed
confidentiality agreement in reasonably customary form or (ii)
disclosing to the Company's shareholders a position with respect
to a tender offer by a third party pursuant to Rules 14d.9 and
30
14e.2 promulgated under the Exchange Act or from making such
disclosures to the Company's shareholders which, in the judgment
of the Board of Directors of the Company, made in good faith
after consultation with and based upon the advice of independent
legal counsel, is required under applicable law. For purposes of
this Agreement, "Acquisition Proposal" shall mean any of the
following (other than the transactions between the Company,
Parent and Sub contemplated hereunder) involving the Company or
any of its Subsidiaries: (i) any merger, consolidation, share
exchange, recapitalization, business combination, or other
similar transaction; (ii) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of any asset of the Company
or any of its Subsidiaries, outside the ordinary course of
business; (iii) any tender offer or exchange offer for the
outstanding shares of capital stock of the Company or the filing
of a registration statement under the Securities Act in
connection therewith; or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
(c) Advice of Changes; SEC Filings. The Company shall
confer on a regular and frequent basis with Parent, report on
operational matters and promptly advise Parent orally and in
writing of any change or event having, or which, insofar as
reasonably can be foreseen, could have, individually or in the
aggregate, a Material Adverse Effect on the Company. The Company
shall promptly provide Parent (or its counsel) with copies of all
filings made by the Company with the SEC or any other
Governmental Entity in connection with this Agreement and the
transactions contemplated hereby, and shall provide Parent with
all reports prepared regarding internal and financial matters.
(d) Other Actions. Except as contemplated by this
Agreement, the Company will not nor will it permit any of its
Subsidiaries to take or agree or commit to take any action or
omit to take any action, which action or omission could
reasonably be expected, individually or in the aggregate, result
in any of the Company's representations or warranties hereunder
being untrue in any material respect or in any of the Company's
covenants hereunder or any of the conditions to the Merger or
Offer not being satisfied in all material respects. Neither the
Company nor any of its Subsidiaries shall amend in any material
respect any of the Contracts. Neither the Company nor any of its
Subsidiaries shall extend the term of the North Branch Warehouse
lease for more than one year on terms no less favorable than the
terms contained in such lease in respect of the current lease
term thereof.
(e) Tax Covenants. The Company and its Subsidiaries
shall not file any tax returns, claims, reports or similar
documents other than in the ordinary course of its operaitons
(including the filing of its 1994 federal tax return, a copy of
31
such return shall be deliver to Parent immediately after it is
filed), or close any tax matter with a governmental authority
without notifying Parent of such filing or matter, and providing
Parent reasonable opportunity and time to consult with the
Company and its Subsidiaries on such filing or matter.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Preparation of the Proxy Statement; Offer Documents;
Company Stockholders Meeting; Merger without a Company
Stockholders Meeting. (a) As soon as practicable following the
acceptance for payment of and payment for shares of Company
Common Stock by Sub in the Offer, the Company and Parent shall
prepare and file with the SEC the Proxy Statement. The Company
shall use its best efforts to respond to all SEC comments with
respect to the Proxy Statement and to cause the Proxy Statement
to be mailed to the Company's stockholders at the earliest
practicable date. If at any time prior to the expiration date of
the Offer or the Effective Time any event, with respect to the
Company or any of its Subsidiaries or with respect to other
information supplied by the Company for inclusion in the Offer
Documents or the Proxy Statement, shall occur which is required
to be described in an amendment of, or a supplement to, the Offer
Documents or the Proxy Statement, as the case may be, such event
shall be so described to Parent, and such amendment or supplement
shall be promptly filed with the SEC by Parent or Company, as the
case may be, and, as required by law, disseminated to the
stockholders of the Company. The Proxy Statement, insofar as it
relates to the Company or its Subsidiaries or other information
supplied by the Company for inclusion therein will comply as to
form, in all material respects, with the provisions of the
Exchange Act on the rules and regulations thereunder. If at any
time prior to the Effective Time any event with respect to Parent
or Sub, or with respect to information supplied by Parent or Sub
for inclusion in the Schedule 14D-9 or the Proxy Statement, shall
occur which is required to be described in an amendment of, or a
supplement to, such documents, such event shall be so described
to the Company and such amendment or supplement shall promptly be
filed by Company, and, as required by law, disseminated to the
Subsidiaries of the Company.
(b) The Company will, as soon as practicable following
the acceptance for payment of and payment for shares of Company
Common Stock by Sub in the Offer, duly call, give notice of,
convene and hold the Company Stockholders Meeting for the purpose
of approving this Agreement and the transactions contemplated
hereby. At the Company Stockholders Meeting, Parent shall cause
32
all of the shares of Company Common Stock then owned by Parent or
Sub or any of their Subsidiaries or affiliates to be voted in
favor of the Merger.
(c) Notwithstanding the foregoing clauses (a) and (b),
in the event that Parent or any other Subsidiary of Parent shall
acquire at least 90% of the outstanding shares of Company Common
Stock in the Offer, the parties hereto agree, at the request of
Sub, to take all necessary and appropriate action to cause the
Merger to become effective, as soon as practicable after the
expiration of the Offer, without a meeting of stockholders of the
Company, in accordance with the TBCA.
(d) Parent shall as necessary (i) cause Sub promptly
to submit this Agreement and the transactions contemplated hereby
for approval and adoption by its parent by written consent of
sole stockholder; (ii) cause the shares of capital stock of Sub
to be voted for adoption and approval of this Agreement and the
transactions contemplated hereby; and (iii) cause to be taken all
additional actions necessary for Sub to adopt and approve this
Agreement and the transactions contemplated hereby.
7.2 Access to Information. Upon reasonable notice, the
Company shall (and shall cause each of its Subsidiaries to)
afford to the officers, employees, accountants, counsel and other
representatives of the Parent, access, during normal business
hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records, employees,
lenders and suppliers and, during such period, each party
hereunder shall (and shall cause each of its Subsidiaries to)
furnish promptly to the other party, (a) a copy of each report,
schedule, registration statement and other document filed or
received by it during such period pursuant to SEC requirements
and (b) in the case of the Company, all other information
concerning its business, properties and personnel as Parent may
reasonably request. Each of the Company and Parent agrees that
it will not, and will cause its representatives not to, use any
information obtained pursuant to this Section 7.2 for any purpose
unrelated to the consummation of the transactions contemplated by
this Agreement. The Confidentiality Agreement, dated as of July
28, 1995, between Parent and the Company (the "Confidentiality
Agreement") shall apply with respect to information furnished
thereunder or hereunder and any other activities contemplated
thereby.
7.3 Current Information. Prior to Closing, the Company and
its Subsidiaries will advise Parent in writing as soon as
practicable after it becomes known to the Company or any its
Subsidiaries:
(i) of the occurrence of any event that renders
any of the representations or warranty of the Company or any
33
Subsidiary set forth herein was not accurate in any material
respect:
(ii) that any representation or warranty of the
Company or any Subsidiary set forth herein was not accurate in
all material respects when made; and
(iii) of the failure of the Company or any
Subsidiary to comply with or accomplish any of the covenants or
agreements set forth herein in any material respect.
7.4 Legal Conditions to Merger. Each of the Company,
Parent and Sub will take all reasonable actions necessary to
comply promptly with all legal requirements which may be imposed
on such party with respect to the Offer, the Merger and the
transactions contemplated by the Stockholders Agreement
(including furnishing all information required under the HSR Act
and in connection with approvals of or filings with any other
Governmental Entity and responding at the earliest practicable
date with any requests for additional information received from
any Governmental Entity in connection therewith) and will
promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or
any of their Subsidiaries in connection with the Offer, the
Merger and the transactions contemplated by the Stockholders
Agreement; provided, however, that Parent need not so comply if
required by the Department of Justice or any other Governmental
Entity to hold separate, sell or otherwise dispose of any
Subsidiary of Parent or the Company or assets or properties of
any of the foregoing. Each of the Company, Parent and Sub will,
and will cause its Subsidiaries to, take all reasonable actions
necessary to obtain (and will cooperate with each other in
obtaining) any consent, authorization, order or approval of, or
any exemption by, any Governmental Entity or other public or
private third party, required to be obtained or made by the
Company, Parent or any of their Subsidiaries in connection with
the Offer, the Merger, or the taking of any action contemplated
hereby or thereby. In case at any time after the Effective Time,
any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation
with full title to all properties, assets, rights, approvals,
immunities and franchises of either of the Constituent
Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action.
7.5 Fees and Expenses. Except as otherwise provided in
Section 9.1, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expense.
7.6 Indemnification. (a) The Company shall, and from and
after the Effective Time, Parent shall, indemnify, defend and
34
hold harmless each 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 or director of the Company or any of its
Subsidiaries (the "Indemnified Parties") against all losses,
claims, damages, costs, expenses (including reasonable attorneys'
fees and expenses), liabilities or judgments or amounts that are
paid in settlement with the approval of the indemnifying party
(which approval shall not be unreasonably withheld) of or in
connection with any threatened or actual claim, action, suit,
proceeding or investigation based in whole or in part on or
arising in whole or in part out of the fact that such person is
or was a director or officer of the Company or any of its
Subsidiaries whether pertaining to any matter existing or
occurring at or prior to the Effective Time and whether asserted
or claimed prior to, or at or after, the Effective Time
("Indemnified Liabilities"), including all Indemnified
Liabilities based in whole or in part on, or arising in whole or
in part out of, or pertaining to this Agreement or the
transactions contemplated hereby, in each case to the full extent
a corporation is permitted under the TBCA to indemnify its own
directors or officers as the case may be (and Parent will pay
expenses in advance of the final disposition of any such action
or proceeding to each Indemnified Party to the full extent
permitted by law). Without limiting the foregoing, in the event
any such claim, action, suit, proceeding or investigation is
brought against any Indemnified Parties (whether arising before
or after the Effective Time), (i) the Indemnified Parties may
retain counsel satisfactory to them and the Company (or them and
Parent after the Effective Time) and the Company (or after the
Effective Time, Parent) shall pay all fees and expenses of such
counsel for the Indemnified Parties promptly as statements
therefor are received; and (ii) the Company (or after the
Effective Time, Parent) will use all reasonable efforts to assist
in the vigorous defense of any such matter, provided that neither
the Company nor Parent shall be liable for any settlement
effected without its prior written consent. Any Indemnified
Party wishing to claim indemnification under this Section 7.6,
upon learning of any such claim, action, suit, proceeding or
investigation, shall notify the Company (or after the Effective
Time, Parent) and shall deliver to the Company (or after the
Effective Time, Parent) the undertaking contemplated by the TBCA.
The Indemnified Parties as a group may retain only one law firm
to represent them with respect to each such matter unless there
is, under applicable standards of professional conduct, a
conflict, in the written opinion of counsel to the Indemnified
Parties, on any significant issue between the positions of any
two or more Indemnified Parties, provided that in no event shall
the Company (or after the Effective Time, Parent) be obligated to
pay the fees and expenses of more than two law firms on behalf of
all Indemnified Parties. The Company, Parent and Sub agree that
all rights to indemnification, including provisions relating to
advances of expenses incurred in defense of any action or suit,
35
existing in favor of the Indemnified Parties with respect to
matters occurring through the Effective Time, shall survive the
Merger and shall continue in full force and effect for a period
of not less than six years from the Effective Time; provided,
however, that all rights to indemnification in respect of any
Indemnified Liabilities asserted or made within such period shall
continue until the disposition of such Indemnified Liabilities.
(b) The provisions of this Section 7.6 are intended to
be for the benefit of, and shall be enforceable by, each
Indemnified Party, his heirs and his personal representatives and
shall be binding on all successors and assigns of Parent, Sub,
the Company and the Surviving Corporation.
7.7 Publicity. The parties will consult with each other
and will mutually agree upon any press release or public
announcement pertaining to the Offer and the Merger and shall not
issue any such press release or make any such public announcement
prior to such consultation and agreement, except as may be
required by applicable law or by obligations pursuant to any
listing agreement with any national securities exchange, in which
case the party proposing to issue such press release or make such
public announcement shall use reasonable efforts to consult in
good faith with the other party before issuing any such press
release or making any such public announcement.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the
Merger shall be subject to the satisfaction prior to the Closing
Date of the following conditions:
(a) Stockholder Approval. This Agreement and the
Merger shall have been approved and adopted by the affirmative
vote of the holders of two-thirds of the Shares entitled to vote
thereon if such vote is required by applicable law; provided that
--------
the Parent and Sub shall vote all Shares purchased pursuant to
the Offer or the Stockholders Agreement in favor of the Merger.
(b) HSR Act. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have
been terminated or shall have expired.
(c) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or other
legal restraint or prohibition or other order issued by any
Governmental Entity having competent jurisdiction (an
36
"Injunction") preventing the consummation of the Merger shall be
in effect; provided, however, that prior to invoking this
condition, each party shall use all commercially reasonable
efforts to have any such decree, ruling, injunction or order
vacated.
8.2 Conditions of Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are subject to
the satisfaction of the following conditions, any or all of which
may be waived in whole or in part by Parent and Sub:
(a) Payment for Shares. Prior to the Expiration Date
of the Offer, Sub shall have accepted for payment and paid for
the shares of Company Common Stock validly tendered and not
withdrawn in the Offer such that, after such acceptance and
payment, Parent and its affiliates shall own, at consummation of
the Offer, two-thirds of the outstanding shares of the Company
Common Stock on a fully diluted basis; provided, however, that
------------------
this condition shall be deemed satisfied if Sub fails to purchase
the shares of Company Common Stock pursuant to the Offer in
violation of the terms thereof.
(b) Representations and Warranties. The
representations and warranties of the Company set forth in this
Agreement shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and Parent shall have received a
certificate signed on behalf of the Company by the chief
executive officer and by the chief financial officer of the
Company to such effect.
(c) Performance of Obligations of the Company. The
Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement
at or prior to the Closing Date, and Parent shall have received a
certificate signed on behalf of the Company by the chief
executive officer and by the chief financial officer of the
Company to such effect.
(d) Consents, etc. All licenses, permits, consents,
approvals, authorizations, qualifications and orders of
Governmental Entities and other third parties referred to in
Sections 4.1(c), 5.1(b), or disclosed on Schedule 4.1(c) and
marked with an asterisk thereon.
8.3 Conditions of Obligations of the Company. The
obligation of the Company to effect the Merger is subject to the
satisfaction of the following conditions, any or all of which may
be waived in whole or in part by the Company:
(a) Representations and Warranties. The
37
representations and warranties of Parent and Sub set forth in
this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of
the Closing Date, except as otherwise contemplated by this
Agreement, and the Company shall have received a certificate
signed on behalf of Parent by the chief executive officer and by
the chief financial officer of Parent to such effect.
(b) Performance of Obligations of Parent and Sub.
Parent and Sub shall have performed in all material respects all
obligations required to be performed by them under this Agreement
at or prior to the Closing Date, and the Company shall have
received a certificate signed on behalf of Parent by the chief
executive officer and by the chief financial officer of Parent to
such effect.
ARTICLE IX
TERMINATION AND AMENDMENT
9.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time,
whether before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company or
Parent:
(a) by mutual written consent of the Company and
Parent, or by mutual action of their respective Boards of
Directors;
(b) by either the Company or Parent (i) if there has
been a material breach of any representation, warranty, covenant
or agreement on the part of the other set forth in this Agreement
which breach has not been cured within three business days
following receipt by the breaching party of notice of such
breach, provided that the failure to provide such notice shall
not be deemed to be a waiver of any breach, or (ii) if any
permanent injunction or other order of a court or other competent
authority preventing the consummation of the Merger shall have
become final and non-appealable, provided that Parent and Company
shall have used all commercially reasonable efforts to cause any
such injunction or order to be vacated or lifted;
(c) by either the Company or Parent, so long as such
party has not breached its obligations hereunder, if the Merger
shall not have been consummated on or before March 31, 1996,
unless the Offer has expired and shares of common stock were
purchased thereto prior to March 31, 1996, in which event not
earlier than 120 days from such expiration date; provided, that
the right to terminate this Agreement under this Section 8.1(c)
shall not be available to any party whose failure to fulfill any
38
obligation under this Agreement has been the cause of or resulted
in the failure of the Merger to occur on or before such date;
(d) by the Company if an Acquisition Proposal has been
made and, in the good faith judgment of the Board of Directors of
the Company, based upon the advice of counsel, the Board of
Directors of the Company determines in good faith that as a
result of such Acquisition Proposal termination is required under
applicable law in the exercise of the Board of Directors'
fiduciary duties; provided, however, that if this Agreement is
terminated pursuant to this Section 9.1(d), the Company shall
reimburse Parent and Sub for all of its fees (including, without
limitation, legal fees) and expenses in connection with the
transactions contemplated hereby (but not in excess of
$1,000,000), plus all fees (including, without limitation, legal
fees) incurred by Parent and Sub in connection with enforcing
their rights hereunder and, if within 12 months of such
termination, the Company shall thereafter consummate or approve
any Acquisition Proposal, the Company shall pay Parent the sum of
$1,500,000 promptly upon the consummation of such transaction, in
each case not as a penalty or forfeiture but to compensate Parent
adequately for its time, effort, expense and loss of opportunity
in connection with the transactions contemplated by this
Agreement.
(e) by the Company, if Sub shall have failed to
commence the Offer within five business days following the date
of the initial public announcement of the Offer;
(f) by Parent, if the Offer terminates, is withdrawn,
abandoned or expires by reason of the failure to satisfy any
condition set forth in Exhibit A hereto; or
(g) by the Company, if the Offer shall have expired or
have been withdrawn, abandoned or terminated without any shares
of Company Common Stock being purchased by Sub thereunder on or
prior to the Expiration Date as it may be extended pursuant to
Section 1.2 hereof.
9.2 Effect of Termination. The termination of this
Agreement by either the Company or Parent as provided in Section
8.1, shall not relieve either party from any liability it may
have hereunder as a result of any breach of this Agreement or
otherwise.
9.3 Amendment. Subject to applicable law, this Agreement
may be amended, modified or supplemented only by written
agreement of Parent, Sub and the Company at any time prior to the
Effective Date with respect to any of the terms contained herein;
provided, however, that, after this Agreement is approved by the
Company's stockholders, no such amendment or modification shall
reduce the amount or change the form of consideration to be
39
delivered to the stockholders of the Company.
9.4 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their
respective Boards of Directors, may, to the extent legally
allowed: (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto; (ii) waive
any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto; and
(iii) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in
a written instrument signed on behalf of such party. The failure
of any party hereto to assert any of its rights hereunder shall
not constitute a waiver of such rights.
ARTICLE X
GENERAL PROVISIONS
10.1 Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties and
agreements in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time,
except for the agreements contained in Article III, and Sections
7.6 and 9.1(d) hereof. The Confidentiality Agreement shall
survive the execution and delivery of this Agreement, and the
provisions of the Confidentiality Agreement shall apply to all
information and material delivered by any party hereunder.
10.2 Notices. Any notice or communication required or
permitted hereunder shall be in writing and either delivered
personally, telegraphed or telecopied or sent by certified or
registered mail, postage prepaid, and shall be deemed to be
given, dated and received when so delivered personally,
telegraphed or telecopied or, if mailed, five business days after
the date of mailing to the following address or telecopy number,
or to such other address or addresses as such person may
subsequently designate by notice given hereunder:
(a) if to Parent or Sub, to:
G-I Holdings Inc.
0000 Xxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Telephone: 201/000-0000
Telecopy: 201/628-3326
with a copy to:
40
General Counsel
(b) if to Company, to:
U.S. Intec, Inc.
0000 Xxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Telephone: 800/000-0000
Telecopy: 409/724-2348
with a copy to:
Xxxxxxx Xxxxxxx, P.C.
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telephone: 214/000-0000
Telepcopy: 214/969-4343
10.3 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of
this Agreement unless otherwise indicated. The table of
contents, glossary of defined terms and headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Whenever the word "include", "includes" or
"including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation". 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.
10.4 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.
10.5 Entire Agreement; No Third Party Beneficiaries; Rights
of Ownership. This Agreement (together with the Confidentiality
Agreement, the Stockholders Agreement and any other documents and
instruments referred to herein) constitutes the entire agreement
and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject
matter hereto and, except as provided in Section 7.6, is not
intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
41
10.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York,
without giving effect to the principles of conflicts of law
thereof.
10.7 No Remedy in Certain Circumstances. Each party agrees
that, should any court or other competent authority hold any
provision of this Agreement or part hereof to be null, void or
unenforceable, or order any party to take any action inconsistent
herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the
remaining provisions and obligations contained or set forth
herein shall not in any way be affected or impaired thereby,
unless the foregoing inconsistent action or the failure to take
an action constitutes a material breach of this Agreement or
makes the Agreement impossible to perform in which case this
Agreement shall terminate pursuant to Article IX hereof. Except
as otherwise contemplated by this Agreement, to the extent that a
party hereto took an action inconsistent herewith or failed to
take action consistent herewith or required hereby pursuant to an
order or judgment of a court or other competent authority, such
party shall incur no liability or obligation unless such party
42
did not in good faith seek to resist or object to the imposition
or entering of such order or judgment.
10.8 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, except that Sub may assign, in its sole discretion, any
or all of its rights, interests and obligations hereunder to any
newly-formed wholly-owned Subsidiary of Parent. Subject to the
preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
G-I HOLDINGS INC.
----------------------------------
By:
USI ACQUISITION COMPANY
----------------------------------
By:
U. S. INTEC, INC.
----------------------------------
By:
43
EXHIBIT A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Sub
shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to Sub's obligation to
pay for or return tendered Shares promptly after expiration or
termination of the Offer), to pay for any Shares tendered, and
may postpone the acceptance for payment or, subject to the
restriction referred to above, payment for any Shares tendered,
and, subject to the terms of this Merger Agreement, may amend or
terminate the Offer, if, before acceptance for payment of such
Shares (whether or not any Shares have theretofore been purchased
or paid for), (i) there have not been validly tendered and not
withdrawn prior to the time the Offer shall otherwise expire a
number of Shares which constitutes two-thirds of the Shares
outstanding on a fully-diluted basis on the date of purchase ("on
a fully-diluted basis" having the meaning, as of any date: the
number of Shares outstanding, together with Shares the Company is
then required to issue pursuant to obligations outstanding at
that date under employee stock option or other benefit plans or
otherwise) or (ii) all material regulatory and related approvals
have not been obtained or made on terms reasonably satisfactory
to Sub and the Company shall have obtained all consents marked
with an asterisk on Schedule 4.1(c) to the Merger Agreement on
terms reasonably satisfactory to Sub; (iii) any applicable
waiting periods under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer or (iv) at any
time on or after the date of the Merger Agreement and before
acceptance for payment of, or payment for, such Shares any of the
following events shall occur:
(a) any governmental entity or federal or state court
of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other
order which is in effect and which (1) materially restricts,
prevents or prohibits consummation of the Offer, the Merger
or any transaction contemplated by the Merger Agreement, (2)
prohibits or limits materially the ownership or operation by
the Company, Parent or any of their subsidiaries of all or
any material portion of the business or assets of the
Company and its subsidiaries taken as a whole, or compels
the Company, Parent, or any of their subsidiaries to dispose
of or hold separate all or any material portion of the
business or assets of the Company and its subsidiaries taken
44
as a whole, (3) imposes limitations on the ability of
Parent, Sub or any other subsidiary of Parent to exercise
effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares
acquired by 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
the Merger Agreement and the transactions contemplated
thereby or (4) requires divestitures by Parent, Sub or any
other affiliate of Parent of any Shares; provided that
Parent shall have used all commercially reasonable efforts
to cause any such decree, judgment, injunction or other
order to be vacated or lifted;
(b) any action, suit or proceeding before any court or
any Governmental Authority shall be pending, or shall have
been threatened, seeking to restrain, prevent, enjoin or
change the transactions contemplated hereby, or questioning
the validity or legality of any such transactions or seeking
damages in connection with such transactions;
(c) the representations and warranties of the Company
contained in the Merger Agreement shall not be true and
correct in all material respects as of the date of
consummation of the Offer as though made on and as of such
date;
(d) the Company shall not have performed or complied
in all material respects with its obligations under the
Merger Agreement to be performed or complied with by it;
(e) the Merger Agreement shall have been terminated in
accordance with its terms;
(f) prior to the purchase of Shares pursuant to the
Offer, an Acquisition Proposal for the Company exists and
the Board shall have withdrawn or materially modified or
changed (including by amendment of the Schedule 14D-9) in a
manner adverse to Sub its recommendation of the Offer, the
Merger Agreement or the Merger;
(g) (1) it shall have been publicly disclosed or Sub
shall have otherwise learned that, except as contemplated by
the Stockholders Agreement, any person or "group" (as
defined in Section 13(d)(3) of the Exchange Act), other than
Parent, its affiliates or any group of which any of them is
a member or any stockholder which is a party to the
Stockholders Agreement, shall have acquired beneficial
45
ownership (determined pursuant to Rule 13d-3 promulgated
under the Exchange Act) of more than 7% of any class or
series of capital stock of the Company (including the
Shares) (or in the case of any holder of shares identified
in the Company's most recent Proxy Statement which has not
executed a Stockholders Agreement ("Other Shareholder"),
such Other Shareholder shall have increased its holding of
shares by more than 1% of the outsting Shares), through the
acquisition of stock, the formation of a group or otherwise,
or shall have been granted an option, right or warrant,
conditional or otherwise ("Option"), to acquire beneficial
ownership of more than 7% of any class or series of capital
stock of the Company (including the Shares) (or in the case
of an Other Shareholder, such Other Shareholder shall have
been granted an Option to acquire an additional 1% of the
Outstanding Shares); or (2) any person or group shall have
entered into a definitive agreement or agreement in
principle with the Company with respect to a merger,
consolidation or other business combination with the
Company;
(h) the Company shall not have terminated its coal tar
operations on terms satisfactory to Parent; or
(i) the Employment Agreement between the Company and
Xxxxx Xxxxx, dated the date of the Merger Agreement, shall
have been terminated and shall not be in full force and
effect; or
(j) the Company shall not own nor have the right under
the lease currently in effect with Armco Inc. to acquire the
warehouse located in Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxx,
Xxxxx
which, in the judgment of Sub in any such case, and regardless of
the circumstances (including any action or omission by Sub)
giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payments.
The foregoing conditions are for the sole benefit of
Sub and its affiliates and may be asserted by Sub regardless of
the circumstances (including, without limitation, any action or
inaction by Sub or any of its affiliates) giving rise to any such
condition or may be waived by Sub, in whole or in part, from time
to time in its sole discretion, except as otherwise provided in
the Agreement. The failure by Sub at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such
46
right and each such right shall be deemed an ongoing right and
may be asserted at any time and from time to time. Any
determination by Sub concerning any of the events described
herein shall be final and binding. Unless otherwise defined
herein, capitalized terms used herein shall have the meanings
ascribed to them in the Agreement and Plan of Merger among the
Parent, Sub and the Company to which this Exhibit A is attached
(the "Agreement").
47
Schedule 1.3 - Directors, Officers and Stockholders who intend to tender stock
------------ ---------------------------------------------------------------
First Southwest Company
Xxxxxxx Family Limited Partnership
490 Park Joint Venture
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxx
Xxx X. Xxxxxxxxx
X. Xxxxx Xxxxx
Xxxxxxx Xxxx Xxxxxx, Xx.
X. Xxxxx Xxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx Group II
Xxxx X. Xxxx, Xx.
Xxxxxxx X. Xxxx
Schedule 4.1(a) - Subsidiaries
--------------- ------------
1. The Company owns 100% of the outstanding capital stock of Exterior
Technologies Corporation, a Texas corporation.
2. The company owns 100% of the outstanding capital stock of Intec Marine,
Inc., a Texas corporation.
Schedule 4.1(b) - Capital Structure
--------------- -----------------
1. There are no liens, charges, encumbrances, claims and options on the
capital stock of the Subsidiaries of the Company.
2. The Company owns a 40% limited partnership interest in Tharmo Manufacturing
Company, L.P., a Delaware limited partnership.
3. The following agreements provide certain rights to shareholders of the
Company:
(a) Registration Rights Agreements dated January 12, 1995, between the
Company and Xxxxxx Xxxx.
(b) Registration Agreement dated January 12, 1995, between the Company,
Xxxxx Xxxxx, First Southwest Company, 490 Park Joint Venture and the Xxxxxxx
Family Limited Partnership.
(c) Global Modification Agreement, dated September 28, 1990, between Xxxxx
Xxxxx and the Company, as such agreement pertains to Xx. Xxxxx'x rights in
connection with the common stock pledged to the Company.
4. Attached is a list of all outstanding options to purchase common stock of
the Company as of August 31, 1995.
5. The Company's 1994 Long Term Incentive Plan provides for automatic grants
of 10,000 shares of Restricted Stock to non-employee directors of the Company
who do not own or control as many as 100,000 shares of the Company's common
stock. The shares vest at a rate of 25% per year for each full year of service
as a director, and become fully vested upon a change in control. A list of
Restricted Stock grants is attached.
RESTRICTED STOCK (S)
TOTAL VESTED UNVESTED VESTING
OUTSIDE DIRECTORS SHARES SHARES SHARES DATE
-------------------- --------- ---------- ------------ ---------
XXXXXX X. XXXXXXX 10,000 5,000 5,000 5/88
AUSTIN BONBOULIN 10,000 5,000 6,000 5/88
XXXXXXX XXXX
XXXXXX, XX. 10,000 5,000 5,000 5/88
--------- ---------- ------------
30,000 15,000 16,000
========= ========== ============
(A) - EMPLOYMENT TERMINATION 2 WITH OPTIONS EXPIRING 5/27/03
(B) - SHARES VEST OVER FOUR YEARS
VESTING SCHEDULES OPTIONS % VESTED
---------------------- ----------- ----------- -----------
#1 4/24/89 25% 0 100 0
4/24/90 25%
4/24/91 25%
4/24/92 25%
#2 1/13/88 25% 108,250 100 108,250
1/13/89 25%
1/13/90 25%
1/13/91 25%
#3 5/8/90 25% 52,000 100 52,000
1/1/91 25%
1/1/92 25%
1/1/93 25%
OUTSIDE DIRECTORS 0
----------
EXERCISEABLE 01/14/95 160,250
==========
EXPIRATION DATE SUMMARY
---------------------------
3/31/96 0
1/13/96 80,000
4/6/96 70,250
---------
150,250
=========
08/14/95
U.S. INTEC, INC.
STOCK OPTION GRANTS
LOANS
BEG VESTING
EMPLOYEES NUMBER EXERCISED DATE PRICE TYPE SCHEDULE
------------------------- -------- --------- ---------- ------------ ------ -------- -
XXX XXXXXXXXX 10,000 4.80 I 2
30,000 8.75 N 2
XXXXX XXXXXXXX XXXXXXX 12,400 12,000 08/24/83 4.80 I 1
50,000 10,000 08/01/84 7.375 N 1
40,000 EXPIRED
XXXXX XXXXX 10,000 4.80 I 2
24,000 9.75 N 2
XXXXX WALLENUK 1,258 4.80 I 2
6,000 9.75 N 2
XXXX XXXXXXXX 5,000 4.80 I 2
7,500 9.75 N 2
XXXX XXXXXX 10,000 10,000 01/14/86 4.80 I 2
7,500 9.75 N 2
XXXX (IKE) XXXXX 1,260 1,260 08/08/84 4.80 I 2
6,000 9.75 N 2
XXXX XXXXXXX 4,000 4.80 I 3
XXXX XXXXXX 5,000 4.80 I 3
XXXX XXXXXXX 5,000 4.80 I 3
XXXX XXXXXX 5,000 4.80 I 3
XXXXX XXXXX 15,000 4.80 I 3
XXXXX XXXXXX 2,000 4.80 I 3
XXXXXX XXXXX 4,000 4.80 I 3
XXXXX XXXXXX 5,000 5,000 02/07/94 4.80 I 3
XXX XXXXXXX 2,000 4.80 I 3
XXXX XXXXXX 2,000 4.80 I 3
XXXX XXXXX 3,000 3,000 08/13/83 4.80 I 3
XXXXXXX XXXXXXX 10,000 10,000 EXPIRED A) 4.80 I 3
XXXXX XXXXXXX 2,000 4.80 I 3
XXXXXX XXXXXXX 10,000 10,000 EXPIRED A) 4.80 I 3
XXXXX XXXXXX 4,000 4.80 I 3
XXXX XXXXXXX 2,000 4.80 I 3
-------- --------
280,000 101,750
======== ========
U.S. INTEC, INC.
STOCK OPTION GRANTS
LOANS
DATE DATE END
EMPLOYEES GRANTED EXPIRED NUMBER
------------------------- ------- --------- --------
XXX XXXXXXXXX 4/8/86 4/8/86 10,000
8/3/87 1/13/88 30,000
XXXXX XXXXXXXX XXXXXXX 0
4/24/86 8/31/96 0
3/31/96 0
XXXXX XXXXX 4/6/80 4/8/90 10,000
5/3/87 1/13/90 25,000
XXXXX WALLENUK 4/6/86 4/6/90 1,280
8/3/87 1/13/88 6,000
XXXX XXXXXXXX 4/8/86 4/6/89 5,000
8/4/87 1/13/90 7,500
XXXX XXXXXX 4/8/89 4/8/90 0
8/3/87 1/13/90 7,500
XXXX (IKE) XXXXX 0
8/3/87 1/13/90 5,000
XXXX XXXXXXX 4/8/86 4/8/90 4,000
XXXX XXXXXX 4/8/86 4/8/90 5,000
XXXX XXXXXXX 4/8/86 4/8/90 5,000
XXXX XXXXXX 4/8/86 4/8/90 5,000
XXXXX XXXXX 4/8/86 4/8/90 15,000
XXXXX XXXXXX 4/8/86 4/8/90 2,000
XXXXXX XXXXX 4/8/86 4/8/90 4,000
XXXXX XXXXXX 4/8/86 4/8/90 0
XXX XXXXXXX 4/8/86 4/8/90 2,000
XXXX XXXXXX 4/8/86 4/8/90 2,000
XXXX XXXXX 4/8/86 4/8/90 0
XXXXXXX XXXXXXX 4/8/86 4/8/90 0
XXXXX XXXXXXX 4/8/86 4/8/90 2,000
XXXXXX XXXXXXX 4/8/86 4/8/90 0
XXXXX XXXXXX 4/8/86 4/8/90 4,000
XXXX XXXXXXX 4/8/86 4/8/90 2,000
--------
184,250
========
Schedule 4.1(c)(ii) - Potential Violations/Comments Required
------------------- --------------------------------------
1. Consent of Somerset Trust Company, pursuant to that certain Promissory
Note, dated November 18, 1986, made by the Company is favor of Somerset Trust
Company (now known as Summit Bank), in the original principal amount of
$1,260,000, which provides that the holder of the note may declare it
immediately due and payable in full in the event there is a change of ownership
of the corporate borrower, unless the holder gives its prior written consent.
2. Consent of LaSalle National Bank, pursuant to that certain Security
Agreement, dated January 17, 1990, between The Exchange National Bank of Chicago
(now known as LaSalle National Bank) and the Company, which provides that the
Company will not enter into any merger or consolidation or sell, lease or
otherwise dispose of all or substantially all of its assets or enter into any
other transaction outside the ordinary course of business.
3. Consent of Community Bank, pursuant to that certain Commercial Real
Estate Lien Note, dated May 11, 1995, made by the Company in favor of Community
Bank, in the original principal amount of $1,000,000, which provides that the
holder of the note may declare it immediately due and payable in full in the
event the Company is a party to any merger or consolidation without obtaining
the holder's prior written consent.
4. Consents of Valley Recycling Works, Inc. and Thermo Manufacturing
Company, L.P., pursuant to that certain Sublease Agreement dated August 1, 1994,
between the Company and Thermo Materials, a division of Thermo Manufacturing
Company, L.P., which provides that the Company cannot assign the sublease
without Thermo's prior written consent or in violation of primary lease
agreement between Thermo and Valley Recycling Works, Inc., which provides that
the transfer of more than 25% of the voting control of the leasee constitutes an
assignment requiring the lessor's consent.
5. Pursuant to an Amendment, dated January 30, 1995, to the Security
Agreement dated January 17, 1990, between The Exchange National Bank of Chicago
(now known as LaSalle National Bank) and the Company, the Company has agreed to
grant to LaSalle National Bank as additional security for existing loans, a Deed
of Trust, Security Agreement, Assignment of Rents and Fixture Filing, relating
to the Company's real property located in Hoffman Estates, Illinois, Stockton,
California, North Branch, New Jersey, Corvallis, Oregon, Monroe, Georgia, and
Houston, Texas, which, when executed will prohibit the Company from selling,
conveying, transferring or assigning any beneficial interest in the Company or
in any corporation which owns all or part of the property.
6. Consent of MetLife Capital Corporation pursuant to that certain Loan
Security Agreement, dated September 29, 1993, which provides that the Company
may not enter into any merger that MetLife reasonably believes would adversely
affect the Company's ability to perform its obligations thereunder.
7. Consent of The CIT Group/ Equipment Financing, Inc. pursuant to those
certain Equipment Leases dated September 12, 1994 and January 6, 1995 and that
certain Cross-Collateral Security Agreement dated January 6, 1995.
*8. The Company is required pursuant to the Industrial Site Recovery Act
to obtain the approval of the New Jersey Department of Environmental Protection
before transferring ownership of the Company's manufacturing plant located at
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxxx (including a transfer that is the
result of a change of control of the Company).
*Condition to Sub's closing of Offer
Schedule 4.1 (g) - Litigation/Potential Liabilities
---------------- --------------------------------
1. See attached for a list of pending and settled litigation of the Company.
2. The Company received a notice, dated June 6, 1995, from the Texas Attorney
General relating to a warranty claim under the Deceptive Trade Practices Act.
3. For a description of the Company's OSHA noncompliance, see Schedule 4.1(n).
4. Warranties are provided with respect to the Company's products and claims
under such warranties may be made against the Company.
5. The wife and minor children of Xxx Xxxxxx, a former employee of the
Company, are receiving workers' compensation benefits, and have filed suit (or
indicated that they intend to file suit) against the treating physician,
anesthesiologist, and hospital in connection with Xx. Xxxxx'x death. Xxx.
Xxxxxx has not indicated any intention to bring suit against the Company;
however, the possibility remains that she could bring an action against the
Company.
6. The Company has informed Xxxxxxx, Incorporated that it does not intend to
proceed with the condition of a warehouse on the Company's property located at
000 Xxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx. The Company expects that it will be
required to pay approximately $12,000 in connection with this contract but has
not received an invoice from Xxxxxxxx at this time.
7. S & S Roofing has joined the Company as a third-party defendant in a
counterclaim against Bradco Supply, alleging that products manufactured by the
Company and sold to S&S Roofing by Bradco Supply were defective. S&S Roofing is
seeking approximately $500,000 in damages. In connection with this claim,
Bradco Supply is currently withholding approximately $250,000 that it owes to
the Company.
8. On March 9, 1995, Xxxxx Xxxxxxxx, an employee of X.X. Xxxxxxxx, was injured
while unloading asphalt at the Company's Houston plant. Xx. Xxxxxxxx filed a
claim under his employer's workers' compensation insurance. The insurance
carrier notified the Company that it is subrogating the claim against the
Company. The subrogation, which will be handled by the Company's general
liability insurer, is expected to cost between approximately $10,000 and
$11,000. In addition, the Company has received a subpoena for information
concerning this claim which suggest additional legal action has been taken by
Xx. Xxxxxxxx.
9. On June 28, 1995 the Company canceled the Master Agreement for InfoWork
Interactive Voice Services, dated September 19, 1994, between the Company and
AT&T Communications, Inc. The Company has agreed to pay $8,400 to At&T as
consideration for a full release of all of the Company's obligations under the
agreement.
10. According to California law, vacation pay accrues on a daily basis.
Despite the Company's 15-month wait for vacation policy, the Company has been
required to provide two of its employees in California with their accrued
vacation time and may have to provide the same to other of its employees in
California in the future.
Schedule 4.1 (g)
PENDING LITIGATION
------------------
(1) No. 2089/86; J. Xxxxxxx Xxxxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxxx, Xxxxx Xxxx and Xxxxxxx X. Xxxxx, d/b/a The Orchard of
Xxxxxxxx, vs. Xxxx Xxxxxxx, d/b/a Expert Roofing Company and Xxx Xxxxx,
d/b/a All Type Roofing and U.S. Intec, Inc., pending in the Supreme Court
of the State of New York. Fire Loss - Alleged damages are $402,803.75;
however settlement value is $250,000.
(2) No. 154,157; Rapides Parish Airport Authority Vs. Dixie Roofing and
Sheetmetal Company, Inc., U.S. Intec, and Aetna Life and Casualty Insurance
Company is pending in the Ninth Judicial District Court, Parish of
Rapides, State of Louisiana. Warranty Claim - Alleged damages are
$58,977.50; however, settlement value is $8,500 in material.
(3) Hartford Insurance Company, as Subrogee for Alden Town Food Mart, Inc. Vs.
Xxxxxx X. Xxxxxxx, d/b/a Robmann Roofing Company, Xxxxx Xxxxxxx, U.S.
Intec, Inc. and B&L Wholesale, Inc., currently pending in the Superior
Court for Erie County, New York. Fire Loss - Alleged damages are $198,915.
(4) Cause No. 000-000000-00; Volunteers of America Housing Corporation and
Sierra Manor, Inc. vs. U.S. Intec, Inc., pending in Tarrant County, Texas.
Warranty Claim - Alleged damages are $124,000.
(5) Cause No. 92-01966; Pennswood Condominium Association Vs. U.S. Intec, Inc.
and Xxxx-XxXxxxxx, Inc., pending in Court of Common Pleas of Xxxxxxxxxx
County, Pennsylvania. Warranty Claim - Damages are unknown.
(6) Cause No. CPM-L-14-92; United Methodist Homes of New Jersey Vs. U.S.
Intec, Inc. and Xxxxxx Xxxxxx & Sons, Inc., pending in the Cape May County
Superior Court of New Jersey. Warranty Claim - Damages are unknown.
(7) Cause No. C-92-7447; Xxxxxxx Roofing & Storage, Inc., Xxxxx X. Xxxxxxx and
Xxxxx X. Xxxxxxx Vs. Atlas Roofing, Inc. and U.S. Intec, Inc. pending in
the District Court of Oklahoma County, Oklahoma. Warranty Claim - Damages
are estimated to be $180,000.
(8) Cause No. C-92-7432; Comrand Aviation Services, Ltd. Vs. U.S. Intec, Inc.,
Triplex Roofing & Coatings, Ltd., Xxxxxx Xxxx, Xxxx X. Xxxxxx and Elite
Insurance Company, pending in the Supreme Court or British Columbia,
Canada. Warranty Claim - Damages are $73,036.45, excluding consequentials.
(9) Cause No. 92-18626; St. Mary's Roman Catholic Church Vs. Goreski
Construction Company, Xxxxxx Xxxxxxxxx, F.A.R.A, Xxxx X Xxxx, Inc.,Xxxxxxx
X. Xxxxxxxx, Mymar Roofing Company, Inc., Skyline Construction, Xxxxx &
Company, Inc., XxXxxxxx Contractor, Inc., Coppers Company, Inc., Bradco
Supply Corporation, U.S. Intec, Inc. Xxxx Associates, LTD., Xxxx-Xxxx
Corporation, Devido Xxxxxx Xxxxx & Marble Company and Cal Consulting,
pending in the Court of Common Pleas of Xxxxxxxxxx County, Pennsylvania.
Warranty Claim - Damages are unknown.
Pending Litigation
Page 2
(10) Cause No. 93-000933; Bayon Bend Towers Council of Co-Owners Vs. U.S. Intec,
Inc., pending in the 61st Judicial District Court of Xxxxxx County, Texas.
Warranty Claim - Damages are alleged in excess of $200,000.
(11) Cause No. 534-1993; May Xxx, Inc. Vs. Xxxxxxx X. Xxxxxxx, d/b/a Xxxxxxx'x
Roofing and Home Improvements Vs. U.S. Intec, Inc., Pending in the Court of
Common Pleas of Beaver County, Pennsylvania. Warranty Claim - Damages are
estimated at $35,000.
(12) Cause No. 93-6127; Xxxxxxx Xxxxxxx, Xx. and Xxxxx Xxxxxxx Vs. U.S. Intec,
Inc., J&G Products, Inc. and Professional Single-Ply Roofing Company,
Inc., In the 14th Judicial District Court of the Parish of Calcasieu,
Louisiana. Warranty Claim - Damages are unknown; however a settlement has
been tendered to Plaintiff at $3,500.
(13) Cause No. 9365090; Xxxxxxx X. Joer, III and Rose Xxx Xxxxxx Vs. Ba-Cor
Enterprises, Inc. and U.S. Intec, Inc., pending in the 21st Judicial
District court of Xxxxxx County, Texas. Warranty Claim - Damages are
unknown.
(14) Cause No. CV93-105; Xxxxx Realty Company, Inc. Vs. U.S. Intec, Inc., Eagle
Supply, Inc., Xxxxxx Strength, et al, pending in the Circuit Court in and
for Escambia County, Alabama. Warranty Claim - Alleged damages are
$93,000.
(15) Cause No. 93-CI-2207; St. Xxxxxx Offion Park Association, Inc. Vs. Xxxxx
Xxxxx Construction Company, Inc., Xxxxx Xxxxx and U.S. Intec, Inc. pending
in the Fayette Circuit Court, First Division, Commonwealth of Kentucky.
Warranty Claim - Alleged damages are $53,474.
(16) Case No.95X1134064 1304; Xxxxxx Manor Condominium Association Vs. Xxxxxxx
Roofing Company, Bone Roofing Supply, Inc. and U.S. Intec, Inc., pending in
the Circuit Court of Xxxx County, Illinois, Municipal Department - First
District. Warranty Complaint - Seeks damages in $29,300.
(17) Cause No. 450-05-000656-906; Les Residences De Carrefour, Inc. Vs. Xxxxxxx
Xxxxxx Inc., U.S. Intec, Inc., Les Couvreurs Barnard, Inc., S.B.C.S.
Experts-Conseils Inc. and Xxxxxxx Xxxx, pending in the Superior Court of
the Provence of Quebec, District of St. Francois, Canada. Warranty
Claim - Damages alleged are in the approximate sum of 120,000.
(18) Cause No; 03001-9210-CT-1339; RZSO Neat Company, Incorporated Vs. Xxx
Xxxxxxx, Individually and d/b/a Xxx & Daughters Construction, Xxxxx
Wholesale Supply, Inc., and U.S. Intec, Inc., pending in the Xxxxxxxxxxx
Circuit Court in and for the State of Indiana. Fire Loss - Damages are in
excess of $3,000,000.
Pending Litigation
Page 3
(19) No. 619250; Xxxxx Xxxxxxx and Xxxx Xxxxxxx Vs. Xxxxxx Xxxxx, d/b/a Quality
Property Services, ICN Xxxxxx, d/b/a New Xxxx Enterprises, Houston Gutter
Service, U.S. Intec, Inc. and The Estate of Xxxxxxxxx Xxxxxxx, pending in
the County Court at Law Number 4 of Xxxxxx County, Texas. Warranty Claim -
Damages are alleged to be in the sum of approximately $39,000.
(20) No. 1072/94; Spoleta Construction & Development Vs. W. Xxxxxxx Xxxx, Jr.,
d/b/a W. Xxxxxxx Xxxx Sheet Metal Products and Xxx Xxxx Sheet Metal &
Roofing, U.S. Intec, Inc., d/b/a Tri-Fly Roofing Products, pending in the
Supreme Court for the County of Monroe, State of New York. Warranty
Claim - Damages are unknown.
(21) No. 94-00312; Xxx Xxxxxx and Nevis Buck Vs. U.S. Intec, Inc., pending in
the 261st Judicial District Court of Xxxxxx County, Texas. Warranty
Claim - Damages are $49,270.
(22) No. 124158-94; The Board of Managers of the 000 Xxxxxx Xxxxxx Condominium
Vs. Xxxxxxx Engineering, P.C., summit Waterproofing & Restoration Corp. and
U.S. Intec, Inc., pending in the Supreme Court of New York County, State of
New York. Warranty Claim - Damages alleged to be in excess of $250,000.
(23) No. LX636; First Unitarian Church of Richmond, Virginia Vs. Built-Up Roofs,
Inc. and U.S. Intec, Inc., pending in the Circuit Court of the City of
Richmond, Virginia. Warranty Claim - Damages are alleged to be
$214,005.50.
(24) No. 94-C-4292; All Products Automotive, Inc. Vs. U.S. Intec, Inc., pending
in the United States District Court for the Northern District of Illinois,
Eastern Division. Warranty Claim - Damages are unknown.
(25) Xxxxx Corporation Vs. U.S. Intec, Inc., pending in the district Court of
Xxxxxx County, Texas. Warranty Claim - Damages are alleged to be in excess
of the sum of $400,000.
(26) No. CI-94-8023; Bradco Supply Corporation Vs. S & S Roofing South, Inc., et
el Vs. Bradco Supply Corporation and U.S. Intec, Inc., pending in
the Circuit Court in and for the Ninth Judicial Circuit of Orange County,
Florida. Warranty Claim - Damages are unknown.
(27) No. 94-01366; Devon Medical Building partnership Vs. U.S. Intec, Inc. and
Sugartown Construction Company, Inc., in the Court of Common Pleas of
Xxxxxxx County, Pennsylvania. Warranty Claim - Damages are unknown.
Pending Litigation
Page 4
(28) No. 95190D-D; R & S Real Estate Management, Inc., Xxxxxx Xxxxxx Xxxx,
Xxxxxx Xxxxxx Inslar Xxxx, Xxxx X. Xxxxx and Xxxxxxx Xxxxx Xxxx Xxxxx Vs.
Xxxxxx X. Xxxxxxx, d/b/a Xxx Xxxxxxx Vinyl and U.S. Intec, Inc., pending
in the 16th Judicial District Court of St. Xxxx Xxxxxx in the State of
Louisiana. Warranty Claim - Damages alleged are below the sum of $50,000.
(29) No. 00-000-000; Xxxxxxx Xxxxxx, et al Vs. Kaminiar Family Trust, 12130 Ohio
Homeowners Association and Court Management Company Vs. Coordinated
Construction, Inc., pending in the Superior Court in and for Los Angeles
County, California. Intec is not actually a defendant in this lawsuit, but
has received demands for contribution and indemnity from Coordinated
Construction, Inc. Damages are unknown.
(30) No. 94-CP-26-391; Holiday Towers Condominiums Property Owners Association,
Inc. Vs. Xxxx X. Pool, Jr., individually, and d/b/a Custom Roofing, a/k/a
Xxxx X. Pool, Jr. and Company and U.S. Intec, Inc., pending in the Court of
Common Pleas, Fifteenth Judicial Circuit, Xxxxx County, South Carolina.
Warranty Claim - Damages are unknown.
(31) No. L-3599-93; Xxxx Xxxxx and Xxxxxx Xxxxx Vs. Xxxx Building Corp.,
Consolidated Construction Management, Inc., U.S. Intec, Inc., Bradco-
Lakewood, Xxxxxxxx Roofing Corp., Xxxx Xxxxxx, Xxxx Does 1-5, ABC
Corporation and KFI Company, pending in the Superior Court of New Jersey,
Monmouth County. Warranty Claim - Damages alleged are $43,826.
(32) No. 616279; Xxxx Xxxxx Xxxx Vs. U.S. Intec, Inc. and Alamo Contractors Co.,
Inc., d/b/a Alamo Roofing Company, pending in the County Civil Court at Law
Number 2, Xxxxxx County, Texas. Warranty Claim - Damages are unknown.
(33) no. 1995CV00710; Xxxxx X. Xxxxxx, Xx., dba The Harleigh Inn Vs. U.S. Intec,
Inc.; in the Court of Common Pleas of Xxxxx County, Ohio. Warranty Claim -
Damages are unknown.
(34) Case No. 969278; Xxxxxxxxxx-Xxxxxxx Partners Vs. Exterior Building
Services, Inc., dba DFA Building Services, Ben Xxxxx Xxx, dba Urban
Renaissance, U.S. Intec, Inc., Frontier Pacific Insurance Co., Surety
Company of the Pacific and Does 1-50, inclusive, In the Superior Court of
California in and for the County of San Francisco. Warranty Complaint -
Damages Unknown.
(35) Case No. 30-199-00106-95; Partek Insulations, Inc. Vs. U.S. Intec, Inc.,
pending before the American Arbitration Association. Demand for
Arbitration - Damages are alleged to $176,601.34; Counterclaim filed by
Intec for complete offset plus recovery of additional expenses/damages as
authorized under the Private Label Sales Agreement entered into between
the parties.
Pending Litigation
Page 5
(36) Index No. 5093/95; Xxxxxx X. Xxxx, Inc., d/b/a Seabreeze Amusement Park Vs.
U.S. Intec, Inc. and BSL Wholesale Supply, Inc., pending in the Supreme
Court of the State of New York, county of Monroe. Fire Loss - Seeks
damages of $4,000,000 plus interest, attorney's fees and cost of suit.
(37) Cause No. 95-011061; State of Nevada Public Works Board Vs. Washoe
Roofings & Insulation Supply Co., Inc., d/b/a Van Dyne & Sons Roofing,
Intec Permaglas and Do 1 through 10; In the First Judicial District Court
of the State of Nevada-Xxxxxx City. Warranty Complaint - Seeks damages in
the amount of $145,000 for special damages, plus general damages,
consequential damages; attorney's fees and costs in an unknown amount.
(38) Docket No. 941-313; Pamida, Inc. Vs. U.S. Intec, Inc., pending in the
District Court of Xxxxxxx County, Nebraska. Warranty Complaint - Damages
are alleged in excess of $122,000.
(39) Civil Action No. 11289-1995; Xxxxx X. XxXxxx, et ux and Heritage Place
Gallery of Floors, Inc. Vs. Tri-Ply Company, pending in the Court of Common
Pleas of Beaver County, Pennsylvania. Warranty Complaint - This claim is
unliquidated and the amount of damages is not alleged in the pleadings.
(40) Cause No. 95-039325; Xxxxx Xxxxxxxx Vs. U.S. Intec, Inc. et al, pending in
the 270th Judicial District Court of Xxxxxx County, Texas. Personal Injury
Claim arising out of the rupture of a hose during delivery of asphalt which
resulted in burn injuries to the driver of the asphalt truck. Total
damages are uncertain although indication has been received that the total
worker's compensation subrogation interest is approximately $11,000, which
gives some indication as to the exposure created by the claim.
SETTLED CLAIMS SINCE JANUARY, 1995
----------------------------------
(1) Xxxx Xxxxxxx'x and Xxxx Xxxxxxx'x Westside Appliance & Furniture Corp. Vs.
U.S. Intec, Inc. and B & L Wholesale, Inc., pending in the Supreme Court
for the County of Erie, State of New York. This suite was settled for the
sum of $250,000 which was paid by U.S. Intec, Inc.
(2) Xxxxxx Xxxxx Housing Company, Inc. Vs. U.S. Intec, Inc. and D.M.E.
Contracting, Inc., d/b/a National Roofing System, pending in the Supreme
Court of the County of Nassau, State of New York. This suit was settled
for the total sum of $25,000. Amerisure Insurance Companies paid
$20,000, and U.S. Intec, Inc. paid $5,000.
(3) No. CV-91-398; M & E Valve Company, a Division of XxXxxx, Inc., Vs. U.S.
Intec, Inc., Xxxxxx Xxxxx, Individually and d/b/a Xxxxx Roofing and
Construction, and unknown Xxxx Does, pending in the Circuit Court of
Xxxxxxx County, Alabama. This suit was settled for the total sum of
$90,000. National Union Fire Insurance Company paid $62,000, U.S. Intec,
Inc. paid $7,500 (representing its deductible) and the Texas Property &
Casualty Insurance Guaranty Association paid $20,000.
(4) Cause No. ATL-L-006073-92; Xxxxxx New York Avenue Associates, Ltd. Vs.
U.S. Intec, Inc., Xxxxxxx & Xxxxxxx Construction Company, Inc. and Xxxxxxx
& Addison Construction Company, Inc., d/b/a Xxxxxxx & Xxxxxxx Roofing,
pending in the Superior Court of Atlantic County, New Jersey. This suit
was settled for $70,000, of which U.S. Intec, Inc. paid the sum of $23,330.
(5) Cause No. 92-C-206; Unified School District 490 Vs. Transamerica Premier
Insurance Company, Inc. and Mid-America Roofing, Construction & Supply
Company, Inc. Vs. U.S. Intec, Inc. and Midwest Sales Company of Iowa, Inc.,
pending in the 13th Judicial District of Xxxxxx County, Kansas. This suite
was settled for the total sum of $50,000, of which Amerisure Insurance
Companies paid $18,500.
(6) No. 93CV-1242; Mercury Manor Homeowners' Association, Inc. Vs. U.S. Intec,
In., pending in the Chancery Court for Xxxxxxxxxx County, Tennessee. This
suit was settled for $13,276.50. Amerisure Insurance Companies paid
$4,776.50 and U. S. Intec, Inc. paid $3,444.
(7) No. 94CV-00684; Woodmen of the World, Thomasville Lodge #206 Vs. U. S.
Intec, Inc., pending in the General Court of Justice, Superior Court
Division, Davidson County, North Carolina. This suit was settled for the
sum of $9,163. Amerisure Insurance Companies and U. S. Intec, Inc. split
the cost of settlement, each paying $4,581.50
(8) Case No. CL94-61; Xxxxxxxx Xxxx Xxxxxxx Vs. U.S. Intec/Brai and Wall
Xxxxxxx and Air Conditioning, pending in the Circuit Court of the City of
Colonial Heights, Virginia. This suit was settled for $7,500. Amerisure
Insurance Companies paid $3,750, and U.S. Intec, Inc. paid $3,750.
(9) Case No. 93-CV-438; White Lakes Plaza Associates, L.P. Vs. U.S. Intec,
Inc., Exterior Technologies Corp. and Professional Roof Inspectors, pending
in the District Court of Shawnee County, Kansas, Division 13. This suit
was settled for the sum of $200,000 paid by National Union Fire Insurance
Company.
(10) Cause No. 820; Trustee of Metropolitan Council United Brother of Carpenters
and Joiners of America Vs. Highway Mission Tabernacle Vs. X.X. Xxxxxx, Inc.
and Xxxxxx Xxxxxxx Vs. Xxxx X. Xxxxxxx & Son and Xxxxxx Xxxxxx, et al Vs.
U.S. Intec, Inc., pending in the Court of Common Pleas of Philadelphia
County, Pennsylvania. Settled by contribution made by Texas Property &
Casualty Insurance Guaranty Association (due to receivership of Employers
Casualty Company) on behalf of U.S. Intec, Inc.
(11) Cause No. 92-07856; Xxxxx Xxxxxxxxx Vs. U.S. Intec, Inc. and River City
Roofing Company, Inc., currently pending in the District Court of Xxxxxx
County, Texas. This suit was settled for the sum of $12,000, $4,000 of
which was paid by U.S. Intec.
(12) No. 94M2-1343; Center for Respiratory Therapy, Inc. Vs. U.S. Intec, Inc.,
pending in the Circuit Court of Xxxx County, Illinois. This suit was
settled for the sum of $6,000 paid by U.S. Intec, Inc.
(13) No. CV94-26084; Hydraulic Power Systems, Inc. Vs. U.S. Intec, Inc., pending
in the Circuit Court of Xxxxxxx County, Missouri. This suit was settled
from the sum of $4,500 paid by U.S. Intec, Inc.
In addition to the above-referenced litigation, the following violations over
$25,000 have been resolved during the last five years:
1. North Branch - 1992 - NJDEP settlement, penalty $17,000 on log nos.
A880205, A880206, A880207 (totalling $15,000) and log no. 893133 ($2,000)
1994 - OSHA citation and penalties, penalty $5,425
1994 - NJDEP stack no. 1 permit violation, penalty $9,500
2. Port Xxxxxx - 1993 - OSHA citations and penalties $10,250
3. Stockton - 1993 - SJVUACD NOV - operations of process equipment during
period of emission control equipment failure, penalty $30,000
Various audits by the IRS and various state agencies have resulted in certain
non-material payments over the past five years.
Schedule 4.1(i) -- Employee Benefits
--------------- -----------------
1. U.S. Intec, Inc. 401(k) Plan
2. U.S. Intec, Inc. 1994 Executive Annual Cash Incentive Plan
3. U.S. Intec, Inc. 1985 Stock Option Plan
4. U.S. Intec, Inc. 1994 Long-term Incentive Plan
5. U.S. Intec, Inc. Short Term Disability Plan
6. U.S. Intec, Inc. Long Term Disability Plan
7. U.S. Intec, Inc. Section 125 (Cafeteria) Plan
8. U.S. Intec, Inc. Employee Health Care Plan
9. U.S. Intec, Inc. Life Insurance Plan
10. U.S. Intec, Inc. Supplemental Life Insurance Plan
11. All of the participant's in the Company's 401(k) Plan are entitled to
receive benefits after termination of employment. The 401(k) Plan is a
funded plan.
12. The Company's Employee Policy and Procedure Manual provides for the
payment of specified severance benefits to full-time employees who are laid
off (or, in the case of salaried exempt employees, terminated for reasons
other than gross misconduct).
13. The Company has entered into Key Employee Severance Agreements with
each of Xxxxx X. Xxxxx, Xxx Xxxxxxxxx, X. Xxxxx Xxxxx and S. Xxxxx Xxxxx,
providing for the payment of specified benefits after termination of
employment.
14. The Company's Employee Policy Manual provides for the payment of
certain severance benefits to full-time hourly employees and full-time non-
exempt salaried employed who have been employed for a minimum of one year
and whose employment is terminated.
15. The Merger Agreement provides that each outstanding option to purchase
Common Stock of the Company shall represent the right to receive the Option
Consideration, as defined therein.
16. Pursuant to the terms of the Company's 1994 Long-Term Incentive Plan,
all of the restricted stock granted to the Company's Independent Directors
will vest immediately upon consummation of the transactions contemplated by
the Merger Agreement.
Schedule 4.1(j) -- Material Changes
--------------- ----------------
1. The Company intends to close its Chicago office and sublease the space
by December 31, 1995. In connection therewith, the Company will incur the
costs of transferring its employees from Chicago to Georgia.
2. The Company subleases a portion of the warehouse located at 0000 X.
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx to Hoechst-Celanese for $4,375 per month
pursuant to a verbal agreement. In June 1995, Hoechst-Celanese notified
the Company that it intends to terminate this arrangement in October 1995.
3. On July 1, 1995, the Company entered into a Lease Agreement with
Armco, Inc. for premises consisting of approximately 35,000 square feet
located at Complex 19 within Greens Port Industrial Park. The lease is for
a period of three months, terminating September 30, 1995, with a 30-day
written notice cancellation.
4. Agreements between the Company and Thermo Manufacturing Company, L.P.,
dated September 1, 1995 relating to consignment, private label sales and
confidentiality.
5. The Company currently is negotiating the renewal of its Licensing
Agreement with Asphalti Xxxxxxxx, which is due to expire on December 31,
1995, provided that the terms of such renewal shall be satisfactory to
Parent.
6. Asphalti Xxxxxxxx has expressed interest in having the Company supply
certain raw materials to it. The Company has provided Asphalti Xxxxxxxx
samples of certain materials to determine whether future purchases are
possible.
7. The Company has settled certain litigation matters, as referenced on
Schedule 4.1(g).
8. The Company entered into a premium finance agreement with Imperial IPF
on July 1, 1995 for $240,000 which represents the insurance premium for
property located at its Houston, Texas facility for the period June 13,
1995 through 1996.
9. The Company entered into a sublease for warehouse space, dated
September 1, 1995, with Thermo Manufacturing Company, L.P. for a period of
one year.
Schedule 4.1(m) -- Intangible Property
--------------- -------------------
1. A list of all of the Company's registered patents and trademarks
is attached hereto.
2. Pursuant to a License Agreement dated as of January 1, 1986,
between the Company and Asphalti Xxxxxxxx S.p.A., the Company has the right
to use certain proprietary technology owned by Asphalti Xxxxxxxx to produce
products for sale anywhere in world except Europe, and the right to use the
registered trademark "Brai" in the United States. This Agreement is
scheduled to expire on December 31, 1995. The Company is currently
negotiating with Asphalti Xxxxxxxx regarding the renewal of the agreement,
provided that the terms of such renewal shall be satisfactory to Parent.
3. Pursuant to a Licensing Agreement dated as of February 1, 1993
between the Company and Thunderhawk Manufacturing Company, L.P., the
Company granted to Thunderhawk the right to use certain proprietary
technology located at the Company's Monroe, Georgia plant to produce built-
up roofing products, and the exclusive right to use the registered
trademark "Tri-Ply and Design." If Thunderhawk fully performs its
obligations under the Licensing Agreement, the Company has agreed to
transfer ownership of the "Tri-Ply and Design" trademark to Thunderhawk
upon the expiration of the Licensing Agreement on February 1, 2003.
4. Pursuant to a Trademark License Agreement dated May 3, 1995
between the Company and Minnesota Mining and Manufacturing Company, the
Company has the right to use the registered trademarks "3TM Algae BlockTM"
in connection with the sale of shingles that have been manufactured with
the 3M Algae Block Copper Roofing Granule System. In connection with this
agreement, the parties entered into a Limited Warranty Agreement, pursuant
to which Minnesota Mining and Manufacturing agreed to provide a 10-year
warranty for the 3M Algae Block Copper Roofing Granule System.
5. The rights to the patent issued for an "Apparatus for Cutting of
Roofing Membrane" was assigned to MWeld by Xxxxxxxx XxXxxx, the owner of
the patent, in 1990. In 1993, Xx. XxXxxx requested that the patent be
returned to him; however, MWeld still has the original patent, and there
has been so correspondence regarding this matter since July 1993.
6. The Company has orally granted to Centrotex S.A. de C.V. the
right to use the name "Amerival" in connection with the sale in Mexico of
products manufactured by the Company.
7. The Company has granted to Ogura Industries the right to use the
name "Elite" in connection with the resale in Japan of products
manufactured by the Company.
U.S. INTEC, INC.
Registered Patents and Trademarks
TYPE
Patent(P)/ FILING
FILE NO. Trademark(T) COUNTRY TITLE DATE SERIAL NO.
-------------------------------------------------------------------------------------------------------------
U.S. Intec-2* P U.S. Solubilized Polymers in Coal 02-14-94 08/195,621
Tar Pitch
-------------------------------------------------------------------------------------------------------------
U.S. Intec-2-A* P U.S. Solubilized Polymers in Coal 08-15-94 PCT/U894/10526
Tar Pitch
-------------------------------------------------------------------------------------------------------------
U.S. Intec-2-B* P Mexico Solubilized Polymers in Coal 02-19-95 960905
Tar Pitch
U.S. Intec-8** T U.S. Majestic 03-04-94 74/498,783
-------------------------------------------------------------------------------------------------------------
U.S. Intec-10** T U.S. Sundance 03-04-94 74/496,782
-------------------------------------------------------------------------------------------------------------
U.S. Intec-11** T U.S. Legend 03-04-94 74/497,188
-------------------------------------------------------------------------------------------------------------
U.S. Intec-13** T U.S. Rio Grande 03-04-94 74/497,183
-------------------------------------------------------------------------------------------------------------
U.S. Intec-14** T U.S. Timeshield 03-04-94 74/496,752
-------------------------------------------------------------------------------------------------------------
U.S. Intec-17** T U.S. Pinnole 03-28-94 74/805,410
-------------------------------------------------------------------------------------------------------------
U.S. Intec-18 T Texas SP4
-------------------------------------------------------------------------------------------------------------
U.S. Intec-19 T T_______ BRAI
-------------------------------------------------------------------------------------------------------------
U.S. Intec-21 P U.S. Method and Means for Producing 10-01-84 08/656,514
Waterproofing Membranes
-------------------------------------------------------------------------------------------------------------
U.S. Intec-22 T U.S. Quickpitch 04-13-90 74/048,580
-------------------------------------------------------------------------------------------------------------
U.S. Intec-23 T U.S. Quickpitch 06-17-90 74/070,759
-------------------------------------------------------------------------------------------------------------
U.S. Intec-24 T U.S. Permaglas 10-03-90 73/755,625
-------------------------------------------------------------------------------------------------------------
U.S. Intec-25 T U.S. USICAD 11-19-90 74/118,788
-------------------------------------------------------------------------------------------------------------
U.S. Intec-26 of 6 T U.S. MWELD 04-03-90 74/045,446
-------------------------------------------------------------------------------------------------------------
U.S. Intec-27 of 7 T U.S. MWELD 03-23-90 74/041,334
-------------------------------------------------------------------------------------------------------------
ISSUE PATENT NO./ EXPIRATIONDATE/
FILE NO. DATE REG. NO. RENEWAL DATE
-------------------- --------------------------------------
U.S. Intec-2* Pending
-------------------- ----------------------------------
U.S. Intec-2-A* Pending
-------------------- ----------------------------------
U.S. Intec-2-B* Pending
U.S. Intec-8** Pending
-------------------- ----------------------------------
U.S. Intec-10** Pending
-------------------- ----------------------------------
U.S. Intec-11** Pending
-------------------- ----------------------------------
U.S. Intec-13** Pending
-------------------- ----------------------------------
U.S. Intec-14** Pending
-------------------- ----------------------------------
U.S. Intec-17** Pending
-------------------- ----------------------------------
X.X. Xxxxx-00 00000 09-06-94
-------------------- ----------------------------------
X.X. Xxxxx-00 00000 09-06-94
-------------------- ----------------------------------
U.S. Intec-21 04-22-86 4,584,000 00-00-00
-------------------- ----------------------------------
U.S. Intec-22 07-02-91 1,649,000 00-00-00
-------------------- ----------------------------------
U.S. Intec-23 07-09-91 1,650,000 00-00-00
-------------------- ----------------------------------
U.S. Intec-24 01-22-91 1,632,000 00-00-00
-------------------- ----------------------------------
U.S. Intec-25 06-23-92 1,696,000 00-00-00
-------------------- ----------------------------------
U.S. Intec-26 of 6 01-15-91 1,631,000 00-00-00
-------------------- ----------------------------------
U.S. Intec-27 of 7 12-25-90 1,628,000 00-00-00
-------------------- ----------------------------------
TYPE
Patent(P)/ FILING
FILE NO. Trademark(T) COUNTRY TITLE DATE SERIAL NO.
--------------------------------------------------------------------------------------------------------
U.S. Intec-28 T U.S. M & Design 06-03-90 73/818,869
--------------------------------------------------------------------------------------------------------
U.S. Intec-30 T U.S. M Design for Metallic Vent 08-14-90 73/819,112
Covers for Roof Deck Protrusions
--------------------------------------------------------------------------------------------------------
U.S. Intec-31 P U.S. Speed Control for Roof Welding 03-06-90 07/349,542
Apparatus
--------------------------------------------------------------------------------------------------------
U.S. Intec-32 P U.S. Improved Single Ply Roofing 10-28-84 06/885,920
Base Sheet Adherence Method
--------------------------------------------------------------------------------------------------------
U.S. Intec-33 T U.S. Rabbit Design Xxxx 05-17-90 74/069,713
--------------------------------------------------------------------------------------------------------
U.S. Intec-34** T U.S. Royalwood 03-28-94 74/505,914
--------------------------------------------------------------------------------------------------------
U.S. Intec-50 of 19 T Texas Rabbit Design
--------------------------------------------------------------------------------------------------------
P Apparatus for Cutting Roofing
Membrane***
--------------------------------------------------------------------------------------------------------
P Vent Cover, Pitch Pan and Roof
Drain: Process for Making Roof
Deck Accessories and Product
Thereof
--------------------------------------------------------------------------------------------------------
P Hot Plate Welding Device***
--------------------------------------------------------------------------------------------------------
P Combined Sheet Metal Flashing 06/740,620
and Bitumen Membrane Strip
--------------------------------------------------------------------------------------------------------
U.S. Intec BRAI 7-31-80
--------------------------------------------------------------------------------------------------------
ISSUE PATENT NO./ EXPIRATIONDATE/
FILE NO. DATE REG. NO. RENEWAL DATE
--------------------- --------------------------------------
U.S. Intec-28 09-11-90 1,612,000 00-00-00
--------------------------------------------------------------------------------------------------------
U.S. Intec-30 03-20-90 1,567,000 00-00-00
--------------------------------------------------------------------------------------------------------
U.S. Intec-31 12-10-01 5,072,000 00-00-00
--------------------------------------------------------------------------------------------------------
U.S. Intec-32 05-13-88 4,588,000 00-00-00
--------------------------------------------------------------------------------------------------------
U.S. Intec-33 06-11-91 1,647,000 00-00-00
--------------------------------------------------------------------------------------------------------
U.S. Intec-34** Pending
--------------------------------------------------------------------------------------------------------
U.S. Intec-50 of 00 00-00-00 44243
--------------------------------------------------------------------------------------------------------
12-18-90 4,997,673
--------------------------------------------------------------------------------------------------------
12-24-91 DBS 318,101
--------------------------------------------------------------------------------------------------------
7-31-86 4,743,332
--------------------------------------------------------------------------------------------------------
8-30-88 DBS 297,465
--------------------------------------------------------------------------------------------------------
U.S. Intec 5-17-83 1237857
*Subject to the Coal Tar Assets Sale
**Subject to the Houston Assets Sale
***Abandoned/lapsed
4.1(n) Disclosure
4.1(n)(ii)
1. North Branch Facility, Branchburg, NJ
-------------------------------------
U.S. Intec letter, Case Nos. 95-5-23-1753-58,95-5-23-1801-26, dated
5/30/95, regarding reporting of Weston groundwater and soil samples
detecting VOC's, metals and petroleum hydrocarbons; NJDEP letter,
Incident #95-5-23-1801-26, dated 5/30/95, regarding suspected release of
hazardous substances.
2. Port Xxxxxx Plant, Port Xxxxxx, TX
----------------------------------
Texas Water, Commission ("TWC") letter, dated 3/1/93, regarding
violations of the solid waste rules, including unauthorized discharges.
3. Fannett Warehouse, Port Xxxxxx, TX
----------------------------------
Texas Water Commission ("TWC") letter, dated 3/1/93, regarding violations
of the solid waste rules, including unauthorized discharges.
4. Corvallis Plant, Corvallis, OR
------------------------------
ODEQ letter, dated 5/25/95, approving sampling plan to determine if
contaminated soil remains in vicinity of the former UST excavations.
5. Thermo Plant, Chandler, AZ
--------------------------
The Thermo Plan is required to connect each mixing vessel to the central
dust collection system.
4.1(n)(v)
1. The southwestern portion of the North Branch facility historically may
have been used for the storage and/or disposal of solid waste.
2. Port Xxxxxx Plant, Port Xxxxxx, TX
----------------------------------
Raw materials such as polymer product historically were stored at various
outdoor locations at the Port Xxxxxx Plant. Some of this material has
deteriorated and become solid waste. Such disposal currently requires a
solid waste permit.
3. Fannett Warehouse, Port Xxxxxx, TX
----------------------------------
Solid waste historically was disposed of on-site. Such disposal
currently requires a solid waste permit.
4. MWeld Plant, Nederland, TX
--------------------------
Solid waste historically was disposed of on-site. Such disposal
currently requires a solid waste permit.
5. Houston Plant, Houston, TX
--------------------------
Approximately 120 drums, 13,000 rolls of off-spec premium coal tar, 200
cubic yards of associated soil and a refuse file containing concrete,
soil and miscellaneous wastes are stored at the Houston Plan without a
permit.
4.1(n)(vii)
1. North Branch Facility, Branchburg, NJ
--------------------------------------
The North Branch Facility is required to obtain a stormwater permit. A
Request for Authorization under NJPDES Industrial General Permit No.
NJ008315 was submitted on 6/15/95. Public notice was issued on 06/29/95.
2. Houston Plant, Houston, TX
--------------------------
The Houston Plant applied for wastewater discharge permits from EPA and
TNRCC on April 12, 1995. As of July 20, 1995, neither EPA nor TNRCC have
issued a response. Currently, the Houston Plant's wastewater is
discharged under permits held by ARMCO Steel.
4.1(n)(viii)
North Branch Facility, Branchburg, NJ
-------------------------------------
The North Branch Facility is required to comply with the New Jersey
Industrial Site Recovery Act prior to a change in ownership.
4.1(n)(ix)
1. North Branch Facility, Branchburg, NJ
-------------------------------------
OSHA Citation and Notification of Penalty, Inspection No. 109913236,
dated 7/13/94.
2. Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxx, XX
----------------------------------
OSHA Citation and Notification of Penalty, Inspection No. 107488413,
dated 9/28/93.
3. Houston Plant, Houston, TX
--------------------------
Several environmental reports prepared by Dames & Xxxxx consultants
documented the historical release of Hazardous Materials at the Houston
Plant and surrounding properties prior to the Company's ownership of the
Houston Plant. The Houston Plant has been investigated by EPA and TNRCC
and is located within the 800-acre Armco Houston Works property, which is
listed on the Comprehensive Environmental Response and Liability
Information System ("CERCLIS"), No. TXD00802942.
4. Corvallis Plant, Corvallis, OR
------------------------------
OSHA Citation and Notification of Penalty, Inspection No. 124812389,
dated 5/16/95.
5. Monroe Plant, Monroe, GA
------------------------
OSHA Citation and Notification of Penalty, Inspection No. 107183923,
dated 9/13/93.
Schedule 4.1(o)-Material Contracts
--------------- ------------------
Key Employee Severance Agreements, dated as of May 9, 1995, between the
Company and each of Xxxxx X. Xxxxx, Xxx X. Xxxxxxxxx, X. Xxxxx Xxxxx and
S. Xxxxx Xxxxx.
Sales Representative Agreements as listed on Annex A attached hereto.
The Company occasionally makes advances to employees and sales
representatives, which generally are repaid through payroll or commission
deductions.
Employment Contract dated June 3, 1983, between U.S. Intec, Inc. and Xxxx
Xxxxxx.
Debt Restructuring and Non-Competition Agreement, dated September 28, 1990,
between the Company and Xxxxx X. Xxxxx.
Pursuant to the standard employment agreement entered into between the
Company and its employees, each employee covenants not to compete with the
Company during the term of such employee's employment and for three years
thereafter.
Promissory Notes, dated September 28, 1990 and December 31, 1993, made by Xxxxx
X. Xxxxx in favor of the Company in the original principal amount of $2,803,000,
and related Global Modification and Restructuring Agreement.
Registration Rights Agreement, dated January 12, 1995, between the Company and
Xxxxxx X. Xxxx.
Registration Agreement dated January 12, 1995, between the Company, Xxxxx Xxxxx,
First Southwest Company, 490 Park Joint Venture and the Xxxxxxx Family
Partnership.
Consignment Agreement dated July 31, 1989, between the Company and Geo
Industries, a Division of Xxxxx Company, terminable within 60 days without
penalty.
Lease Agreement, dated July 1, 1994, between the Company and Frontier
Development, Ltd., for premises located at 000 Xxxxxxx 000, Xxxx Xxxxxx, Xxxxx.
Lease Agreement dated May 1, 1995, between the Company and Frontier Development,
Ltd., for premises located at 000 X. Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxx.
Lease Agreement, dated May 11, 1994, between the Company and L&P Realty for the
premises located at 00 Xxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx.
Lease Agreement dated September 16, 1992, between Intec-Permaglass, a division
of the Company, and Xxxxxx Xxxxxx, for premises located at 000 Xxxxxxx Xxxxx,
Xxxxxx, Xxxxxxx (now on month-to-month basis).
Lease Agreement, dated January 9, 1992, between the Company and Armor Investment
Co., for premises located at 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx.
Sublease Agreement, dated September 1, 1995 between the Company and Thermo
Materials, a Division of Thermo Manufacturing Company, L.P., for a portion
of the Premises located at 000 X. Xxx Xxxx, Xxxxxxxx, Xxxxxxx.
Lease Agreement dated as of March 14, 1994, between the Company and Armco, Inc.,
d/b/a Greensport Industrial Park, for the premises located at 00000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxx, Xxxxx.
On July 1, 1995, the Company entered into a Lease Agreement with Armco, Inc. for
premises consisting of approximately 35,000 square feet located at Complex 19
within Greens Port Industrial Park. The lease is for a period of three months,
terminating September 30, 1995, with a 30-day written notice of cancellation.
Cross-Collateral Security Agreement, dated January 26, 1995, between the Company
and CIT Group/Equipment Financing, Inc.
Master Lease Agreement, dated September 28, 1994, between the Company and Yale
Financial Services, Inc.
Equipment Rental Agreement, dated April 15, 1993, between the Company and First
Source Financial Services.
Consignment Agreement, dated March 2, 1994, between the Company and Thermo
Materials, a Division of Thunderhawk Manufacturing Co., L.P., terminable within
60 days without penalty.
Vehicle Lease Service Agreement, dated May 19, 1992, between the Company and
Penske Truck Leasing Co., L.P.
Equipment Leases, dated May 24, 1994, between the Company and Canon Financial
Services.
Lease Agreement, dated June 2, 1995, between the Company and Toyota Lift of
Houston.
Equipment Leases between the Company and Pitney Xxxxx Credit Corporation.
Equipment Lease dated March 2, 1992, between the Company and Apple Unit Leasing,
Inc.
Interests of Mirex Corporation in certain equipment leased to MWeld pursuant to
Lease Agreement, dated September 11, 1995.
Consulting Agreement dated December 9, 1991, between the Company and Xxxxxx
Xxxxxx.
First Southwest engagement Letter in connection with the Merger Agreement and
transactions contemplated therein.
Agreement, dated as of January 1, 1995,between the Company and Air Recon, a
division of Recon Environmental Corp., for the provision of continuous
environmental services at the Company's New Jersey manufacturing facility.
Various Services and Maintenance Agreements between the Company and AT&T
Communications, Inc.
Gas Transportation Agreement, dated March 23, 1994, between the Company and
Southern Union Gas Company, relating to the supply of natural gas to the
Company's Port Xxxxxx facilities.
Standard Membrance Supply Agreement, dated February 10, 1995, between the
Company and Liquid America Corporation, relating to the supply of nitrogen.
Agreement, dated February 17, 1995, between the Company and Exxon Company,
U.S.A., relating to the purchase of asphalt by the Company.
Gas Sales Contract, dated as of October 1, 1994, and letter agreement, dated
February 5, 1995, between the Company and Entex, a division of Noram Energy
Corporation.
Letter Agreement, dated February 10, 1995, between the Company and Minnesota
Mining and Manufacturing Company, for the purchase of roofing granules.
The Company issues purchase orders for long-term commitments for delivery of
polymers.
Natural Gas Sales Agreement dated April 1, 1995, between the Company and KCS
Energy Marketing, Inc. related to supply of natural gas to the New Jersey
facility.
In order to repay the cost of certain equipment purchased by Luzenac America,
Inc., the Company has agreed to purchase talc from Luzernac America, Inc., at an
increased price until the full amount is repaid, with the excess charge
($10.00/ton) to be applied against the original $53,840 purchase price of the
equipment.
The Company has entered into Re-Label Agreements with other manufacturers which
provide that the Company shall purchase manufactured products at specified
prices for resale by the Company under its own label. The Company has Re-Label
Agreements with the following manufacturers:
- Apache Products Company
- Thermo Manufacturing Company, L.P., d/b/a Thermo Materials
- Nestle Oil Services, Inc.
- Gulf States Asphalt Company
- Southeastern Asphalt Products, Inc.
- Tru-Fax Corporation
- Danse Corporation
- United Asphalts, Inc.
- SIBO Incorporated
- RMax, Inc.
- NRG Barriers, Inc.
- Xxxxxxxx Roofing Systems
- FR, Inc.
- Continental Materials, Inc.
- Xxxx Materials Company
- RawPing Company, Inc.
- Cast Strip of America Corporation
- Cast Products, Inc.
- Atlas Energy Products
- Partek Insulation, Inc.
- International Permalite, Inc. (now knows as BMCA Insulation)
- National Varnish Company (now knows as ALCO-NVC, Inc.)
- Four Star Roofing
- Cryson Refining, Inc.
- Eagle Asphalt Products
- Trunball
- ChemRex, Inc.
Agreement, dated February 8, 1995, between the Company and Apollo Environmental
Strategies, Inc. for the removal of an underground storage tank at the Company's
Houston facility.
Agreement between the Company and Automated Data Processing, Inc., for payroll
processing.
Brokerage Service Agreement, dated October 10, 1994, between the Company and
Xxxxx & XxXxxxxx, Incorporated, for insurance brokerage services.
Gas Purchase and Sales Agreement dated October 10, 1994, between the Company and
Redwood Resources, Inc., relating to the supply of natural gas to the Company's
Stockton, California facility (gas supply and interstate transportation).
Administration Agreement, dated June 1, 1995, between the Company and Top
Priority Administration, Inc.
Consignment Agreement, dated March 27, 1992, between the Company and National
Varnish Co., terminable within 60 days without penalty.
Gas Sales Agreement between the Company and Xxxxxxx Gas Services, Inc. dated
March 15, 1988 and Letter Agreement, dated June 1, 1995 for purchase of natural
gas at Port Xxxxxx, Texas facility.
Natural Gas Transportation Agreement, dated September 1, 1995, between the
Company and PG&E for supply of natural gas to Stockton, California facility.
Agreements exist which extend the trade payables of the Company to the
following suppliers of materials: Minnesota Mining and Manufacturer,
Xxxxxxx & Xxxxx, Hoechst Celanese and Polytex.
Agreement between the Company and Thermo Manufacturing Company, L.P. as to
that certain consignment agreement dated September 1, 1995.
Agreement between the Company and Thermo Manufacturing Company, L.P.
regarding private label sales, dated September 1, 1995.
Agreements listed on Schedule 4.1(m).
Guaranty, dated March 25, 1995, of indebtedness of Thermo Manufacturing
Company, L.P., made by the Company in favor of Community Bank.
Guaranty Agreement, dated November 18, 1994, of indebtedness of
Thunderhawk Manufacturing Company, L.P., (now Thermo Manufacturing
Company, L.P.) made by the Company in favor of Neste Oil Services, Inc.
Asset Purchase Agreement, dated February 4, 1994, among Neste Thermo, and
Neste Oil Services, Inc., as Sellers, Thunderhawk Manufacturing, L.P., as
Buyer, joined by the Company, as Guarantor.
The Company has entered into a Corporate Business Travel Account Agreement
with American Express Travel Related Services Company, Inc. The terms of
this agreement required the Company to pay all amounts charged to the
Business Travel Account which are not paid promptly by the Company's
employees.
Indemnification Agreements, dated as of May 1, 1995, between the Company
and each of Xxxxx X. Xxxxx, Xxx X. Xxxxxxxxx, X. Xxxxx Xxxxx, S. Xxxxx
Xxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxx and
Xxxxxx X. Xxxxxxxxx.
Insurance Premium Finance Agreement dated December 5, 1994, between the
Company and AFCO Credit Corporation.
Standard rebate agreements entered into with distributors of the Company
on an annual basis.
Memorandum of Understanding (undated), between Asahi Corporation, the
Company, Keet Trading Company and Ogura Industries relating to the
marketing and distribution of the Company's products in Japan.
Guaranty, dated May 11, 1995, of indebtedness of the Company, made by
Exterior Technologies Corporation in favor of Community Bank.
The Company has provided an irrevocable standby letter of credit, in the
face amount of $325,000, by LaSalle National Bank in favor of Traveler's
Insurance Group.
Lease Agreement, dated March 15, 1994, between the Company and Stonegate
Properties, Inc. for premises located at Xxxxxxx Xxxxxx, 0000 X.
Xxxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxxx.
Security Agreement, dated January 17, 1990, between the Company and The
Exchange National Bank of Chicago (now known as LaSalle National Bank), as
amended, and related promissory note, dated March 5, 1990, made by the
Company in favor of LaSalle National Bank, in the original principal
amount of $29,400,000.
Promissory Note and Mortgage, dated November 18, 1986, between the Company
and Somerset Trust Company, in the original principal amount of
$1,260,000.
Commercial Real Estate Lien Note, dated May 11, 1995, made by the Company
in favor of Community Bank.
Loan and Security Agreement, dated September 29, 1993, between the Company
and MetLife Capital Corporation, as amended, and related promissory notes.
The proceeds of this loan were used to purchase equipment which is part of
the Distribution Assets, and the notes are secured solely by such
equipment.
Promissory Note, dated September 28, 1990, made by Xxxxx X. Xxxxx in favor
of the Company, in the original principal amount of $2,803,000.
Master Revolving Credit Note, dated December 31, 1987, made by MWeld,
Inc. (now Exterior Technologies Corporation) in favor of the Company in the
original principal amount of $5,000,000.
Promissory Note, dated November 30, 1994, made by Star, Inc., in favor of
the Company, in the original principal amount of $500,000.
Commercial Real Estate Lien Note, dated April 16, 1993, made by Xxxxxxxx-
Trust, Inc. in favor of the Company, in the original principal amount of
$75,000.
Pursuant to an Amendment dated January 30, 1995, to the Security
Agreement, the Company has agreed to grant to LaSalle National Bank, as
additional security for existing loans, a Deed of Trust, Security
Agreement, Assignment of Rents and Fixture Filing relating to the
Company's real properties located in Hoffman Estates, Illinois, Stockton,
California, North Branch, New Jersey, Corvallis, Oregon, Monroe, Georgia
and Houston, Texas.
Agreement of Limited Partnership of Thunderhawk (Thermo) Manufacturing
Company, L.P., between Thunderhawk, Inc. (Eagle Ventures), as general
partner, and the Company, as limited partner.
Exclusive Manufacturing Agreement between the Company and Allied Signal,
Inc., dated March 31, 1994.
PermaGlas Roofing Contractor Promotion Program whereby contractors earn
premiums for products purchases.
Joint Development Agreement, dated May 19, 1993, between the Company and
Allied Signal Inc.
Arrangement with Ernst & Young pursuant to which such company consults
with U.S. Intec, Inc. in order to minimize its ad valorem tax liabilities.
The Company has purchased two life insurance policies with the Company
names as beneficiary, on Xxxxx X. Xxxxx, with an aggregate death benefit
of $1,500,000.
Agreement between the Company and Thermo Manufacturing Company, L.P. as to
confidentiality, dated September 1, 1995.
Confidentiality Agreement, dated December 20, 1994 between Xxxxx Xxxxx and
Allied Signal, Inc.
Interests of Imperial IPF in Company's unearned premiums, dividends and
loss payments under specified insurance policies pursuant to certain
Premium Finance Agreement, dated June 13, 1995.
Annex A
-------
SALESMAN CONTRACT LIST WITH DATES
U.S. INTEC, INC.
NAME LOCATION SALESMAN REP
---- -------- -------- ---
Xxxx Xxxxxxx (Sales Mgr.) Eastern Region 2/85
Xxxx Xxxxxxx MD, DC 1/93
Xxxxxx Xxxxxxxxx VA, NC 4/87
Xxxxx Xxxxxxx NY City 11/86
Xxxx Xxxxxx (ASR Assoc.) FL, SE GA 1/95
Xxxxx Xxxxx (ASR Assoc.) FL, SE GA
Xxxx Xxxxxx (ASR Assoc.) FL, SE GA
Xxxxxx Xxxxxxxx (ASR Assoc.) W. Coast FL
Xxx White New England 5/88
Xxxx Xxx W. PA, NW VA None
Xxxx Xxxxxxx (Xxxxxxx, So. J, Phil. PA, DE 12/92
Xxxxxxxx & Assoc.)
Xxx Xxxxxxxx (Xxxxxxx, E. PA 12/92
Xxxxxxxx & Assoc.)
Xxxx Xxxxx (Division 7 E. NY State 4/92
Sales)
Xxx Xxxx (Division 7 Sales) W. NY State 4/92
Xxxxx Xxxxxxxxxx (Equinox NO Jersey None
Building Materials)
Xxxxx Xxxxx Atlanta, GA 3/94
Xxx Xxxxxx (Thermo) 1/95
Xxx Xxxxxxx (Xxxxxxx E. PA
Xxxxxxxx)
Xxxx Xxxx SC, E, TN, NC None
Xxxx Xxxxxx (Sales Mgr.) NC Region, IL 2/85
Xxxx Xxxxxxxx MI 2/87
Xxxx Xxxxxxxxxxx (Specified WI, MN 1/92
Sales)
Xxx Xxxx (Specified Sales) WI, MN 1/92
Xxxxx Xxxxxxx OH, WV 1/90
Xxxx Xxxxxx (Elmslie & Manitoba-E. None
Assoc.)
Xxx Xxxxxx IL None
Xxx Xxxxxx, Xx. (X.X. Sales IL None
and Mktg.)
Xxxx Xxxxxxx (Elmslie & E. Canada 1/92
Assoc.)
Xxxx Xxxxxxx (Conspec 7 IN 1/95
and Mktg.)
Xxxxxxx Xxxxxxx (Metro Mktg. KY 1/95
Company)
Xxx Xxxx (Phoenix Rfg. & TN (Xxxx) 1/95
Metal Supply)
Xxxx Xxxxxx (Sales Mgr.) N.W. Region, Alaska 7/89
G. Xxxxx Xxxxxxxxx (Thermo) 3/95
Xxxx Xxxxxx Bay Area, S.F., CA 1/87
Xxx Xxxxxxxx MO, CA, NV 2/85
Xxxx Xxxxxxx (Aqua Seal) BC, ALBT,SASK 1/92
Xxxxx Xxxxxxxxx OR, SO. ID 1/92
SALESMAN CONTRACT LIST WITH DATES
NAME LOCATION SALESMAN REP
---- -------- -------- ---
Xxxxx Xxxxxx Bay Area, S.F., CA 1/87
Xxxx Xxxxxxx NO, California None
Will Xxxxxx Bay Area, S.F., CA 0/00
Xxxx Xxxxxxxxx X. XX 1/93
Xxx Xxxxxxx Tacoma, WA 4/94
Xxxx Xxxxxx BC, ALBT, SASK None
Xxxxx Xxxxx (Sales Mgr.) SC Region TX 10/93
Xxx Xxxxxx Houston, SE TX None
Xxx Xxxxx Dallas/Ft. Worth None
Xxx Xxxxx Austin, El Paso 2/85
Xxx Xxxx LA None
Xxxxxxxx-Xxxxxxx (Xxxxxxxx, MO, KS, IA, NE, Xxxxxxx 1/92
Xxxxxxx)
Xxxx XxXxxxxxxxx (Olympic 3/95
Supply)
Xxx Xxxxx (Infra Xxx Xxxx Texas 8/93
Enterprises)
Xxxxxx Xxxxxxx AL, W. Panama City, FL
Xxxx Xxxxxx (Xxxx Xxxxxx San Antonio 9/93
& Assoc.)
Xxxx Xxxx (Xxxx Xxxxxx & C. Christi & Valley 9/93
Assoc.)
Xxx Xxx (K & K Sales) OK, N.M., AR 3/94
Xxxxxxxx Xxxxx (X.X. Xxxxx TN
& Assoc.)
Xxxxx Xxxxx (X.X. Xxxxx & W. TN
& Assoc.)
Xxxxxx Xxxxxxxx (X.X. Xxxxx W. TN
& Assoc.)
Xxxx Xxxxxx TX 9/94
Xxxxxx Xxxx TX 2/95
Xxxx Xxxxxxx (Sales Mgr.) SW Region, AZ 0/00
Xxxx Xxxxxxx Xxxxxx, Xxxxxxx XX Xxxx
Xxxxxx Xxxxxxxxxxx (Roofing HI None
Solutions)
Xxxx Xxxxxxx (Xxxxxxx & UT, SW, Wyoming, SE ID 1/92
Assoc.)
Xxxx Xxxxx San Bern, Riverdale None
Xxxx Max So. NV 12/92
Xxxx Max So. NV 12/92
Xxx Xxxxxx NM 10/90
Xxx Xxxxxx AZ None
Xxxx XxXxxxxxx (B.R. CO, Wyoming 12/92
XxXxxxxxx Co.)
X. X. Xxxxx, III (B.R. CO, Wyoming 12/92
XxXxxxxxx Co.)
Xxxxxxx Xxxxxx (B.R. CO, Wyoming 12/92
XxXxxxxxx Co.)
Xxxx Xxxxxxx Tucson/So. AZ 2/94
Xxxxx Xxxxxxx So. CA 3/94
Dala Cisco Orange, Ventura, LA None
Schedule 4.1(p) - Related Party Transactions
--------------- --------------------------
Lease Agreement, dated July 1, 1994, between the Company and
Frontier Development, Ltd., for premises located at 000 Xxxxxxx 000, Xxxx
Xxxxxx, Xxxxx.
Lease Agreement, dated May 1, 1995, between the Company and
Frontier Development, Ltd., for premises located at 000 X. Xxxxxx Xxxxx,
Xxxxxxxx Xxxxxxx, Xxxxx.
Promissory Notes, dated September 28, 1990 and December 31,
1993, made by Xxxxx X. Xxxxx in favor of the Company in the original principal
amount of $2,803,000, and related Global Modification and Restructuring
Agreement.
Debt Restructuring and Non-Competetion Agreement, dated
September 28, 1990, between the Company and Xxxxx X. Xxxxx.
Indemnification Agreements, dated as of May 1, 1995, between
the Company and each of Xxxxx X. Xxxxx, Xxx X. Xxxxxxxxx, X. Xxxxx Xxxxx, S.
Xxxxx Xxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxx and
Xxxxxx X. Xxxxxxxxx.
Registration Agreement, dated January 12, 1995, between the
Company, Xxxxx Xxxxx, First Southwest Company, 490 Park Joint Venture and the
Xxxxxxx Family Partnership.
Consulting Agreement, dated December 9, 1991, between the
Company and Xxxxxx Xxxxxx.
The Company periodically makes advances to employees and
sales representatives, which are paid through payroll or commission deductions.
The Company has entered into a Corporate Business Travel
Account Agreement with American Express Travel Related Services Company, Inc.
The terms of this agreement require the Company to pay all amounts charged to
the Business Travel Account which are not paid promptly by the Company's
employees.
The Company has purchased two life insurance policies with
the Company named as beneficiary on Xxxxx X. Xxxxx, having an aggregate death
benefit of $1,500,000.
Schedule 4.1(p) - Liens
--------------- -----
The following sets forth encumbrances that exist on the
Company's properties and assets.
1. Liens in favor of La Salle National Bank on all of the
Company's accounts and inventory and on all of the Company's deposits, cash and
other property which is in the possession of La Salle National Bank.
2. Commitment to La Salle National Bank to xxxxx x xxxx on the
Company's real property located in Houston, Texas; Stockholm, California;
Corvallis, Oregon; and Monroe, Georgia; pursuant to Amendment to Security
Agreement, dated January 30, 1995, of Security Agreement, dated January 17,
1990, between the Company and La Salle.
3. Mortgage in favor of Somerset Trust Company on the real
property owned by the Company and located at 000 Xxxxxxx Xxx., Xxxxx Xxxxxx, Xxx
Xxxxxx, pursuant to that certain Promissory Note dated as of November 18, 1986,
in the original amount of $1,260,000.
4. The interest of Geo Industries, a Division of Xxxxx Company,
in certain personal property delivered to the Company pursuant to that certain
Consignment Agreement, dated July 31, 1989, between the Company and Geo
Industries.
5. The interest of National Varnish Co. (now known as ALCO-NVC,
Inc.) in certain personal property delivered to the Company pursuant to that
certain Consignment Agreement, dated March 27, 1992, between the Company and
National Varnish Co.
6. The interest of Thermo Materials, a Division of Thunderhawk
Manufacturing Company, L.P., in certain personal property delivered to the
Company pursuant to that certain Consignment Agreement, dated March 2, 1994,
between the Company and Thermo Materials.
7. The interest of Penske Truck Leasing Co., L.P. in certain
vehicles leased to the Company pursuant to that certain Vehicle Lease Service
Agreement, dated May 19, 1992, between the Company and Penske Truck Leasing
Co., L.P.
8. The interest of Canon Financial Services in certain
equipment leased to the Company pursuant to those certain Equipment Leases dated
May 24, 1994, between the Company and Xxxxxx Financial Services.
9. The interest of Yale Financial Services in certain equipment
leased to the Company pursuant to that certain Master Lease Agreement dated
September 28, 1994 between the Company and Yale Financial Services.
10. The interest of First Source Financial Services in certain
equipment leased to the Company pursuant to that certain Equipment Rental
Agreement dated April 15, 1993, between the Company and First Source Financial
Services.
11. The interest of Community Bank in the Company's real
property (and improvements and fixtures to the real property operation) located
in Jefferson County, Texas, pursuant to that certain Deed of Trust dated as of
May 11, 1995, between the Company and Xxxxx X. Xxxxxxxx, as Trustee for
Community Bank.
12. The interest of Pitney Xxxxx Credit Corporation in certain
equipment leased to the Company pursuant to Equipment Lease Agreements between
the Company and Pitney Xxxxx Credit Corporation.
13. The Security Interest of MetLife Capital Corporations is
certain equipment owned by the Company, pursuant to that certain Loan and
Security Agreement, dated September 29, 1993, as supplemented by Supplemental
Security Agreement No. 1, dated March 10, 1994, and Supplemental Security
Agreement No. Three, dated March 30, 1995.
14. The interest of The CIT Group/Equipment Financing, Inc. in
certain equipment leased to the Company pursuant to those certain Equipment
Leases between the Company and The CIT Group/Equipment Financing, Inc.
15. The interest of Toyota Lift of Houston in certain equipment
leased to the Company pursuant to those certain Lease Agreements dated June 30,
1995.
16. The interest of Apple Unit Leasing, Inc., in certain
equipment leased to the Company pursuant to that certain Equipment Lease dated
March 2, 1992, between the Company and Apple Unit Leasing, Inc.
17. The interest of AFCO Credit Corporation in all of the
Company's unearned premiums, dividends and loss payments under specified
insurance policies pursuant to that certain Premiums Finance Agreement dated
December 5, 1994.
18. The interest of Corporation in certain equipment
leased to McWeid pursuant to that Lease Agreement dated September 11, 1995.
19. Interest of Imperial IPF in all of the Company's unearned
premiums, dividends, and loss payments under specified insurance policies
pursuant to that certain Premiums Finance Agreement, dated June 13, 1995.
