AGREEMENT AND PLAN OF MERGER
dated as of September 23, 1998
by and among
XXXXXXX CORPORATION,
XXXXXXX ACQUISITION CORPORATION
and
XXXXX STEAM CORPORATION
TABLE OF CONTENTS
ARTICLE A
THE OFFER
A-1.01 The Offer......................................2
A-1.02 Xxxxx Actions..................................3
A-1.03 Stockholder Lists..............................3
ARTICLE I
PLAN OF MERGER
1.01 The Merger.......................................4
1.02 Effective Time...................................4
1.03 Closing..........................................4
1.04 Articles of Incorporation; By-laws of the
Surviving Corporation; Location of
Principal Office.................................4
1.05 Directors and Officers of the Surviving
Corporation......................................5
1.06 Effects of the Merger............................5
1.07 Further Assurances...............................5
1.08 Shareholders' Approval...........................5
ARTICLE II
CONVERSION OF SHARES
2.01 Conversion of Capital Stock......................6
2.02 Exchange of Certificates.........................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Organization and Qualification...................9
3.02 Capital Stock...................................10
3.03 Authority Relative to this Agreement............11
3.04 Non-Contravention: Approvals and Consents.......12
3.05 SEC Reports and Financial Statements............13
3.06 Absence of Certain Changes or Events............13
3.07 Absence of Undisclosed Liabilities..............14
3.08 Legal Proceedings...............................14
3.09 Information Supplied; Schedule 14D-9; Offer
Documents and Proxy Statement...................14
3.10 Compliance with Laws and Orders.................15
3.11 Compliance with Agreements; Certain Agreements..15
3.12 Taxes...........................................16
3.13 Benefit Plans; ERISA............................17
3.14 Insurance.......................................19
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3.15 Labor Matters...................................20
3.16 Environmental Matters...........................21
3.17 Tangible Property and Assets....................23
3.18 Intellectual Property Rights....................23
3.19 Vote Required...................................25
3.20 Disclosure......................................25
3.21 Effect of Transactions on Manufacturer's
Representatives and Customers...................25
3.22 Bryan's Transaction Costs.......................25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER
SUB
4.01 Organization and Qualification..................25
4.02 Authority Relative to this Agreement............26
4.03 Non-Contravention; Approvals and Consents.......26
4.04 Legal Proceedings...............................27
4.05 Information Supplied............................27
4.06 Financing.......................................28
ARTICLE V
COVENANTS OF THE COMPANY
5.01 Conduct of Business.............................28
5.02 No Solicitations................................31
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Access to Information; Confidentiality..........32
6.02 Preparation of Proxy Statement..................32
6.03 Approval of Shareholders........................33
6.04 Regulatory and Other Approvals..................34
6.05 Employees.......................................34
6.06 Expenses........................................35
6.07 Brokers or Finders..............................35
6.08 Notice and Cure.................................35
6.09 Fulfillment of Conditions.......................36
6.10 Indemnification; Directors' and Officers'
Insurance.......................................36
6.11 Retention of Xxxxx Name.........................37
6.12 Takeover Laws...................................38
6.13 Subsequent Financial Statements.................38
6.14 Termination Fee; Expenses.......................38
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ARTICLE VII
CONDITIONS
7.01 Conditions to Each Party's Obligation to
Effect the Merger...............................39
7.02 Conditions to Obligation of Buyer and Merger
Sub to Effect the Merger........................40
7.03 Conditions to Obligation of Xxxxx to Effect
the Merger......................................41
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination.....................................42
8.02 Effect of Termination...........................43
8.03 Amendment.......................................43
8.04 Waiver..........................................43
ARTICLE IX
GENERAL PROVISIONS
9.01 Non-Survival of Representations; Warranties;
Covenants and Agreements........................44
9.02 Knowledge.......................................44
9.03 Notices.........................................44
9.04 Entire Agreement................................45
9.05 Public Announcements............................45
9.06 No Third Party Beneficiaries....................46
9.07 No Assignment, Binding Effect...................46
9.08 Headings........................................46
9.09 Invalid Provisions..............................46
9.10 Governing Law...................................46
9.11 Counterparts....................................46
9.12 Interpretation..................................47
9.13 Incorporation of Exhibits.......................47
9.14 Enforcement of Agreement; Injunctive Relief.....47
9.15 Joint and Several Obligations...................48
ANNEXES:
Annex A -- Conditions of Offer and List of Encumbrances
EXHIBITS:
Exhibit A - Form of Stockholders Agreement
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SCHEDULES:
Schedule 3.01 - Jurisdictions of Qualification
Schedule 3.04 - Xxxxx Consents and Approvals
Schedule 3.06 - Material Adverse Changes, etc.
Schedule 3.07 - Undisclosed Liabilities
Schedule 3.08 - Legal Proceedings
Schedule 3.10 - Permits; Legal Compliance
Schedule 3.11 - Contracts and Contract Compliance
Schedule 3.12 - Tax Matters
Schedule 3.13 - Benefit Plans
Schedule 3.14 - Insurance
Schedule 3.15 - Labor Matters
Schedule 3.16 - Environmental Matters
Schedule 3.17 - Exceptions to Title to Personal Property
Schedule 3.18 - Intellectual Property
Schedule 3.21 - Relationships with Representatives
and Customers
Schedule 3.22 - Bryan's Transaction Costs
Schedule 7.02 - Encumbrances
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This AGREEMENT AND PLAN OF MERGER dated as of September 23,
1998 (this "Agreement"), is made and entered into by and among
("XXXXXXX CORPORATION"), a New York corporation ("Buyer" or
"Xxxxxxx"), XXXXXXX ACQUISITION CORPORATION, a New Mexico
corporation wholly owned by Buyer ("Merger Sub"), and XXXXX STEAM
CORPORATION, a New Mexico corporation (prior to the Merger
referred to as "Xxxxx", and after the Merger referred to as the
"Surviving Corporation").
WHEREAS, the Boards of Directors of Buyer, Merger Sub and
Xxxxx have each determined that it is advisable and in the best
interests of their respective shareholders to consummate and have
approved the transactions contemplated hereby (in which Merger
Sub will make a tender offer (the "Offer") for all outstanding
shares of Xxxxx, Merger Sub will subsequently merge with and into
Xxxxx, and Xxxxx will thereupon become a wholly-owned subsidiary
of Buyer (the "Merger"));
WHEREAS, the Board of Directors of Xxxxx has unanimously
adopted a resolution approving the Offer, the Merger, this
Agreement and the transactions contemplated hereby and
recommending that the holders of Xxxxx Common Stock (as defined
below) tender their shares of Xxxxx Common Stock in the Offer and
approve the Merger;
WHEREAS, concurrently with the execution hereof and in
order to induce Buyer and Merger Sub to enter into this
Agreement, Buyer and Merger Sub are entering into a Stockholders'
Agreement with ten holders of Xxxxx Common Stock who collectively
own beneficially and of record 55.6% of the issued and
outstanding shares of common stock of Xxxxx; and such holders
have, in accordance with Rule 14a-2(b)(2) of the rules
promulgated under the Securities Exchange Act of 1934, as
amended, executed and delivered such Stockholders' Agreement
substantially in form of Exhibit A hereto wherein each such
holder (i) has agreed to tender his shares of Xxxxx Common Stock
pursuant to the Offer and (ii) has granted to Buyer the right to
vote such holder's shares of common stock of Xxxxx in favor of
the adoption and approval of the Merger;
WHEREAS, Buyer, Merger Sub and Xxxxx desire to make certain
representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and of
the mutual covenants and agreements and representations and
warranties set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE A
THE OFFER
A-1.01 The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.01 hereof and subject to
the provisions hereof, Buyer shall cause Merger Sub promptly (but
in no event later than five business days following the public
announcement of the terms of this Agreement) 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 all
outstanding shares of common stock of Xxxxx, par value $10.00 per
share (the "Xxxxx Common Stock" or the "Shares"), at a price of
$152.00 per Share, net to the seller in cash (the "Offer").
Subject to the satisfaction of the Offer Conditions (as defined
below) and the terms and conditions of this Agreement, Merger Sub
shall accept for payment and pay for Shares validly tendered and
not withdrawn pursuant to the Offer as soon as practicable under
applicable law. The obligation of Merger Sub to consummate the
Offer and to accept for payment and to pay for any Shares
tendered pursuant thereto shall be subject to only those
conditions set forth in Annex A hereto (the "Offer Conditions"),
which are for the sole benefit of Buyer and Merger Sub and may be
asserted by Buyer or Merger Sub or waived by Buyer or Merger Sub,
in whole or in part, at any time and from time to time in their
sole discretion. Xxxxx agrees that no Shares held by Xxxxx or any
of its subsidiaries will be tendered to Merger Sub pursuant to
the Offer. Merger Sub will not, without the prior written consent
of Xxxxx, (i) decrease or change the amount or form of the
consideration payable in the Offer, (ii) decrease the number of
Shares sought pursuant to the Offer, (iii) impose additional
conditions to the Offer, (iv) change the conditions to the Offer
(provided, that Buyer or Merger Sub in their sole discretion may
waive any of the conditions to the Offer) or (v) make any change
to any other provision of the Offer that is materially adverse to
the holders of the Shares. Merger Sub shall be entitled to extend
the Offer in accordance with applicable law, but if the
conditions set forth in Annex A are satisfied as of any scheduled
expiration date of the Offer, the Offer may not be extended by
more than ten business days in the aggregate, except with the
prior written consent of the Company or as required by law. If
the conditions set forth in Annex A are not satisfied or waived
by Merger Sub as of any scheduled expiration date, Merger Sub may
extend the Offer from time to time until the earlier of the
consummation of the Offer or twenty business days following the
original expiration date of the Offer.
(b) On the date of commencement of the Offer, Buyer
and Merger Sub shall file or cause to be filed with the
Securities and Exchange Commission (the "SEC") a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer (together
with all amendments and supplements thereto, the "Schedule
14D-1"), 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"). Xxxxx and its counsel shall be given a
reasonable opportunity to review and comment on the Offer
Documents prior to their filing with the SEC. Buyer and Merger
Sub agree to provide Xxxxx with, and to consult with Xxxxx
regarding, any comments that may be received from the SEC or its
staff with respect to the Offer Documents promptly after receipt
thereof.
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A-1.02 Xxxxx Actions. (a) Xxxxx hereby consents to the
Offer and represents and warrants that (i) the making of the
Offer and the other transactions contemplated by this Agreement
have been approved and consented to by the Board of Directors of
Xxxxx in accordance with applicable law, (ii) Bryan's Board of
Directors (at meetings duly called and held) has unanimously (x)
determined that the Offer and the Merger are fair to and in the
best interests of the stockholders of Xxxxx, (y) resolved to
recommend acceptance of the Offer and approval of the plan of
merger contained in this Agreement by such stockholders of Xxxxx,
and (z) resolved to elect, to the extent permitted by law, not to
be subject to any "moratorium", "control share acquisition",
"business combination", "fair price" or other form of
antitakeover laws and regulations (collectively, "Takeover Laws")
of any jurisdiction that may purport to be applicable to this
Agreement, and (iii) XxXxxxxx & Company Securities, Inc., Bryan's
independent financial advisor, has advised Bryan's Board of
Directors that, in its opinion, the consideration to be paid in
the Offer and the Merger to Bryan's stockholders is fair, from a
financial point of view, to such stockholders.
(b) Upon commencement of the Offer, Xxxxx shall file
with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto, the
"Schedule 14D-9") containing the recommendations of its Board of
Directors described in Section A-1.02(a) and hereby consents to
the inclusion of such recommendations in the Offer Documents and
to the inclusion of a copy of the Schedule 14D-9 with the Offer
Documents mailed or furnished to Bryan's stockholders. Buyer,
Merger Sub and their counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 prior to
its filing with the SEC. Xxxxx agrees to provide Buyer and Merger
Sub with, and to consult with Buyer and Merger Sub regarding, any
comments that may be received from the SEC or its staff with
respect to the Schedule 14D-9 promptly after receipt thereof.
(c) Xxxxx hereby agrees that, subject to the terms and
conditions of this Agreement, in the event there shall occur a
change in law or in a binding judicial interpretation of existing
law which would, in the absence of action by Xxxxx or the Board
of Directors of Xxxxx specified in such law or interpretation,
prevent Merger Sub, were it to acquire two-thirds of the Shares
then outstanding, from approving and adopting this Agreement
without the affirmative vote of any other holder of Shares, Xxxxx
will use its best efforts promptly to take such action or cause
such action to be taken.
A-1.03 Stockholder Lists. In connection with the
Offer, Xxxxx shall promptly furnish Buyer and Merger Sub with
mailing labels, security position listings and any available
listing or computer file containing the names and addresses of
the record holders of the Shares as of the latest practicable
date and shall furnish Buyer and Merger Sub with such information
and assistance (including periodic updates of such information)
as Buyer or Merger Sub or their agents may reasonably request in
communicating the Offer to the record and beneficial holders of
the Shares.
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ARTICLE I
PLAN OF MERGER
1.01 The Merger. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined
in Section 1.02), Merger Sub shall be merged with and into Xxxxx
and the separate corporate existence of Merger Sub shall
thereupon cease. Xxxxx shall be the surviving corporation in the
Merger (the "Surviving Corporation"). Merger Sub and Xxxxx are
sometimes referred to herein as the "Constituent Corporations."
As a result of the Merger, the outstanding shares of capital
stock of the Constituent Corporations shall be converted or
canceled in the manner provided in Article II.
1.02 Effective Time. At the Closing (as defined in Section
1.03), such articles of merger or other appropriate documents (in
each case, "Articles of Merger") shall be duly prepared and
executed by the Constituent Corporations and thereafter delivered
to the Corporation Commission of the State of New Mexico or its
successor (the "New Mexico Corporation Commission") for filing,
as provided in Section 53-14-4 of the New Mexico Business
Corporation Act (the "NMBCA"), on, or as soon as practicable
after, the Closing Date (as defined in Section 1.03) and shall
make all other filings, recordings and publications as required
by the NMBCA. The Merger shall become effective on the date the
Articles of Merger are filed (such date being referred to herein
as the "Effective Time").
1.03 Closing. The closing of the Merger (the "Closing")
will take place at the offices of Xxxxxx & Xxxxxxxxx, 00 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, or at such other
place as the parties hereto mutually agree, on a date and at a
time to be specified by the parties, which shall in no event be
later than 10:00 a.m., local time, on the 5th business day
following the day on which the last to be satisfied or waived of
the conditions set forth in Article VII shall be satisfied or, if
permissible, waived in accordance with this Agreement, or on such
other date and time as the parties hereto mutually agree. The
date on which the Closing occurs is hereinafter referred to as
the "Closing Date." At the Closing, Buyer, Merger Sub and Xxxxx
shall deliver to each other the certificates and other documents
and instruments required to be delivered under Article VII and
take such other actions as may be necessary to consummate the
transactions contemplated by this Agreement.
1.04 Articles of Incorporation; By-laws of the Surviving
Corporation; Location of Principal Office.
(a) Articles of Incorporation. The Articles of
Incorporation of Merger Sub in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the
Surviving Corporation until thereafter amended as provided by law
and such Articles of Incorporation; provided, however, that
Article I of the Articles of Incorporation of the Surviving
Corporation shall be amended to read in its entirety as follows:
"The name of the Corporation is Xxxxx Steam Corporation."
(b) By-laws. The By-laws of Merger Sub in effect
immediately prior to the Effective Time shall be the By-laws of
the Surviving Corporation until thereafter amended as provided by
law, the Articles of Incorporation of the Surviving Corporation
and such By-laws.
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(c) Location of Principal Office. The location of the
principal office of the Surviving Corporation shall be Xxxxx Xxxx
00 Xxxxx, Xxxx Xxxxxx Xxx 00, Xxxx, Xxxxxxx 00000.
1.05 Directors and Officers of the Surviving Corporation.
(a) Directors. The individuals listed below shall be
the directors of the Surviving Corporation until their successors
shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with
the Articles of Incorporation and By-laws of the Surviving
Corporation:
H. Xxxxx XxXxx
Xxxxxx Xxxxxxxx, III
Xxxxxx X. Xxxxxxxx
(b) Officers. The individuals listed below shall be
the officers of the Surviving Corporation until their successors
shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with
the Articles of Incorporation and By-laws of the Surviving
Corporation, and the Board of Directors of Xxxxx will confirm by
resolution the appointment of such officers effective as of the
Effective Time:
H. Xxxxx XxXxx, President
Xxxxxx X. Xxxxxxxx, Vice President
Xxxx X. Xxxxxxxxx, Treasurer,
Comptroller and Secretary
Xxxxxx Xxxxxxx, Assistant Treasurer
Xxxxx XxXxxx, Assistant Secretary
1.06 Effects of the Merger. Subject to the foregoing, the
Merger shall have the effects specified in accordance with
Section 53-14-6 of the NMBCA.
1.07 Further Assurances. Each party hereto will execute
such further documents and instruments and take such further
actions as may reasonably be requested by one or more of the
others to consummate the Merger, to vest the Surviving
Corporation with full title to all assets, properties, rights,
approvals, immunities and franchises of either of the Constituent
Corporations or to effect the other purposes of this Agreement.
1.08 Shareholders' Approval. In order to consummate the
Merger, Xxxxx, acting through its Board of Directors, shall
pursuant to Section 6.03 as soon as practicable and in accordance
with (but only if required under) applicable law, promptly and
duly call, give notice of, convene and hold a special shareholder
meeting or its 1998 Annual Meeting of shareholders for the
purpose of considering and taking action upon the Merger and
adopting and approving this Agreement (the "Shareholder
Meeting").
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ARTICLE II
CONVERSION OF SHARES
2.01 Conversion of Capital Stock.
(a) Conversion of Capital Stock and Dissenting Shares.
At the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof:
(i) Capital Stock of Merger Sub. All of the
issued and outstanding shares of the common stock, with no par
value, of Merger Sub ("Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall remain
outstanding and unchanged after the Merger and shall thereafter
constitute all of the issued and outstanding shares of the
capital stock of the Surviving Corporation ("Surviving
Corporation Common Stock"). Immediately after the Merger, all of
the issued and outstanding shares of common stock of the
Surviving Corporation shall be owned by Buyer.
(ii) Cancellation of Treasury Stock. All shares
of common stock, of Xxxxx, par value $10.00 per share ("Xxxxx
Common Stock"), that are owned by Xxxxx as treasury stock shall
be canceled and retired and shall cease to exist and no stock of
Buyer or other consideration shall be delivered in exchange
therefor.
(iii) Exchange Price for Xxxxx Common Stock. Each
share of Xxxxx Common Stock (other than shares to be canceled in
accordance with Section 2.01(a)(ii) and other than Dissenting
Shares (as defined in Section 2.01(b))) issued and outstanding
immediately prior to the Effective Time shall be converted into
and represent the right to receive $152.00 in cash per share (the
"Merger Price"). The Merger Price shall be payable in cash
without interest thereon, upon surrender of the corresponding
Certificate (as defined in Section 2.02(b)) in accordance with
Section 2.02. As of the Effective Time, all shares of Xxxxx
Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist,
and each holder of a Certificate representing any such shares
shall cease to have any rights with respect thereto, except the
right to receive the Merger Price per share as provided herein.
(b) Dissenting Shares.
(i) To the extent applicable, each outstanding
share of Xxxxx Common Stock the holder of which has not voted in
favor of the Merger, has perfected such holder's right to fair
value of such holder's shares in accordance with the applicable
provisions of the NMBCA and has not effectively withdrawn or lost
such right (a "Dissenting Share"), shall not be converted into or
represent a right to receive the Merger Price pursuant to Section
2.01 (a)(iii), but the holder thereof (sometimes referred to
herein as a "Dissenting Shareholder") shall be entitled only to
such rights as are granted by the applicable provisions of the
NMBCA; provided, however, that any Dissenting Share held by a
person at the Effective Time who shall, after the Effective Time,
withdraw the demand for fair value or lose the right to fair
value, in either case pursuant to the NMBCA, shall be deemed to
be converted into, as of the Effective Time, the right to receive
the Merger Price pursuant to Section 2.01(a)(iii).
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(ii) Xxxxx shall give Buyer (x) prompt notice of any
written objection to the proposed adoption and approval of this
Agreement, any written demand for payment of the fair value of
shares, any withdrawals of such demands and any other instruments
received by Xxxxx served pursuant to the applicable provisions of
the NMBCA relating to dissenting shareholders and (y) the
opportunity to direct all negotiations and proceedings with
respect to demands by dissenting shareholders under the NMBCA.
Xxxxx will not voluntarily make any payment with respect to any
demands by dissenting shareholders and will not, except with the
prior written consent of Buyer, settle or offer to settle any
such demands.
2.02 Exchange of Certificates.
(a) Exchange Agent.
(i) At the Closing or immediately prior to the
Effective Time, Buyer (x) shall appoint as exchange agent
reasonably satisfactory to Xxxxx (the "Exchange Agent") in
accordance with an exchange agreement reasonably satisfactory to
Xxxxx, and (y) shall make available to the Surviving Corporation,
and shall cause to be deposited with the Exchange Agent, the
aggregate amount due to holders of shares of Xxxxx Common Stock
under Section 2.01(a)(iii) (the "Purchase Price"), to be held for
the benefit of and to be distributed to, holders of shares of
Xxxxx Common Stock in accordance with this Section 2.02. The
Exchange Agent shall agree to hold such funds (such funds,
together with earnings thereon, being referred to herein as the
"Exchange Fund") for delivery as contemplated by this Section
2.02 and upon such additional terms as may be agreed upon by the
Exchange Agent, Xxxxx and Buyer.
(ii) The deposit shall be made on the following
terms: (a) the Exchange Agent will be given irrevocable
instructions that monies deposited in the Exchange Fund pursuant
to this Section 2.02 will be applied by the Exchange Agent to
making the cash payments to the former Xxxxx shareholders
provided for herein; (b) the Exchange Agent, upon the direction
of Buyer or, after the Effective Time, the Surviving Corporation,
may invest in direct obligations of the United States of America
or obligations for which the full faith and credit of the United
States is pledged to provide for the payment of principal and
interest, certificates of deposit issued by commercial banks
having capital and surplus in excess of One Hundred Million
Dollars ($100,000,000), or commercial paper rated A-1 or better
by Standard & Poor's corporation or P-1 by Xxxxx'x Investors
Service, Inc.; (c) any net profit resulting from, or interest or
income produced by, such investments will be payable as directed
by the Surviving Corporation (including, if so directed, to it);
provided, that Buyer shall replace any monies lost through any
investments made as contemplated by this Section 2.02, if
required to make payments to former shareholders of Xxxxx
pursuant to this Agreement, and shall reimburse the Exchange
Agent for all expenses incurred in connection with the
acquisition or liquidation of any such investment; (d) all
expenses of the Exchange Agent will be paid by Buyer or the
Surviving Corporation; and (e) any portion of the Exchange Fund
deposited with the Exchange Agent pursuant to this Section 2.02,
which remains unclaimed by the former shareholders of Xxxxx for
six (6) months after the Effective Time, will be repaid to the
Surviving Corporation upon demand. If certain Xxxxx shareholders,
such as shareholders who cannot be located, have not received the
cash to which they are entitled under the terms of this Agreement
within six (6) months after the Effective Time, the Surviving
Corporation will thereafter hold the amount of
7
cash to which such shareholders are entitled, subject to
applicable law and to the extent that the same has not yet been
paid to a public official pursuant to abandoned property laws,
for their benefit and will act and serve as their agent for the
purpose of holding such funds. To the extent that any former
shareholders of Xxxxx exercise their rights as Dissenting
Shareholders, payments to them required or authorized by the
NMBCA may be made from the Exchange Fund, but not in excess of
the Merger Price for each share of Xxxxx Common Stock formerly
owned.
(b) Exchange Procedures.
(i) The record date for the purposes of the
transactions contemplated hereby shall be the Closing Date. As
soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to
each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding
shares of Xxxxx Common Stock (the "Certificates") converted
pursuant to Section 2.01(a)(iii) into the right to receive the
Merger Price (x) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and
have such other provisions as the Surviving Corporation may
reasonably specify) and (y) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Price.
Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal duly executed and
completed in accordance with its terms, the holder of such
Certificate shall be entitled to receive in exchange therefor an
amount equal to the Merger Price per share of Xxxxx Common Stock
represented thereby, which such holder has the right to receive
pursuant to the provisions of this Article II (in accordance with
applicable law), and the Certificate so surrendered shall
forthwith be canceled. In no event shall the holder of any
Certificate be entitled to receive interest on any funds to be
received in the Merger. In the event of a transfer of ownership
of Xxxxx Common Stock which is not registered in the transfer
records of Xxxxx, the Merger Price may be issued to a transferee
if the Certificate representing such Xxxxx Common Stock is
presented to the Exchange Agent accompanied by all documents
required to evidence, to the satisfaction of the Surviving
Corporation, that such transfer had properly occurred and that
any applicable stock transfer taxes had been properly paid.
(ii) Until surrendered as contemplated by this
Section 2.02(b), each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive
upon such surrender the Merger Price per share of Xxxxx Common
Stock represented thereby as contemplated by this Article II, and
shall not entitle the holder thereof to any rights of
shareholders of the Surviving Corporation.
(iii) The Surviving Corporation shall pay all
charges and expenses incurred by the Surviving Corporation or the
Exchange Agent in connection with the exchange of Certificates
for cash.
(iv) The parties acknowledge that the Exchange
Agent may require each holder of record of outstanding shares of
Xxxxx Common Stock to execute and deliver such documents and
instruments as the Exchange Agent may reasonably require to
effectuate the surrender of such shares in exchange for the
Merger Price, including any appropriate affidavits and tax forms.
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(c) No Further Ownership Rights in Xxxxx Common Stock.
All cash paid upon the surrender of shares of Xxxxx Common Stock
in accordance with the terms hereof shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares
of Xxxxx Common Stock. From and after the Effective Time, Bryan's
stock transfer books shall be closed and there shall be no
further registration of transfers on the stock transfer books of
the Surviving Corporation of the shares of Xxxxx Common Stock
which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article II. If any Certificates
shall not have been surrendered prior to two years after the
Effective Time, unclaimed funds payable with respect to such
Certificates shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled
thereto.
(d) No Further Ownership Rights in Merger Sub Common
Stock. All shares of common stock of the Surviving Corporation
(the "Surviving Corporation Common Stock") issued upon the
surrender of shares of Merger Sub Common Stock in accordance with
the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Merger
Sub Common Stock, and there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of Merger Sub Common Stock that were
outstanding immediately prior to the Effective Time. If, after
the Effective Time, certificates representing Merger Sub Common
Stock are presented to the Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in Article II.
(e) Termination of Exchange Fund. Any portion of the
Exchange Fund that remains undistributed to the shareholders of
Xxxxx six (6) months after the Effective Time shall be delivered
to the Surviving Corporation, upon demand, and any shareholders
of Xxxxx who have not theretofore complied with this Article II
shall thereafter look only to the Surviving Corporation (subject
to abandoned property, escheat and other similar laws) as general
creditors for payment of their claims for the Merger Price per
share. Neither Buyer nor the Surviving Corporation shall be
liable to any holder of shares of Xxxxx Common Stock for cash
representing the Merger Price delivered from the Exchange Fund or
otherwise to a public official pursuant to any applicable
abandoned property, escheat or similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Xxxxx represents and warrants to Buyer and Merger Sub
as follows:
3.01 Organization and Qualification. (a) Xxxxx is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has full
corporate power and authority to conduct its business as and to
the extent now conducted and to own, use and lease its assets and
properties. Xxxxx is duly qualified, licensed or admitted to do
business and is in good standing in each jurisdiction listed on
Schedule 3.01 hereto in which the ownership, use or leasing of
its assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission
necessary, except for such failures to be so
9
qualified, licensed or admitted and in good standing which,
individually or in the aggregate, (i) are not having and could
not be reasonably expected to have a material adverse effect on
Xxxxx, and (ii) could not be reasonably expected to have a
material adverse effect on the validity or enforceability of this
Agreement or on the ability of Xxxxx to perform its obligations
hereunder. As used in this Agreement, any reference to any event,
change or effect being "material" or "materially adverse" or
having a "material adverse effect" on or with respect to an
entity (or group of entities taken as a whole) means such event,
change or effect is material or materially adverse, as the case
may be, to the business, condition (financial or otherwise),
properties, assets (including intangible assets), liabilities
(including contingent liabilities), prospects or results of
operations of such entity (or, if with respect thereto, of such
group of entities taken as a whole). Xxxxx has previously
delivered to Buyer accurate and complete copies of the Articles
of Incorporation and the By-laws of Xxxxx and each of its
subsidiaries as currently in effect.
(b) Except for Monticello Exchanger and Manufacturing Co.,
Inc. ("Memco") and Xxxxxxxx Manufacturing Co., Inc. ("Xxxxxxxx"),
Xxxxx does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business
association or entity. All outstanding shares of capital stock of
each of Memco and Xxxxxxxx are duly authorized, validly issued,
fully paid, non-assessable and owned, directly or indirectly, by
Xxxxx xxxx and clear of any liens, claims or encumbrances. Each
of Memco and Xxxxxxxx is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation and has full corporate power and authority to
conduct its business as and to the extent now conducted and to
own, use and lease its assets and properties. Each of Memco and
Xxxxxxxx is duly qualified, licensed or admitted to do business
and is in good standing in each jurisdiction listed on Schedule
3.01 hereto in which the ownership, use or leasing of its assets
and properties, or the conduct or nature of its business, makes
such qualification, licensing or admission necessary, except for
such failures to be so qualified, licensed or admitted and in
good standing which, individually or in the aggregate, (i) are
not having and could not be reasonably expected to have a
material adverse effect on either Memco or Xxxxxxxx as the case
may be, and (ii) could not be reasonably expected to have a
material adverse effect on the validity or enforceability of this
Agreement or on the ability of Xxxxx to perform its obligations
hereunder.
3.02 Capital Stock, etc.. (a) The authorized capital stock
of Xxxxx consists solely of 200,000 shares of common stock, par
value $10.00 per share (previously defined as "Xxxxx Common
Stock"), and 2,500 shares of preferred stock (the "Preferred
Stock"). As of the date hereof, 191,284 shares of Xxxxx Common
Stock are issued and outstanding, 8,716 shares of Xxxxx Common
Stock are held in the treasury of Xxxxx; and no shares of
Preferred Stock are issued or outstanding. All of the issued and
outstanding shares of Xxxxx Common Stock are duly authorized,
validly issued, fully paid and nonassessable. Except pursuant to
this Agreement, there are no outstanding subscriptions, options,
warrants, rights (including "phantom" stock rights), preemptive
rights or other contracts, commitments, understandings or
arrangements, including any right of conversion or exchange under
any outstanding security, instrument or agreement (together,
"Options"), obligating Xxxxx to issue or sell any shares of
capital stock of Xxxxx or to xxxxx, extend or enter into any
Option with respect thereto.
10
(b) There are no outstanding contractual obligations
of Xxxxx to repurchase, redeem or otherwise acquire any shares of
Xxxxx Common Stock or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in any
other person.
(c) There are no obligations to issue or to make any
payments in respect of any shares of Preferred Stock; no person
or entity has any right to make any claim in any manner
whatsoever as a holder or a prior holder of any Preferred Stock
or any rights related in any way to any shares of Preferred
Stock; and no person or entity has any right to claim to be a
holder of any rights related in any way to the Preferred Stock.
(d) Except as expressly provided herein or in the
Schedules hereto, no notice to obtain approval of the Merger is
required to be sent to any person or entity, whether or not
entitled to vote, other than the holders of record of Xxxxx
Common Stock.
(e) There are no outstanding subscriptions, options,
warrants, rights (including "phantom" stock rights), preemptive
rights or other contracts, commitments, understandings or
arrangements, including any right of conversion or exchange under
any outstanding security, instrument or agreement, obligating
either Xxxxxxxx or Memco to issue or sell any shares of its
capital stock (each, a "Subsidiary Option") or to grant, extend
or enter into any Subsidiary Option with respect thereto. There
are no outstanding contractual obligations of either Xxxxxxxx or
Memco to provide funds to, or make any investment (in the form of
a loan, capital contribution or otherwise) in, any other person
or entity.
3.03 Authority Relative to this Agreement. Xxxxx has full
corporate power and authority to enter into this Agreement and,
subject to obtaining Shareholders' Approval (as defined in
Section 6.03) with respect to the Merger, to perform its
obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of
this Agreement by Xxxxx and the consummation by Xxxxx of the
transactions contemplated hereby have been duly and validly
approved by the Board of Directors of Xxxxx, the Board of
Directors of Xxxxx has recommended adoption of this Agreement by
the shareholders of Xxxxx and directed that this Agreement be
submitted to the shareholders of Xxxxx for their consideration,
and no other corporate proceedings on the part of Xxxxx or its
shareholders are necessary to authorize the execution, delivery
and performance of this Agreement by Xxxxx and the consummation
by Xxxxx of the transactions contemplated hereby other than
obtaining Shareholders' Approval (as defined in Section 6.03).
This Agreement has been duly and validly executed and delivered
by Xxxxx and constitutes a legal, valid and binding obligation of
Xxxxx enforceable against Xxxxx in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
3.04 Non-Contravention; Approvals and Consents.
(a) The execution and delivery of this Agreement by
Xxxxx does not, and the performance by Xxxxx of its obligations
hereunder and the consummation of the transactions contemplated
hereby will not, conflict with, result in a violation or breach
of, constitute (with or without notice or lapse of time or both)
a default under, or result in the creation or imposition of
11
any liens, mortgages, encumbrances, pledges or security interests
of any kind (each a "Lien') upon any of the assets or properties
of Xxxxx under any of the terms, conditions or provisions of (i)
the Articles of Incorporation or By-laws of Xxxxx, or (ii)
subject to the obtaining of Shareholders' Approval and the taking
of the actions described in paragraph (b) of this Section, (x)
any statute, law, rule, regulation, requirement, code or
ordinance (together, "Laws"), or any judgment, decree, binding
agreement or order (together, "Orders"), of or with any court,
tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States, any foreign country
or any domestic or foreign state, county, city or other political
subdivision (a "Governmental or Regulatory Authority"),
applicable to Xxxxx or any of its assets or properties, or (y)
any note, bond, mortgage, security agreement, indenture, license,
franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind (each a
"Contract", and together, "Contracts") to which Xxxxx or any of
its Subsidiaries is a party or by which Xxxxx or any of its
Subsidiaries or any of its assets or properties is bound,
excluding from the foregoing clauses (x) and (y) conflicts,
violations, breaches, defaults, terminations, modifications,
accelerations and creations and impositions of Liens which,
individually or in the aggregate, could not be reasonably
expected to have a material adverse effect on the business or a
material product line of Xxxxx and its Subsidiaries or on the
ability of Xxxxx to consummate the transactions contemplated by
this Agreement. As used in this Agreement, "Subsidiary" means,
with respect to any party, any corporation or other organization,
whether incorporated or unincorporated, of which more than fifty
percent (50%) of either the equity interests in, or the voting
control of, such corporation or other organization is, directly
or indirectly through Subsidiaries or otherwise, beneficially
owned by such party.
(b) Except (i) for the filing of a premerger
notification report by Xxxxx under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"), (ii) for the filing of
the Proxy Statement (as defined in Section 3.09) with the
Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act") and clearance of any
SEC comments thereon, (iii) for the filing of the Articles of
Merger required by the NMBCA with the New Mexico Corporate
Commission and appropriate documents with the relevant
authorities of other states in which the Constituent Corporations
are qualified to do business, (iv) for the filing of Schedule
14D-1 and Schedule 14D-9, and (v) as disclosed in Schedule 3.04
hereto, no consent, approval or action of, filing with or notice
to any Governmental or Regulatory Authority or other public or
private third party is necessary or required under any of the
terms, conditions or provisions of any Law or Order of any
Governmental or Regulatory Authority or any Contract to which
Xxxxx is a party or by which Xxxxx or any of its assets or
properties is bound for the execution and delivery of this
Agreement by Xxxxx, the performance by Xxxxx of its obligations
hereunder or the consummation of the transactions contemplated
hereby, other than such consents, approvals, actions, filings and
notices which the failure to make or obtain, as the case may be,
individually or in the aggregate, could not be reasonably
expected to have a material adverse effect on Xxxxx or on the
ability of Xxxxx to consummate the transactions contemplated by
this Agreement.
3.05 SEC Reports and Financial Statements. (a) Xxxxx
delivered to Buyer prior to the execution of this Agreement a
true and complete copy of each form, report, schedule,
registration statement, definitive proxy statement and other
document, including any financial statements,
12
exhibits or schedules included or incorporated by reference
(together with all amendments thereof and supplements thereto)
filed by Xxxxx with the SEC since July 1, 1995 whether or not the
same was required to have been filed under applicable law (as
such documents have since the time of their filing been amended
or supplemented, the "Xxxxx SEC Reports"), which includes all the
documents (other than preliminary material) that Xxxxx was
required to file with the SEC since such date. As of their
respective dates, each of the Xxxxx SEC Reports (i) complied as
to form in all material respects with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Securities Act"), or the Exchange Act, as the
case may be, (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not misleading and (iii) was timely
filed pursuant to the Securities Act and the Exchange Act.
(b) The audited consolidated financial statements and
unaudited interim financial statements (including, in each case,
the notes, if any, thereto) included in Xxxxx SEC Reports (the
"Xxxxx Financial Statements") or contained in filings subsequent
to the date hereof complied or will comply as to form in all
material respects with the published rules and regulations of the
SEC with respect thereto, were or will be prepared in accordance
with United States generally accepted accounting principles
("GAAP") applied on a consistent basis (except as may be
indicated therein or in the notes thereto and except with respect
to unaudited statements as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited interim
financial statements, to normal, recurring year-end audit
adjustments which are not expected to be, individually or in the
aggregate, materially adverse to Xxxxx) the consolidated
financial position of Xxxxx and its Subsidiaries as at the
respective dates thereof and the results of their consolidated
operations and cash flows for the respective periods then ended.
3.06 Absence of Certain Changes or Events. Except as
disclosed in Schedule 3.06 hereto, (a) since June 30, 1998 there
has not been any change, event or development having, or that
could be reasonably expected to have (individually or when
aggregated with other such changes, events and developments) a
material adverse effect on Xxxxx, other than those occurring as a
result of general economic or financial conditions and other than
developments which are not unique to Xxxxx but also generally
affect other persons who participate or are engaged in the lines
of business in which Xxxxx participates or is engaged, and (b)
except as disclosed in Schedule 3.06 hereto, between such date
and the date hereof (i) Xxxxx has conducted its business only in
the ordinary course consistent with past practice and (ii) Xxxxx
has not taken any action which, if taken after the date hereof,
would constitute a breach of any provision of clause (ii) of
Section 5.01(b).
3.07 Absence of Undisclosed Liabilities. Except for matters
reflected or reserved against in the balance sheet dated June 30,
1998 included in Xxxxx Financial Statements or as disclosed in
Schedule 3.07 hereto, neither Xxxxx nor any of its Subsidiaries
has at such date, or has incurred since that date, any
liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, that would be required by GAAP
to be reflected on a consolidated balance sheet of Xxxxx and its
Subsidiaries (including the notes thereto), except liabilities or
obligations (i) which were incurred in the ordinary course of
business consistent with past practice and (ii) which have not
been, and could not be reasonably expected to be, individually or
in the aggregate, materially adverse to Xxxxx and its
Subsidiaries.
13
3.08 Legal Proceedings. Except as disclosed in Schedule
3.08 hereto, (i) there are no claims, actions, suits,
arbitrations, proceedings or any Governmental or Regulatory
Authority investigations or audits pending, or to the knowledge
of Xxxxx threatened, against, relating to or affecting Bryan,
Wendland, Memco or any of their respective assets or properties,
and there are no facts or circumstances known to Xxxxx that could
be reasonably expected to give rise to any such claim, action,
suit, arbitration, proceeding, investigation or audit (other than
threatened claims, actions and suits which, individually or in
the aggregate, cannot reasonably be expected to have an adverse
effect on Xxxxx or on the ability of Xxxxx to consummate the
Merger); provided, however, that Xxxxx has been named as a
defendant in litigation involving claims relating to exposure to
asbestos disclosed on Schedule 3.08 ("Asbestos Suits") and Xxxxx
is likely to be named as defendant in additional Asbestos Suits
prior to the Closing Date, and (ii) neither Xxxxx, Xxxxxxxx nor
Memco is subject to any Order of any Governmental or Regulatory
Authority.
3.09 Information Supplied; Schedule 14D-9; Offer Documents
and Proxy Statement.
(a) None of the information supplied or to be supplied
by or on behalf of Xxxxx or any affiliate of Xxxxx for inclusion
in the Offer Documents and any other schedule or document
required to be filed with the SEC in connection with the Offer
and the Merger will, at the times such documents are filed with
the SEC and are mailed to stockholders of Xxxxx, 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, or to correct any statement made
in any communication with respect to the Offer previously filed
with the SEC or disseminated to the stockholders of Xxxxx. The
Schedule 14D-9 will not, at the time the Schedule 14D-9 is filed
with the SEC and at all times prior to the purchase of Shares by
Merger Sub pursuant to the Offer, 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, except that no representation or warranty is made by
Xxxxx with respect to information supplied in writing by Buyer,
Merger Sub or an affiliate of Buyer or Merger Sub expressly for
inclusion therein. The Schedule 14D-9 will comply as to form in
all material respects with the provisions of the Exchange Act and
the rules and regulations of the SEC thereunder.
(b) The proxy statement relating to the Shareholder
Meeting, including the letter to stockholders, notice of meeting,
proxy statement and form of proxy, the information statement and
any other information that may be provided in writing to holders
of Xxxxx Common Stock in connection with the Merger, and any
schedules required to be filed with the SEC in connection
therewith, each as amended or supplemented from time to time (as
so amended and supplemented, the "Proxy Statement"), and any
other documents to be filed by Xxxxx with any other Governmental
or Regulatory Authority in connection with the Merger and the
other transactions contemplated hereby will not, on the date of
its filing or, in the case of the Proxy Statement, at the date it
is mailed to shareholders, at the time of the Shareholder Meeting
and at the Effective Time, contain any untrue statement of a
material fact, 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 or omit to state any material fact
14
required to correct any statement made in any earlier
communication with respect to the solicitation of any proxy or
approval for the Merger, except that no representation is made by
Xxxxx with respect to information supplied in writing by or on
behalf of Buyer and Merger Sub expressly for inclusion therein
and information incorporated by reference therein from documents
filed by Buyer or any of its Subsidiaries with the SEC. The Proxy
Statement and any such other documents filed by Xxxxx with the
SEC under the Exchange Act will comply as to form in all material
respects with the requirements of the Exchange Act, to the extent
applicable.
(c) Neither the information supplied or to be supplied in
writing by or on behalf of Xxxxx for inclusion in any document to
be filed by Buyer or Merger Sub with the SEC nor any other
Governmental or Regulatory Authority in connection with the
Merger and the other transactions contemplated hereby will, on
the date of its filing, 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.
3.10 Compliance with Laws and Orders. Set forth on Schedule
3.10 are all permits, licenses, variances, exemptions, orders and
approvals of all Governmental and Regulatory Authorities that are
currently held by Xxxxx, Xxxxxxxx or Memco or for which Xxxxx,
Xxxxxxxx or Memco has applied. Xxxxx and its subsidiaries hold
all permits, licenses, variances, exemptions, orders and
approvals of all Governmental and Regulatory Authorities
necessary for the lawful conduct of their respective businesses
("Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals which, individually
or in the aggregate, are not having and could not be reasonably
expected to have a material adverse effect on Xxxxx and its
subsidiaries taken as a whole. Xxxxx and its subsidiaries are in
compliance with the terms of the Permits, except failures so to
comply which, individually or in the aggregate, are not having
and could not be reasonably expected to have a material adverse
effect on Xxxxx and its subsidiaries taken as a whole. Except as
set forth in detail on Schedule 3.10, Xxxxx and its subsidiaries
are not in violation of or default under any Law or Order of any
Governmental or Regulatory Authority, except for violations
which, individually or in the aggregate, are not having and could
not be reasonably expected to have a material adverse effect on
Xxxxx and its subsidiaries taken as a whole.
3.11 Compliance with Agreements; Certain Agreements. Set
forth on Schedule 3.11 are all Contracts under which either
Xxxxx, Xxxxxxxx or Memco have any rights, entitlements, duties or
obligations, other than (i) manufacturer's representative
contracts written on one of the two standard forms disclosed to
Buyer, (ii) contracts for the purchase of materials, supplies or
services in the ordinary course of business consistent with past
practice, no one of which (and no group of related contracts of
which) involves an aggregate purchase price in excess of $250,000
and each of which contracts is to be fully performed within 90
days after its commencement, and (iii) contracts for the sale of
finished goods in the ordinary course of business consistent with
past practice, no one of which contracts (and no group of related
contracts of which) involves an aggregate selling price in excess
of $150,000 and no one of which (other than contracts with
aggregate selling prices of not more than $500,000) has been in
effect, without being fully performed, for more than 150 days.
Except as disclosed in Schedule 3.11 hereto, neither Xxxxx, its
Subsidiaries nor, to the knowledge of Xxxxx, any other party
thereto, is in breach or violation of, or in default in the
performance or observance of any term or provision of, and no
event has occurred which, with notice or lapse of time or both,
could be reasonably expected to result in a
15
default under, (i) the Articles of Incorporation or By-laws of
Xxxxx or (ii) any Contract to which Xxxxx is a party or by which
Xxxxx or any of its assets or properties is bound, except in the
case of clause (ii) for breaches, violations and defaults which,
individually or in the aggregate, are not having and could not be
reasonably expected to have a material adverse effect on Xxxxx.
3.12 Taxes.
(a) Each of Xxxxx and its Subsidiaries has filed all
federal and all material foreign, state and local tax reports and
returns required to be filed and except as disclosed on Schedule
3.12, has duly paid all taxes shown as due thereon, including,
without limitation, income, capital stock, gross receipts, net
proceeds, ad valorem, value added, turnover, sales, use, real
estate transfer, property, personal property (tangible and
intangible), stamp, leasing, lease, user, excise, franchise,
transfer, fuel, vehicle sales, excess profits, occupational and
interest equalization, unitary, severance, withholding, social
security, employment and other taxes, duties, assessments and
charges (including, without limitation, the recapture of any tax
items such as investment tax credits), together with all
interest, penalties and additions imposed with respect to such
amounts, which are due on or before the date hereof or claimed to
be due by federal, state, or local taxing authorities or which
are payable on or before the date hereof with respect to the
business and operations of Xxxxx and its Subsidiaries
(collectively, "Taxes"). All such returns are accurate and
complete in all material respects. There are no tax liens upon
any property or assets of Xxxxx and its Subsidiaries, except
liens for Taxes not yet due and payable. All Taxes (including
interest and penalties) applicable for all periods prior to the
Closing or other governmental charges upon Xxxxx and its
Subsidiaries or their assets, income or revenues have been or
will be paid (if due) or, if not currently payable, reserved
against in accordance with GAAP. Xxxxx and its Subsidiaries have
not executed any waivers of the statute of limitations on the
right of the Internal Revenue Service (the "IRS") or any state or
local taxing authority to assess additional Taxes or to contest
the income or loss with respect to any tax return. The basis of
any depreciable assets, and the methods used in determining
allowable depreciation (including cost recovery), held by Xxxxx
and its Subsidiaries, are substantially correct and in compliance
with the Internal Revenue Code of 1986, as amended (the "Code"),
and all regulations thereunder.
(b) No issues have been raised that are currently
pending by any taxing authority in connection with any of the
aforesaid tax returns or reports. No issues have been raised in
any examination by any taxing authority with respect to Xxxxx and
its Subsidiaries which, by application of similar principles,
reasonably could be expected to result in a material proposed
deficiency for any other period not so examined. The items of
income and deductions reflected on the federal income tax returns
and comparable state and local returns filed by or on behalf of
Xxxxx and its Subsidiaries for all taxable years (including the
supporting schedules filed therewith), available copies of which
have been supplied (or will be promptly supplied upon request) to
Buyer, state accurately in all material respects the receipts and
expenditures of Xxxxx and its Subsidiaries, and the same were
derived from the books and records of Xxxxx.
(c) Xxxxx and its Subsidiaries have not entered into
any joint venture, partnership, or other arrangement or contract
which is treated as a partnership for federal income tax
purposes.
16
(d) None of Xxxxx or any of its Subsidiaries has ever
been a "consenting corporation," within the meaning of Section
341(f)(l) of the Code, or comparable provisions of any state
statutes, and none of the assets of Xxxxx and its Subsidiaries is
subject to an election under Section 341(f) of the Code or
comparable provisions of any state statutes.
(e) No property of Xxxxx and its Subsidiaries is
property which Xxxxx or Buyer is or will be required to treat as
being owned by another person pursuant to the provisions of
Section 168(f)(8) of the Code, as in effect prior to the Tax
Reform Act of 1986.
(f) No property of Xxxxx and its Subsidiaries is "tax
exempt use property" as such term is defined in Section 168(h) of
the Code.
(g) None of the properties or assets of Xxxxx and its
Subsidiaries is tax-exempt bond financed property within the
meaning of Section 168(g)(5) of the Code.
(h) None of Xxxxx nor any of its Subsidiaries nor any
predecessor thereof is or has been, or has filed a tax return
claiming that it is or has been, an Electing Small Business
Corporation pursuant to the provisions of Subchapter S of the
Code.
(i) None of Xxxxx or its Subsidiaries (i) has been a
member of an affiliated group filing a consolidated federal
income tax return (other than a group the common parent of which
was Xxxxx) or (ii) has any liability for the Taxes of any person
(other than any of Xxxxx and its Subsidiaries) under Treas. Reg.
ss. 1.1502-6 (or any provision of state, local or foreign law),
as a transferor or successor, by contract or otherwise.
3.13 Benefit Plans; ERISA.
(a) All Benefit Plans (as defined below) are listed in
Schedule 3.13, and copies of all documentation relating to such
Benefit Plans have been delivered or made available to Buyer
(including copies of written Benefit Plans, written descriptions
of oral Benefit Plans, summary plan descriptions, trust
agreements, the three most recent annual returns IRS Forms 5500
and IRS determination letters). Except as disclosed in Schedule
3.13 hereto:
(i) each Benefit Plan has at all times been
maintained and administered in all material respects in
accordance with its terms and with the requirements of all
applicable law, including ERISA (as defined below) and the Code,
and each Benefit Plan intended to qualify under Section 401(a) of
the Code has at all times since its adoption been so qualified,
and each trust which forms a part of any such plan has at all
times since its adoption been tax-exempt under Section 501(a) of
the Code whether or not waived;
(ii) no Benefit Plan has incurred any
"accumulated funding deficiency" within the meaning of Section
302 of ERISA or Section 412 of the Code;
(iii) no "reportable event" (within the meaning
of Section 4043 of ERISA) has occurred with respect to any
Benefit Plan or any Plan (as defined below) maintained by an
ERISA Affiliate (as defined below) since the effective date of
Section 4043;
17
(iv) with respect to each Multiemployer Plan (as
defined below) (i) no withdrawal liability has been incurred by
Xxxxx or any ERISA Affiliate, and Xxxxx has no reason to believe
that any such liability will be incurred, prior to the Closing
Date, (ii) no such plan is in "reorganization" (within the
meaning of Section 4241 of ERISA), (iii) no notice has been
received that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of an excise tax, or
that the plan is or may become "insolvent" (within the meaning of
Section 4241 of ERISA), and (iv) no proceedings have been
instituted by the Pension Benefit Guaranty Corporation against
the plan;
(v) no direct, contingent or secondary liability
has been incurred or is expected to be incurred by Xxxxx under
Title IV of ERISA to any party with respect to any Benefit Plan
or Multiemployer Plan presently or heretofore maintained or
contributed to by any ERISA Affiliate;
(vi) neither Xxxxx nor any ERISA Affiliate has
incurred any liability for any tax imposed under Section 4971
through 4980B of the Code or civil liability under Section 502(i)
or (1) of ERISA;
(vii) no benefit under any Benefit Plan (except
as may be set forth in the Senior Management Agreements as
defined in Section 6.05(a)), including, without limitation, any
severance or parachute payment plan or agreement, will increase
the amount of compensation due any employee or will be
established or become accelerated, vested or payable by reason of
any transaction contemplated under this Agreement;
(viii) no tax has been incurred under Section 511
of the Code with respect to any Benefit Plan (or trust or other
funding vehicle pursuant thereto);
(ix) no Benefit Plan provides health or death
benefit coverage beyond the termination of an employee's
employment, except as required by Part 6 of Subtitle B of Title I
of ERISA or Section 4980B of the Code or any State laws requiring
continuation of benefits coverage following termination of
employment and there has been no communication to any employee
that would reasonably be expected to promise or guarantee any
such employee retiree health or life insurance or other retiree
death benefits on a permanent basis;
(x) no suit, actions or other litigation
(excluding claims for benefits incurred in the ordinary course of
plan activities) have been brought or, to the knowledge of Xxxxx,
threatened against or with respect to any Benefit Plan and there
are no facts or circumstances known to Xxxxx that could
reasonably be expected to give rise to any such suit, action or
other litigation; and
(xi) all contributions to Benefit Plans and
Multiemployer Plans that were required to be made under such
Benefit Plans as of the Closing Date have been made, and all
benefits accrued under any unfunded Benefit Plan have been paid,
accrued or otherwise adequately reserved in accordance with GAAP,
all of which accruals under unfunded Benefit Plans are as
reflected in Xxxxx SEC Reports or disclosed in Schedule 3.13, and
Xxxxx has performed all material obligations required to be
performed under all Benefit Plans.
18
(b) Except as set forth in Schedule 3.13 hereto or as
provided in Section 6.05, neither the execution and delivery of
this Agreement nor the consummation of the transaction
contemplated hereby will entitle any former or current employee
of Xxxxx or any Affiliate or any group of such employees to any
payment, increase the amount of compensation due to any such
employees or cause acceleration of benefits under any Benefit
Plan.
(c) As used herein:
(i) "Benefit Plan" means any Plan, existing at
the Closing Date or prior thereto, established or to which
contributions have at any time been made by Xxxxx or its
Subsidiaries, or under which any employee, former employee or
director of Xxxxx or its Subsidiaries or any beneficiary thereof
is covered, is eligible for coverage or has benefit rights.
(ii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
(iii) "ERISA Affiliate" means any business entity
which is, or at any time was, a member of a controlled group
(within the meaning of Section 412(n)(6) of the Code) that
includes, or at any time included, Xxxxx or its Subsidiaries.
(iv) "Multiemployer Plan" means a multiemployer
plan within the meaning of Section 4001(a)(3) of ERISA with
respect to which Xxxxx or any ERISA Affiliate has an obligation
to contribute or has or could have withdrawal liability under
Section 4201 of ERISA.
(v) "Plan" means any employment, consulting,
termination, bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement stock purchase,
stock option, stock ownership, stock appreciation rights, phantom
stock, savings, leave of absence, layoff, vacation, day or
dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance,
severance, separation or other employee benefit plan, practice,
policy, agreement or arrangement of any kind, whether written or
oral, or whether for the benefit of a single individual or more
than one individual including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
3.14 Insurance. Schedule 3.14 identifies all insurance
policies of Xxxxx and its Subsidiaries currently in force,
inclusive of the name and address of the insurer, the policy
number and the year or years of coverage (the "Insurance
Policies"). To the best of Bryan's knowledge, Schedule 3.14 lists
all claims made against or under the Insurance Policies and under
any prior insurance policies in effect at any time during the
past five years with respect to Xxxxx, Xxxxxxxx and Memco,
including claims related to product liability, third-party
property damage, bodily injury and third-party environmental
impairment. To the best of the knowledge of Xxxxx, Schedule 3.14
also identifies all insurance policies of Xxxxx under which
asbestos-related claims against Xxxxx are or would be covered.
Xxxxxxxx will promptly (and in any event within 10 days from the
date hereof) reinstate product liability insurance coverage with
a scope equivalent to that under the product liability insurance
policy of Xxxxxxxx most recently expired, and Xxxxxxxx will
promptly deliver to Buyer reasonable evidence of such
reinstatement.
19
3.15 Labor Matters.
(a) Except as set forth in Schedule 3.15, (i) no
employees of Xxxxx or any of its Subsidiaries are represented by
a labor union or organization, no labor union or organization has
been certified or recognized as a representative of any such
employees, and neither Xxxxx nor any of its Subsidiaries is a
party to or has any obligation under any collective bargaining
agreement or other labor union contract with any labor union or
organization, or has any obligation to recognize or deal with any
labor union or organization, and there are no such contracts
pertaining to or which determine the terms or conditions of
employment of any employee of Xxxxx or any of its Subsidiaries;
(ii) there are no pending or threatened representation campaigns,
elections or proceedings or questions concerning union
representation involving any employees of Xxxxx or any of its
Subsidiaries; (iii) neither Xxxxx nor any of its Subsidiaries has
any knowledge of any activities or efforts of any labor union or
organization (or representatives thereof) to organize any
employees of Xxxxx or any of its Subsidiaries, nor of any demands
for recognition or collective bargaining, nor of any strikes,
slowdowns, work stoppages or lock-outs of any kind, or threats
thereof, by or with respect to any employees of Xxxxx or any of
its Subsidiaries or any actual or claimed representatives
thereof, and no such activities, efforts, demands, strikes,
slowdowns, work stoppages or lock-outs occurred during the
48-month period preceding the date hereof; (iv) neither Xxxxx nor
any of its Subsidiaries has engaged in, admitted committing or
been held in any administrative or judicial proceeding to have
committed any unfair labor practice under the National Labor
Relations Act, as amended; (v) neither Xxxxx nor any of its
Subsidiaries is involved in any industrial or trade dispute or
any dispute or negotiations regarding a claim of material
importance with any labor union or organization; and (vi) there
are no controversies, claims, demands or grievances of material
importance pending or, so far as Xxxxx or any of its Subsidiaries
is aware, threatened, between Xxxxx or any of its Subsidiaries
and any of their respective employees or any actual or claimed
representative thereof.
(b) Schedule 3.15 (and the exhibits thereto) set forth
all contracts and agreements, including, without limitation,
employment agreements, consulting agreements, change in control
agreements, independent contractor agreements, retainers and
severance agreements under which Xxxxx or any of its Subsidiaries
has any obligation to provide wages, salary, commissions or other
compensation or remuneration (other than obligations to make
current wage or salary payments terminable at will without
notice) to or on behalf of any employee, former employee,
consultant or contractor (or any designee, assignee or
beneficiary thereof). A complete and correct copy of each written
(and a complete and correct written description of each such
oral) contract or agreement, has been delivered or made available
to Buyer.
(c) A true and correct statement of the names, current
rates of base compensation and description of the formula for
computing bonus compensation of all officers, directors and
salaried non-union employees of Xxxxx and its Subsidiaries as of
the date hereof, is set forth in Schedule 3.15. Except as set
forth in Schedule 3.15, (i) Xxxxx and its Subsidiaries have no
obligation (including an obligation for the payment of any fee,
extraordinary bonus or "golden parachute" based upon the
successful completion of the transactions contemplated hereunder)
under any employment contract, severance agreement or other
change in control plan, agreement or arrangement, or any other
similar agreements, employment policies (including vacation and
severance pay policies) or retirement or employee benefit plans,
arrangements or
20
understandings, written or otherwise, with any officer, director,
employee or agent of Xxxxx or any Subsidiary and (ii) since
January 1, 1998, Xxxxx and its Subsidiaries have (A) not paid or
agreed to pay any bonuses or made or agreed to make any increase
in the rate of wages, salaries or other compensation or
remuneration of any of its officers, directors, consultants or
employees (except for increases in accordance with written
binding commitments, true, correct and complete copies of which
have been previously delivered to Buyer, or in accordance with a
past practice described in Schedule 3.15), or (B) become a party
to any employment contract or arrangement with any of its
officers or employees providing for any new or additional
bonuses, profit sharing payments, severance pay or retirement
benefits or any other form of employee compensation or benefits.
(d) Xxxxx and each of its Subsidiaries has at all
times complied in all material respects and is in material
compliance with all applicable federal, state and local laws,
rules and regulations respecting employment, wages, hours,
occupational health and safety, and payment and withholding of
taxes in connection with employment. Except as set forth in
Schedule 3.15, there are no claims, complaints or legal or
administrative proceedings pending or, so far as Xxxxx is aware,
threatened, against Xxxxx or any of its Subsidiaries before any
federal, state or municipal court or governmental agency, or any
federal, state or municipal taxing authority involving or
relating to any past or present employee(s) or applicant(s) for
employment of Xxxxx or any of its Subsidiaries, or relating to
any acts, omissions or practices of Xxxxx or any of its
Subsidiaries relating to employment practices or occupational
health and safety. Neither Xxxxx nor any of its Subsidiaries are
party to or bound by any court or administrative order, judgment,
decree or ruling of any kind respecting the employment practices
or occupational health and safety of any employees or prospective
employees of Xxxxx or any of its Subsidiaries.
3.16 Environmental Matters. Except as disclosed in
Schedule 3.16 hereto:
(a) To the best of Bryan's knowledge, Xxxxx and its
Subsidiaries are and have been consistently in compliance with
applicable Environmental Law (as defined below) and have obtained
all licenses, permits, authorizations, approvals and consents
from Governmental and Regulatory Authorities that are required in
respect of the business, operations, assets or properties of each
under any applicable Environmental Law. Xxxxx and its
Subsidiaries are in material compliance with the terms and
conditions of all such licenses, permits, authorizations,
approvals and consents.
(b) No Order or notice has been issued, no demand or
claim (including any for personal injury, property or natural
resources damage) has been asserted, no complaint has been filed,
no penalty has been assessed and no investigation or review is
pending or, to the knowledge of Xxxxx and its Subsidiaries,
threatened by any third party (including any Governmental or
Regulatory Authority) with respect to any alleged failure by
Xxxxx or any of its Subsidiaries to comply with applicable
Environmental Law or to have any license, permit, authorization,
approval or consent from Governmental or Regulatory Authorities
required under any applicable Environmental Law in connection
with the conduct of the business or operations of Xxxxx or any of
its Subsidiaries or with respect to any treatment, storage,
recycling, transportation, disposal or "release" as defined in 42
U.S.C. ss. 9601(22) ("Release"), of any Hazardous Material (as
defined below).
21
(c) Xxxxx and its Subsidiaries have not handled any
Hazardous Material on any property owned or leased by Xxxxx or
any of its Subsidiaries; and, without limiting the foregoing, at
any property owned or leased by Xxxxx or any of its Subsidiaries,
(i) there are no underground storage tanks, active or abandoned;
(ii) no Hazardous Material has been Released in a quantity
reportable under, or in violation of, any Environmental Law;
(iii) no interim status or hazardous waste permit is or has been
required; and (iv) there has been no disposal of any Hazardous
Material.
(d) Xxxxx and its Subsidiaries have not transported or
arranged for the transportation of any Hazardous Material to any
location that, to the knowledge of Xxxxx and its Subsidiaries, is
not consistently in compliance with applicable Environmental Law
or which is the subject of any investigation, action, suit,
arbitration or proceeding that could be reasonably expected to
lead to claims against Xxxxx or any of its Subsidiaries for
clean-up costs, remedial work, damages to natural resources or
personal injury claims, which could be reasonably expected to
have a material adverse impact on Xxxxx or any of its
Subsidiaries including, but not limited to, claims under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, and the rules and regulations
promulgated thereunder ("CERCLA").
(e) No oral or written notification of a Release of a
Hazardous Material has been or was required to be filed by or on
behalf of Xxxxx or any of its Subsidiaries and no property owned
or leased by Xxxxx or any of its Subsidiaries is listed or
proposed for listing on the National Priorities List promulgated
pursuant to CERCLA or on any similar state list of sites
requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to
any Environmental Law with respect to any real property owned or
leased by Xxxxx or any of its Subsidiaries, and no action of any
Governmental or Regulatory Authority has been taken or is in
process which could subject any of such properties to such Liens,
and Xxxxx or any of its Subsidiaries would not be required to
place any notice or restriction relating to the presence of
Hazardous Material at any such property owned by it in any deed
to such property.
(g) Xxxxx has delivered, or made available, to Buyer
all environmental (including asbestos) investigations, studies,
audits, tests, reviews or other analyses conducted during the
prior three years by, or which are in the possession of, Xxxxx in
relation to any property or facility owned or leased by Xxxxx or
any of its Subsidiaries, including Phase 1 environmental reports
for all properties owned, leased or controlled, indirectly or
directly, by Xxxxx or any of its Subsidiaries.
As used herein:
(x) "Environmental Law" means any Law or Order
relating to human health, safety or protection of the environment
or to emissions, discharges, releases or threatened releases of
pollutants, contaminants or Hazardous Materials in the
environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), or
otherwise relating to the treatment, storage, disposal,
transport, use or handling of any Hazardous Material; and
22
(y) "Hazardous Material" means (A) any chemicals,
materials, substances or wastes which are now or hereafter become
defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants," "pollutants,"
"contaminants" or words of similar import, under any
Environmental Law; and (B) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could
become friable, and polychlorinated biphenyls (PCBs).
3.17 Tangible Property and Assets. Except as disclosed in
Schedule 3.17 hereto, Xxxxx has good and marketable title to, or
has valid leasehold interests in or valid rights under contract
to use, all tangible property and assets used in and,
individually or in the aggregate, material to the conduct of the
businesses of Xxxxx xxxx and clear of all Liens other than (i)
any statutory Lien arising in the ordinary course of business by
operation of law with respect to a liability that is not yet due
or delinquent and (ii) any minor imperfection of title or similar
Lien which individually or in the aggregate with other such Liens
does not materially impair the value of the property or asset
subject to such Lien or the use of such property or asset in the
conduct of the business of Xxxxx. All such property and assets
are, in all material respects, in good working order and
condition, ordinary wear and tear excepted, and adequate and
suitable for the purposes for which they are presently being
used.
3.18 Intellectual Property Rights. Schedule 3.18 sets forth
a true, correct and complete list of all Intellectual Property
(as defined below) owned or held by Xxxxx or any of its
Subsidiaries (or otherwise used in the business of Xxxxx and its
Subsidiaries) on the date hereof and all license agreements
(including all amendments or supplements thereto or continuing
thereunder) in effect on the date hereof pursuant to which any
such Intellectual Property is licensed to or by Xxxxx or its
Subsidiaries, in each case, which have been, are, or may
reasonably be expected in the future to be, material to Xxxxx and
its Subsidiaries taken as a whole. Except as set forth in
Schedule 3.18, Xxxxx and its Subsidiaries own all right, title
and interest in and to all Intellectual Property used in their
respective businesses (other than Intellectual Property which,
individually or in the aggregate, is not material to the conduct
of the businesses of Xxxxx and its Subsidiaries), free and clear
of any royalty or other payment obligation, lien or charge. Xxxxx
and its Subsidiaries are not in default (and with the giving of
notice or lapse of time or both, would not be in default) in any
material respect under any license to use any Intellectual
Property. The Intellectual Property is not being infringed by any
third party, and Xxxxx is not infringing any intellectual
property rights of any third party, except for such defaults and
infringements which, individually or in the aggregate, are not
having and could not be reasonably expected to have a material
adverse effect on Xxxxx. Except as indicated in Schedule 3.18,
all maintenance taxes, annuities and renewal fees have been paid
and all other necessary actions to maintain the Intellectual
Property have been taken through the date hereof and will
continue to be paid or taken by Xxxxx and its Subsidiaries
through the Effective Time. To the best of Bryan's knowledge, no
claims or controversies currently exist regarding any
infringement of or by or violation of or by any of the
Intellectual Property. For purposes of this Agreement,
"Intellectual Property" includes
(i) all trademarks, service marks, trademark
registrations, service xxxx registrations, trade
names and applications for registration of
trademarks and service marks;
23
(ii) all licenses which create rights in or to the
trademark, service xxxx or trade name properties
described in clause (i) above;
(iii) all copyrights, copyright registrations and
applications for registration of copyrights;
(iv) all renewals, modifications and extensions of any
items referred to in clauses (i) through (iii)
above;
(v) all patents, design patents and utility patents,
all applications for grant of any such patents
pending as of the date hereof or as of the
Effective Time or filed within five years prior to
the date hereof, and all reissues, divisions,
continuations-in-part and extensions thereof;
(vi) all technical documentation, trade secrets,
designs, inventions, processes, formula, know-how,
operating manuals and guides, plans, new product
development, technical and marketing surveys,
material specifications, product specifications,
invention records, research records, labor
routings, inspection processes, equipment lists,
engineering reports and drawing, architectural or
engineering plans, know-how agreements and other
know- how;
(vii) all marketing and licensing records, sales
literature, customer lists, trade lists, sales
forces and distributor networks lists, advertising
and promotional materials, service and parts
records, warranty records, maintenance records and
similar records;
(viii) all rights arising under, and rights to develop,
use and sell under, any of the foregoing and all
licenses with respect thereto; and
(ix) all rights and incidents of interest in and to all
non-competition or confidentiality agreements.
3.19 Vote Required. The affirmative vote of the holders of
record of at least two-thirds of the outstanding shares of Xxxxx
Common Stock with respect to the adoption of this Agreement is
the only vote of the holders of any class or series of the
capital stock of Xxxxx required to adopt this Agreement and
approve the Merger and the other transactions contemplated
hereby.
3.20 Disclosure. The information heretofore delivered or
made available by Xxxxx with respect to Xxxxx and its
Subsidiaries, when such information is taken as a whole, does not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
misleading.
3.21 Effect of Transactions on Manufacturer's
Representatives and Customers. Except as listed on Schedule 3.21,
to the best of the knowledge of Xxxxx, the execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby (a) will not
24
adversely affect the relationship of Xxxxx with any of its
manufacturer's representatives or customers, (b) will not
adversely affect the relationship of Xxxxx with any of its
suppliers, and (c) will not result in any breach or default, or
trigger any "change in control" provision, under any material
Contract.
3.22 Bryan's Transaction Costs. To the best of the
knowledge of Xxxxx, Schedule 3.22 sets forth an accurate estimate
of Bryan's Transaction Costs (as defined in Section 6.06) through
consummation of the Merger, and Xxxxx has furnished Buyer with
true and complete copies of all currently-existing agreements
(and written summaries of all currently-existing oral agreements)
under which Bryan's Transaction Costs are likely to become
payable. After the date hereof, neither Xxxxx nor any of its
subsidiaries will materially amend any such agreement, or enter
into any new such agreement, without the prior approval of Buyer
(such approval not to be unreasonably withheld).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB
Buyer and Merger Sub represent and warrant to Xxxxx as
follows:
4.01 Organization and Qualification. Each of Buyer and
Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation. Merger Sub was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement, has
engaged in no other business activities and has conducted its
operations only as contemplated hereby. Each of Buyer and Merger
Sub is duly qualified, licensed or admitted to do business and is
in good standing in each jurisdiction in which the ownership, use
or leasing of its assets and properties, or the conduct or nature
of its business, makes such qualification, licensing or admission
necessary, except for such failures to be so qualified, licensed
or admitted and in good standing which, individually or in the
aggregate, could not be reasonably expected to have a material
adverse effect on the validity or enforceability of this
Agreement or on the ability of Buyer or Merger Sub to perform its
obligations hereunder.
4.02 Authority Relative to this Agreement. Each of Buyer
and Merger Sub has full corporate power and authority to enter
into this Agreement, and to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by each of
Buyer and Merger Sub and the consummation by each of Buyer and
Merger Sub of the transactions contemplated hereby have been duly
and validly approved by their respective Boards of Directors and
by Buyer in its capacity as the sole shareholder of Merger Sub
and no other corporate proceedings on the part of Buyer, Merger
Sub or their shareholders are necessary to authorize the
execution, delivery and performance of this Agreement by Buyer or
Merger Sub and the consummation by Buyer or Merger Sub of the
transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Buyer and Merger Sub and
constitutes a legal, valid and binding obligation of Buyer and
Merger Sub enforceable against Buyer and Merger Sub in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency,
25
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
4.03 Non-Contravention; Approvals and Consents.
(a) The execution and delivery of this Agreement by
Buyer and Merger Sub does not and the performance by Buyer and
Merger Sub of their obligations hereunder and the consummation of
the transactions contemplated hereby will not, conflict with,
result in a violation or breach of, constitute (with or without
notice or lapse of time or both) a default under, result in or
give to any person any right of termination, cancellation,
modification or acceleration of, or result in the creation or
imposition of any Lien upon any of the assets or properties of
Buyer, or any of its Subsidiaries, under any of the terms,
conditions or provisions of (i) the certificates or articles of
incorporation or By-laws (or other comparable charter documents)
of Buyer or any of its Subsidiaries, or (ii) subject to the
taking of the actions described in paragraph (b) of this Section,
(x) any Law or Order of any Governmental or Regulatory Authority
applicable to Buyer or any of its Subsidiaries or any of their
respective assets or properties, or (y) any Contract to which
Buyer or any of its Subsidiaries is a party or by which Buyer or
any of its Subsidiaries or any of their respective assets or
properties is bound, excluding from the foregoing clauses (x) and
(y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of
Liens which, individually or in the aggregate, could not be
reasonably expected to have a material adverse effect on the
ability of Buyer and Merger Sub to consummate the transactions
contemplated by this Agreement.
(b) Except (i) for the filing of a premerger
notification report by Buyer under the HSR Act, (ii) for the
filing of the Articles of Merger required by the NMBCA with the
New Mexico Corporation Commission and appropriate documents with
the relevant authorities of other states in which the Constituent
Corporations are qualified to do business, and (iii) for the
filing of Schedule 14D-1 and Schedule 14D-9, no consent approval
or action of, filing with or notice to any Governmental or
Regulatory Authority or other public or private third party is
necessary or required under any of the terms, conditions or
provisions of any Law or Order of any Governmental or Regulatory
Authority or any Contract to which Buyer or any of its
Subsidiaries is a party or by which Buyer or any of its
Subsidiaries or any of their respective assets or properties is
bound by the execution and delivery of this Agreement by Buyer
and Merger Sub, the performance by Buyer and Merger Sub of their
obligations hereunder or the consummation of the transactions
contemplated hereby, other than such consents, approvals,
actions, filings and notices which the failure to make or obtain,
as the case may be, individually or in the aggregate, could not
be reasonably expected to have a material adverse effect on the
ability of Buyer and Merger Sub to consummate the transactions
contemplated by this Agreement.
4.04 Legal Proceedings. There are no actions, suits,
arbitrations or proceedings pending or, to the knowledge of Buyer
and its Subsidiaries, threatened against, relating to or
affecting, nor to the knowledge of Buyer and its Subsidiaries are
there any Governmental or Regulatory Authority investigations or
audits pending or threatened against, relating to or affecting,
Buyer or any of its Subsidiaries or any of their respective
assets and properties which, if determined adversely to Buyer or
any of its Subsidiaries, individually or in the aggregate,
26
could be reasonably expected to have a material adverse effect on
the ability of Buyer and Merger Sub to consummate the
transactions contemplated by this Agreement. Neither Buyer nor
any of its Subsidiaries is subject to any Order of any
Governmental or Regulatory Authority which, individually or in
the aggregate, could be reasonably expected to have a material
adverse effect on the ability of Buyer and Merger Sub to
consummate the transactions contemplated by this Agreement.
4.05 Information Supplied.
(a) None of the Offer Documents will, at the times such
documents are filed with the SEC and are mailed to the
stockholders of Xxxxx, contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made,
not misleading, except that no representation is made by Buyer or
Merger Sub with respect to information supplied in writing by
Xxxxx or an affiliate of Xxxxx expressly for inclusion therein.
The Offer Documents will comply as to form in all material
respects with the provisions of the Exchange Act and the rules
and regulations of the SEC thereunder.
(b) None of the information supplied by Buyer, Merger Sub
or any affiliate of Buyer or Merger Sub specifically for
inclusion in the Proxy Statement or the Schedule 14D-9 will, at
the date of filing with the SEC, and, in the case of the Proxy
Statement, at the time the Proxy Statement is mailed and at the
time of the Special Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(c) Neither the information supplied or to be supplied in
writing by or on behalf of Buyer or Merger Sub for inclusion, nor
the information incorporated by reference from documents filed by
Buyer or any of its Subsidiaries with the SEC, in the Proxy
Statement or any other documents to be filed by Buyer, Merger Sub
or Xxxxx with the SEC or any other Governmental or Regulatory
Authority in connection with the Merger and the other
transactions contemplated hereby will on the date of its filing
or, in the case of the Proxy Statement, at the date it is mailed
to shareholders, and at the time of the Shareholder 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. All such
documents filed by Buyer or Merger Sub with the SEC under the
Exchange Act will comply as to form in all material respects with
the requirements of the Exchange Act.
4.06 Financing. Buyer has sufficient cash and/or credit
facilities on hand or immediately available to consummate the
Offer and the Merger in accordance with this Agreement and to
make all other necessary payments of fees and expenses in
connection with the transactions contemplated by this Agreement.
27
ARTICLE V
COVENANTS OF THE COMPANY
5.01 Conduct of Business. At all times from and after the
date hereof until the Effective Time, Xxxxx covenants and agrees
that (except as expressly contemplated or permitted by this
Agreement, or to the extent that Buyer may otherwise grant prior
consent in writing, which consent shall not be unreasonably
withheld):
(a) Xxxxx shall conduct its business only in, and
Xxxxx shall cause its Subsidiaries not to take any action except
in, the ordinary course consistent with past practice (subject to
the further limitations specified in this Article).
(b) Without limiting the generality of paragraph (a)
of this Section, Xxxxx shall, and shall cause its Subsidiaries
to, use all commercially reasonable efforts to preserve intact in
all material respects its present business organization and
reputation, to keep available the services of its key officers
and employees, to maintain its assets and properties in good
working order and condition (ordinary wear and tear excepted), to
preserve its relationships with customers and suppliers and
others having significant business dealings with them, to comply
in all material respects with all Laws and Orders of all
Governmental or Regulatory Authorities applicable to them, and to
maintain (subject to Section 5.01(b)(xx)) insurance, including,
without limitation, product liability insurance, in such amounts
and against such risks and losses as was in effect on June 30,
1998 (subject to Section 3.14). Also without limiting the
generality of paragraph (a) of this Section, Xxxxx shall not, and
shall cause its Subsidiaries not to:
(i) amend or propose to amend its or their Articles of
Incorporation or By-laws;
(ii) (w) declare, set aside or pay any dividends on or
make other distributions in respect of any of its capital
stock other than the dividend of $2.00 per share declared
on Xxxxx Common Stock on August 26, 1998 and payable on
September 15, 1998; (x) split, combine, reclassify or take
similar action with respect to any of its capital stock or
issue or authorize or propose the issuance of any other
securities or Option in respect of, in lieu of or in
substitution for shares of its capital stock, (y) adopt a
plan of complete or partial liquidation or resolutions
providing for or authorizing such liquidation or a
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization or (z) directly or
indirectly redeem, repurchase or otherwise acquire any
shares of its capital stock or any Option with respect
thereto;
(iii) issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its
capital stock or any Option with respect thereto, or modify
or amend any right of any holder of outstanding shares of
capital stock or Options with respect thereto;
(iv) acquire (by merging or consolidating with, or by
purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other
manner) any business or any corporation, partnership,
association or other business
28
organization or division thereof or otherwise acquire or
agree to acquire any assets other than raw materials and
supplies acquired in the ordinary course of its business
consistent with past practice in amounts in any one
instance (or group of related instances) not in excess of
$250,000 and in each case pursuant to an order or agreement
requiring delivery of such raw materials and supplies
within 120 days after the creation of such order or
agreement;
(v) sell, lease, grant any security interest in or
otherwise dispose of or encumber any of its assets or
properties other than finished goods in the ordinary course
of business consistent with past practice pursuant to
orders as to which (x) no one order (or group of related
orders) involves an aggregate selling price in excess of
$150,000, and (y)(i) each order is to be fully performed
within 150 days after its creation or (ii) in the case of
orders for which there is no definite date by which the
orders must be fully performed, the aggregate selling price
for all such orders that are more than 150 days old shall
not exceed $500,000;
(vi) except to the extent required by applicable law
or GAAP, (x) permit any material change in (A) any pricing,
marketing, purchasing, investment, accounting, financial
reporting, inventory, receivable, credit, allowance or tax
practice or policy or (B) any method of calculating any bad
debt, contingency or other reserve for accounting,
financial reporting or tax purposes or (y) make any
material tax election or settle or compromise any material
income tax liability with any Governmental or Regulatory
Authority;
(vii) (x) other than working capital borrowings of up
to $300,000 under Bryan's existing bank line of credit,
incur any indebtedness for borrowed money (which shall be
deemed for this purpose to include entering into credit
agreements, lines of credit or similar arrangements,
whether or not amounts are borrowed thereunder) or
guarantee any such indebtedness, or (y) voluntarily
purchase, cancel, prepay or otherwise provide for a
complete or partial discharge in advance of a scheduled
repayment date with respect to, or waive any right under,
any indebtedness for borrowed money;
(viii) (x) enter into, adopt, amend in any material
respect (except as may be required by applicable law) or
terminate any Xxxxx Benefit Plan or other agreement between
Xxxxx (or any of its Subsidiaries) and one or more of its
directors, officers or employees, or (y) increase in any
manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any
plan or arrangement in effect as of the date hereof (except
that Xxxxx shall comply with the union contract and except
for normal increases approved by Buyer);
(ix) enter into any new Contract or amend, modify or
terminate any existing Contract, or engage in any new
transaction (x) not in the ordinary course of business
consistent with past practice, (y) not on an arm's length
basis, or (z) with any shareholder or affiliate of Xxxxx;
29
(x) make any capital expenditure or any commitment to
make a capital expenditure or any commitment for additions
to plant, property or equipment constituting capital
assets;
(xi) make any change in lines of business or any
material changes in prices, marketing plans or procedures;
(xii) make any changes to current levels of inventory,
receivables or payables, except as may occur in the
ordinary course of business consistent with past practice;
(xiii) grant any stock-related, performance or similar
awards or bonuses;
(xiv) forgive any loans to employees, officers or
directors or any of their respective affiliates or
associates;
(xv) make any deposits or contributions of cash or
other property to, or take any other action to fund or in
any other way secure the payment of compensation or
benefits under, any Xxxxx Benefit Plan;
(xvi) enter into, amend, extend or waive any rights
under any collective bargaining or other labor agreement;
(xvii) commence, settle or agree to settle any
litigation, suit, action, claim, proceeding or
investigation;
(xviii) pay, discharge or satisfy or agree to pay,
discharge or satisfy any claim, liability or obligation
(absolute accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or
satisfaction of liabilities reflected or reserved against
in full in the financial statements as at June 30, 1998 or
incurred in the ordinary course of business subsequent to
June 30, 1998 or Bryan's Transaction Costs;
(xix) enter into, modify, amend or terminate any
Contract material to the business of Xxxxx or any of its
Subsidiaries which it may enter, amend or terminate without
violating clause (ix) above, or waive any rights under any
such Contract, unless in each instance Xxxxx first obtains
the consent of Buyer, which consent shall not be
unreasonably withheld;
(xx) enter into or extend or renew any Contract
(including without limitation any insurance policy), which
Contract, extension or renewal has a term or is to be
performed over a period of more than 60 days (and before
renewing any insurance policy, Xxxxx shall reasonably
consult with Buyer); or
(xxi) enter into any contract, agreement, commitment
or arrangement to do or engage in any of the foregoing.
(c) Advice of Changes. Xxxxx shall confer on a regular
and frequent basis with Buyer with respect to its businesses and
operations and other matters relevant to the Merger,
30
and shall promptly advise Buyer, in writing, of any change or
event, including, without limitation, any complaint,
investigation or hearing by any Governmental or Regulatory
Authority (or communication indicating the same may be
contemplated) or the institution or threat of litigation, having,
or which, insofar as can be reasonably foreseen, could have, a
material adverse effect on Xxxxx or on the ability of Xxxxx to
consummate the transactions contemplated hereby.
5.02 No Solicitations. (a) Xxxxx shall not, and it shall
not authorize or permit either of its Subsidiaries or any of its
or their officers, directors, employees, investment bankers,
financial advisors, attorneys, accountants or other agents or
representatives (each, a "Representative") to directly or
indirectly, solicit, initiate or participate in any negotiations
regarding, furnish any confidential information in connection
with, endorse or otherwise cooperate with, or assist, participate
in or facilitate (collectively, "Solicitation Activities") the
making of any proposal or offer for, or which may reasonably be
expected to lead to, a Potential Transaction (as defined below),
by any person, corporation, partnership or other entity or group,
including a current shareholder of Xxxxx Common Stock or a person
acting on behalf of or who has been in contact with such a
shareholder (a "Potential Acquiror"); provided, however, that to
the extent the Board of Directors of Xxxxx believes, on the basis
of a written opinion furnished by independent legal counsel, that
the failure to take any such actions would constitute a breach of
applicable fiduciary duties of such Board of Directors, then
Xxxxx and its Representatives may participate in Solicitation
Activities but only to the extent necessary to comply with such
duties; provided further, however, that such participation shall
only be in compliance with Section 5.02(b); provided further,
however, that nothing herein shall in any event prevent Bryan's
Board of Directors from taking and disclosing to Bryan's
shareholders a position contemplated by Rule 14D-9 and 14e-2
promulgated under the Exchange Act with respect to any tender
offer or from making such other disclosures to Bryan's
shareholders, which, in either case, based upon the advice of
independent legal counsel, the Board in its good faith judgment
determines is required by the fiduciary duties of the Board of
Directors under applicable law.
(b) Xxxxx shall promptly inform Buyer, in writing, of the
material terms and conditions of any proposal or offer for, or
which may reasonably be expected to lead to, a Potential
Transaction that it receives and the identity of the Potential
Acquiror and Xxxxx shall keep Buyer fully apprised of all
developments regarding such Potential Transaction. Such full
apprising of all developments shall include providing Buyer with
copies of all correspondence from or to Xxxxx and the Potential
Acquirer, including all attachments and enclosures.
(c) As of the date and time of this agreement Xxxxx and its
Representatives will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any
parties other than Xxxxxxx and Merger Sub conducted heretofore
with respect to any Potential Transaction.
(d) As used in this Agreement, "Potential Transaction"
means any potential merger, consolidation or other business
combination involving Xxxxx, or any acquisition in any manner of
all or a substantial portion of the equity of, or all or a
substantial portion of the assets of Xxxxx whether for cash,
securities or any other consideration or combination thereof
other than pursuant to the transactions contemplated by this
Agreement.
31
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Access to Information; Confidentiality.
(a) Xxxxx shall, throughout the period from the date
hereof to the Effective Time, (i) provide Buyer and its
Representatives with full access, upon reasonable prior notice
and during normal business hours, to all officers, employees,
agents and accountants of Xxxxx and its assets, properties, books
and records, and (ii) furnish promptly to such persons (x) a copy
of each report, statement, schedule and other document filed or
received by Xxxxx pursuant to the requirements of federal or
state securities or tax laws or filed with any other Governmental
or Regulatory Authority, and (y) all other information and data
(including, without limitation, copies of Contracts, Xxxxx
Benefit Plans and other books and records) concerning the
business and operations of Xxxxx or its Subsidiaries as Buyer or
its Representatives reasonably may request. No investigation
pursuant to this paragraph or otherwise shall affect any
representation or warranty contained in this Agreement or any
condition to the obligations of the parties hereto.
(b) Non-public information obtained by Buyer pursuant
to Section 6.01(a) shall be subject to the provisions of the
confidentiality agreement between Buyer and Xxxxx, dated June 18,
1998 (the "Confidentiality Agreement"), the terms of which are
incorporated herein by reference.
6.02 Preparation of Proxy Statement. Xxxxx shall prepare
and file with the SEC the Proxy Statement at the earliest
practicable date after the Offer has expired or terminated
(unless 90% or more of outstanding Xxxxx Common Stock is acquired
by Merger Sub pursuant to the Offer or Xxxxx Common Stock ceases
to be registered under the Exchange Act in accordance with
applicable law); and shall use all reasonable efforts to have the
Proxy Statement cleared by the SEC. If at any time prior to the
Effective Time any event shall occur that is required to be set
forth in an amendment of or a supplement to the Proxy Statement,
Xxxxx shall prepare and file with the SEC such amendment or
supplement as soon thereafter as is reasonably practicable.
Buyer, Merger Sub and Xxxxx shall cooperate with each other in
the preparation of the Proxy Statement, and Xxxxx shall promptly
notify Buyer of the receipt of any comments of the SEC with
respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional
information, and shall promptly provide to Buyer copies of all
correspondence between Xxxxx or any representative of Xxxxx and
the SEC with respect to the Proxy Statement. Xxxxx shall give
Buyer and its counsel the opportunity to review the Proxy
Statement and all responses to requests for additional
information by and replies to comments of the SEC before their
being filed with, or sent to, the SEC. If the Proxy Statement is
required to be filed with the SEC, each of Xxxxx, Buyer and
Merger Sub agrees to use all reasonable efforts, after
consultation with the other parties hereto, to respond promptly
to all such comments of and requests by the SEC and to cause the
Proxy Statement to be mailed to the holders of Xxxxx Common Stock
entitled to vote at the Shareholder Meeting at the earliest
practicable time.
6.03 Approval of Shareholders. (a) To the extent required
by applicable xxx, Xxxxx shall, through its Board of Directors,
duly call, give notice of, convene and hold the Shareholder
Meeting for the purpose of voting on the adoption of this
Agreement (the "Shareholders'
32
Approval") as soon as reasonably practicable after consummation
of the Offer but in any event prior to the 90th day after the
date hereof (subject to unavoidable delays in receiving comments
from the SEC staff or in considering and preparing responses to
such comments). Except to the extent legally required for the
discharge of its fiduciary duties as reflected in a written
opinion of independent legal counsel, Xxxxx shall, through its
Board of Directors, include in the Proxy Statement the
recommendation of the Board of Directors of Xxxxx that the
shareholders of Xxxxx adopt this Agreement and approve the
Merger, and shall use all reasonable efforts to obtain such
adoption and approval, including utilizing a proxy solicitation
firm that is reasonably acceptable to Buyer and obtaining the
opinion of XxXxxxxx & Company Securities, Inc. to the effect that
the Merger Price is fair to the holders of Xxxxx Common Stock
from a financial point of view. At such meeting, Buyer shall, and
shall cause its Subsidiaries to, cause all shares of Xxxxx Common
Stock, if any, then owned by Buyer or any such Subsidiary to be
voted in favor of the adoption of this Agreement.
(b) Not earlier than five days, and not later than three
days, prior to the day of the Shareholder Meeting (if such
Shareholder Meeting is required under applicable law), Xxxxx
shall provide a notice to Buyer stating the number of Xxxxx
Common Shares for which valid, executed proxies have been
received with directions to vote such shares in favor of the
Merger. Xxxxx shall thereupon promptly consult with Buyer and, if
after such consultation Buyer so requests, Xxxxx shall cause the
Shareholder Meeting to be adjourned for such period as Buyer
shall request not to exceed thirty (30) days (or postponed to
such date as Buyer shall request, which date shall not be more
than thirty (30) days after the original date of the meeting) to
allow the proxy solicitation firm to continue to solicit proxies
in favor of the Merger. In such event, Xxxxx shall cooperate with
Buyer and the proxy solicitation firm to attempt to obtain
proxies sufficient to result in approval of the Merger by the
shareholders of Xxxxx.
(c) In the event that the approval and adoption of this
Agreement and the Merger at the Shareholder Meeting or any
adjournment thereof receives the affirmative vote of less than
66- 2/3% of all shares entitled to vote for such approval, then
Buyer may in its sole discretion (but subject to Section
8.01(b)(ii)) require Xxxxx to, and Xxxxx shall be obligated to,
through its Board of Directors, duly call, give notice of,
convene and hold a second Shareholder Meeting for the purpose of
voting on the adoption of this Agreement. Such second Shareholder
Meeting shall be held as soon as reasonably practicable after the
date of the notice from Buyer to Xxxxx in which Buyer notifies
Xxxxx that Buyer desires Xxxxx to call a second Shareholder
Meeting. In the event Buyer determines a second Shareholder
Meeting is appropriate, then all other provisions in this
Agreement relating to the Shareholder Meeting shall be read
mutatis mutandis as applying to such second Shareholder Meeting.
(d) If Buyer shall directly or indirectly acquire at least
90 percent of the outstanding shares of Xxxxx Common Stock, each
of Buyer, Merger Sub and Xxxxx shall take all necessary and
appropriate action as Buyer may reasonably request to cause the
Merger to become effective as promptly as practicable after the
consummation of the Offer without a meeting of holders of Xxxxx
Common Stock in accordance with Section 53-14-5 of the NMBCA.
6.04 Regulatory and Other Approvals. Subject to the terms
and conditions of this Agreement and without limiting the
provisions of Sections 6.02 and 6.03, each of Xxxxx and Buyer
will proceed diligently and in good faith and will use all
commercially reasonable efforts
33
to do, or cause to be done, all things necessary, proper or
advisable to, as promptly as practicable, (a) obtain all
consents, approvals or actions of, make all filings with and give
all notices to Governmental or Regulatory Authorities or any
other public or private third parties required of Buyer, Xxxxx or
any of their Subsidiaries to consummate the Merger and the other
matters contemplated hereby, and (b) provide such other
information and communications to such Governmental or Regulatory
Authorities or other public or private third parties as the other
party or such Governmental or Regulatory Authorities or other
public or private third parties may reasonably request. In
addition to and not in limitation of the foregoing, (i) each of
the parties will (x) take promptly all actions necessary to make
the filings required of Buyer and Xxxxx or their affiliates under
the HSR Act, (y) comply at the earliest practicable date with any
request for additional information received by such party or its
affiliates from the Federal Trade Commission (the "FTC") or the
Antitrust Division of the Department of Justice (the "Antitrust
Division") pursuant to the HSR Act, and (z) cooperate with the
other party in connection with such party's filings under the HSR
Act and in connection with resolving any investigation or other
inquiry concerning the Merger or the other matters contemplated
by this Agreement commenced by either the FTC or the Antitrust
Division or state attorneys general.
6.05 Employees.
(a) Buyer confirms that the Surviving Corporation will
honor in accordance with their respective provisions the existing
agreements between Xxxxx and each of Messrs. Bishop, McVay,
Holmquist, Krauskopf, Kubly, Minard, Mitting, XxXxxx and Xxxxxx
(collectively, "Senior Management Agreements"), copies of which
Xxxxx has heretofore delivered to Buyer. Further, Buyer confirms
that it will cause the Surviving Corporation to pay to each of
such persons the Transaction Bonus contemplated in the applicable
Senior Management Agreement, in the installments and at the times
specified therein, irrespective of whether the Merger is deemed
to have been supported or sponsored by management or any
management group.
(b) The Surviving Corporation will honor all existing
union contracts and all other existing agreements between Xxxxx
and its employees which have heretofore been disclosed to Buyer.
6.06 Expenses. Subject to Section 6.14 and to remedies in
respect of breach of the provisions hereof, if the Merger is not
consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such cost or expense. If the Merger
is consummated, Bryan's Transaction Costs (as defined below)
shall be paid by Xxxxx, by the Surviving Corporation and/or by
Buyer without reduction of the per-share amount payable to Xxxxx
shareholders under Section 2.01(a)(iii). As used herein, "Bryan's
Transaction Costs" means all out-of-pocket costs reasonably
incurred by Xxxxx or any of its Subsidiaries on or after July 1,
1998 in connection with the potential and actual sale of Xxxxx
and its Subsidiaries, including without limitation (i) the fees
and expenses of XxXxxxxx & Company Securities, Inc., (ii) the
fees and expenses of Xxxxxxx & Co. Inc., (iii) legal fees and
expenses, (iv) expenses for environmental reports, (v) expenses
for title reports, (vi) expenses for proxy solicitation and fees
and expenses of the Exchange Agent, and (viii) filing fees in
connection with compliance with securities and antitrust laws.
Bryan's Transaction Expenses shall not include (a) any amounts
payable or paid to senior managers of Xxxxx under the Senior
Management Agreements by virtue of the consummation of the Merger
34
(Buyer having agreed separately to cause the Surviving
Corporation to pay such amounts in addition to all other
consideration for the Merger), or (b) any expenses incurred by
Buyer or Merger Sub with respect to the Offer.
6.07 Brokers or Finders. Each of Buyer and Xxxxx
represents, as to itself and its Affiliates, that no agent,
broker, investment banker, financial advisor or other firm or
person is or will be entitled to any broker's or finder's fee or
any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement, except, in the case
of Xxxxx, for XxXxxxxx & Company Securities, Inc. and Xxxxxxx &
Co., Inc. True and complete copies of Bryan's agreements with
such firms have been delivered by Xxxxx to Buyer prior to the
execution of this Agreement.
6.08 Notice and Cure. Each of Buyer and Xxxxx will notify
the other promptly in writing of, and contemporaneously will
provide the other with true and complete copies of any and all
information or documents relating to, and will use all
commercially reasonable efforts to cure before the Closing, any
event, transaction or circumstance occurring or not occurring
after the date of this Agreement that causes or will cause or is
likely to cause any covenant or agreement of Buyer or Xxxxx, as
the case may be, under this Agreement to be breached or that
renders or will render untrue (disregarding any limitations as to
materiality as may be contained therein) any representation or
warranty of Buyer or Xxxxx, as the case may be, contained in this
Agreement as if the same were made on or as of the date of such
event, transaction or circumstance. Each of Buyer and Xxxxx also
will notify the other promptly in writing of, and will use all
commercially reasonable efforts to cure before the Closing, any
violation or breach of any representation, warranty, covenant or
agreement made by Buyer or Xxxxx, as the case may be, in this
Agreement, whether occurring or arising prior to, on or after the
date of this Agreement. No notice given pursuant to this Section
shall have any effect on the representations, warranties,
covenants or agreements contained in this Agreement for purposes
of determining satisfaction of any condition contained herein and
such notice shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
6.09 Fulfillment of Conditions. Subject to the terms and
conditions of this Agreement, each of Buyer and Xxxxx will take
or cause to be taken all commercially reasonable steps necessary
or desirable and proceed diligently and in good faith to satisfy
each condition to the other's obligations contained in this
Agreement and to consummate and make effective the transactions
contemplated by this Agreement, and neither Buyer nor Xxxxx will,
nor will either permit any of its Subsidiaries to, take or fail
to take any action that could be reasonably expected to result in
the nonfulfillment of any such condition.
6.10 Indemnification; Directors' and Officers' Insurance.
(a) Until the fourth anniversary of the Effective Time
(and until resolution of any claims asserted prior to such fourth
anniversary), the Surviving Corporation shall, to the extent
allowed by law and to the extent currently provided in the
By-laws and Articles of Incorporation of Xxxxx, indemnify, defend
and hold harmless each person who is as of the date hereof, or
has been at any time prior to the date hereof, a director or
officer of Xxxxx or any of its Subsidiaries (the "Indemnified
Parties") against (i) all losses, claims, damages, costs,
expenses, liabilities or judgments or amounts that are paid in
settlement of or in connection with any claim,
35
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 Xxxxx or any Subsidiary
of Xxxxx, 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") and (ii) 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 Xxxxx would have been
permitted under New Mexico law to indemnify such person (and
subject to the foregoing, the Surviving Corporation shall, in the
event the Surviving Corporation determines in its reasonable
discretion that such person would be entitled to indemnification
hereunder, pay expenses in advance of the final disposition of
any such action or proceeding to each Indemnified Party;
provided, however, that the person to whom the expenses are
advanced must provide an undertaking (without delivering a bond
or other security) to repay such advance if it is ultimately
determined that such person is not entitled to indemnification as
provided in Section 53-11-4.1 of the NMBCA). 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) any
counsel retained by the Indemnified Parties for any period after
the Effective Time shall be reasonably satisfactory to the
Surviving Corporation; (ii) after the Effective Time, the
Surviving Corporation shall pay all reasonable fees and expenses
of such counsel for the Indemnified Parties promptly as
statements therefor are received as heretofore provided; and
(iii) after the Effective Time, the Surviving Corporation will
use all reasonable efforts to assist in the vigorous defense of
such matter, provided that the Surviving Corporation shall not be
liable for any settlement of any claim effected without its
written consent, which consent, however, shall not be
unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section 6.10, upon learning of any
such claim, action, suit, proceeding or investigation, shall
notify the Surviving Corporation (but the failure so to notify
the Surviving Corporation shall not relieve it from any liability
which it may have under this Section 6.10 except to the extent
such failure prejudices the Surviving Corporation), and shall
deliver to the Surviving Corporation the undertaking, if any,
required by the NMBCA or this Agreement. The Surviving
Corporation shall be liable for the fees and expenses hereunder
with respect to only one law firm, in addition to local counsel
in each applicable jurisdiction, to represent the Indemnified
Parties as a group with respect to each such matter unless there
is, under applicable standards of professional conduct, a
conflict between the positions of any two or more Indemnified
Parties that would preclude or render inadvisable joint or
multiple representation of such parties.
(b) For a period of four years after the Effective
Time, the Surviving Corporation shall cause to be maintained in
effect the current policies of directors' and officers' liability
insurance maintained by Xxxxx (provided that the Surviving
Corporation may substitute therefor other policies of at least
the same coverage and amounts containing terms and conditions
which are no less advantageous) with respect to claims arising
from facts or events which occurred before or at the Effective
Time; provided, however, that the Surviving Corporation shall not
be obligated to make annual premium payments for such insurance
to the extent such premiums exceed 125% of the premiums paid as
of the date hereof by Xxxxx for such insurance ("Bryan's Current
Premium"), and if such premiums for such insurance would at any
time exceed 125% of Bryan's Current Premium, then the Surviving
Corporation shall cause to be maintained policies of insurance
which, in the Surviving Corporation's good faith determination,
36
provided the maximum coverage available at an annual premium
equal to 125% of Bryan's Current Premium. Notwithstanding
anything to the contrary contained elsewhere herein, the
Surviving Corporation's indemnity agreement set forth above in
Section 6.10(a) shall be limited to cover claims only to the
extent that those claims are not covered under Bryan's current
directors' and officers' insurance policies and the continuation
or maintenance thereof as required by this Section 6.10(b) (or
any substitute policies permitted by this Section 6.10(b)).
(c) In the event Buyer or any of its successors or
assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person,
then, and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of
Buyer assume the obligations set forth in this section.
(d) The provisions of this Section 6.10 (i) are
intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party, his heirs and his representatives and
(ii) are in addition to, and not in substitution for, any other
rights to indemnification or contribution that any such person
may have by contract or otherwise.
6.11 Retention of Xxxxx Name. Until the 10th anniversary of
the Closing Date, Buyer shall cause the name of the Surviving
Corporation to continue to be "Xxxxx Steam Corporation", unless,
due to a change in circumstances after the Closing, such
continuation shall be, in the opinion of the Board of Directors
of the Surviving Corporation at any time, materially adverse to
Buyer or the Surviving Corporation.
6.12 Takeover Laws. Xxxxx shall, upon the request of Buyer,
take all reasonable steps to exclude the applicability of, or to
assist in any challenge by Buyer or the Merger Sub of the
validity or applicability to the Merger of, any Takeover Laws. As
used herein, "Takeover Laws" shall mean any "moratorium",
"control share acquisition", "business combination", "fair price"
or other form of antitakeover laws and regulations of any
jurisdiction that may purport to be applicable to this Agreement
or the Merger.
6.13 Subsequent Financial Statements. Until the Effective
Time, Xxxxx will timely file with the SEC each form, report and
document required to be filed by Xxxxx under the Exchange Act and
will promptly deliver to Buyer copies of each such report filed
with the SEC. As of their respective dates, none of such reports
shall contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial
statements of Xxxxx included in such reports shall be prepared in
accordance with GAAP applied on a consistent basis (except as may
be indicated in the notes thereto) and shall fairly present the
financial position of Xxxxx and its Subsidiaries as at the dates
thereof and the results of their operations and changes in
financial position for the periods then ended.
6.14 Termination Fee; Expenses. (a) In the event that this
Agreement is terminated as a result of the occurrence of any
Trigger Event (as defined below), then Xxxxx shall pay to Buyer a
fee equal to 1.5% of the Purchase Price plus all Reimbursable
Expenses (as defined in Section
37
6.14(d)); provided, however, that if such termination is solely
attributable to events described in clause (iii) or (iv) of the
definition of Trigger Event, then Xxxxx shall pay to Buyer all
Reimbursable Expenses (but not the 1.5% fee). Amounts due
hereunder shall be payable in immediately available funds at the
time of such termination.
(b) As used herein, "Trigger Event" shall mean the
occurrence of any of the following:
(i) the Board of Directors of Xxxxx (or any
committee thereof) shall approve, recommend, authorize, propose
or facilitate any potential Acquisition Transaction (as
defined below) other than the Offer and the Merger pursuant to
this Agreement, or such Board (or any such committee) shall
engage in discussions or negotiations with a potential
counterparty concerning any such potential Acquisition
Transaction, or such Board (or any such committee) shall publicly
announce its intention to do any of the foregoing;
(ii) the Board of Directors of Xxxxx (or any
committee thereof) shall fail to recommend the Offer and the
Merger to stockholders of Xxxxx in the Schedule 14D-9 or proxy
statement required by this Agreement or within two business days
following Buyer's request from time to time that Xxxxx so confirm
its recommendation of the Offer and the Merger, or such Board (or
any such committee) shall withdraw, modify or amend in any manner
adverse to Buyer the authorization, approval or recommendation
given by such Board (or such committee) to the Offer and the
Merger, or shall publicly announce that it does not favor the
Offer or the Merger;
(iii) the shareholders of Xxxxx holding at least
66-2/3% of the outstanding shares of Xxxxx Common Stock shall
fail to approve the Merger in accordance with applicable law at
the Shareholder Meeting, or if the Shareholder Meeting shall not
be held on or prior to December 31, 1998; or
(iv) any person, entity or "group" (as that term
is used in Section 13(d)(e) of the Exchange Act), other than
those shareholders who have executed and delivered Irrevocable
Proxy and Option Agreements as described in the recitals to this
Agreement, becomes the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of 15% or more of outstanding
Xxxxx Common Stock.
(c) As used herein, "Acquisition Transaction" shall mean
any tender offer or exchange offer, any merger, consolidation,
liquidation, dissolution, recapitalization, reorganization or
other business combination, any acquisition, sale or other
disposition of a material amount of assets or securities or any
other similar transaction involving Xxxxx, its securities or any
of its Subsidiaries or divisions.
(d) As used herein, "Buyer Reimbursable Expenses" means all
out-of-pocket costs (including without limitation reasonable
legal and accounting costs) heretofore and hereafter incurred by
Buyer in connection with the transactions contemplated by this
Agreement including, without limitation, costs and expenses
incurred in connection with (i) Buyer's due diligence
investigations concerning Xxxxx and its Subsidiaries, (ii)
Buyer's preparation of preliminary and final proposals relating
to the acquisition of Xxxxx, (iii) Buyer's negotiation of this
Agreement, (iv) Buyer's assistance in the preparation of the
proxy statement relating to the Merger, (v) fees
38
and expenses of the Exchange Agent, and (vi) fees and expenses
reasonably incurred so as to facilitate and promote consummation
of the Merger.
ARTICLE VII
CONDITIONS
7.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the
Merger is subject to the fulfillment, at or prior to the Closing,
of each of the following conditions:
(a) Shareholder Approval. This Agreement and the
transactions contemplated hereby shall have been approved by
Bryan's shareholders in the manner and to the extent required by
applicable law and the Articles of Incorporation and By-laws of
Xxxxx.
(b) HSR Act. Any waiting period (and any extension
thereof) applicable to the consummation of the Merger under the
HSR Act shall have expired or been terminated.
(c) No Injunctions or Restraints. No action or
proceeding before a court of competent jurisdiction or other
competent governmental body by any Governmental or Regulatory
Authority shall have been instituted or threatened to make
illegal or otherwise restrain or prohibit (whether temporarily,
preliminary or permanently) the Merger or the other transactions
contemplated by this Agreement or to obtain an amount of damages
or other material relief in connection with the execution of the
Agreement or the consummation of the Merger or other transactions
contemplated by this Agreement; and no governmental agency shall
have given notice to any party hereto to the effect that
consummation of the Merger or the other transactions contemplated
by this Agreement would constitute a violation of any law or that
it intends to commence proceedings to restrain consummation of
the Merger (each party hereto, however, agrees to use reasonable
efforts promptly to have such prohibition or notice lifted).
(d) Board Resolutions. Each of Merger Sub and Xxxxx
shall have received from the other appropriately certified copies
of all resolutions adopted by their respective Boards of
Directors and shareholders in connection with this Agreement and
the transactions contemplated hereby.
7.02 Conditions to Obligation of Buyer and Merger Sub to
Effect the Merger. The obligation of Buyer and Merger Sub to
effect the Merger is further subject to the fulfillment, at or
prior to the Closing, of each of the following additional
conditions (all or any of which may be waived in whole or in part
by Buyer and Merger Sub in their sole discretion):
(a) Xxxxx shall have performed and complied with, in
all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by
Xxxxx at or prior to the Closing, and Xxxxx shall have delivered
to Buyer a certificate, dated the Closing Date and executed on
behalf of Xxxxx by its President, to such effect.
39
(b) All proceedings to be taken on the part of Xxxxx
in connection with the transactions contemplated by this
Agreement and all documents incident thereto shall be reasonably
satisfactory in form and substance to Buyer, and Buyer shall have
received copies of all such documents and other evidences as
Buyer may reasonably request in order to establish the
consummation of such transactions and the taking of all
proceedings in connection therewith.
Such documents shall include, but shall not be limited to:
(i) the certificates required by Section 7.02(a)
of this Agreement;
(ii) a certificate of existence or good standing
regarding each of Xxxxx and its Subsidiaries, certified in the
case of Xxxxx by the New Mexico Corporation Commission and
certified in the case of Xxxxxxxx and Memco by the appropriate
office of the jurisdiction of its respective incorporation, each
dated within ten (10) business days of the Closing Date; and
(iii) an incumbency certificate certifying the
identity of the officers of Xxxxx.
(iv) the resignations, effective the Closing
Date, of such directors and officers of Xxxxx, Xxxxxxxx and Memco
as Buyer shall specify consistent with Section 1.05;
(c) Buyer shall have received a complete list of the
signatories of each account or safe deposit box of Xxxxx,
Xxxxxxxx and Memco;
(d) Xxxxx shall not have received written objections
to the Merger from holders who in the aggregate hold more than
10% of the outstanding shares of Xxxxx Common Stock, and Xxxxx
shall not have knowledge that holders of 10% or more of the
outstanding shares of Xxxxx Common Stock intend to file with
Xxxxx written objections to the Merger.
(e) Xxxxx shall have delivered to Buyer a final
accounting of Bryan's Transaction Expenses, in form reasonably
satisfactory to Buyer, including copies of applicable final
invoices;
(f) Other than the filings provided for by Section
1.02, all consents, approvals and actions of filings with and
notices to any Governmental or Regulatory Authority or any other
public or private third party required of Xxxxx or any of its
Subsidiaries to consummate the Merger and the other transactions
contemplated hereby, the failure of which to be obtained or taken
could, individually or in the aggregate, be reasonably expected
to have a material adverse effect on Xxxxx and its Subsidiaries
or on the ability of Xxxxx to consummate the transactions
contemplated hereby shall have been obtained, all in form and
substance reasonably satisfactory to Buyer and no such consent,
approval or action shall contain any term or condition which
could be reasonably expected to result in a material diminution
of the benefits of the Merger to Buyer.
7.03 Conditions to Obligation of Xxxxx to Effect the
Merger. The obligation of Xxxxx to effect the Merger is further
subject to the fulfillment, at or prior to the Closing, of each
of the following additional conditions (all or any of which may
be waived in whole or in part by Xxxxx in its sole discretion):
40
(a) Each of the representations and warranties made by
Buyer and Merger Sub in this Agreement shall be true and correct
in all material respects as of the Closing Date as though made on
and as of the Closing Date or, in the case of representations and
warranties made as of a specified date earlier than the Closing
Date, on and as of such earlier date, and Buyer and Merger Sub
shall each have delivered to Xxxxx a certificate, dated the
Closing Date and executed on behalf of Buyer by its President and
on behalf of Merger Sub by its President, to such effect.
(b) Buyer and Merger Sub shall have performed and
complied with, in all material respects, each agreement, covenant
and obligation required by this Agreement to be so performed or
complied with by Buyer or Merger Sub at or prior to the Closing,
and Buyer and Merger Sub shall each have delivered to Xxxxx a
certificate, dated the Closing Date and executed on behalf of
Buyer by its President and on behalf of Merger Sub by its
President, to such effect.
(c) Xxxxx shall have received a written opinion, dated
as of the Closing Date, from Krieg, Devault, Alexander &
Xxxxxxxx, Indiana counsel to Buyer and Merger Sub, from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx and/or from Buyer's New Mexico
counsel, as appropriate, in form and substance reasonably
satisfactory to Xxxxx, as to certain appropriate matters agreed
upon by legal counsel of Buyer and Merger Sub and of Xxxxx.
(d) All proceedings to be taken on the part of Buyer
and Merger Sub in connection with the transactions contemplated
by this Agreement and all documents incident thereto shall be
reasonably satisfactory in form and substance to Xxxxx, and Xxxxx
shall have received copies of all such documents and other
evidences as Xxxxx xxx reasonably request in order to establish
the consummation of such transactions and the taking of all
proceedings in connection therewith. Such documents shall
include, but shall not be limited to:
(i) the certificates required by Section 7.03(a)
and 7.03(b) of this Agreement;
(ii) certificates of existence or good standing
regarding each of Buyer and Merger Sub, certified by the New York
Secretary of State and the New Mexico State Corporation
Commission, respectively, dated within ten (10) business days of
the Closing Date; and
(iii) incumbency certificates certifying the
identity of the officers of Buyer and Merger Sub, respectively.
(e) The Exchange Fund shall have been funded with the
full amount of the Merger Price for all outstanding shares of the
Xxxxx Common Stock.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time
prior to the Effective Time, whether prior to or after
Shareholders' Approval:
41
(a) by mutual written agreement of the parties hereto
duly authorized by action taken by or on behalf of their
respective Boards of Directors;
(b) by either Xxxxx or Buyer upon notification to the
non-terminating party by the terminating party:
(i) at any time after January 31, 1999 if the
Merger shall not have been consummated on or prior to such date
and such failure to consummate the Merger is not caused by a
breach of this Agreement by the terminating party; provided,
however, the date may be extended indefinitely by the mutual
written agreement of the parties;
(ii) if Shareholders' Approval shall not be
obtained by January 31, 1999;
(iii) if any Governmental or Regulatory
Authority, the taking of action by which is a condition to the
obligations of either Xxxxx or Buyer to consummate the
transactions contemplated hereby, shall have determined not to
take such action and all appeals of such determination shall have
been taken and have been unsuccessful; or
(iv) if any court of competent jurisdiction or
other competent Governmental or Regulatory Authority shall have
issued an Order making illegal or otherwise restricting,
preventing or prohibiting the Merger and such Order shall have
become final and nonappealable.
(c) by Xxxxx, if (1) Merger Sub fails to commence the
Offer as provided in Section A-1.01 or fails to purchase validly
tendered Shares in violation of the terms of the Offer or this
Agreement; (2) there has been a breach by Buyer or Merger Sub of
any representation or warranty contained in this Agreement, or
(3) there has been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of Buyer or
Merger Sub, which breach is not curable or, if curable, is not
cured within ten (10) days after written notice of such breach is
given by Xxxxx to Buyer or Merger Sub.
(d) by Buyer, if (1) the Offer is terminated or
withdrawn on account of the failure to be fulfilled of a
condition specified in Annex A hereto, (2) there has been a
breach by Xxxxx of any representation or warranty contained in
this Agreement or (3) there has been a material breach of any of
the covenants or agreements set forth in this Agreement on the
part of Xxxxx, which breach is not curable or, if curable, is not
cured within ten (10) days after written notice of such breach is
given by Buyer to Xxxxx.
(e) by Buyer if a Trigger Event occurs.
8.02 Effect of Termination. If this Agreement is validly
terminated by either Xxxxx or Buyer pursuant to Section 8.01,
this Agreement will forthwith become null and void and there will
be no liability or obligation on the part of either Xxxxx or
Buyer (or any of their respective Representatives or affiliates),
except (i) that the provisions of Sections 6.01(b), 6.06, 6.07
and 6.14 will continue to apply following any such termination,
and (ii) that nothing contained herein shall relieve any party
hereto from liability for any breach of its representations,
warranties, covenants or agreements contained in this Agreement;
provided however, that no breach of this
42
Agreement by Xxxxx shall be deemed to have occurred if such
termination is solely due to the occurrence of a Trigger Event
described in paragraph 6.14(b)(i) or 6.14(b)(ii), to the extent
that such Trigger Event arose because action was taken by the
Board of Directors of Xxxxx based upon the belief, and supported
by a written opinion furnished by independent legal counsel, that
the failure to take such action would constitute a breach of
fiduciary duties of such Board of Directors under applicable law.
8.03 Amendment. This Agreement may be amended, supplemented
or modified by the parties hereto at any time prior to the
Effective Time, whether prior to or after adoption of this
Agreement at the Shareholder Meeting, but after such adoption
only to the extent permitted by applicable law. No such
amendment, supplement or modification shall be effective unless
set forth in a written instrument duly executed by or on behalf
of each party hereto.
8.04 Waiver. At any time prior to the Effective Time any
party hereto may to the extent permitted by applicable law (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 of the other
parties hereto contained herein or in any document delivered
pursuant hereto or (iii) waive compliance with any of the
covenants, agreements or conditions of the other parties hereto
contained herein. No such extension or waiver shall be effective
unless set forth in a written instrument duly executed by or on
behalf of the party extending the time of performance or waiving
any such inaccuracy or noncompliance. No waiver by any party of
any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any
future occasion.
ARTICLE IX
GENERAL PROVISIONS
9.01 Non-Survival of Representations, Warranties, Covenants
and Agreements. None of the representations, warranties,
covenants and agreements in this Agreement or in any instrument
delivered pursuant to this Agreement, including any rights
arising out of any breach of such representations, warranties,
covenants, and agreements, shall survive the Effective Time,
except for those covenants and agreements contained herein and
therein that by their terms apply or are to be performed in whole
or in part after the Effective Time.
9.02 Knowledge. An individual will be deemed to have
"knowledge" of a particular fact or other matter if such
individual is actually aware of such fact or other matter.
Whenever a provision of this Agreement is qualified as to "the
best knowledge of" or "to the knowledge of" Xxxxx or Buyer, or is
qualified with words of similar meaning, then the current
officers, directors and senior management of such entity shall be
deemed to have conducted a reasonable inquiry into the question
at hand. The entity will be deemed to have "knowledge" of a
particular fact or other matter if (i) any individual who is
serving, or who has at any time served, as a director, officer,
senior manager or trustee of such person (or in any similar
capacity) has, or at any time had, knowledge of such fact or
other matter, or (ii) such individual would have had such
knowledge if such a reasonable inquiry had been conducted.
43
9.03 Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to
have been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the
parties at the following addresses or facsimile numbers:
If to Buyer or Merger Sub, to:
Xxxxxxx Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx III, President and CEO
Facsimile No.: (000) 000-0000
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esquire
Facsimile No.: (000) 000-0000
If to Xxxxx, to:
Xxxxx Steam Corporation
Xxxx Xxxxxx Xxx 00
Xxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Chairman
with a copy to:
Xxxxxx & Xxxxxxxxx
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxx, Esquire
All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section,
be deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in this Section,
be deemed given upon receipt, and (iii) if delivered by mail in
the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received
by any other person to whom a copy of such notice is to be
delivered pursuant to this Section). Any party from time to time
may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying
such change to the other parties hereto.
44
9.04 Entire Agreement. Except for the Confidentiality
Agreement (as defined in Section 6.01(b)), which shall remain in
full force and effect as provided therein, this Agreement
supersedes all prior discussions and agreements among the parties
hereto with respect to the subject matter hereof and thereof and
contains the sole and entire agreement among the parties hereto
with respect to the subject matter hereof and thereof.
9.05 Public Announcements. Except as otherwise required by
law or the rules of any applicable securities exchange or
national market system, so long as this Agreement is in effect
(until the Closing), Buyer and Xxxxx will not, and will not
permit any of their respective Representatives to, issue or cause
the publication of any press release or make any other public
announcement with respect to the transactions contemplated by
this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld. Buyer and Xxxxx will
cooperate with each other in the development and distribution of
all press releases and other public announcements (including
announcements made to the employees, managers, customers,
suppliers and sales representatives of Xxxxx and its Subsidiaries
and including any interested community members or governmental
officials) with respect to this Agreement and the transactions
contemplated hereby, and will furnish the other with drafts of
any such releases and announcements as far in advance as
practicable.
9.06 No Third Party Beneficiaries. Other than the
Indemnified Parties (as defined in Section 6.10), the terms and
provisions of this Agreement are intended solely for the benefit
of each party hereto and their respective successors or permitted
assigns and it is not the intention of the parties to confer
third party beneficiary rights upon any other person.
9.07 No Assignment, Binding Effect. Neither this Agreement
nor any right, interest or obligation hereunder may be assigned
by any party hereto without the prior written consent of the
other parties hereto and any attempt to do so will be void,
except that Buyer and Merger Sub may assign any or all of their
rights, interests and obligations hereunder to another direct or
indirect wholly-owned Subsidiary of Buyer, provided that any such
Subsidiary agrees in writing to be bound by all of the terms,
conditions and provisions contained herein. Subject to the
preceding sentence, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
9.08 Headings. The headings used in this Agreement have
been inserted for convenience of reference only and do not define
or limit the provisions hereof.
9.09 Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid or unenforceable under any present
or future law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely
affected thereby, (i) such provision will be fully severable,
(ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a
part hereof, (iii) the remaining provisions, of this Agreement
will remain in full force and effect and will not be affected by
the legal, invalid or unenforceable provision or by its severance
herefrom and (iv) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a
part of this Agreement a legal, valid and enforceable provision
as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
45
9.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana
applicable to a contract executed and performed in such State
without giving effect to the conflicts of laws principles
thereof, except to the extent that the NMBCA, the Securities Act
and the Exchange Act shall apply to the transactions contemplated
herein.
9.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same
instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all
of the parties hereto.
9.12 Interpretation. In this Agreement, unless the context
otherwise requires, words describing the singular number shall
include the plural and vice versa, and words denoting any gender
shall include all genders and words denoting natural persons
shall include corporations and partnerships and vice versa and
the words "include," "including" and the like shall be deemed not
to be limiting.
9.13 Incorporation of Exhibits. The Exhibits and Schedules
attached hereto and referred to herein are hereby incorporated
herein and made a part hereof for all purposes as if fully set
forth herein.
9.14 Enforcement of Agreement; Injunctive Relief. (a)
Buyer, Merger Sub and Xxxxx hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction
of the United States District Court for the Southern District of
Indiana, Indianapolis Division for federal jurisdiction (unless
such court has no jurisdiction, in which case Buyer, Merger Sub
and Xxxxx consent to the exclusive jurisdiction of the courts of
the State of Indiana located in Xxxxxx County) for any actions,
suits or proceedings arising out of or relating to this Agreement
and the transactions contemplated hereby (and Buyer, Merger Sub
and Xxxxx agree not to commence any action, suit or proceeding
relating thereto or to this Agreement except in such courts), and
further agree that service of any process, summons, notice or
document by U.S. registered mail to the addresses set forth
herein shall be effective service of process for any such action,
suit or proceedings brought against Buyer, Merger Sub or Xxxxx in
such court. Xxxxx, Buyer and Merger Sub hereby irrevocably and
unconditionally waive any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby, in such federal court (unless
such court has no jurisdiction, in which case Buyer, Merger Sub
and Xxxxx consent to the laying of venue in the courts of the
State of Indiana in the County of Xxxxxx). Buyer, Merger Sub and
Xxxxx hereby further irrevocably and unconditionally waive and
agree not to plead or to claim in any such court that any such
action, suit or proceeding brought in any such court has been
brought in an inconvenient forum; and agree not to oppose a
motion to dismiss an improperly filed action. Buyer, Merger Sub
and Xxxxx waive, to the fullest extent permitted by law, any
rights they may have to a jury trial on any matter related in any
way to this Agreement or the transactions contemplated hereby.
(b) Each of Xxxxx on the one hand and Buyer and Merger Sub
on the other hand recognize and acknowledge that a breach by it
of any covenants or agreements contained in this Agreement will
cause the other party to sustain damages for which it would not
have an adequate remedy at law for money damages, and therefore
each of the parties hereto agrees that in the
46
event of any such breach, if the aggrieved party so desires, the
aggrieved party shall be entitled to the remedy of specific
performance, injunctive and other equitable relief (without the
requirement or need for the posting of any bond) in addition to
any other remedy to which the aggrieved party may be entitled, at
law or in equity.
9.15 Joint and Several Obligations. The obligations of
Buyer and Merger Sub hereunder are joint and several.
[signature page follows]
47
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be signed by its officer thereunto duly authorized
as of the date first above written.
XXXXXXX CORPORATION
By:______________________________
Name: Xxxxxx Xxxxxxxx, III
Title: President and Chief
Executive Officer
XXXXXXX ACQUISITION CORPORATION
By:______________________________
Name: Xxxxxx Xxxxxxxx, III
Title: President
XXXXX STEAM CORPORATION
By:______________________________
Name:
Title:
ANNEX A
CONDITIONS TO THE OFFER
Capitalized terms used in this Annex A and not
otherwise defined herein shall have the meanings assigned to them
in the Agreement to which this Annex is attached (the "Merger
Agreement").
Notwithstanding any other provision of the Offer, the
obligation of Merger Sub to accept for payment, purchase or pay
for any Shares tendered prior to the scheduled expiration date of
the Offer or any extension thereof (the "Offer Date") is subject
to the fulfillment, at or prior to the Offer Date, of the
following conditions (and upon the failure of any such condition
to be fulfilled, unless waived by Merger Sub, Merger Sub may
terminate the Offer as to any Shares not then accepted for
payment, and Merger Sub shall not be required to accept for
payment, purchase or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act, pay for any Shares):
(a) The number of Shares validly tendered and not
withdrawn shall constitute at least a two-thirds
majority plus one of the outstanding Shares on a fully
diluted basis (the "Minimum Condition").
(b) Any waiting period (and any extension thereof)
applicable to the consummation of the Offer under the
HSR Act shall have expired or been terminated.
(c) No action or proceeding before a court of competent
jurisdiction or other competent governmental body by
any Governmental or Regulatory Authority shall have
been instituted or threatened to make illegal or
otherwise restrain or prohibit (whether temporarily,
preliminary or permanently) the Offer or the Merger or
the other transactions contemplated by the Merger
Agreement or to obtain an amount of damages or other
material relief in connection with the execution of
the Merger Agreement or the consummation of the Offer
or other transactions contemplated by the Merger
Agreement; and no governmental agency shall have given
notice to any party hereto to the effect that
consummation of the Offer or the Merger or the other
transactions contemplated by the Merger Agreement
would constitute a violation of any law or that it
intends to commence proceedings to restrain
consummation of the Offer or the Merger.
(d) Merger Sub shall have received from Xxxxx
appropriately certified copies of all resolutions
adopted by Bryan's Boards of Directors in connection
with the Offer, the Merger, the Merger Agreement and
the transactions contemplated thereby.
(e) Each of the representations and warranties made by
Xxxxx in the Merger Agreement shall be true and
correct in all respects (subject to limitations as to
materiality as may be contained therein) as though
made on and as of the Offer Date or, in the case of
representations and warranties made as of a specified
date
earlier than the Offer Date, on and as of such earlier
date, and Xxxxx shall have delivered to Buyer a
certificate, dated the Offer Date and executed on
behalf of Xxxxx by its President to such effect.
(f) Xxxxx shall have performed and complied with, in all
material respects, each agreement, covenant and
obligation required by the Merger Agreement to be so
performed or complied with by Xxxxx at or prior to the
Offer Date, and Xxxxx shall have delivered to Buyer a
certificate, dated the Offer Date and executed on
behalf of Xxxxx by its President, to such effect.
(g) Buyer and Merger Sub shall have received a written
opinion, dated as of the Offer Date, from Xxxxxx &
Xxxxxxxxx, counsel to Xxxxx, in form and substance
reasonably satisfactory to Buyer and Merger Sub, as to
certain appropriate matters agreed upon by legal
counsel of Buyer and Merger Sub and of Xxxxx.
(h) All proceedings to be taken on the part of Xxxxx on or
before the consummation of the Offer in connection
with the transactions contemplated by the Merger
Agreement and all documents incident thereto shall be
reasonably satisfactory in form and substance to
Buyer, and Buyer shall have received copies of all
such documents and other evidences as Buyer may
reasonably request in order to establish the
consummation of such transactions and the taking of
all proceedings in connection therewith. Such
documents shall include, but shall not be limited to:
(i) the certificates required by clauses (e) and (f)
of this Annex; (ii) a certificate of existence or good
standing regarding each of Xxxxx and its Subsidiaries,
certified in the case of Xxxxx by the New Mexico
Corporation Commission and certified in the case of
Xxxxxxxx and Memco by the appropriate office of the
jurisdiction of its respective incorporation, each
dated within ten (10) business days of the Offer Date;
and (iii) an incumbency certificate certifying the
identity of the officers of Xxxxx.
(i) Xxxxx and each of its Subsidiaries shall have good,
marketable and insurable title to their respective
real properties, subject only to those encumbrances
identified in Schedule 7.02 to the Merger Agreement,
and Xxxxx shall have obtained and delivered to Buyer
reasonable assurances from the relevant municipalities
to the effect that such real properties and their
current operations are in compliance with local zoning
ordinances without constituting non- conforming uses.
(j) Xxxxx shall have delivered to Buyer a current survey
of the real property and facilities of Xxxxx located
in Peru, Indiana, which survey (i) shall have been
prepared by a licensed Indiana land surveyor, (ii)
shall fulfill the Minimum Detail Requirements for
ALTA/ACSM Land Title Surveys (1992) for an Urban
Survey and Table A thereof, and (iii) shall have been
certified to the Surviving Corporation, Buyer and
Buyer's title insurance company in a manner reasonably
satisfactory to Buyer; and such survey shall not show
encroachments or other
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matters which, individually or in the aggregate,
materially adversely affect the value or use of such
real property and facilities.
(k) There shall not have occurred (A) any general
suspension of, or limitation on prices for, trading in
the securities of a general nature on any national
securities exchange that lasts more than 24 hours, (B)
the declaration of any banking moratorium or any
suspension of payments in respect of banks or any
limitation (whether or not mandatory) on the extension
of credit by lending institutions in the United
States, (C) the commencement of a war, armed
hostilities or any other international or national
calamity involving the United States or a substantial
terrorist attack or the threat thereof on a target in
United States that leads to the declaration of a
national emergency, (D) a material adverse change in
the United States currency exchange rates or a
suspension of, or limitation on, the markets therefor,
or (E) the Dow Xxxxx Index shall fall below 6448
(which was the value of such Index on December 31,
1996).
(l) A Trigger Event shall not have occurred.
(m) Other than the filings provided for by Section 1.02 of
the Merger Agreement, all consents, approvals and
actions of, filings with and notices to any
Governmental or Regulatory Authority or any other
public or private third party required of Xxxxx or any
of its Subsidiaries to consummate the Offer, the
failure of which to be obtained or taken could,
individually or in the aggregate, be reasonably
expected to have a material adverse effect on Xxxxx
and its Subsidiaries or on the ability of Buyer to
consummate the purchase of Shares pursuant to the
Offer, shall have been obtained, all in form and
substance reasonably satisfactory to Buyer and no such
consent, approval or action shall contain any term or
condition which could be reasonably expected to result
in a material diminution of the benefits of the Offer
to Buyer.
(n) The Merger Agreement shall not have been terminated
pursuant to its terms and shall not have been amended
pursuant to its terms to provide for its termination.
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