EXHIBIT 2
ACQUISITION AGREEMENT AND PLAN OF MERGER
BETWEEN
TPG HOLDINGS, INC.
AND
XXXX INDUSTRIES, INC.
DATED AS OF JUNE 6, 1997
Exhibits - 1
ACQUISITION AGREEMENT AND PLAN OF MERGER
THIS ACQUISITION AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is
executed as of the 6th day of June, 1997, by and among TPG HOLDINGS, INC., a
Delaware corporation ("TPG"), and XXXX INDUSTRIES, INC., a Delaware corporation
("XXXX").
RECITALS
WHEREAS, TPG and Xxxx desire to enter into a business combination pursuant
to which TPG will merge with and into Xxxx;
WHEREAS, the Boards of Directors of TPG and Xxxx each have determined that
such a business combination is in the best interests of the respective
corporations and their stockholders, and accordingly have approved this merger
upon the terms and conditions set forth herein.
WHEREAS, for federal income tax purposes, it is intended that this merger
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND CERTAIN RULES OF CONSTRUCTION
1.1 DEFINITIONS. In addition to any other terms defined elsewhere in this
Agreement, including any Exhibit or Schedule hereto (unless such Exhibit or
Schedule provides for a different definition), as used herein, the following
terms shall have the following meanings:
"AFFILIATE" means any Person which (i) directly or indirectly controls, is
controlled by or is under common control with a specified Person, (ii) owns or
controls 5% or more of the outstanding equity interests of a specified Person or
(iii) is an officer, director, general partner or trustee of a specified Person.
For this purpose, the term "control" means possession, directly or indirectly
(through one or more intermediaries), of the power to direct or cause the
direction of management and policies of a Person through an ownership of voting
securities or other ownership interests, contract, voting trust or otherwise.
"AFFILIATE LETTER" means the Affiliate Letter substantially in the form of
EXHIBIT A hereto.
"BLUE SKY LAWS" means state securities Laws or "blue sky" Laws.
"BUSINESS DAY" means any day other than a Saturday, Sunday or legal
holiday in the State of Delaware.
"CERTIFICATE OF MERGER" is defined in SECTION 2.3.
"CLOSING" means closing and the consummation of the Merger pursuant to the
terms of this Agreement.
Exhibits - 2
"CLOSING DATE" means the date on which the Closing occurs.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIALITY AGREEMENT" is defined in SECTION 7.1(E).
"DGCL" means the Delaware General Corporation Law, as amended.
"EFFECTIVE TIME" is defined in SECTION 2.3.
"ENVIRONMENTAL LAW" is defined in SECTION 5.14(A).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" is defined in SECTION 4.2(A).
"EXCHANGE FUND" is defined in SECTION 4.2(A).
"FAIRNESS OPINION" is defined in SECTION 7.2(L).
"GAAP" means generally accepted accounting principles in the United States
of America as set forth in pronouncements of the Financial Accounting Standards
Board and the American Institute of Certified Public Accountants, as such
principles are from time to time supplemented and amended.
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state or local
government, political subdivision or governmental or regulatory authority,
agency, board, bureau, commission, instrumentality or court or
quasi-governmental authority.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
"INDEMNIFIED LIABILITIES" is defined in SECTION 9.1.
"INDEMNIFIED PARTY" or "INDEMNIFIED PARTIES" is defined in SECTION 9.1.
"IRS" means the United States Internal Revenue Service.
"JOINT PROXY STATEMENT/PROSPECTUS" is defined in SECTION 5.8.
"LAW" or "LAWS" means any and all statutes, laws, ordinances,
proclamations, regulations, published requirements, orders, decrees and rules of
any Governmental Authority, including those covering environmental, tax, energy,
safety, health, transportation, bribery, recordkeeping, zoning, discrimination,
antitrust and wage and hour matters, in each case as amended and in effect from
time to time.
"LIENS" means all liens, encumbrances, mortgages, pledges, security
interests, conditional sales agreements, charges, claims, options, rights of
first refusal, reservations, restrictions or other encumbrances or defects in
title.
Exhibits - 3
"XXXX ACQUISITION PROPOSAL" is defined in SECTION 7.2(A).
"XXXX AFFILIATE STOCKHOLDER" is defined in SECTION 7.2(D).
"XXXX BENEFIT PLANS" is defined in SECTION 5.12.
"XXXX COMMON STOCK" means the Common Stock, par value $0.01 per share, of
Xxxx.
"XXXX DISCLOSURE LETTER" is defined in the preamble to ARTICLE 5.
"XXXX DISSENTER PAYMENT" is defined in SECTION 4.4(C).
"XXXX DISSENTING SHARES" is defined in SECTION 4.4(C).
"XXXX EXCHANGE RATIO" means 0.1.
"XXXX FINANCIAL STATEMENTS" means the audited consolidated financial
statements of Xxxx for the fiscal years ended December 31, 1995 and December 31,
1996, as disclosed in the Xxxx SEC Reports, and the unaudited consolidated
financial statements of Xxxx for the quarter ended March 31, 1997 delivered to
TPG as part of the Xxxx Disclosure Letter.
"XXXX INTELLECTUAL PROPERTY" is defined in SECTION 5.21.
"LUNN'S MOST RECENT BALANCE SHEET" shall mean the unaudited consolidated
balance sheet dated March 31, 1997 of Xxxx.
"XXXX OPTION" means (a) any option to purchase Xxxx Common Stock granted
by Xxxx pursuant to the Xxxx Stock Option Plan or (b) any option to purchase
Xxxx Common Stock granted by Xxxx but not pursuant to the Xxxx Stock Option
Plan.
"XXXX PREFERRED STOCK" shall mean the preferred stock, par value $0.01 per
share, of Xxxx.
"XXXX SEC REPORTS" is defined in SECTION 5.7.
"XXXX STOCKHOLDER" means any holder of shares of the Xxxx Common Stock.
"XXXX STOCKHOLDERS' MEETING" is defined in SECTION 7.2(B).
"XXXX STOCK OPTION PLAN" means Lunn's 1994 Stock Incentive Plan.
"XXXX SUPERIOR PROPOSAL" means any Xxxx Acquisition Proposal to merge with
or acquire, directly or indirectly, all of the outstanding capital stock of Xxxx
then outstanding on terms that the Board of Directors of Xxxx determines in its
good faith reasonable judgment (based on advice of an independent financial
advisor of nationally recognized reputation) to be more favorable to the Xxxx
Stockholders than the Merger.
"XXXX WARRANT" means any warrant to purchase shares of Xxxx Common Stock.
Exhibits - 4
"MATERIAL ADVERSE EFFECT" means, with respect to either TPG or Xxxx, any
change or effect that is or would be materially adverse to the business, results
of operations or financial condition of TPG or Xxxx, as the case may be, and
their respective Subsidiaries taken as a whole.
"MATERIAL CONTRACTS" means, with respect to Xxxx, any contracts or
agreements that are required to be filed as exhibits to the Xxxx SEC Reports,
and, with respect to TPG, any contracts or agreements that would be required to
be filed as exhibits to SEC Reports if TPG were a Reporting Person.
"MERGER" means the merger of TPG with and into Xxxx, with Xxxx as the
surviving corporation.
"MERGER CONSIDERATION" means, with respect to any TPG Stockholder or Xxxx
Stockholder, (i) certificates evidencing the number of whole shares of Surviving
Corporation Common Stock or Surviving Corporation Preferred Stock that such
Stockholder has the right to receive pursuant to SECTION 4.1, and (ii) any cash
in lieu of fractional shares of the Surviving Corporation Common Stock to which
such Stockholder is entitled pursuant to SECTION 4.2(E).
"NASDAQ SMALLCAP MARKET" means the Nasdaq SmallCap Market of The Nasdaq
Stock Market, Inc., a wholly owned subsidiary of the National Association of
Securities Dealers, Inc.
"PERMITTED LIEN" means (i) with respect to Xxxx, (a) any Lien reserved
against in Lunn's Most Recent Balance Sheet, (b) Liens for Taxes not yet due and
payable or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on Lunn's
books in accordance with GAAP, (c) Liens that, individually or in the aggregate,
would have only an immaterial effect on the value of any of the assets of Xxxx
or the use thereof as currently used, and (d) obligations under operating and
capital leases, and (ii) with respect to TPG, (a) any Lien reserved against in
TPG's Most Recent Balance Sheet, (b) Liens for Taxes not yet due and payable or
which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on TPG's books in
accordance with GAAP, (c) Liens that, individually or in the aggregate, would
have only an immaterial effect on the value of any of the assets of TPG or the
use thereof as currently used, and (d) obligations under operating and capital
leases.
"PERSON" means an individual, corporation, partnership, limited liability
company, trust, association or other entity, including any Governmental
Authority.
"PROXY STATEMENT" is defined in SECTION 5.8.
"REGISTRATION STATEMENT" is defined in SECTION 5.8.
"REPORTING PERSON" means any issuer which has a class of equity securities
registered pursuant to Section 12 of the Exchange Act or is required to file
periodic reports pursuant to Section 15(d) of the Exchange Act.
"RULE 145" means Rule 145 promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.
Exhibits - 5
"SEC REPORTS" any registration statement, report, proxy statement or
information statement (other than preliminary materials) filed with the SEC
pursuant to the Securities Act or the Exchange Act (including exhibits and any
amendments thereto).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCKHOLDERS" means the TPG Stockholders and Xxxx Stockholders.
"SUBSIDIARIES" means, with respect to any Person, any corporation or other
organization that is controlled by such Person. For this purpose, the term
"control" means possession, directly or indirectly (through one or more
intermediaries), of the power to direct or cause the direction of management and
policies of a Person through an ownership of voting securities or other
ownership interests, contract, voting trust or otherwise.
"SURVIVING CORPORATION" is defined in SECTION 2.1.
"SURVIVING CORPORATION COMMON STOCK" means the common stock, par value
$0.01 per share, of the Surviving Corporation.
"SURVIVING CORPORATION PREFERRED STOCK" means the preferred stock, par
value $1.00 per share, of the Surviving Corporation, having the same
designations, preferences and limitations as the TPG Preferred Stock.
"TAX" or "TAXES" means any foreign, federal, state or local income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not.
"TPG ACQUISITION PROPOSAL" is defined in SECTION 7.3(A).
"TPG AFFILIATE STOCKHOLDER" is defined in SECTION 7.3(J).
"TPG BENEFIT PLANS" is defined in SECTION 6.12.
"TPG COMMON STOCK" means the common stock, $0.01 par value per share, of
TPG.
"TPG DISCLOSURE LETTER" is defined in the preamble to ARTICLE 6.
"TPG DISSENTER PAYMENT" is defined in SECTION 4.4(A).
"TPG DISSENTING SHARES" is defined in SECTION 4.4(A).
"TPG EXCHANGE RATIO" means 8.3028.
"TPG FINANCIAL STATEMENTS" is defined in SECTION 6.7.
Exhibits - 6
"TPG INTELLECTUAL PROPERTY" is defined in SECTION 6.21.
"TPG'S MOST RECENT BALANCE SHEET" shall mean the unaudited consolidated
balance sheet dated March 31, 1997 of TPG.
"TPG OPTION" means (i) any option to purchase TPG Common Stock granted by
TPG pursuant to the TPG Stock Option Plan or (ii) any option to purchase TPG
Common Stock granted by TPG but not pursuant to the TPG Stock Option Plan.
"TPG PREFERRED STOCK" means the 8% cumulative redeemable preferred stock,
par value $1.00 per share, of TPG, having the designations, preferences and
limitations described in TPG's Certificate of Incorporation, as amended.
"TPG STOCKHOLDERS" means the holders of shares of the TPG Common Stock or
the TPG Preferred Stock.
"TPG STOCKHOLDERS' MEETING" is defined in SECTION 7.3(B).
"TPG STOCK OPTION PLAN" means TPG's Key Management Stock Option Plan
(1996).
"TPG SUPERIOR PROPOSAL" means any TPG Acquisition Proposal to merge with
or acquire, directly or indirectly, all of the outstanding capital stock of TPG
then outstanding on terms that the Board of Directors of TPG determines in its
good faith reasonable judgment (based on advice of an independent financial
advisor of nationally recognized reputation) to be more favorable to the TPG
Stockholders than the Merger.
"TRANSACTIONS" means the transactions contemplated by this Agreement.
"TRANSMITTAL LETTER" means the Transmittal Letter substantially in the
form of EXHIBIT B hereto to be executed by each of the Stockholders who receive
Surviving Corporation Common Stock under this Agreement.
1.2 CERTAIN RULES OF CONSTRUCTION The captions in this Agreement are for
convenience of reference only and in no way define, limit or describe the scope
or intent of any provisions or sections of this Agreement. All references in
this Agreement to Articles or Sections are references to the Articles or
Sections in this Agreement, unless some other reference is clearly indicated.
All accounting terms not specifically defined in this Agreement shall be
construed in accordance with GAAP as in effect on the date hereof. In this
Agreement, unless the context otherwise requires, (a) words describing the
singular number shall include the plural and vice versa, (b) words denoting any
gender shall include all genders and (c) references to "including" shall mean
"including without limitation."
ARTICLE 2
THE MERGER
2.1 THE MERGER. Subject to the terms and conditions set forth in this
Agreement, and in accordance with the DGCL, at the Effective Time, TPG shall be
merged with and into Xxxx and the separate corporate existence of TPG shall
thereupon cease. Xxxx shall be the surviving corporation in the Merger
Exhibits - 7
(sometimes referred to herein as the "SURVIVING CORPORATION") and shall succeed
to and assume all of the rights and obligations of TPG in accordance with the
DGCL. The name of the Surviving Corporation shall be Technical Products Group,
Inc., or such other name as may be mutually agreed to by TPG and Xxxx prior to
the Closing. The Merger shall have the effects specified in the DGCL.
2.2 THE CLOSING. Subject to the terms and conditions of this Agreement,
the Closing shall be held (a) at the offices of Gardere & Xxxxx, L.L.P., 000
Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx at 10:00 a.m., local time, as promptly as
practicable (and in any event within two Business Days) following the day on
which all of the conditions set forth in ARTICLE 8 shall be fulfilled or waived
in accordance herewith or (b) at such other time, date or place as TPG and Xxxx
may agree. The Closing Date shall be the same as the date of the Effective Time.
2.3 EFFECTIVE TIME. If all of the conditions to the Merger set forth in
ARTICLE 8 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in ARTICLE 10, on the
Closing Date, the parties hereto shall cause a Certificate of Merger
incorporating this Agreement (and setting forth such other information as is
required by the DGCL (the "CERTIFICATE OF MERGER") to be properly executed and
filed, together with appropriate officers' certificates, in accordance with
Section 251 of the DGCL on the Closing Date. The Merger shall become effective
at the time the Certificate of Merger is filed with the Secretary of State of
Delaware or at such later time as Xxxx and TPG shall have agreed upon and
designated in such filing as the effective time of the Merger (the "EFFECTIVE
TIME").
ARTICLE 3
CERTIFICATE OF INCORPORATION AND BYLAWS
AND OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
3.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of Xxxx
as amended at the Effective Time shall be the Certificate of Incorporation of
the Surviving Corporation, until duly amended in accordance with applicable Law.
3.2 BYLAWS. The Bylaws of Xxxx in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until duly
amended in accordance with applicable Law.
3.3 DIRECTORS. The directors of the Surviving Corporation immediately
after the Effective Time shall be the following Persons:
Xxxxx X. Xxxxxx
Xxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxx
In accordance with the Restated Certificate of Incorporation of Xxxx, as
amended at the Effective Time, the terms of the members of the board of
directors of the Surviving Corporation shall be staggered
Exhibits - 8
such that Mssrs. Simon, Forbes and Xxxxxx shall serve as directors of the
Surviving Corporation for a term of three years, Mssrs. Xxxxxxxx and Xxxxxx
shall serve as directors of the Surviving Corporation for a term of two years,
and Mssrs. Xxxxxxxx, Xxxxxxx and Xxxxxxx shall serve as directors of the
Surviving Corporation for a term of one year.
3.4 OFFICERS. The officers of the Surviving Corporation immediately after
the Effective Time shall be the following Persons:
Chairman of Board, President and
Chief Executive Officer Xxxxx X. Xxxxxx
Executive Vice President, Chief Financial
Officer, Assistant Secretary and
Treasurer Xxxxxxx X. Xxxxxx
Secretary Xxx Xxxx
ARTICLE 4
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES;
OTHER MATTERS
4.1 CONVERSION OF SECURITIES. At the Effective Time, by virtue of the
Merger and without any action on the part of TPG, Xxxx or the holders of any of
their respective securities:
(a) CAPITAL STOCK OF XXXX. Each share of the capital stock of
Xxxx issued and outstanding prior to the Effective Time (other than any
Xxxx Dissenting Shares, if applicable) shall be converted, subject to
SECTION 4.2(E), into the right to receive a number of fully paid and
nonassessable shares of the Surviving Corporation Common Stock equal to
the Xxxx Exchange Ratio. At the Effective Time, all shares of Xxxx Common
Stock outstanding immediately prior to the Effective Time shall no longer
be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each certificate previously evidencing any such shares
shall thereafter represent the right to receive, upon the surrender of
such certificate in accordance with SECTION 4.2 (or in case of a lost,
stolen or destroyed stock certificate, compliance with the provisions of
SECTION 4.2(I)), certificates evidencing such number of whole shares of
Surviving Corporation Common Stock into which such Xxxx Common Stock was
converted in accordance with the first sentence of this SECTION 4.1(A). At
the Effective Time, the holders of such certificates evidencing such
shares of Xxxx Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such shares except as
otherwise provided herein or by Law. No fractional share of Surviving
Corporation Common Stock shall be issued, and, in lieu thereof, a cash
payment shall be made pursuant to SECTION 4.2(E).
(b) TPG COMMON STOCK. Each share of TPG Common Stock issued
and outstanding immediately prior to the Effective Time (other than any
TPG Dissenting Shares, if applicable) shall be converted, subject to
SECTION 4.2(E), into the right to receive a number of fully paid and
nonassessable shares of the Surviving Corporation Common Stock equal to
the TPG Exchange Ratio. At the Effective Time, all shares of TPG Common
Stock outstanding immediately prior to the Effective Time shall no longer
be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each certificate previously evidencing any such shares
shall thereafter represent the right to receive, upon the surrender of
such certificate in accordance with SECTION 4.2
Exhibits - 9
(or in case of a lost, stolen or destroyed stock certificate, compliance
with the provisions of SECTION 4.2(I)), certificates evidencing such
number of whole shares of Surviving Corporation Common Stock into which
such TPG Common Stock was converted in accordance with the first sentence
of this SECTION 4.1(B). At the Effective Time, the holders of such
certificates evidencing such shares of TPG Common Stock outstanding
immediately prior to the Effective Time shall cease to have any rights
with respect to such shares except as otherwise provided herein or by Law.
No fractional share of Surviving Corporation Common Stock shall be issued,
and, in lieu thereof, a cash payment shall be made pursuant to SECTION
4.2(E).
(c) TPG PREFERRED STOCK. Each share of TPG Preferred Stock
issued and outstanding immediately prior to the Effective Time (other than
TPG Dissenting Shares, if applicable) shall be converted into the right to
receive one fully paid and nonassessable share of Surviving Corporation
Preferred Stock. At the Effective Time, all shares of TPG Preferred Stock
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be canceled and retired and shall
cease to exist, and each certificate previously evidencing any such shares
shall thereafter represent the right to receive, upon the surrender of
such certificate in accordance with SECTION 4.2 (or in case of a lost,
stolen or destroyed stock certificate, compliance with the provisions of
SECTION 4.2(I)), certificates evidencing such number of whole shares of
Surviving Corporation Preferred Stock into which such TPG Preferred Stock
was converted in accordance with the first sentence of this SECTION
4.1(C). At the Effective Time, the holders of such certificates evidencing
such shares of TPG Preferred Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares
except as otherwise provided herein or by Law.
(d) SHARES HELD IN TREASURY. Each share of Xxxx Common Stock,
TPG Common Stock and TPG Preferred Stock held in treasury immediately
prior to the Effective Time by Xxxx or TPG, as the case may be, shall be
canceled and extinguished at the Effective Time without any conversion
thereof and without any payment with respect thereto.
4.2 EXCHANGE OF CERTIFICATES. The procedures for exchanging outstanding
shares of TPG Common Stock and Xxxx Common Stock for Surviving Corporation
Common Stock pursuant to the Merger are as follows:
(a) EXCHANGE AGENT. As of the Effective Time, the Surviving
Corporation shall deposit with American Stock Transfer & Trust Co. (the
"EXCHANGE AGENT"), for the benefit of the holders of shares of TPG Common
Stock and Xxxx Common Stock, for exchange in accordance with this SECTION
4.2 through the Exchange Agent, certificates representing the shares of
Surviving Corporation Common Stock and Surviving Corporation Preferred
Stock (such shares of Surviving Corporation Common Stock and Surviving
Corporation Preferred Stock, together with any dividends or distributions
with respect thereto, being hereinafter referred to as the "EXCHANGE
FUND") issuable pursuant to SECTION 4.1 in exchange for outstanding shares
of TPG Common Stock, TPG Preferred Stock or Xxxx Common Stock, as the case
may be.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder of
record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of TPG Common Stock, TPG
Preferred Stock or Xxxx Common Stock, as the case may be (the
"CERTIFICATES"), whose shares were converted pursuant to SECTION 4.1 into
the right to receive shares of Surviving Corporation Common Stock or
Surviving Corporation Preferred Stock, as the case may be, (i) a letter of
Exhibits - 10
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 TPG may reasonably specify prior to the Effective
Time) and (ii) instructions for effecting the surrender of the
Certificates in exchange for certificates representing shares of Surviving
Corporation Common Stock (plus cash in lieu of fractional shares, if any,
of Surviving Corporation Common Stock as provided below) or Surviving
Corporation Preferred Stock, as the case may be. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by the Surviving Corporation, together with
such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Surviving Corporation Common
Stock or Surviving Corporation Preferred Stock that such holder has the
right to receive pursuant to the provisions of this ARTICLE 4, and the
Certificate so surrendered shall immediately be cancelled. In the event of
a transfer of ownership of TPG Common Stock, TPG Preferred Stock or Xxxx
Common Stock, as the case may be, that is not registered in the transfer
records of TPG or Xxxx, as the case may be, a certificate representing the
proper number of shares of Surviving Corporation Common Stock or Surviving
Corporation Preferred Stock, as the case may be, may be issued to a
transferee if the Certificate representing such TPG Common Stock, TPG
Preferred Stock or Xxxx Common Stock, as the case may be, is presented to
the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence that any applicable stock transfer
taxes have been paid. Until surrendered as contemplated by this SECTION
4.2, each Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the certificate
representing shares of Surviving Corporation Common Stock or Surviving
Corporation Preferred Stock, as the case may be, and cash in lieu of any
fractional shares of Surviving Corporation Common Stock as contemplated by
this SECTION 4.2.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions declared or made after the Effective Time
with respect to Surviving Corporation Common Stock or Surviving
Corporation Preferred Stock with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect
to the shares of Surviving Corporation Common Stock or Surviving
Corporation Preferred Stock represented thereby and no cash payment in
lieu of fractional shares shall be paid to any holder of any unsurrendered
certificate with respect to the shares of Surviving Corporation Common
Stock represented thereby pursuant to subsection (e) below until the
holder of record of such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing whole shares of Surviving Corporation Common Stock or
Surviving Corporation Preferred Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Surviving Corporation Common
Stock to which such holder is entitled pursuant to subsection (e) below
and the amount of dividends or other distributions with a record date
after the Effective Time previously paid with respect to such whole shares
of Surviving Corporation Common Stock or Surviving Corporation Preferred
Stock, as the case may be, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Surviving
Corporation Common Stock or Surviving Corporation Preferred Stock, as the
case may be.
(d) NO FURTHER OWNERSHIP RIGHTS IN TPG COMMON STOCK, TPG
PREFERRED STOCK OR XXXX COMMON STOCK. All shares of Surviving Corporation
Common Stock and Surviving Corporation
Exhibits - 11
Preferred Stock issued upon the surrender for exchange of Certificates in
accordance with the terms hereof (including any cash paid pursuant to
SUBSECTION (C) or (E) of this SECTION 4.2) shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of TPG
Common Stock, TPG Preferred Stock or Xxxx Common Stock, as the case may
be, subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by TPG or Xxxx on such
shares of TPG Common Stock, TPG Preferred Stock or Xxxx Common Stock, as
the case may be, in accordance with the terms of this Agreement prior to
the date hereof and which remain unpaid at the Effective Time, and from
and after the Effective Time there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the
shares of TPG Common Stock, TPG Preferred Stock or Xxxx Common Stock that
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 cancelled and exchanged as provided in this
SECTION 4.2.
(e) NO FRACTIONAL SHARES. No certificate or scrip representing
fractional shares of Surviving Corporation Common Stock shall be issued
upon the surrender for exchange of Certificates, and such fractional share
interests will not entitle the owner thereof to vote or to any other
rights of a stockholder of the Surviving Corporation. Notwithstanding any
other provision of this Agreement, each holder of shares of TPG Common
Stock and Surviving Corporation Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a
share of Surviving Corporation Common Stock (after taking into account all
Certificates delivered by such holder) shall receive, in lieu thereof,
cash (without interest) in an amount equal to such fractional part of a
share of Surviving Corporation Common Stock multiplied by the average of
the last reported sales prices of Xxxx Common Stock, as reported on the
Nasdaq SmallCap Market, on each of the five trading days immediately prior
to the date of the Effective Time.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund which remains undistributed to the stockholders of TPG and Xxxx for
180 days after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any stockholders of TPG and Xxxx who have
not previously complied with this SECTION 4.2 shall thereafter look only
to the Surviving Corporation for payment of their claim for Surviving
Corporation Common Stock or Surviving Corporation Preferred Stock, as the
case may be, any cash in lieu of fractional shares of Surviving
Corporation Common Stock and any dividends or distributions with respect
to Surviving Corporation Common Stock or Surviving Corporation Preferred
Stock, as the case may be.
(g) NO LIABILITY. Neither the Surviving Corporation, Xxxx nor
TPG shall be liable to any holder of shares of TPG Common Stock, TPG
Preferred Stock or Xxxx Common Stock, as the case may be, for such shares
(or dividends or distributions with respect thereto) delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
(h) WITHHOLDING RIGHTS. The Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of TPG Common Stock,
TPG Preferred Stock or Xxxx Common Stock such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Code, or any provision of state, local or foreign tax law. If amounts are
so withheld by Surviving Corporation then such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of the shares of TPG Common Stock, TPG Preferred Stock or Xxxx
Common Stock, as the
Exhibits - 12
case may be, in respect of which such deduction and withholding was made
by Surviving Corporation.
(i) LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed and,
if required by the Surviving Corporation, the posting by such person of a
bond in such reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the shares of Surviving Corporation Common
Stock or Surviving Corporation Preferred Stock and any cash in lieu of
fractional shares, and unpaid dividends and distributions on shares of
Surviving Corporation Common Stock deliverable in respect thereof pursuant
to this Agreement.
4.3 STOCK OPTIONS AND WARRANTS.
(a) At the Effective Time, TPG's obligations with respect to each then
outstanding TPG Option shall be assumed by the Surviving Corporation. The TPG
Options so assumed by the Surviving Corporation shall not expire and shall
continue to have, and be subject to, the same terms and conditions as set forth
in the TPG Stock Option Plan and/or any agreements pursuant to which such TPG
Options were granted as in effect immediately prior to the Effective Time,
except that (i) each TPG Option shall be exercisable for that number of whole
shares of Surviving Corporation Common Stock equal to the number of shares of
TPG Common Stock covered by such TPG Option immediately prior to the Effective
Time, multiplied by the TPG Exchange Ratio and rounded downward to the nearest
whole number of shares of Surviving Corporation Common Stock, and (ii) the price
at which each such TPG Option is exercisable shall be divided by the TPG
Exchange Ratio and then rounded upward to the nearest cent.
(b) At the Effective Time, Lunn's obligations with respect to each then
outstanding Xxxx Option and Xxxx Warrant shall be assumed by the Surviving
Corporation. The Xxxx Options and Xxxx Warrants so assumed by the Surviving
Corporation shall not expire and shall continue to have, and be subject to, the
same terms and conditions as set forth in the Xxxx Stock Option Plan and/or any
agreements pursuant to which such Xxxx Options and Xxxx Warrants were granted as
in effect immediately prior to the Effective Time, except that (i) each Xxxx
Option or Xxxx Warrant shall be exercisable for that number of whole shares of
Surviving Corporation Common Stock equal to the number of shares of Xxxx Common
Stock covered by such Xxxx Option or Xxxx Warrant immediately prior to the
Effective Time, multiplied by the Xxxx Exchange Ratio and rounded to the nearest
whole number of shares of Surviving Corporation Common Stock, and (ii) the price
at which each such Xxxx Option or Xxxx Warrant is exercisable shall be divided
by the Xxxx Exchange Ratio and then rounded to the nearest cent.
(c) The Surviving Corporation shall reserve for issuance the aggregate
number of shares of Surviving Corporation Common Stock that will become issuable
upon the exercise of the TPG Options, Xxxx Options and Xxxx Warrants as adjusted
at the Effective Time in accordance with this SECTION 4.3.
(d) At the Effective Time, the Surviving Corporation shall adopt a Stock
Option Plan in substantially the form set forth in EXHIBIT C and 300,000 shares
of Surviving Corporation Common Stock shall be reserved for issuance upon
exercise of options granted under such Stock Option Plan.
4.4 DISSENTING SHARES.
Exhibits - 13
(a) If provided for under the DGCL, notwithstanding any other provision of
this Agreement to the contrary, shares of TPG Common Stock and TPG Preferred
Stock that are outstanding immediately prior to the Effective Time and which are
held by TPG Stockholders who shall not have voted in favor of the Merger or
consented thereto in writing and who shall have demanded properly in writing
payment for such shares in accordance with the DGCL (a "TPG DISSENTER PAYMENT")
and who shall not have withdrawn such demand or have been deemed to or otherwise
have forfeited the right to payment under the DGCL (such shares of TPG Common
Stock and TPG Preferred Stock being referred to as "TPG DISSENTING SHARES")
shall not be converted into or represent the right to receive the Merger
Consideration. Instead, such TPG Stockholders shall be entitled to receive their
TPG Dissenter Payments in accordance with the provisions of the DGCL, except
that all TPG Dissenting Shares held by TPG Stockholders who shall have failed to
perfect who effectively shall have withdrawn or lost the rights to payment for
such shares of TPG Common Stock and TPG Preferred Stock under the DGCL shall
thereupon be deemed to have been converted into, as of the Effective Time, the
right to receive, without any interest thereon, the Merger Consideration, upon
surrender in the manner provided in SECTION 4.2 hereof of the certificate or
certificates that formally evidence such shares of TPG Common Stock and TPG
Preferred Stock (or compliance with SECTION 4.2(I) hereof if applicable) and the
presentation of an executed Transmittal Letter.
(b) TPG shall give Xxxx (i) prompt notice of any demands for TPG Dissenter
Payments received by TPG pursuant to the DGCL, withdrawals of such demands, and
any other instruments served pursuant to the DGCL and received by TPG and (ii)
the opportunity to participate in all negotiations and proceedings with respect
to demands for payment under the DGCL. TPG shall not, except with the prior
written consent of Xxxx (which consent shall not be unreasonably withheld or
delayed), make any payment with respect to any demands for payment of, or offer
to settle, or settle, any such demands.
(c) If provided for under the DGCL, notwithstanding any other provision of
this Agreement to the contrary, shares of Xxxx Common Stock that are outstanding
immediately prior to the Effective Time and which are held by Xxxx Stockholders
who shall not have voted in favor of the Merger or consented thereto in writing
and who shall have demanded properly in writing payment for such shares in
accordance with the DGCL (a "XXXX DISSENTER PAYMENT") and who shall not have
withdrawn such demand or have been deemed to or otherwise have forfeited the
right to payment under the DGCL (such shares of Xxxx Common Stock being referred
to as "XXXX DISSENTING SHARES") shall not be converted into or represent the
right to receive the Merger Consideration. Instead, such Xxxx Stockholders shall
be entitled to receive their Xxxx Dissenter Payments in accordance with the
provisions of the DGCL, except that all Xxxx Dissenting Shares held by Xxxx
Stockholders who shall have failed to perfect who effectively shall have
withdrawn or lost the rights to payment for such shares of Xxxx Common Stock
under the DGCL shall thereupon be deemed to have been converted into, as of the
Effective Time, the right to receive, without any interest thereon, the Merger
Consideration, upon surrender in the manner provided in SECTION 2.6 hereof of
the certificate or certificates that formally evidence such shares of Xxxx
Common Stock (or compliance with SECTION 4.2(I) hereof if applicable) and the
presentation of an executed Transmittal Letter.
(d) Xxxx shall give TPG (i) prompt notice of any demands for Xxxx
Dissenter Payments received by Xxxx pursuant to the DGCL, withdrawals of such
demands, and any other instruments served pursuant to the DGCL received by Xxxx
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for payment under the DGCL. Xxxx shall not, except with the prior
written consent of TPG, make any payment with respect to any demands for payment
of, or offer to settle, or settle, any such demands.
Exhibits - 14
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF XXXX
Except as set forth in the disclosure letter delivered to TPG concurrently
with the execution hereof (the "XXXX DISCLOSURE LETTER") or as disclosed with
reasonable specificity in the Xxxx SEC Reports, Xxxx represents and warrants to
TPG that:
5.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Xxxx is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Xxxx is duly qualified to do business as a
foreign corporation and is in good standing under the laws of any jurisdiction
in which the character if the properties owned or leased by it therein or in
which the transaction of its business makes such qualification necessary, except
where the failure to be so qualified would not have, individually or in the
aggregate, a Material Adverse Effect. Xxxx has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as now conducted. The copies of Lunn's certificate of incorporation and bylaws
previously made available to TPG are true and correct.
5.2 AUTHORIZATION; VALIDITY AND EFFECT OF AGREEMENTS. Xxxx has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents contemplated hereby. The consummation by Xxxx
of the Transactions has been duly authorized by all requisite corporate action,
other than, with respect to the Merger, the approval and adoption of this
Agreement by the Xxxx Stockholders. This Agreement constitutes the valid and
legally binding obligation of Xxxx, enforceable in accordance with its terms.
Xxxx has taken all action necessary to render the restrictions set forth in
Section 203 of the DGCL inapplicable to this Agreement and the Merger.
5.3 CAPITALIZATION. The authorized capital stock of Xxxx consists of
30,000,000 shares of Xxxx Common Stock and 1,000,000 shares of Xxxx Preferred
Stock. As of the date hereof, there are 12,762,153 shares of Xxxx Common Stock
and no shares of Xxxx Preferred Stock issued and outstanding and 150 shares of
Xxxx Common Stock and no shares of Xxxx Preferred Stock are held as treasury
shares. All such issued and outstanding shares of Xxxx Common Stock are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights. There are 1,500,000 shares of Xxxx Common Stock reserved for issuance
pursuant to the Xxxx Stock Option Plan and 656,300 shares of Xxxx Common Stock
reserved for issuance upon exercise of the Xxxx Warrants and, as of the date
hereof, Xxxx Options to purchase 1,167,500 shares of Xxxx Common Stock and Xxxx
Warrants to purchase 656,300 shares of Xxxx Common Stock were outstanding. As of
the date of this Agreement, there are no other outstanding shares of capital
stock and there are no other options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments which
obligate Xxxx or any of its Subsidiaries to issue, transfer or sell and shares
of capital stock or other voting securities of Xxxx or any of its Subsidiaries.
Xxxx has no outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
Xxxx on any matter.
5.4 SUBSIDIARIES. Each of Lunn's Subsidiaries is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own, operate, and lease its properties and to
carry on its business as it is now being conducted, and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership,
operation or lease of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so qualified
or to be in good standing would not have a Material Adverse Effect. Except as
reflected on SCHEDULE 5.4 of the Xxxx Disclosure
Exhibits - 15
Letter, all of the outstanding shares of capital stock, or other ownership
interests in, each of Lunn's Subsidiaries is duly authorized, validly issued,
fully paid and nonassessable, and is owned, directly or indirectly, by Xxxx free
and clear of all Liens. SCHEDULE 5.4 of the Xxxx Disclosure Letter sets forth
the following information for each Subsidiary of Xxxx, as applicable; (i) its
name and jurisdiction of incorporation or organization; (ii) its authorized
capital stock or share capital; and (iii) the number of issued and outstanding
shares of capital stock or share capital.
5.5 NO VIOLATION OF LAW. Neither Xxxx nor any of its Subsidiaries is in
violation of any order of any court, Governmental Authority or arbitration board
or tribunal, or any Law to which Xxxx or any of its Subsidiaries or any of their
respective properties or assets is subject, except as would not have,
individually or in the aggregate, a Material Adverse Effect.
5.6 NO CONFLICT. (a) Neither the execution and delivery by Xxxx of this
Agreement nor the consummation by Xxxx of the Transactions in accordance with
the terms hereof, will: (i) violate any provisions of the certificate of
incorporation or bylaws of Xxxx; (ii) violate any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or accelerate the performance required by, or
result in the creation of any Lien upon any of the properties of Xxxx or its
Subsidiaries under, or result in being declared void, voidable, or without
further binding effect, any of the terms, conditions or provisions of, any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit, lease,
contract, agreement or other instrument or obligation to which Xxxx or any of
its Subsidiaries is a party, or by which Xxxx or any of its Subsidiaries or any
of their properties is bound or affected; or (iii) constitute a violation of any
provision of any Law binding upon or applicable to Xxxx or any of its
Subsidiaries, except, in the case of matters described in clause (ii) or (iii),
as would not have, individually or in the aggregate, a Material Adverse Effect.
(b) Neither the execution and delivery by Xxxx of this Agreement nor
the consummation by Xxxx of the Transactions in accordance with the terms hereof
will require any consent, approval or authorization of, or filing or
registration with, any governmental or regulatory authority, other than (i) such
filings, consents and approvals that are obtained before Closing and (ii)
filings required under the HSR Act, the Exchange Act, the Securities Act or
applicable state securities and "Blue Sky" laws, except for any consent,
approval or authorization the failure of which to obtain and for any filing or
registration the failure of which to make would not have a Material Adverse
Effect.
5.7 SEC DOCUMENTS. Xxxx has made available to TPG each registration
statement, report, proxy statement or information statement (other than
preliminary materials) filed by Xxxx with the SEC since January 1, 1994, each in
the form (including exhibits and any amendments thereto) filed with the SEC
(collectively, the "XXXX SEC REPORTS"). Each of the Xxxx SEC Reports, as of
their respective dates, (i) were prepared in all material respects in accordance
with the applicable requirements of the Securities Act, the Exchange Act, and
the rules and regulations thereunder and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading except for such
statements, if any, as have been modified by subsequent filings prior to the
date hereof. Each of the consolidated balance sheets of Xxxx included in or
incorporated by reference into the Xxxx SEC Reports (including the related notes
and schedules) fairly presents the consolidated financial position of Xxxx and
its Subsidiaries as of its date and each of the consolidated statements of
income, cash flows and changes in stockholders' equity ("RETAINED EARNINGS") of
Xxxx included in or incorporated by reference into the Xxxx SEC Reports
(including any related notes and schedules) fairly presents the results of
operations, cash flows
Exhibits - 16
or retained earnings, as the case may be, of Xxxx and its Subsidiaries for the
periods set forth therein (subject, in the case of unaudited statements, to (x)
such exceptions as may be permitted by Form 10-Q of the SEC and (y) normal
year-end audit adjustments), in each case in accordance with GAAP, except as may
be noted therein. Except as and to the extent set forth on the consolidated
balance sheet of Xxxx and its Subsidiaries at December 31, 1996, including all
notes thereto, neither Xxxx nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on, or reserved against in, a balance
sheet of Xxxx or in the notes thereto prepared in accordance with GAAP, other
than liabilities or obligations which would not have, individually or in the
aggregate, a Material Adverse Effect and liabilities and obligations arising in
the ordinary course of business since such date.
5.8 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the information
supplied or to be supplied by Xxxx for inclusion in (a) the Registration
Statement on Form S-4 to be filed under the Securities Act with the SEC by Xxxx
in connection with the Merger for the purpose of registering the Surviving
Corporation Common Stock to be issued in connection with the Merger (the
"REGISTRATION STATEMENT"), or (b) the proxy statement to be distributed in
connection with the Xxxx Stockholders' Meeting and the TPG Stockholders' Meeting
to vote upon this Agreement and the Transactions (the "PROXY STATEMENT" and,
together with the prospectus included in the Registration Statement, the "JOINT
PROXY STATEMENT/PROSPECTUS") will, in the case of the Proxy Statement or any
amendments thereof or supplements thereto, at the time of the mailing of the
Proxy Statement and any amendments or supplements thereto, at the time of the
Xxxx Stockholders' Meeting and the TPG Stockholders' Meeting to be held in
connection with the Transactions, and at the Effective Time, or, in the case of
the Registration Statement, as amended or supplemented, at the time it is
declared effective by the SEC, 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. The Registration Statement and Joint Proxy
Statement/Prospectus shall comply in all material respects as to form and
substance with the requirements of the Securities Act, the Exchange Act and the
rules and regulations promulgated thereunder, except that no representation is
made by Xxxx with respect to information relating to TPG and included therein,
provided TPG approved of the inclusion of such information in the Registration
Statement and Joint Proxy Statement/Prospectus.
5.9 LITIGATION. There are no actions, suits or proceedings pending against
Xxxx or any of its Subsidiaries or, to Lunn's knowledge, threatened against Xxxx
or any of its Subsidiaries, at law or in equity, or before or by any federal or
state commission, board, bureau, agency or instrumentality, that are likely to
have, individually or in the aggregate, a Material Adverse Effect. There are no
outstanding judgments, decrees, injunctions, awards or orders against Xxxx or
any of its Subsidiaries that are likely to have, individually or in the
aggregate, a Material Adverse Effect. SCHEDULE 5.9 of the Xxxx Disclosure Letter
contains, as of the date of this Agreement, an accurate and complete list of all
actions, suits and proceedings pending or, to the knowledge of Xxxx, threatened
against Xxxx or its Subsidiaries.
5.10 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE 5.10 of
the Xxxx Disclosure Letter, since December 31, 1996, there has not been (i) any
change in the financial condition or business of Xxxx or its Subsidiaries which
has had a Material Adverse Effect, other than any adverse effect resulting from
adverse changes in general economic conditions, stock market fluctuations or
conditions or adverse changes in or affecting the aerospace or high performance
composites industries generally, (ii) any material change by Xxxx in its
accounting methods, principles or practices, (iii) any declaration, setting
aside or payment of any dividend or distribution in respect of any capital stock
of Xxxx or any redemption, purchase or other acquisition of any of its
securities, or (iv) any increase in or establishment of any bonus, insurance,
Exhibits - 17
severance, deferred compensation, pension, retirement, profit sharing, stock
option, stock purchase or other employee benefit plan, except in the ordinary
course of business.
5.11 TAXES. (a) Xxxx and its Subsidiaries have (i) duly filed (or there
has been filed on their behalf) with appropriate governmental authorities all
tax returns, statements, reports and forms required to be filed by them, on or
prior to the date hereof, except to the extent that any failure to file would
not have, individually or in the aggregate, a Material Adverse Effect and (ii)
duly paid in full or made provisions in accordance with GAAP (or there has been
paid or provision has been made on their behalf) for the payment of all material
Taxes for all periods ending through the date hereof or the Closing Date, as the
case may be.
(b) (i) Except as set forth in SCHEDULE 5.11(B), the federal income tax
returns of Xxxx and each of its Subsidiaries have been examined by the IRS (or
the applicable statutes of limitation for the assessment of federal income taxes
for such periods have expired) for all periods through and including December
31, 1996 and all material deficiencies asserted by the IRS have been paid, fully
settled or adequately provided for in the financial statements contained in the
Xxxx SEC Reports; (ii) as of the date hereof, neither Xxxx nor any of its
Subsidiaries has granted any requests, agreements, consents or waivers to extend
the statutory period of limitations applicable to the assessment of any taxes
with respect to any tax returns of Xxxx or any of its Subsidiaries; and (iii)
neither Xxxx nor any of its Subsidiaries is a party to any material tax sharing
or tax indemnity agreement.
5.12 EMPLOYEE BENEFIT PLANS. SCHEDULE 5.12 of the Xxxx Disclosure Letter
contains a list of all employee benefit plans and other benefit arrangements,
including all "employee benefit plans" as defined in ERISA, covering employees
of Xxxx and its Subsidiaries (the "XXXX BENEFIT PLANS"). True and complete
copies of the Xxxx Benefit Plans and, if applicable, the most recent Form 5500
and annual reports for each such plan have been made available to TPG. To the
extent applicable, the Xxxx Benefit Plans comply, in all material respects, with
the requirements of the ERISA and the Code, and any Xxxx Benefit Plan intended
to be qualified under section 401(a) of the Code has been determined by the IRS
to be so qualified. To Lunn's knowledge, there are no pending or anticipated
claims against or otherwise involving any Xxxx Benefit Plan and no suit, action
or other litigation (excluding claims for benefits incurred in the ordinary
course of Xxxx Benefit Plan activities) has been brought against or with respect
to any such Xxxx Benefit Plan, except for any of the foregoing which,
individually or in the aggregate, would not have a Material Adverse Effect. All
material contributions required to be made as of the date hereof to any Xxxx
Benefit Plans have been made or provided for. Xxxx does not maintain or
contribute to any plan or arrangement which provides or has any liability to
provide life insurance, medical or other employee welfare benefits to any
employee or former employee upon his retirement or termination of employment and
Xxxx has not represented, promised or contracted (whether in oral or written
form) to any employee or former employee that such benefits would be provided.
Except for any liability or any excise tax which would not have a Material
Adverse Effect, (i) neither Xxxx nor any of its Subsidiaries has incurred any
direct or indirect liability under title IV of ERISA in connection with the
termination of, or withdrawal from, any Xxxx Benefit Plan; (ii) there does not
exist with respect to any Xxxx Benefit Plan any accumulated funding deficiency
within the meaning of section 412 of the Code or section 302 of ERISA, whether
or not waived; and (iii) no prohibited transaction has occurred with respect to
any Xxxx Benefit Plan that would result in the imposition of any excise tax or
other liability under the Code or ERISA. The execution of this Agreement and the
performance of the Transactions will not (either alone or upon the occurrence of
any additional or subsequent events) constitute an event under any benefit plan,
policy, arrangement or agreement or any trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligations to
fund benefits with respect to any employee.
Exhibits - 18
5.13 LABOR MATTERS. Except as set forth on SCHEDULE 5.13 of the Xxxx
Disclosure Letter, neither Xxxx nor any of its Subsidiaries is a party to, or
bound by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. To Lunn's knowledge,
there are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of Xxxx or any of its Subsidiaries.
5.14 ENVIRONMENTAL MATTERS. Except as would not have, individually or in
the aggregate, a Material Adverse Effect and except as set forth on SCHEDULE
5.14:
(a) there are not any past or present conditions or
circumstances that interfere with the conduct of the business of Xxxx and
each of its Subsidiaries in the manner now conducted or that interfere
with compliance with any order of any court, governmental authority or
arbitration board or tribunal, or any law, ordinance, governmental rule or
regulation related to human health or the environment ("ENVIRONMENTAL
LAW");
(b) there are not any past or present conditions or
circumstances that, or arising out of, any current or former businesses,
assets or properties of Xxxx or any Subsidiary of Xxxx, including but not
limited to on-site or off-site disposal or release of any chemical
substance, product or waste, which may give rise to: (i) liabilities or
obligations for any cleanup, remediation or corrective action under any
Environmental Law or (ii) claims arising for personal injury, property
damage or damage to natural resources; and
(c) neither Xxxx nor any of its Subsidiaries has (i) received
any notice of noncompliance with, violation of, or liability or potential
liability under any Environmental Law or (ii) entered into any consent
decree or order or is subject to any order of any court or governmental
authority or tribunal under any Environmental Law or relating to the
cleanup of any hazardous materials contamination.
5.15 TITLE TO PROPERTIES. Xxxx has, or will have at Closing, good and
marketable title to all its assets, free and clear of all Liens, except for
Permitted Liens, the Liens set forth on SCHEDULE 5.15 of the Xxxx Disclosure
Letter, and Liens expressly disclosed in the Xxxx SEC Reports. No Xxxx
Stockholder owns in his individual capacity any of Lunn's assets or any other
properties or assets used in its business.
5.16 CONDITION OF FIXED ASSETS. Except as set forth on SCHEDULE 5.16 of
the Xxxx Disclosure Letter, the machinery, equipment and other tangible
properties included in the assets of Xxxx, are in good operating condition
(ordinary wear and tear excepted) and have been maintained by Xxxx in accordance
with industry standards, are acceptable for their intended uses in the ordinary
course consistent with past practices and conform in all material respects with
all applicable ordinances, regulations and other laws and there are no known
defects therein.
5.17 ASSETS USED IN THE BUSINESS. Lunn's assets as reflected on Lunn's
Most Recent Balance Sheet are all of the assets and leaseholds used by Xxxx in
the conduct of its business as now being conducted, and are all of the assets
and leasehold interests necessary therefor.
5.18 ACCOUNTS RECEIVABLE. Subject to any reserves therefor established in
a consistent manner throughout the period covered by the Xxxx Financial
Statements in accordance with GAAP, and except as reflected in Lunn's Most
Recent Balance Sheet, all accounts, notes, and other receivables reflected in
the Xxxx Financial Statements or generated after the date of Lunn's Most Recent
Balance Sheet, with respect
Exhibits - 19
to Lunn's business, are valid and genuine, arise out of bona fide sales and
either have been collected or are enforceable and collectible claims not subject
to any valid defense, offset or credit. All accounts receivable are recorded on
the books of Xxxx in accordance with GAAP. Xxxx has delivered to TPG the
accounts receivable aging report of Xxxx as of April 30, 1997.
5.19 INVENTORIES. Subject to any reserves therefor established in a
consistent manner throughout the period covered by the Xxxx Financial Statements
in accordance with GAAP, and except as reflected in Lunn's Most Recent Balance
Sheet, the inventories of Lunn's business reflected in the financial statements
of Xxxx contained in the Xxxx Financial Statements or acquired since the date of
Lunn's Most Recent Balance Sheet, consist of items that are in good, current,
standard, and merchantable condition, and are of a quantity and quality salable
in the ordinary course of business.
5.20 MATERIAL AGREEMENTS. Except as set forth in the Xxxx Disclosure
Letter, Xxxx has no material contracts which are required to be filed as
exhibits to the Xxxx SEC Reports which have not been so filed, and complete
copies of the contracts identified in the Xxxx Disclosure Letter have been
furnished to TPG.
5.21 TRADEMARKS, PATENTS AND COPYRIGHTS. SCHEDULE 5.21 of the Xxxx
Disclosure Letter describes all patents, patent rights, trademarks, trademark
rights and proprietary information used or held for use in connection with their
respective businesses as currently being conducted (the "XXXX INTELLECTUAL
PROPERTY"). Except as previously disclosed to TPG in writing, to the knowledge
of Xxxx, Xxxx and its Subsidiaries own or possess adequate licenses or other
valid rights to use the Xxxx Intellectual Property, except where the failure to
own or possess such license and other rights would not have, individually or in
the aggregate, a Material Adverse Effect, and there are no assertions or claims
challenging the validity of any of the foregoing which are likely to have,
individually or in the aggregate, a Material Adverse Effect. To the knowledge of
Xxxx, the conduct of Lunn's and its Subsidiaries' respective businesses as
currently conducted does not conflict with any patents, patent rights, licenses,
trademarks, trademark rights, trade names, trade name rights or copyrights of
others in any way likely to have, individually or in the aggregate, a Material
Adverse Effect. To the knowledge of Xxxx, there is no material infringement of
any proprietary right owned by or licenses by or to Xxxx or any of its
Subsidiaries which is likely to have, individually or in the aggregate, a
Material Adverse Effect.
5.22 INSURANCE. Xxxx has previously delivered to TPG a schedule listing
the officers' and directors' liability insurance policies, primary and excess
casualty insurance policies providing coverage for bodily injury and property
damage to third parties, including products liability and completed operations
coverage, and worker's compensation insurance policies maintained by Xxxx and
its Subsidiaries. Xxxx and its Subsidiaries maintain insurance coverage
reasonably adequate for the operation of their respective businesses (taking
into account the cost and availability of such insurance).
5.23 LICENSES AND PERMITS. Set forth on SCHEDULE 5.23 of the Xxxx
Disclosure Letter is a list of all material permits, licenses, consents,
approvals and governmental or regulatory authorizations used by or affecting the
conduct of Lunn's business. Xxxx has all licenses and permits (federal, state
and local) necessary to own its assets and to conduct its operations, and such
licenses and permits are in full force and effect. No violations are or have
been recorded in respect of such licenses or permits and no proceeding is
pending or, to the knowledge of Xxxx, threatened, seeking the revocation or
limitation of any of such licenses or permits.
5.24 FEDERAL INCOME TAX REPRESENTATIONS.
Exhibits - 20
(a) Xxxx is undertaking the Merger for a bona fide business purpose and
not merely for the avoidance of federal income tax.
(b) Xxxx is not an investment company as defined in Section 368(a)(2)(F)
(iii) and (iv) of the Code.
5.25 NO BROKERS. Xxxx has not entered into any contract, arrangement or
understanding with any person or firm that may result in the obligation of the
Surviving Corporation to pay any finder's fees, brokerage or agent's commissions
or other like payments in connection with the negotiations leading to this
Agreement or the consummation of the Transactions, except that Xxxx has retained
Xxxxx & Company Incorporated to render a fairness opinion with respect to the
transaction, the arrangements with which have been disclosed in writing to TPG
prior to the date hereof.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF TPG
Except as set forth in the disclosure letter delivered to Xxxx
concurrently with the execution hereof (the "TPG DISCLOSURE LETTER"), TPG
represents and warrants to Xxxx that:
6.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. TPG is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. TPG is duly qualified to do business as a foreign
corporation and is in good standing under the laws of any jurisdiction in which
the character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, except where the
failure to be so qualified would not have, individually or in the aggregate, a
Material Adverse Effect. TPG has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as now
conducted. The copies of TPG's certificate of incorporation and bylaws
previously made available to Xxxx are true and correct.
6.2 AUTHORIZATION; VALIDITY AND EFFECT OF AGREEMENTS. TPG has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents contemplated hereby. The consummation by TPG of
the Transactions has been duly authorized by all requisite corporate action,
other than, with respect to the Merger, the approval and adoption of this
Agreement by the TPG Stockholders. This Agreement constitutes the valid and
legally binding obligation of TPG, enforceable in accordance with its terms. TPG
has taken all action necessary to render the restrictions set forth in Section
203 of the DGCL inapplicable to this Agreement and the Merger.
6.3 CAPITALIZATION. The authorized capital stock of TPG consists of
1,000,000 shares of TPG Common Stock and 1,000,000 shares of TPG Preferred
Stock. As of the date hereof, there are 475,000 shares of TPG Common Stock and
1,000,000 shares of TPG Preferred Stock issued and outstanding and no shares of
TPG Common Stock or and TPG Preferred Stock are held as treasury shares. All
such issued and outstanding shares of TPG Common Stock are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights. Except
as set forth in SCHEDULE 6.3, there are 25,000 shares of TPG Common Stock
reserved for issuance pursuant to the TPG Stock Option Plan and, as of the date
hereof, TPG Options to purchase 25,000 shares of TPG Common Stock are
outstanding. There are no other outstanding shares of capital stock and there
are no other options, warrants, calls, subscriptions, convertible securities, or
other rights, agreements or commitments which obligate TPG or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock or other
voting securities of TPG or any of its Subsidiaries. TPG has no
Exhibits - 21
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of TPG on any matter.
6.4 SUBSIDIARIES. Each of TPG's Subsidiaries is a corporation or
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own, operate, and lease its properties and to
carry on its business as it is now being conducted, and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership,
operation or lease of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so qualified
or to be in good standing would not have a Material Adverse Effect. Except as
reflected on SCHEDULE 6.4 of the TPG Disclosure Letter, all of the outstanding
shares of capital stock, or other ownership interests in, each of TPG's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable,
and is owned, directly or indirectly, by TPG free and clear of all Liens.
SCHEDULE 6.4 of the TPG Disclosure Letter sets forth the following information
for each Subsidiary of TPG, as applicable; (a) its name and jurisdiction of
incorporation or organization; (b) its authorized capital stock or share
capital; and (c) the number of issued and outstanding shares of capital stock or
share capital.
6.5 NO VIOLATION OF LAW. Neither TPG nor any of its Subsidiaries is in
violation of any order of any court, Governmental Authority or arbitration board
or tribunal, or any Law, to which TPG or any of its Subsidiaries or any of their
respective properties or assets is subject, except as would not have,
individually or in the aggregate, a Material Adverse Effect.
6.6 NO CONFLICT. (a) Except as set forth in SCHEDULE 6.6(A) of the TPG
Disclosure Letter, neither the execution and delivery by TPG of this Agreement
nor the consummation by TPG of the Transactions in accordance with the terms
hereof, will: (i) violate any provisions of the certificate of incorporation or
bylaws of TPG; (ii) violate any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination or in a right of termination or cancellation
of, or accelerate the performance required by, or result in the creation of any
Lien upon any of the properties of TPG or its Subsidiaries under, or result in
being declared void, voidable, or without further binding effect, any of the
terms, conditions or provisions of, any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, lease, contract, agreement or other
instrument or obligation to which TPG or any of its Subsidiaries is a party, or
by which TPG or any of its Subsidiaries or any of their properties is bound or
affected; or (iii) constitute a violation of any provision of any Law binding
upon or applicable to TPG or any of its Subsidiaries, except, in the case of
matters described in clause (ii) or (iii), as would not have, individually or in
the aggregate, a Material Adverse Effect.
(b) Neither the execution and delivery by TPG of this Agreement nor
the consummation by TPG of the Transactions in accordance with the terms hereof
will require any consent, approval or authorization of, or filing or
registration with, any governmental or regulatory authority, other than (i) such
filings, consents and approvals that are obtained before the Closing and (ii)
filings required under the HSR Act, the Exchange Act, the Securities Act or
applicable state securities and "Blue Sky" laws, except for any consent,
approval or authorization the failure of which to obtain and for any filing or
registration the failure of which to make would not have a Material Adverse
Effect.
6.7 FINANCIAL STATEMENTS. SCHEDULE 6.7 of the TPG Disclosure Letter
contains the audited consolidated financial statements of TPG for the fiscal
years ended December 31, 1995 and December 31, 1996 and the unaudited
consolidated financial statements of TPG for the quarter ended April 4, 1997
Exhibits - 22
(collectively, the "TPG FINANCIAL STATEMENTS"). Each of the balance sheets
included in the TPG Financial Statements (including the related notes and
schedules) fairly presents the consolidated financial position of TPG as of its
date and each of the statements of income, retained earnings and cash flows
(including any related notes and schedules) fairly presents the consolidated
results of operations, retained earnings and cash flows, respectively, of TPG
for the periods set forth therein (subject, in the case of interim statements,
to normal year-end audit adjustments which will be consistent with prior years'
adjustments and which would not be material in amount or effect, and except as
disclosed in SCHEDULE 6.7 of the TPG Disclosure Letter) in each case in
accordance with GAAP consistently applied during the periods involved, except as
may be noted therein and except for the absence of notes, a consolidated
statement of cash flow and a consolidated statement of shareholders' equity in
interim statements. Except as and to the extent set forth on the consolidated
balance sheet of TPG and its Subsidiaries at December 31, 1996, including all
notes thereto, neither TPG nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that would be required to be reflected on, or reserved against in, a balance
sheet of TPG or in the notes thereto prepared in accordance with GAAP, other
than liabilities or obligations which would not have, individually or in the
aggregate, a Material Adverse Effect and liabilities and obligations arising in
the ordinary course of business since such date.
6.8 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the information
supplied or to be supplied by TPG for inclusion in (a) the Registration
Statement, or (b) the Proxy Statement will, in the case of the Proxy Statement
or any amendments thereof or supplements thereto, at the time of the mailing of
the Proxy Statement and any amendments or supplements thereto, at the time of
the Xxxx Stockholders' Meeting and the TPG Stockholders' Meeting, and at the
Effective Time, or, in the case of the Registration Statement, as amended or
supplemented, at the time it is declared effective by the SEC, 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. The
Registration Statement and Joint Proxy Statement/Prospectus shall comply in all
material respects as to form and substance with the requirements of the
Securities Act, the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation is made by TPG with respect to
information supplied by Xxxx for inclusion therein.
6.9 LITIGATION. There are no actions, suits or proceedings pending against
TPG or any of its Subsidiaries or, to TPG's knowledge, threatened against TPG or
any of its Subsidiaries, at law or in equity, or before or by any federal or
state commission, board, bureau, agency or instrumentality, that are likely to
have, individually or in the aggregate, a Material Adverse Effect. There are no
outstanding judgments, decrees, injunctions, awards or orders against TPG or any
of its Subsidiaries that are likely to have, individually or in the aggregate, a
Material Adverse Effect. SCHEDULE 6.9 of the TPG Disclosure Letter contains, as
of the date of this Agreement, an accurate and complete list of all actions,
suits and proceedings pending or, to the knowledge of TPG, threatened against
TPG or its Subsidiaries.
6.10 ABSENCE OF CERTAIN CHANGES. Except as reflected in SCHEDULE 6.10,
since December 31, 1996, there has not been (i) any change in the financial
condition or business of TPG or its Subsidiaries which has had a Material
Adverse Effect, other than any adverse effect resulting from adverse changes in
general economic conditions, stock market fluctuations or conditions or adverse
changes in or affecting the aerospace or high performance composites industries
generally, (ii) any material change by TPG in its accounting methods, principles
or practices, (iii) any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of TPG or any redemption, purchase
or other acquisition of any of its securities, or (iv) any increase in or
establishment of any bonus, insurance, severance, deferred
Exhibits - 23
compensation, pension, retirement, profit sharing, stock option, stock purchase
or other employee benefit plan, except in the ordinary course of business.
6.11 TAXES. (a) TPG and its Subsidiaries have (i) duly filed (or there has
been filed on their behalf) with appropriate governmental authorities all tax
returns, statements, reports and forms required to be filed by them, on or prior
to the date hereof, except to the extent that any failure to file would not
have, individually or in the aggregate, a Material Adverse Effect and (ii) duly
paid in full or made provisions in accordance with GAAP (or there has been paid
or provision has been made on their behalf) for the payment of all material
Taxes for all periods ending through the date hereof on the Closing Date, as the
case may be.
(b) (i) Except as reflected in SCHEDULE 6.11(B), the federal income tax
returns of TPG and each of its Subsidiaries have been examined by the IRS (or
the applicable statutes of limitation for the assessment of federal income taxes
for such periods have expired) for all periods through and including December
31, 1996, and all material deficiencies asserted by the IRS have been paid,
fully settled or adequately provided for in the TPG financial statements; (ii)
as of the date hereof, neither TPG nor any of its Subsidiaries has granted any
requests, agreements, consents or waivers to extend the statutory period of
limitations applicable to the assessment of any taxes with respect to any tax
returns of TPG or any of its Subsidiaries; and (iii) neither TPG nor any of its
Subsidiaries is a party to any material tax sharing of tax indemnity agreement.
6.12 EMPLOYEE BENEFIT PLANS. SCHEDULE 6.12 of the TPG Disclosure Letter
contains a list of all employee benefit plans and other benefit arrangements,
including all "employee benefit plans" as defined in ERISA, covering employees
of TPG and its Subsidiaries (the "TPG BENEFIT PLANS"). True and complete copies
of TPG Benefit Plans and, if applicable, the most recent Form 5500 and annual
reports for each such plan have been made available to TPG. To the extent
applicable, TPG Benefit Plans comply, in all material respects, with the
requirements of ERISA and the Code, and any TPG Benefit Plan intended to be
qualified under section 401(a) of the Code has been determined by the IRS to be
so qualified. To TPG's knowledge, there are no pending or anticipated claims
against or otherwise involving any TPG Benefit Plan and no suit, action or other
litigation (excluding claims for benefits incurred in the ordinary course of TPG
Benefit Plan activities) has been brought against or with respect to any such
TPG Benefit Plan, except for any of the foregoing which, individually or in the
aggregate, would not have a Material Adverse Effect. All material contributions
required to be made as of the date hereof TPG Benefit Plans have been made or
provided for. TPG does not maintain or contribute to any plan or arrangement
which provides or has any liability to provide life insurance, medical or other
employee welfare benefits to any employee or former employee upon his retirement
or termination of employment and TPG has not represented, promised or contracted
(whether in oral or written form) to any employee or former employee that such
benefits would be provided. Except for any liability or any excise tax which
would not have a Material Adverse Effect, (i) neither TPG nor any of its
Subsidiaries has incurred any direct or indirect liability under title IV of
ERISA in connection with the termination of, or withdrawal from, any TPG Benefit
Plan; (ii) there does not exist with respect to any TPG Benefit Plan any
accumulated funding deficiency within the meaning of section 412 of the Code or
section 302 of ERISA, whether or not waived; and (iii) no prohibited transaction
has occurred with respect to any TPG Benefit Plan that would result in the
imposition of any excise tax or other liability under the Code or ERISA. The
execution of this Agreement and the performance of the Transactions will not
(either alone or upon the occurrence of any additional or subsequent events)
constitute an event under any benefit plan, policy, arrangement or agreement or
any trust or loan that will or may result in any payment (whether of severance
pay or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligations to fund benefits with respect
to any employee.
Exhibits - 24
6.13 LABOR MATTERS. Except as reflected on SCHEDULE 6.13, neither TPG nor
any of its Subsidiaries is a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization. To TPG's knowledge, there are no organizational efforts with
respect to the formation of any collective bargaining unit presently being made
or threatened involving employees of TPG or any of its Subsidiaries.
6.14 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE 6.14 and as
would not have, individually or in the aggregate, a Material Adverse Effect and
except as set forth on SCHEDULE 6.14:
(a) there are not any past or present conditions or
circumstances that interfere with the conduct of the business of TPG and
each of its Subsidiaries in the manner now conducted or that interfere
with compliance with any order of any court, governmental authority or
arbitration board or tribunal, or any Environmental Law;
(b) there are not any past or present conditions or
circumstances at, or arising out of, any current or former businesses,
assets or properties of TPG or any Subsidiary of TPG, including but not
limited to on-site or off-site disposal or release of any chemical
substance, product or waste, which may give rise to: (i) liabilities or
obligations for any cleanup, remediation or corrective action under any
Environmental Law or (ii) claims arising for personal injury, property
damage or damage to natural resources; and
(c) neither TPG nor any of its Subsidiaries has (i) received
any notice of noncompliance with, violation of, or liability or potential
liability under any Environmental Law or (ii) entered into any consent
decree or order or is subject to any order of any court or governmental
authority or tribunal under any Environmental Law or relating to the
cleanup of any hazardous materials contamination.
6.15 TITLE TO PROPERTIES. TPG has, or will have at Closing, good and
marketable title to all its assets, free and clear of all Liens, except for
Permitted Liens and the liens set forth on SCHEDULE 6.15 of the TPG Disclosure
Letter. No TPG Stockholder owns in his individual capacity any of TPG's assets
or any other properties or assets used in its business.
6.16 CONDITION OF FIXED ASSETS. The machinery, equipment and other
tangible properties included in the assets of TPG, are in good operating
condition (ordinary wear and tear excepted) and have been maintained by TPG in
accordance with industry standards, are acceptable for their intended uses in
the ordinary course consistent with past practices and conform in all material
respects with all applicable ordinances, regulations and other laws and there
are no known defects therein.
6.17 ASSETS USED IN THE BUSINESS. TPG's assets are all of the assets and
leaseholds used by TPG in the conduct of its business as now being conducted,
and are all of the assets and leasehold interests necessary therefor.
6.18 ACCOUNTS RECEIVABLE. Subject to any reserves therefor established in
a consistent manner throughout the periods covered by the TPG Financial
Statements in accordance with GAAP, and except as reflected in TPG's Most Recent
Balance Sheet, all accounts, notes, and other receivables reflected in the TPG
Financial Statements, or generated after TPG's Most Recent Balance Sheet, with
respect to TPG's business, are valid and genuine, arise out of bona fide sales
and either have been collected or are enforceable and collectible claims not
subject to any valid defense, offset or credit. All accounts receivable are
recorded on
Exhibits - 25
the books of TPG in accordance with GAAP. TPG has delivered to Xxxx the accounts
receivable aging report of TPG as of March 31, 1997.
6.19 INVENTORIES. Subject to any reserves therefor established in a
consistent manner throughout the periods covered by the TPG Financial Statements
in accordance with GAAP, and except as reflected in TPG's Most Recent Balance
Sheet, the inventories of TPG's business reflected in the TPG Financial
Statements or acquired since the date of TPG's Most Recent Balance Sheet consist
of items that are in good, current, standard, and merchantable condition, and
are of a quantity and quality salable in the ordinary course of business.
6.20 MATERIAL AGREEMENTS. SCHEDULE 6.20 of the TPG Disclosure Letter lists
and describes all material contracts which TPG would be required to file as
exhibits to SEC Reports if TPG were a Reporting Person. Complete copies of the
contracts identified in the TPG Disclosure Letter have been made available to
Xxxx.
6.21 TRADEMARKS, PATENTS AND COPYRIGHTS. SCHEDULE 6.21 to the TPG
Disclosure Letter describes all patents, patent rights, trademarks, trademark
rights and proprietary information used or held for use in connection TPG and
its Subsidiaries' respective businesses as currently being conducted (the "TPG
INTELLECTUAL PROPERTY"). Except as previously disclosed to Xxxx in writing, to
the knowledge of TPG, TPG and its Subsidiaries own or possess adequate licenses
or other valid rights to use the TPG Intellectual Property, except where the
failure to own or possess such license and other rights would not have,
individually or in the aggregate, a Material Adverse Effect, and to the
knowledge of TPG, there are no assertions or claims challenging the validity of
any of the foregoing which are likely to have, individually or in the aggregate,
a Material Adverse Effect. To the knowledge of TPG, the conduct of TPG's and its
Subsidiaries' respective businesses as currently conducted does not conflict
with any patents, patent rights, licenses, trademarks, trademark rights, trade
names, trade name rights or copyrights of others in any way likely to have,
individually or in the aggregate, a Material Adverse Effect. To the knowledge of
TPG, there is no material infringement of any proprietary right owned by or
licenses by or to TPG or any of its Subsidiaries which is likely to have,
individually or in the aggregate, a Material Adverse Effect.
6.22 INSURANCE. TPG has made available to Xxxx copies of all officers' and
directors' liability insurance policies, primary and excess casualty insurance
policies providing coverage for bodily injury and property damage to third
parties, including products liability and completed operations coverage, and
worker's compensation insurance policies maintained by TPG and its Subsidiaries.
TPG and its Subsidiaries maintain insurance coverage reasonably adequate for the
operation of their respective businesses (taking into account the cost and
availability of such insurance).
6.23 LICENSES AND PERMITS. Set forth on SCHEDULE 6.23 of the TPG
Disclosure Letter is a list of all material permits, licenses, consents,
approvals and governmental or regulatory authorizations used by or affecting the
conduct of TPG's business. TPG has all licenses and permits (federal, state and
local) necessary to own its assets and to conduct its operations, and such
licenses and permits are in full force and effect. No violations are or have
been recorded in respect of such licenses or permits and no proceeding is
pending or, to the knowledge of TPG, threatened, seeking the revocation or
limitation of any of such licenses or permits.
6.24 FEDERAL INCOME TAX REPRESENTATIONS
Exhibits - 26
(a) TPG is undertaking the Merger for a bona fide business purpose and not
merely for the avoidance of federal income tax.
(b) TPG is not an investment company as defined in Section 368(a)(2)(F)
(iii) and (iv) of the Code.
6.25 NO BROKERS. TPG has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of TPG
or Xxxx to pay any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the Transactions.
ARTICLE 7
COVENANTS
7.1 COVENANTS OF TPG AND XXXX. During the period from the date hereof and
continuing until the Effective Time (except as expressly contemplated or
permitted hereby, or to the extent Xxxx consents in writing in the case of TPG's
obligations and to the extent TPG consents in writing in the case of Lunn's
obligations) each of TPG and Xxxx covenants with the other that, insofar as the
obligations relate to it:
(a) TPG and Xxxx and their respective Subsidiaries shall each carry on and
conduct their respective businesses only in the ordinary course in substantially
the same manner as previously conducted and shall use all commercially
reasonable efforts to preserve intact their present business organizations,
maintain their rights and franchises and preserve their relationships with
customers, suppliers and others having business dealings with them to the end
that their businesses shall not be impaired in any material respect at the
Effective Time.
(b) TPG and Xxxx and their respective subsidiaries shall cooperate in all
commercially reasonable respects and promptly prepare, and Xxxx shall file with
the SEC as soon as practicable, the Registration Statement, a portion of which
Registration Statement shall also serve as the proxy statement with respect to
the Xxxx Stockholders' Meeting and the TPG Stockholders' Meeting in connection
with the Merger. The respective parties will cause the Joint Proxy
Statement/Prospectus and the Registration Statement to comply as to form in all
material respects with the applicable provisions of the Securities Act and the
rules and regulations thereunder. Xxxx shall use all commercially reasonable
efforts, and TPG will cooperate in all commercially reasonable respects with
Xxxx, to have the Registration Statement declared effective by the SEC as
promptly as practicable. Xxxx shall use all commercially reasonable efforts to
obtain, prior to the effective date of the Registration Statement, all necessary
state securities law permits or approvals required to carry out the
Transactions. TPG shall furnish all information concerning TPG and the TPG
Stockholders' as Xxxx may reasonably request in connection with such actions. As
promptly as practicable after the Registration Statement shall have become
effective, Xxxx shall mail the Joint Proxy Statement/Prospectus to the Xxxx
Stockholders and the TPG Stockholders. Xxxx agrees that the Joint Proxy
Statement/Prospectus at the time of mailing thereof and at the time of the Xxxx
Stockholders' Meeting or the TPG Stockholders' Meeting (or during the period
that consents are solicited or received) will not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact relates TPG and was approved by TPG for use
in the Joint
Exhibits - 27
Proxy Statement/Prospectus. TPG agrees that the information relating to TPG
provided to Xxxx for use in the Joint Proxy Statement/Prospectus, at the time of
mailing thereof and at the time of the Xxxx Stockholders' Meeting and the TPG
Stockholders' Meeting (or during the period that consents are solicited or
received), will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Neither the Joint Proxy Statement/Prospectus nor any amendment
or supplement to the Joint Proxy Statement/Prospectus will be made by TPG or
Xxxx without the approval of the other party. Xxxx will advise TPG, promptly
after it receives notice thereof, of the time when the Registration Statement
has become effective. TPG and Xxxx each hereby (i) consents to the use of its
name, and on behalf of its Affiliates, the names of such Affiliates and to the
inclusion of financial statements and business information relating to such
party and its Affiliates (in each case, to the extent required by applicable
securities Laws) in the Registration Statement or Joint Proxy
Statement/Prospectus and (ii) agrees to use commercially reasonable efforts to
obtain the written consent of any Person retained by it which may be required to
be named (as an expert or otherwise) in the Registration Statement or Joint
Proxy Statement/Prospectus. Xxxx shall not amend or supplement the Registration
Statement at any time after it is filed with the SEC without first obtaining the
consent of TPG, which consent shall not be unreasonably withheld or delayed.
(c) TPG and Xxxx shall each use their commercially reasonable efforts to
(i) take, or cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary and proper under applicable law to consummate and
make effective the Transactions as promptly as practicable, (ii) obtain from any
Governmental Authority or any other third party any consents, licenses, permits,
waivers, approvals, authorizations, or orders required to be obtained or made by
TPG or Xxxx or any of their Subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
Transactions including, without limitation, the Merger, and (iii) as promptly as
practicable, make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (A)
the Securities Act and the Exchange Act, and any other applicable federal or
state securities laws, (B) the HSR Act and any related governmental request
thereunder, or (C) any other applicable law. TPG and Xxxx shall cooperate with
each other in connection with the making of all such filings, including
providing copies of all such documents to the non-filing party and its advisors
prior to filing and, if requested, to accept all reasonable additions, deletions
or changes suggested in connection therewith. TPG and Xxxx shall use their
commercially reasonable efforts to furnish to each other all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable law (including all information required to be
included in the Joint Proxy Statement and the Registration Statement) in
connection with the Transactions.
(d) Xxxx and TPG agree, and shall cause each of their respective
Subsidiaries, to cooperate and to use their respective commercially reasonable
efforts to obtain any government clearances required for Closing (including
through compliance with the HSR Act and any applicable foreign government
reporting requirements), to respond to any government requests for information,
and to contest and resist any action, including any legislative, administrative
or judicial action, and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order (whether temporary, preliminary or
permanent) that restricts, prevents or prohibits the consummation of the Merger
or any other Transactions, including, without limitation, by pursuing all
commercially reasonable avenues of administrative and judicial appeal. Xxxx and
TPG also agree to take any and all of the following actions to the extent
necessary to obtain the approval of any Governmental Authority with jurisdiction
over the enforcement of any applicable laws regarding the Merger: entering into
negotiations; providing information; substantially complying with any second
request for information pursuant to the HSR Act; making proposals; entering into
and performing agreements or submitting to judicial or administrative orders;
selling or otherwise disposing of, or holding separate (through
Exhibits - 28
the establishment of a trust or otherwise) particular assets or categories of
assets, or businesses of Xxxx, TPG or any of their Affiliates; and withdrawing
from doing business in a particular jurisdiction. The parties hereto will
consult and cooperate with one another, and consider in good faith the views of
one another, in connection with any analyses, appearances, presentations,
memoranda, briefs, arguments, opinions and proposals made or submitted by or on
behalf of any party hereto in connection with proceedings under or relating to
the HSR Act or any other federal, state or foreign antitrust or fair trade law.
Xxxx shall be entitled to direct any proceedings or negotiations with any
Governmental Authority relating to any of the foregoing, provided that it shall
afford TPG a reasonable opportunity to participate therein. Notwithstanding
anything to the contrary in this SECTION 7.1(D), neither Xxxx nor TPG nor any of
their respective Subsidiaries shall be required to take any action that would
reasonably be expected to substantially impair the overall benefits expected, as
of the date hereof, to be realized from the consummation of the Merger.
(e) Prior to the Closing, TPG and Xxxx shall adhere to and abide by the
terms and conditions of that certain Confidentiality Agreement dated as of March
21, 1997 (the "CONFIDENTIALITY AGREEMENT").
7.2 COVENANTS OF XXXX. Xxxx covenants and agrees with TPG that during the
period from the date hereof and continuing until the Effective Time (except as
expressly contemplated or permitted hereby, or to the extent that TPG shall
otherwise consent in writing):
(a) Xxxx hereby agrees as follows:
(i) (A) Prior to the Effective Time, neither it nor any
of is Subsidiaries shall, and each of them shall not permit any of its
officers, directors, employees, agents or representatives (including,
without limitation, any investment banker, attorney or accountant retained
by it or any of its Subsidiaries) to, directly or indirectly, (1) solicit
or encourage any inquiry, proposal or offer (including, without
limitation, any proposal or offer to its stockholders) with respect to a
merger, acquisition, consolidation or similar transaction involving, or
any purchase of 20% or more of the assets on a consolidated basis or 20%
or more of the capital stock of, Xxxx (any such proposal or offer being
hereinafter referred to as a "XXXX ACQUISITION PROPOSAL") (2) enter into
any agreement with respect to any Xxxx Acquisition Proposal, (3)
participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, the making of any proposal
that constitutes, or may reasonably be expected to lead to, or to endorse,
any Xxxx Acquisition Proposal, (4) solicit proxies in opposition to
approval by the Lunn's stockholders of the Merger, (5) engage in any
negotiations concerning a Xxxx Acquisition Proposal, or (6) directly or
indirectly, enter into any agreement to, or make any public announcement
by or on behalf of Xxxx of a plan or intention to do any of the foregoing;
and (B) it will immediately cease and cause to be terminated any existing
negotiations with any parties conducted heretofore with respect to any of
the foregoing; PROVIDED that nothing contained in this Agreement shall
prevent Xxxx or its Board of Directors from (w) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a Xxxx Acquisition
Proposal or (x) providing information to or engaging in any negotiations
or discussions with any person or entity who has made an unsolicited bona
fide Xxxx Acquisition Proposal if the Board of Directors of Xxxx, after
consultation with Dechert, Price & Xxxxxx or other legal counsel
reasonably acceptable to TPG, determines in good faith that the failure to
do so would be a violation of its fiduciary obligations under Delaware
Law. Without limiting the foregoing, it is understood that any violation
of the restrictions set forth in the preceding sentence by any officer,
director or employee of Xxxx or any of Lunn's Subsidiaries or any
investment banker, attorney or other advisor, agent or representative of
Xxxx shall be deemed to be a material breach of this Agreement by Xxxx.
Except to the extent the Board of Directors of Xxxx determines in good
faith, after consultation with
Exhibits - 29
Dechert, Price & Xxxxxx or other legal counsel reasonably acceptable to
TPG, that such actions are necessary to discharge properly such Board's
fiduciary duties, neither the Board of Directors of Xxxx nor any committee
thereof shall (y) modify or withdraw, or propose to modify or withdraw, in
a manner adverse to TPG the approval or recommendation by such Board of
Directors or any such committee of this Agreement or the Merger or take
any action having such effect or (z) approve or recommend, or propose to
approve or recommend, any Xxxx Acquisition Proposal. Notwithstanding the
foregoing, if the Board of Directors of Xxxx receives a Xxxx Acquisition
Proposal that, in the exercise of its fiduciary duties (as determined in
good faith after consultation with Dechert, Price & Xxxxxx or other legal
counsel reasonably acceptable to TPG), it determines to be a Xxxx Superior
Proposal, the Board of Directors of Xxxx may withdraw or modify its
approval or recommendation of this Agreement and the Merger and may
terminate this Agreement.
(ii) If the Board of Directors of Xxxx or any committee
thereof shall (A) withdraw or modify in a manner adverse to TPG the
approval or recommendation by the Board of Directors of such corporation
or any such committee of this Agreement or the Merger or take any action
having such effect or (B) approve or recommend any Xxxx Acquisition
Proposal, TPG may terminate this Agreement.
(iii) In addition to the obligations of Xxxx set forth
in SECTION 7.2(A)(I), Xxxx shall (A) promptly advise TPG of the existence
of any negotiations or discussions entered into in reliance on the proviso
in the first sentence of SECTION 7.2(A)(I) prior to furnishing any
information to any person or entity in connection with a Xxxx Acquisition
Proposal; PROVIDED, HOWEVER, that Xxxx shall not be obligated to provide
TPG with the identity of such person or entity until it becomes reasonably
likely that such person or entity or his or its Affiliate will make a Xxxx
Acquisition Proposal; (B) obtain from such person or entity an executed
confidentiality agreement with terms not materially less favorable to Xxxx
than those contained in the Confidentiality Agreement; and (C) keep TPG
informed, on a current basis, of the status of any such discussions or
negotiations.
Notwithstanding anything to the contrary contained herein, it is agreed and
understood that any termination of this Agreement shall be pursuant to SECTION
10.1 and that, prior to any such termination, Xxxx shall not enter into any
written agreement with any person or entity that provides for, or in any way
facilitates, a Xxxx Acquisition Proposal, other than a confidentiality agreement
in accordance with the terms hereof.
(b) Promptly after the date of this Agreement and subject to the timing of
the SEC's review of the Registration Statement, Xxxx shall take all action
necessary in accordance with the DGCL and its Certificate of Incorporation and
Bylaws to convene an annual meeting of Lunn's Stockholders (or seek consent in
lieu of a meeting) for the purpose of considering and approving the Merger (the
"XXXX STOCKHOLDERS' MEETING"), and Xxxx shall consult with TPG in connection
therewith. Xxxx shall use commercially reasonable efforts to solicit from the
Xxxx Stockholders proxies in favor of the Merger (and consents to be bound by
the terms of this Agreement).
(c) Xxxx will make all normal and customary repairs, replacements, and
improvements to their facilities, and without limiting the generality of the
foregoing or the covenants set forth in SECTION 7.1(A), Xxxx will not, without
the prior written consent of TPG or as otherwise contemplated by this Agreement:
(i) change any provision of its Certificate of Incorporation
or Bylaws (or equivalent organizational documents);
Exhibits - 30
(ii) except for the issuance of Xxxx Common Stock pursuant to
the exercise of any Xxxx Options or Xxxx Warrants and any related
agreements, change the number of shares of the authorized, issued or
outstanding capital stock or share capital of Xxxx, including any
issuance, purchase, redemption, split, combination or reclassification
thereof, or issue or grant any option, warrant, call, commitment,
subscription, right or agreement to purchase relating to the authorized or
issued capital stock or share capital of Xxxx, or declare, set aside or
pay any dividend or other distribution in cash or in kind with respect to
the outstanding capital stock or share capital of Xxxx;
(iii) incur any liabilities or obligations, whether directly
or indirectly, or by way of guaranty, and whether or not evidenced by any
note, bond, debenture, or similar instrument, except as set forth in
SCHEDULE 7.2(C) of the Xxxx Disclosure Letter and except in the ordinary
course of business consistent with past practices and prior periods;
(iv) except as set forth in SCHEDULE 7.2(C) of the Xxxx
Disclosure Letter, make any capital expenditures (or enter into any lease
required to be capitalized in accordance with GAAP) individually in excess
of $100,000 or in the aggregate in excess of $500,000;
(v) pay any bonuses or commissions to any employee of Xxxx
except as set forth on SCHEDULE 7.2(C) of the Xxxx Disclosure Letter;
enter into any new or amend in any respect any existing employment
agreement with any Person; adopt any new or amend in any respect any
existing Plan, except as may be otherwise required by Law; purchase any
additional "key man" life insurance policy covering any employee or
director of Xxxx, or any other Person; grant any increase in compensation
or benefits of any kind to its employees, officers or directors, except
regularly scheduled general increases in the ordinary course of business
and consistent with past practices and policies; or effect any change in
any respect in retirement benefits to any class of employees or officers,
except as otherwise required by Law;
(vi) purchase, sell, mortgage, pledge, or otherwise dispose of
or encumber any asset owned by Xxxx, other than purchase and sales,
mortgages, pledges, or other dispositions or Encumbrances occurring in the
ordinary course of business consistent with past practices and prior
periods;
(vii) incur or collect receivables, or extend loans or
advances, incur or pay trade payables or accrued liabilities in any manner
other than consistent with past practices and prior periods and in the
ordinary course of business;
(viii)cancel without payment or satisfaction in full, waive or
extend the time for performance of, any notes, loans, or other obligations
inuring to the benefit of Xxxx unless such cancellation or termination
occurs in the ordinary course of business of Xxxx consistent with past
practices or unless such cancellations or terminations, individually or in
the aggregate, would have only an immaterial effect on the business,
results of operations or financial condition of Xxxx, taken as a whole;
(ix) make any material modification of or material amendment
to any of the contracts or agreements listed or described on any Schedule
to this Agreement;
(x) fail to use commercially reasonable efforts to maintain in
full force and effect all insurance now carried by Xxxx;
Exhibits - 31
(xi) institute any changes in management personnel or any
material change in any management policy; or
(xii) make any agreement or commitment by or on behalf of Xxxx
to do or take any of the actions referred to in the foregoing SECTION
7.2(C)(I) through (XI).
(d) At least 30 days prior to the Closing Date, Xxxx shall deliver to TPG
a list, which shall be reasonably satisfactory to TPG, of names and addresses of
those Persons who were, in Lunn's reasonable judgment after discussion with its
counsel, at the record date for the Xxxx Stockholder's Meeting, "affiliates"
(each such Person, a "XXXX AFFILIATE STOCKHOLDER") of Xxxx within the meaning of
Rule 145 promulgated pursuant to the Exchange Act. Xxxx shall provide TPG such
information and documents as TPG shall reasonably request for purposes of
reviewing such list. Xxxx shall deliver or cause to be delivered to TPG prior to
the Closing Date, from each of the Xxxx Affiliate Stockholders identified in the
foregoing list, an Affiliate Letter. The Surviving Corporation shall be entitled
to place legends as specified in such Affiliate Letters on the certificates
evidencing any Surviving Corporation Common Stock to be received by such
Affiliates pursuant to the terms of this Agreement and to issue appropriate stop
transfer instructions to the transfer agent for the Surviving Corporation Common
Stock consistent with the terms of such Affiliate Letters.
(e) Without the prior written consent of TPG, Xxxx shall not knowingly
take any action which would cause or would be reasonably likely to cause the
conditions upon the obligations of the parties hereto to effect the Transactions
not to be fulfilled, including taking, causing to be taken, or permitting or
suffering to be taken or to exist any action, condition or thing which would
cause the representations and warranties made by Xxxx herein not to be true,
correct and accurate as of any time between the date hereof and the Closing
Date.
(f) Xxxx shall promptly provide to TPG monthly and quarterly consolidated
financial statements of Xxxx.
(g) Xxxx shall not (i) knowingly take any action, or knowingly fail to
take any action, that would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code; or (ii) enter
into any contract, agreement, commitment or arrangement with respect to the
foregoing.
(h) Upon at least 24 hours' notice to Xxxx, Xxxx shall afford to the
officers, employees, advisors, attorneys and accountants of TPG access during
normal business hours to the offices, properties, records, books, contracts and
other documents (including computer files, retrievable programs and similar
documentation) of Xxxx to the extent that TPG shall reasonably request and shall
furnish to TPG such additional information as shall be reasonably requested by
TPG; provided that neither the furnishing of such information nor any
investigation made heretofore or hereafter by TPG shall affect TPG's right to
rely on any representation or warranty made by Xxxx.
(i) Xxxx shall use its best efforts to cause to be delivered to TPG
"comfort" letters of KPMG Peat Marwick LLP, Lunn's independent public
accountants, dated the effective date of the Registration Statement and the
Closing Date, respectively, and addressed to TPG, with respect to certain
financial information regarding Xxxx included in the Registration Statement, in
form and substance reasonably satisfactory to TPG and customary in scope and
substance for "comfort" letters delivered by independent public accountants in
connection with registration statements similar to the Registration Statement.
Exhibits - 32
(j) Xxxx shall promptly prepare and submit to the Nasdaq SmallCap Market
an additional listing application covering the shares of Xxxx Common Stock
issuable in the Merger, and shall use commercially reasonable efforts to obtain,
prior to the Effective Time, approval for the listing of such Xxxx Common Stock,
subject to official notice of issuance.
(k) Prior to the Closing, Xxxx shall cause Xxxx Xxxxxxx to agree to the
termination of his employment agreement with Xxxx as of the Effective Time and
without any further liability or obligation to Xxxx or the Surviving
Corporation, including without limitation any liability arising as a result of
Xxxx entering into this Agreement or consummating the transactions contemplated
hereby, which termination shall be conditioned only upon the Surviving
Corporation's agreement to (i) pay Xxxx Xxxxxxx an aggregate severance payment
of $380,000 in 12 equal consecutive monthly payments, commencing the month
immediately following the Closing, (ii) continue, at the Surviving Corporation's
expense, the health and life insurance benefits that Xxxx provides to Xxxxxxx as
of the date of this Agreement for one year following the Closing, and (iii)
extend for two years immediately following the Closing, the period during which
Xxxx Xxxxxxx may exercise his Xxxx Options.
(l) Xxxx shall use its best efforts to cause Xxxxx & Company Incorporated
to deliver to Xxxx its opinion letter to the effect that the terms of the Merger
are fair from a financial point of view to the Xxxx Stockholders (the "FAIRNESS
OPINION") and cause such Fairness Opinion to be delivered as soon as possible,
but in no event later than one business day prior to the filing of the
Registration Statement with the SEC.
7.3 COVENANTS OF TPG. TPG covenants with Xxxx that during the period from
the date hereof and continuing until the Effective Time (except as expressly
contemplated or permitted hereby, or to the extent that Xxxx shall otherwise
consent in writing):
(a) TPG hereby agrees as follows:
(i) (A) Prior to the Effective Time, neither it nor any
of is Subsidiaries shall, and each of them shall not permit any of its
officers, directors, employees, agents or representatives (including,
without limitation, any investment banker, attorney or accountant retained
by it or any of its Subsidiaries) to, directly or indirectly, (1) solicit
or encourage any inquiry, proposal or offer (including, without
limitation, any proposal or offer to its stockholders) with respect to a
merger, acquisition, consolidation or similar transaction involving, or
any purchase of 20% or more of the assets on a consolidated basis or 20%
or more of the capital stock of, the TPG (any such proposal or offer being
hereinafter referred to as a "TPG ACQUISITION PROPOSAL") (2) enter into
any agreement with respect to any TPG Acquisition Proposal, (3)
participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, the making of any proposal
that constitutes, or may reasonably be expected to lead to, or to endorse,
any TPG Acquisition Proposal, (4) solicit proxies in opposition to
approval by the TPG's stockholders of the Merger, (5) engage in any
negotiations concerning an TPG Acquisition Proposal, or (6) directly or
indirectly, enter into any agreement to, or make any public announcement
by or on behalf of TPG of a plan or intention to do any of the foregoing;
and (B) it will immediately cease and cause to be terminated any existing
negotiations with any parties conducted heretofore with respect to any of
the foregoing; PROVIDED that nothing contained in this Agreement shall
prevent TPG or its Board of Directors from (x) providing information to or
engaging in any negotiations or discussions with any person or entity who
has made an unsolicited bona fide TPG Acquisition Proposal if the Board of
Directors of TPG, after consultation with Gardere & Xxxxx, L.L.P. or other
legal counsel reasonably acceptable to Xxxx, determines in good faith that
the failure to do so would be a violation of its fiduciary
Exhibits - 33
obligations under Delaware Law. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the
preceding sentence by any officer, director or employee of TPG or any of
TPG's Subsidiaries or any investment banker, attorney or other advisor,
agent or representative of TPG shall be deemed to be a material breach of
this Agreement by TPG. Except to the extent the Board of Directors of TPG
determines in good faith, after consultation with Gardere & Xxxxx, L.L.P.
or other legal counsel reasonably acceptable to Xxxx, that such actions
are necessary to discharge properly such Board's fiduciary duties, neither
the Board of Directors of TPG nor any committee thereof shall (y) modify
or withdraw, or propose to modify or withdraw, in a manner adverse to Xxxx
the approval or recommendation by such Board of Directors or any such
committee of this Agreement or the Merger or take any action having such
effect or (z) approve or recommend, or propose to approve or recommend,
any TPG Acquisition Proposal. Notwithstanding the foregoing, if the Board
of Directors of TPG receives an TPG Acquisition Proposal that, in the
exercise of its fiduciary duties (as determined in good faith after
consultation with Gardere & Xxxxx, L.L.P. or other legal counsel
reasonably acceptable to Xxxx), it determines to be an TPG Superior
Proposal, the Board of Directors of Xxxx may withdraw or modify its
approval or recommendation of this Agreement and the Merger and may
terminate this Agreement.
(ii) If the Board of Directors of TPG or any committee
thereof shall (A) withdraw or modify in a manner adverse to Xxxx the
approval or recommendation by the Board of Directors of such corporation
or any such committee of this Agreement or the Merger or take any action
having such effect or (B) approve or recommend any TPG Acquisition
Proposal, Xxxx may terminate this Agreement.
(iii) In addition to the obligations of TPG set forth in
SECTION 7.3(A)(I), TPG shall (A) promptly advise Xxxx of the existence of
any negotiations or discussions entered into in reliance on the proviso in
the first sentence of SECTION 7.3(A)(I) prior to furnishing any
information to any person or entity in connection with an TPG Acquisition
Proposal, (B) obtain from such person or entity an executed
confidentiality agreement with terms not materially less favorable to TPG
than those contained in the Confidentiality Agreement and (C) keep Xxxx
informed, on a current basis, of the status of any such discussions or
negotiations.
Notwithstanding anything to the contrary contained herein, it is agreed and
understood that any termination of this Agreement shall be pursuant to SECTION
10.1 and that, prior to any such termination, TPG shall not enter into any
written agreement with any person or entity that provides for, or in any way
facilitates, an TPG Acquisition Proposal, other than a confidentiality agreement
in accordance with the terms hereof.
(b) Promptly after the date of this Agreement and subject to the timing of
the SEC's review of the Registration Statement, TPG shall take all action
necessary in accordance with the DGCL and its Certificate of Incorporation and
Bylaws to convene a special meeting of TPG's Stockholders (or seek consent in
lieu of a meeting) for the purpose of considering and approving the Merger (the
"TPG STOCKHOLDERS' MEETING"), and TPG shall consult with Xxxx in connection
therewith. TPG shall use commercially reasonable efforts to solicit from the TPG
Stockholders proxies in favor of the Merger (and consents to be bound by the
terms of this Agreement).
(c) TPG will make all normal and customary repairs, replacements, and
improvements to their facilities, and without limiting the generality of the
foregoing or the covenants set forth in SECTION 7.1(A), TPG will not, without
the prior written consent of Xxxx or as otherwise contemplated by this
Agreement:
Exhibits - 34
(i) change any provision of its Certificate of Incorporation
or Bylaws (or equivalent organizational documents);
(ii) except as set forth in SCHEDULE 7.3(C) and except for the
issuance of TPG Common Stock pursuant to the exercise of any TPG Options,
and except pursuant to the terms of the TPG Preferred Stock, and any
related agreements, change the number of shares of the authorized, issued
or outstanding capital stock or share capital of TPG, including any
issuance, purchase, redemption, split, combination or reclassification
thereof, or issue or grant any option, warrant, call, commitment,
subscription, right or agreement to purchase relating to the authorized or
issued capital stock or share capital of TPG, or declare, set aside or pay
any dividend or other distribution in cash or in kind with respect to the
outstanding capital stock or share capital of TPG;
(iii) incur any liabilities or obligations, whether directly
or indirectly, or by way of guaranty, and whether or not evidenced by any
note, bond, debenture, or similar instrument, except as set forth in
SCHEDULE 7.3(C) of the TPG Disclosure Letter and except in the ordinary
course of business consistent with past practices and prior periods;
(iv) except as set forth in SCHEDULE 7.3(C) of the TPG
Disclosure Letter, make any capital expenditures (or enter into any lease
required to be capitalized in accordance with GAAP) individually in excess
of $100,000 or in the aggregate in excess of $500,000;
(v) pay any bonuses or commissions to any employee of TPG
except as set forth on SCHEDULE 7.3(C) of the TPG Disclosure Letter; enter
into any new or amend in any respect any existing employment agreement
with any Person; adopt any new or amend in any respect any existing Plan,
except as may be otherwise required by Law; purchase any additional "key
man" life insurance policy covering any employee or director of TPG, or
any other Person; grant any increase in compensation or benefits of any
kind to its employees, officers or directors, except regularly scheduled
general increases in the ordinary course of business and consistent with
past practices and policies; or effect any change in any respect in
retirement benefits to any class of employees or officers, except as
otherwise required by Law;
(vi) except as set forth in SCHEDULE 7.3(C) of the TPG
Disclosure Letter, purchase, sell, mortgage, pledge, or otherwise dispose
of or encumber any asset owned by TPG, other than purchase and sales,
mortgages, pledges, or other dispositions or Encumbrances occurring in the
ordinary course of business consistent with past practices and prior
periods;
(vii) incur or collect receivables, or extend loans or
advances, incur or pay trade payables or accrued liabilities in any manner
other than consistent with past practices and prior periods and in the
ordinary course of business;
(viii)cancel without payment or satisfaction in full, waive or
extend the time for performance of, any notes, loans, or other obligations
inuring to the benefit of TPG unless such cancellation or termination
occurs in the ordinary course of business of TPG consistent with past
practices or unless such cancellations or terminations, individually or in
the aggregate, would have only an immaterial effect on the business,
results of operations or financial condition of TPG, taken as a whole;
Exhibits - 35
(ix) make any material modification of or material amendment
to any of the contracts or agreements listed or described on any Schedule
to this Agreement;
(x) fail to use commercially reasonable efforts to maintain in
full force and effect all insurance now carried by TPG;
(xi) institute any changes in management personnel or any
material change in any management policy; or
(xii) make any agreement or commitment by or on behalf of TPG
to do or take any of the actions referred to in the foregoing SECTION
7.3(C)(I) through (XI).
(d) Without the prior written consent of Xxxx, TPG shall not knowingly
take any action which would cause or be reasonably likely to cause the
conditions upon the obligations of the parties hereto to effect the Transactions
not to be fulfilled, including without limitation, taking, causing to be taken,
or permitting or suffering to be taken or to exist any action, condition or
thing which would cause the representations and warranties made by TPG herein
not to be true, correct and accurate as of any time between the date hereof and
the Closing Date.
(e) TPG shall not (i) knowingly take any action, or knowingly fail to take
any action, that would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code; or (ii) enter
into any contract, agreement, commitment or arrangement with respect to the
foregoing.
(f) TPG shall promptly provide to Xxxx monthly and quarterly consolidated
financial statements of TPG.
(g) Upon at least 24 hours' notice to TPG, TPG shall afford to the
officers, employees, advisors, attorneys and accountants of Xxxx access during
normal business hours to the offices, properties, records, books, contracts and
other documents (including computer files, retrievable programs and similar
documentation) of TPG to the extent that Xxxx shall reasonably request and shall
furnish to Xxxx such additional information as shall be reasonably requested by
Xxxx; provided that neither the furnishing of such information nor any
investigation made heretofore or hereafter by Xxxx shall affect Lunn's right to
rely on any representation or warranty made by TPG.
(h) TPG shall use its best efforts to cause to be delivered to Xxxx
"comfort" letters of Xxxxxx Xxxxxxxx LLP, TPG's independent public accountants,
dated the effective date of the Registration Statement and the Closing Date,
respectively, and addressed to Xxxx, with respect to certain financial
information regarding TPG included in the Registration Statement, in form and
substance reasonably satisfactory to Xxxx and customary in scope and substance
for "comfort" letters delivered by independent public accountants in connection
with registration statements similar to the Registration Statement.
(i) At the Closing, TPG shall cause the Surviving Corporation to agree to
(i) pay Xxxx Xxxxxxx an aggregate severance payment of $380,000 in 12 equal
consecutive monthly payments, commencing the month immediately following the
Closing, (ii) continue, at the Surviving Corporation's expense, the health and
life insurance benefits that Xxxx provides to Xxxxxxx as of the date of this
Agreement for one year following the Closing, and (iii) extend for two years
immediately following the Closing, the period during which Xxxx Xxxxxxx may
exercise his Xxxx Options, which agreement shall be conditioned upon the
termination of Xxxx Xxxxxxx'x employment agreement with Xxxx as of the Effective
Time and Xxxx
Exhibits - 36
Xxxxxxx'x release of Xxxx and the Surviving Corporation of any further liability
or obligation thereunder, including without limitation any liability arising as
a result of Xxxx entering into this Agreement or consummating the transactions
contemplated hereby.
(j) At least 30 days prior to the Closing Date, TPG shall deliver to Xxxx
a list, which shall be reasonably satisfactory to Xxxx, of names and addresses
of those Persons who were, in TPG's reasonable judgment after discussion with
its counsel, at the record date for the TPG Stockholder's Meeting, "affiliates"
(each such Person, a "TPG AFFILIATE STOCKHOLDER") of TPG within the meaning of
Rule 145 promulgated pursuant to the Exchange Act. TPG shall provide Xxxx such
information and documents as Xxxx shall reasonably request for purposes of
reviewing such list. TPG shall deliver or cause to be delivered to Xxxx prior to
the Closing Date, from each of the TPG Affiliate Stockholders identified in the
foregoing list, an Affiliate Letter. The Surviving Corporation shall be entitled
to place legends as specified in such Affiliate Letters on the certificates
evidencing any Surviving Corporation Common Stock to be received by such
Affiliates pursuant to the terms of this Agreement and to issue appropriate stop
transfer instructions to the transfer agent for the Surviving Corporation Common
Stock consistent with the terms of such Affiliate Letters.
7.4 FEES AND EXPENSES. (a) Whether or not the Merger is consummated,
except as provided in SECTION 7.4(b) and (c), all costs and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the party
incurring such costs and expenses.
(b) (i) Notwithstanding any provision in this Agreement to the contrary,
if TPG terminates this Agreement pursuant to SECTION 10.1 (b)(i), (e), (g), or
(j), then Xxxx shall immediately pay TPG cash in the amount of $750,000;
PROVIDED, HOWEVER, that Xxxx shall not be obligated to pay TPG such amount if
TPG terminates this Agreement pursuant to SECTION 10.1(e) as a result of Lunn's
breach of its representations in SECTION 5.14(a) or (b) or the first sentence of
SECTION 5.18 and if Xxxx had no knowledge of the facts or circumstances giving
rise to such breach.
(ii) Notwithstanding any provision in this Agreement to the
contrary, if Xxxx terminates this Agreement pursuant to SECTION 10.1(i), then
Xxxx shall immediately pay TPG cash in the amount of $750,000.
(c) (i) Notwithstanding any provision in this Agreement to the contrary,
if Xxxx terminates this Agreement pursuant to SECTION 10.1 (c)(i), (f), (h), or
(l), then TPG shall immediately pay Xxxx cash in the amount of $750,000;
PROVIDED, HOWEVER, that TPG shall not be obligated to pay Xxxx such amount if
Xxxx terminates this Agreement pursuant to SECTION 10.1(f) as a result of TPG's
breach of its representations in SECTION 6.14(a) or (b) or the first sentence of
SECTION 6.18 and if TPG had no knowledge of the facts or circumstances giving
rise to such breach.
(ii) Notwithstanding any provision in this Agreement to the
contrary, if TPG terminates this Agreement pursuant to SECTION 10.1(k), then TPG
shall immediately pay Xxxx cash in the amount of $750,000.
(d) (i) Notwithstanding any provision in this Agreement to the contrary,
if TPG terminates this Agreement pursuant to SECTION 10.1(b)(i), (ii), (iii),
(v) or SECTION 10.1(e) or if Xxxx terminates this Agreement pursuant to SECTION
10.1(c)(ii), Xxxx shall pay TPG, within five business days following such
termination and presentation of receipts therefor, an amount in cash equal to
all out-of-pocket expenses actually and reasonably incurred by TPG in connection
with this Agreement and the Transactions; PROVIDED,
Exhibits - 37
HOWEVER, that Xxxx shall not be obligated to pay TPG such expenses if TPG
terminates this Agreement pursuant to SECTION 10.1(e) as a result of Lunn's
breach of its representations in SECTION 5.14(a) or (b) or the first sentence of
SECTION 5.18 and if Xxxx had no knowledge of the facts or circumstances giving
rise to such breach.
(ii) Notwithstanding any provision in this Agreement to the
contrary, if Xxxx terminates this Agreement pursuant to SECTION 10.1(c)(i),
(iii) or (iv) or SECTION 10.1(f), or if TPG terminates this Agreement pursuant
to SECTION 10.1(b)(iv), TPG shall pay Xxxx within five business days following
such termination and presentation of receipts therefor, an amount in cash equal
to all out-of-pocket expenses actually and reasonably incurred by Xxxx in
connection with this Agreement and the transaction contemplated hereby;
PROVIDED, HOWEVER, that TPG shall not be obligated to pay Xxxx such expenses if
Xxxx terminates this Agreement pursuant to SECTION 10.1(f) as a result of Lunn's
breach of its representations in SECTION 6.14(a) or (b) or the first sentence of
SECTION 6.18 and if TPG had no knowledge of the facts or circumstances giving
rise to such breach.
ARTICLE 8
CONDITIONS
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement and the Transactions shall have been approved in the
requisite manner, according to the Certificate of Incorporation and Bylaws of
Xxxx and the DGCL, by the holders of the issued and outstanding shares of
capital stock of Xxxx entitled to vote thereon, which approval and the voting
thereon shall be certified by the Chief Executive Officer of Xxxx.
(b) This Agreement and the Transactions shall have been approved in the
requisite manner, according to the Certificate of Incorporation and Bylaws of
TPG and the DGCL, by the holders of the issued and outstanding shares of capital
stock of TPG entitled to vote thereon, which approval and the voting thereon
shall be certified by the Chief Executive Officer of TPG.
(c) No action or proceeding shall have been instituted before a court or
other Governmental Authority to restrain or prohibit the Transactions or to
obtain an amount of damages or other material relief in connection with the
execution of the Agreement or the related agreements or the consummation of the
Merger; and no Governmental Authority shall have given notice to any party
hereto to the effect that consummation of the Transactions would constitute a
violation of any applicable Law or that it intends to commence proceedings to
restrain consummation of the Merger.
(d) The Registration Statement shall have become effective, no stop orders
suspending its effectiveness shall have been issued, and no proceedings for that
purpose shall have been instituted or, to the knowledge of TPG or Xxxx, shall be
contemplated.
(e) All consents, authorizations, orders and approvals of (or filings or
registrations with) any Governmental Authority required in connection with the
execution, delivery and performance of this Agreement shall have been obtained
or made, except for filings in connection with the Merger and any other
documents required to be filed after the Effective Time and except where the
failure to have obtained or
Exhibits - 38
made any such consent, authorization, order, approval, filing or registration
would not have a Material Adverse Effect on Xxxx.
(f) The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or been terminated.
(g) The shares of Surviving Corporation Common Stock issuable in the
Merger shall have been approved for listing, subject to official notice of
issuance, on the Nasdaq SmallCap Market.
(h) TPG and Xxxx shall have executed and delivered the Certificate of
Merger and appropriate certificates for filing with the Secretary of State of
Delaware.
8.2 CONDITIONS TO OBLIGATION OF XXXX TO EFFECT THE MERGER. The obligations
of Xxxx to effect the Merger shall be subject to the fulfillment, or the waiver
by Xxxx, at or prior to the Closing Date of the following conditions:
(a) TPG shall have performed its agreements contained in this Agreement
required to be performed on or prior to the Closing Date and the representations
and warranties of TPG contained in this Agreement shall be true and correct in
all material respects as of the Closing Date, and Xxxx shall have received a
certificate of the Chief Executive Officer of TPG, dated the Closing Date,
certifying to such effect.
(b) From the date of this Agreement through the Effective Time, there
shall not have occurred any change in the financial condition, business or
operations of TPG that would have or would be reasonably likely to have a
Material Adverse Effect other than any such change that affects Xxxx and TPG in
a substantially similar manner.
(c) Xxxx shall have received a written opinion letter, dated as of the
Closing Date, from Gardere & Xxxxx, L.L.P. substantially in the form of EXHIBIT
D hereto.
(d) Xxxx shall have received "comfort" letters of Xxxxxx Xxxxxxxx LLP,
TPG's independent public accountants, dated the effective date of the
Registration Statement and the Closing Date, respectively, and addressed to
Xxxx, with respect to certain financial information regarding TPG included in
the Registration Statement, in form and substance reasonably satisfactory to TPG
and customary in scope and substance for "comfort" letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statement.
(e) Xxxx shall have received a good standing certificate for TPG from the
Secretary of State of the State of Delaware and the Secretary of State of each
state where TPG or its Subsidiaries is qualified to do business.
(f) Xxxx shall have received from TPG certified copies of all resolutions
adopted by the Board of Directors and the TPG Stockholders in connection with
this Agreement and the Transactions.
(g) The Merger will qualify as a "reorganization" within the meaning of
Section 368(a) of the Code.
(h) The number of TPG Dissenting Shares for the TPG Common Stock does not
exceed 10% of the TPG Common Stock.
Exhibits - 39
(i) TPG and Fleet Capital Corporation shall have executed a First
Amendment to Loan and Security Agreement substantially in the form of that
delivered to Xxxx at or prior to the date of this Agreement.
(j) TPG shall have obtained the waiver of Brunswick Corporation with
respect to the acceleration of that certain obligation to make payments under
the Amended and Restated Asset Purchase Agreement dated April 28, 1995 by and
between TPG and Brunswick; provided, however, that TPG may, in lieu of obtaining
such waiver, refinance the payment of such obligation with a third party.
(k) Fleet Capital Corporation, TPG's primary lender, and First Union
National Bank of Maryland, Lunn's primary lender, shall have consented to the
Merger and, to the extent necessary, entered into an intercreditor arrangement,
which arrangement shall be mutually acceptable to TPG and Xxxx.
8.3 CONDITIONS TO OBLIGATION OF TPG TO EFFECT THE MERGER. The obligations
of TPG to effect the Merger shall be subject to the fulfillment, or waiver by
TPG, at or prior to the Closing Date of the following conditions:
(a) Xxxx shall have performed its agreements contained in this Agreement
required to be performed on or prior to the Closing Date and the representations
and warranties of Xxxx contained in this Agreement shall be true and correct in
all material respects as of the Closing Date, and Xxxx shall have received a
certificate of the Chief Executive Officer of Xxxx, dated the Closing Date,
certifying to such effect.
(b) From the date of this Agreement through the Effective Time, there
shall not have occurred any change in the financial condition, business,
operations or prospects of Xxxx that would have or would be reasonably likely to
have a Material Adverse Effect on Xxxx, other than any such change that affects
and Xxxx in a substantially similar manner (E.G., changes in general economic
conditions).
(c) TPG shall have received a written opinion letter, dated as of the
Closing Date, from Dechert, Price & Xxxxxx, substantially in the form of EXHIBIT
F attached hereto and a written opinion letter, dated as of the Closing Date.
(d) TPG shall have received "comfort" letters of KPMG Peat Marwick LLP,
Lunn's independent public accountants, dated the effective date of the
Registration Statement and the Closing Date, respectively, and addressed to TPG,
with respect to certain financial information regarding Xxxx included in the
Registration Statement, in form and substance reasonably satisfactory to TPG and
customary in scope and substance for "comfort" letters delivered by independent
public accountants in connection with registration statements similar to the
Registration Statement.
(e) TPG shall have received an Affiliate Letter from each Xxxx Affiliate
Stockholder.
(f) TPG shall have received good standing certificates for Xxxx from the
Secretary of State of the State of Delaware and the Secretary of State of each
state where Xxxx and its Subsidiaries are qualified to do business.
(g) TPG shall have received from Xxxx (i) certified copies of all
resolutions adopted by the Board of Directors and the Xxxx Stockholders in
connection with this Agreement and the Transactions, and (ii) original minute
books and stock record books relating to Xxxx.
Exhibits - 40
(h) The number of Xxxx Dissenting Shares does not exceed 10% of the Xxxx
Common Stock.
(i) Xxxxx & Company Incorporated shall have delivered the Fairness Opinion
to Xxxx no later than one business day prior to the filing of the Registration
Statement with the SEC, and the Fairness Opinion shall not have been withdrawn
or modified in any material respect.
(j) TPG shall have received a written opinion letter, dated as of the
Closing Date, from Gardere & Xxxxx, L.L.P. substantially in the form of EXHIBIT
E attached hereto.
(k) Fleet Capital Corporation, TPG's primary lender, and First Union
National Bank of Maryland, Lunn's primary lender, shall have consented to the
Merger and, to the extent necessary, entered into an intercreditor arrangement,
which arrangement shall be mutually acceptable to TPG and Xxxx.
ARTICLE 9
INDEMNIFICATION
9.1 INDEMNIFICATION.
(a) After the Effective Time, the Surviving Corporation shall, to the
fullest extent permitted under applicable law, defend, indemnify and hold
harmless each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, an officer or director of
Xxxx, TPG or any of their respective Subsidiaries (each, an "INDEMNIFIED PARTY"
and, collectively, the "INDEMNIFIED PARTIES") against all costs or expenses
(including, without limitation, reasonable attorneys' fees), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, based in whole or in part on,
or arising in whole or in part out of, the fact that such person is or was an
officer or director of Xxxx or TPG as the case may be, whether pertaining to any
matter existing or occurring at or prior to the Effective Time and whether
asserted or claimed prior to, at or after, the Effective Time (collectively, the
"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, the Merger or the Transactions. After the Effective Time, the
Surviving Corporation will be entitled to participate in and, to the extent that
it may wish, to assume the defense of any action, with counsel reasonably
satisfactory to the Indemnified Party; provided, however, if there is an actual
conflict of interest, or if the Surviving Corporation shall fail after the
Effective Time to assume responsibility for such defense, such Indemnified Party
may retain counsel reasonably satisfactory to the Surviving Corporation who will
represent such Indemnified party, and the Surviving Corporation shall be
obligated to pay all reasonable fees and disbursements of such counsel promptly
as statements therefor are received. Each of the Indemnified Party and the
Surviving Corporation will cooperate with each other and use their reasonable
efforts to assist each other in the vigorous defense of any such matter;
provided, however, 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 9.1, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify the Surviving
Corporation, as applicable (but the failure to be so notified by an Indemnified
Party shall not relieve an indemnifying party from any liability that it may
have under this SECTION 9.1 except to the extent such failure materially
prejudices such indemnifying party). The indemnifying parties shall be required
to pay for only one law firm (in addition to any required local counsel)
selected by the Indemnified Parties as a group in accordance with the foregoing
provisions with respect to each such matter unless there is, under applicable
standards of
Exhibits - 41
professional conduct, a conflict in any significant issue between the positions
of any two or more Indemnified Parties. This SECTION 9.1 is intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives and shall be binding upon all successors
and assigns of the Surviving Corporation. All rights and obligations under this
SECTION 9.1 shall be in addition to any rights an Indemnified Party may have
under the Certificates of Incorporation or Bylaws of Xxxx, TPG or the Surviving
Corporation, or pursuant to any other agreement, arrangement or document in
effect prior to the Effective Time.
ARTICLE 10
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after any approval by the TPG Stockholders
and the Xxxx Stockholders:
(a) by mutual written consent of TPG and Xxxx;
(b) by TPG if (i) Xxxx shall have failed to comply in any
material respect with any of its covenants or agreements contained in this
Agreement required to be complied with by Xxxx prior to the date of such
termination, which failure to comply has not been cured within ten
business days following receipt by Xxxx of notice of such failure to
comply, (ii) the Xxxx Stockholders shall have failed to approve the Merger
and this Agreement at the Xxxx Stockholders' Meeting, (iii) Xxxx
Dissenting Shares comprise more than an aggregate of 10% of the aggregate
outstanding shares of Xxxx Common Stock, (iv) the TPG Stockholders shall
have failed to approve this Agreement and the Merger at the TPG
Stockholders' Meeting, or (v) Xxxxx & Company Incorporated shall have
failed to deliver the Fairness Opinion to Xxxx before one business day
prior to the filing of the Registration Statement with the SEC or shall
have withdrawn or modified the Fairness Opinion in any material respect;
(c) by Xxxx if (i) TPG shall have failed to comply in any
material respect with any of its covenants or agreements contained in this
Agreement required to be complied with by TPG prior to the date of such
termination, which failure to comply has not been cured within ten
business days following receipt by TPG of notice of such failure to
comply, (ii) the Xxxx Stockholders shall have failed to approve the Merger
and this Agreement at the Xxxx Stockholders' Meeting, (iii) the TPG
Stockholders shall have failed to approve this Agreement and the Merger at
the TPG Stockholders' Meeting, or (iv) TPG Dissenting Shares comprise more
than an aggregate of 10% of the outstanding TPG Common Stock;
(d) by either TPG or Xxxx, if (i) the Merger has not been
effected on or prior to the close of business on November 30, 1997;
PROVIDED, HOWEVER, that the right to terminate this Agreement pursuant to
this clause shall not be available to any party whose failure to fulfill
any obligation of this Agreement has been the cause of, or resulted in,
the failure of the Merger to have occurred on or prior to such date, or
(ii) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have issued
an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Transactions and such
order, decree, ruling or other action shall have become final and
nonappealable;
Exhibits - 42
(e) by TPG, if there has been (i) a material breach by Xxxx of
any representation or warranty that is not qualified as to materiality, or
(ii) a breach by Xxxx of any representation or warranty that is not
qualified as to materiality, in each case which breach has not been cured
within five business days following receipt by Xxxx of written notice of
the breach from TPG;
(f) by Xxxx, if there has been (i) a material breach by TPG of
any representation or warranty that is not qualified as to materiality, or
(ii) a breach by TPG of any representation or warranty that is not
qualified as to materiality, in each case which breach has not been cured
within five business days following receipt by TPG of written notice of
the breach from Xxxx;
(g) by TPG, (i) if, after the delivery of the Fairness Opinion
to Xxxx, the Board of Directors of Xxxx shall not have recommended, or
shall have resolved not to recommend, or shall have modified or withdrawn
its recommendation of the Merger or declaration that the Merger is fair to
and advisable and in the best interest of Xxxx, as the case may be, and
the Xxxx Stockholders, or shall have resolved to do so, or (ii) if the
Board of Directors of Xxxx shall have recommended, or shall have resolved
to recommend, to the Xxxx Stockholders any Xxxx Acquisition Proposal or
other takeover proposal or offer for Xxxx, as the case may be;
(h) by Xxxx, (i) if the Board of Directors of TPG shall not
have recommended, or shall have resolved not to recommend, or shall have
modified or withdrawn its recommendation of the Merger or declaration that
the Merger is fair to and advisable and in the best interest of TPG and
the TPG Stockholders, or shall have resolved to do so, or (ii) if the
Board of Directors of TPG shall have recommended, or shall have resolved
to recommend, to the TPG Stockholders any TPG Acquisition Proposal or
other takeover proposal or offer for TPG, as the case may be;
(i) by Xxxx, in accordance with SECTION 7.2(A)(I);
(j) by TPG, in accordance with SECTION 7.2(A)(II);
(k) by TPG, in accordance with SECTION 7.3(A)(I); and
(l) by Xxxx, in accordance with SECTION 7.3(A)(II).
10.2 EFFECT OF TERMINATION. In the event of termination of this Agreement
by TPG or Xxxx, as provided in SECTION 10.1, this Agreement shall forthwith
become void and there shall be no liability hereunder on the part of TPG, Xxxx
or their respective officers or directors; PROVIDED, HOWEVER, that nothing
contained in this SECTION 10.2 shall relieve any party hereto from any liability
for any breach of this Agreement; and PROVIDED, FURTHER, that, (i) any
termination under SECTION 10.1(B)(I),(E),(G) OR (J) shall not become effective
until the fee required to be paid pursuant to SECTION 7.4(B)(I) shall have been
paid to TPG, (ii) any termination under SECTION 10.1(C)(I),(F),(H) OR (L) shall
not become effective until the fee required to be paid pursuant to SECTION
7.4(C)(I) shall have been paid to Xxxx, (iii) if this Agreement is terminated
pursuant to SECTION 10.1(H), the provisions of SECTION 7.4(B)(II) shall survive
until any payments required to be made thereunder are made, (iv) if this
Agreement is terminated pursuant to SECTION 10.1(K), the provisions of SECTION
7.4(C)(II) shall survive until any payments required to be made thereunder are
made, (v) if this Agreement is terminated pursuant to SECTION 10.1(B)(I),(II),
OR (III), (C)(II), OR (E), the provisions of SECTION 7.4(D)(I) shall survive
until any payments required to be made thereunder are made, and (iv) if this
Agreement is terminated pursuant to SECTION 10.1(B)(IV), (C)(I) or (III), or
(F), the provisions of SECTION 7.4(D)(II) shall survive until any payments
required to be made thereunder are made.
Exhibits - 43
ARTICLE 11
GENERAL PROVISIONS
11.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties and agreements in this Agreement or in any instrument delivered
pursuant to this Agreement shall not survive the Merger; PROVIDED, HOWEVER, that
the agreements contained in ARTICLES 4 and 9 and in SECTIONS 7.2(D), 7.2(G),
7.3(D), and 7.4 and this ARTICLE 11 and the agreements delivered pursuant to
this Agreement shall survive the Merger. Notwithstanding anything to the
contrary contained herein, the Confidentiality Agreement shall survive any
termination of this Agreement, and the provisions of the Confidentiality
Agreement shall apply to all information and material delivered by or on behalf
of any party hereunder.
11.2 EXTENSION; WAIVER. At any time prior to the Effective Time, TPG or
Xxxx, by action taken or authorized by its Board of Directors, may, to the
extent legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of TPG or Xxxx to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. Except as provided in this Agreement, no action taken pursuant to
this Agreement, including any investigation by or on behalf of any party, shall
be deemed to constitute a waiver by the party taking such action of compliance
with any representations, warranties, covenants or agreements contained in this
Agreement. The right of TPG or Xxxx to terminate this Agreement pursuant to
ARTICLE 10 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any party hereto, whether prior to or
after execution of this Agreement.
11.3 NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered, mailed or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the facsimile numbers
specified below:
(a) If to TPG:
TPG Holdings, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: President and Chief Financial Officer
Facsimile No.: (000) 000-0000
with a copy to:
Gardere & Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
Exhibits - 44
Facsimile No.: (000) 000-0000
(b) If to Xxxx:
Xxxx Industries, Inc.
0 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxx, Xxx Xxxx 00000-0000
Attention: President
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx X. Price, Esq.
00 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
11.4 ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
11.5 ENTIRE AGREEMENT. Except with respect to the Confidentiality
Agreement, which shall remain in full force and effect until the Closing, this
Agreement, the Exhibits and the Schedules constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto among the
parties. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
11.6 AMENDMENT. This Agreement may be amended by the parties hereto at any
time before or after approval of matters presented in connection with the Merger
by the Xxxx Stockholders, but after any such stockholder approval, no amendment
shall be made which by Law requires the further approval of stockholders without
obtaining such further approval. This Agreement may not be modified or amended
except by an instrument in writing signed on behalf of TPG and Xxxx.
11.7 GOVERNING LAW. THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION OF
ITS TERMS AND THE DETERMINATION OF THE RIGHTS AND DUTIES OF THE PARTIES HERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED
STATES AND THOSE OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE AND WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
11.8 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts
Exhibits - 45
shall together 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.
11.9 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
11.10 ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of competent jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
Exhibits - 46
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first written above.
ATTEST: TPG HOLDINGS, INC.
By: _______________________ By: /s/ XXXXXXX X. XXXXXX
XXXXXXX X. XXXXXX
[Printed Name]
EXECUTIVE VICE PRESIDENT & CFO
[Title]
ATTEST: XXXX INDUSTRIES, INC.
By: _______________________ By: /s/ XXXX X. XXXXXXX
XXXX X. XXXXXXX
[Printed Name]
CEO
[Title]
Exhibits - 47
AMENDMENT TO ACQUISITION AGREEMENT
AND
PLAN OF MERGER
This AMENDMENT is made as of the 22nd day of August, 1997 by and between
TPG Holdings, Inc., a Delaware corporation ("TPG"), and Xxxx Industries, Inc., a
Delaware corporation ("Xxxx").
WHEREAS, TPG and Xxxx are parties to that certain Acquisition Agreement
and Plan of Merger dated as of June 6, 1997 (the "Merger Agreement"); and
WHEREAS, TPG and Xxxx have mutually agreed to amend certain terms of the
Merger Agreement in accordance with the terms thereof as set forth herein.
NOW, THEREAFTER, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree with each other as follows:
1. AMENDMENTS. The Merger Agreement is hereby amended as follows:
(a) Section 1.1 is hereby amended by adding in the appropriate
alphabetical order the following definitions:
"1997 TPG NET INCOME" is defined in SECTION 4.5(B).
"CANCELLED STOCK" is defined in SECTION 4.5(B).
"ESCROW AGENT" is defined in SECTION 4.5(A).
"ESCROWED STOCK" is defined in SECTION 4.5(A).
"DETERMINATION DATE" is defined in SECTION 4.5(C).
"RELEASED STOCK" is defined in SECTION 4.5(B).
(b) Section 4.1(b) is hereby amended by adding to the end of the first
sentence therein after the words "TPG Exchange Ratio" the following:
", subject further to the retention of the Escrowed Stock by the
Escrow Agent in accordance with SECTION 4.5."
(c) Section 4.3(b) is hereby amended by adding in subsection (i) thereof
after the words "TPG Exchange Ratio" the following:
", subject further to the retention of the Escrowed Stock by the
Escrow Agent in accordance with SECTION 4.5."
Exhibits - 48
(d) Article 4 is hereby amended by adding a new Section 4.5 as follows:
" 4.5 ESCROWED STOCK.
(a) AMOUNT; RIGHTS OF BENEFICIAL OWNERS. At the Closing, the
Surviving Corporation shall retain in its capacity as escrow agent
(the "ESCROW AGENT") an aggregate number of shares of the Surviving
Corporation Common Stock equal to fifty percent (50%) of the shares
of the Surviving Corporation Common Stock to be delivered to each of
the holders of TPG Common Stock and the number of shares of
Surviving Corporation Common Stock reserved for issuance upon
exercise of the TPG Options, such number of shares to be rounded
down to the nearest whole number (the "ESCROWED STOCK"). From the
Effective Time until the Determination Date (i) holders of TPG
Common Stock as of the Effective Time who surrender their
certificates evidencing shares of the TPG Common Stock in accordance
with the procedures set forth in SECTION 4.2 shall be entitled to
delivery of certificate(s) representing shares of the Surviving
Corporation Common Stock to be issued to such holder pursuant to
SECTION 4.1(B), less such holder's pro rata share of the Escrowed
Stock, and (ii) except as otherwise set forth herein, each holder of
the TPG Common Stock as of the Effective Time shall be considered
the beneficial owner of his pro rata portion of the Escrowed Stock
and shall have all of the rights of the holders of Surviving
Corporation Common Stock with respect thereto, including without
limitation the right to vote on all matters and the right to receive
any distributions.
(b) 1997 TPG NET INCOME; CANCELLATION OF CANCELLED STOCK. If
the net income after taxes, as calculated in accordance with
generally accepted accounting principles, of the business of TPG and
its Subsidiaries, as currently constituted, for the fiscal year
ending December 31, 1997, as determined by the Surviving Corporation
(the "1997 TPG NET INCOME"), is less than $4,000,000, then the
Surviving Corporation shall (i) immediately cancel the Cancelled
Stock, and (ii) deliver the number of shares of Escrowed Stock not
constituting the Cancelled Stock (the "RELEASED STOCK") in
accordance with SECTION 4.5(C). Upon cancellation, no person shall
have any interest in or rights to the Cancelled Stock. For purposes
of this Agreement, the term "CANCELLED STOCK" shall be defined as
that number of fully paid and nonassessable shares of Surviving
Corporation Common Stock calculated pursuant to the following
formula:
4,000,000 X
-----------------------------
4,000,000 - 1997 TPG Net Income + X = 4,151,402
(With X = the number of shares of Cancelled Stock);
provided, however, that if the 1997 TPG Net Income is $4,000,000 or
more, then the number of shares constituting the Cancelled Stock
shall be shall be deemed to be 0, and if the 1997 TPG Net Income is
less than 0, then the 1997 TPG Net Income shall be deemed to be 0.
(c) RELEASE. Within thirty (30) days after the date the 1997
TPG Net Income is finally determined (the "DETERMINATION DATE"), the
Escrow Agent shall
Exhibits - 49
deliver to each of the holders of record as of the Effective Time of
the TPG Common Stock and to each of the holders of record as of the
Effective Time of the TPG Options which have exercised all or any
part of such TPG Options, a certificate evidencing such Person's pro
rata share of the Released Stock, if any (with the Surviving
Corporation making, in good faith, any rounding determinations such
that each such Person's pro rata shares of the Released Stock equals
a whole number). Any shares of Surviving Corporation Common Stock
that are not delivered within thirty (30) days of the Determination
Date shall be held by the Surviving Corporation in escrow for the
benefit of holders of the TPG Options which have not yet exercised
such securities until such time that such TPG Options shall be
exercised or shall expire or terminate. Upon exercise of any such
TPG Options after the Determination Date, the Surviving Corporation
shall issue to the holder thereof such holder's pro rata share of
the Escrowed Stock as provided in this SECTION 4.3(C).
Notwithstanding any provision of this Agreement, the Released Stock
shall be delivered only to those TPG Stockholders of record as of
the Effective Time and the holders of record of the TPG Options as
of the Effective Time and the right to receive all or any part of
the Released Stock may not be transferred or assigned."
(e) Section 7.2(k) is hereby amended by deleting the number "$380,000"
in subsection (i) thereof and substituting in lieu of such number
the number "$420,000."
2. NO OTHER MODIFICATIONS. Except as amended hereby, the terms and conditions of
the Merger Agreement shall continue in full force and effect and are hereby in
all respects ratified and confirmed.
3. COUNTERPARTS. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
4. GOVERNING LAW. This Agreement shall be construed in accordance with the laws
of the State of Delaware without reference to the conflicts of law principles
therein.
IN WITNESS WHEREOF, this Amendment has been executed as of the date and
year first above written.
TPG HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXX
Name: XXXXXXX X. XXXXXX
Title: EXECUTIVE VICE PRESIDENT & CFO
XXXX INDUSTRIES, INC.
By: /s/ XXXX X. XXXXXXX
Name: XXXX X. XXXXXXX
Title: CEO
Exhibits - 50
