Exhibit (a)(13)
AGREEMENT AND PLAN OF MERGER
among
XXXX XXX CORPORATION
CFN ACQUISITION CORPORATION
and
CHOCK FULL O'NUTS CORPORATION
Dated as of June 8, 1999
TABLE OF CONTENTS
Page
ARTICLE I
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 The Merger . . . . . . . . . . . . . . . 1
Section 1.2 Closing . . . . . . . . . . . . . . . . . 2
Section 1.3 Effective Time . . . . . . . . . . . . . 2
Section 1.4 Effects of the Merger . . . . . . . . . . 2
Section 1.5 Certificate of Incorporation; By-Laws . . 2
Section 1.6 Directors and Officers of Surviving
Corporation . . . . . . . . . . . . . . 3
ARTICLE II
Exchange of Shares . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1 Conversion of Securities . . . . . . . . 3
Section 2.2 Exchange of Certificates . . . . . . . . 4
Section 2.3 Transfer of Shares After the Effective
Time . . . . . . . . . . . . . . . . . 7
Section 2.4 Company Stock Options . . . . . . . . . . 7
ARTICLE III
Representations and Warranties of the Company . . . . . . . . . . 8
Section 3.1 Due Incorporation and Authority . . . . . 8
Section 3.2 Capitalization . . . . . . . . . . . . . 9
Section 3.3 Authorization; Enforceability . . . . . . 10
Section 3.4 No Violation or Conflict . . . . . . . . 11
Section 3.5 SEC Reports; Financial Statements;
Indebtedness; Other Information . . . . 12
Section 3.6 Litigation . . . . . . . . . . . . . . . 13
Section 3.7 Absence of Certain Changes . . . . . . . 13
Section 3.8 Performance of Contracts . . . . . . . . 14
Section 3.9 Employee Benefit Plans . . . . . . . . . 14
Section 3.10 Taxes . . . . . . . . . . . . . . . . . . 16
Section 3.11 Governmental Approvals . . . . . . . . . 18
Section 3.12 Labor Matters . . . . . . . . . . . . . . 18
Section 3.13 Existing Permits and Violations of Law . 18
Section 3.14 Intangible Assets . . . . . . . . . . . . 19
Section 3.15 Year 2000 . . . . . . . . . . . . . . . . 19
Section 3.16 Customers and Suppliers . . . . . . . . . 20
Section 3.17 Environmental Matters . . . . . . . . . . 20
Section 3.18 Disclosure Documents . . . . . . . . . . 21
Section 3.19 Opinion of Financial Advisor . . . . . . 22
Section 3.20 Certain Agreements . . . . . . . . . . . 22
Section 3.21 Rights Agreement . . . . . . . . . . . . 22
Section 3.22 Vote Required . . . . . . . . . . . . . . 23
Section 3.23 Finders or Brokers . . . . . . . . . . . 23
ARTICLE IV
Representations and Warranties of the Parent and the Sub . . . . . 23
Section 4.1 Due Incorporation and Authority . . . . . 23
Section 4.2 Authorization; Enforceability . . . . . . 24
Section 4.3 No Violation or Conflict . . . . . . . . 24
Section 4.4 SEC Reports; Financial Statements . . . . 25
Section 4.5 Disclosure Documents . . . . . . . . . . 25
Section 4.6 Governmental Approvals . . . . . . . . . 26
Section 4.7 Authorization of Parent Common Stock . . 26
Section 4.8 Finders or Brokers . . . . . . . . . . . 26
Section 4.9 Interim Operations of the Sub . . . . . . 26
ARTICLE V
Covenants and Agreements . . . . . . . . . . . . . . . . . . . . . 27
Section 5.1 Conduct of Business by the Company . . . 27
Section 5.2 Shareholders Meeting; Registration
Statement and Proxy
Statement/Prospectus . . . . . . . . . 30
Section 5.3 Listing of Parent Common Stock . . . . . 31
Section 5.4 Access . . . . . . . . . . . . . . . . . 31
Section 5.5 Commercially Reasonable Efforts;
Further Assurances . . . . . . . . . . 32
Section 5.6 Takeover Statute . . . . . . . . . . . . 33
Section 5.7 No Solicitation . . . . . . . . . . . . . 33
Section 5.8 Public Announcement . . . . . . . . . . . 35
Section 5.9 Notices of Certain Events . . . . . . . . 35
Section 5.10 Indemnification and Insurance . . . . . . 35
Section 5.11 Additional Reports . . . . . . . . . . . 36
Section 5.12 Affiliates . . . . . . . . . . . . . . . 37
Section 5.13 Tax-Free Reorganization . . . . . . . . . 37
Section 5.14 Actions Regarding Debentures . . . . . . 37
ARTICLE VI
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . 38
Section 6.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . . . 38
Section 6.2 Conditions to the Parent's and the Sub's
Obligations to Effect the Merger . . . 39
Section 6.3 Conditions to the Company's Obligations
to Effect the Merger . . . . . . . . . 40
ARTICLE VII
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.1 Termination . . . . . . . . . . . . . . . 40
Section 7.2 Rights on Termination . . . . . . . . . . 44
Section 7.3 Termination Fee Payable to Parent . . . . 44
Section 7.4 Other Remedies . . . . . . . . . . . . . 44
ARTICLE VIII
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 8.1 No Survival of Representations and
Warranties . . . . . . . . . . . . . . 45
Section 8.2 Expenses . . . . . . . . . . . . . . . . 45
Section 8.3 Counterparts; Effectiveness . . . . . . . 45
Section 8.4 Governing Law . . . . . . . . . . . . . . 45
Section 8.5 Notices . . . . . . . . . . . . . . . . . 46
Section 8.6 Assignment; Binding Effect . . . . . . . 47
Section 8.7 Severability . . . . . . . . . . . . . . 47
Section 8.8 Enforcement of Agreement . . . . . . . . 47
Section 8.9 Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . . . 47
Section 8.10 Headings . . . . . . . . . . . . . . . . 47
Section 8.11 Finders or Brokers . . . . . . . . . . . 48
Section 8.12 Amendment or Supplement . . . . . . . . . 48
Section 8.13 Extension of Time, Waiver, Etc . . . . . 48
ARTICLE IX
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 9.1 Affiliate . . . . . . . . . . . . . . . . 49
Section 9.2 Agreement . . . . . . . . . . . . . . . . 49
Section 9.3 Code . . . . . . . . . . . . . . . . . . 49
Section 9.4 Company Disclosure Schedule . . . . . . . 49
Section 9.5 Company Financial Statements . . . . . . 49
Section 9.6 Computer Programs . . . . . . . . . . . . 49
Section 9.7 Contracts . . . . . . . . . . . . . . . . 50
Section 9.8 Control . . . . . . . . . . . . . . . . . 50
Section 9.9 Employees . . . . . . . . . . . . . . . . 50
Section 9.10 Employee Benefit Plans . . . . . . . . . 50
Section 9.11 Environmental Claim . . . . . . . . . . . 50
Section 9.12 Environmental Laws . . . . . . . . . . . 51
Section 9.13 ERISA . . . . . . . . . . . . . . . . . . 51
Section 9.14 Existing Liens . . . . . . . . . . . . . 51
Section 9.15 Existing Permits . . . . . . . . . . . . 51
Section 9.16 Existing Plans . . . . . . . . . . . . . 51
Section 9.17 Hazardous Materials . . . . . . . . . . . 51
Section 9.18 Indebtedness . . . . . . . . . . . . . . 51
Section 9.19 Intangible Assets . . . . . . . . . . . . 52
Section 9.20 Investment . . . . . . . . . . . . . . . 52
Section 9.21 Law . . . . . . . . . . . . . . . . . . . 52
Section 9.22 Lien . . . . . . . . . . . . . . . . . . 52
Section 9.23 Material Adverse Effect . . . . . . . . . 52
Section 9.24 Merger . . . . . . . . . . . . . . . . . 53
Section 9.25 NYBCL . . . . . . . . . . . . . . . . . . 53
Section 9.26 Parent Financial Statements . . . . . . . 53
Section 9.27 Parent Material Adverse Effect . . . . . 53
Section 9.28 Person . . . . . . . . . . . . . . . . . 53
Section 9.29 Significant Subsidiary . . . . . . . . . 53
Section 9.30 Subsidiary . . . . . . . . . . . . . . . 53
Section 9.31 Taxes . . . . . . . . . . . . . . . . . . 54
Section 9.32 Tax Return . . . . . . . . . . . . . . . 54
AGREEMENT AND PLAN OF MERGER, dated as of June 8, 1999 (the
"Agreement"), among Xxxx Xxx Corporation, a Maryland corporation (the
"Parent"), CFN Acquisition Corporation, a New York corporation (the "Sub"),
and Chock Full O'Nuts Corporation, a New York corporation (the "Company").
Capitalized terms used herein without definition shall have the meanings
ascribed to them in Article IX.
WHEREAS, the Boards of Directors of the Parent, the Sub and the
Company have approved and deem it advisable and in the best interests of
their respective stockholders to consummate the acquisition of the Company
by the Parent upon the terms and subject to the conditions provided for in
this Agreement;
WHEREAS, in furtherance thereof it is proposed that the
acquisition be accomplished by a merger of the Sub with and into the
Company (the "Merger") pursuant to which each outstanding share of common
stock , par value $.25 per share, of the Company (the "Company Common
Stock," and together with the common stock purchase rights (the "Rights"),
issued pursuant to the Amended and Restated Rights Agreement, dated as of
December 30, 1997, by and between the Company and the American Stock
Transfer & Trust Company as Rights Agent (the "Rights Agreement")
associated with such shares, the "Shares") will be converted into the right
to receive the Merger Consideration (as hereinafter defined), upon the
terms and conditions set forth in this Agreement; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, and
intending to be legally bound hereby, the Parent, the Sub and the Company
agree as follows:
ARTICLE I
The Merger
Section 1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the NYBCL,
the Sub shall merge with and into the Company, and the separate corporate
existence of the Sub shall thereupon cease, and the Company shall be the
surviving corporation in the Merger (the "Surviving Corporation") . The
Surviving Corporation shall possess all the rights, privileges, powers and
franchises, and shall be subject to all of the restrictions, disabilities,
duties, debts and obligations, of the Company and the Sub, all as provided
in the NYBCL.
Section 1.2 Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m., Chicago time, on the later of
August 26, 1999 or the date that is no later than the second business day
after satisfaction of the conditions set forth in Article VI, unless
another time or date is agreed to in writing by the parties hereto. The
Closing will be held at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois), 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, unless another place
is agreed to in writing by the parties hereto.
Section 1.3 Effective Time. Subject to the provisions of this
Agreement, on the Closing Date, the parties shall file with the Secretary
of State of the State of New York a certificate of merger (the "Certificate
of Merger") executed in accordance with the relevant provisions of the
NYBCL and shall make all other filings or recordings required under the
NYBCL in order to effect the Merger. The Merger shall become effective
upon the filing of the Certificate of Merger or at such other time as is
specified in the Certificate of Merger (the time at which the Merger
becomes fully effective being hereinafter referred to as the "Effective
Time").
Section 1.4 Effects of the Merger. The Merger shall have the
effects set forth in the applicable provisions of the NYBCL.
Section 1.5 Certificate of Incorporation; By-Laws.
(a) At the Effective Time, the Restated Certificate of
Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended in accordance with its terms and the
NYBCL.
(b) At the Effective Time, the By-Laws of the Sub, as in
effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by the NYBCL,
the Certificate of Incorporation of the Surviving Corporation and the By-
Laws.
Section 1.6 Directors and Officers of Surviving Corporation.
(a) The directors of the Sub at the Effective Time shall be
the directors of the Surviving Corporation until their respective
successors are duly elected and qualified or their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and By-Laws of the Surviving Corporation.
(b) The officers of the Company at the Effective Time shall
be the officers of the Surviving Corporation until their respective
successors are duly elected and qualified or their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and By-Laws of the Surviving Corporation.
ARTICLE II
Exchange of Shares
Section 2.1 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of the holders
of any securities of the Sub or the Company:
(a) The Shares (including the associated Rights) that are
issued and outstanding immediately prior to the Effective Time (other than
Shares owned by the Parent, the Sub or any direct or indirect wholly owned
subsidiary of the Parent (collectively, "Parent Companies") or any of the
Company's direct or indirect wholly owned subsidiaries or shares held in
the treasury of the Company) shall, by virtue of the Merger and without any
action on the part of the Sub, the Company or the holder thereof, be
cancelled and extinguished and converted into the right to receive the
number of validly issued, fully paid and non-assessable shares of common
stock, par value $0.01 per share, of the Parent (the "Parent Common Stock")
equal to the ratio (the "Exchange Ratio") determined by dividing $11.00 by
the average of the per share last sales prices, regular way (rounded to
four decimal points, the "Average Parent Price") of Parent Common Stock as
reported on the New York Stock Exchange, Inc. (the "NYSE") composite
transactions reporting system (as reported in the New York City edition of
The Wall Street Journal or, if not reported thereby, another authoritative
source) for the twenty (20) consecutive trading days (the "Averaging
Period") commencing on the date that the Proxy Statement/Prospectus (as
hereinafter defined) is mailed to the shareholders of the Company (the
"Merger Consideration"); provided, however, that in no event shall the
Exchange Ratio exceed .5238 (except, at the election of Parent, as provided
in Section 7.1(c)(iii)) or be less than .4231.
(b) Each Share (and associated Rights) issued and
outstanding and owned by the Parent Companies or any of the Company's
direct or indirect wholly owned subsidiaries or authorized but unissued
shares held by the Company immediately prior to the Effective Time shall
cease to be outstanding, be cancelled and retired without payment of any
consideration therefor and cease to exist.
(c) Each share of common stock of the Sub issued and
outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and non-assessable share of common stock of
the Surviving Corporation.
(d) The Exchange Ratio shall be adjusted to reflect fully
the effect of any stock split, reverse split, stock dividend (including any
dividend or distribution of securities convertible into Company Common
Stock or Parent Common Stock, as applicable), extraordinary dividend,
reorganization, recapitalization or any other like change with respect to
Company Common Stock or Parent Common Stock occurring after the date hereof
and prior to the Effective Time. References to the Exchange Ratio
elsewhere in this Agreement shall be deemed to refer to the Exchange Ratio
as it may have been adjusted pursuant to this Section 2.1(d).
(e) No fractional shares of Parent Common Stock shall be
issued pursuant hereto. In lieu of any such fractional share of Parent
Common Stock, the Parent shall pay to each former shareholder of the
Company who otherwise would be entitled to receive a fractional share of
Parent Common Stock an amount in cash equal to the fraction of such share
of Parent Common Stock multiplied by the per share Merger Consideration.
No interest shall be paid on such amount.
Section 2.2 Exchange of Certificates. The manner of
exchanging Shares in the Merger shall be as follows:
(a) At or prior to the Effective Time, the Parent shall
deposit with Xxxxxx Trust and Savings Bank (the "Exchange Agent"), or such
other exchange agent selected by the Parent and reasonably acceptable to
the Company, for the benefit of the holders of Shares outstanding
immediately prior to the Effective Time, for exchange in accordance with
this Section 2.2, through the Exchange Agent, certificates evidencing the
shares of Parent Common Stock issuable pursuant to Section 2.1(a) in
exchange for outstanding Shares (the shares of Parent Common Stock so
deposited, together with any dividends or distributions with respect to
such shares of Parent Common Stock payable after the Effective Time which
also shall be deposited with the Exchange Agent, the "Exchange Fund"). The
Exchange Agent shall, pursuant to irrevocable instructions, deliver the
Merger Consideration out of the Exchange Fund.
(b) As soon as practicable after the Effective Time, but in
any event no later than five (5) business days thereafter, the Exchange
Agent shall mail to each holder of record (other than holders of
certificates representing Shares referred to in Section 2.1(b)) of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent and shall be in such form and
have such other customary provisions as the Parent and the Company may
reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange
Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration without any interest thereon,
less any applicable withholding of taxes, and the Certificate so
surrendered shall forthwith be canceled. The Merger Consideration with
respect to the Shares represented thereby may be paid to a person other
than the person in whose name the Certificate so surrendered is registered
if such Certificate shall be properly endorsed or otherwise be in proper
form for transfer and the person requesting such issuance shall pay any
transfer or other nonincome taxes required by reason of the payment of the
Merger Consideration to a person other than the registered holder or
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable. Until surrendered as contemplated by this
Section 2.2, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender
thereof, the Merger Consideration with respect to each of the Shares
represented thereby.
(c) Whenever a dividend or other distribution is declared
by the Parent on the Parent Common Stock, the record date for which is at
or after the Effective Time, the declaration shall include dividends or
other distributions on all shares issuable pursuant to this Agreement,
provided that no such dividends or other distributions declared or made
shall be paid to the holder of an unsurrendered Certificate with respect to
the shares of Parent Common Stock represented thereby until the holder of
such Certificate shall surrender such Certificate in accordance with this
Article II.
(d) Any portion of the Exchange Fund which remains
undistributed to the holders of the Certificates as of the date which is
six months after the Effective Time shall be delivered to the Parent, upon
demand, and any holders of the Certificates who have not theretofore
complied with this Article II shall thereafter look only to the Parent or
the Surviving Corporation for payment of their claim for Merger
Consideration.
(e) None of the Parent, the Company, the Sub or the
Exchange Agent shall be liable to any person in respect of any Shares or
cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificate
shall not have been surrendered prior to seven years after the Effective
Time (or immediately prior to such earlier date on which any Merger
Consideration, would otherwise escheat to or become the property of any
governmental body or authority), any such Merger Consideration, to the
extent permitted by applicable law, shall become the property of the
Surviving Corporation, free and clear of all claims or interest of any
person previously entitled thereto.
(f) The Exchange Agent shall invest any cash included in
the Exchange Fund, as directed by the Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
the Parent.
(g) 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 Merger Consideration.
(h) Holders of unsurrendered Certificates will not be
entitled to vote at any meeting of shareholders of the Parent.
(i) Notwithstanding anything herein to the contrary,
Certificates surrendered for exchange into Merger Consideration by any
"affiliate" (as determined pursuant to Section 5.12) of the Company shall
not be exchanged until the Parent has received a written agreement from
such Person as provided in Section 5.12 hereof.
(j) The Exchange Agent or Parent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to
this Agreement to any holder of Company Common Stock such amounts as the
Exchange Agent, Parent or the Surviving Corporation, as the case may be, is
required to deduct and withhold with respect to such payment under the Code
or any provisions of state, local or foreign tax law. Any amounts so
withheld shall be treated for all purposes of this Agreement as having been
paid to the holder of the Company Common Stock in respect of which such
deduction and withholding was made.
Section 2.3 Transfer of Shares After the Effective Time. No
transfers of Shares shall be made on the stock transfer books of the
Company after the Effective Time.
Section 2.4 Company Stock Options.
(a) At the Effective Time, by virtue of the Merger and
without any further action on the part of the Company or the holder of each
unexpired and unexercised option to purchase shares of Company Common Stock
(a "Company Stock Option"), under the Company Stock Plans (as hereinafter
defined) or otherwise granted by the Company outside of any Company Stock
Plan, each Company Stock Option shall be assumed by the Parent as
hereinafter provided. At the Effective Time, by virtue of the Merger and
without any further action on the part of the Company or the holder
thereof, each Company Stock Option will be automatically converted into an
option (a "Parent Stock Option") to purchase a number of shares of Parent
Common Stock equal to the number of shares of Company Common Stock that
could have been purchased under such Company Stock Option multiplied by the
Exchange Ratio (rounded to the nearest whole share), at a price per share
of Parent Common Stock equal to the per share option exercise price
specified in the Company Stock Option, divided by the Exchange Ratio
(rounded to the nearest whole cent); provided, however, that any Company
Stock Option that is intended to qualify as an "incentive stock option"
under the Code shall be converted to a Parent Stock Option in a manner that
results in any such converted Company Stock Option retaining its incentive
stock option status. Such Parent Stock Option shall otherwise be subject
to the same terms and conditions as such Company Stock Option. At the
Effective Time, (i) all references in the Company Stock Plans, the
applicable stock option or other awards agreements issued thereunder and in
any other Company Stock Options to the Company shall be deemed to refer to
the Parent; and (ii) the Parent shall assume the Company Stock Plans and
all of the Company's obligations with respect to the Company Stock Options.
(b) In respect of each Company Stock Option as converted
into a Parent Stock Option pursuant to Section 2.4(a) and assumed by the
Parent, and the shares of Parent Common Stock underlying such option, the
Parent shall file as soon as practicable after the Effective Time with the
Securities and Exchange Commission (the "SEC"), and keep current the
effectiveness of, a registration statement on Form S-8 (which may be
accomplished by amendment of the Registration Statement (as hereinafter
defined)) or other appropriate form for as long as such options remain
outstanding (and maintain the current status of the prospectus with respect
thereto). The Parent agrees to reserve a number of shares of Parent Common
Stock equal to the number of shares of Parent Common Stock issuable upon
the exercise of such Company Stock Options.
(c) Prior to the Effective Time, the Company shall use its
best efforts to (i) obtain all necessary consents from, and provide any
required notices to, holders of Company Stock Options and (ii) amend the
terms of the applicable Company Stock Option Plan, in each case as is
necessary to give effect to the provisions of this Section 2.4.
(d) The Company agrees that, from the date hereof through
the Effective Time, it will not grant any stock options, restricted stock,
stock appreciation rights or similar rights.
ARTICLE III
Representations and Warranties of the Company
The Company hereby represents and warrants to the Parent and the
Sub on the date of this Agreement that:
Section 3.1 Due Incorporation and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York, has the corporate power and authority to own
its properties and assets 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 of the jurisdictions in which the ownership of its properties or the
conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect. The
Company has delivered to the Parent copies of the certificates of
incorporation and by-laws or other organizational documents of the Company.
Such certificates of incorporation and by-laws or other organizational
documents are complete and correct and in full force and effect, and
neither the Company nor any of its Subsidiaries is in violation of any of
the provisions of their respective certificates of incorporation, by-laws
or similar organizational documents. Each of the Company's Subsidiaries is
a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization, has the
corporate power and authority to own its properties and assets 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 of its properties or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect. All the outstanding shares of capital stock of, or other
ownership interests in, the Company's Subsidiaries are duly authorized,
validly issued, fully paid and non-assessable and are owned by the Company,
directly or indirectly, free and clear of all liens, claims, mortgages,
encumbrances, pledges, security interests, equities or charges of any kind
except the liens resulting from the pledge of all of the outstanding shares
of capital stock of the Company's Subsidiaries to Fleet Bank, N.A. under
the Amended and Restated Revolving Credit and Term Loan Agreements with
Fleet Bank, N.A. and The Chase Manhattan Bank, dated as of January 1, 1996
(the "Company Credit Facility"). Other than the Subsidiaries, there are no
other Persons in which the Company owns, of record or beneficially, any
direct or indirect equity interest or any right (including contingent
rights) to acquire the same; provided, however, the Company has the right
(but not the obligation) to acquire an interest in Industrias Marino and/or
CafE El Marino.
Section 3.2 Capitalization. The authorized capital stock of
the Company consists of 50,000,000 shares of Company Common Stock. As of
the date hereof, (i) 10,996,510 shares of Company Common Stock are issued
and outstanding; (ii) 401,000 shares of Company Common Stock are subject to
outstanding options issued pursuant to the Company's 1984 Incentive
Compensation Plan ("1984 Plan"), and 76,500 additional shares of Company
Common Stock are reserved for issuance under the 1984 Plan; (iii) 475,522
shares of Company Common Stock are issued and held in the treasury of the
Company; (iv) 6,232,077 shares of Company Common Stock are reserved for
issuance upon the conversion of the Company's outstanding 7% Convertible
Senior Subordinated Debentures due April 1, 2012 (the "7% Debentures"); and
(v) 4,012,676 shares of Company Common Stock are reserved for issuance upon
the conversion of the Company's outstanding 8% Convertible Subordinated
Debentures due September 15, 2006 (the "8% Debentures" and, together with
the 7% Debentures, the "Debentures"). All the outstanding shares are duly
authorized, validly issued, fully paid and non-assessable. Except with
respect to the capital stock of the Company's Subsidiaries which is pledged
to Fleet Bank, N.A. pursuant to the Company Credit Facility and except as
set forth above or in Section 3.2 of the Company Disclosure Schedule, other
than the Company's obligations under the Rights Agreement and the
transactions contemplated by this Agreement, (1) there are no shares of
capital stock of the Company authorized, issued or outstanding, (2) there
are no authorized or outstanding options, warrants, calls, preemptive
rights, subscriptions or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital
stock of the Company or any of its Subsidiaries, obligating the Company or
any of its Subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or other equity interest in
the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company
or any of its Subsidiaries to grant, extend or enter into any such option,
warrant, call, subscription, agreement, arrangement or commitment, and (3)
there are no outstanding contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any Shares or
other capital stock of the Company or any Subsidiary or to provide funds to
make any investment (in the form of a loan, capital contribution or
otherwise) in any Subsidiary or any other entity other than loans to
Subsidiaries in the ordinary course of business.
Section 3.3 Authorization; Enforceability.
(a) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby are
within the corporate power and authority of the Company and, subject to the
provisions hereof, have been duly authorized by the Board of Directors of
the Company. Except for the requisite approval and authorization of this
Agreement and the Merger by the Company's Shareholders pursuant to the
NYBCL (the "Company Shareholder Approval"), no other corporate proceeding
or action on the part of the Company or the holders of any class or series
of the Company's capital stock is necessary to authorize the execution and
delivery by the Company of this Agreement and the consummation by it of the
transactions contemplated hereby. This Agreement is the valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
Laws generally affecting the rights of creditors and subject to general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) Prior to execution and delivery of this Agreement, the
Board of Directors of the Company has (at a meeting duly called and held)
unanimously (i) approved this Agreement and the transactions contemplated
hereby in accordance with the NYBCL, (ii) resolved to recommend the
approval of this Agreement by the Company's shareholders and (iii) directed
that this agreement be submitted to the Company's shareholders for their
approval.
(c) No state antitakeover, "fair price," "moratorium,"
"control share acquisition" or similar statute or regulation applicable to
the Company (including Section 912 of the NYBCL) would have the effect of
invalidating or voiding this Agreement or any material provision hereof or
would subject the Parent or the Sub to any impediment or condition in
connection with the exercise of any of their respective rights under this
Agreement.
Section 3.4 No Violation or Conflict. Except as set forth in
Section 3.4 of the Company Disclosure Schedule, the execution and delivery
of this Agreement and all documents and instruments required by this
Agreement to be executed and delivered by the Company do not, and the
consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, (i) result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any Contract or to
the loss of a material benefit under any Contract, or result in the
creation of any Lien upon any of the properties or assets of the Company or
its Subsidiaries, (ii) conflict with or result in any violation of any
provision of the Restated Certificate of Incorporation or the Amended and
Restated By-Laws, in each case as amended, of the Company, (iii) violate
any Existing Permits or any Law applicable to the Company or its
Subsidiaries or any of their respective properties or assets, other than,
in the case of clauses (i) and (iii), any such violations, defaults,
rights, losses or Liens that, individually or in the aggregate, would not
have a Material Adverse Effect or would not affect adversely the ability of
the Company to consummate the transactions contemplated by this Agreement.
Section 3.5 SEC Reports; Financial Statements; Indebtedness;
Other Information.
(a) The Company has filed with the SEC true and complete
copies of all forms, reports, schedules, statements and other documents
required to be filed by it since July 31, 1996 under the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the "Exchange Act"), or the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively, the
"Securities Act") (as such documents have been amended since the time of
their filing, collectively, the "Company SEC Reports"). As of their
respective dates or, if amended, as of the date of the last such amendment,
the Company SEC Reports, including, without limitation, any financial
statements or schedules included therein (a) did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading and
(b) complied in all material respects with the applicable requirements of
the Exchange Act and the Securities Act, as the case may be, and the
applicable rules and regulations of the SEC thereunder at such time of
filing.
(b) Company Financial Statements. The Company Financial
Statements comply in all material respects with the applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis by the Company
during the periods involved, except as otherwise described in the notes
thereto and, in the case of the unaudited interim financial statements,
subject to usual and recurring year-end adjustments that have not been and
are not expected to be material in amount. The Company Financial
Statements fairly present in all material respects the financial position
of the Company as of the date set forth on each of such Company Financial
Statements and the results of operations of the Company for the periods
indicated. Except as set forth in Section 3.5(b) of the Company Disclosure
Schedule and except as set forth in the Company SEC Reports filed and
publicly available and except for liabilities and obligations incurred in
the ordinary course of business consistent with past practice since the
date of the most recent Company Financial Statements included in the
Company SEC Reports filed and publicly available prior to the date hereof,
neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) which are reasonably likely to have a Material Adverse Effect,
including any liabilities arising or required to be accrued as a result of
the consummation of the transactions contemplated hereby.
(c) Indebtedness. As of June 7, 1999, the Company had
outstanding Indebtedness of $86,504,000 (including the Debentures).
(d) Additional Company Information. The information set
forth in Section 3.5(d) of the Company Disclosure Schedule (including the
financial information with respect to the nine-month period ending April
30, 1999 (the "1999 Financial Information")), which was provided to the
Parent prior to the date hereof are accurate and complete statements of the
matters set forth therein. The information contained in the Company's
Quarterly Report on Form 10-Q for the nine months ended April 30, 1999 will
not differ in any material respect from the 1999 Financial Information.
Section 3.6 Litigation.
(a) Except as disclosed in the Company SEC Reports filed
prior to the date hereof or in Section 3.6 of the Company Disclosure
Schedule, as of the date hereof, there are no actions, suits, claims
(including worker's compensation claims), litigation or other governmental
or judicial proceedings or investigations or arbitrations pending against
the Company, its Subsidiaries or any of its properties, assets or
businesses, or, to the knowledge of the Company, any of the Company's or
any Subsidiary's current or former directors or officers or any other
Person whom the Company or any Subsidiary has agreed to indemnify that is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect; (b) there are no actions, suits or proceedings pending or,
to the knowledge of the Company, threatened against the Company by any
Person which question the legality or validity of the transactions
contemplated by this Agreement; and (c) there are no outstanding orders,
judgments, injunctions, awards or decrees of any Governmental Entity
against the Company, its Subsidiaries, any of its properties, assets or
businesses, or, to the knowledge of the Company, any of the Company's or
its Subsidiaries' current or former directors or officers or any other
person whom the Company or any Subsidiary has agreed to indemnify that is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect.
Section 3.7 Absence of Certain Changes. Except as disclosed
in the Company SEC Reports filed prior to the date hereof or as set forth
in Section 3.7 of the Company Disclosure Schedule and except for matters
directly resulting from (x) the filing by Parent with the SEC of its
Schedule 13D or its tender offer with respect to the Company or (y) the
execution of this Agreement and the consummation of the transactions
contemplated hereby, since January 31, 1999, (a) the businesses of the
Company and its Subsidiaries have been conducted in the ordinary course
consistent with past practice, (b) there has not been any event,
occurrence, development or state of circumstances or facts that has had, or
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect, and (c) neither the Company nor any of its Subsidiaries has
taken any action, which if taken after the date hereof, would constitute a
material breach of any provision set forth in Section 5.1 hereof (other
than paragraphs (d) and (g) of such Section 5.1).
Section 3.8 Performance of Contracts. Each of the Contracts
is in full force and effect and constitutes the legal and binding
obligation of the Company and, to the knowledge of the Company, constitutes
the legal and binding obligation of the other parties thereto, except where
the failure to be in full force and effect is not reasonably likely to have
a Material Adverse Effect. There are no existing breaches or defaults by
the Company or, to the knowledge of the Company, any other party under any
Contract the effect of which would constitute a Material Adverse Effect
and, to the knowledge of the Company, no event has occurred which, with the
passage of time or the giving of notice or both, could reasonably be
expected to constitute such a breach or default. The Company is not
subject to the terms of any non-competition or other agreement (including
any area restrictions) which restrict in any material respect the conduct
of the respective businesses of the Company and its Subsidiaries as
presently conducted.
Section 3.9 Employee Benefit Plans.
(a) Existing Plans. Except as set forth in Section 3.9(a)
of the Company Disclosure Schedule, neither the Company nor any Company
ERISA Affiliate (as hereinafter defined) maintains or contributes to, nor
is it bound by, nor has it maintained or contributed to at any time during
the three (3) years prior to the date hereof, any Existing Plan. To the
knowledge of the Company, all of the Existing Plans that are subject to
ERISA or the Code are in compliance in all material respects with ERISA and
the Code. Except as set forth in Section 3.9(b) of the Company Disclosure
Schedule, no Existing Plans have been adopted or modified in any material
respect since July 31, 1998. All of the Existing Plans which are intended
to meet the requirements of Section 401(a) of the Code have been determined
by the Internal Revenue Service to be "qualified" within the meaning of the
Code or have been filed with the Internal Revenue Service with a request
for a determination letter on or prior to the end of the applicable
remedial amendment period and, to the knowledge of the Company, there are
no facts which would adversely affect the tax qualified status of any of
the Existing Plans. "Company ERISA Affiliate" shall mean any Person which
together with the Company would be deemed a "single employer" within the
meaning of Section 4001 of ERISA.
(b) ERISA Code. There is no accumulated funding
deficiency, within the meaning of Section 302 of ERISA or Section 412 of
the Code, in connection with the Existing Plans. No reportable event, as
defined in ERISA (other than reportable events for which the 30-day notice
requirement has been waived) has occurred in connection with the Existing
Plans since January 1, 1995. Except as set forth in Section 3.9(c) of the
Company Disclosure Schedule, neither the Company nor any Company ERISA
Affiliate is contributing to or has any material liability with respect to
any multiemployer plan within the meaning of Section 3(37) of ERISA.
(c) Compliance. Neither the Company nor any Company ERISA
Affiliate has incurred, directly or indirectly, any material liability to
or on account of an Existing Plan pursuant to Title IV, Subtitle D of
ERISA, and, to the knowledge of the Company, no proceedings have been
instituted to terminate any Existing Plan that is subject to Title IV,
Subtitle D of ERISA.
(d) ESOP. With respect to any Existing Plan that is an
employee stock ownership plan within the meaning of Section 4975(e)(7) of
the Code (an "ESOP") any indebtedness owed to the Company by any such ESOP
is secured by the shares of Company Common Stock acquired by such ESOP with
the proceeds of such indebtedness, provided, however, that in the event of
a change in control of the Company, any such indebtedness is forgiven or
the Company is required to make sufficient contributions to enable the ESOP
to repay such indebtedness in full.
(e) Funding. As of the last valuation date of each
Existing Plan that is subject to Title IV, Subtitle D of ERISA, the current
value of the assets of each such Existing Plan is at least ninety (90)
percent of the present value of the accrued benefits under each such
Existing Plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such Existing
Plan's actuary with respect to such Existing Plan; and all contributions or
other amounts payable by the Company as of the Effective Time with respect
to the current or prior plan year of each Existing Plan have been either
paid or accrued on the balance sheet of the Company. There are no material
pending, or, to the knowledge of the Company, threatened or anticipated
claims (other than routine claims for benefits) by, on behalf of or against
any of the Existing Plans or any trusts related thereto.
(f) Other Plan Obligations. To the knowledge of the
Company, neither the Company nor any Company ERISA Affiliate, nor any
Existing Plan, nor any trust created thereunder, nor any trustee or
administrator thereof, has engaged in a transaction in connection with
which the Company or any Company ERISA Affiliate, any Existing Plan, any
such trust, or any trustee or administrator thereof, or any party dealing
with any Existing Plan or any such trust could be subject to either a civil
penalty assessed pursuant to Section 409 or 502(j) of ERISA or a tax
imposed pursuant to Section 4975 or 4976 of the Code. No Existing Plan
provides death or medical benefits (whether or not insured), with respect
to current or former employees of the Company or any Company ERISA
Affiliate beyond their retirement other than (i) coverage mandated by
applicable Law or (ii) death benefits under any "employee pension plan," as
that term is defined in Section 3(2) of ERISA.
Section 3.10 Taxes. Except as disclosed in Section 3.10 of the
Company Disclosure Schedule and except as would not have a Material Adverse
Effect:
(a) the Company and each of its Subsidiaries have timely
filed or caused to be filed (except where the failure to file on a timely
basis has not or will not result in the imposition of any material
additional tax liability and taking into account all extensions) all Tax
Returns required to be filed by them and all such Tax Returns were true,
correct and complete in all material respects when filed.
(b) the Company and each of its Subsidiaries have paid (or
have had paid on their behalf) or, where payment is not yet due, have
established (or have had established on their behalf and for their sole
benefit and recourse) an adequate accrual for the payment of all material
Taxes due with respect to any period ending on or prior to the Closing;
(c) none of the Company or any of its Subsidiaries has
received written notice of any ongoing, pending or threatened federal,
state, local or foreign tax audit or examination of any Tax Returns;
(d) there are no outstanding written requests, agreements,
consents or waivers to extend the statutory period of limitations
applicable to the assessment of any material Taxes or deficiencies against
the Company or any of its Subsidiaries;
(e) none of the Company or any of its Subsidiaries is a
party to an agreement or arrangement providing for the allocation or
sharing of any material Taxes;
(f) there are no statutory liens for any material Taxes
upon the assets of the Company or any of its Subsidiaries, except liens for
Taxes not yet due and payable and liens for Taxes that are being contested
in good faith (and for which adequate accruals have been established);
(g) no consent to the application of Section 341(f)(2) of
the Code has been made or filed by or with respect to the Company, any of
its Subsidiaries or any of their assets or properties;
(h) none of the Company or any of its Subsidiaries have
taken any action that would require an adjustment pursuant to Section 481
of the Code by reason of a change in accounting method or otherwise;
(i) except as disclosed in Section 3.10(i) of the Company
Disclosure Schedule, there have not been, nor will there be from the date
hereof through and including the Closing Date, any payments, or any
agreements to make payments, which would be "excess parachute payments"
under Section 280G of the Code;
(j) none of the Company or any of its Subsidiaries has
executed or entered into any closing agreement pursuant to Section 7121 of
the Code or any predecessor provisions thereof or any similar provision of
state or other law with respect to any period for which the statue of
limitations has not expired;
(k) none of the Company or any of its Subsidiaries has been
or is in violation (or with notice or lapse of time or both, would be in
violation) of any applicable law relating to the payment or withholding of
Taxes. The Company and each of its Subsidiaries have duly and timely
withheld from employee salaries, wages and other compensation, and paid
over to the appropriate taxing authorities all amounts required to be so
withheld and paid over for all periods under all applicable laws; and
(l) none of the Company or any of its Subsidiaries is or
has been a "United States real property holding company" (as defined in
Code Section 897(c)(2)) during the applicable period specified in Code
Section 897(c)(1)(ii).
Section 3.11 Governmental Approvals. No permission, approval,
determination, consent or waiver by, or any declaration, filing or
registration with, any federal, state, local or foreign court, arbitral
tribunal, administrative agency or commission or other governmental or
regulatory authority or administrative agency (a "Governmental Entity") is
required by the Company in connection with the execution and delivery of
this Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except: (a) the approvals described in
Section 3.11 of the Company Disclosure Schedule; (b) in connection with the
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), and antitrust or other competition
laws of other jurisdictions; (c) pursuant to the applicable requirements of
the Securities Act, the Exchange Act, state blue sky laws, the NYSE, and
the rules and regulations promulgated thereby; and (d) the filing of the
Certificate of Merger as described in this Agreement.
Section 3.12 Labor Matters. Except as described in Section
3.12 of the Company Disclosure Schedule, there is (i) no pending, nor has
the Company experienced since July 31, 1997 any, labor dispute, strike or
organized work stoppage and, to the knowledge of the Company, there is no
threatened material labor dispute, strike or organized work stoppage
against the Company and (ii) (A) to the knowledge of the Company, no union
organizing activities are in process or have been proposed or threatened
involving any employees of the Company not presently organized, and (B) no
petitions have been filed or, to the knowledge of the Company, have been
threatened or proposed to be filed, for union organization or
representation of employees of the Company not presently organized except
with respect to matters in clauses (i) and (ii) which do not have a
Material Adverse Effect.
Section 3.13 Existing Permits and Violations of Law. The
Company has all licenses, permits, approvals, exemptions, orders,
approvals, franchises, qualifications, permissions, agreements and
governmental authorizations which the Company is required to have for the
conduct of its business as currently conducted, except where the failure to
have the same would not have a Material Adverse Effect. No action or
proceeding is pending or, to the knowledge of the Company, threatened that
is reasonably likely to result in a revocation, non-renewal, termination,
suspension or other material impairment of any Existing Permits, except for
such revocations, non-renewals, terminations, suspensions or other
impairments as would not be reasonably likely to result in a Material
Adverse Effect. The business of the Company is not being conducted in
violation of any applicable Law, except for such violations which would not
have a Material Adverse Effect. No Governmental Entity has indicated to
the Company an intention to conduct an investigation or review with respect
to the Company other than, in each case, those which would not have a
Material Adverse Effect.
Section 3.14 Intangible Assets. (i) There are no claims,
demands or proceedings instituted, pending or, to the knowledge of the
Company, threatened by any Person contesting or challenging the right of
the Company or any of its Subsidiaries to use any of its Intangible Assets;
(ii) each trademark registration, service xxxx registration, copyright
registration and patent used by the Company is owned by or licensed
pursuant to a valid license agreement to the Company or its Subsidiaries
and, with respect to those owned by the Company or its Subsidiaries, has
been maintained in good standing and, with respect to those licensed to the
Company or its Subsidiaries, to the Company's knowledge, has been
maintained in good standing; (iii) to the knowledge of the Company, there
are no Intangible Assets owned by a third Person which the Company or any
of its Subsidiaries is using without license to do so; (iv) the Company and
each of its Subsidiaries owns or possesses adequate licenses or other
rights to use all Intangible Assets necessary to conduct its business as
now conducted; and (v) the consummation of the Merger and the transactions
contemplated by this Agreement will not impair the validity,
enforceability, ownership or right of the Company and each of its
Subsidiaries to use its Intangible Assets; except, in each of clauses (i)
through (v), as would not result in a Material Adverse Effect.
Section 3.15 Year 2000. Except as, individually or in the
aggregate, is not reasonably likely to result in a Material Adverse Effect:
(a) all of the Computer Programs, computer firmware,
computer hardware (whether general or special purpose) and other similar or
related items of automated, computerized and/or software system(s) that are
used or relied on by the Company or by any of its Subsidiaries in the
conduct of their respective businesses will not malfunction, will not cease
to function, will not generate incorrect data, and will not provide
incorrect results when processing, providing and/or receiving (i) date-
related data into and between the twentieth and twenty-first centuries and
(ii) date-related data in connection with any valid date in the twentieth
and twenty-first centuries; and
(b) all of the products and services sold, licensed,
rendered or otherwise provided by the Company or by any of its Subsidiaries
in the conduct of their respective businesses will not malfunction, will
not cease to function, will not generate incorrect data and will not
produce incorrect results when processing, providing and/or receiving (i)
date-related data into and between the twentieth and twenty-first centuries
and (ii) date-related data in connection with any valid date in the
twentieth and twenty-first centuries; and neither the Company nor any of
its Subsidiaries is or shall be subject to claims or liabilities arising
from their failure to do so; and
(c) neither the Company nor any of its Subsidiaries has
made other representations or warranties regarding the ability of any
product or service sold, licensed, rendered or otherwise provided by the
Company or by any of its Subsidiaries in the conduct of their respective
businesses to operate without malfunction, to operate without ceasing to
function, to generate correct data and to produce correct results when
processing, providing and/or receiving (i) date-related data into and
between the twentieth and twenty-first centuries and (ii) date-related data
in connection with any valid date in the twentieth and twenty-first
centuries.
Section 3.16 Customers and Suppliers. Since January 31, 1999,
other than as a result of the execution of this Agreement and the
consummation of the transactions contemplated hereby, there has been no
termination, cancellation or material curtailment of the business
relationship of the Company with any customer or supplier or group of
affiliated customers or suppliers which would result in a Material Adverse
Effect nor, to the knowledge of the Company, any written notice of intent
to so terminate, cancel or materially curtail such business relationships.
Section 3.17 Environmental Matters.
(a) Except as described in Section 3.17 of the Company
Disclosure Schedule and except as is not reasonably likely to result in a
Material Adverse Effect, the Company is, and at all times has been, in full
compliance with and has not been and is not in violation of or liable
under, any Environmental Law. The Company has not received, any actual or
threatened order, notice or other communication (written or oral) from (i)
any Governmental Body or third party or (ii) the current or prior owner or
operator of any property, of any actual or potential violation or failure
to comply with any Environmental Law, or of any actual or threatened
obligation to undertake or bear the cost of any Environmental Claim with
respect to any property or assets (whether real, personal or mixed) in
which the Company has had an interest except as is not reasonably likely to
result in a Material Adverse Effect.
(b) Except as described in Section 3.17 of the Company
Disclosure Schedule and except as is not reasonably likely to result in a
Material Adverse Effect, there are no pending or, to the knowledge of the
Company, threatened Environmental Claims, encumbrances, or other
restrictions of any nature, resulting from any liabilities or arising under
or pursuant to any Environmental Law, with respect to or affecting any
property and assets (whether real, personal or mixed) in which the Company
has or had an interest.
(c) Environmental Permits. The Company has obtained all
material environmental, health and safety permits and governmental
authorizations (collectively, the "Environmental Permits") required for its
operations, and all such permits are in good standing and the Company is in
compliance in all material respect with all terms and conditions of the
Environmental Permits.
Section 3.18 Disclosure Documents. None of the information
supplied in writing or to be supplied in writing by the Company for
inclusion in (i) the definitive proxy statement (as the same may be amended
or supplemented from time to time, the "Proxy Statement/Prospectus"), and
(ii) the registration statement on Form S-4 to be filed with the SEC by the
Parent in connection with the Merger (as the same may be amended or
supplemented from time to time, the "Registration Statement") including the
Proxy Statement/Prospectus included therein, will, in the case of the Proxy
Statement/Prospectus, either at the time of mailing of the Proxy
Statement/Prospectus to shareholders of the Company or at the time of the
special meeting of the shareholders of the Company (the "Shareholders
Meeting") to be duly called, noticed, convened and held as soon as
practicable following the date hereof for the purpose of voting to approve
this Agreement and the Merger, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading or will, in the
case of the Registration Statement, either at the time the Registration
Statement is filed with the SEC or at the time the Registration Statement
becomes effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading except
that no representation or warranty is made by the Company with respect to
(i) any forward-looking information regarding or statements made by the
Company (whether or not included in the Registration Statement) or (ii)
with respect to the information supplied by the Parent.
Section 3.19 Opinion of Financial Advisor. The Board of
Directors of the Company has received the opinion of Credit Suisse First
Boston Corporation ("Credit Suisse First Boston"), its financial advisor,
to the effect that, as of the date of this Agreement, the Exchange Ratio,
based upon and subject to the assumptions and limitations set forth in such
opinion, is fair to the holders of the Company Common Stock (other than
Parent and its Affiliates) from a financial point of view, a copy of the
written opinion of which will be delivered to the Parent after receipt
thereof by the Company.
Section 3.20 Certain Agreements. Except as set forth in
Section 3.20 of the Company Disclosure Schedule, the Company is not a party
to any oral or written Agreement or plan, including any stock option plan,
stock appreciation rights plan, restricted stock plan or stock purchase
plan, any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement. Except as described in
Section 3.20 of the Company Disclosure Schedule, the transactions
contemplated by this Agreement will not constitute a "change of control"
under, require the consent from or the giving of notice to any third party
pursuant to, or accelerate the vesting or repurchase rights under, the
terms, conditions or provisions of any loan or credit agreement, note,
bond, mortgage or indenture or any material license, lease, contract,
Agreement or other instrument or obligation to which the Company is a party
or by which any of them or any of their properties or assets may be bound.
Except as set forth in Section 3.20 of the Company Disclosure Schedule or
as expressly provided herein, there are no material amounts payable by the
Company to any officers of the Company (in their capacity as officers) as a
result of the transactions contemplated by this Agreement. Except as set
forth in Section 3.20 of the Company Disclosure Schedule, there are no
contractual agreements between any officers or directors of the Company and
the Company.
Section 3.21 Rights Agreement. The Company has taken all
action which may be necessary under the Rights Agreement, so that the
execution of this Agreement and any amendments thereto by the parties
hereto and the consummation of the transactions contemplated hereby and
thereby shall not cause (i) the Parent and/or the Sub or their respective
Affiliates or Associates to become an Acquiring Person (as such terms are
defined in the Rights Agreement) unless this Agreement has been terminated
in accordance with its terms or (ii) a Distribution Date, a Stock
Acquisition Date (as such terms are defined in the Rights Agreement) or
certain other events (as described in the Rights Agreement) to occur,
irrespective of the number of shares of Company Common Stock acquired
pursuant to the Merger or other transactions contemplated by this
Agreement.
Section 3.22 Vote Required. The affirmative vote of the
holders of two-thirds of the shares of the Company Common Stock entitled to
vote with respect to the Merger is the only vote of the holders of any
class or series of the Company's capital stock or other securities
necessary for the Company to approve the Merger, this Agreement and the
transactions contemplated hereby.
Section 3.23 Finders or Brokers. Except for Credit Suisse
First Boston with respect to the Company, a copy of whose engagement
agreement has been provided to the Parent, neither the Company nor its
Subsidiaries has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who
might be entitled to any fee or any commission in connection with or upon
consummation of the transactions contemplated hereby.
ARTICLE IV
Representations and Warranties of the Parent and the Sub
The Parent and the Sub hereby represent and warrant to the
Company on the date of this Agreement that:
Section 4.1 Due Incorporation and Authority. Each of the
Parent and the Sub is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. Each of
the Parent and the Sub has the corporate power and authority to own its
properties and assets 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 of the jurisdictions in which the ownership of its properties or the
conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified would not,
individually or in the aggregate, have a Parent Material Adverse Effect.
The Parent has delivered to the Company copies of the certificates of
incorporation and by-laws or other organizational documents of the Parent
and the Sub.
Section 4.2 Authorization; Enforceability. Each of the Parent
and the Sub has the corporate power and authority to enter into this
Agreement and carry out its obligations hereunder and consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of the Parent and the Sub,
and no other corporate proceeding or action on the part of the Parent or
the Sub is necessary to authorize this Agreement and the consummation of
the transactions contemplated hereby. This Agreement is, and the other
documents and instruments required by this Agreement to be executed and
delivered by the Parent and the Sub will be, when executed and delivered by
the Parent and the Sub, the valid and binding obligations of the Parent and
the Sub, enforceable against each party in accordance with their respective
terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws
generally affecting the rights of creditors and subject to general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 4.3 No Violation or Conflict. The execution and
delivery of this Agreement and all documents and instruments required by
this Agreement to be executed and delivered by the Parent and the Sub do
not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, (i) result in any violation
of, or default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancellation or acceleration of any
contract, agreement and obligation, written or oral, to which the Parent or
the Sub is a party or by which either of them or any of their assets are
bound, including, without limitation, any loan, bond, mortgage, indenture,
lease, instrument, franchise or license or to the loss of a material
benefit under any such contract, agreement or obligation or result in the
creation of any Lien upon any of the properties or assets of the Parent or
the Sub, (ii) conflict with or result in any violation of any provision of
the certificate of incorporation or by-laws or other equivalent
organizational document, in each case as amended, of the Parent and the
Sub, (iii) violate any permits, licenses, approvals, qualifications,
authorizations, and registrations required by Law which the Parent or the
Sub has or holds or any Law applicable to the Parent or the Sub or any of
their respective properties or assets, other than, in the case of clauses
(i) and (iii), any such violations, defaults, rights, losses or Liens that,
individually or in the aggregate, would not have a Parent Material Adverse
Effect or would not affect adversely the ability of the Company to
consummate the Merger and the other transactions contemplated by this
Agreement.
Section 4.4 SEC Reports; Financial Statements.
(a) The Parent has filed with the SEC true and complete
copies of all forms, reports, schedules, statements and other documents
required to be filed by it since June 29, 1996 under the Exchange Act or
the Securities Act (as such documents have been amended since the time of
their filing, collectively, the "Parent SEC Reports"). As of their
respective dates or, if amended, as of the date of the last such amendment,
the Parent SEC Reports, including, without limitation, any financial
statements or schedules included therein (a) did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading and
(b) complied in all material respects with the applicable requirements of
the Exchange Act and the Securities Act, as the case may be, and the
applicable rules and regulations of the SEC thereunder at such time of
filing.
(b) Parent Financial Statements. The Parent Financial
Statements comply in all material respects with the applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis by the Parent
during the periods involved, except as otherwise described in the notes
thereto and, in the case of the unaudited interim financial statements,
subject to usual and recurring year-end adjustments that have not been and
are not expected to be material in amount. The Parent Financial Statements
fairly present in all material respects the financial position of the
Parent as of the date set forth on each of such Parent Financial Statements
and the results of operations of the Parent for the periods indicated.
Section 4.5 Disclosure Documents. None of the information
supplied in writing or to be supplied in writing by the Parent for
inclusion in the Proxy Statement/Prospectus and the Registration Statement
will, in the case of the Proxy Statement/Prospectus, either at the time of
mailing of the Proxy Statement/Prospectus to shareholders of the Company or
at the time of the Shareholders Meeting contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading or will, in the
case of the Registration Statement, either at the time the Registration
Statement is filed with the SEC or at the time the Registration Statement
becomes effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Registration Statement will comply as to form in all material respects with
the provisions of the Securities Act, except that no representation or
warranty is made by the Parent with respect to (i) any forward-looking
information regarding or statements made by the Parent (whether or not
included in the Registration Statement) or (ii) information supplied by the
Company.
Section 4.6 Governmental Approvals. No permission, approval,
determination, consent or waiver by, or any declaration, filing or
registration with, any Governmental Entity is required by the Parent or the
Sub in connection with the execution and delivery of this Agreement by the
Parent and the Sub or the consummation by either of them of the
transactions contemplated hereby, except: (a) in connection with the
applicable requirements of the HSR Act and antitrust or other competition
laws of other jurisdictions; (b) pursuant to the applicable requirements of
the Securities Act, the Exchange Act, state blue sky laws, the NYSE, and
the rules and regulations promulgated thereby; and (c) the filing of the
Certificate of Merger as described in this Agreement.
Section 4.7 Authorization of Parent Common Stock. Prior to
the Effective Time, the Parent will have taken all necessary action to
permit it to issue the number of shares of Parent Common Stock required to
be issued pursuant to Article II. Parent Common Stock issued pursuant to
Article II will, when issued in accordance with the terms hereof, be
validly issued, fully paid and nonassessable, and no stockholder of the
Parent will have any preemptive right of subscription or purchase in
respect thereof.
Section 4.8 Finders or Brokers. Except for Xxxxxxx Xxxxx &
Co. with respect to the Parent, neither the Parent nor the Sub has employed
any investment banker, broker, finder or intermediary in connection with
the transactions contemplated hereby who might be entitled to any fee or
any commission in connection with or upon consummation of the transactions
contemplated hereby.
Section 4.9 Interim Operations of the Sub. The Sub was formed
solely for the purpose of engaging in the transactions contemplated hereby,
has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
ARTICLE V
Covenants and Agreements
Section 5.1 Conduct of Business by the Company. From and
after the date of this Agreement and until the earlier of the termination
of this Agreement or the Effective Time (unless the other party shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement), the Company will preserve in all material respects its business
organization intact and will conduct its operations according to its
ordinary and usual course of business consistent in all material respects
with past practice, including, without limitation, retaining the services
of employees and conducting business with suppliers, customers, creditors
and others having business relationships with the Company. Without
limiting the generality of the foregoing, and except as otherwise permitted
in this Agreement or set forth on Section 5.1 of the Company Disclosure
Schedule, prior to the Effective Time, neither the Company nor its
Subsidiaries will:
(a) except for shares to be issued or delivered pursuant to
outstanding Options, upon conversion of the outstanding Debentures or
issuances by a Subsidiary of the Company to such Subsidiaries' parent,
issue deliver, sell, dispose of, pledge or otherwise encumber, or authorize
or propose the issuance, sale, disposition or pledge or other encumbrance
of (A) any additional shares of capital stock of any class, or any
securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for any shares of capital stock, or any rights,
warrants, options, calls, commitments or any other agreements of any
character to purchase or acquire any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of capital stock, or (B) any other
securities in respect of, in lieu of, or in substitution for, Company
Common Stock outstanding on the date hereof;
(b) amend its Restated Certificate of Incorporation or
Amended and Restated By-laws or, except to the extent required to comply
with its obligations hereunder, alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any Subsidiary of the Company (other than the
Merger) or split, combine, subdivide or reclassify any Company Common Stock
or declare, set aside for payment or pay any dividend, or make any other
actual, constructive or deemed distribution in respect of any Company
Common Stock or otherwise make any payments to shareholders of the Company
in their capacity as such;
(c) make payments or distributions (other than salaries,
director fees, expense reimbursements and other employee compensation in
the ordinary course of business consistent with past practice) to any
Affiliate of the Company; provided, however, dividends or distributions may
be made between wholly-owned Subsidiaries of the Company and between the
Company and wholly-owned Subsidiaries;
(d) enter into, accelerate, terminate, modify in any
material respect, or cancel any Contract involving either more than
$250,000 or outside the ordinary course of business or knowingly do any act
or knowingly omit to do any act or, to the extent within the Company's
reasonable control, knowingly permit any act or omission to act, which will
cause a breach of any of the Contracts that would have a Material Adverse
Effect;
(e) (i) except in a manner consistent with past practice,
grant any increase in the rate of pay of any of the Employees; (ii)
institute or amend any Employee Benefit Plan unless required by Law; (iii)
enter into or modify any written employment agreement with any Person; or
(iv) pay or accrue any bonus or incentive compensation to any Person;
(f) make any acquisition, by means of merger, consolidation
or otherwise, or disposition (other than short term investments of the
Company's cash balances in the ordinary course of business or disposition
of assets or securities in the ordinary course of business, consistent with
past practice), of assets or securities;
(g) authorize or make any individual capital expenditure in
excess of $250,000 or authorize or make capital expenditures in excess of
$1,000,000 in the aggregate (in the event the Closing does not occur before
October 31, 1999, such maximum amount will be increased to $1,500,000 and
if the Closing does not occur before November 30, 1999, such amount will be
increased to $2,000,000), except for those capital expenditures which have
been authorized on the date hereof and are specifically set forth in
Section 5.1(g) of the Company Disclosure Schedule;
(h) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the
ordinary course of business of liabilities reflected or reserved against
in, or contemplated by, the Company Financial Statements or incurred in the
ordinary course of business consistent with past practice;
(i) except as may be required as a result of a change in
law or in generally accepted accounting principles, make any change in
accounting policies or procedures applied by the Company (including tax
accounting policies and procedures);
(j) create, incur or assume any Indebtedness or make any
Investment, other than in the ordinary course of business;
(k) waive, amend or otherwise alter the Rights Agreement or
redeem the Rights or take any action to render Section 912 of the NYBCL
inapplicable to any transaction other than the transactions contemplated by
this Agreement;
(l) enter into an agreement to purchase green coffee with a
term exceeding four months or in an amount in excess of $1,500,000 or enter
into agreements to purchase green coffee (other than fixed price contracts
for the purchase of green coffee, all of which is committed to be purchased
pursuant to a matching bona fide fixed price sales contract with a third
party customer) in an aggregate amount (together with all existing
agreements to purchase green coffee) in excess of 20 million pounds;
provided, that the Company will consult with the Parent and consider in
good faith its views prior to entering into any agreement that results in
such aggregate amount exceeding 16 million pounds;
(m) knowingly do any act or omit to do any act that would
result in a breach of any representation by the Company set forth in this
Agreement; or
(n) authorize, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
Section 5.2 Shareholders Meeting; Registration Statement and
Proxy Statement/Prospectus.
(a) The Company agrees to take all steps necessary to cause
the Shareholders Meeting to be duly called, noticed, convened and held as
soon as practicable following the date hereof for the purpose of voting to
approve this Agreement and the Merger. Except as provided in Section
7.1(c) with respect to a Superior Proposal, the Board of Directors of the
Company shall recommend approval and adoption of this Agreement and the
Merger by the holders of Shares entitled to vote thereon ("Voting Shares").
(b) The Company and the Parent shall prepare as soon as
practicable, following the date of this Agreement, and shall file with the
SEC, the Registration Statement, including the related Proxy
Statement/Prospectus, under the Securities Act. The Company and the Parent
each shall use all reasonable efforts to have the Registration Statement
declared effective under the Securities Act as promptly as practicable
after such filing. The respective parties will cause the Registration
Statement to comply as to form in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the rules and
regulations thereunder. The Company and the Parent shall also take any
action required to be taken under state blue sky laws or other securities
laws in connection with the issuance of Parent Common Stock in the Merger.
(c) Each of the Company and the Parent shall furnish all
information concerning it required to be included in the Registration
Statement, including the related Proxy Statement/Prospectus. The Parent
agrees that the written information provided by it for inclusion in the
Registration Statement and the related Proxy Statement/Prospectus and each
amendment or supplement thereto at the time it is filed or becomes
effective, and at the time that the Proxy Statement/Prospectus which forms
a part thereof is mailed to the shareholders of the Company, 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; 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 was made by the Parent in reliance upon and in
conformity with written information concerning the Company furnished to the
Parent by the Company specifically for use in the Registration Statement
and the related Proxy Statement/Prospectus. The Company agrees that the
written information provided by it specifically for inclusion in the
Registration Statement and the related Proxy Statement/Prospectus and each
amendment or supplement thereto, at the time it is filed or becomes
effective, and at the time that the Proxy Statement/Prospectus which forms
a part thereof is mailed to the shareholders of the Company, will not
contain 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.
Section 5.3 Listing of Parent Common Stock. The Parent shall
use its best efforts to cause the shares of Parent Common Stock to be
issued in the Merger to be approved for listing on the NYSE, subject to
official notice of issuance, prior to the Closing Date.
Section 5.4 Access. The Company shall (and shall cause each
of its Subsidiaries to) afford to the officers, employees, accountants,
counsel and other authorized representatives of the Parent full and
complete access upon reasonable notice and at reasonable times, throughout
the period prior to the earlier of the Effective Time or the Termination
Date, to its properties, offices, employees, contracts, commitments, books
and records (including but not limited to Tax Returns and computer and
information systems) and any report, schedule or other document filed or
received by it pursuant to the requirements of federal or state securities
laws and shall (and shall cause each of its Subsidiaries to) furnish
promptly to the Parent such additional financial and operating data and
other information as to its and its Subsidiaries' respective businesses and
properties as the Parent may from time to time reasonably request;
provided, however, that the Parent's access to the Company's businesses
which directly compete with the Parent (LaTouraine, Xxxx'x and Chock Food
Service Distribution and Convenience Stores ("CFS"), collectively,
the"Competing Businesses") shall be limited to the top manager of each
Competing Business and shall not include customer lists and information
regarding specific customer locations, contract terms or other information
relating to the cost structure or margins of the Competing Businesses;
provided further, that the immediately preceding proviso shall not limit
Parent's access to information regarding the costs of manufacturing,
freight and storage of the CFS business. From and after the date of this
Agreement until the earlier of the Closing Date or the first anniversary of
any termination of this Agreement, the Parent and its Subsidiaries agree
not to solicit for employment any person employed by the Competing
Businesses or employ any person known by the Parent to be an employee of
the Company at the time of employment. In the event that the transactions
contemplated hereby are not consummated, the Parent and each of its
officers, employees, accountants, counsel and other authorized
representatives shall keep any information obtained in accordance with this
Section 5.4 confidential and not use such information for any other
purpose. The Parent and the Sub will use all reasonable efforts to
minimize any disruption to the businesses of the Company and its
Subsidiaries which may result from the requests for data and information
hereunder. No investigation pursuant to this Section 5.4 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
Section 5.5 Commercially Reasonable Efforts; Further
Assurances.
(a) Subject to the terms and conditions of this Agreement
and applicable law, each of the parties shall act in good faith and use its
commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement as soon as practicable. Without limiting the foregoing, the
parties shall (and shall cause their respective subsidiaries, and use
reasonable best efforts to cause their respective affiliates, directors,
officers, employees, agents, attorneys, accountants and representatives,
to) consult and fully cooperate with and provide assistance to each other
in (i) the preparation and filing with the SEC of the Registration
Statement and the Proxy Statement/Prospectus and all necessary amendments
or supplements thereto; (ii) obtain all necessary consents, approvals,
waivers, licenses, permits, authorizations, registrations, qualifications
or other permissions or actions by, and give all necessary notices to and
make all necessary filings with and applications and submissions to, any
Governmental Entity or other Person (except for approvals obtained under
the HSR Act) as soon as reasonably practicable after the date of this
Agreement; and (iii) provide all such information concerning such party,
its Subsidiaries and its officers, directors, employees, partners and
affiliates as may be necessary or reasonably requested in connection with
any of the foregoing. Prior to making any application to or filing with a
Governmental Entity or other entity in connection with this Agreement
(other than filing under the HSR Act), each party shall provide the other
party with drafts thereof and afford the other party a reasonable
opportunity to comment on such drafts.
(b) In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each of the parties to this
Agreement shall use their commercially reasonable best efforts to take all
such action.
(c) The Company, the Parent and the Sub each shall keep the
other apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the other
with copies of notices or other communications received by the Parent, the
Sub or the Company, as the case may be, or any of their respective
Subsidiaries (other than in any such case with respect to Acquisition
Proposals (as hereinafter defined)), from any third party and/or any
Governmental Entity with respect to the transactions contemplated by this
Agreement.
Section 5.6 Takeover Statute. If any "fair price,"
"moratorium," "control share acquisition" or other form of anti-takeover
statute or regulation shall become applicable to the transactions
contemplated hereby, each of the Company, the Parent and the Sub and the
members of their respective Boards of Directors shall grant such approvals
and take such actions as are reasonably necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the
terms contemplated hereby and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated
hereby.
Section 5.7 No Solicitation.
(a) The Company and its Affiliates shall not, directly or
indirectly, through any officer, director, employee, investment banker,
attorney, representative or agent of the Company or any of its
Subsidiaries, (i) solicit, initiate, facilitate, or encourage any inquiries
or proposals that constitute, or could reasonably be expected to lead to,
an Acquisition Proposal, (ii) engage in negotiations or discussions
concerning, or provide any non-public information or data to any Person or
entity relating to, any Acquisition Proposal, or (iii) agree to, approve or
recommend any Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; provided, however,
that nothing contained in this Agreement shall prevent the Company or its
Board of Directors from (A) furnishing nonpublic information or data to, or
entering into discussions or negotiations with, any Person in connection
with an unsolicited bona fide Acquisition Proposal for all of the
outstanding shares at a price more favorable to the Company's shareholders
than the Merger, from a party with sufficient financial resources available
to it to consummate such a transaction and that is reasonably likely to
result in a Superior Proposal (as hereinafter defined), if and only to the
extent that the Company's Board of Directors determines in good faith
(after consultation with its financial and legal advisors), that such
action is necessary for such Board of Directors to comply with its
fiduciary duties under applicable law, and prior to furnishing such non-
public information to, or entering into discussions or negotiations with,
such Person or entity, such Board of Directors receives from such Person or
entity an executed confidentiality agreement containing customary terms and
conditions; (B) complying with Rule 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal. The Company will immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of
the foregoing and request the return of all information provided to third
parties pursuant to a confidentiality agreement. For purposes of this
Agreement, "Superior Proposal" means any bona fide written Acquisition
Proposal, not subject to any financing condition or which includes written
commitments to finance such transaction from one or more financial
institutions capable of providing such commitments, for all of the
outstanding Shares and/or Debentures on terms that the Board of Directors
of the Company determines in good faith (after receiving the advice of a
financial advisor of nationally recognized reputation) are more favorable
and provide greater value to all the Company's shareholders than this
Agreement and the Merger taken as a whole. For purposes of this Agreement,
"Acquisition Proposal" means any offer or proposal for, or any indication
of interest in, a merger or other business combination involving the
Company or any Subsidiary of the Company or the acquisition of any equity
interest in, or a substantial portion of the assets of, the Company or any
Subsidiary of the Company, other than the transactions contemplated by this
Agreement.
(b) The Company shall (i) promptly (and in no event later
than 24 hours after receipt of any Acquisition Proposal) notify the Parent
after receipt by it of any Acquisition Proposal or any inquiries indicating
that any Person is considering making or wishes to make an Acquisition
Proposal, identifying such Person, (ii) promptly notify the Parent after
receipt of any request for nonpublic information relating to it or any of
its Subsidiaries or for access to its or any of its Subsidiaries'
properties, books or records by any Person, identifying such Person and the
information requested by such Person, that may be considering making, or
has made, an Acquisition Proposal and promptly provide the Parent with any
nonpublic information which is given to such Person pursuant to this
Section 5.7(b), (iii) keep the Parent advised of the status and principal
financial terms of any such Acquisition Proposal, indication or request,
and (iv) prior to furnishing any such information, provide reasonable
advance notice to the Parent that it intends to do so. The Company shall
give the Parent at least 24 hours' advance notice of any information to be
supplied to, and at least 24 hours' advance notice of any confidentiality
or other agreement to be entered into with, any Person making such
Acquisition Proposal.
Section 5.8 Public Announcement. The Parent and the Company
agree that neither one of them will issue any press release or otherwise
make any public statement or respond to any press inquiry with respect to
this Agreement or the transactions contemplated hereby without the prior
approval of the other party (which approval will not be unreasonably
withheld), except as may be required by applicable law, order of any court
or governmental agency or the rules of the NYSE.
Section 5.9 Notices of Certain Events. Each party shall, upon
obtaining knowledge of any of the following, promptly notify the other
party in writing of: (i) any Material Adverse Effect with respect to such
party; (ii) any change which makes it likely that any representation,
warranty or information set forth in this Agreement or its schedules
regarding such party or any of its Subsidiaries is not or will not be true
in any material respect at the Closing; (iii) the occurrence or non-
occurrence of any event the occurrence or non-occurrence of which would be
likely to cause any condition to the obligations of any party to effect the
transactions contemplated by this Agreement not to be satisfied; (iv) the
failure of such party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it pursuant to this Agreement
which would be likely to result in any condition to the obligations of any
party to effect the transactions contemplated by this Agreement not be
satisfied; (v) any notice or other communication from any Governmental
Entity in connection with the Merger; or (vi) with respect to the Company
or any of its Subsidiaries, any actions, suits, claims, investigations or
other proceedings (or communications indicating that the same may be
contemplated) commenced or threatened against the Company or any of its
Subsidiaries which, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 3.6 or which
relate to the consummation of the Merger; provided, however, that the
delivery of any notice pursuant to this Section 5.9 shall not cure any
breach of any representation or warranty or otherwise limit or affect the
remedies available to the other party.
Section 5.10 Indemnification and Insurance.
(a) From and after the Effective Time, the Parent agrees to
cause the Surviving Corporation to indemnify and hold harmless the current
or former directors or officers (the "Indemnified Parties") of the Company
against any losses, claims, damages, judgments, settlements, liabilities,
costs or expenses incurred in connection with any claim, action, suit,
proceeding or investigation arising out of or pertaining to acts or
omissions, or alleged acts or omissions, by them in their capacities as
such occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time (including, without
limitation, in connection with the Merger and the other transactions
contemplated by this Agreement), to the fullest extent that the Company or
such Subsidiaries would have been permitted, under the NYBCL and the
Restated Certificate of Incorporation or Amended and Restated By-laws of
the Company or the organizational documents of such Subsidiaries each as in
effect on the date of this Agreement. Such indemnification shall survive
the Merger and shall continue in full force and effect for a period of six
years following the Effective Time.
(b) For a period of three years following the Effective
Time, the Parent or the Surviving Corporation shall maintain in effect the
Company's current directors' and officers' liability insurance policy (the
"Company Policy"), or enter into a policy providing comparable coverage,
covering those persons who are currently covered by the Company Policy (a
copy of which has been heretofore delivered to the Parent); provided,
however, that in no event shall the Parent or the Surviving Corporation be
required to expend in any one year an amount in excess of 150% of the
annual premiums currently paid by the Company for such insurance; and,
provided, further, that if the annual premiums of such insurance coverage
exceed such amount, the Parent or the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage available for a
cost not exceeding such amount.
Section 5.11 Additional Reports. The Company and the Parent
shall furnish to the other party copies of all reports of the type referred
to in Section 3.5 and Section 4.4, respectively, which it files with the
SEC on or after the date hereof, and each of the Company and the Parent
represents and warrants that as of the respective dates thereof, such
reports will 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 therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements and
the unaudited consolidated interim financial statements included in such
reports (including any related notes and schedules) will fairly present in
all material respects the financial position of the Company and its
consolidated Subsidiaries and the Parent and its consolidated Subsidiaries,
respectively, as of the dates thereof and the results of operations and
cash flows or other information included therein for the periods or as of
the date then ended (subject, in the case of the interim financial
statements, to normal, recurring year-end adjustments), in each case in
accordance with past practice and generally accepted accounting principles
consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto).
Section 5.12 Affiliates. Prior to the Effective Time, the
Company shall deliver to the Parent a list of names and addresses of those
Persons who are, in the opinion of the Company, as of the time of the
Shareholders Meeting, "affiliates" of the Company within the meaning of
Rule 145 under the Securities Act. The Company shall provide to the Parent
such information and documents as the Parent shall reasonably request for
purposes of reviewing such list. There shall be added to such list the
names and addresses of any other Person subsequently identified by either
the Parent or the Company as a Person who may be deemed to be such an
affiliate of the Company; provided, however, that no such Person identified
by the Parent shall be added to the list of affiliates of the Company if
the Parent shall receive from the Company, on or before the date of the
Shareholders Meeting, an opinion of counsel reasonably satisfactory to the
Parent to the effect that such Person is not such an affiliate. The
Company shall seek to deliver or cause to be delivered to the Parent, prior
to the date of the Shareholders Meeting, from each affiliate of the Company
identified in the foregoing list (as the same may be supplemented as
aforesaid), a letter dated as of the Closing Date substantially in the form
attached as Exhibit A (the "Affiliates Letter"). The Parent shall not be
required to maintain the effectiveness of the Registration Statement or any
other registration statement under the Securities Act for the purposes of
resale of Parent Common Stock by such affiliates received in the Merger and
the certificates representing Parent Common Stock received by such
affiliates shall bear a customary legend regarding applicable Securities
Act restrictions and the provisions of this Section 5.12.
Section 5.13 Tax-Free Reorganization. Each of the Parent, Sub
and Company shall use all reasonable efforts to cause the Merger to
constitute a "reorganization" within the meaning of Section 368(a) of the
Code. Unless otherwise required (and then only to the extent otherwise
required) by a "determination" (as defined in Section 1313(a)(1)) of the
Code or by a similar applicable provision of state or local income tax law,
each party shall (i) report the Merger on all tax returns and other filings
as a reorganization with in the meaning of Section 368(a) of the Code and
(ii) not take any position that is inconsistent with the characterization
of the Merger as such a reorganization in any audit, administrative
proceeding, litigation or otherwise.
Section 5.14 Actions Regarding Debentures. Prior to the
Closing Date, the Company will consult with the Parent and consider in good
faith any arrangements proposed by the Parent to call the outstanding
Debentures for redemption. The Company will cooperate with the Parent in
connection with such arrangements and take all actions reasonably requested
to facilitate such redemption; provided, that the Company will not be
required to irrevocably call the Debentures for redemption prior to the
Closing Date unless it otherwise agrees to do so.
ARTICLE VI
Conditions to the Merger
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligations of each party to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions:
(a) The Company Shareholder Approval shall have been
obtained;
(b) No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
enforced by any Governmental Entity which prohibits, restricts or makes
illegal the consummation of the Merger substantially on the terms
contemplated hereby, and there shall be no order or injunction of a court
of competent jurisdiction in effect precluding or restricting consummation
of the Merger;
(c) Other than the filing provided for in Section 1.3
hereof, all filings required pursuant to Sections 3.11 and 4.6 hereof, and
all material consents, approvals, and authorizations required to be
obtained prior to the Effective Time by the parties hereto from any
Governmental Entity to consummate the Merger, shall have been made or
obtained, as the case may be;
(d) The Registration Statement shall have been declared
effective by the SEC under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement shall have been issued by
the SEC and no proceeding for that purpose shall have been initiated by the
SEC and not concluded or withdrawn; and
(e) The Parent Common Stock to be issued in the Merger
shall have been approved for listing on the NYSE, subject to official
notice of issuance.
Section 6.2 Conditions to the Parent's and the Sub's
Obligations to Effect the Merger. The obligations of the Parent and the
Sub to effect the Merger shall be subject to the fulfillment at or prior to
the Effective Time of each of the following conditions:
(a) The representations and warranties made by the Company
in this Agreement shall be true and correct (i) in all respects at and as
of the Effective Time (as to representations and warranties specifically
qualified or limited by the term "Material Adverse Effect," the word
"material" and phrases of like import), and (ii) in all material respects
at and as of the Effective Time (as to representations and warranties not
qualified or limited by the term "Material Adverse Effect," the word
"material" and phrases of like import), in each case with the same force
and effect as though made at and as of the Effective Time (except to the
extent they relate to a specific date), the Company shall have performed in
all material respects all of its obligations under this Agreement
theretofore to be performed, and the Parent shall have received at the
Effective Time a certificate of the President and Chief Financial Officer
of the Company to that effect;
(b) During the period from January 31, 1999, to the Closing
Date, there shall not have occurred any Material Adverse Effect with
respect to the Company, that has not been fully disclosed in the Company
SEC Reports or in Section 6.2(c) of the Company Disclosure Schedule, that
continues to exist on the Closing Date and as of the Effective Time, except
for matters directly resulting from (x) the filing by Parent with the SEC
of its Schedule 13D or its tender offer with respect to the Company or (y)
the execution of this Agreement and the consummation of the transactions
contemplated hereby; and
(c) The Parent shall have received the opinion of Skadden,
Arps, Slate, Xxxxxxx & Xxxx (Illinois), special counsel to the Parent,
dated the Closing Date and in form and substance reasonably satisfactory to
the Parent, to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with the state
of facts existing on the Closing Date, the Merger will be treated for
federal income tax purposes as a reorganization with in the meaning of
Section 368(a) of the Code. In rendering such opinion, Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois) may require and rely upon (and may
incorporate by reference) representations and covenants, including those
contained in certificates of officers of the Parent, Sub, the Company and
others.
Section 6.3 Conditions to the Company's Obligations to Effect
the Merger. The obligations of the Company to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of each of the
following conditions:
(a) The representations and warranties made by the Parent
and the Sub in this Agreement shall be true and correct (i) in all respects
at and as of the Effective Time (as to representations and warranties
specifically qualified or limited by the term "Parent Material Adverse
Effect," the word "material" and phrases of like import), and (ii) in all
material respects at and as of the Effective Time (as to representations
and warranties not qualified or limited by the term "Parent Material
Adverse Effect," the word "material" and phrases of like import), in each
case with the same force and effect as though made at and as of the
Effective Time (except to the extent they relate to a specific date), the
Parent and the Sub shall have performed in all material respects all of
their respective obligations under this Agreement theretofore to be
performed, and the Company shall have received at the Effective Time a
certificate of the President and Chief Financial Officer of Parent to that
effect; and
(b) The Company shall have received the opinion of Xxxxxx
Xxxxxx & Xxxxxxx, counsel to the Company, dated the Closing Date and in
form and substance reasonably satisfactory to the Company, to the effect
that, on the basis of facts, representations and assumptions set forth in
such opinion which are consistent with the state of facts existing on the
Closing Date, the Merger will be treated for federal income tax purposes as
a reorganization with in the meaning of Section 368(a) of the Code. In
rendering such opinion, Xxxxxx Xxxxxx & Xxxxxxx may require and rely upon
(and may incorporate by reference) representations and covenants, including
those contained in certificates of officers of the Parent, Sub, the Company
and others.
ARTICLE VII
Termination
Section 7.1 Termination. This Agreement may be terminated and
the transactions contemplated by this Agreement may be abandoned at any
time prior to the Closing (whether before or after the Company Shareholder
Approval), as follows:
(a) by mutual written agreement duly authorized by the
respective Boards of Directors of the Parent and the Company;
(b) by either of the Company or the Parent if:
(i) the Effective Time shall not have
occurred on or before December 31, 1999; 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 under this Agreement has been the primary cause of, or
resulted in, the failure of the Effective Time to occur on or
before such date;
(ii) a statute, rule, regulation or executive
order shall have been enacted, entered or promulgated prohibiting
the consummation of the Merger substantially on the terms
contemplated hereby;
(iii) an order, decree, ruling or
injunction shall have been entered permanently restraining,
enjoining or otherwise prohibiting the consummation of the Merger
and such order, decree, ruling or injunction shall have become
final and non-appealable; or
(iv) at the Shareholders Meeting (including
any adjournment or postponement thereof) called pursuant to
Section 5.2 hereof, the Company Shareholder Approval shall not
have been obtained;
(c) by the Company:
(i) if (a) the Company, upon the good faith
determination of the Board of Directors of the Company based on
consultation with outside legal counsel that such action is
necessary in order for the Board of Directors of the Company to
comply with its fiduciary duties under applicable Law, subject to
complying with the terms of this Agreement, enters into a binding
written agreement concerning a transaction that constitutes a
Superior Proposal and , prior thereto, the Company notifies the
Parent in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement
to such notice or a detailed description of the price and terms
thereof, (b) the Parent does not make, within two business days
of receipt of the Company's written notification of its intention
to enter into a binding agreement for a Superior Proposal, an
offer to enter into an amendment to this Agreement such that the
Board of Directors of the Company determines, in good faith after
consultation with its financial advisors, that this Agreement as
so amended is at least as favorable, from a financial point of
view, to the shareholders of the Company as the Superior Proposal
and (c) the Company, prior to such termination, pays to the
Parent in immediately available funds any fees required to be
paid pursuant to Section 7.3. The Company agrees (A) that it
will not enter into a binding agreement referred to in clause (a)
above until after the close of business on the second business
day after it has provided the notice to the Parent required
thereby and (B) to notify the Parent promptly if its intention to
enter into a written agreement referred to in its notification
shall change at any time after giving such notification; or
(ii) if the Parent or the Sub shall have
breached in any material respect any of their respective
representations or warranties such that the closing condition in
Section 6.3(a) would not be satisfied or the Parent or the Sub
shall have breached any covenant or other agreement contained in
this Agreement, which breach in either case cannot be or has not
been cured, in all material respects, within 30 days after the
giving of written notice to the Parent or the Sub, as applicable;
(d) by the Parent:
(i) if the Company shall have breached in
any material respect any of its representations or warranties
such that the closing condition in 6.2(b) would not be satisfied
or the Company shall have breached any covenant or other
agreement contained in this Agreement which breach in either case
cannot be or has not been cured, in all material respects, within
30 days after the giving of written notice to the Company;
(ii) if, at any time prior to the Effective
Time, the Board of Directors of the Company shall have withdrawn
or adversely modified its approval or recommendation of this
Agreement or failed to reconfirm its recommendation of this
Agreement within five business days after a written request by
the Parent to do so; or
(iii) at any time following the date 30
days after notice is delivered by the Company as required in
Section 5.7 concerning the receipt of an Acquisition Proposal
unless, prior to termination under this subsection (d)(iii), the
Company provides written notice to the Parent that such
Acquisition Proposal has been rejected or withdrawn or the
Company is no longer engaged in negotiations or discussions with
such other Person concerning the Acquisition Proposal; provided
that the 30-day time period shall be reduced with respect to any
subsequent Acquisition Proposal made by a Person whose
Acquisition Proposal was previously rejected or withdrawn as
provided in this subsection (d)(iii) to a number of days equal to
30 minus the number of days lapsed from the receipt of any notice
of any prior Acquisition Proposal from such Person until the
rejection or withdrawal of any such prior Acquisition
Proposal(s);
(e) if the Average Parent Price is less than $21.00, Parent
shall provide written notice to the Company prior to the close of business
on the first trading day following the end of the Averaging Period stating
that the Average Parent Price is below $21.00 and whether or not it elects
to increase the Merger Consideration as provided below (the "Parent
Election"). On or before the close of business on the first trading day
following its receipt of a Parent Election stating that the Parent has
elected not to increase the Merger Consideration, the Company may terminate
this Agreement by delivering a written notice to the Parent (the "Company
Termination Notice") stating that it has elected to terminate this
Agreement. If the Parent has elected to increase the Merger Consideration
in the Parent Election, then the Parent shall increase the Merger
Consideration by increasing the Exchange Ratio or by making a cash payment
(provided that the Merger shall continue to qualify as a reorganization
within the meaning of Section 368(a) of the Code) or by any combination
thereof (at the Parent's election), such that the Merger Consideration
shall consist of an aggregate number of shares of Parent Common Stock (and
cash, if any) having a value (based on the Average Parent Price of the
Parent Common Stock) equal to $11.00 per share of Company Common Stock. In
such event, no termination shall occur, and this Agreement will remain in
effect in accordance with its terms.
Section 7.2 Rights on Termination. In the event of
termination and abandonment of the Merger by any party pursuant to Section
7.1, written notice thereof shall forthwith be given to the other parties,
and this Agreement shall terminate and the Merger and the other
transactions contemplated hereby shall be abandoned, without further action
by any of the parties hereto. If this Agreement is terminated and the
transactions contemplated hereby are not consummated pursuant to Section
7.1 of this Agreement, this Agreement shall become void and of no further
force and effect, except for (a) the provisions of Section 5.4 relating to
the obligation of the Parent and the Sub to keep confidential and not to
use certain information obtained from the Company and in the second
sentence of Section 5.4 and (b) the provisions of Section 7.3 relating to
the Company's obligations to make certain payments to the Parent.
Section 7.3 Termination Fee Payable to Parent.
Notwithstanding any provision to the contrary contained herein, the Company
shall immediately pay to the Parent (x) the amount of $7 million and (y)
all documented out-of-pocket expenses reasonably incurred by the Parent and
the Sub in connection with this Agreement and the Merger if (i) either (1)
the Company shall have received an Acquisition Proposal or such a proposal
shall have been publicly announced or (2) the Board of Directors of the
Company shall have withdrawn or adversely modified its approval or
recommendation of this Agreement, and in either such case this Agreement is
terminated pursuant to Section 7.1(b)(iv), (ii) this Agreement is
terminated pursuant to Section 7.1(c)(i) or Section 7.1(d)(i) (if the
breach thereof is due to the Company's intentional or bad faith acts), or
(iii) if, within 12 months of a termination of this Agreement pursuant to
any other provision of Section 7.1 (other than Section 7.1(c)(ii)), the
Company or any of its Subsidiaries accepts a written offer for, or
otherwise enters into an agreement to consummate or consummates, a Superior
Proposal with another person, upon the signing of a definitive agreement
relating to such Superior Proposal, or, if no such agreement is signed,
then upon consummation of any such Superior Proposal, in which case such
payment shall be less any amounts paid as a result of a termination of this
Agreement. The amount in (x) above shall be paid concurrently with any
such termination and the amount in (y) above shall be paid in immediately
available funds within two (2) business days after receipt by the Company
of reasonably detailed evidence of the same.
Section 7.4 Other Remedies. Notwithstanding any provision to
the contrary contained herein, if this Agreement is terminated pursuant to
Article 7 or otherwise by the Company, on the one hand, or the Parent or
the Sub, on the other hand, and the non-terminating party is not entitled
to receive the payments described in Section 7.3 (as the case may be), then
the non-terminating party shall be entitled to pursue any available legal
rights to recover actual damages, including, without limitation, its
reasonable costs and expenses incurred in pursuing such recovery
(including, without limitation, reasonable attorneys' fees).
ARTICLE VIII
Miscellaneous
Section 8.1 No Survival of Representations and Warranties.
None of the representations or warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time.
Section 8.2 Expenses.
(a) Except as expressly contemplated by this Agreement, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs and expenses.
(b) The obligation to pay any termination fee or expenses
pursuant to Section 7.3 shall be in addition to any other rights or
remedies that may be available to the Parent, including, without
limitation, the expenses to be paid by the Company pursuant to Section
8.2(a). The Company shall make all such payments promptly (and in any
event within two business days of receipt by the Company of written notice
from the Parent) by wire transfer of immediately available funds to an
account designated by the Parent.
Section 8.3 Counterparts; Effectiveness. This Agreement may
be executed in two or more counterparts, each of which shall be deemed to
be an original but all of which shall constitute one and the same
agreement. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by each of the other parties
hereto.
Section 8.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
without regard to the principles of conflicts of laws thereof.
Section 8.5 Notices. All notices and other communications
hereunder shall be in writing (including telecopy or similar writing) and
shall be effective (a) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section 8.5 and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section 8.5:
To the Parent or the Sub:
Xxxx Xxx Corporation
Three First Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx Xxxxx
Senior Vice President, Secretary and
General Counsel
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Facsimile: (000) 000-0000
To the Company:
Chock Full O'Nuts Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
Senior Vice President and Chief Financial
Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
Eighty Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxx Xxxxx
Facsimile: (000) 000-0000
Section 8.6 Assignment; Binding Effect. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned
by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties, except that the Sub
may assign, in its sole discretion, all or any of its rights, interests and
obligations hereunder to the Parent or to any direct or indirect wholly
owned Subsidiary of the Parent. 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 permitted assigns.
Section 8.7 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 in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
Section 8.8 Enforcement of Agreement. The parties hereto agree
that money damages or other remedies at law would not be sufficient or
adequate remedy for any breach or violation of, or a default under, this
Agreement by them and that in addition to all other remedies available to
them, each of them shall be entitled to the fullest extent permitted by law
to an injunction restraining such breach, violation or default or
threatened breach, violation or default and to any other equitable relief,
including, without limitation, specific performance, without bond or other
security being required.
Section 8.9 Entire Agreement; No Third-Party Beneficiaries.
This Agreement constitute the entire agreement, and supersedes all other
prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof and
thereof and except for the provisions of Section 5.10 hereof, is not
intended to and shall not confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 8.10 Headings. Headings of the Articles and Sections of
this Agreement are for convenience of the parties only and shall be given
no substantive or interpretive effect whatsoever.
Section 8.11 Finders or Brokers. Except for Credit Suisse First
Boston with respect to the Company and Xxxxxxx Xxxxx & Co. with respect to
the Parent, neither the Company nor the Parent nor any of their respective
Subsidiaries has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who
might be entitled to any fee or any commission in connection with or upon
consummation of the Merger.
Section 8.12 Amendment or Supplement. Subject to applicable
law, at any time prior to the Effective Time, this Agreement may be amended
or supplemented in any and all respects, whether before or after the
Company Shareholder Approval, by written agreement of the parties hereto,
by action taken by their respective Boards of Directors, with respect to
any of the terms contained in this Agreement; provided, however that
following the Company Shareholder Approval there shall be no amendment or
change to the provisions hereof which would reduce the amount or change the
type of consideration into which each Share shall be converted upon
consummation of the Merger without further approval by the shareholders of
the Company.
Section 8.13 Extension of Time, Waiver, Etc. At any time prior
to the Effective Time, any party may (a) extend the time for the
performance of any of the obligations or acts of any other party hereto;
(b) waive any inaccuracies in the representations and warranties of any
other party hereto contained herein or in any document delivered pursuant
hereto; or (c) subject to the proviso of Section 8.12 waive compliance with
any of the agreements or conditions of any other party hereto contained
herein. Notwithstanding the foregoing, no failure or delay by the Company,
the Parent or the Sub in exercising any right hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right
hereunder. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE IX
Definitions
When used in this Agreement, and in addition to the other terms
defined herein, the following terms shall have the meanings specified:
Section 9.1 Affiliate. "Affiliate" shall mean, in relation to
any party hereto, any entity directly or indirectly controlling, controlled
by or under common control with such party.
Section 9.2 Agreement. "Agreement" shall mean this Agreement
and Plan of Merger, together with the Exhibits attached hereto, and the
Company Disclosure Schedule, as the same may be amended from time to time
in accordance with the terms hereof.
Section 9.3 Code. "Code" shall mean the Internal Revenue Code
of 1986, as amended.
Section 9.4 Company Disclosure Schedule. "Company Disclosure
Schedule" means the disclosure schedule delivered by the Company.
Section 9.5 Company Financial Statements. "Company Financial
Statements" shall mean the audited Consolidated Balance Sheet, Consolidated
Statement of Operations, Consolidated Statement of Cash Flows and
Consolidated Statement of Stockholders Equity of the Company and related
notes for each of the fiscal years ended on July 31, 1996, July 31, 1997
and July 31, 1998, and the unaudited Consolidated Balance Sheet,
Consolidated Statement of Operations, Consolidated Statement of Cash Flows
and Consolidated Statement of Stockholders' Equity of the Company and
related notes for the six months ended January 31, 1998 and January 31,
1999, each as included in the Company SEC Reports.
Section 9.6 Computer Programs. "Computer Programs" shall mean
(i) any and all computer software programs, including all source and object
code, (ii) all computer software programs incorporated in any equipment,
including any beverage dispensing equipment, owned or leased by the Company
or its Subsidiaries or provided by the Company or its Subsidiaries to
customers, (iii) databases and compilations, including any and all data and
collections of data, whether machine readable or otherwise, (iii) billing,
reporting and other management information systems, (iv) all descriptions,
flow-charts and other work product used to design, plan, organize and
develop any of the foregoing, (v) all content contained on any Internet
site(s), and (vi) all documentation including user manuals and training
materials, relating to any of the foregoing.
Section 9.7 Contracts. "Contracts" shall mean all of the
material contracts, agreements and obligations to which the Company is a
party or by which the Company or any of its material assets are bound,
including, without limitation, any loan, bond, mortgage or indenture or
material lease, instrument, franchise or license.
Section 9.8 Control. "Control" (including the terms
"controlling," "controlled by," and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities or
by contract.
Section 9.9 Employees. "Employees" shall mean all of the
employees of the Company.
Section 9.10 Employee Benefit Plans. "Employee Benefit Plans"
shall mean any pension plan, profit sharing plan, bonus plan, incentive
compensation plan, stock purchase plan, stock ownership plan, stock option
plan, stock appreciation plan, employee benefit plan, employee benefit
policy, retirement plan, fringe benefit program, insurance plan, severance
plan, disability plan, health care plan, sick leave plan, death benefit
plan, or any other plan, program or policy to provide retirement income,
fringe benefits or other benefits to former or current employees of the
Company (including, without limitation, any employee pension benefit plan
or employee welfare plan, but excluding any multi-employer plan, as each
term is defined in ERISA).
Section 9.11 Environmental Claim. "Environmental Claim" shall
mean any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, directives, claims, Liens, investigations,
proceedings or notices of noncompliance or violation (written or oral) by
any Person alleging liability (including, without limitation, liability for
enforcement, investigatory costs, cleanup costs, governmental response
costs, removal costs, remedial costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based on or
resulting from: (A) the presence or environmental release of any Hazardous
Materials at any parcel of real property; or (B) circumstances forming the
basis of any violation or alleged violation, of any Environmental Law; or
(C) any and all claims by any Person seeking damages, contribution,
indemnification, cost, recovery, compensation or injunctive relief
resulting from the presence or Environmental Release of any Hazardous
Materials.
Section 9.12 Environmental Laws. "Environmental Laws" shall
mean any federal, state, local or foreign statute, Law, rule, ordinance,
code, policy, rule of common law and regulations relating to pollution or
protection of human health (excluding OSHA) or the environment (including,
without limitation, ambient air, surface water, ground water, land surface
or subsurface strata), including, without limitation, Laws and regulations
relating to Environmental Releases or threatened Environmental Releases of
Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
Section 9.13 ERISA. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as the same may be in effect from time to
time.
Section 9.14 Existing Liens. "Existing Liens" shall mean those
Liens affecting any of the assets or properties of the Company.
Section 9.15 Existing Permits. "Existing Permits" shall mean
those material permits, licenses, approvals, qualifications,
authorizations, and registrations required by Law which the Company has or
holds.
Section 9.16 Existing Plans. "Existing Plans" shall mean all
material Employee Benefit Plans of the Company in effect on the date
hereof.
Section 9.17 Hazardous Materials. "Hazardous Materials" shall
mean: (A) any petroleum or petroleum products, radioactive materials,
asbestos in any form that is or could become friable, urea formaldehyde
foam insulation, and transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls ("PCBs") above
regulated levels and radon gas; and (B) any chemicals, materials or
substances which are now defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," or words of similar import, under any
Environmental Law; and (C) any other chemical, material, substance or
waste, exposure to which is now prohibited, limited or regulated by any
governmental authority.
Section 9.18 Indebtedness. "Indebtedness" shall mean all
liabilities or obligations of the Company, whether primary or secondary or
absolute or contingent: (a) for borrowed money; or (b) evidenced by notes,
bonds, debentures or similar instruments.
Section 9.19 Intangible Assets. "Intangible Assets" shall mean
(a) any invention, United States and foreign patents, pending patent
applications, trade names, trade dress, logos, corporate names, trademarks,
service marks, trademark registrations, service xxxx registrations, pending
trademark applications, pending service xxxx applications, registered
copyrights, and pending copyright applications, together with all
translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; (b) proprietary
software; and (c) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier
lists, pricing and cost information, and business and marketing plans and
proposals).
Section 9.20 Investment. "Investment" by the Company shall mean
(a) any transfer or delivery of cash, stock or other property or value by
the Company in exchange for equity, debt, preferred stock, partnership
interests, participations or any other security of another Person; (b) any
loan or capital contribution to or in any other Person; (c) any guaranty of
any obligation to pay money to, or perform an obligation of, any other
Person; and (d) any investments in any property or assets other than
properties and assets acquired and used in the ordinary course of the
business of the Company.
Section 9.21 Law. "Law" shall mean any foreign, federal, state
or local governmental law, rule, regulation or requirement, including any
rules, regulations and orders promulgated thereunder and any orders,
decrees, consents or judgments of any governmental regulatory agencies and
courts having the force of law, other than any Environmental Laws.
Section 9.22 Lien. "Lien" shall mean, with respect to any asset
(real, personal or mixed): (a) any mortgage, pledge, lien, easement, lease,
title defect or imperfection or any other form of security interest,
whether imposed by Law or by Contract; and (b) the interest of a vendor or
lessor under any conditional sale agreement, financing lease or other title
retention agreement relating to such asset.
Section 9.23 Material Adverse Effect. "Material Adverse Effect"
shall mean with respect to the Company any adverse change or effect that is
material to the business, financial condition, results of operations or
assets of the Company and its Subsidiaries taken as a whole; other than any
change or effect (i) relating to the economy or securities markets in
general or (ii) generally relating to the industries in which the Company
operates (including without limitation, fluctuations in coffee prices
generally) and not specifically relating to the Company.
Section 9.24 Merger. "Merger" shall mean the merger of the Sub
with and into the Company pursuant to this Agreement.
Section 9.25 NYBCL. "NYBCL" shall mean the New York Business
Corporation Law.
Section 9.26 Parent Financial Statements. "Parent Financial
Statements" shall mean the audited Consolidated Balance Sheet, Consolidated
Statement of Income, each of the fiscal years ended on June 29, 1996, June
28, 1997 and June 27, 1998, each as included in the Parent SEC Reports and
the unaudited Consolidated Statement of Cash Flows and Consolidated
Statement of Stockholders' Equity of Parent and related notes for the nine
months ended March 31, 1999.
Section 9.27 Parent Material Adverse Effect. "Parent Material
Adverse Effect" shall mean with respect to the Parent any adverse change or
effect that is material to the business, financial condition, results of
operations or assets of the Parent and its Subsidiaries taken as a whole;
other than any change or effect (i) relating to the economy or securities
markets in general or (ii) generally relating to the industries in which
the Company operates and not specifically relating to the Company.
Section 9.28 Person. "Person" shall mean a natural person,
corporation, limited liability company, association, joint stock company,
trust, partnership, governmental entity, agency or branch or department
thereof, or any other legal entity.
Section 9.29 Significant Subsidiary. "Significant Subsidiary"
shall mean any Subsidiary of the Company meeting the definition in Rule 1-
02 of Regulation S-X of the SEC.
Section 9.30 Subsidiary. "Subsidiary" shall mean any
corporation, at least a majority of the outstanding capital stock of which
(or any class or classes, however designated, having ordinary voting power
for the election of at least a majority of the board of directors of such
corporation) shall at the time be owned by the relevant Person directly or
through one or more corporations which are themselves Subsidiaries.
Section 9.31 Taxes. "Taxes" shall mean all taxes, charges,
fees, levies or other assessments, including, without limitation, all net
income, gross income, gross receipts, sales, use, service, service use, ad
valorem, transfer, franchise, profits, license, lease, withholding, social
security, payroll, employment, excise, estimated, severance, stamp,
recording, occupation, real and personal property, gift, value added,
windfall profits or other taxes, customs duties, fees, assessments or
charges of any kind whatsoever, whether computed on a separate,
consolidated, unitary, combined or other basis, together with any interest,
fines, penalties, additions to tax or other additional amounts imposed
thereon or with respect thereto imposed by any taxing authority (domestic
or foreign).
Section 9.32 Tax Return. "Tax Return" shall mean any return,
report or other document required to be filed or in fact filed with any
taxing authority with respect to Taxes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the date first above written.
XXXX XXX CORPORATION
By:
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Name:
Title:
CFN ACQUISITION CORPORATION.
By:
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Name:
Title:
CHOCK FULL O'NUTS CORPORATION
By:
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Name:
Title:
