1
Ex-99.1
AGREEMENT AND PLAN OF MERGER
dated as of
September 29, 2000
among
XXXXXXX INDUSTRIES, INC.
SIMMER ACQUISITION COMPANY LLC
and
SIMMER ACQUISITION CORPORATION
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS..............................................................................................2
SECTION 1.01. Definitions......................................................................2
ARTICLE 2
THE MERGER...............................................................................................5
SECTION 2.01. The Merger......................................................................5
SECTION 2.02. The Effective Time..............................................................6
SECTION 2.03. Effect of the Merger............................................................6
SECTION 2.04. Effect on Capital Stock.........................................................6
SECTION 2.05. Payment for Shares..............................................................7
SECTION 2.06. Stock Options; Restricted Stock.................................................8
SECTION 2.07. Stock Transfer Books............................................................9
SECTION 2.08. No Further Ownership Rights in the Shares.......................................9
SECTION 2.09. Lost, Stolen or Destroyed Certificates..........................................9
SECTION 2.10. Further Action. ...............................................................9
ARTICLE 3
THE SURVIVING CORPORATION................................................................................9
SECTION 3.01. Articles of Incorporation.......................................................10
SECTION 3.02. Bylaws..........................................................................10
SECTION 3.03. Directors and Officers..........................................................10
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................10
SECTION 4.01. Corporate Existence and Power...................................................10
SECTION 4.02. Corporate Authorization.........................................................10
SECTION 4.03. Governmental Authorization......................................................11
SECTION 4.04. Non-contravention...............................................................11
SECTION 4.05. Capitalization..................................................................12
SECTION 4.06. Subsidiaries....................................................................12
SECTION 4.07. SEC Filings.....................................................................13
SECTION 4.08. Financial Statements............................................................14
SECTION 4.09. Disclosure Documents............................................................14
SECTION 4.10. Absence of Certain Changes......................................................14
SECTION 4.11. No Undisclosed Material Liabilities.............................................16
SECTION 4.12. Compliance with Laws and Court Orders...........................................16
SECTION 4.13. Litigation......................................................................16
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SECTION 4.14. Finders' Fees...................................................................16
SECTION 4.15. Taxes...........................................................................17
SECTION 4.16. Employee Benefit Plans..........................................................18
SECTION 4.17. Environmental Matters...........................................................20
SECTION 4.18. Antitakeover Statutes and Rights Agreement......................................20
SECTION 4.19. Opinion of Financial Advisor....................................................21
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT................................................................21
SECTION 5.01. Corporate Existence and Power...................................................21
SECTION 5.02. Authorization...................................................................22
SECTION 5.03. Governmental Authorization......................................................22
SECTION 5.04. Non-contravention...............................................................22
SECTION 5.05. Disclosure Documents............................................................23
SECTION 5.06. Finders' Fees...................................................................23
SECTION 5.07. Financing.......................................................................23
ARTICLE 6
COVENANTS OF THE COMPANY................................................................................24
SECTION 6.01. Conduct of the Company..........................................................24
SECTION 6.02. Shareholder Meeting; Proxy Material.............................................27
SECTION 6.03. Access to Information...........................................................27
SECTION 6.04. No Solicitation.................................................................28
SECTION 6.05. State Takeover Laws.............................................................28
SECTION 6.06. Reports.........................................................................28
ARTICLE 7
COVENANTS OF PARENT.....................................................................................29
SECTION 7.01. Obligations of Merger Sub.......................................................29
SECTION 7.02. Voting of Shares................................................................29
SECTION 7.03. Director and Officer Liability..................................................29
SECTION 7.04. Employee Benefits after the Merger..............................................30
SECTION 7.05. Financing Arrangements..........................................................31
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY.....................................................................32
SECTION 8.01. Commercially Reasonable Efforts.................................................32
SECTION 8.02. Certain Filings.................................................................33
SECTION 8.03. Public Announcements............................................................33
SECTION 8.04. Confidentiality.................................................................33
SECTION 8.05. Notices of Certain Events.......................................................33
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ARTICLE 9
CONDITIONS TO THE MERGER................................................................................34
SECTION 9.01. Conditions to Obligations of Each Party........................................34
SECTION 9.02. Conditions to Obligations of Parent and Merger Sub.............................35
SECTION 9.03. Conditions to Obligations of the Company.......................................35
ARTICLE 10
TERMINATION.............................................................................................36
SECTION 10.01. Termination....................................................................36
SECTION 10.02. Effect of Termination..........................................................37
ARTICLE 11
MISCELLANEOUS...........................................................................................37
SECTION 11.01. Notices........................................................................37
SECTION 11.02. Survival of Representations and Warranties.....................................38
SECTION 11.03. Amendments; No Waivers.........................................................38
SECTION 11.04. Expenses; Topping Fee..........................................................39
SECTION 11.05. Successors and Assigns.........................................................40
SECTION 11.06. Governing Law..................................................................40
SECTION 11.07. Jurisdiction...................................................................40
SECTION 11.08. WAIVER OF JURY TRIAL...........................................................40
SECTION 11.09. Counterparts; Effectiveness; Benefit...........................................40
SECTION 11.10. Entire Agreement...............................................................41
SECTION 11.11. Captions.......................................................................41
SECTION 11.12. Severability...................................................................41
SECTION 11.13. Specific Performance...........................................................41
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") dated as of September
29, 2000 among Xxxxxxx Industries, Inc, a Michigan corporation (the "COMPANY"),
Simmer Acquisition Company LLC, a Delaware limited liability company ("PARENT"),
and Simmer Acquisition Corporation, a Michigan corporation and a wholly owned
subsidiary of Parent ("MERGER SUB").
BACKGROUND
WHEREAS, the Boards of Directors of Merger Sub and the Company have
each determined that it is advisable and in the best interests of their
respective shareholders for the Company and Merger Sub to enter into a business
combination upon the terms and subject to the conditions set forth herein;
WHEREAS, the managers and members of Parent have determined that it is
advisable and in the best interests of its members for the Company and Merger
Sub to enter into a business combination upon the terms and subject to the
conditions set forth herein;
WHEREAS, in furtherance of such combination, the Boards of Directors of
Merger Sub and the Company have each approved the merger of Merger Sub with and
into the Company in accordance with the applicable provisions of the Michigan
Business Corporation Act and upon the terms and subject to the conditions set
forth herein, and the Board of Directors of the Company has resolved and agreed
to recommend that holders of outstanding Shares (as defined herein), approve the
Merger;
WHEREAS, in furtherance of such combination, the members and managers
of Parent have approved the merger of Merger Sub with and into the Company in
accordance with the applicable provisions of the Michigan Business Corporation
Act and upon the terms and conditions set forth herein;
WHEREAS, pursuant to the Merger (as defined in Section 2.01), each
outstanding share of the Company's common stock, $1.00 par value, shall be
converted into the right to receive the Merger Consideration (as defined in
Section 2.04(a)), upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
representations and warranties and mutual covenants herein contained, Parent,
Merger Sub and the Company hereby agree as follows:
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.
(a) The following terms, as used herein, have the following
meanings:
"ACQUISITION PROPOSAL" means any offer or proposal for, or any
indication of interest in, (i) any acquisition or purchase of 30% or more of the
consolidated assets of the Company and its Subsidiaries, (ii) any acquisition or
purchase of an equity interest in the Company representing in excess of 30% of
the power to vote for the election of a majority of the directors of the
Company, or any tender offer or exchange offer for equity securities of the
Company as a result of which the offeror would hold such an equity interest in
the Company or (iii) any merger, consolidation, business combination, sale of
substantially all assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company, or any of its Subsidiaries whose assets,
individually or in the aggregate, constitute more than 30% of the consolidated
assets of the Company, in each case other than the transactions contemplated by
this Agreement.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City or Detroit are authorized or required by
law to close.
"BENEFICIALLY OWNED" means, with respect to any Shares held by any
Person, that such Person is the beneficial owner of such Shares as defined in
Rule 13d-3 promulgated under the 1934 Act.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY 10-K" means the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1999.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction or governmental
restriction or requirement or any agreement with any governmental authority, in
each case as currently in effect, relating to the environment or to pollutants,
contaminants, wastes or chemicals or any toxic, radioactive, ignitable,
corrosive, reactive or otherwise hazardous substances, wastes or materials.
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"ENVIRONMENTAL PERMITS" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by Environmental Laws and affecting, or
relating to, the business of the Company or any Subsidiary as currently
conducted.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976.
"KNOWLEDGE" of the Company or the "Company's knowledge" or "known by
the Company" means the actual knowledge of the senior officers of the Company
listed on Schedule A attached hereto.
"INTELLECTUAL PROPERTY" means patents, copyrights, trademarks
(registered or unregistered), service marks, brand names, trade dress, trade
names, computer software programs and applications (including imbedded
software), the goodwill associated with the foregoing and registrations in any
jurisdiction of, and applications in any jurisdiction to register, the
foregoing; and trade secrets and rights in any jurisdiction to limit the use of
disclosure thereof by any person.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, either (A)
a material adverse effect on the assets, liabilities (contingent or otherwise),
condition (financial or otherwise), business or results of operations of such
Person and its Subsidiaries, taken as a whole or (B) an effect which is
materially adverse to the ability of such Person and its Subsidiaries to
consummate the transactions contemplated by this Agreement; provided that with
respect to subclause (A) of this definition, any such effect resulting or
arising from (i) this Agreement or the transactions contemplated hereby or the
execution or announcement hereof, (ii) changes in circumstances or conditions
affecting the industry in which the Company and its Subsidiaries operate or
affecting industrial manufacturing companies in general, (iii) changes in
general economic, regulatory or political conditions or in financial markets in
the United States or Europe or (iv) changes in generally accepted accounting
principles shall not be considered a Material Adverse Effect, and with respect
to subclause (B) of this definition any such effect resulting from subclause
(ii), (iii) or (iv) above, shall not be considered a Material Adverse Effect.
"MATERIAL SUBSIDIARY" means, with respect to the Company, all of the
Subsidiaries of the Company other than Xxxxx International, Inc., Xxxxxxx
Industries, LTDA, Xxxxxxx Sabind Industries Limited, and XX Xxxxxxx India
Private Limited.
"MBCA" means the Michigan Business Corporation Act.
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"1933 ACT" means the Securities Act of 1933.
"1934 ACT" means the Securities Exchange Act of 1934.
"OPTION PLANS" means the Company's 1984 Stock Option and Incentive
Plan, 1993 Executive Long-Term Stock Incentive Plan and 1993 Non-Employee
Director Stock Option Plan.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"RIGHTS" means the common stock purchase rights attached to the Shares
and issued pursuant to the Rights Agreement.
"RIGHTS AGREEMENT" means the Rights Agreement between the Company and
Xxxxxx Trust and Savings Bank, dated as of February 28, 1997.
"SEC" means the Securities and Exchange Commission.
"SHARES" means the shares of common stock, $1.00 par value, of the
Company.
"SPONSOR" means Heartland Industrial Partners, L.P., a Delaware limited
partnership.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other body performing similar functions
are at any time directly or indirectly owned by such Person.
"THIRD PARTY" means any Person as defined in Section 13(d) of the 1934
Act, other than Sponsor or Merger Sub or any of Sponsor's Affiliates.
"TOPPING FEE" means a fee of $7.5 million, less any amount of expense
reimbursement paid by the Company pursuant to Section 11.04(b), payable by wire
transfer in same day funds to a bank account designated by Parent.
Any reference in this Agreement to a statute shall be to such statute,
as amended from time to time, and to the rules and regulations promulgated
thereunder.
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(b) Each of the following terms is defined in the Section set
forth opposite such term:
TERM SECTION
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Antitrust Law........................................ 8.01
Bank................................................. 5.07
Benefit Plans........................................ 4.16
Certificate of Merger................................ 2.02
Certificates......................................... 2.05
Commitment Letter.................................... 5.07
Company Proxy Statement.............................. 4.09
Company Representatives.............................. 6.04
Company SEC Documents................................ 4.07
Company Securities................................... 4.05
Company Subsidiary Securities........................ 4.06
Company Shareholder Meeting.......................... 6.02
Confidentiality Agreement............................ 6.03
DOJ.................................................. 8.01
Effective Time....................................... 2.02
Equity Commitment Letters ........................... 5.07
Equity Investors..................................... 5.07
ERISA................................................ 4.16
ERISA Affiliate...................................... 4.16
Financing Agreements................................. 7.05
Foreign Plan......................................... 4.16
FTC.................................................. 8.01
GAAP................................................. 4.08
Indemnified Person................................... 7.04
Merger............................................... 2.01
Merger Consideration................................. 2.04
Multi-Employer Plan.................................. 4.16
Paying Agent......................................... 2.05
Required Amount...................................... 5.07
Surviving Corporation................................ 2.01
Tax Return........................................... 4.15
Taxes................................................ 4.15
Taxing Authority..................................... 4.15
Termination Date..................................... 10.01
Transmittal Documents................................ 2.05
ARTICLE 2
THE MERGER
SECTION 2.01. The Merger. At the Effective Time, and subject to and
upon the terms and conditions of this Agreement, Merger Sub shall be merged (the
"MERGER") with and into the Company in accordance with the MBCA, whereupon the
separate corporate existence of Merger Sub shall cease, and the Company shall
continue as the surviving corporation (THE "SURVIVING CORPORATION").
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SECTION 2.02. The Effective Time. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 10.01, as promptly as practicable (and in any event within
three business days) after satisfaction or waiver of the conditions set forth in
Article 9, the parties hereto shall cause the Merger to be consummated by filing
a certificate of merger as contemplated by the MBCA (the "CERTIFICATE OF
MERGER"), together with any required related certificates, with the Department
of Consumer and Industry Services of the State of Michigan, in such form as
required by, and executed in accordance with the relevant provisions of, the
MBCA. The Merger shall become effective at such time (the "EFFECTIVE TIME") as
the Certificate of Merger is duly filed with the Department of Consumer and
Industry Services of the State of Michigan or at such later time as may be
specified in the Certificate of Merger. Prior to such filing a closing shall be
held at the offices of Xxxxxx Xxxxxxx PLLC, 39577 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx Xxxxx, Xxxxxxxx, unless another date, time or place is agreed to
in writing by the parties hereto for the purpose of confirming the satisfaction
or waiver, as the case may be, of the conditions set forth in Article 9.
SECTION 2.03. Effect of the Merger. At the Effective Time, the effect
of the Merger shall be as provided in this Agreement, the Certificate of Merger
and the applicable provisions of the MBCA. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 2.04. Effect on Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the Parent, Merger Sub, the
Company or the holders of any of the following securities:
(a) each Share issued and outstanding immediately prior to the
Effective Time (excluding any Shares to be canceled pursuant to Section
2.04(b)), shall be converted into the right to receive $13.00, in cash (the
"MERGER CONSIDERATION"); each such Share shall no longer be outstanding, shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate formerly representing any such Shares shall, to the extent such
certificate formerly represented such Shares, cease to have any rights with
respect thereto, except the right to receive the Merger Consideration, upon
surrender of such certificate in accordance with Section 2.05;
(b) each Share owned by Parent or any of Parent's Subsidiaries
immediately prior to the Effective Time shall be canceled, and no payment shall
be made with respect thereto; and
(c) each share of common stock, without par value, of Merger Sub issued
and outstanding immediately prior to the Effective Time shall be converted into
and exchanged for one validly issued, fully paid and nonassessable share of
common stock, without par value, of the Surviving Corporation.
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SECTION 2.05. Payment for Shares.
(a) Prior to the Effective Time, Parent shall designate a bank or trust
company, reasonably acceptable to the Company, to act as paying agent in
connection with the Merger (the "PAYING AGENT") pursuant to a paying agent
agreement providing for the matters set forth in this Section 2.05 and otherwise
reasonably satisfactory to the Company. At the Effective Time, Parent shall
deposit, or cause to be deposited, in trust with the Paying Agent for the
benefit of holders of Shares the aggregate consideration to which such holders
shall be entitled at the Effective Time pursuant to Section 2.04. Such funds
shall be invested as directed by the Surviving Corporation pending payment
thereof by the Paying Agent to holders of the Shares. Earnings from such
investments shall be the sole and exclusive property of the Surviving
Corporation and no part thereof shall accrue to the benefit of the holders of
the Shares.
(b) As soon as reasonably practicable after the Effective Time, the
Paying Agent shall mail to each record holder, as of the Effective Time, of an
outstanding certificate or certificates which immediately prior to the Effective
Time represented outstanding Shares (the "CERTIFICATES"), whose Shares were
converted pursuant to Section 2.04 into the right to receive the Merger
Consideration (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 Paying Agent and shall be
in such form and have such other provisions not inconsistent with this Agreement
as the Surviving Corporation shall specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for payment of the
Merger Consideration (together, the "TRANSMITTAL DOCUMENTS"). Upon surrender of
a Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each Share formerly represented
by such Certificate, without any interest thereon, and less any applicable
withholding taxes, and the Certificate so surrendered shall forthwith be
canceled. Until surrendered in accordance with the provisions of and as
contemplated by this Section 2.05 each Certificate (other than Certificates
representing Shares subject to Section 2.04(b)) shall be deemed at any time
after the Effective Time to represent only the right to receive the Merger
Consideration in cash as contemplated by this Section 2.05. Upon the surrender
of Certificates in accordance with the terms and instructions contained in the
Transmittal Documents, Parent shall cause the Paying Agent to pay the holder of
such Certificates in exchange therefor cash in an amount equal to the Merger
Consideration multiplied by the number of Shares represented by such Certificate
(other than Certificates representing Shares subject to Section 2.04(b)).
(c) If payment of the Merger Consideration is to be made to a Person
other than the Person in whose name the surrendered Certificate is registered,
it shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed or shall otherwise be in proper form
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for transfer, that the signatures on the Certificate or any related stock power
shall be properly guaranteed and that the Person requesting such payment shall
have paid any transfer and other taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid or is not applicable.
(d) From and after the Effective Time, the holders of Certificates
evidencing ownership of Shares outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares, except as
otherwise provided herein or by applicable law.
(e) Promptly following the date which is six (6) months after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any cash (including any earnings and interest
received with respect thereto), Certificates and other documents in its
possession relating to the Merger, which had been made available to the Paying
Agent and which have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat or similar laws) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon and the Paying
Agent's duties shall terminate.
(f) Parent or the Paying Agent shall be entitled to deduct and withhold
from the Merger Consideration otherwise payable pursuant to this Agreement to
any holder of the Shares such amounts as Parent or the Paying Agent is required
to deduct and withhold with respect to the making of such payment under the
Code, or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Parent or the Paying Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which such deduction and withholding was made
by Parent or the Paying Agent.
(g) Notwithstanding anything to the contrary in this Section 2.05, none
of the Paying Agent, Parent or the Surviving Corporation shall be liable to any
holder of a Certificate formerly representing Shares for any amount properly
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If Certificates are not surrendered prior to two (2)
years after the Effective Time, unclaimed funds payable with respect to such
Certificates shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any Person previously entitled thereto.
SECTION 2.06. Stock Options; Restricted Stock. (a) At or immediately
prior to the Effective Time, each outstanding stock option to purchase Shares
granted under any of the Option Plans, shall be canceled, and each holder of any
such option, whether or not then vested or exercisable, shall be paid by the
Surviving Corporation promptly after the Effective Time for each such option, in
consideration therefor an amount in cash determined by multiplying (i) the
excess, if any, of $13.00 per Share over the applicable exercise price of such
option by (ii) the number of Shares such holder could have purchased (assuming
full vesting of all options) had such holder exercised such option in full
immediately prior to the Effective Time. The Company shall use all reasonable
efforts to
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effectuate the foregoing, including without limitation, amending the Option
Plans and obtaining any necessary consents from the holders of such options.
(b) Immediately prior to the Effective Time, all restricted stock
awards granted under any Option Plan shall be treated as having vested and all
restrictions pertaining to such awards shall be treated as having lapsed.
SECTION 2.07. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall not be any further
registration of transfers of any shares of capital stock thereafter on the
records of the Company. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, they shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures set forth, in
this Article 2. No interest shall accrue or be paid on any cash payable upon the
surrender of a Certificate or Certificates which immediately before the
Effective Time represented outstanding Shares.
SECTION 2.08. No Further Ownership Rights in the Shares. The Merger
Consideration delivered upon the surrender for exchange of Shares in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Shares, and there shall be no further
registration of transfers on the records of the Surviving Corporation of Shares
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Shares are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article 2.
SECTION 2.09. Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the Paying Agent or the
Surviving Corporation, as applicable, shall deliver in exchange for such lost,
stolen or destroyed Certificates, upon the making of an affidavit of that fact
by the holder thereof, the Merger Consideration as provided in this Article;
provided, however, that the Surviving Corporation may, in its discretion and as
a condition precedent to the payment thereof, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against the
Surviving Corporation or the Paying Agent with respect to the Certificates
alleged to have been lost, stolen or destroyed.
SECTION 2.10. Further Action. If, at any time after the Effective Time,
any further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
the Company and Merger Sub, the officers and directors of the Company and Merger
Sub immediately prior to the Effective Time are fully authorized in the name of
their respective corporations or otherwise to take, and will take, all such
lawful and necessary action.
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ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.01. Articles of Incorporation. The Articles of Incorporation
of Merger Sub in effect at the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until amended in accordance with
applicable law; provided that, at the Effective Time, Article I of such Articles
of Incorporation shall be amended to read that the name of the corporation is
the same as the name of the Company.
SECTION 3.02. Bylaws. The bylaws of Merger Sub in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 3.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (i) the directors of Merger Sub at the Effective Time shall
be the directors of the Surviving Corporation and (ii) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that, except as set forth
in the section or subsection of the disclosure schedule delivered by the Company
to Parent prior to the execution of this Agreement (the "DISCLOSURE SCHEDULE")
corresponding to the relevant section or subsection of this Article 4:
SECTION 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Michigan and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to own or
lease and operate its assets and to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where such qualification is necessary, except for those
jurisdictions where failure to be so qualified would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company. The Company has heretofore delivered to Parent true and complete copies
of the Articles of Incorporation and bylaws of the Company as currently in
effect.
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SECTION 4.02. Corporate Authorization.
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby are
within the Company's corporate powers and, except for the affirmative vote of
the holders of a majority of the outstanding Shares in connection with the
consummation of the Merger, have been duly authorized by all necessary corporate
action on the part of the Company. The affirmative vote of the holders of a
majority of the outstanding Shares is the only vote of the holders of any of the
Company's capital stock necessary or required under applicable law or the
Company's Articles of Incorporation and bylaws in connection with the
consummation of the Merger. This Agreement constitutes a valid and binding
obligation of the Company.
(b) At a meeting duly called and held, the Board of Directors has (i)
determined that this Agreement and the Merger are fair to and in the best
interests of the shareholders of the Company (other than Parent and its
Affiliates), (ii) approved and adopted this Agreement and the Merger and (iii)
resolved (subject to Section 6.04) to recommend approval and adoption of the
Merger and this Agreement by the shareholders of the Company.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby require no action by or in respect of,
or filing with, any foreign, federal, state or local court, administrative
agency, commission, governmental body, agency, official or authority, other than
(i) the filing of the Certificate of Merger with the Michigan Department of
Consumer and Industry Services Corporation, Securities and Land Development
Bureau, and appropriate documents with the relevant authorities of other states
in which the Company is qualified to do business, (ii) compliance with any
applicable requirements of the HSR Act and of laws, rules and regulations
analogous to the HSR Act existing in foreign jurisdictions, (iii) compliance
with any applicable requirements of the 1934 Act and any other applicable
securities laws, whether state or foreign, and (iv) any actions or filings the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. As provided by Section
762(2)(b) of the MBCA, no shareholder is entitled to dissent from the Merger.
Neither the Articles of Incorporation or Bylaws or any applicable law provide
the shareholders with, nor has the board provided, pursuant to resolution or
otherwise, the shareholders with, a right to dissent from the Merger in
accordance with the provisions of Section 762 of the MBCA.
SECTION 4.04. Non-contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) contravene, conflict
with, or result in any violation or breach of any provision of the Articles of
Incorporation or Bylaws of the Company, (ii) assuming compliance with the
matters referred to in Section 4.03, contravene, conflict with or result in a
violation or breach of any provision of any applicable law, statute, ordinance,
rule, regulation, judgment, injunction, order or decree, (iii) require any
consent or other action by any Person under, constitute a default under, or
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cause or permit the termination, cancellation, acceleration or other change of
any right or obligation or the loss of any benefit to which the Company or any
of its Subsidiaries is entitled under any provision of any agreement or other
instrument binding upon the Company or any of its Subsidiaries or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Company and
its Subsidiaries or (iv) result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries except for such contraventions,
conflicts and violations referred to in clause (ii) and for such failures to
obtain any such consent or other action, default, termination, cancellation,
acceleration, change, loss or Lien referred to in clauses (iii) and (iv) that
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
SECTION 4.05. Capitalization.
(a) The authorized capital stock of the Company consists of 55,000,000
Shares. As of the close of business on September 27, 2000, there were
outstanding 17,874,374 Shares (including all shares of restricted stock
outstanding under the Option Plans) and employee stock options to purchase an
aggregate of 1,009,430 Shares (of which options to purchase an aggregate of
410,388 Shares were exercisable). All shares of capital stock of the Company
outstanding as of the date hereof have been duly authorized and validly issued
and are fully paid and nonassessable. All Shares issuable upon exercise of
outstanding stock options have been duly authorized and, when issued, will have
been validly issued and will be fully paid and nonassessable.
(b) Except as set forth in this Section 4.05 and for changes since
September 27, 2000 resulting from the award or grant of options or Shares
awarded under the Option Plans, each in the ordinary course of business, or the
exercise of stock options outstanding on such date, there are no outstanding (i)
shares of capital stock or voting securities of the Company, (ii) securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company or (iii) options or other rights to acquire
from the Company or other obligation of the Company to issue, any capital stock,
voting securities or securities convertible into, exercisable for, or
exchangeable for capital stock or voting securities of the Company or (iv) stock
appreciation, phantom stock or similar rights with respect to the Company (the
items in clauses (i), (ii), (iii) and (iv) being referred to collectively as the
"COMPANY SECURITIES"). There are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
Company Securities.
(c) A list of the holders of options, the number of options held by
each such holder, the exercise prices and the date of grant of each such option
are set forth in Section 4.05(c) of the Disclosure Schedule. A list of the
holders of Restricted Stock, the number of Shares of Restricted Stock held by
each such holder and the date of grant is set forth in Section 4.05(c) of the
Disclosure Schedule.
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SECTION 4.06. Subsidiaries.
(a) Each Subsidiary of the Company is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to own and lease its
assets and carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company. Each such Material Subsidiary is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where such qualification is necessary, except for those
jurisdictions where failure to be so qualified would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company.
(b) All of the outstanding capital stock of, or other voting securities
or ownership interests in, each Material Subsidiary of the Company (other than
director qualifying shares) is owned by the Company, directly or indirectly,
free and clear of any Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other voting securities or ownership interests). All of
the outstanding shares of capital stock of each Subsidiary of the Company have
been validly issued and are fully paid and non-assessable. There are no
outstanding (i) securities of the Company or any of its Subsidiaries convertible
into, exercisable for, or exchangeable for shares of capital stock or other
voting securities or ownership interests in any Material Subsidiary of the
Company, (ii) options or other rights to acquire from the Company or any of its
Subsidiaries, or other obligation of the Company or any of its Subsidiaries to
issue, any capital stock or other voting securities or ownership interests in,
or any securities convertible into or exchangeable for any capital stock or
other voting securities or ownership interests in, any Material Subsidiary of
the Company or (iii) stock appreciation, phantom stock or similar rights with
respect to any Subsidiary of the Company (the items in clauses (i), (ii) or
(iii) being referred to collectively as the "COMPANY SUBSIDIARY SECURITIES").
There are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any of the Company Subsidiary
Securities.
(c) Schedule 4.06(c) lists any equity interest owned by the Company or
any Subsidiary of the Company in any other corporation, partnership, joint
venture or other business association or entity owned directly or indirectly by
the Company and having a fair market value or book value in excess of $100,000.
SECTION 4.07. SEC Filings.
(a) The Company has made available to Parent (i) the Company's annual
reports on Form 10-K for its fiscal years ended December 31, 1997, 1998 and
1999, (ii) its quarterly reports on Form 10-Q for its fiscal quarters ended
March 31, 2000 and June 30, 2000, (iii) its proxy statements relating to
meetings of the shareholders of the Company held since December 31, 1999, and
(iv) all
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of its other reports, statements, schedules and registration statements filed by
the Company with the SEC since December 31, 1999 (the documents referred to in
this Section 4.07(a), collectively, the "COMPANY SEC DOCUMENTS").
(b) As of its filing date, each Company SEC Document complied as to
form in all material respects with the applicable requirements of the 1934 Act
or the 1933 Act, as applicable.
(c) As of its filing date, each Company SEC Document did not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
SECTION 4.08. Financial Statements. The audited consolidated financial
statements of the Company included in the annual reports on Form 10-K referred
to in clause (i) of Section 4.07(a) and the unaudited consolidated interim
financial statements of the Company included in the quarterly reports on Form
10-Q referred to in clause (ii) of Section 4.07(a) fairly present, in conformity
with United States generally accepted accounting principles ("GAAP") applied on
a consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and their consolidated results of operations and cash
flows for the periods then ended (subject to normal year-end adjustments and the
absence of notes in the case of any unaudited interim financial statements).
SECTION 4.09. Disclosure Documents.
(a) The proxy statement of the Company to be filed with the SEC in
connection with the Merger (the "COMPANY PROXY STATEMENT"), and any amendments
or supplements thereto, will, when filed, comply as to form in all material
respects with the applicable requirements of the 1934 Act. At the time the
Company Proxy Statement or any amendment or supplement thereto is first mailed
to shareholders of the Company and at the time such shareholders vote on
adoption of this Agreement, the Company Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties contained in this Section 4.09
will not apply to statements or omissions included in the Company Proxy
Statement based upon information furnished to the Company in writing by or on
behalf of Parent or Merger Sub specifically for use therein.
SECTION 4.10. Absence of Certain Changes. Since December 31, 1999, the
business of the Company and its Subsidiaries has been conducted in the ordinary
course consistent with past practices and there has not been:
(a) any event, occurrence or development that has had or would
reasonably be expected to have a Material Adverse Effect on the Company;
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(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company (other
than quarterly cash dividends on the Shares not in excess of $.10 per Share per
quarter and having customary record and payment dates), or any repurchase,
redemption or other acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of, or other ownership
interests in, the Company or any of its Subsidiaries (other than ordinary course
open market purchases made in connection with the Company's stock incentive
plans or stock repurchase program);
(c) any amendment of any material term of any outstanding security of
the Company or, to the knowledge of the Company, any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or any of
its Subsidiaries of any indebtedness for borrowed money in excess of $1 million,
individually or in the aggregate, other than (i) under the Company's existing
credit facilities (as in effect on the date hereof), or (ii) between the Company
and its Subsidiaries or between two or more of the Company's Subsidiaries;
(e) any creation or other incurrence by the Company or any of its
Subsidiaries of any Lien on any asset that is material to the Company and its
Subsidiaries, taken as a whole, other than in the ordinary course of business
consistent with past practices;
(f) any making of any loan, advance or capital contribution to or
investment in excess of $500,000, individually or in the aggregate, in any
Person that is not an employee or director of the Company or any of its
Subsidiaries other than loans, advances or capital contributions to or
investments in its wholly-owned Subsidiaries, or by its wholly-owned
Subsidiaries to or in the Company or other wholly-owned Subsidiaries of the
Company;
(g) any change in any method of accounting, method of tax accounting or
accounting principles or practice by the Company or any of its Subsidiaries,
except for any such change required by reason of a concurrent change in GAAP,
Regulation S-X under the 1934 Act or other applicable law or regulation;
(h) any damage, destruction or other casualty loss (whether or not
covered by insurance) or any condemnation affecting the business or assets of
the Company or any of its Subsidiaries that has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company; or
(i) any (i) adoption or grant of any severance or termination pay to or
other benefit for (or amendment to any existing arrangement with) any director
or executive officer of the Company, (ii) increase in benefits payable to any
executive officer or director of the Company under any existing, severance or
termination pay policies or employment agreements, (iii) entering into any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director or executive officer of the
Company, or (iv) increase in
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compensation, bonus or other benefits payable to any director or executive
officer of the Company or (v) any amendment to any Benefit Plan or Option Plan,
except, in the case of (i), (ii) (iv) or (v), for such adoption, grant,
increase, or amendment with respect to benefits payable to any director or
executive officer of the Company in the ordinary course of business consistent
with past practice.
SECTION 4.11. No Undisclosed Material Liabilities. There are no
liabilities or obligations of the Company or any of its Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities or obligations disclosed or provided for in the
unaudited consolidated balance sheet of the Company and its Subsidiaries at June
30, 2000, and the footnotes to the audited consolidated financial statements
included in the annual report on Form 10-K for the year ended December 31, 1999
included in the Company SEC Documents filed prior to the date hereof;
(b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since June 30, 2000 that would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company;
(c) liabilities or obligations under this Agreement; and
(d) liabilities or obligations that would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
SECTION 4.12. Compliance with Laws and Court Orders:
(a) The Company and each of its Subsidiaries are and since January 1,
1999 have been in compliance with all applicable laws, statutes, ordinances,
rules, regulations, judgments, injunctions, orders or decrees, except for
failures to comply or violations that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
(b) There are no claims pending or, to the knowledge of the Company,
threatened that the Company or any of its Subsidiaries is infringing on or
otherwise violating the rights of any Person with regard to any material
Intellectual Property that would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company.
SECTION 4.13. Litigation. There is no action, suit, investigation or
proceeding pending, or, to the knowledge of the Company, threatened, against the
Company or any of its Subsidiaries or any of their respective assets before any
court or arbitrator or before or by any Governmental body, agency or official,
domestic or foreign, that would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company.
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SECTION 4.14. Finders' Fees. Except for PaineWebber Incorporated, a
copy of whose engagement agreement has been provided to Parent, there is no
investment banker, broker, finder or other intermediary that has been retained
by or is authorized to act on behalf of the Company or any of its Subsidiaries
who might be entitled to any fee or commission from the Company or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement.
SECTION 4.15. Taxes. Except as set forth on Schedule 4.15:
(a) the Company and each of its Subsidiaries has timely filed (or has
had timely filed on its behalf), taking into account any extension of time
within which to file, all material Tax Returns required to be filed by it;
(b) the Company and each of its Subsidiaries has paid (or has had paid
on its behalf), or, where payment is not yet due, has established (or has had
established on its behalf) in accordance with GAAP an adequate accrual for the
payment of, all Taxes, except with respect to matters contested in good faith
for which adequate reserves have been established or for such amounts that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company;
(c) there are no material Liens or encumbrances for Taxes on any of
the assets of the Company or any of its Subsidiaries;
(d) no federal, state, local or foreign audits or administrative
proceedings are pending or, to the Company's knowledge, threatened, with regard
to any Taxes or any Tax Return of the Company or its Subsidiaries which, could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company; and
(e) Except for the Option Plans, Supplemental Executive Retirement Plan
and change in control agreements included among the Benefit Plans, no amount
that could be received (whether in cash or property or the vesting of property)
as a result of any of the transactions herein contemplated by any employee,
officer or director of the Company or any of its affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Benefit Plan could be characterized
as an excess "parachute payment" (as such term is defined in Section 280G(b)(1)
of the Code).
"TAXES" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added, capital,
net worth, payroll, profits, withholding, franchise, transfer and recording
taxes, fees and charges, and any other taxes, assessment or similar charges
imposed by the IRS or any taxing authority (whether domestic or foreign
including any state, county, local or foreign government or any subdivision or
taxing agency thereof (including a United States possession)) (a "TAXING
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AUTHORITY"), whether computed on a separate, consolidated, unitary, combined or
any other basis; and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. "TAX RETURN" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any taxing authority
or jurisdiction (foreign or domestic) with respect to Taxes, including
information returns, any documents with respect to or accompanying payments of
estimated Taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return, document, declaration or other
information.
SECTION 4.16. Employee Benefit Plans.
(a) Schedule 4.16 contains a correct and complete list identifying each
material "employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), each material employment,
severance or similar contract, plan, arrangement or policy and each other
material plan or arrangement providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other forms of
incentive or deferred compensation, vacation benefits, insurance coverage
(including, any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits) which is
maintained, administered or contributed to by the Company or any ERISA Affiliate
and covers any employee, former employee or director of the Company or any of
its Subsidiaries, or with respect to which the Company or any of its
Subsidiaries has any liability. Copies of such plans (and, if applicable,
related trust agreements) and all amendments thereto and written interpretations
thereof have been furnished, or will be made available upon request, to Parent.
Such plans are referred to collectively herein as the "BENEFIT PLANS". For
purposes of this Section 4.16, "ERISA AFFILIATE" of any Person means any other
Person which, together with such Person, would be treated as a single employer
under Section 414 of the Code, and "MULTIEMPLOYER PLAN" means a multiemployer
plan within the meaning of Section 4001(a)(3) of ERISA with respect to which the
Company or any ERISA Affiliate has an obligation to contribute or has or could
have withdrawal liability under ERISA.
(b) Except as set forth on Schedule 4.16 or as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company:
(i) each Benefit Plan has at all times been maintained and
administered in all respects in accordance with its terms and with the
requirements of all applicable law, including ERISA and the Code. Each
Benefit Plan intended to qualify under Section 401(a) of the Code has
been determined by the IRS to be qualified under Section 401(a) of the
Code, and the Company knows of no fact or circumstance giving rise to a
material likelihood that the plan would not be treated as so qualified
by the IRS;
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(ii) all required contributions to any Benefit Plans and
Multiemployer Plans that are "defined benefit pension plans" required
to be made by the Company or any Subsidiary in accordance with Section
302 of ERISA or Section 412 of the Code have been timely made; there
has been no application for or waiver of the minimum funding standards
imposed by Section 412 of the Code with respect to any Benefit Plan;
and no Benefit Plan has incurred any "accumulated funding deficiency"
within the meaning of section 302 of ERISA or section 412 of the Code;
(iii) no "reportable event" (within the meaning of section
4043 of ERISA) has occurred with respect to any Benefit Plan or any
employee benefit plan (as defined in Section 3(3) of ERISA) maintained
by an ERISA Affiliate since the effective date of said section 4043;
(iv) with respect to each Multiemployer Plan, (A) no
withdrawal liability (within the meaning of Section 4201(b) of ERISA)
has been incurred by the Company or any ERISA Affiliate, and the
Company has no reason to believe that any such withdrawal liability
will be incurred, (B) no notice has been received indicating that such
Multiemployer Plan is in "reorganization" (within the meaning of
Section 4241 of ERISA), (C) no notice has been received that increased
contributions may be required to avoid a reduction in plan benefits or
the imposition of an excise tax, or that such Multiemployer Plan is or
may become "insolvent" (within the meaning of Section 4245 of ERISA),
(D) to the knowledge of the Company, no proceedings have been
instituted by the PBGC against such Multiemployer Plan, (E) neither the
Company nor any Subsidiary thereof has sold assets in a transaction
intended to satisfy the requirements of Section 4204 ERISA, and (F) if
the Company or any ERISA Affiliate were to have a complete withdrawal
under Section 4203 of ERISA as of the Effective Time, no withdrawal
liability would exist on the part of the Company or any ERISA
Affiliate;
(v) no benefit under any Benefit Plan, including without
limitation, any severance or parachute payment plan or agreement, will
be established or become accelerated, vested or payable by reason of
any of the transactions contemplated by this Agreement;
(vi) neither the Company nor any ERISA Affiliate has
incurred any liability for any tax imposed under Sections 4971 through
4980E of the Code or civil liability under Section 502(i) or (l) of
ERISA;
(vii) no Tax has been incurred under Section 511 of the Code
with respect to any Benefit Plan (or trust or other funding vehicle
pursuant thereto);
(viii) there is no commitment or agreement that would prevent
the termination or modification as to employees or former employees of
the Company of any Benefit Plan under which obligations to provide
post-retirement benefits arise; and
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(ix) no action (excluding claims for benefits incurred in
the ordinary course of Plan activities) has been brought or, to the
knowledge of the Company or any Subsidiary thereof, threatened against
or with respect to any Benefit Plan.
(c) Except as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect, (i) all contributions
required to be made by the Company or any Subsidiary with respect to a Foreign
Plan have been timely made, (ii) each Foreign Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws and has been maintained, where required, in good standing with
the applicable governmental authority, and (iii) neither the Company nor any
Subsidiary has incurred any obligation in connection with the termination or
withdrawal from any Foreign Plan. To the knowledge of the Company, each of the
Foreign Plans that is a defined benefit plan has plan assets with aggregate fair
market value that is greater than such plan's liabilities, as determined in
accordance with applicable law using reasonable actuarial assumptions. For
purposes hereof, the term "FOREIGN PLAN" shall mean any plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into with,
the Company or any Subsidiary with respect to employees (or former employees)
employed outside the United States.
SECTION 4.17. Environmental Matters. (a) Except as disclosed in
Section 4.17 of the Disclosure Schedule or as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company:
(i) no notice, notification, demand, request for
information, citation, summons or order has been received, no complaint
has been filed, no penalty has been assessed, and no investigation,
action, claim, suit, proceeding or review is pending or, to the
knowledge of the Company, is threatened by any governmental entity or
other Person, nor is the Company subject to any judgment, decree, or
agreement relating to or arising out of any Environmental Law;
(ii) the Company is in compliance with and has no liability
under all Environmental Laws and all Environmental Permits; and
(iii) to the knowledge of the Company, no property or facility
currently or formerly owned, leased or operated by the Company or any
of the Subsidiaries, or at which hazardous substances of the Company or
any of the Subsidiaries have been stored, treated or disposed of is
listed or proposed on the National Priorities List or the Comprehensive
Environmental Response, Compensation and Liability Information System,
both promulgated under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or on any
comparable state or foreign list established under any Environmental
Law.
(b) The Company has made available to Parent all material records
and files, including, but not limited to, all material assessments, reports,
studies, audits, analyses, tests and data known
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by the Company to be in the possession or control of the Company or any of its
Subsidiaries relating to the existence of hazardous substances at facilities or
properties currently owned, operated, leased or used by the Company or any
Subsidiaries or in any way concerning compliance by the Company and any of its
Subsidiaries with, or liability of any of them, under any Environmental Law.
SECTION 4.18. Antitakeover Statutes and Rights Agreement.
(a) The Company has taken all action necessary to exempt the Merger
and this Agreement and the transactions contemplated hereby from the provisions
of Section 775 through 784 of the MBCA. Neither the restrictions in such
sections nor any other anti-takeover or similar statute or regulation applies to
the transactions contemplated by this Agreement. The Company has taken all
action necessary to opt out of Sections 790 through 799 of the MBCA in order to
render the provisions of such statutes restricting voting rights of "control
shares" inapplicable to Shares acquired by Parent, Merger Sub or their
affiliates pursuant to the Merger.
(b) The Company has taken all action necessary to render the Rights
issued pursuant to the Rights Agreement inapplicable to the Merger, this
Agreement and the transactions contemplated hereby. The Rights Agreement has
been amended such that it will expire and all Rights will be canceled
immediately prior to the Effective Time and the Rights Agreement will have no
force or effect at or after the Effective Time.
SECTION 4.19. Opinion of Financial Advisor. The Board of Directors has
received the opinion of the financial advisor to the Company to the effect that,
as of the date of this Agreement, the Merger Consideration is fair to the
shareholders of the Company from a financial point of view.
SECTION 4.20. Disclaimer of Other Representations and Warranties. The
Company does not make, and has not made, any representations or warranties in
connection with the Merger other than those expressly set forth herein. It is
understood that any data, any financial information or any memoranda or offering
materials or presentations (including but not limited to the Confidential
Memorandum dated May 2000) are not and shall not be deemed to be or to include
representations or warranties of the Company. Except as expressly set forth
herein, no Person has been authorized by the Company to make any representation
or warranty relating to the Company or any Subsidiary thereof or their
respective businesses, or otherwise in connection with the Merger and, if made,
such representations or warranties may not be relied upon as having been
authorized by the Company.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
SECTION 5.01. Corporate Existence and Power. Each of Parent and Merger
Sub is a limited liability company or corporation, as the case may be, duly
formed or incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation and has all limited liability company or
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent. Merger Sub is directly owned
by Parent and indirectly owned by Sponsor and any other equity investors in
Parent and Merger Sub was incorporated solely for the purpose of engaging in the
transactions contemplated by this Agreement. Since the date of its
incorporation, Merger Sub has not engaged in any activities other than in
connection with or as contemplated by this Agreement. Merger Sub has no
Subsidiaries.
SECTION 5.02. Authorization. The execution, delivery and performance by
Parent and Merger Sub of this Agreement and the consummation by Parent and
Merger Sub of the transactions contemplated hereby are within the limited
liability company or corporate powers of Parent and Merger Sub and have been
duly authorized by all necessary limited liability company or corporate action.
This Agreement constitutes a valid and binding agreement of each of Parent and
Merger Sub.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the consummation by
Parent and Merger Sub of the transactions contemplated hereby require no action
by or in respect of, or filing, with, any foreign, federal, state or local
court, administrative agency, commission, governmental body, agency, official or
authority, other than (i) the filing of the Certificate of Merger with the
Michigan Department of Consumer and Industry Services Corporation, Securities
and Land Development Bureau, and appropriate documents with the relevant
authorities of other states in which Parent is qualified to do business, (ii)
compliance with any applicable requirements of the HSR Act and of laws, rules
and regulations analogous to the HSR Act existing in foreign jurisdictions,
(iii) compliance with any applicable requirements of the 1934 Act and any other
applicable securities laws, whether state or foreign, and (iv) any actions or
filings the absence of which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent.
SECTION 5.04. Non-contravention. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the consummation by
Parent and Merger Sub of the transactions contemplated hereby do not and will
not (i) contravene, conflict with, or result in any violation or breach of any
provision of the certificate of incorporation or bylaws or other organizational
document of Parent or Merger Sub, (ii) assuming compliance with the matters
referred to in Section 5.03, contravene, conflict with, or result in any
violation or breach of any provision of any law, rule, regulation, judgment,
injunction, order or decree, (iii) require any consent or other action by any
Person under, constitute a default under, or cause or permit the termination,
cancellation, acceleration or other change of any right or obligation or the
loss of any benefit to which Parent or Merger Sub is entitled under any
provision of any agreement or other instrument binding upon
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Parent or Merger Sub, or any license, franchise, permit, certificate, approval
or other similar authorization affecting, or relating in any way to, the assets
or business of Parent or Merger Sub or (iv) result in the creation or imposition
of any Lien on any asset of Parent or Merger Sub, except for such
contraventions, conflicts and violations referred to in clause (ii) and for such
failures to obtain any such consent or other action, defaults, terminations,
cancellations, accelerations, changes, losses or Liens referred to in clauses
(iii) and (iv) that would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent or materially to impair the
ability of Parent or Merger Sub to consummate the transactions contemplated by
this Agreement.
SECTION 5.05. Disclosure Documents. None of the information provided by
Parent for inclusion in the Company Proxy Statement or any amendment or
supplement thereto, at the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to shareholders of the Company and at the
time the shareholders vote on adoption of this Agreement will contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 5.06. Finders' Fees. Except for Chase Securities Inc. and
Credit Suisse First Boston, whose fees will be paid by the Surviving
Corporation, there is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of Parent or any of
its Affiliates who might be entitled to any fee or commission from the Company
or any of its Affiliates upon consummation of the transactions contemplated by
this Agreement.
SECTION 5.07. Financing. (a) Parent has received and furnished a copy
to the Company of a commitment letter (including the Summary of Terms and
Conditions annexed thereto, the "COMMITMENT LETTER") with The Chase Manhattan
Bank and Credit Suisse First Boston (together, the "BANK") dated as of September
28, 2000. The funds which the Bank has agreed, subject to the terms and
conditions of the Commitment Letter, to provide will be sufficient, when taken
together with other funds available to Parent, to enable it to provide to the
Paying Agent the aggregate Merger Consideration and any other amounts owing as a
result of the transactions contemplated by this Agreement, and to pay all
related fees and expenses pursuant to the Merger (collectively, the "Required
Amount").
(b) As of the date hereof, (i) the Commitment Letter has not been
withdrawn and is in full force and effect and (ii) Merger Sub has no reason to
believe that any of the conditions set forth in the Commitment Letter will not
be satisfied.
(c) Merger Sub has received and furnished a copy to the Company of
the equity commitment letters (the "Equity Commitment Letters") addressed to
Parent from Sponsor and each of the other equity investors in Parent (the
"Equity Investors"), each dated as of September 28, 2000 pursuant to which the
Equity Investors have committed to make available to Parent certain funds,
subject to the terms and conditions contained therein, for the purpose of
consummating the transactions contemplated by this Agreement. As of the date
hereof, (i) no Equity Commitment
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Letter has been withdrawn and each Equity Commitment Letter is in full force and
effect and (ii) Merger Sub has no reason to believe that any of the conditions
set forth in any Equity Commitment Letter will not be satisfied. Sponsor may
arrange for other equity commitment letters addressed to Parent to be executed
on substantially the same terms and conditions as the equity commitment letters
executed on the date hereof, in lieu of the existing equity commitment letters
(including in order to cause Sponsor to reduce its equity commitment), so long
as the aggregate equity commitments to Parent are not less than the equity
commitments on the date hereof and Sponsor maintains a controlling interest in
Parent.
(d) Upon consummation of the transactions contemplated by this
Agreement, the Surviving Corporation (i) will not become insolvent, (ii) will
not be left with unreasonably small capital, and (iii) will not have incurred
debts beyond its ability to pay such debts as they mature.
ARTICLE 6
COVENANTS OF THE COMPANY
The Company agrees that, except as set forth in the Disclosure
Schedule:
SECTION 6.01. Conduct of the Company. Except as contemplated by this
Agreement, from the date hereof until the Effective Time, the Company shall and
shall cause its Subsidiaries to conduct their business in the ordinary course of
business and consistent with past practice and shall use all commercially
reasonable efforts to preserve intact their current business organizations and
relationships with customers, suppliers, licensors, licensees, distributors and
others having business dealings with them and to keep available the services of
their present officers and employees and to preserve goodwill. Without limiting
the generality of the foregoing and except as (x) otherwise expressly provided
in this Agreement or (y) required by law, from the date hereof until the
Effective Time, without the consent of Parent (which consent shall not be
unreasonably withheld):
(a) the Company will not and will not permit its Subsidiaries to
adopt or propose any change to its Articles of Incorporation or Bylaws or
analogous organizational documents or alter through merger, liquidation,
reorganization or in any other fashion the corporate structure or ownership of
the Company or any of its Material Subsidiaries;
(b) the Company will not, and will not permit any of its
Subsidiaries to, merge or consolidate with any other Person or acquire a
material amount of stock or assets of any other Person other than (i) purchases
of materials or products in the ordinary course consistent with past practice
and (ii) pursuant to purchase orders in the ordinary course consistent with past
practice;
(c) the Company will not, and will not permit any of its
Subsidiaries to, sell, lease, license or otherwise dispose of any Subsidiary or
material amount of assets, securities or property
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of the Company and its Subsidiaries, taken as a whole, except pursuant to
existing contracts, commitments or arrangements or otherwise in the ordinary
course consistent with past practice; and
(d) the Company will not and will not permit any of its Subsidiaries
to (i) expend funds for capital expenditures that in the aggregate would cause
total capital expenditures for the period from January 1, 2000 to the Effective
Time to exceed 110% of the amounts set forth in the most recent version of the
business plan previously provided to Merger Sub in the Confidential Memorandum
dated May 2000, (ii) enter into any new material line of business, or (iii)
amend, modify or terminate any material contracts or waive, realease or assign
any rights or claims thereunder except in the ordinary course of business and
consistent with past practice.
(e) except for issuances of Shares upon exercise of presently
outstanding options, the Company will not and will not permit any of its
Subsidiaries to authorize for issuance, issue, deliver, sell or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise), pledge
or otherwise encumber any shares of its capital stock or the capital stock of
any of its Subsidiaries, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities or any other securities or
equity equivalents (including, without limitation, stock appreciation rights);
(f) the Company will not and will not permit any of its Subsidiaries
to (i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that (x) the Company may pay quarterly cash
dividends on the Shares in and after the first quarter of 2001 not in excess of
$.10 per share per quarter and having customary record and payment dates and (y)
a wholly-owned Subsidiary of the Company may declare and pay a dividend, or make
advances, to the Company or another wholly-owned Subsidiary of the Company, (ii)
split, combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (iii) except as required by the
terms of any security as in effect on the date hereof amend the terms or change
the period of exercisability of, purchase, repurchase, redeem or otherwise
acquire any of the Company's securities, including Shares, or any option,
warrant or right, directly or indirectly, to acquire any such securities;
(g) the Company will not and will not permit its Subsidiaries to (i)
incur any additional indebtedness for borrowed money, except for borrowings and
reborrowings in the ordinary course of business consistent with past practice
not to exceed $30 million in the aggregate at any one time outstanding under the
Company's existing credit facilities (as in effect on the date hereof) and
intercompany indebtedness, (ii) issue or sell any debt securities (except
intercompany debt securities) or warrants or other rights to acquire any debt
securities of the Company or any of its Subsidiaries, (iii) make any loans,
advances (other than to employees of and consultants to the Company for travel
and other reasonable and customary expenses incurred in the ordinary course of
business consistent with past practice) or capital contributions to, or
investment in, any other Person, other than to the Company or any direct or
indirect Subsidiary of the Company or otherwise
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in the ordinary course consistent with past practice or (iv) assume, guarantee
(other than guarantees of obligations of the Company's Subsidiaries entered into
in the ordinary course of business consistent with past practice) or endorse, or
otherwise as an accommodation become responsible for, the obligations of any
Person (other than obligations of Subsidiaries and the endorsements of
negotiable instruments for collection in the ordinary course of business
consistent with past practice);
(h) the Company will not and will not permit any of its Subsidiaries
to (i) increase the compensation or severance payable or to become payable to
any existing director and officer, except for any previously scheduled increases
in compensation to existing officers in the ordinary course consistent with past
practice, (ii) enter into any employment or severance agreement with any
existing director or officer or any new officer, except as provided in Section
6.01(h) of the Disclosure Schedule and except for an employment agreement with a
new officer, entered into after consultation with Parent, providing for annual
base compensation not to exceed $300,000, either individually, in the case of
one such agreement, or in the aggregate for all such agreements.
(i) the Company will not and will not permit its Subsidiaries to
adopt or amend (except as previously adopted or amended by the Company or a
Subsidiary or as may be required by law) any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or other
arrangement for the benefit or welfare of any employee, director or former
director or employee, other than increases for individuals (other than existing
officers and directors, except as provided in Section 6.01(h) above) in the
ordinary course of business consistent with past practice.
(j) the Company will not and will not permit any of its Subsidiaries
to take any action to or make any tax election or to change any method of
accounting, method of tax accounting or accounting principles or practice by the
Company or any of its Subsidiaries, except for any such change required by
reason of a concurrent change in GAAP, Regulation S-X under the 1934 Act or
other applicable law or regulation.
(k) the Company will not and will not permit any of its Subsidiaries
to pay, discharge or satisfy any claim, liability or obligation in excess of
$1,000,000 in any individual case or $3.0 million in the aggregate, other than
the payment, discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in the financial statements contained
in the Company SEC Documents filed prior to the date of this Agreement or
incurred in the ordinary course of business.
(l) the Company will not and will not permit any of its Subsidiaries
to settle or compromise (i) any shareholder derivative suits arising out of the
transactions contemplated by this Agreement or (ii) any other material
litigation (whether or not commenced prior to the date of this Agreement) or
settle, pay or compromise any claims not required to be paid;
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(m) the Company will not and will not permit any of its Subsidiaries
to (i) take any action that would make any representation and warranty of the
Company hereunder inaccurate in any material respect at, or as of any time prior
to, the Effective Time or (ii) omit to take any action necessary to prevent any
such representation or warranty from being materially inaccurate in any respect
at any such time;
(n) the Company will not waive or amend any provision of the Rights
Agreement or otherwise take any action with respect to the Rights Agreement; or
(o) the Company will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
SECTION 6.02. Shareholder Meeting; Proxy Material. The Company shall
cause a meeting of its shareholders (the "COMPANY SHAREHOLDER MEETING") to be
duly called and held as soon as reasonably practicable for the purpose of voting
on the approval and adoption of this Agreement and the Merger. Subject to
Section 6.04(b), the Board of Directors of the Company shall recommend approval
and adoption of this Agreement and the Merger by the Company's shareholders. In
connection with such meeting, the Company will (i) promptly prepare and file
with the SEC, will use all commercially reasonable efforts to have cleared by
the SEC and will thereafter mail to its shareholders as promptly as practicable
the Company Proxy Statement and all other proxy materials for such meeting, (ii)
use all commercially reasonable efforts to obtain the necessary approvals by its
shareholders of this Agreement and the transactions contemplated hereby, unless
otherwise required by the applicable fiduciary duties of the Company's
directors, as determined by them in good faith and (iii) otherwise comply with
all legal requirements applicable to such meeting.
SECTION 6.03. Access to Information. From the date hereof until the
Effective Time and subject to applicable law and the Confidentiality Agreement
dated as of August 2, 2000 between the Company and Sponsor (the "CONFIDENTIALITY
AGREEMENT"), the Company shall, and shall cause its Subsidiaries to (i) give
Parent, its counsel, financial advisors, auditors and other authorized
representatives and representatives of financing sources identified by Parent
reasonable access to the offices, properties, books and records of the Company
and the Subsidiaries, (ii) furnish to Parent, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating data
and other information as such Persons may reasonably request and (iii) cause the
employees, counsel, financial advisors, auditors and other authorized
representatives of the Company and its Subsidiaries to cooperate with Parent in
its investigation of the Company and its Subsidiaries. Any investigation
pursuant to this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Company and its
Subsidiaries. No information or knowledge obtained by Parent in any
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by the Company hereunder.
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SECTION 6.04. No Solicitation.
(a) Neither the Company nor any of its Subsidiaries shall, nor shall
the Company or any of its Subsidiaries authorize or permit any of its or their
officers, directors, employees, investment bankers, attorneys, accountants,
consultants or other representatives, agents or advisors (collectively, "Company
Representatives") to, directly or indirectly, (i) seek, solicit, initiate or
take any action to encourage any Person to make an Acquisition Proposal (ii)
enter into or participate in any discussions or negotiations concerning an
Acquisition Proposal with any other Person or group, (iii) furnish or disclose
any non-public information relating to the Company or any of its Subsidiaries or
afford access to the employees, business, properties, assets, books or records
of the Company or any of its Subsidiaries to any other Person or group in
connection with an Acquisition Proposal or (iv) approve or recommend or agree to
approve or recommend any Acquisition Proposal.
(b) Notwithstanding the foregoing, the Board of Directors, directly
or indirectly through Company Representatives, may (i) subject to the other
provisions of this Section 6.04, engage in negotiations or discussions with any
Third Party that has made an Acquisition Proposal not solicited in violation of
this Section 6.04, (ii) furnish to such Third Party any information relating to
the Company or any of its Subsidiaries, (iii) following receipt of such
Acquisition Proposal, take and disclose to its shareholders a position
contemplated by Rule 14e-2(a) under the 1934 Act or otherwise comply with its
disclosure obligations, (iv) fail to make, withdraw, or modify in a manner
adverse to Parent its recommendation to its shareholders referred to in Section
6.02 hereof or fail to call the Company Shareholder Meeting in accordance with
Section 6.02 hereof and/or (v) take any non-appealable, final action ordered to
be taken by the Company by any court of competent jurisdiction, but (x) in each
case referred to in the foregoing clauses (i) through (iv) only if the Board of
Directors determines in good faith (after consultation with outside legal
counsel to the Company), that failing to take such action would cause the
Company's board of directors to be in breach of its fiduciary duties to the
Company's shareholders under applicable law and (y) in each case referred to in
the foregoing clauses (i) and (ii) only if prior to participating in such
negotiations or discussions or furnishing such information, the Company and the
party making such Acquisition Proposal agree to a confidentiality agreement on
customary terms.
(c) The Company shall notify Parent in writing promptly (but in no
event later than the end of the next business day after receipt thereof) of the
receipt of, or any change to or modification of, any Acquisition Proposal
(including a copy thereof if in writing), the terms and conditions of such
Acquisition Proposal and the identity of the Person making it.
(d) The Company shall, and shall cause its Subsidiaries and Company
Representatives to, cease immediately and cause to be terminated any and all
existing activities, discussions or negotiations, if any, with any Third Party
conducted prior to the date hereof with respect to any Acquisition Proposal and
shall use its commercially reasonable efforts to cause any such Party (or its
agents or advisors) in possession of confidential information about the Company
that was furnished by or on behalf of the Company to return or destroy all such
information.
SECTION 6.05. State Takeover Laws. The Company shall, upon the request
of Parent, take all reasonable steps to render inapplicable and to assist in any
challenge to the validity or applicability to the transactions contemplated by
this Agreement, including the Merger, of any state takeover laws.
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SECTION 6.06 Reports. From the date of this Agreement, the Company
shall provide Parent with monthly financial statements in the existing reporting
format (balance sheet, cash flow statement, income statement and, if available,
notes thereto), broken out by operating unit, no later than the tenth Business
Day following the end of each calendar month following the date of this
Agreement; provided that for calendar months that are also the end of a calendar
quarter, the Company may provide such financial information to Parent on the
earlier of (a) the second business day following the date on which such
financial information becomes available to the Company, and (b) the same date
such information is publicly released in accordance with the past practice of
the Company.
ARTICLE 7
COVENANTS OF PARENT
Parent agrees that:
SECTION 7.01. Obligations of Merger Sub. Parent will take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
SECTION 7.02. Voting of Shares. Parent agrees to vote or cause to be
voted all Shares Beneficially Owned by it, if any, in favor of adoption of this
Agreement at the Company Shareholder Meeting.
SECTION 7.03. Director and Officer Liability. Parent shall cause the
Surviving Corporation, and the Surviving Corporation hereby agrees, to do the
following:
(a) For six years after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless each present and former officer
and director of the Company and of any Subsidiary of the Company (each an
"INDEMNIFIED PERSON") in respect of acts or omissions occurring at or prior to
the Effective Time to the fullest extent permitted by the MBCA or provided under
the Company's Articles of Incorporation and Bylaws in effect on the date hereof;
provided that such indemnification shall be subject to any limitation imposed
from time to time under applicable law.
(b) The Surviving Corporation shall pay all expenses, including
reasonable fees and expenses of counsel, that an Indemnified Person may incur in
enforcing the indemnity and other obligations provided for in this Section 7.03.
The Indemnified Person shall be entitled to control the defense of any action,
suit, investigation or proceeding with counsel of its own choosing reasonably
acceptable to the Surviving Corporation and the Surviving Corporation shall
cooperate
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in the defense thereof, provided that the Surviving Corporation shall not be
liable for the fees of more than one counsel for all Indemnified Persons, other
than local counsel, unless a conflict of interest shall be caused thereby, and
provided further that the Surviving Corporation shall not be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld).
(c) For six years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering each
such Indemnified Person currently covered by the Company's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date hereof;
provided that the Surviving Corporation shall not be obligated to make annual
premium payments for such insurance to the extent such annual premiums exceed
225% of the annual premiums paid as of the date hereof by the Company for such
insurance and provided, further, that if the premiums with respect to such
insurance exceed 225% of the annual premiums paid as of the date hereof by the
Company for such insurance, the Surviving Corporation shall be obligated to
obtain such insurance with the maximum coverage as can be obtained at an annual
premium equal to 225% of the annual premiums paid by the Company as of the date
hereof.
(d) The obligations of the Surviving Corporation under this Section
7.03 shall be joint and several obligations of Parent and the Surviving
Corporation.
(e) If Parent, the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Parent or
the Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 7.03.
(f) The rights of each Indemnified Person under this Section 7.03
shall be in addition to any rights such Person may have under the Articles of
Incorporation or Bylaws of the Company or any of its Subsidiaries, or under the
MBCA or any other applicable laws. These rights shall survive consummation of
the Merger and are intended to benefit, and shall be enforceable by, each
Indemnified Person.
SECTION 7.04. Employee Benefits after the Merger.
(a) For a period commencing at the Effective Time and ending on
December 31, 2002, Parent shall cause the Surviving Corporation to provide those
of its and its Subsidiaries' employees who were employed by the Company or its
Subsidiaries immediately prior to the completion of the Effective Time with
compensation and employee benefits substantially equivalent in the aggregate, to
the compensation and benefits provided by the Company and its Subsidiaries to
such employees immediately prior to the date hereof; provided, however, that the
Surviving Corporation and its Subsidiaries shall not be required to offer
compensation and benefit plans or arrangements with employer stock as a
component.
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(b) Subject to Section 7.04(a), from and after the Effective Time,
Parent will, and will cause the Surviving Corporation to, honor, without
modification, perform all acts and pay all amounts required or due under or with
respect to each Benefit Plan and each agreement which relates to any current or
former employee of the Company and its Subsidiaries or the terms of any such
employee's employment or termination of employment, including, without
limitation, all employment, retention, change of control, employment protection,
severance, termination, consulting, deferred compensation, executive pension and
retirement, welfare and fringe benefit agreements, plans and programs, except
for any modification to any such Benefit Plan or agreement to the extent
permitted in accordance with Section 7.04(a). Nothing contained in this Section
7.04(b) shall restrict Parent or the Surviving Corporation from seeking to amend
or otherwise modify any Benefit Plan to the extent such modification is
permitted by the terms of such Plan and is consistent with Section 7.04(a).
(c) Notwithstanding the foregoing, nothing in this Section 7.04
shall preclude Parent from seeking to (i) modify any employment agreement with
the consent of the affected employee or employees or (ii) modify any Benefit
Plan to the extent such modification is permitted by the terms of such Benefit
Plan and is consistent with Section 7.04(a).
(d) Notwithstanding Section 7.04(a), employment of any of the
employees by the Surviving Corporation or its Subsidiaries will be "at will" and
may be terminated by the Surviving Corporation or its Subsidiaries at any time
for any reason (subject to any legally binding agreement other than this
Agreement, or any applicable laws or collective bargaining agreement, or any
other arrangement or commitment). No provision of this Section 7.04 shall confer
any third party beneficiary rights or benefits to any employee of the Surviving
Corporation or its Subsidiaries under this Agreement.
SECTION 7.05. Financing Arrangements. (a) Merger Sub shall use its
commercially reasonable efforts to obtain financing in an amount at least equal
to the Required Amount, including by executing definitive agreements for the
facilities referred to in the Commitment Letter on or prior to the Effective
Time. The Commitment Letter and the definitive agreements for the facilities
referred to therein (along with any other document pursuant to which Parent or
Merger Sub intends to obtain financing of all or a portion of the Required
Amount) are referred to herein collectively as the "Financing Agreements." The
Company will be afforded a reasonable opportunity to review and comment on the
representations and warranties contained in the Financing Agreements and no such
representation or warranty, insofar as it relates to facts and circumstances
relating to the Company and its Subsidiaries, shall be included therein that the
Company shall have advised Merger Sub is incorrect or inaccurate. Merger Sub
shall use commercially reasonable efforts to ensure that the representations and
warranties contained in the Financing Agreements shall be consistent with the
Commitment Letter.
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(b) Without limiting the generality of the foregoing, in the event
that at any time funds are not or have not been made available under the
Financing Agreements so as to enable Merger Sub to proceed with the Merger in a
timely manner, Merger Sub shall (i) use its commercially reasonable efforts to
obtain alternative funding in an amount at least equal to the Required Amount on
terms and conditions comparable to those provided in such Financing Agreements
or otherwise on terms reasonably acceptable to Merger Sub and (ii) shall
continue to 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 under applicable laws and regulations to consummate the
transactions contemplated by this Agreement; provided, however, nothing
contained herein shall require Merger Sub to obtain equity financing in excess
of the amount of equity financing contemplated in the Commitment Letter.
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement and
subject to the fiduciary duties under applicable law of the directors of the
Company (as determined by such directors in good faith), Company and Parent will
use 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 under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement, including but not limited to making all filings with the SEC
necessary to consummate such transactions and to assist Parent and cooperate in
all respects with Parent and the Bank and the other lenders in order for Parent
to establish its contemplated debt financing arrangements under the Commitment
Letter. In furtherance and not in limitation of the foregoing, each of Parent
and Company agrees to make, if required, an appropriate filing of a Notification
and Report Form pursuant to the HSR Act with respect to the transactions
contemplated hereby as promptly as practicable and in any event within ten
business days of the date hereof and to supply as promptly as practicable any
additional information and documentary material that may be requested pursuant
to the HSR Act and to take all other actions necessary to cause the expiration
or termination of the applicable waiting periods under the HSR Act as soon as
practicable.
(b) In connection with the efforts referenced in Section 8.01(a) to
obtain all requisite approvals and authorizations for the transactions
contemplated by this Agreement under the HSR Act or any other Antitrust Law,
each of Parent and Company shall use all commercially reasonable efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) keep the other party informed
in all material respects of any material
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communication received by such party from, or given by such party to, the
Federal Trade Commission (the "FTC"), the Antitrust Division of the Department
of Justice (the "DOJ") or any other governmental authority and of any material
communication received or given in connection with any proceeding by a private
party, in each case regarding any of the transactions contemplated hereby and
(iii) permit the other party to review any material communication given by it
to, and consult with each other in advance of any meeting or conference with,
the FTC, the DOJ or any such other governmental authority or, in connection with
any proceeding by a private party, with any other Person. For purposes of this
Agreement, "ANTITRUST LAW" means the Xxxxxxx Act, as amended, the Xxxxxxx Act,
as amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade or lessening of competition through
merger or acquisition.
SECTION 8.02. Certain Filings. The Company and Parent shall cooperate
with one another (i) in connection with the preparation of the Company Proxy
Statement, (ii) in determining whether any action by or in respect of, or filing
with, any governmental body, agency, official, or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (iii) in taking such actions or
making any such filings, furnishing information required in connection therewith
or with the Company Proxy Statement and seeking, timely to obtain any such
actions, consents, approvals or waivers.
SECTION 8.03. Public Announcements. Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement or the transactions contemplated hereby and,
except as may be required by applicable law or any listing agreement with any
national securities exchange, will not issue any such press releases or make any
such public statement prior to such consultation.
SECTION 8.04. Confidentiality. Prior to the Effective Time and after
any termination of this Agreement, Parent and the Company will hold, and will
cause its officers, directors, managers, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, all confidential
documents and information concerning the other party furnished to it or its
Affiliates in connection with the transactions contemplated by this Agreement in
accordance with the terms of the Confidentiality Agreement.
SECTION 8.05. Notices of Certain Events. Each of the Company and Merger
Sub shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
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(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 4.12 or 4.13 or that relate to the consummation of the
transactions contemplated by this Agreement.
(d) the occurrence or non-occurrence of any fact or event which
would be reasonably likely:
(i) to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at any
time from the date hereof to the Effective Time; or
(ii) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied; and
(e) any failure of the Company or Merger Sub, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that no such notification shall
affect the representations or warranties of any party or the conditions to the
obligations of any party hereunder.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to Obligations of Each Party. The obligations
of the Company and Merger Sub to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) This Agreement shall have been approved and adopted by the
holders of not less than a majority of the Shares entitled to vote for directors
in accordance with the MBCA;
(b) any applicable waiting period under the HSR Act or comparable
period under the Antitrust Laws of other applicable jurisdictions relating to
the Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
Merger;
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(d) receipt of a solvency opinion addressed to each of the Board of
Directors of the Company, Parent, and Merger Sub, as to the solvency of the
Surviving Corporation after giving effect to the transactions contemplated by
this Agreement;
(e) all licenses, permits, qualifications, consents, waivers,
approvals, authorizations or orders set forth on the Disclosure Schedule shall
have been obtained and made by the Company, except where the failure to receive
such licenses, permits, qualifications, consents, waivers, approvals,
authorizations or orders, individually or in the aggregate with all other such
failures, would not be reasonably expected to have a Material Adverse Effect
(either before or after giving effect to the transactions contemplated by this
Agreement); and
(f) all actions by or in respect of, or filings with, any
governmental body, agency or authority required to permit the consummation of
the Merger, shall have been taken, made or obtained.
SECTION 9.02. Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) (i) the Company shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior to
the Effective Time, (ii) the representations and warranties of the Company
contained in this Agreement and in any certificate or other writing delivered by
the Company pursuant hereto that are qualified by materiality or Material
Adverse Effect shall be true, and all other such representations and warranties
of the Company shall be true in all material respects, in each case at and as of
the Effective Time as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date),
and (iii) Parent shall have received a certificate signed by a duly authorized
officer of the Company to the foregoing effect;
(b) no court, arbitrator or governmental body, agency or authority,
domestic or foreign, shall have issued any order, and there shall not be any
statute, rule or regulation, restraining or prohibiting the consummation of the
Merger or the effective operation of the business of the Company and its
Subsidiaries after the Effective Time; and
(c) the financing contemplated by the Commitment Letter to be
provided by the Bank shall have been completed on substantially the terms and
conditions identified in such Commitment Letter or on such other terms and
conditions or involving such other financing sources, as are acceptable to
Parent and the Company and are not materially more onerous; provided, however,
that this condition shall be deemed satisfied if the failure of this condition
is due to a willful breach by Parent or Merger Sub of any covenant or willful
failure to perform any agreement or a willful breach by Parent or Merger Sub of
any representation or warranty contained in the Financing Agreements with the
Bank.
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SECTION 9.03. Conditions to Obligations of the Company. The obligations
of the Company to consummate the Merger are subject to the satisfaction of the
following further conditions:
(a) (i) Parent and Merger Sub shall have performed in all material
respects all of its obligations hereunder required to be performed by it at or
prior to the Effective Time, (ii) the representations and warranties of Parent
contained in this Agreement and in any certificate or other writing delivered by
Parent pursuant hereto that are qualified by materiality or Material Adverse
Effect shall be true, and all other such representations or warranties of Parent
shall be true in all material respects, in each case at and as of the Effective
Time as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such earlier date), and (iii) the
Company shall have received a certificate signed by a duly authorized officer of
Parent to the foregoing effect; and
(b) no court, arbitrator or governmental body, agency or authority,
domestic or foreign, shall have issued any order, and there shall not be any
statute, rule or regulation, restraining or prohibiting the consummation of the
Merger or the effective operation of the business of the Company and its
Subsidiaries after the Effective Time.
ARTICLE 10
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the shareholders of the Company):
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) the Merger has not been consummated on or before March
31, 2001 (the "TERMINATION DATE"); provided that the right to terminate
this Agreement pursuant to this Section 10.01(b)(i) shall not be
available to any party whose breach of any provision of this Agreement
results in the failure of the Merger to be consummated by such time; or
(ii) there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or any
judgment, injunction, order or decree of any court or governmental body
having competent jurisdiction enjoining the Company or Parent from
consummating the Merger is entered and such judgment, injunction, order
or decree shall have become final and nonappealable; provided that the
right to terminate this Agreement pursuant to this Section 10.01(b)(ii)
shall not be available to any party whose breach of any provision of
this Agreement results in the application of any such law or regulation
to the Merger or the imposition of any such judgment, injunction, order
or decree; or
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(iii) this Agreement and the Merger shall not have been
approved and adopted in accordance with the MBCA by the shareholders of
the Company at the Company Shareholder Meeting (or any adjournment
thereof); or
(iv) as permitted by Section 6.04 hereof, the Board of
Directors of the Company shall have failed to make or withdrawn or
modified in a manner adverse to Parent its approval or recommendation
of this Agreement or the Merger; provided that the Company may not
terminate this Agreement pursuant to this Section 10.01(b)(iv) unless
and until (i) five Business Days have elapsed following delivery to
Parent of a written notice of such determination by the Board of
Directors of the Company and (ii) at the end of such five Business Day
period the Board of Directors of the Company confirms its determination
(after consultation with outside legal counsel) that failing to
withdraw, not make or modify in a manner adverse to Parent its
recommendation of this Agreement or the Merger would cause the
Company's Board of Directors to be in breach of its fiduciary duties to
the Company's shareholders under applicable law.
(c) by Parent if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of the Company set
forth in this Agreement shall have occurred that would cause the condition set
forth in Section 9.02(a) hereof not to be satisfied, and such condition is
incapable of being satisfied by the Termination Date; or
(d) by the Company if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of Parent or Merger
Sub set forth in this Agreement shall have occurred that would cause the
conditions set forth in Section 9.03(a) hereof not to be satisfied, and such
condition is incapable of being satisfied by the Termination Date.
The party desiring to terminate this Agreement pursuant to this Section 10.01
(other than pursuant to Section 10.01(a)) shall give prompt notice of such
termination to the other party.
SECTION 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01, this Agreement shall become void and of no effect
with no liability on the part of any party (or any shareholder, director,
officer, manager, member, employee, agent, consultant or representative of such
party) to the other party hereto; provided that, if such termination shall
result from the willful (i) failure of either party to fulfill a condition to
the performance of the obligations of the other party or (ii) failure of either
party to perform a covenant hereof, such party shall be fully liable for any and
all liabilities and damages incurred or suffered by the other party as a result
of such failure. The provisions of Sections 8.04, 11.04, 11.06, 11.07 and 11.08
shall survive any termination hereof pursuant to Section 10.01.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to the Company, to:
Xxxxxxx Industries, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxx X. Xxxxxxx
with a copy to:
Xxxxxx Xxxxxxx PLLC
Suite 300 - 00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: D. Xxxxxxx XxXxxxxx
if to Parent or Merger Sub, to:
Simmer Acquisition Company LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: W. Xxxxxx Xxxxx
Xxxxxxxx X. Xxxxxxxxx
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a business day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
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SECTION 11.02. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement, except for the agreements
set forth in Sections 2.04, 2.06, 7.03, 7.04, 8.04, 10.02, 11.04, 11.06, 11.07
and 11.08.
SECTION 11.03. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived prior
to the Effective Time if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement or,
in the case of a waiver, by each party against whom the waiver is to be
effective, provided that, after the adoption of this Agreement by the
shareholders of the Company and without their further approval, no such
amendment or waiver shall reduce the amount or change the kind of consideration
to be received in exchange for the Shares.
(b) No failure or delay by any party in exercising any right,
power or privilege 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, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 11.04. Expenses; Topping Fee.
(a) Except as otherwise provided in this Section, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
(b) If (x) this Agreement is terminated by the Company or Parent,
(y) the conditions set forth in Section 9.02(a)(i) would not be satisfied at the
date of termination and the condition set forth in Section 9.03(a)(i) would be
satisfied at the date of termination, and (z) the Company has not previously
paid to Parent the Topping Fee in accordance with Section 11.04(c), the Company
shall promptly reimburse Parent for all reasonable and documented out-of-pocket
expenses and fees (including, without limitation, expenses payable to all banks,
investment banking firms and other financial institutions and all reasonable
fees and expenses of such banks'; firms' and institutions' legal counsel) and
all reasonable fees and expenses of counsel, accountants, financial printers,
experts and consultants to Parent and Merger Sub and their Affiliates incurred
in connection with the matters contemplated by this Agreement, and the financing
thereof; provided, however, that the reimbursement for costs and expenses
provided in this Section 11.04(b) shall not exceed $1,000,000.
(c) (i) If (x) any Third Party shall have made, proposed,
communicated or disclosed an Acquisition Proposal in a manner which is or
otherwise becomes public prior to the termination of this Agreement, (y) this
Agreement is terminated by either the Company or Parent pursuant to
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Section 10.01(b) (iii) or Section 10.01(b)(iv) and (z) within six months of such
termination the Company or any of its Subsidiaries shall have entered into a
definitive agreement with respect to an Acquisition Proposal or consummated an
Acquisition Proposal, the Company shall promptly pay Parent the Topping Fee
immediately prior to the earlier of (a) the execution of a definitive agreement
with respect to such Acquisition Proposal or (b) the consummation of the
Acquisition Proposal.
(ii) If (x) any Third Party shall have made, proposed, communicated
or disclosed an Acquisition Proposal in a manner which is or otherwise becomes
public prior to the termination of this Agreement, (y) this Agreement is
terminated pursuant to Section 10.01(b)(i) or Section 10.01(c) and (z) within
six months of such termination, the Company or any of its Subsidiaries shall
have entered into a definitive agreement with respect to an Acquisition Proposal
with such Third Party or consummated an Acquisition Proposal with such Third
Party, the Company shall promptly pay Merger Subsidiary the Topping Fee
immediately prior to the earlier of (a) the execution of a definitive agreement
with respect to such Acquisition Proposal or (b) the consummation of such
Acquisition Proposal.
SECTION 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding, upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto. Notwithstanding the foregoing,
Parent or Merger Sub may, without the prior consent of the Company, transfer or
assign, in whole or from time to time in part, to one or more Affiliates of
Parent or Merger Sub, the right to enter into the transactions contemplated by
this Agreement, but any such transfer or assignment will not relieve Parent or
Merger Sub of its obligations hereunder.
SECTION 11.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Michigan.
SECTION 11.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of Michigan or any Michigan state court,
and each of the parties hereby consents to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 11.01 shall be deemed effective service of
process on such party.
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SECTION 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 11.09. Counterparts; Effectiveness; Benefit. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Section 7.03, no provision of this Agreement is intended
to confer any rights, benefits, remedies, obligations or liabilities hereunder
upon any Person other than the parties hereto and their respective successors
and assigns.
SECTION 11.10. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.
SECTION 11.11. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 11.12. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. Upon
such a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
SECTION 11.13. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of Michigan or any Michigan state court,
in addition to any other remedy to which they are entitled at law or in equity.
* * * * * * * * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXXX INDUSTRIES, INC.
By: /s/ Xxx X. Xxxxxxx
-------------------------------
Name: Xxx X. Xxxxxxx
Title: Chairman and Chief
Executive Officer
SIMMER ACQUISITION COMPANY LLC
By: /s/ W. Xxxxxx XxXxxxxxx
-------------------------------
Name: W. Xxxxxx XxXxxxxxx
Title:
SIMMER ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title:
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