EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
FLP HOLDINGS III LLC,
XXXXX FOODS, INC.
AND
RFI ACQUISITION, INC.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of April
10, 2001 between FLP HOLDINGS III LLC, an Illinois limited liability company
("Parent"), XXXXX FOODS, INC., a Delaware corporation ("Xxxxx"), and RFI
ACQUISITION, INC., a Delaware corporation ("Merger Sub").
RECITALS
WHEREAS, the respective Boards of Directors of Xxxxx and Parent
have approved and declared advisable a merger of Merger Sub with and into
Xxxxx upon the terms and subject to the conditions set forth in this
Agreement, with Xxxxx to be the surviving corporation in the Merger, and the
Board of Directors of Xxxxx has resolved to recommend that the stockholders
of Xxxxx approve the Merger upon the terms of this Agreement;
WHEREAS, the Boards of Directors of Merger Sub and Xxxxx have
determined that the Merger is fair to and in the best interests of their
respective stockholders;
WHEREAS, pursuant to provisions contained in the Certificate of
Incorporation of Xxxxx, the Merger is subject to the approval of a two-
thirds (2/3) majority of the outstanding shares of the $0.04 par value
common stock of Xxxxx (the "Xxxxx Common Stock");
WHEREAS, certain stockholders of Xxxxx holding not less than seventeen
and three-tenths percent (17.3%) of the outstanding Xxxxx Common Stock have
entered into voting agreements, dated as of the date hereof (collectively,
the "Voting Agreements"), pursuant to which they have agreed, among other
things, to vote all shares of Xxxxx Common Stock owned by such stockholders
in favor of the Merger; and
WHEREAS, Parent has caused Merger Sub to be formed for the purpose of
effecting the Merger and the Board of Directors and sole stockholder of
Merger Sub have each approved the Merger and this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.01 The Merger. Subject to the terms and conditions of
this Agreement, and in accordance with Section 251 of the General
Corporation Law of the State of Delaware ("DGCL"), at the Effective Time (as
defined below) Merger Sub shall be merged with and into Xxxxx (the
"Merger"). As a result of the Merger, the separate corporate existence of
Merger Sub shall cease, and Xxxxx shall continue its existence as a Delaware
corporation, shall be the surviving corporation in the Merger (the
"Surviving Corporation"), and shall change its name to "Xxxxx Foods, Inc."
Section 1.02 Closing; Effective Time. As promptly as
practicable, and in no event later than five business days after the
satisfaction or waiver of the conditions set forth in Article VII
(including, without limitation, the approval of the Merger by the requisite
vote of the holders of the outstanding shares of Xxxxx Common Stock), the
parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger (the "Certificate of Merger") with the Secretary of
State of the State of Delaware, in such form as is required by, and executed
in accordance with the DGCL. The term "Effective Time" means the date and
time of the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware (or such later time as may be agreed by the parties
hereto and specified in the Certificate of Merger). Immediately prior to
the filing of the Certificate of Merger, a closing (the "Closing") will be
held at the offices of Xxxxxxx Xxxx & Xxxxxxxxx LLC, 00 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx or such other place as the parties may agree (the date on
which such closing takes place being the "Closing Date").
Section 1.03 Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at and after the Effective Time: (a) all the property, rights,
immunities, privileges, powers and franchises of Xxxxx and Merger Sub shall
vest in the Surviving Corporation, without further act or deed and without
reversion or impairment; (b) all debts, liabilities, obligations,
restrictions, disabilities and duties of each of Xxxxx and Merger Sub shall
become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation and be enforceable against the Surviving
Corporation to the same extent as if the same had been contracted by the
Surviving Corporation; and (c) a civil, criminal, administrative or
investigatory proceeding against either of Xxxxx or Merger Sub may be
continued as if the Merger did not occur or the Surviving Corporation may be
substituted in the proceeding for Xxxxx or Merger Sub, as the case may be.
Section 1.04 Certificate of Incorporation; By-laws.
(a) From and after the Effective Time, the Certificate of
Incorporation of the Surviving Corporation shall be the Certificate of
Incorporation of Merger Sub as in effect immediately prior to the Effective
Time until thereafter amended in accordance with its terms and as provided
by applicable Law and this Agreement, except that, as of the Effective Time,
Article I of such Certificate of Incorporation shall be amended to read as
follows: "The name of the Corporation is 'Xxxxx Foods, Inc.'".
(b) From and after the Effective Time, the By-laws of Merger Sub, as
in effect immediately prior to the Effective Time, shall be the By-laws of
the Surviving Corporation until thereafter amended as provided by applicable
Law, the Certificate of Incorporation of the Surviving Corporation and such
By-laws.
Section 1.05 Directors and Officers.
(a) Directors. From and after the Effective Time, the directors of
Merger Sub immediately prior to the Effective Time shall be the directors of
the Surviving Corporation until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the
case may be, in accordance with the Certificate of Incorporation and By-laws
of the Surviving Corporation and applicable Law.
(b) Officers. From and after the Effective Time, the officers of
Merger Sub immediately prior to the Effective Time shall be the officers of
the Surviving Corporation and shall hold office until the earlier of their
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be, in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation and applicable Law.
Section 1.06 Additional Actions. If, at any time at or after the
Effective Time, the Surviving Corporation shall consider or be advised that
any further deeds, assignments or assurances in Law or any other acts are
necessary or desirable to (a) vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its rights, title or interest in, to
or under any of the rights, properties or assets of Xxxxx or its
subsidiaries, or (b) otherwise carry out the provisions of this Agreement,
Xxxxx and its officers and directors shall be deemed to have granted to the
Surviving Corporation an irrevocable power of attorney to execute and
deliver all such deeds, assignments or assurances in Law and to take all
acts necessary, proper or desirable to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving Corporation
and otherwise to carry out the provisions of this Agreement, and the
officers and directors of the Surviving Corporation are authorized in the
name of Xxxxx or otherwise to take any and all such action.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF
CERTIFICATES; DISSENTERS' RIGHTS
Section 2.01 Effect on Capital Stock and Xxxxx Stock Options. As
of the Effective Time, by virtue of the Merger and without any action on the
part of the holder of any Xxxxx Common Stock or any other holder of capital
stock of Xxxxx or any shares of capital stock of Merger Sub:
(a) Cancellation of Xxxxx Owned Stock. All shares of Xxxxx Common
Stock that are held (i) in the treasury of Xxxxx, (ii) by any wholly owned
subsidiary of Xxxxx or (iii) by Merger Sub shall be canceled and retired and
shall cease to exist without any consideration payable therefor.
(b) Conversion of Xxxxx Common Stock. Each share of Xxxxx Common
Stock issued and outstanding immediately prior to the Effective Time (other
than Dissenting Shares (as herein defined) and shares of Xxxxx Common Stock
referred to in Section 2.01(a)) shall be converted into the right to receive
from the Surviving Corporation in cash $0.525 per share of Xxxxx Common
Stock, subject to adjustment to reflect the payment by Xxxxx of certain
Transaction Costs as set forth in and in the manner described in Section
8.03(a) hereof (the "Merger Consideration") without interest thereon upon
surrender of the certificate previously representing such share of Xxxxx
Common Stock. As of the Effective Time, all such shares of Xxxxx Common
Stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate
representing any such share of Xxxxx Common Stock shall cease to have any
rights with respect thereto, except the right to receive the cash into which
their shares of Xxxxx Common Stock have been converted by the Merger as
provided in this Section 2.01(b).
(c) Conversion of Common Stock of Merger Sub. Each share of common
stock of Merger Sub which is issued and outstanding immediately prior to the
Effective Time shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01, of the Surviving
Corporation upon the surrender of the certificates previously representing
such share(s) of Merger Sub's common stock.
(d) Conversion of Xxxxx Stock Options. Subject to the provisions of
Section 8.03(c) hereof, each Xxxxx Stock Option (as defined in
Section 2.03(a) hereof), issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive from the
Surviving Corporation the Option Consideration (as defined in
Section 2.03(a) hereof) without interest thereon. As of the Effective Time,
all such Xxxxx Stock Options shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
holder of any such Xxxxx Stock Option shall cease to have any rights with
respect thereto, except the right to receive the cash into which their Xxxxx
Stock Options have been converted by the Merger as provided in this
Section 2.01(d) and Section 2.03(a).
Section 2.02 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Merger Sub shall
designate a bank or trust company, reasonably satisfactory to Xxxxx, to act
as paying agent in the Merger (the "Paying Agent").
(b) At the Closing, Merger Sub or Surviving Corporation shall deliver:
(i) to the Parent, who shall have surrendered to the Merger
Sub at the Closing the certificates which, immediately prior to
the Effective Time, represented shares of outstanding common stock
of Merger Sub, the securities of the Surviving Corporation into
which the shares of common stock of Merger Sub represented by such
certificates have been converted pursuant to the provisions of
this Article II;
(ii) to the Paying Agent, for the benefit of the holders of
Xxxxx Common Stock entitled to receive Merger Consideration, the
amount of Merger Consideration which such holders of Xxxxx Common
Stock are entitled to receive pursuant to the provisions of this
Article II; and
(iii) to the holders of Xxxxx Stock Options entitled to
receive Option Consideration, the amount of Option Consideration
which such holders of Xxxxx Stock Options are entitled to receive
pursuant to the provisions of this Article II.
(c) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall mail or caused to be mailed
to each holder of record of any certificate, which as of immediately prior
to the Effective Time represented shares of Xxxxx Common Stock and as of the
Effective Time represents the right to receive Merger Consideration (all
such certificates, the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon delivery of the Certificates to the
address specified therein) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the applicable Merger
Consideration. Upon surrender of a Certificate for cancellation to the
Paying Agent, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor
from the Paying Agent the amount of cash into which the shares of Xxxxx
Common Stock theretofore represented by such Certificate shall have been
converted pursuant to Section 2.01, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of the
shares of Xxxxx Common Stock that is not registered in the transfer records
of Xxxxx, payment may be made to a person other than the person in whose
name the Certificate so surrendered is registered, if such Certificate shall
be properly endorsed or otherwise be in proper form for transfer and the
person requesting such payment shall pay any transfer or other Taxes
required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such Tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.02, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without interest, into which
the shares of Xxxxx Common Stock theretofore represented by such Certificate
shall have been converted pursuant to Section 2.01. No interest will be
paid or will accrue on the cash payable upon the surrender of any
Certificate. In the event any Certificate shall have been lost, stolen or
destroyed, upon making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed, the Surviving Corporation
will pay in exchange for such lost, stolen or destroyed Certificate, the
amount of cash into which the shares of Xxxxx Common Stock theretofore
represented by such Certificate have been converted pursuant to
Section 2.01, except that when authorizing such payment, the Board of
Directors of the Surviving Corporation, may, in its discretion and as a
condition precedent to such payment, require the owner of such lost, stolen
or destroyed Certificate 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 such Certificate.
(d) Withholding. Merger Sub, Surviving Corporation and Paying Agent
shall be entitled to deduct and withhold from the Merger Consideration
otherwise payable or issuable pursuant to this Agreement to any holder of
Xxxxx Common Stock or Xxxxx Stock Option such amount as Merger Sub,
Surviving Corporation or Paying Agent is required to deduct and withhold
with respect to such payment or issuance under the Code, or any provision of
state, local or foreign Tax Law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of Xxxxx Common Stock in respect
of which such deduction and withholding was made.
(e) No Further Ownership Rights in Xxxxx Common Stock. All cash paid
upon the surrender of Certificates in accordance with the terms of this
Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Xxxxx Common Stock theretofore
represented by such Certificates. At the Effective Time, the stock transfer
books of Xxxxx shall be closed, and there shall be no further registration
of transfers on the stock transfer books of the Surviving Corporation of the
shares of Xxxxx Common Stock that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation or the Paying Agent for any reason, they shall be
canceled and exchanged as provided in this Article II.
(f) No Liability. At any time following the expiration of six months
after the Effective Time, the Surviving Corporation shall, in its sole
discretion, be entitled to require the Paying Agent to deliver to it any
funds (including any interest received with respect thereto) 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 any applicable abandoned
property, escheat or similar Law) only as general creditors thereof with
respect to the Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwithstanding the foregoing,
none of Merger Sub, Xxxxx, the Surviving Corporation or the Paying Agent
shall be liable to any person in respect of any cash delivered to a public
official or entity pursuant to any applicable abandoned property, escheat or
similar Law.
Section 2.03 Xxxxx Stock Options; Plans.
(a) Except as set forth in this Section 2.03, Section 8.03(a) and
except to the extent that Merger Sub and the holder of any option otherwise
agree, the Surviving Corporation shall promptly after the Effective Time pay
to each holder of an outstanding option to purchase Xxxxx Common Stock (a
"Xxxxx Stock Option") issued pursuant to Xxxxx'x 1997 Stock Option Plan, as
amended (the "Xxxxx Stock Option Plan"), in settlement of each such Xxxxx
Stock Option, whether or not exercisable or vested, an amount of cash in
respect thereof equal to the product of (x) the excess, if any, of the
Merger Consideration over the exercise price of each such Xxxxx Stock
Option, and (y) the number of shares of Xxxxx Common Stock subject to Xxxxx
Stock Option immediately prior to its settlement (the "Option
Consideration") (such payment to be net of applicable withholding Taxes).
Upon receipt of the Option Consideration, such Xxxxx Stock Option shall be
canceled. The surrender of a Xxxxx Stock Option to Xxxxx in exchange for
the Option Consideration shall be deemed a release of all rights the holder
had or may have had in respect of that Xxxxx Stock Option.
(b) Prior to the Effective Time, Xxxxx shall use its best efforts to
obtain any consents from holders of Xxxxx Stock Options and make any
amendments to the terms of Xxxxx Stock Option Plan or arrangements that are
necessary to give effect to the transactions contemplated by Section 2.01(d)
and this Section 2.03.
(c) The Xxxxx Stock Option Plan shall terminate as of the Effective
Time, and no holder of Xxxxx Stock Options or any participant in Xxxxx Stock
Option Plan shall have any rights thereunder, including any rights to
acquire any equity securities of Xxxxx, the Surviving Corporation or any
subsidiary thereof, other than to receive Option Consideration payable
pursuant to Section 2.03(a).
(d) Except as may otherwise be agreed by Merger Sub and Xxxxx, all
other plans, programs or arrangements providing for the issuance or grant of
any other interest in respect of the capital stock of Xxxxx or any of its
subsidiaries shall terminate as of the Effective Time, and no participant in
any such plans, programs or arrangements shall have any rights thereunder to
acquire any equity securities of Xxxxx, the Surviving Corporation or any
subsidiary thereof.
Section 2.04 Shares of Dissenting Stockholders.
(a) Notwithstanding anything in this Agreement to the contrary, any
shares of Xxxxx Common Stock that are issued and outstanding as of the
Effective Time and that are held by a holder who has not voted in favor of
the Merger or consented thereto in writing and who has properly exercised
his or her appraisal rights under the DGCL (the "Dissenting Shares"), shall
not be converted into the right to receive the Merger Consideration, unless
and until such holder shall have failed to perfect, or shall have
effectively withdrawn or lost, his or her right to dissent from the Merger
under the DGCL and to receive such consideration as may be determined to be
due with respect to such Dissenting Shares pursuant to and subject to the
requirements of the DGCL. If, after the Effective Time, any such holder
shall have failed to perfect or shall have effectively withdrawn or lost
such right, each share of such holder's Xxxxx Common Stock shall thereupon
be deemed to have been converted into and to have become, as of the
Effective Time, the right to receive, without interest or dividends thereon,
the Merger Consideration.
(b) Xxxxx shall give Merger Sub and Parent (i) prompt notice of any
notices or demands for appraisal or payment for shares of Xxxxx Common Stock
received by Xxxxx and (ii) the opportunity to participate in all
negotiations and proceedings with respect to any such demands or notices.
Xxxxx shall not, without prior written consent of Merger Sub and Parent
(which consent shall not be unreasonably withheld or delayed), make any
payments with respect to, or settle, offer to settle or otherwise
negotiate, with respect to any such demands.
(c) Dissenting Shares, if any, after payments of fair value in respect
thereto have been made to the holders thereof pursuant to the DGCL, shall be
canceled.
Section 2.05 Adjustment of Merger Consideration and Option
Consideration. In the event that, subsequent to the date of this Agreement
but prior to the Effective Time, the outstanding shares of Xxxxx Common
Stock shall have been changed into a different number of shares of Xxxxx
Common Stock or shares of a different class as a result of a stock split,
reverse stock split, stock dividend, subdivision, reclassification, split,
combination, exchange, recapitalization or other similar transaction, the
Merger Consideration and the Option Consideration shall be appropriately
adjusted. The Merger Consideration and the Option Consideration have been
calculated based upon the representations and warranties made by Xxxxx in
Section 3.06 hereof. The provisions of this Section 2.05 shall not, in any
event, derogate from the representation and warranty made by Xxxxx in
Section 3.06.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx hereby makes the following representations and warranties to
Parent and Merger Sub, each of which shall be deemed to be independently
material and relied upon by the Parent and Merger Sub, regardless of any
investigation made by, or information known to, the Parent and Merger Sub.
Each of the following representations and warranties are qualified by
reference to the disclosures made by Xxxxx with respect to a specific
section or subsection of this Agreement on a separate disclosure schedule
delivered by Xxxxx to Parent and Merger Sub prior to the execution of this
Agreement and made a part hereof (the "Disclosure Schedule").
Section 3.01 Organization and Qualification. Each of Xxxxx and
its subsidiaries is duly formed and organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
formation, as applicable, and has the requisite power and authority and all
necessary and material governmental approvals to own, lease and operate the
properties and assets it currently owns, operates or holds under lease and
to carry on its business as it is now being conducted. Each of Xxxxx and
its subsidiaries is duly qualified or licensed as a foreign corporation or
other entity to do business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary,
except for such failures to be so qualified or licensed and in good standing
that would not, individually or in the aggregate, have a Material Adverse
Effect.
Section 3.02 Authority Relative to this Agreement. Xxxxx has all
necessary power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the Merger, except that
with respect to the Merger, Xxxxx cannot consummate the Merger unless and
until this Agreement has been adopted by the holders of the shares of Xxxxx
Common Stock in accordance with the Certificate of Incorporation of Xxxxx
and the provisions of the DGCL. The execution and delivery of this
Agreement by Xxxxx and the consummation by Xxxxx of the Merger have been
duly and validly authorized by all necessary corporate action on the part of
Xxxxx and, except as expressly described in this Agreement, no other
proceedings on the part of Xxxxx are necessary to authorize this Agreement
or to consummate the Merger (other than, with respect to the Merger, the
adoption of this Agreement by the holders of the shares of Xxxxx Common
Stock and the filing and recordation of appropriate merger documents as
required by the DGCL). This Agreement has been duly and validly executed
and delivered by Xxxxx and constitutes the legal, valid and binding
obligation of Xxxxx, enforceable against Xxxxx in accordance with its terms,
except insofar as enforcement may be limited by bankruptcy, insolvency or
similar Laws affecting the enforcement of creditors rights generally and by
principles of equity.
Section 3.03 No Conflict; Required Filings and Consents.
(a) Subject to compliance with applicable provisions of the DGCL, the
execution and delivery of this Agreement by Xxxxx does not, and the
consummation of the Merger by Xxxxx will not (i) conflict with or violate
the Certificate of Incorporation or By-laws of Xxxxx, (ii) assuming
compliance with the matters referred to in Section 3.03(b), conflict with or
violate any domestic (federal, state or local) or foreign law, rule,
regulation, order, judgment or decree (collectively, "Laws") applicable to
Xxxxx or by which any of its properties or assets are bound or affected, or
(iii) result in a violation or any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a violation,
breach or default) or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of any Lien (as
defined below) on any property or asset of Xxxxx or its subsidiaries
pursuant to or under any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Xxxxx is a party or by which it or any of its properties
or assets is bound or affected, except, in the case of clauses (ii) and
(iii), for violations, breaches or defaults which would not, individually or
in the aggregate, be reasonably expected to prevent or materially delay the
consummation of the Merger or result in a Material Adverse Effect.
(b) The execution and delivery of this Agreement by Xxxxx does not,
and the consummation of the Merger by Xxxxx will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority (as defined below), except (i) for applicable
requirements, if any, of the Securities Act of 1933, as amended (the "1933
Act") the Securities Exchange Act of 1934, as amended (the "1934 Act"),
state securities or "blue sky" laws ("Blue Sky Laws"), the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable
state takeover Laws and the DGCL, and (ii) where the failure to obtain such
other consents, approvals, authorizations, or permits, or to make such
filings or notifications, would not, individually or in the aggregate, be
reasonably expected to prevent or materially delay the consummation of the
Merger or result in a Material Adverse Effect.
Section 3.04 Certificate of Incorporation and By-laws. The
Disclosure Schedule includes complete and correct copies of its Certificate
of Incorporation and By-laws, each as amended to the date hereof. Such
Certificate of Incorporation and By-laws are in full force and effect and
have not been modified or amended in any way.
Section 3.05 Subsidiaries and Affiliates. Except as set forth on
the Disclosure Schedule, Xxxxx does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
business association or entity. The Disclosure Schedule sets forth the name,
owner, jurisdiction of organization and type and percentages of outstanding
equity securities owned, directly or indirectly, by Xxxxx, with respect to
each corporation, partnership, limited liability company, joint venture or
other business association or entity of which Xxxxx owns, directly or
indirectly, any equity or equity related securities. Except as set forth on
the Disclosure Schedule, all outstanding shares of stock or other equity
securities of each subsidiary of Xxxxx have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned, directly or
indirectly, by Xxxxx free and clear of any Lien, and there are no
outstanding options, warrants, convertible securities, calls, rights,
commitments, preemptive rights or agreements or instruments or
understandings of any character, obligating any subsidiary of Xxxxx to
issue, deliver or sell, or cause to be issued, delivered or sold,
contingently or otherwise, additional shares of such subsidiary or any
securities or obligations convertible or exchangeable for such shares or to
grant, extend or enter into any such option, warrant, convertible security,
call, right, commitment, preemptive right or agreement. All references in
this Agreement to Xxxxx, its business, assets, condition (financial or
otherwise) or business prospects and all references to documents,
instruments or other agreements to be delivered at Closing shall mean and
include Xxxxx and each subsidiary (past and present), unless the context
clearly and specifically limits the meaning solely to Xxxxx.
Section 3.06 Capitalization. The authorized capital stock of
Xxxxx consists of 20,000,000 shares of common stock, $0.04 par value per
share and 400,000 shares of preferred stock, of which 4,291,855 shares of
common stock and no shares of preferred stock are issued and outstanding as
of the date of this Agreement. All of the outstanding shares of Xxxxx
Common Stock have been issued pursuant to and in accordance with the 1933
Act, and any applicable state securities Laws and rules and regulations
under such Laws. All of the outstanding shares of Xxxxx Common Stock are
duly authorized, validly issued, fully paid and nonassessable, with no
liability attaching by virtue of share ownership, and all such shares are
free of pre-emptive rights. The Disclosure Schedule identifies and
describes the number of shares of Xxxxx Common Stock to be received upon
exercise or conversion and the exercise or conversion price of each
outstanding Xxxxx Stock Option (the "Xxxxx Common Stock Equivalents") as
well as the aggregate number of shares of Xxxxx Common Stock and the
aggregate exercise price for all of the outstanding Xxxxx Common Stock
Equivalents. All of Xxxxx Common Stock Equivalents will become fully vested
upon a change of control of Xxxxx. Except for Xxxxx Common Stock
Equivalents, there are no existing options, warrants, convertible
securities, calls, subscriptions, or other rights or other agreements or
commitments obligating Xxxxx to issue, transfer or sell, or caused to be
issued, transferred or sold, contingently or otherwise, any shares of
capital stock of Xxxxx or any other securities convertible into or
evidencing the right to subscribe for any such shares. There are no
outstanding stock appreciation rights or similar phantom equity securities
with respect to the capital stock of Xxxxx. To Xxxxx'x knowledge, other
than the Voting Agreements, there are no voting trusts or shareholder
agreements with respect to the voting of the capital stock of Xxxxx, and to
Xxxxx'x knowledge, there are no such agreements among its stockholders.
To Xxxxx'x knowledge, other than the Voting Agreements, there are no
irrevocable proxies with respect to shares of capital stock of Xxxxx or any
Subsidiary that cover more than one percent (1%) of Xxxxx'x outstanding
capital stock. A list of the holders of record of shares of Xxxxx'x capital
stock and their respective state of residency as of a recent date is set
forth on the Disclosure Schedule.
Section 3.07 Financial Statements. Attached to the Disclosure
Schedule are (i) the audited consolidated financial statements (including
balance sheet and statements of income and cash flow and including all notes
and schedules thereto) of Xxxxx for its fiscal years ended October 25, 1997,
October 31, 1998, October 30, 1999 and October 28, 2000, including in each
case the footnotes thereto, certified by Xxxxx'x independent accountants
(the audited balance sheet as of October 28, 2000 being herein referred to
as the "Xxxxx Balance Sheet"), and (ii) the unaudited consolidated financial
statements (including balance sheet and statements of income and cash flow)
for the three months ended January 31, 2001 (collectively, the "Financial
Statements"). Xxxxx'x books and records of accounts accurately reflect all
of the assets, liabilities, transactions and results of operations of Xxxxx,
and the Financial Statements have been prepared based upon and in conformity
therewith. The Financial Statements complied as to form in all material
respects with the applicable accounting requirements and rules and
regulations of the SEC and have been prepared in accordance with generally
accepted accounting principles maintained and applied on a consistent basis
throughout the indicated periods ("GAAP"), and fairly present the financial
condition and results of operation of Xxxxx at the dates and for the
relevant periods indicated in accordance with GAAP (subject, in the case of
unaudited statements to normal and recurring year-end adjustments and the
absence of footnotes none of which would, individually or in the aggregate,
have or be reasonably expected to have a Material Adverse Effect). True and
correct copies have been delivered to Parent of all written reports
submitted to Xxxxx by Xxxxx'x auditors since January 1, 1997, relating to
the findings of audits or examination of the books and records of Xxxxx.
The Disclosure Schedule sets forth a list of all of Xxxxx'x and its
subsidiaries' indebtedness for borrowed money which is outstanding as of the
date hereof, except for amounts of indebtedness which are not in excess of
Ten Thousand Dollars ($10,000) individually or Fifty Thousand Dollars
($50,000) in the aggregate.
Section 3.08 SEC Filings. Xxxxx has filed all forms, reports
and documents required to be filed by it with the Securities and Exchange
Commission (the "SEC") since January 1, 1997, and has made available to the
Merger Sub all registration statements (on all forms applicable to the
registration of securities), periodic reports and other documents filed by
Xxxxx with the SEC, including all exhibits filed in connection therewith
since January 1, 1997, and prior to the date of this Agreement
(collectively, the "Xxxxx SEC Reports"). As of their respective dates, the
Xxxxx SEC Reports (i) complied in all material respects with the
requirements of the 1933 Act or the 1934 Act, as the case may be, and the
rules and regulations thereunder and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
Xxxxx will deliver to Parent and Merger Sub, as soon as they become
available, true and complete copies of any Xxxxx SEC Reports filed
subsequent to the date hereof and prior to the Effective Time.
Section 3.09 Receivables. All accounts, notes and other
receivables of Xxxxx, whether reflected in the Financial Statements or
otherwise, represent bona fide sales in the ordinary course of business, and
to the extent not previously collected, are fully collectible, subject to
reserves as set forth on the Financial Statements, and none of such
receivables or other debts is or will be at the date of the Closing subject
to any counterclaim or set-off and, to the knowledge of Xxxxx, no customer
has disputed any such receivable or other debt.
Section 3.10 Inventories. The inventories of Xxxxx consist
solely of raw materials, supplies, work-in-process and finished goods and
have been valued at the lower of cost or market. The inventories consist of
a quality and quantity which are usable and salable at normal profit margins
and within customary time periods in the ordinary course of business
consistent with past practice (including as to quantity and frequency) and
contain no material amount of slow-moving, obsolete, spoiled or damaged
items. The finished goods inventory of Xxxxx is merchantable and fit for its
particular use, including, in the case of food products, human consumption.
The inventories which consist of work-in-process are being completed on
schedule and there are no forfeitures, chargebacks or penalties which have
been or will be incurred due to the failure of Xxxxx to complete the work-
in-process in a timely manner. The values at which inventories are
reflected on the Financial Statements have been determined on a FIFO basis
in accordance with GAAP consistently applied for all periods, with
appropriate write-downs for slow-moving, obsolete and damaged merchandise.
None of the inventories have been consigned to others, nor are any
inventories consigned to Xxxxx. All inventories are located at 0000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
Section 3.11 Absence of Certain Changes. Since January 1,
2000, Xxxxx has conducted its business only in the ordinary course thereof
consistent with past custom and practice (including with respect to quantity
and frequency) and has not experienced any changes in its financial
condition, assets, liabilities, business or operations which individually or
in the aggregate had or could have a Material Adverse Effect. For purposes
of this Section, an item shall be deemed "material" if the dollar amount or
value associated with such item exceeds Twenty-Five Thousand Dollars
($25,000). Without limiting the generality of the foregoing sentence, since
January 1, 2000, Xxxxx has not:
(i) in a single transaction or a series of related
transactions, sold (including by sale-leaseback), leased,
licensed, or otherwise disposed of any assets which, individually
or in the aggregate, have a fair market value in excess of Fifty
Thousand Dollars ($50,000);
(ii) paid, discharged or satisfied any material liability or
obligation (whether accrued, absolute, contingent or otherwise)
other than liabilities and obligations which were paid, discharged
or satisfied in the ordinary and usual course of business, or
liabilities or obligations shown or reflected on the Xxxxx Balance
Sheet, or incurred any material liability or obligation except for
this Agreement and except in the ordinary course of business
consistent with past practice since the date of the Xxxxx Balance
Sheet;
(iii) prepaid any material expenses, indebtedness or
other obligations;
(iv) except in the ordinary and usual course of business,
permitted or allowed any assets (whether real, personal or mixed,
tangible or intangible) to be subjected to any Lien of any kind;
(v) written off as uncollectible any notes or accounts
receivable;
(vi) released, waived or terminated any material obligation
of any third party to Xxxxx;
(vii) disposed of or permitted to lapse any rights in, to
or for the use of any patent, trademark, trade name or copyright;
(viii) settled any material claim, action or lawsuit
involving Xxxxx, or amended any Tax Return in any respect;
(ix) granted any increase in the base compensation or other
payment to any director, officer or employee, whether now or
hereafter payable or granted (other than increases in compensation
in the ordinary course consistent in timing and amount with past
practice) or granted any severance or termination pay (other than
for severance pay to employees who are not Related Parties (as
defined in Section 3.25) in amounts consistent with Xxxxx'x
established severance pay practices), terminated any employee
earning greater than Thirty-Five Thousand Dollars ($35,000) per
year, entered into amended or become obligated under any
employment, severance, bonus, profit sharing or other employee
benefit arrangement or entered into, established, adopted, amended
or renewed any employment, consulting, severance or similar
agreement or arrangement with any director, officer or stockholder
(other than in the ordinary course of business consistent with
past custom and practice);
(x) made any material capital expenditure or commitment for
additions to property, plant or equipment, or leased or agreed to
lease any assets which, if purchased, would be reflected in the
property, plant or equipment accounts;
(xi) made any change in any method of accounting or keeping
its books of account or accounting practices;
(xii) paid any amounts to, or sold or otherwise disposed
of any assets to, assets from, or entered into any agreement or
arrangement with, any Related Party;
(xiii) except for this Agreement, incurred any obligation
or liability, including without limitation any liability for
nonperformance or termination of any contract, except liabilities
incurred in the ordinary and usual course of the business;
(xiv) other than under Xxxxx'x existing credit facilities
as in effect as of the date hereof, incurred or become
contingently liable with respect to any indebtedness for borrowed
money or guaranteed any such indebtedness, where the aggregate
amount of indebtedness so incurred or guaranteed exceeded Ten
Thousand Dollars ($10,000), redeemed any long-term debt; issued
any debt securities or assumed, guaranteed or endorsed, or
otherwise as an accommodation become responsible for, the
obligations of any person, or made any loans, advances, or capital
contributions to or investments in, any other person;
(xv) entered into or amended any contract, agreement or
commitment, or engaged in any transaction, in each case which is
material to Xxxxx and which is not in the usual and ordinary
course of the business;
(xvi) amended or proposed to amend its Certificate of
Incorporation or By-laws;
(xvii) acquired or agreed to acquire by merging with, or
by purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business
entity, in a transaction or series of related transactions;
(xviii) solicited or encouraged any inquiries or proposals
regarding, or offers for, or entered into or continued any
discussions with any third party concerning any sale or transfer
of Xxxxx or any of its assets or entered into or consummated any
agreement or understanding providing for a sale or transfer of
Xxxxx or any of its assets, other than as contemplated herein;
(xix) redeemed, purchased, otherwise acquired, or agreed
to redeem, purchase or otherwise acquire, any shares of capital
stock of Xxxxx, or declared, set aside or paid any dividend or
otherwise made a distribution (whether in cash, stock or property
or any combination thereof) in respect of Xxxxx'x capital stock;
(xx) issued, sold, pledged, disposed of, granted or
encumbered, or authorized the issuance, sale, pledge, disposition,
grant or encumbrance of, any shares of capital stock or other
equity securities of any type or class, or any options, warrants,
convertible securities or other rights of any kind to acquire any
shares of such capital stock or other equity securities, or any
other ownership interest (including, without limitation, any
phantom interests);
(xxi) reclassified, combined, split, subdivided or
redeemed, purchased or otherwise acquired, or proposed to redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock or other equity securities;
(xxii) commenced any voluntary petition, proceeding or
action under any bankruptcy, insolvency or other similar Law;
(xxiii) authorized, proposed or agreed, whether or not in
writing, to take any of the actions described in clauses (i)-
(xxii) above.
Section 3.12 Litigation. Other than as set forth on the
Disclosure Schedule, Xxxxx is not a party to any pending claim, action,
suit, investigation or proceeding nor, to Xxxxx'x knowledge, is any such
claim, action, suit, investigation or proceeding threatened against Xxxxx or
any of its properties or assets, before any court, arbitrator or
Governmental Authority. Other than as set forth on the Disclosure Schedule,
since January 1, 2000 Xxxxx has not been a party to any claim, action, suit,
investigation or proceeding. The Disclosure Schedule discloses, with respect
to each item described thereon, the name or title of the action (and parties
or potential parties thereto), a description of the nature of the action or
claim, and a good faith estimate of the maximum liability of Xxxxx in the
event of an adverse result (however, Xxxxx makes no representation or
warranty regarding the actual amount of liability which Xxxxx may suffer as
a result of any such action). There is no outstanding order, judgment,
decree or stipulation issued by any federal, state or local authority to
which Xxxxx is a party or subject and which adversely affects or may
adversely affect Xxxxx'x properties, business or prospects.
Section 3.13 Compliance with Laws and Licenses.
(a) Xxxxx has conducted and is conducting its business in compliance
with all applicable Laws, regulations and requirements in each jurisdiction
in which it conducts (or in the past has conducted) business, except where
the failure to comply would not have a Material Adverse Effect.
(b) In addition to, but not in limitation of the foregoing, Xxxxx has
prepared, manufactured and sold all of its products (including product in
process and in inventory on the Effective Date) in full compliance with the
applicable provisions of the United States Food, Drug and Cosmetic Act, as
amended, and the United States Meat Inspection Act, as amended, and all
rules and regulations promulgated thereunder and all other applicable Laws
adopted or promulgated by any Governmental Authority which govern the
quality or purity of food sold for human consumption (collectively, the
"Food Acts"). All of the products of Xxxxx satisfy all federal and state
nutritional labeling requirements, and all regulations under the Food Acts.
All ingredients used in such products conform to the requirements of the
Food Acts. All products of Xxxxx (i) in process or in inventory on the
Effective Date are not and (ii) all products manufactured or packaged by
Xxxxx at the time of delivery thereof to the customers of Xxxxx were not,
"adulterated" or "contaminated" within the meaning of any of Food Act, nor
did any such products constitute an article prohibited from introduction
into interstate commerce under the Food Acts at the time of such delivery.
(c) The Disclosure Schedule lists all licenses, registrations and
permits, and applications with respect to the business and operations of
Xxxxx. Xxxxx currently possesses all governmental approvals, consents,
licenses, registrations, and permits (collectively, the "Licenses")
necessary to carry on its business as presently conducted and has not
received any notice of violation of any Laws or notice of any proposed
regulations or changes in the requirement of such approvals, consents,
licenses, registrations, or permits. True and complete copies of each
written document evidencing or affecting any of the Licenses have been
previously delivered to Parent. Xxxxx is in compliance with the terms and
conditions of all of the Licenses. Neither the execution of this Agreement
nor the consummation of the transactions contemplated hereby will result in
the revocation, or a material adverse change in the terms or conditions, of
any of the Licenses, and all Licenses shall continue in full force and
effect in accordance with their present terms unaffected by the consummation
of the transactions contemplated hereby.
Section 3.14 Taxes.
(a) Each of Xxxxx and its Subsidiaries (current or former) has timely
filed with the appropriate Governmental Authorities all Tax Returns required
to be filed by it and has timely paid, or fully reserved on the Xxxxx
Balance Sheet for the most recent fiscal quarter (such reserve being for Tax
liability as opposed to any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) for the payment of,
all Taxes of every type and description which have or may become due
(whether or not shown on any Tax Return), and such Tax Returns accurately
reflect Xxxxx'x obligations to pay Taxes for the periods covered therein.
Neither Xxxxx nor any Subsidiary of Xxxxx currently is the beneficiary of
any extension of time within which to file any Tax Return. No examination
or audit relating to any Tax Returns is currently in progress of which Xxxxx
or any Subsidiary has received either written or oral notice. No waivers
of statutes of limitation in respect of Taxes have been given or requested
and no extensions of time with respect to a Tax assessment or deficiency
have been agreed to. The Disclosure Schedule lists all Tax Returns of Xxxxx
and its Subsidiaries which have been audited from January 1, 1995 to the
present, and all of such audits have been closed and all deficiencies,
penalties, assessments and other amounts required to be paid have been
paid. No claim for a refund of any Tax has been filed or is currently
pending. No oral or written communication has been received by Xxxxx or any
Subsidiary from any authority in a jurisdiction where Xxxxx or any of its
Subsidiaries do not file Tax Returns requesting information concerning the
extent of its contact with such jurisdiction or asserting that Xxxxx or any
Subsidiary is or may be subject to taxation in such jurisdiction. None of
Xxxxx and its Subsidiaries has contact with any jurisdiction in which it
does not currently file Tax Returns which would allow such jurisdiction to
impose its taxing jurisdiction on Xxxxx or any Subsidiary. All taxes and
assessments which Xxxxx or any of its Subsidiaries were or are required by
Law to withhold or collect have been and are being withheld or collected by
it and have been timely paid over to the proper Governmental Authorities or,
if not yet due, are being held by Xxxxx or its Subsidiary for such payment.
Xxxxx and its Subsidiaries have disclosed on their federal income tax
returns all positions taken therein that could give rise to a substantial
understatement penalty within the meaning of Code Section 6662. Parent has
been provided with correct and complete copies of all income Tax Returns,
examination reports and statements of deficiencies assessed against or
agreed to by Xxxxx and any Subsidiary since July 1, 1995. There are no
Liens for Taxes upon the assets of Xxxxx or any of its Subsidiaries, other
than Liens for Taxes that are not yet due, Liens that are being contested in
good faith in accordance with applicable law and liens disclosed on the
Disclosure Schedule (and for which adequate reserves have been provided).
(b) None of Xxxxx and its Subsidiaries: (i) has filed any consent or
agreement under Section 341(f) of the Code; (ii) has applied for a tax
ruling from any taxing authority; (iii) has entered into a closing
agreement with any taxing authority; (iv) has made any payments, is
obligated to make any payments, or is a party to any agreement that under
certain circumstances could obligate it to make any payments that will not
be deductible under Code Section 280G or Section 162(m); (v) is a party to
any tax allocation or sharing agreement; (vi) has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than
a group of which Xxxxx was the common parent) or has any liability for Taxes
of any Person other than Xxxxx and its Subsidiaries under Regs. Section
1.1502-6 or any similar provision of state, local or foreign law, as a
transferee or successor, by contract or otherwise; or (vii) has been a
United States real property holding company within the meaning of Code
Section 897 during the applicable period specified in Code Section
897(c)(1)(A)(ii).
(c) Xxxxx and its Subsidiaries have timely filed all required returns
or reports and remitted all property as required under any applicable
abandoned property, escheat or similar Laws.
(d) The Disclosure Schedule sets forth the following information with
respect to Xxxxx and each Subsidiary as of the last Tax period: (i) basis in
assets for federal and state tax purposes; (ii) Xxxxx'x basis in the stock
of its Subsidiaries or its excess loss account as determined under the
federal income tax consolidated return rules or similar provisions of state,
local or foreign Law; (iii) the amount of any net operating loss, net
capital loss, unused credits or excess charitable contributions and the
extent to which such tax attributes are presently subject to limitation
under Code Section 382, 383 or 384 or similar provisions of any state, local
or foreign law; (iv) the amount of any deferred gain or loss arising from
any deferred intercompany transaction under the Code Section 1502
consolidated return rules or similar provisions of any state, local or
foreign law; (v) any elections made with respect to Taxes, including, but
not limited to, elections under Code Sections 382, 338, 1031 and 1033; (vi)
any adjustments to income under Code Section 481; (vii) and any installment
sales or open transactions.
Section 3.15 Properties.
(a) Xxxxx has good and marketable title to all of its properties and
assets, real, personal and mixed, including intangibles, free and clear of
all Liens, except for installments of special assessments not yet paid
(however, Xxxxx has no knowledge of any such special assessments), recorded
easements, covenants, and zoning restrictions, and other easements and
restrictions existing generally with respect to properties of similar
character (which, individually or in the aggregate do not have a Material
Adverse Effect), and has taken all steps necessary or otherwise required to
perfect and protect its rights in and to its properties and assets,
including intangibles. All personal property of Xxxxx is located upon
Xxxxx'x premises described on the Disclosure Schedule and all of such
personal property (except for personal property acquired or disposed of in
the ordinary course of business consistent with past practice (including as
to quantity and frequency)) is reflected on the Financial Statements. Xxxxx
owns or, pursuant to a written contract or License, possesses valid and
enforceable rights to use all assets which are used in or necessary for the
conduct of Xxxxx'x business as presently conducted and as presently planned
to be conducted in the future. Xxxxx has no present plan to purchase or
lease any other real estate or tangible personal property so as to be able
to continue Xxxxx'x business as presently conducted or presently planned to
be conducted in the future and to Xxxxx'x knowledge no capital expenditures
(excluding only normal maintenance and repairs made consistently with past
practice and which are required to be expensed for federal income tax
purposes) or remediations suggested or required by any applicable
Governmental Authority or insurer, in the next twelve months in an amount
exceeding Twenty-Five Thousand Dollars ($25,000) in the aggregate are
necessary to carry on Xxxxx'x business as it is presently conducted, nor are
any such expenditures planned.
(b) All properties and assets owned and/or currently used by Xxxxx in
Xxxxx'x business are in good condition and repair and are not in violation
of any applicable Laws, including without limitation building and zoning
Laws, and no notice of any violation of building or other Laws, statutes,
ordinances or regulations relating to such business, property or assets has
been received by Xxxxx.
(c) The Disclosure Schedule sets forth: (i) a true and complete list
of all real property leases of Xxxxx and all personal property leases to
which Xxxxx is a party as lessee as of the date hereof involving an annual
lease payment of more than One Thousand Dollars ($1,000), including an
identification of the parties, the property, the term of the lease and the
rent or lease payments thereunder, and (ii) a true and complete list of all
real property owned or leased by Xxxxx as of the date hereof (collectively,
the "Real Property"), including an identification of the property, the
record owner and the principal structures on it.
Section 3.16 Contracts and Commitments. Except as set forth on
the Disclosure Schedule, Xxxxx has no written or oral contracts,
commitments, or other agreements or arrangements, including any notes, loan
agreements, guarantees or other evidences of indebtedness of Xxxxx, which
individually or in the aggregate of all similar instances involve
consideration with a value in excess of Ten Thousand Dollars ($10,000) or
which, in the aggregate of all such items (whether similar or dissimilar)
involve consideration with a value in excess of One Hundred Thousand Dollars
($100,000), or any contracts, commitments, or other agreements or
arrangements with any Related Party. All of such contracts, commitments, or
other agreements or arrangements to which Xxxxx is a party or by which any
of its assets or properties are bound or affected are in full force and
effect and no event or condition has occurred or exists, or is alleged by
any of the other parties thereto to have occurred or exist, which
constitutes, or with lapse of time or giving of notice might constitute, a
default or basis for acceleration under any such contract, commitment,
arrangement or other agreement, except where the occurrence or existence of
such event or condition would not have a Material Adverse Effect. Xxxxx has
listed on the Disclosure Schedule and, except with respect to the Company's
plan of reorganization under Chapter 11 of the United States Bankruptcy Code
which became effective in April 1993, has previously delivered to Parent a
complete and correct copy of all of the following contracts, commitments,
agreements or arrangements that are in written form (and written
descriptions of all such oral contracts, commitments, agreements or
arrangements):
(a) Leases. All leases of real or personal property which obligate
Xxxxx to make aggregate payments of more than One Thousand Dollars ($1,000)
annually;
(b) Purchase Orders. All contracts relating to the purchase or sale
of products, services or supplies by Xxxxx, other than individual purchase
or sales orders issued in the ordinary course of business consistent with
past practice (including as to quantity and frequency) for amounts in each
case not in excess of Five Thousand Dollars ($5,000) individually or Twenty-
Five Thousand Dollars ($25,000) in the aggregate of all such orders with the
same or related parties;
(c) Certain Agreements. A list of the following described types of
contracts or documents: (i) dealership, distributorship, sales
representative or similar contracts; (ii) license, royalty or similar
contracts; (iii) service or maintenance; (iv) protective services or
security; (v) railroad track or spur track; and (vi) royalty, commission or
other contingent contracts, pursuant to which Xxxxx'x obligation to make
payments is in excess of Five Thousand Dollars ($5,000) per year, or
pursuant to which Xxxxx'x obligation to make contingent payments is
dependant upon sales, revenues, income, success or other performance
standard;
(d) Other Financial Obligations. A list of any other contract which
requires Xxxxx to pay or expend, after the Closing, more than Ten Thousand
Dollars ($10,000) in any single instance or Twenty-Five Thousand Dollars
($25,000) in the aggregate of all such instances with the same or related
parties;
(e) Employment Contracts. A list of all employment, bonus, incentive
compensation, profit-sharing, retirement, pension, salary-continuation,
post-retirement benefit, death benefit, vacation or other fringe benefit
contracts in effect, or under which any amounts remain unpaid, on the date
of this Agreement or to become payable or effective after the date of this
Agreement;
(f) Loans and Borrowing Agreements. A list of each (i) loan, credit
or borrowing arrangement or contract; or (ii) contract by which Xxxxx has
guaranteed or otherwise become liable or contingently liable for the debt of
another;
(g) Non-Compete Covenants. A list of any written or oral covenants
not to compete, non-solicitation covenants and non-disclosure covenants in
favor of Xxxxx, or binding upon or against Xxxxx;
(h) Powers of Attorney. The names of all persons holding powers of
attorney from Xxxxx and a summary statement of the terms thereof;
(i) Discounts. A list of any contract, arrangement or program
pursuant to which Xxxxx has offered, promised or made available to its
customers any volume discount, rebate, credit or allowance which,
individually or in the aggregate involves a discount, rebate, credit or
allowance in excess of $5,000;
(j) Non-Ordinary Course Agreements. A list and description of any
contract or arrangement upon Xxxxx and which was made or entered into other
than in the ordinary course of business consistent with past practice
(including as to quantity and frequency);
(k) Bankruptcy Judgments. A list of all bankruptcy judgments
involving Xxxxx or any of its Subsidiaries.
Section 3.17 Employee Relations. Except as set forth on the
Disclosure Schedule, Xxxxx is not a party to any collective bargaining
agreement covering or relating to any of its employees and has not
recognized, is not required to recognize and during the past five years has
not received a demand for recognition by any collective bargaining
representative or experienced any strikes or work stoppages or slowdowns.
Xxxxx is in compliance with all applicable Laws, rules and regulations
relating to employment or employment practices, including those relating to
wages, hours, collective bargaining and the withholding and payment of Taxes
and contributions, and Xxxxx is in compliance with the Occupational Safety
and Health Act and applicable federal civil rights Laws. There are no
controversies pending or, to the knowledge of Xxxxx, threatened between
Xxxxx and any of its employees. Xxxxx has complied in all material respects
with its payment obligations to all employees in respect of all wages,
salaries, commissions, bonuses, benefits and other compensation due and
payable to such employees under any Xxxxx policy, practice, agreement, plan,
program and applicable Law. Xxxxx is not liable for any severance pay or
other payments to any employee or former employee arising from the
termination of employment under any benefit or severance policy, practice,
agreement, plan, or program of Xxxxx, nor will Xxxxx have any liability that
exists or arises, or may be deemed to exist or arise, under any applicable
Law or otherwise, as a result of or in connection with the transactions
contemplated hereunder or as a result of the termination by Xxxxx of any
persons employed by Xxxxx on or prior to the Effective Time of the Merger
except as required by Code Section 4980B. Xxxxx is in compliance with its
obligations pursuant to the Worker Adjustment and Retraining Notification
Act of 1988 and part 6 and 7 of Title I of ERISA (as defined below), to the
extent applicable, and all other employee notification and bargaining
obligations arising under any collective bargaining agreement or Law. To the
knowledge of Xxxxx, the employment of any employee or independent contractor
by Xxxxx does not violate any legal or contractual rights of any third
party, including any rights with respect to Intellectual Property.
Section 3.18 Employee Benefit Plans.
(a) General. The Disclosure Schedule sets forth a true and
complete list and brief description of each "employee pension benefit plan"
(as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), "employee welfare benefit plan" (as defined
in Section 3(1) of ERISA) and other employee benefit plans (including,
without limitation, those providing any stock option, stock purchase, stock
appreciation right, bonus, deferred compensation, excess benefits, profit
sharing, pension, thrift, savings, stock bonus, employee stock ownership,
salary continuation, severance, retirement, supplemental retirement, short-
or long-term disability, dental, vision care, hospitalization, major
medical, life insurance, accident insurance, vacation, holiday and/or sick
leave pay, tuition reimbursement, executive perquisite or other employee
benefits) maintained, or contributed to, or required to be contributed to,
by Xxxxx for the benefit of any officers or employees, current or former,
active or inactive, of Xxxxx, whether on an active or frozen basis (all the
foregoing being herein called "Benefit Plans"). Xxxxx does not have any
formal plan or commitment, whether legally binding or not, to create any
additional plan or modify or change any existing Benefit Plan that would
affect any employee or former employee of Xxxxx, except as required by
applicable Law, including the Code. True, complete and correct copies of
the following have been previously delivered to Parent: (i) each Benefit
Plan, including any amendments thereto (or, in the case of any unwritten
Benefit Plan, descriptions thereof); (ii) the most recent annual report
(Form 5500 series) filed with the Internal Revenue Service ("IRS") with
respect to each Benefit Plan (if any such report was filed); (iii) each
trust agreement or other funding arrangement relating to any Benefit Plan;
(iv) the most recent summary plan description together with each subsequent
summary of material modifications required under ERISA with respect to each
such Benefit Plan, and all material employee communications relating to each
such Benefit Plan; and (v) all currently effective IRS rulings or
determination letters relating to any Benefit Plan.
(b) Administration. Each Benefit Plan has been administered in all
respects in accordance with its terms. All of the Benefit Plans and Xxxxx
are in compliance in all respects with the applicable provisions of ERISA
and the Code, except where the failure to comply would not have a Material
Adverse Effect. All material reports, returns and similar documents with
respect to the Benefit Plans required to be filed with any Governmental
Authority or distributed to any Benefit Plan participant have been duly and
timely filed or distributed, except where such failure to file or distribute
would not have a Material Adverse Effect. There are no investigations by any
Governmental Authority, termination proceedings or other claims (except
claims for benefits payable in the normal operation of the Benefit Plans),
suits or proceedings pending, or to the knowledge or Xxxxx, threatened
against or involving any Benefit Plan or asserting any rights or claims to
benefits under any Benefit Plan that could give rise to any liability, and
there are not any facts that could give rise to any liability in the event
of any such investigation, claim, suit or proceeding, except such facts as
would not have a Material Adverse Effect.
(c) Contributions; Funding. All contributions to, and payments from,
the Benefit Plans that may have been required to be made in accordance with
the Benefit Plans and applicable Law have been timely made. No Benefit Plan
is subject to the minimum funding requirements of Section 302 of ERISA or
Section 412 of the Code.
(d) Compliance. All the Benefit Plans, as and from the date adopted
or as they may have been amended, as, when, and to the extent required,
comply, and at all applicable times complied with, the applicable provisions
of the Code; ERISA; the Equal Pay Act of 1963, as amended; the Age
Discrimination in Employment Act of 1967, as amended; Title VII of the Civil
Rights Act of 1964, as amended; all other Laws regulating employment and
employee benefits; and all Laws and Orders enacted, issued or promulgated by
Government Authorities responsible for the administration or enforcement of
one or more of such Laws, except where the failure to comply would not have
a Material Adverse Effect. Each Benefit Plan that is an employee pension
benefit plan within the meaning of Section 3(2) of ERISA has received a
determination letter from the IRS to the effect that such Benefit Plan is
currently qualified and exempt from Federal income taxes under Sections
401(a) and 501(a), respectively, of the Code, and no such determination
letter has been revoked, nor has revocation been threatened, nor has any
such Benefit Plan been amended since the date of its most recent
determination letter or application therefor in any respect that would
adversely affect its qualification or increase its cost. No Benefit Plan,
nor any trust established thereunder, will be amended or terminated by
formal action of Xxxxx after the date copies thereof are disclosed, and no
Benefit Plan or trust will be amended or terminated by formal action of
Xxxxx prior to the Closing Date, except as an amendment may be necessary to
effect the transactions contemplated by this Agreement so long as any such
amendment does not adversely affect Parent's interests in the Benefit Plan
being amended, or as may be adopted as a condition to the issuance of a
favorable determination letter by the IRS, or as otherwise may be required
to comply with the requirements of ERISA and the Code.
(e) Prohibited Transactions; Reportable Events. No "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 of
ERISA) has occurred which involves the assets of any Benefit Plan which
could subject any employees of Xxxxx or any of its subsidiaries, a trustee,
administrator or other fiduciary of any trusts created under any Benefit
Plan to the tax or penalty on prohibited transactions imposed by Section
4975 of the Code or the sanctions and penalties imposed on prohibited
transactions under Title I of ERISA. No Benefit Plan has been terminated,
nor have there been any "reportable events" (as defined in Section 4043 of
ERISA and the regulations thereunder) with respect thereto. Neither Xxxxx
nor any trustee, administrator or other fiduciary of any Benefit Plan, nor
any agent of any of the foregoing has engaged in any transaction or acted or
failed to act in a manner which could subject Xxxxx or any Benefit Plan to
any material tax, penalty or other liability under ERISA or any other
applicable Law, whether by way of indemnity or otherwise. No Benefit Plan
or related trust has any liability of any nature, accrued or contingent,
including, without limitation, liabilities for federal, state or local
taxes, other than for routine payments to be made in due course to
participants, investment managers, trustees and beneficiaries.
(f) PBGC. No Benefit Plan is subject to Title IV of ERISA, and there
are no facts which might give rise to any liability of Xxxxx under Title IV
of ERISA and which could reasonably be anticipated to result in any claims
being made against Xxxxx by the Pension Benefit Guaranty Corporation, except
such facts as would not have a Material Adverse Effect. For purposes of the
preceding sentence the term Xxxxx shall be deemed to refer also to any
entity which is under common control or affiliated with Xxxxx, within the
meaning of Section 4001 of ERISA, and the rules and regulations promulgated
thereunder and/or Sections 414(b), (c), (m) or (o) of the Code and the rules
and regulations promulgated thereunder.
(g) Foreign Employees. There are no officers or employees, current or
former, active or inactive, of Xxxxx working outside the United States.
(h) Certain Matters. The execution and performance of the
transactions contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) constitute an event
under any Benefit Plan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, vesting or increase in benefits
with respect to any employee, former employee, officer or director of Xxxxx.
No payment which will be or may be made by Xxxxx to any employee, former
employee, director or agent thereof will or may be characterized as an
"excess parachute payment" within the meaning of Section 280F(b)(1) of the
Code. Except for the payment of the Option Consideration, no payments of
any kind will become due in connection with the execution and performance of
the transactions contemplated in this Agreement (either alone or upon the
occurrence of any additional or subsequent events) under any Benefit Plan.
(i) Post-Retirement Benefits. No Benefit Plan provides benefits,
including without limitation, death, disability, or medical benefits
(whether or not insured), with respect to current or former employees of
Xxxxx beyond their retirement or other termination of service other than:
(i) coverage mandated by applicable Law; (ii) death benefits or retirement
benefits under any "employee pension plan", as that term is defined in
Section 3(2) of ERISA; (iii) deferred compensation benefits accrued as
liabilities on the books of Xxxxx; or (iv) benefits the full cost of which
is borne by the current or former employee (or his beneficiary).
(j) COBRA. Each "group health plan" (within the meaning of Section
5000(b)(1) of the Code) maintained by Xxxxx as of the first day of each
group health plan's first plan year beginning on or after July 1, 1986, has
been administered in compliance with the continuation coverage requirements
initially enacted as part of the Consolidated Omnibus Budget Reconciliation
Act of 1985 and as formerly provided under Section 162(k) and as currently
provided under Section 4980B of the Code and any regulations promulgated or
proposed thereunder.
(k) Multiemployer Plans. At no time has Xxxxx been required to
contribute to, or incurred any withdrawal liability (within the meaning of
Section 4201 of ERISA) to any Benefit Plan which is a multiemployer plan as
defined in ERISA Section 3(37).
(l) Health Plan Coverage. Xxxxx does not have any notice of, and has
no knowledge of, any disease, injury or illness which might reasonably be
expected to result in claims against any Benefit Plan which could exceed
$20,000 for any participant in any calendar year.
Section 3.19 Intellectual Property. The Disclosure Schedule lists
(or, in the case of trade secrets and secret processes, generally describes)
all of the following which are owned by Xxxxx or used or intended to be used
by Xxxxx in Xxxxx'x business: (i) patents and patent applications,
(ii) trademarks, trade names, service marks and registrations and
applications for registrations thereof (including, but not limited to,
"Xxxxx Foods"), (iii) copyrights and copyright registrations, and (iv) trade
secrets and secret processes (the "Intellectual Property"). The Disclosure
Schedule lists for each item of Intellectual Property owned by Xxxxx and
which is patented or registered with the United States or any foreign or
state agency or office, the patent or registration number thereof, the date
of patent issuance or registration and the agency or office where so
patented or registered. Except as otherwise described on the Disclosure
Schedule, Xxxxx is the sole owner of all right, title and interest in the
Intellectual Property. With respect to any Intellectual Property which is
not owned by Xxxxx, Xxxxx has valid, binding and enforceable rights to use
such Intellectual Property. There are no interference, opposition or
cancellation proceedings pending or, to the knowledge of Xxxxx, threatened,
against Xxxxx or the Intellectual Property. The use of the Intellectual
Property does not infringe upon the rights of any third party. No claim,
suit or action is pending or, to the knowledge of Xxxxx, threatened,
alleging that Xxxxx is infringing upon the intellectual property rights of
others. Except as set forth on the Disclosure Schedule, Xxxxx has not
licensed or permitted any third party to use any of the Intellectual
Property.
Section 3.20 Environmental Matters.
(a) No Violations. Xxxxx has never violated or been threatened with
or received a notice, directive, violation report or charge asserting any
violation of any Environmental Law (as defined below).
(b) No Proceedings. No suit, proceeding or other administrative or
legal action has ever been instituted against Xxxxx by any federal, state or
local Governmental Authority or any other person or entity concerning any
Environmental Laws.
(c) Claims for Remediation. Xxxxx has not received from any federal,
state or local Governmental Authority or any other person or entity any
claim, demand, directive, order or request to investigate, restore, repair,
clean up or otherwise remediate, or to contribute to the costs of
investigating, restoring, repairing, cleaning up or otherwise remediating
the Real Property.
(d) Compliance. (i) Xxxxx is, and at all times in the past has been,
in compliance with all Environmental Laws, except where such failure would
not have a Material Adverse Effect, (ii) Xxxxx has obtained all permits,
authorizations, licenses, or approvals which are necessary or required under
Environmental Laws in connection with the operation of Xxxxx'x business, and
Xxxxx is in compliance with such permits, authorizations, licenses, and
approvals, except where such failure would not have a Material Adverse
Effect, (iii) no asbestos, urea formaldehyde or polychlorinated biphenyls
are present on, at, in or under the Real Property, and (iv) none of the
assets or operations of Xxxxx is required to be upgraded, modified, or
replaced in order to be in compliance with Environmental Laws.
(e) No Releases. (i) Xxxxx has not disposed of, spilled, discharged,
released or otherwise placed any Environmental Materials, on, at, in or
under the Real Property, (ii) to the knowledge of Xxxxx, no third party has
disposed of, spilled, discharged, released or otherwise placed any
Environmental Materials on, at, in or under the Real Property, and (iii)
other than the information provided in (i) and (ii), there has been no
release, discharge, leakage, seepage or migration of any Environmental
Materials from any aboveground or underground storage tank or any other
structure currently or previously located on, at, in or under the Real
Property, except for such matters as would not have a Material Adverse
Effect.
(f) Certain Uses. (i) no septic systems or xxxxx exist on, at, in or
under the Real Property, (ii) to Xxxxx'x knowledge, the Real Property has
never been used as a landfill, dump site or any other use which involves the
disposal of Environmental Materials on the Real Property in a manner which
may subject the Surviving Corporation to any claim for investigation,
remediation or damages, and (iii) except with respect to the storage, use,
generation, handling or removal from the Real Property of Environmental
Materials in the ordinary course of business consistent with past practice
and in compliance with all Environmental Laws, no Environmental Materials
are currently located at or ever have been used, generated, treated, stored,
disposed of, handled on or removed from the Real Property, except where such
existence or use would not have a Material Adverse Effect
(g) Storage Tanks. To Xxxxx'x knowledge, no aboveground or underground
storage tanks have ever been located on, at, in or under the Real Property.
(h) List of Reports and Disposal Sites. The Disclosure Schedule
includes a list of, (i) all environmental investigative reports, studies or
assessments (including, but not limited to, Phase I and Phase II
assessments), compliance audits, laboratory analytical data, technical
reviews, or the like with respect to Xxxxx, the Real Property, Xxxxx'x
business or any of Xxxxx'x assets, copies of which are attached hereto, and
(ii) all past and present locations where Environmental Materials, which
currently are or have been controlled by Xxxxx have been sent, spilled,
released, discharged or disposed.
(i) Assumption of Liability. Xxxxx has not assumed, either
contractually or by operation of Law, any liability of any person or entity
under any Environmental Laws.
Section 3.21 Contingent or Undisclosed Liabilities. Xxxxx does
not have any debts, liabilities or obligations (whether known or unknown,
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated and whether due or to become due, including any liability for
Taxes), and there are no claims or causes of action that may be asserted
against Xxxxx by any Governmental Authority or third party which arise with
respect to or relate to any period or periods on or prior to the date
hereof, regardless of whether such obligations, liabilities or claims are
known or unknown, absolute, accrued, contingent or otherwise, except as and
to the extent set forth on the Xxxxx Balance Sheet or disclosed on the
Disclosure Schedule, and except for liabilities incurred since October 28,
2000 in the ordinary course of business consistent with past practice (none
of which liabilities were incurred in connection with any breach of
contract, tortuous conduct or violation of Law).
Section 3.22 Insurance. The Disclosure Schedule lists and
contains a description of each policy of insurance owned or held by Xxxxx
currently in effect (including without limitation, policies for fire and
casualty, liability, workers' compensation, business interruption, umbrella
coverage, products liability, medical, disability and other forms of
insurance) specifying the insurer, amount of coverage, type of insurance,
policy number, deductible limits and any pending claim in excess of Five
Thousand Dollars ($5,000), whether or not covered by insurance (the
"Insurance"). Xxxxx is not self-insured for any insurable risks. The
Insurance is in full force and effect, all premiums with respect thereto
covering all periods up to and including the date hereof have been paid, and
no notice of cancellation or termination has been received by Xxxxx with
respect to any such policy. The policies evidencing the Insurance are valid,
outstanding and enforceable policies subject to the terms and conditions
contained therein, and there has not occurred any act or omission of Xxxxx
which could result in cancellation of any such policy prior to its scheduled
expiration date. Xxxxx has not received any notice from or on behalf of any
insurance carrier issuing any such policy to the effect that: (i) insurance
rates will hereafter be substantially increased; (ii) there will hereafter
be no renewal of any such policy; or (iii) alteration of any personal or
real property or purchase of additional equipment, or modification of any
method of doing business, is required or suggested. None of such policies
will in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement. Xxxxx has not been refused any
insurance with respect to Xxxxx'x assets or operations, nor has Xxxxx'x
coverage been limited by any insurance carrier to which it has applied for
or with which it has carried insurance. The Disclosure Schedule sets
forth a summary of information pertaining to all claims of property damage
and personal injury or death against Xxxxx which are currently pending or
were made during the preceding five fiscal years or the current fiscal year.
Except as set forth on the Disclosure Schedule, all of such claims are
fully satisfied or are being defended by an insurance carrier and involve no
exposure to Xxxxx.
Section 3.23 Products Liability; Warranties. There exists no
(a) material defect in the design or manufacture of any product designed,
manufactured or sold by Xxxxx or any predecessor in interest to Xxxxx, or
(b) pending or, to the knowledge of Xxxxx, threatened action, suit, inquiry,
proceeding or investigation by or before any Governmental Authority or
commission relating to any product alleged to have been manufactured,
distributed or sold by Xxxxx, or any predecessor in interest to Xxxxx, to
others, and alleged to have been defective, or improperly designed or
manufactured, or in breach of any express or implied product warranty
("Products Liability"); (ii) there exists no pending or, to the knowledge of
Xxxxx, threatened Products Liability claims; and (iii) there is no valid
basis for any such suit, inquiry, action, proceeding, investigation or
claim. Xxxxx is insured, and has been insured continuously since November
1, 1990, against Products Liabilities, in accordance with the insurance
policies identified on the Disclosure Schedule. The Financial Statements
contain adequate reserves (calculated in accordance with Financial
Accounting Standards Board Statement of Financial Accounting Standards No.
5) for all Products Liability claims which are probable or reasonably
possible to be asserted. The Disclosure Schedule sets forth the material
terms and conditions of all express product warranties under which Xxxxx may
have liability after the Closing. Except as set forth on the Disclosure
Schedule, all product warranties given by Xxxxx in connection with Xxxxx'x
business: (a) limit the remedy available to Xxxxx'x customers to the repair
and replacement of the warranted goods by Xxxxx, or alternatively, a refund
of the sales price of such goods to the customer; (b) expressly disallow
claims for all other damages, including direct, immediate, incidental,
foreseeable, consequential or special damages; and (c) expressly disclaim
all other warranties not expressly stated therein, whether express or
implied, including warranties of merchantability, fitness for a particular
purpose, performance or otherwise.
Section 3.24 Certain Payments. Neither Xxxxx, nor to the
knowledge of Xxxxx, any other person or entity has, directly or indirectly,
on behalf of or with respect to Xxxxx: (a) made an unreported political
contribution; (b) made or received any payment which was not legal to make
or receive; (c)engaged in any material transaction or made or received any
material payment which was not properly recorded in the books and records of
Xxxxx; (d) created or used any "off-book" bank or cash account or "slush
fund"; or (e) engaged in any conduct constituting a violation of the Foreign
Corrupt Practices Act of 1977.
Section 3.25 Related Party Transactions. Xxxxx, (a) has not had
any financial transactions or arrangements (other than payment of regular
salary to Related Parties who are employees) with any Related Party since
January 1, 1999, and (b) has not and will not have any present or future
obligation to enter into any transaction or arrangement with any Related
Party. For purposes of this Agreement, the term "Related Party" shall mean
(i) any subsidiary, (ii) any shareholder, employee, officer or director of
Xxxxx or any subsidiary, and (iii) any spouse, in-law or lineal descendant
of any shareholder, employee, officer or director of Xxxxx or any
subsidiary. To the knowledge of Xxxxx, no Related Party owns, directly or
indirectly, or is a director, member, officer or employee of, or consultant
to, any business organization which is a competitor, supplier, or customer
having business dealings with Xxxxx or any subsidiary, nor does any Related
Party own any assets or properties which are used in Xxxxx'x or any
subsidiary's business.
Section 3.26 Proxy Statement, Etc. None of the information to
be supplied by Xxxxx for use in (i) the Proxy Statement to be filed with the
SEC and to be mailed to the stockholders of Xxxxx in connection with the
meeting of stockholders to be called to consider and vote upon the Merger,
and (ii) any other documents to be filed with the SEC in connection with the
transactions contemplated hereby, at the respective times such documents are
filed with the SEC and, in the case of the Proxy Statement, when mailed,
shall be false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein
not misleading. In the case of the Proxy Statement or any amendment
thereof, none of such information at the time of the stockholders' Meeting
referred to in Section 6.03 hereof shall be false or misleading with respect
to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for such meeting. The Proxy Statement will comply
as to form in all material respects with the provisions of the Exchange Act
and the rules and regulations thereunder. All documents filed by Xxxxx with
the SEC in connection with the Merger will comply in all material respects
with the provisions of applicable federal and state securities Laws.
Section 3.27 Change of Control Provisions. No director, officer
or employee of Xxxxx will be entitled to receive additional compensation,
other payments or other rights (whether as a result of any employee benefit
plan, program or arrangement, any contract or other agreement, or otherwise)
as a result of the execution of this Agreement, the consummation of the
Merger, the consummation of any of the other transactions contemplated
hereby or otherwise in connection with a change of control of Xxxxx.
Section 3.28 Stockholder Vote Required. The affirmative vote of
the holders of two-thirds (2/3) of the outstanding shares of Xxxxx Common
Stock in accordance with Certificate of Incorporation of Xxxxx and the DGCL
is the only vote of the holders of any class or series of securities of
Xxxxx necessary to approve the Merger, this Agreement and the other
transactions contemplated hereby.
Section 3.29 Opinion of Financial Advisor. The Board of
Directors has received the opinion, dated the date hereof, of The Xxxxxxxx
Group, Inc. to the effect that the Merger Consideration is fair to Xxxxx'x
stockholders from a financial point of view.
Section 3.30 Board Action; State Takeover Statutes.
(a) Xxxxx'x Board of Directors (at a meeting duly called and held) has
by requisite vote of directors: (i) approved and adopted this Agreement, the
Merger and all of the other transactions contemplated hereby, (ii)
determined that the transactions contemplated hereby are advisable, fair to
and in the best interests of the holders of Xxxxx Common Stock, (iii)
approved in advance the Voting Agreements, and all of the transactions
contemplated thereby, (iv) approved in advance the transfer of Xxxxx Common
Stock (or voting power with respect thereto) contemplated by Section 8.01(h)
hereof, (v) agreed to recommend that the stockholders of Xxxxx approve and
adopt this Agreement, the Merger and all of the other transactions
contemplated hereby; and (vi) directed that adoption of this Agreement be
submitted to Xxxxx'x stockholders. Subject to the provisions of Section
6.14, Xxxxx hereby agrees to the inclusion in the Proxy Statement of the
recommendations of the Board of Directors described in this Section.
(b) The board approvals described in Section 3.28(a) hereof are
sufficient to render the restrictions on "business combinations" set forth
in Section 203 of the DGCL inapplicable to this Agreement, the Merger and
the other transactions contemplated hereby. No other state takeover Laws
are applicable to the execution of this Agreement, the consummation of the
Merger or the consummation of any of the other transactions contemplated
hereby, and no provision of the Certificate of Incorporation or By-Laws of
Xxxxx or similar governing instruments of any of Xxxxx'x subsidiaries would,
directly or indirectly, restrict or impair the ability of Merger Sub or
Parent to vote, or otherwise to exercise the rights of a stockholder with
respect to, shares of Xxxxx and its subsidiaries that may be acquired or
controlled by Parent or Merger Sub.
Section 3.31 Brokers and Finders. Neither of Xxxxx nor any of its
officers, directors or employees has employed any broker or finder or
incurred any liability for any financial advisory fees, investment banking
fees, brokerage fees, commissions or finders' fees, and no investment
banker, broker or finder has acted directly or indirectly for Xxxxx in
connection with this Agreement or the transactions contemplated hereby and
thereby except for the fees of The Xxxxxxxx Group, Inc. pursuant to that
engagement letter with Xxxxx dated February 8, 2001 and a copy of which is
attached to the Disclosure Schedule.
Section 3.32 Disclosure. No representation, warranty or other
statement by Xxxxx herein or in the schedules hereto, or in any other
document entered into in connection with this Agreement, contains or will
contain an untrue statement of material fact, or omits or will omit to state
a material fact necessary to make the statements contained herein or therein
not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
Xxxxx that:
Section 4.01 Organization and Authority. Each of Merger Sub
and Parent is duly organized, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation or formation, as
applicable, and has the requisite power and authority to carry on its
respective business as now being conducted, except where the failure to have
such power of authority would not be reasonably expected to prevent or
materially delay the consummation of the Merger.
Section 4.02 Authorization. Each of Merger Sub and Parent has
all necessary power and authority to execute and deliver this Agreement, to
perform its respective obligations hereunder and to consummate the Merger.
The execution and delivery of this Agreement by each of Merger Sub and
Parent and the consummation by each of Merger Sub and Parent of the Merger
have been duly and validly authorized by all necessary action and no other
proceedings on the part of Merger Sub or Parent are necessary to authorize
this Agreement or to consummate the Merger (other than the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly and validly executed and delivered by each of Merger
Sub and Parent and constitutes a legal, valid and binding obligation of each
of Merger Sub and Parent, enforceable against each of Merger Sub and Parent
in accordance with its terms,, except insofar as enforcement may be limited
by bankruptcy, insolvency or similar Laws affecting the enforcement of
creditors rights generally and by principles of equity. Other than in
connection with or in compliance with the provisions of the DGCL, applicable
state takeover Laws, the 1933 Act, the 1934 Act, Blue Sky Laws and the HSR
Act, no notice to, filing with, or authorization, consent or approval of,
any public body or authority is necessary for the consummation by Merger Sub
or Parent of the transactions contemplated by this Agreement.
Section 4.03 Information Supplied. None of the information
supplied in writing or to be supplied in writing by Parent or Merger Sub
specifically for inclusion or incorporation by reference in the Proxy
Statement, at the time filed with the SEC and at the date it is first mailed
to Xxxxx'x stockholders or at the time of the Stockholders' Meeting, will
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading.
Section 4.04 No Conflict. To the knowledge of any director or
officer of Parent or Merger Sub, neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, Governmental Authority, or court to which either parent or
Merger Sub is subject or any provision of the charter or bylaws of either
parent or Merger Sub or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which either Parent or Merger Sub is a party or by which it
is bound or to which any of its assets is subject, except where
the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, or failure to give notice would not have a
material adverse effect on the ability of the parties to consummate the
transactions contemplated by this Agreement. To the knowledge of any
director or officer of Parent or Merger Sub, and other than in connection
with the provisions of the XXX Xxx, xxx XXXX, xxx 0000 Xxx, the 1934 Act,
and state securities laws, neither Parent or Merger Sub needs to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority in order for the parties to
consummate the transactions contemplated by this Agreement, except where the
failure to give notice, to file, or to obtain any authorization, consent, or
approval would not have a material adverse effect on the ability of the
parties to consummate the transactions contemplated by this Agreement.
Section 4.05 Interim Operations of Merger Sub. Merger Sub was
formed solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities (other than those
incident to its organization and the execution of this Agreement) and has
conducted its operations only as contemplated hereby. Merger Sub owns no
assets [other than capital stock of Xxxxx] and has no liabilities, except
for liabilities under this Agreement and under other agreements entered into
hereunder and in connection with the transactions contemplated by this
Agreement.
Section 4.06 Brokers and Finders. Except for costs and fees
payable to Forest Lake Partners, LLC, neither Parent, Merger Sub nor any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, investment
banking fees, brokerage fees, commission or finders' fees and no investment
banker, broker or finder has acted directly or indirectly for Parent on
connection with the Agreement or the transactions contemplated thereby.
Section 4.07 Disclosure No representation, warranty or other
statement by Parent or Merger Sub herein or any other document made in
connection with this Agreement, contains or will contain an untrue statement
of material fact, or omits or will omit to state a material fact necessary
to make statements contained herein or therein misleading.
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME
Section 5.01 Conduct of Business Prior to the Effective Time.
During the period from the date of this Agreement to the Effective Time,
Xxxxx shall conduct its operations in the ordinary and usual course of
business consistent with past and current practices (including with respect
to quantity and frequency) and use its best efforts to, (i) keep available
the services of the current officers, employees and consultants of Xxxxx,
(ii) preserve the current relationships of Xxxxx with customers,
distributors, suppliers, licensors, licensees, contractors and other persons
with which Xxxxx has significant business relations, (iii) maintain all of
its assets in good repair and condition (except for ordinary wear and tear)
other than those disposed of in the ordinary course of business consistent
with past custom and practice, (iv) maintain all insurance currently used in
the conduct of Xxxxx'x business as currently conducted, (v) maintain Xxxxx'x
books of account and records in the usual, regular and ordinary manner and
(vi) maintain and protect all of its material intellectual property rights,
in each case, in a manner consistent in all material respects with Xxxxx'x
ordinary course of business, consistent with past practice. In addition,
Xxxxx shall not, without the prior written consent of the Parent, take any
action or permit to occur any event described in Section 3.11 that would be
required to be disclosed by Xxxxx on the Disclosure Schedule with reference
to Section 3.11 had such event occurred with respect to Xxxxx prior to the
date of this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 Access and Information. Prior to the Effective
Time, Xxxxx shall permit Parent, Merger Sub (and their respective lenders,
other financing sources, officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives and advisers)
full and complete access during reasonable business hours and in a manner so
as not to interfere with the normal business operations of Xxxxx, to all
properties, books, contracts, commitments, records, documents and facilities
of Xxxxx, and Xxxxx shall furnish promptly to such parties all other
information concerning the business, properties and personnel of Xxxxx as
such parties may reasonably request, and Xxxxx will make its officers,
employees, agents, independent accountants and actuaries available to such
parties during reasonable business hours to discuss such matters as may be
reasonably requested by the other. Until the Effective Time, all information
obtained hereunder shall be subject to the Confidentiality Agreement by and
between Xxxxx and Parent dated November 14, 2000 (the "Confidentiality
Agreement").
Section 6.02 Preparation of Proxy Statement.
(a) Xxxxx, Merger Sub and Parent shall furnish to each other all
information concerning such person or such person's business that is
required by applicable Law to be included in the Proxy Statement. As soon
as reasonably practicable after the date hereof, but in any event not later
than April 25, 2001, Xxxxx shall prepare and file with the SEC (after
providing Merger Sub and Parent with a reasonable opportunity to review and
comment thereon) preliminary proxy materials relating to the Stockholders'
Meeting (together with any amendments thereof or supplements thereto, the
"Proxy Statement") and shall use its best efforts to promptly respond to any
comments of the staff ("Staff") of the SEC (after providing Merger Sub and
Parent with a reasonable opportunity to review and comment thereon) and to
cause the Proxy Statement to be mailed to Xxxxx'x stockholders as promptly
as practicable after responding to all such comments to the satisfaction of
the Staff. Xxxxx shall notify Merger Sub and Parent promptly of the receipt
of any comments from the SEC and of any request by the SEC for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Merger Sub with copies of all correspondence between Xxxxx or any of
its representatives, on the one hand, and the SEC, on the other hand, with
respect to the Proxy Statement or the Merger. Xxxxx will cause the Proxy
Statement to comply in all material respects with the applicable provisions
of the 1934 Act and the rules and regulations thereunder applicable to the
Proxy Statement and the solicitation of proxies for the Stockholders'
Meeting (including any requirement to amend or supplement the Proxy
Statement) and each party shall furnish to the other such information
relating to it and its affiliates to ensure that the statements regarding
the parties hereto and their affiliates and such transactions contained in
the Proxy Statement will not on the date the Proxy Statement is mailed or on
the date of the Stockholders' Meeting or at the Effective Time include any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. If at any time prior to the Stockholders' Meeting
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, Xxxxx shall promptly prepare and mail to
its stockholders such an amendment or supplement; provided, that no such
amendment or supplement to the Proxy Statement will be made by Xxxxx without
providing the Merger Sub and Parent the reasonable opportunity to review and
comment thereon and without the approval of Merger Sub and Parent, which
approval shall not be unreasonably withheld. Xxxxx and its counsel shall
permit Merger Sub, Parent and their respective counsel to participate in all
communications with the SEC and its Staff, including all meetings and
telephone conferences, relating to the Proxy Statement, this Agreement or
the Merger; provided that in the event that such participation by Merger Sub
and Parent is not practicable, the Board of Directors shall promptly inform
Merger Sub and Parent of the content of all such communications and the
participants involved therein.
(b) Subject to the provisions of Section 6.14 hereof, Xxxxx will
include in the Proxy Statement the unanimous recommendation of Xxxxx'x Board
of Directors to the stockholders of Xxxxx that this Agreement and the Merger
be adopted and approved in all respects subject to any modification,
amendment or withdrawal thereof as provided in this Agreement. The Proxy
Statement shall contain a copy of the written opinion of the Xxxxx Financial
Advisor described in Section 3.29.
(c) Xxxxx, acting through its Board of Directors, shall, in accordance
with its Certificate of Incorporation and By-laws, send the Proxy Statement
to all beneficial owners of Xxxxx Common Stock and shall comply with the
delivery requirements of Regulation 14A or Regulation 14C of the 1934 Act,
whichever shall apply to the Proxy Statement.
Section 6.03 Xxxxx Stockholders Approval. Xxxxx shall call a
special meeting of its stockholders (the "Stockholders' Meeting") to be held
no later than 35 days following the mailing of the Proxy Statement for the
purpose of considering and voting upon the approval and adoption of this
Agreement and the Merger. Xxxxx, through its Board of Directors, shall
recommend to its stockholders approval and adoption of this Agreement and
the Merger, which recommendation shall be contained in the Proxy Statement;
provided, however, that the Board of Directors may fail to make its
recommendation to the stockholders of Xxxxx or may withdraw, modify or
change its recommendation to the stockholders of Xxxxx, in accordance with
Section 6.14 hereof. Subject to the foregoing, Xxxxx shall solicit from the
holders of shares of Xxxxx Common Stock proxies in favor of the approval and
adoption of the Merger, and shall take all other action necessary or
advisable to secure the vote or consent of such holders required by the
DGCL. Subject to the provisions of Section 6.14, Xxxxx shall take all
reasonable action necessary in accordance with the DGCL and its Certificate
of Incorporation and By-laws to obtain the requisite approval and adoption
of this Agreement and the Merger by the stockholders of Xxxxx.
Section 6.04 Miscellaneous Agreements and Consents
(a) Subject to the terms and conditions herein provided, each of the
parties hereto shall use all reasonable efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws and regulations to consummate and
make effective the Merger as promptly as practicable, including, without
limitation, using commercially reasonable efforts to satisfy the conditions
contained in Article VII hereof. Merger Sub, Xxxxx and Parent will use
their best efforts to obtain expeditiously all consents, licenses, permits,
waivers, approvals, authorizations or orders of all third parties and
Governmental Authorities necessary or, in the reasonable opinion of Parent,
desirable for the consummation of the transactions contemplated by this
Agreement. In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Merger Sub, Xxxxx or Parent, as the case
may be, shall take all such necessary action.
(b) From the date of this Agreement until the Effective Time, each
party shall promptly notify the other party in writing of any pending or, to
the knowledge of the first party, threatened action, proceeding or
investigation by any Governmental Authority or any other person
(i) challenging or seeking material damages in connection with the Merger or
the conversion of Xxxxx Common Stock into cash pursuant to the Merger or
(ii) seeking to restrain or prohibit the consummation of the Merger or
otherwise limit the right of Surviving Corporation to own or operate all or
any portion of the businesses or assets of Xxxxx, which in either case would
have a Material Adverse Effect prior to or after the Effective Time.
(c) Each party shall give (or shall cause its respective subsidiaries
to give) any notices to third parties and use their commercially reasonable
efforts to obtain any third party consents, (1) necessary, proper or
advisable to consummate the Merger, (2) disclosed or required to be
disclosed in Disclosure Schedule, or (3) required to prevent a Material
Adverse Effect from occurring prior to or after the Effective Time. In the
event that Merger Sub, Parent or Xxxxx shall fail to obtain any third party
consent described in the immediately preceding sentence, it shall use its
commercially reasonable efforts and shall take any such actions reasonably
requested by the other party, to minimize any adverse effect upon Xxxxx,
Merger Sub and Parent, their respective subsidiaries, and their respective
businesses resulting, or which could reasonably be expected to result after
the Effective Time, from the failure to obtain such consent.
(d) If any state takeover statute or similar statute or regulation
becomes applicable to this Agreement or the Merger, Xxxxx, Merger Sub and
Parent will take all action reasonably necessary to ensure that the Merger
may be lawfully consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger. Xxxxx shall take all reasonably
necessary steps to exempt the Merger from the requirements of any applicable
state takeover Law and to assist Merger Sub in any challenge to the validity
or applicability to the Merger of any state takeover Law.
Section 6.05 Interim Financial Statements During the period
prior to the Effective Time, Xxxxx shall deliver to Parent monthly an
unaudited balance sheet as of the end of such month and the unaudited
statements of income of Xxxxx for the period then ended (the "Interim
Financial Statements"). The Interim Financial Statements shall be correct
and complete in all material respects and shall in material respects fairly
present the financial condition, and results of operations of Xxxxx as of
the respective dates, and the Interim Financial Statements shall be prepared
in accordance with GAAP consistently applied throughout the periods
involved.
Section 6.06 Xxxx-Xxxxx-Xxxxxx Compliance; Governmental Consents.
If required by applicable law, Parent, Merger Sub and Xxxxx shall as soon as
practicable file Notification and Report Forms under the HSR Act with the
Federal Trade Commission ("FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use reasonable
efforts to respond as promptly as practicable to all inquiries received from
the FTC or the Antitrust Division for additional information or
documentation. All costs associated with any such filing shall be borne by
Parent. Parent and Xxxxx will take all such action as may be necessary
under any Laws applicable to or necessary for, and will file and, if
appropriate, use their reasonable efforts to have declared effective or
approved, all documents and notifications with such Governmental Authority
or regulatory bodies which they deem necessary or appropriate for the
consummation of the Merger and the transactions contemplated hereby, and
each party shall give the other information reasonably requested by such
other party pertaining to it and its subsidiaries and affiliates reasonably
necessary to enable such other party to take such actions.
Section 6.07 Certain Notifications. At all times until the
Effective Time, each party shall promptly notify the other in writing of the
occurrence of :
(a) the occurrence, or non-occurrence, of any event the occurrence or
non-occurrence of which would be reasonably likely to cause any
(i) representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (ii) any covenant or any condition to
the obligations of any party to effect the Merger not to be complied with or
satisfied;
(b) the failure of any party hereto to, in any material respect,
comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it pursuant to this Agreement;
(c) the receipt of any notice or other communication from any person
alleging that the consent of such person is or may be required in connection
with the Merger;
(d) the receipt of any notice or other communication from any
Governmental Authority in connection with the Merger; and
(e) any actions, suits, claims, investigations or proceedings
commenced or, to the knowledge of the party, threatened against, relating to
or involving or otherwise affecting Xxxxx or Merger Sub, which relates to
the consummation of the Merger; in each case, to the extent such event or
circumstance is or becomes known to the party required to give such notice;
provided, however, that the delivery of any notice pursuant to this Section
6.07 shall not be deemed to be an amendment of this Agreement or any Section
in Disclosure Schedule and shall not cure any breach of any representation
or warranty requiring disclosure of such matter prior to the date of this
Agreement.
Section 6.08 Compliance with Laws. From the date hereof and
until the Closing Date, Xxxxx shall comply with all laws applicable to, or
binding upon, Xxxxx or its business or properties, except where the failure
to comply would not have a Material Adverse Effect.
Section 6.09 Voting Agreements. Xxxxx shall cause the Voting
Agreements to be delivered to Parent and Merger Sub, which in the aggregate
shall represent the power to vote not less than 17.3% of Xxxxx Common Stock.
Section 6.10 Best Efforts. Each party agrees to use its or his
best efforts to take all necessary actions to cause the Merger to be
consummated.
Section 6.11 Press Releases. The parties agree that, except as
otherwise provided by Law, no press release or other public announcement
with respect to this Agreement or the transactions contemplated hereby shall
be made without the prior consultation (and reasonable opportunity for
comment by) of all parties hereto.
Section 6.12 Exchange Act Filings. Unless an exemption shall
be expressly applicable to Xxxxx, Xxxxx will file with the SEC all reports
required to be filed by it pursuant to the rules and regulations of the SEC
(including, without limitation, all required financial statements). Such
reports and other information shall comply in all material respects with all
of the requirements of the SEC rules and regulations, and when filed, to
Xxxxx'x knowledge, will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
Section 6.13 Cooperation with Financing. In order to assist with
the financing of the transactions contemplated by this Agreement, at or
prior to Closing, Xxxxx shall take such commercially reasonable steps as are
necessary to cause the following to occur:
(a) At Merger Sub's request, (i) with respect to each parcel of real
property leased by Xxxxx or its subsidiaries within the United States, Xxxxx
shall use its commercially reasonable best efforts to deliver to Merger Sub,
if required by the lender of any such financing, a nondisturbance agreement,
a consent and waiver and/or an estoppel letter executed by the landlord,
lessor and/or licensor of such leased property and (ii) with respect to each
parcel of real property owned by Xxxxx or its subsidiaries that is located
within the United States, Xxxxx shall deliver title insurance and surveys,
in each case, in form and substance reasonably acceptable to Merger Sub,
however, the parties acknowledge that Xxxxx is presently on a month-to-
month lease in its primary location and may be unable to procure any of the
foregoing from such landlord;
(b) At Merger Sub's request, Xxxxx shall furnish such financial
statements as may be reasonably requested by Merger Sub in connection with
the financing of the transactions contemplated by this Agreement; and
(c) At Merger Sub's request, Xxxxx shall cause its officers,
employees, consultants, agents, accountants and attorneys to cooperate with
Merger Sub and its lenders and authorized representatives in connection with
a review of Xxxxx and the financing of the transactions contemplated hereby,
including the preparation by Merger Sub and its financing sources of any
offering memorandum or other documents related to the financing of the
Transactions and making senior management available to meet with any
prospective providers of financing during reasonable business hours.
Section 6.14 No Solicitation; Fiduciary Responsibilities.
(a) Xxxxx shall not, and Xxxxx shall cause its subsidiaries not to,
and Xxxxx agrees that it shall not authorize nor permit any of its
directors, officers, employees, agents, representatives or affiliates to,
directly or indirectly, solicit, initiate, encourage or facilitate
(including by way of furnishing or disclosing non-public information) any
inquiries, discussions or the making of any proposal (a "Third Party
Inquiry") with respect to any sale, merger, consolidation, recapitalization
or other business combination involving Xxxxx or acquisition of any kind of
a material portion of the assets or capital stock of Xxxxx or its
subsidiaries (a "Third Party Transaction") or negotiate, in any way with any
person (other than Parent, Merger Sub or their respective directors,
officers, employees and representatives), or enter into any agreement, with
respect to any Third Party Inquiry or Third Party Transaction or enter into
or consummate any agreement, arrangement, or understanding requiring it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement; provided, however, that prior to the
Stockholders' Meeting, Xxxxx may, if and only for so long as the Board of
Directors of Xxxxx determines in good faith by a majority vote, based upon
the advice of its outside counsel that failing to take such action would
constitute a breach of the fiduciary duties of the Board of Directors of
Xxxxx under applicable law, in response to a written Third Party Inquiry
with respect to a proposed Third Party Transaction from any person that was
not solicited by Xxxxx and that did not otherwise result from the breach of
this Section 6.14, and subject to compliance with Section 6.14(c), (x)
furnish information with respect to Xxxxx and its subsidiaries to such
person pursuant to a customary confidentiality agreement and (y) participate
in discussions or negotiations with such person regarding any Third Party
Transaction; provided, that the Third Party Inquiry (1) is not subject to
any material contingency, to which the other party thereto has not
demonstrated in its written inquiry its ability to overcome, including
receipt of government consents or approvals, (2) is from a person whom the
Board of Directors of Xxxxx has concluded in good faith has the financial
capacity to consummate the Third Party Transaction, (3) is in the good faith
judgment of the Board of Directors of Xxxxx reasonably likely to be
consummated and is in the best interests of the stockholders of Xxxxx, and
(4) such proposal is more favorable to the stockholders of Xxxxx from a
financial point of view than the transactions contemplated by this
Agreement. Xxxxx agrees that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Third Party Transaction or
similar transaction or arrangement.
(b) Neither Xxxxx (or any of its subsidiaries) nor the Board of
Directors of Xxxxx nor any committee thereof shall (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to Parent or Merger
Sub, the approval, adoption or recommendation by the Board of Directors of
Xxxxx (or any such committee) of this Agreement, the Merger or the other
transactions contemplated hereby, (ii) approve or recommend, or propose to
approve or recommend, any Third Party Transaction, (iii) approve or
recommend, or propose to approve or recommend, or execute or enter into, any
letter of intent, agreement in principle, merger agreement, acquisition
agreement, option agreement or other agreement relating to any Third Party
Transaction or propose or agree to do any of the foregoing, or (iv) submit
any Third Party Transaction at the Stockholders' Meeting for purposes of
voting upon approval and adoption of the Third Party Transaction; provided,
however, that prior to the Stockholders' Meeting, Xxxxx may, only if
determined in good faith by a majority vote of the members of the Board of
Directors of Xxxxx based on the advice of its outside counsel that the
failure to take such action would constitute a breach of the fiduciary
duties of the Board of Directors of Xxxxx under applicable Law, and after
compliance with the following sentence, terminate this Agreement pursuant to
Section 8.01(i) (provided that concurrently with such termination Xxxxx
enters into a definitive agreement containing the terms of a Third Party
Transaction). If Xxxxx shall exercise its right to terminate this Agreement
pursuant to this Section 6.14(b), Xxxxx shall deliver to Parent (or at
Parent's direction, such other person as Parent may designate in writing),
and any such termination shall be conditioned upon Parent's or such other
person' receipt of, (i) the Termination Fee and Parent Costs specified in
Section 8.03(e), and (ii) written acknowledgment from Xxxxx and from the
other person to the Third Party Transaction that Xxxxx and such other person
have irrevocably waived any right to contest such payment. Xxxxx shall give
Parent and Merger Sub five business days' prior written notice of its intent
to terminate the Agreement pursuant to Section 8.01(i) hereof, which notice
shall include all of the information described in Section 6.14(c) as of the
date of such notice.
(c) Xxxxx promptly (and in any event within two days of the relevant
event) shall advise Merger Sub and Parent orally and in writing of any Third
Party Inquiry or Third Party Transaction or any other inquiry with respect
to or that could reasonably be expected to lead to any Third Party
Transaction and the identity of the person making any such Third Party
Inquiry, Third Party Transaction or other inquiry, and, in each case, the
terms and conditions thereof, including any amendment or other modification
to the terms of any such Third Party Inquiry, Third Party Transaction or
other inquiry. Xxxxx shall keep Merger Sub and Parent fully informed of the
status of any proposal relating to a Third Party Inquiry or Third Party
Transaction on a current basis and will notify Parent 24 hours in advance
before an agreement is executed with respect to any Third Party Transaction.
(d) Subject to Section 6.14(a) hereof, nothing contained in this
Section 6.14 shall prohibit the Board of Directors of Xxxxx from taking and
disclosing to the stockholders of Xxxxx a position with respect to a tender
or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2(a)
promulgated under the 1934 Act or from making such disclosure to the
stockholders of Xxxxx which, in the judgment of the Board of Directors,
after consultation with its legal counsel, is necessary under applicable Law
or the rules of any stock exchange to meet the fiduciary duties of the Board
of Directors under applicable Law. Xxxxx shall give Parent prompt written
notice and a copy of any such disclosure.
Section 6.15 Xxxxxxx Money. The parties each acknowledge that
Parent has paid One Hundred Thousand Dollars ($100,000) in refundable
xxxxxxx money (the "Xxxxxxx Money") in trust to Xxxxxxx Xxxx & Xxxxxxxxx LLP
(the "Escrow Agent"). Xxxxx shall direct the Escrow Agent to transfer the
Xxxxxxx Money to the Paying Agent (for application to the payment of the
Merger Consideration) not less than one full business day prior to the
Closing. If (i) this Agreement is terminated for any reason, or (ii) Merger
Sub, Parent or any of their respective affiliates purchases more than two
percent (2.0%) of the outstanding Xxxxx Common Stock or lends any money to
Xxxxx (directly or indirectly by purchasing an interest in any of the
Company's existing indebtedness with institutional lenders), then in any
such case any party to this Agreement shall be entitled to direct the Escrow
Agent to refund all of the Xxxxxxx Money to Parent.
ARTICLE VII
CONDITIONS
Section 7.01 Conditions to Each Party's Obligations to
Consummate the Merger. The respective obligations of each party to
consummate the Merger shall be subject to the fulfillment (or, if permitted
by applicable Law, waiver by the party for whose benefit such condition
exist) at or prior to the Effective Time of the following conditions:
(a) Stockholder Vote. This Agreement and the Merger shall have been
approved and adopted by the affirmative vote of the requisite holders of the
outstanding shares of Xxxxx Common Stock in accordance with the DGCL and
Xxxxx'x Certificate of Incorporation;
(b) HSR Act. Any applicable waiting period under the HSR Act relating
to the Merger shall have expired or been terminated;
(c) Prohibitive Orders. No order, statute, rule, regulation,
executive order, stay, decree, judgment or injunction shall have been
enacted, entered, issued, promulgated or enforced by any Governmental
Authority or a court of competent jurisdiction or shall be in effect which
has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger or of limiting or restricting the Surviving
Corporation's conduct or operation of the business of Xxxxx after the
Merger; and
(d) Litigation. There shall be no action or proceeding initiated by
any Governmental Authority or any third party pending which seeks to
restrain, prohibit or invalidate any material transaction contemplated by
this Agreement or to recover substantial damages or other substantial relief
with respect thereto and no injunction or restraining order shall have been
issued by any court restraining, prohibiting or invalidating any such
material transaction.
Section 7.02 Conditions to Obligations of Xxxxx to Consummate
the Merger. The obligations of Xxxxx to consummate the Merger shall be
subject to the fulfillment (or waiver by Xxxxx) at or prior to the Effective
Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub set forth in Article IV hereof (i) that
are qualified by materiality shall be true and correct and (ii) that are not
qualified by materiality, shall be true and correct in all material
respects, in each case as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time, and Xxxxx
shall have received a certificate signed by an officer of Parent and Merger
Sub to that effect; and
(b) Performance of Obligations. Parent and Merger Sub shall each have
in all material respects performed all obligations required to be performed
by them under this Agreement prior to the Effective Time, and Xxxxx shall
have received a certificate signed by an officer of Parent and Merger Sub to
that effect.
Section 7.03 Conditions to Obligations of Parent and Merger Sub
to Consummate the Merger. The obligations of Parent and Merger Sub to
consummate the Merger shall be subject to the fulfillment (or waiver by
Parent and Merger Sub) at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Xxxxx set forth in Article III hereof (i) that are qualified
by materiality shall be true and correct and (ii) that are not qualified by
materiality, shall be true and correct in all material respects, in each
case as of the date of this Agreement and as of the Effective Time as though
made on and as of the Effective Time, and Parent and Merger Sub shall have
received a certificate signed by the appropriate officers of Xxxxx to that
effect;
(b) Performance of Obligations. Xxxxx shall have performed in all
material respects all obligations required to be performed by it under this
Agreement prior to the Effective Time, and Parent and Merger Sub shall have
received a certificate signed by the appropriate officers of Xxxxx to that
effect;
(c) Permits, Authorizations, Etc. Xxxxx and Merger Sub shall have
obtained any and all consents or waivers from other parties to loan
agreements or other contracts material to their respective businesses for
the lawful consummation of the Merger;
(d) Proceedings and Instruments Satisfactory. All proceedings,
corporate or otherwise, to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to Parent and Merger Sub; and,
Xxxxx shall have made available to the Parent and Merger Sub for examination
the originals or true and correct copies of all documents which the Parent
and Merger Sub reasonably may request in connection with the transaction
contemplated by this Agreement;
(e) Due Diligence. Parent and Merger Sub shall have conducted a due
diligence investigation and review of Xxxxx, its business and all matters
pertaining thereto (including a continuing review of all matters described
on the Disclosure Schedule) that Parent and Merger Sub deems relevant and
the results of such investigation and review shall be satisfactory to the
Parent and Merger Sub in their sole discretion; provided, however, that this
condition shall be deemed satisfied if Parent and Merger Sub have not
terminated this Agreement pursuant to Section 8.01(c) hereof within 30 days
after execution of this Agreement;
(f) Financing. Surviving Corporation shall have obtained debt and
equity financing sufficient to consummate the Merger (including the payment
of the Merger Consideration, the Option Consideration and the repayment of
indebtedness for borrowed money of Xxxxx or any of its subsidiaries that is
required to be repaid as a result of the Merger, if any) and to pay all fees
and expenses in connection therewith and to provide working capital for the
Surviving Corporation, all on terms reasonably satisfactory to Merger Sub;
(g) Repayment of Indebtedness; Release of Liens and Guaranties.
Except as set forth on Exhibit A hereto, all outstanding indebtedness for
borrowed money of Xxxxx or any of its subsidiaries shall be paid in full,
(ii) any letters of credit of Xxxxx or any of its subsidiaries shall be
terminated, and (iii) Xxxxx shall have obtained (x) the release of all Liens
on the capital stock of Xxxxx or any of its subsidiaries and all assets of
Xxxxx or any of its subsidiaries securing indebtedness and (y) the release
of all guarantees by Xxxxx or any of its subsidiaries of indebtedness for
borrowed money. At the Closing, Xxxxx shall provide or arrange to be
provided to Merger Sub all releases and other documents in form and
substance reasonably satisfactory to Merger Sub demonstrating the release of
such Liens and guarantees;
(h) Third-Party Consents. Xxxxx shall have obtained all consents,
authorizations, approvals and waivers from third parties, in form reasonably
acceptable to Merger Sub (x) which are necessary in order to enable (i) the
consummation of the Merger and (ii) the Surviving Corporation to conduct its
business in all material respects after the Closing Date on the same basis
as conducted prior to the date hereof, in each case, except for those
failure of which to obtain would not have, individually or in the aggregate,
a Material Adverse Effect and (y) which are listed on Exhibit B hereto;
(i) Financial Statements. Parent shall have received the Interim
Financial Statements;
(j) Termination of Xxxxx Stock Options. All Xxxxx Stock Options shall
be extinguished and, as of immediately prior to Closing, Xxxxx shall have no
liability or obligation with respect to any such Xxxxx Stock Options, except
as provided in Section 2.03;
(k) Employment Agreements. Xxxx Xxxxx and Xxxxxx Xxxxxxxxxx shall
have entered into employment agreements with Xxxxx in a form acceptable to
Xxxx Xxxxx, Parent and Merger Sub;
(l) DAR Agreement. The Intellectual Property Purchase Agreement,
dated January 27, 1999, between Xxxxx and DAR Foods Corporation shall have
been terminated and the liabilities evidenced thereby shall have been
compromised and converted into a promissory note with terms and conditions
which are satisfactory to Xxxx Xxxxx, Parent and Merger Sub;
(m) Phase I Environmental Report. Parent shall have received a Phase
I Environmental Report from an independent environmental consulting or
engineering firm, and such report shall not have disclosed environmental
concerns and liabilities which, in the reasonable estimation of such firm,
are reasonably likely to exceed $100,000 to cure or remediate (and if such
firm does not give an estimated amount, then in the reasonable estimation of
Parent);
(n) Material Adverse Effect. No Material Adverse Effect shall have
occurred with respect to Xxxxx after the date hereof and prior to the
Effective Time, or prior to the date hereof, unless such Material Adverse
Effect is fully reflected in the Financial Statements;
(o) Dissenting Shares. The Dissenting Shares, if any, shall not
include greater than seven and one-half percent (7.5%) of the issued and
outstanding shares of Xxxxx Common Stock;
(p) Net Worth. The net worth of Xxxxx (defined as the book value of
Xxxxx'x assets over the book value of Xxxxx'x liabilities, each calculated
on a consolidated basis) on the Closing Date is not less than Eight Hundred
Eighty-Five Thousand Dollars ($885,000); and
(q) Opinion of Counsel. Xxxxxxx & Xxxxxxxx Ltd., counsel for Xxxxx,
shall have furnished to Parent its opinion as of the Closing in the form and
to the effect set forth in Exhibit C hereto.
ARTICLE VIII
TERMINATION, AMENDMENT, WAIVER
Section 8.01 Termination. This Agreement may be terminated
upon written notice by the terminating party to each other party at any time
prior to the Effective Time, whether before or after approval by the
stockholders of Xxxxx; provided, however, that the right to terminate this
Agreement under this Section 8.01 shall not be available to any party whose
breach or default of this Agreement (or any part hereof) or failure to
fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of a condition resulting in such party's right to
terminate this Agreement:
(a) by unanimous consent of Xxxxx, Parent and Merger Sub;
(b) by Parent, Merger Sub or Xxxxx, if the Stockholders' Meeting shall
have been held and the holders of outstanding shares of Xxxxx Common Stock
shall have failed to approve and adopt this Agreement and the Merger in
accordance with Xxxxx'x Certificate of Incorporation and the DGCL upon a
vote taken at such meeting (including any adjournment or postponement
thereof);
(c) by Parent, or Merger Sub if any of the conditions contained in
Sections 7.01 or 7.03 have not been satisfied prior to August 31, 2001 or if
the Closing has not occurred on or prior to August 31, 2001;
(d) by Xxxxx, if any of the conditions contained in Sections 7.01 or
7.02 have not been satisfied prior to August 31, 2001 or if the Closing has
not occurred on or prior to August 31, 2001;
(e) by Xxxxx, if Parent or Merger Sub has committed a material breach
of any representation, warranty or agreement contained in this Agreement and
such breach remains uncured by Merger Sub and Parent for a period of ten
days after written notice to such parties of such breach;
(f) by Parent or Merger Sub, if Xxxxx has committed a material breach
of any representation, warranty or agreement contained in this Agreement and
such breach remains uncured by Xxxxx for a period of ten days after written
notice to Xxxxx of such breach;
(g) by Parent or Merger Sub, if the Board of Directors of Xxxxx or any
committee thereof (i) shall withdraw, modify in a manner adverse to Merger
Sub, or refrain from giving its approval or recommendation of this Agreement
or any of the Transactions or (ii) recommends a potential Third Party
Transaction to Xxxxx'x stockholders pursuant to Section 6.14;
(h) by Parent or Merger Sub, if the condition contained in Section
7.03(e) has expired or been waived in writing by Parent and Merger Sub and
Xxxxx has not within three business days thereafter delivered to Parent and
Merger Sub (or their designee) voting power (in addition to the voting power
contemplated by the Voting Agreements) with regard to at least 42% of the
outstanding Xxxxx Common Stock in the form of shares or a continuing
commitment to immediately sell shares (in either case without a written
purchase agreement) of Xxxxx Common Stock at any time after such three
business day period upon demand by Parent and Merger Sub at a price per
share equal to the Merger Consideration;
(i) By Xxxxx in accordance with Section 6.14 hereof; provided,
however, that in order for the termination of this Agreement pursuant to
this Section 8.01(i) to be deemed effective, Xxxxx shall have complied with
all of the provisions of Section 6.14, including the notice provisions
contained therein and the payment of the Termination Fee and the Parent
Costs; or
(j) By Parent or Merger Sub, if any person or group (as defined in
Section 13(d)(3) of the 1934 Act) (other than Parent, Merger Sub or any of
their affiliates) shall have become the beneficial owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of at least seven and one-half
percent (7.5%) of the outstanding shares of Xxxxx Common Stock (excluding
only persons who are party to a Voting Agreement in favor of Merger Sub and
any stockholder which on the date hereof owns more than forty percent (40%)
of the voting power of Xxxxx Common Stock, on a fully diluted basis).
Section 8.02 Method of Termination; Effect of Termination.
(a) Any such right of termination hereunder shall be exercised by
written notice of termination given by the terminating party to the
applicable other parties hereto in the manner hereinafter provided in
Section 11.01.
(b) In the event of the termination of this Agreement pursuant to
Section 8.01, this Agreement shall forthwith become void, there shall be no
liability under this Agreement on the part of any of the parties hereto or
any of their respective officers or directors and all rights and obligations
of any party hereto shall cease, except for (i) as described in Article IX,
(ii) as set forth in Section 8.03 and (iii) the provisions of the
Confidentiality Agreement; provided, however, that nothing herein shall
relieve any party from liability for, or be deemed to waive any rights of
specific performance of this Agreement available to a party by reason of,
any intentional breach by the other party or parties of this Agreement.
Section 8.03 Fees and Expenses.
(a) Except as provided in Section 6.06 and this Section 8.03, each
party shall pay or be responsible for all expenses incurred by such party in
connection with the transactions contemplated by this Agreement. The fees,
expenses and other costs (including but not limited to legal, accounting,
due diligence, securities, proxy solicitation and printing fees, expenses
and costs) of Xxxxx in connection with the transactions contemplated by this
Agreement (collectively "Transaction Costs") which have been or will be
incurred by Xxxxx between November 15, 2000 and the Closing shall be paid as
follows (with any balance remaining unpaid at Closing to be paid at
Closing):
(i) The first One Hundred Six Thousand Five Hundred Dollars
($106,500) of Transaction Costs shall be paid by Xxxxx;
(ii) The next Forty Three Thousand Five Hundred Dollars ($43,500)
of Transaction Costs shall be paid as follows:
(A) Forty-two and seven one hundredths percent (42.07%) of
such Transaction Costs shall be paid by Xxxxx if, but only if,
prior to the Closing, one or more members of the Board of
Directors of Xxxxx affiliated with X.X. Xxxx Asset Management
surrenders, without consideration therefor, Xxxxx Stock Options
which, but for such surrender, otherwise would be entitled to
receive Option Consideration in an aggregate amount equal to
forty-two and seven one hundredths percent (42.07%) of such
Transaction Costs; and
(B) Fifty-seven and ninty-three one hundredths percent
(57.93%) of such Transaction Costs shall be paid at Closing by
Xxxxx through a reduction in the aggregate Merger Consideration
and Option Consideration payable at Closing by Parent and Merger
Sub on a dollar-for-dollar basis. Accordingly, in the event the
aggregate Merger Consideration and Option Consideration is reduced
by application of the preceding sentence, the per share Merger
Consideration payable to the holders of Xxxxx Common Stock (other
than X.X. Xxxx Asset Management, which will pay its ratable share
of such expenses pursuant to the preceding subparagraph (A)) and
the Option Consideration payable to holders of Xxxxx Stock Options
shall also be reduced ratably; and
(iii) All Transaction Costs not paid as specified in
subsections (i) and (ii) above shall be paid at Closing by Xxxxx
through a reduction in the aggregate Merger Consideration and Option
Consideration payable at Closing by Parent and Merger Sub on a dollar-
for-dollar basis. Accordingly, in the event the aggregate Merger
Consideration and Option Consideration is reduced by application of the
preceding sentence, the per share Merger Consideration payable to the
holders of Xxxxx Common Stock and the Option Consideration payable to
holders of Xxxxx Stock Options shall also be reduced ratably. Except
to the extent specifically described in the last sentence of Section
8.03(f), the remedies described in Sections 8.03 (b) - (e) hereof shall
be mutually exclusive and shall constitute the sole remedy for money
damages for termination of this Agreement pursuant to the sections of
this Agreement described therein.
(b) In the event that this Agreement is terminated pursuant to Section
8.01(e), on the date of such termination, Parent shall pay Xxxxx (or at
Xxxxx'x direction, to such other person as Xxxxx may designate in writing)
by wire transfer of immediately available funds to an account specified by
Xxxxx an amount in cash (which amount may be estimated by Xxxxx in good
faith prior to the date of such payment, subject to an adjustment payment
between the parties upon Xxxxx'x definitive determination of such amount)
equal to the aggregate amount of the costs, fees and expenses of counsel,
accountants, financial advisors, financing sources and other experts and
advisors as well as fees and expenses incident to the investigation,
negotiation, preparation and execution of this Agreement and the attempted
consummation of the transactions contemplated by this Agreement, the related
documentation and the stockholders' meetings and consents, including without
limitation, the commitment, legal and other costs, fees and expenses of
financing sources for which Xxxxx is responsible, up to a maximum amount of
Fifty Thousand Dollars ($50,000).
(c) In the event that this Agreement is terminated pursuant to
Section 8.01(j), on the date of such termination, Xxxxx shall pay Parent (or
at Parent's direction, to such other person as Parent may designate in
writing) by wire transfer of immediately available funds to an account
specified by Parent an amount in cash (which amount may be estimated by
Parent in good faith prior to the date of such payment, subject to an
adjustment payment between the parties upon Parent's definitive
determination of such amount) equal to (i) the aggregate amount of the
costs, fees and expenses of counsel, accountants, financial advisors,
financing sources and other experts and advisors as well as fees and
expenses incident to the investigation, negotiation, preparation and
execution of this Agreement and the attempted financing and consummation of
the transactions contemplated by this Agreement, the related documentation
and the stockholders' meetings and consents, including without limitation,
the commitment, legal and other costs, fees and expenses of financing
sources for which Parent is responsible (such amount, the "Parent Costs"),
plus (ii) Twenty-Five Thousand Dollars ($25,000) up to a maximum combined
amount of One Hundred Seventy-Five Thousand Dollars ($175,000).
(d) In the event that this Agreement is terminated pursuant to
Section 8.01(h), within 60 days following the date of such termination,
Xxxxx shall pay Parent (or at Parent's direction, such other person as
Parent may designate in writing) by wire transfer of immediately available
funds to an account specified by Parent a payment in the amount equal to One
Hundred Fifty Thousand Dollars ($150,000).
(e) In the event that this Agreement is terminated pursuant to
Section 8.01(f), (g) or (i), on the date of such termination, Xxxxx shall
pay Parent (or at Parent's direction, such other person as Parent may
designate in writing) by wire transfer of immediately available funds to an
account specified by Parent a payment in the amount equal to Two Hundred
Thousand Dollars ($200,000) (the "Termination Fee") plus Parent Costs up to
a maximum of One Hundred Thousand Dollars ($100,000).
(f) If this Agreement is terminated pursuant to any of subsections (a)
- (d) of Section 8.01 (except only for a termination by Xxxxx under Section
8.01(d) as a result of the failure of a condition contained in Section 7.02)
and Xxxxx enters into any agreement or understanding with a third party with
respect to a potential Third Party Transaction within 180 days after such
termination, then if the potential Third Party Transaction is consummated
(whether or not during the 180 day period following termination of this
Agreement), on the date of the consummation of such Third Party Transaction,
Xxxxx shall pay the Termination Fee to Parent (or at Parent's direction,
such other person as Parent may designate in writing) by wire transfer of
immediately available funds to an account specified by Parent plus Parent
Costs up to a maximum of One Hundred Thousand Dollars ($100,000).
Notwithstanding the foregoing, if Xxxxx has previously paid any amount
pursuant to Section 8.03(c) or this Section 8.03(f), then Xxxxx'x obligation
to pay Parent Costs hereunder shall be reduced by the amount of Parent Costs
previously paid pursuant to Section 8.03(c) or this Section 8.03(f).
Section 8.04 Amendment. This Agreement may be amended by the
parties hereto at any time prior to the Effective Time; provided, that after
the approval and adoption of this Agreement by the stockholders of Xxxxx, no
amendment may be made which would (a) change the amount or the type of
Merger Consideration to be received by the stockholders of Xxxxx pursuant to
the Merger, (b) change any other term or condition of the Agreement if such
change would materially and adversely affect Xxxxx or the holders of shares
of Xxxxx Common Stock or (c) without the vote of the stockholders entitled
to vote on the matter, change any term of the Certificate of Incorporation
of Xxxxx. This Agreement may not be amended nor may any provision of this
Agreement be waived except by an instrument in writing signed by the parties
hereto.
Section 8.05 Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any
obligation or other act of any other party hereto, (b) waive any inaccuracy
in the representations and warranties of the other party contained herein or
in any document, certificate or writing delivered by the other party
pursuant hereto and (c) waive compliance with any agreement or condition to
its obligations (other than the conditions set forth in Sections 7.01(a) and
(b)) contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
ARTICLE IX
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 9.01 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
and any certificate delivered pursuant hereto shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
8.01, as the case may be, except that (a) those covenants and agreements
that by their terms apply or are to be performed in whole or in part after
the Effective Time and this Article IX shall survive the Effective Time for
the respective periods set forth therein or, if no such period is specified,
for four years, and (b) the representations, warranties and agreements set
forth in Section 3.29, 6.11, Article VIII and this Article IX shall survive
termination for the respective periods set forth therein or, if no such
period is specified, for four years. Nothing in this Article IX shall
relieve any party for any willful breach of any representation, warranty,
covenant or other agreement in this Agreement occurring prior to
termination.
ARTICLE X
DEFINITIONS
Section 10.01 Certain Definitions.
(a) As used in this Agreement, the following terms shall have the
following meanings:
"affiliate" of a specified person means a person who directly
or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
"business day" means any day on which the principal offices
of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any payment is due, any day on which
banks are not required or authorized to close in the City of Milwaukee,
Wisconsin;
"Code" means the Internal Revenue Code of 1986, as amended;
"control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise;
"Environmental Laws" shall mean, collectively, the federal
Clean Air Act, the federal Clean Water Act, the federal Resource
Conservation and Recovery Act, the federal Comprehensive Environmental
Response, Compensation and Liability Act, the federal Toxic Substances
Control Act, principles of common Law and any other federal, state or
local Laws, including rules and regulations thereunder, regulating or
otherwise affecting or relating to human health or the environment;
"Environmental Materials" shall mean, collectively, any
material, substance, chemical, waste, contaminant or pollutant which is
regulated, listed, defined as or determined to be hazardous, extremely
hazardous, toxic, dangerous, restricted or a nuisance, or otherwise
harmful to human health or the environment, under any Environmental
Laws;
"Governmental Authority" means any United States (federal,
state, local or any subdivision thereof), foreign or supra-national
Government, or governmental, judicial, regulatory or administrative
authority, agency, commission, tribunal or body.
"Hazardous Substances" means hazardous substances as defined
under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. S9601, et seq. applicable Illinois Law, and
all regulations promulgated thereunder;
"knowledge" or "knowledge of Xxxxx" or the like, shall mean
the knowledge of Xxxx Xxxxx, Xxx Xxxxxxxxxx or Xxxxxxx Xxxxxxxxx after
making a commercially reasonable inquiry and, if such persons fail to
make such inquiry, shall include constructive knowledge of such facts
as would have been learned had such inquiry been made;
"Lien" shall mean, with respect to any property or asset, any
mortgage, pledge, security interest, lien (statutory or other), charge,
encumbrance or other similar restrictions or limitations of any kind or
nature whatsoever on or with respect to such property or asset;
"Material Adverse Effect." As used in this Agreement, the
term "Material Adverse Effect" shall mean, when used in connection with
Xxxxx and its subsidiaries (or, after the Effective Time, the Surviving
Corporation and its subsidiaries), any change, effect, event,
occurrence, condition or development that is or is reasonably likely to
be materially adverse to (i) the business, assets, liabilities,
properties, results of operations, condition (financial or otherwise)
or prospects of Xxxxx (or, as applicable, the Surviving Corporation)
and its subsidiaries, taken as a whole (including any change or effect
resulting from general economic conditions or relating to those
industries specific to the business of Xxxxx (or, as applicable, the
Surviving Corporation) and its subsidiaries), (ii) the right or ability
of Xxxxx (or, as applicable, the Surviving Corporation) and its
subsidiaries, taken as a whole, to carry on their respective businesses
as now or proposed to be conducted, or (iii) the ability of the Merger
Sub, Xxxxx or the Surviving Corporation to perform their respective
obligations under this Agreement. A Material Adverse Effect shall be
deemed to have occurred if the cumulative effect of an individual event
and all other then existing events would result in a Material Adverse
Effect. In addition to, and not in limitation of, the foregoing, a
"Material Adverse Effect" shall be deemed to have occurred if the
relevant change, effect, event, occurrence, condition or development
(or the cumulative effect of all changes, effects, events, occurrences,
conditions or developments) is valued at $100,000 or greater.
"person" means an individual, corporation, limited liability
company, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act), trust, association or entity or
Governmental Authority, political subdivision, agency or
instrumentality of a Governmental Authority;
"subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which
such person (either above or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body
of such corporation or other legal entity;
"Tax" or "Taxes" means any federal, state, county, local,
foreign or other income, gross receipts, ad valorem, franchise,
profits, sales, use, transfer, registration, excise, utility,
environmental, communications, real or personal property, capital
stock, license, payroll, wage or other withholding, unemployment,
social security (or similar), severance, disability, customs duties,
stamp, occupation, alternative or add-on minimum, estimated and other
taxes, charges, fees, assessments, levies or charges of any kind
whatsoever including deficiencies, penalties, additions to tax, and
interest attributable thereto, whether disputed or not; and
"Tax Return" means any return, declaration, estimate,
information return, report, statement, and claim for refund or filing
with respect to any Taxes, including any schedules attached thereto and
including any amendment thereof.
(b) As used in this Agreement, the following terms shall have the
meanings ascribed thereto in the Section or paragraph of this Agreement
indicated below:
1933 Act Section 3.03(b)
1934 Act Section 3.03(b)
Agreement Introductory Paragraph
Antitrust Division Section 6.06
Benefit Plans Section 3.18(a)
Blue Sky Laws Section 3.03(b)
Certificate of Merger Section 1.02
Certificates Section 2.02(c)
Closing Section 1.02
Closing Date Section 1.02
Confidentiality Agreement Section 6.01
DGCL Section 1.01
Disclosure Schedule Article III
Dissenting Shares Section 2.04(a)
Xxxxxxx Money Section 6.15
Effective Time Section 1.02
Escrow Agent Section 6.15
ERISA Section 3.18(a)
Financial Statements Section 3.07
Food Acts Section 3.13(a)
FTC Section 6.06
GAAP Section 3.07
HSR Act Section 3.03(b)
Insurance Section 3.22
Intellectual Property Section 3.19
Interim Financial Statements Section 6.05
IRS Section 3.18(a)
Laws Section 3.03(a)
Licenses Section 3.13(b)
Merger Section 1.01
Merger Consideration Section 2.01(b)
Merger Sub Introductory Paragraph
Option Consideration Section 2.03(a)
Parent Introductory Paragraph
Parent Costs Section 8.03(c)
Paying Agent Section 2.02(a)
Products Liability Section 3.23
Proxy Statement Section 6.02(a)
Real Property Section 3.15(c)
Related Party Section 3.25
Xxxxx Introductory Paragraph
Xxxxx Balance Sheet Section 3.07
Xxxxx Common Stock Recitals
Xxxxx Common Stock Equivalents Section 3.06
Xxxxx SEC Reports Section 3.08
Xxxxx Stock Option Section 2.03(a)
Xxxxx Stock Option Plan Section 2.03(a)
SEC Section 3.08
Staff Section 6.02(a)
Stockholders' Meeting Section 6.03
Surviving Corporation Section 1.01
Termination Fee Section 8.03(e)
Third Party Inquiry Section 6.14(a)
Third Party Transaction Section 6.14(a)
Transaction Costs Section 8.03(a)
Voting Agreements Recitals
ARTICLE XI
GENERAL PROVISIONS
Section 11.01 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given (i) when delivered
personally, (ii) the second business day after being deposited in the United
States mail registered or certified (return receipt requested), or (iii) the
first business day after being deposited with Fed Ex or any other recognized
national overnight courier service, in each case to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
(a) If to Parent or Merger Sub:
FLP Holdings III LLC
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
With copies to:
Xxxxxxx Xxxx & Friedrich LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
(b) If to Xxxxx:
Xxxxx Foods, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
With a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxx.
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Section 11.02 Miscellaneous. Except for the provisions of the
Confidentiality Agreement, this Agreement (including the exhibits,
schedules, documents and instruments referred to herein or therein):
(i) constitutes the entire agreement, and supersedes all
other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject
matter hereof;
(ii) shall not be assigned by operation of Law or otherwise
(except that Parent and Merger Sub may assign their respective
rights and obligations hereunder as collateral security to any
person providing financing to Parent and/or Merger Sub; provided,
that no such assignment shall change the amount or nature of the
Merger Consideration or relieve the assigning party of its
obligations hereunder if such assignee does not perform such
obligations); and
(iii) may be executed in two or more counterparts which
together shall constitute a single agreement.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, heirs, next of kin,
distributees, executors, administrators and personal representatives.
Section 11.03 Waiver; Remedies. No delay or failure on the part
of any party hereto to exercise any right, power, or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party hereto of any right, power, or privilege hereunder operate as a waiver
of any other right, power, or privilege hereunder, nor shall any single or
partial exercise of any right, power, or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power,
or privilege hereunder.
Section 11.04 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule, Law or regulation, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the Merger is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that
the Merger be consummated as originally contemplated to the fullest extent
possible.
Section 11.05 Construction. This Agreement and any documents or
instruments delivered pursuant hereto or in connection herewith shall be
construed without regard to the identity of the person who drafted the
various provisions of the same. Each and every provision of this Agreement
and such other documents and instruments shall be construed as though all of
the parties participated equally in the drafting of the same. Consequently,
the parties acknowledge and agree that any rule of construction that a
document is to be construed against the drafting party shall not be
applicable either to this Agreement or such other documents and instruments.
Section 11.06 Governing Law. This Agreement shall be construed
in accordance with the Laws of the State of Delaware (without regard to
principles of conflicts of Laws) applicable to contracts made and to be
performed within such State.
Section 11.07 Third-Party Beneficiaries. No third parties are
intended to benefit from this Agreement, and no third-party beneficiary
rights shall be implied from anything contained in this Agreement.
Section 11.08 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this
Agreement was 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 and to specific performance of the terms hereof,
in addition to any other remedy at Law or in equity.
Section 11.09 Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 11.10 Counterparts. This Agreement may be executed and
delivered in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed and delivered shall be
deemed to be an original but all of which taken together shall constitute
one and the same agreement.
Section 11.11 Accounting Terms. All accounting terms used herein
which are not expressly defined in this Agreement shall have the respective
meanings given to them in accordance with GAAP.
Section 11.12 Further Assurances. Each party hereto from time to
time hereafter, and upon request, shall execute, acknowledge and deliver
such other instruments as reasonably may be required to more effectively
carry out the terms and conditions of this Agreement.
Section 11.13 Recitals. The Recitals to this Agreement are true
and correct and are a part of this Agreement hereby incorporated by
reference.
[SIGNATURES ON NEXT PAGE FOLLOWING]
IN WITNESS WHEREOF, Parent, Merger Sub and Xxxxx have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
FLP HOLDINGS III LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Its: Managing Member of Forest Lake
Partners, LLC, Its Manager
XXXXX FOODS, INC.
By: /s/ Xxxx Xxxxx
-------------------------------
Its: Chief Executive Officer
RFI ACQUISITION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Its: President
