1
EXECUTION COPY
SPX CORPORATION
AND
UNITED DOMINION INDUSTRIES LIMITED
---------
MERGER AGREEMENT
As of
March 10, 2001
---------
2
TABLE OF CONTENTS
MERGER AGREEMENT..........................................................................1
ARTICLE 1 INTERPRETATION..................................................................1
Section 1.1 Definitions.........................................................1
Section 1.2 Singular, Plural, etc..............................................12
Section 1.3 Deemed Currency....................................................12
Section 1.4 Headings, etc......................................................12
Section 1.5 Date for any Action................................................12
Section 1.6 Governing Law......................................................12
Section 1.7 Attornment.........................................................13
Section 1.8 Schedules..........................................................13
Section 1.9 Objectives.........................................................14
Section 1.10 Knowledge..........................................................14
ARTICLE 2 THE ARRANGEMENT................................................................15
Section 2.1 Implementation Steps by UDI........................................15
Section 2.2 Implementation Steps by SPX........................................16
Section 2.3 Interim Order......................................................17
Section 2.4 Articles of Arrangement............................................17
Section 2.5 Circular...........................................................17
Section 2.6 Securities Compliance..............................................18
Section 2.7 Preparation of Filings.............................................18
ARTICLE 3 PUBLICITY......................................................................20
Section 3.1 Publicity..........................................................20
i
3
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SPX..........................................21
Section 4.1 Representations and Warranties.....................................21
Section 4.2 Survival...........................................................21
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF UDI..........................................21
Section 5.1 Representations and Warranties.....................................21
Section 5.2 Survival...........................................................21
ARTICLE 6 CONDUCT OF BUSINESS............................................................22
Section 6.1 Conduct of Business by UDI.........................................22
Section 6.2 Transfer of Assets.................................................25
ARTICLE 7 COVENANTS OF UDI...............................................................25
Section 7.1 No Solicitation....................................................25
Section 7.2 Interim Order and Final Order......................................27
ARTICLE 8 COVENANTS OF SPX...............................................................28
Section 8.1 Covenants of SPX...................................................28
Section 8.2 Employment Agreement...............................................28
Section 8.3 Officers and Directors Insurance...................................29
Section 8.4 Indemnities........................................................29
Section 8.5 Compensation; Benefit Plans........................................30
ARTICLE 9 MUTUAL COVENANTS...............................................................31
Section 9.1 Notification of Certain Matters....................................31
Section 9.2 Anti-Trust and Investment Canada Act Filings.......................31
Section 9.3 Other Filings......................................................32
Section 9.4 Additional Agreements..............................................32
Section 9.5 Access to Information..............................................33
ii
4
Section 9.6 Closing Matters.................................................33
ARTICLE 10 CONDITIONS....................................................................33
Section 10.1 Mutual Conditions Precedent.....................................33
Section 10.2 Additional Conditions Precedent to the Obligations of SPX.......35
Section 10.3 Additional Conditions Precedent to the Obligations of UDI.......36
Section 10.4 Satisfaction of Conditions......................................36
ARTICLE 11 TERMINATION, AMENDMENT AND WAIVER.............................................37
Section 11.1 Termination.....................................................37
Section 11.2 Effect of Termination...........................................38
Section 11.3 Amendment.......................................................41
Section 11.4 Waiver..........................................................41
ARTICLE 12 GENERAL PROVISIONS............................................................41
Section 12.1 Notices.........................................................41
Section 12.2 Miscellaneous...................................................43
Section 12.3 Assignment......................................................43
Section 12.4 Expenses........................................................43
Section 12.5 Severability....................................................44
Section 12.6 Counterpart Execution...........................................44
Section 12.7 Parties in Interest.............................................44
ARTICLE 1 INTERPRETATION................................................................B-1
Section 1.1 Definitions....................................................B-1
Section 1.2 Sections and Headings..........................................B-5
Section 1.3 Currency.......................................................B-5
Section 1.4 Number, Gender and Persons.....................................B-5
iii
5
ARTICLE 2 ARRANGEMENT...................................................................B-5
Section 2.1 Binding Effect....................................................B-5
Section 2.2 Arrangement.......................................................B-6
Section 2.3 Anti-Dilution Provisions.........................................B-11
ARTICLE 3 RIGHTS OF DISSENT............................................................B-12
Section 3.1 Rights of Dissent................................................B-12
ARTICLE 4 CERTIFICATES, FRACTIONAL ENTITLEMENTS AND SETTLEMENT PROCEDURES..............B-13
Section 4.1 Issuance of Certificates Representing SPX Common Shares..........B-13
Section 4.2 Distributions with Respect to Unsurrendered Certificates.........B-14
Section 4.3 Lost Certificates................................................B-14
Section 4.4 No Fractional Shares.............................................B-14
Section 4.5 Withholding Rights...............................................B-15
Section 4.6 Extinction of Rights.............................................B-15
ARTICLE 5 AMENDMENTS...................................................................B-16
Section 5.1 Amendments to Plan of Arrangement................................B-16
ARTICLE 6 FURTHER ASSURANCES...........................................................B-16
Section 6.1 Further Assurances...............................................B-16
iv
6
MERGER AGREEMENT
This Agreement made as of the 10th day of March, 2001, between
SPX Corporation, a corporation duly incorporated under and governed by the Laws
of the State of Delaware (hereafter referred to as "SPX"), and United Dominion
Industries Limited, a corporation duly continued under and governed by the CBCA
(hereafter referred to as "UDI").
THIS AGREEMENT WITNESSES THAT in consideration of the mutual
covenants hereinafter contained and other good and valuable consideration (the
receipt and adequacy whereof is hereby acknowledged), the parties hereto agree
as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS.
In this Agreement, unless there is something in the subject matter or
context inconsistent therewith:
"1933 ACT" means the United States Securities Act of 1933, as the same
has been and may hereafter from time to time be amended;
"ACQUISITION PROPOSAL" means, in respect of UDI or its subsidiaries or
their respective assets, any inquiries, proposals or offers (other than
any of the foregoing made by or on behalf of SPX) or any transaction
regarding (i) any amalgamation, plan of arrangement, merger,
consolidation, share exchange, business combination or other similar
transaction or series of related transactions involving UDI or any of
its subsidiaries, (ii) any sale, lease, exchange, transfer or other
disposition, in a single transaction or series of related transactions,
of any material portion (which, for greater certainty, shall be deemed
to be anything in excess of 15% in book value) of the assets of UDI and
its subsidiaries, taken as a whole, other than any divestitures
described in Section 6.1 of the UDI Disclosure Letter, (iii) any
take-over bid, exchange offer or similar transaction or series of
related transactions made by any Person or group of Persons, directly
or indirectly, involving the acquisition or lock-up of, or any
acquisition by any Person or group of Persons, directly or indirectly,
of beneficial ownership of, or the formation of any group of Persons to
acquire beneficial ownership of, (x) that number of UDI Shares which,
when added to the number of UDI Shares then beneficially owned,
directly or indirectly, by such Person or group of Persons, is 10% or
more of the then outstanding UDI Shares if such Person or group of
Persons has announced (including by filing with the SEC a Schedule 13D
or an amendment thereto) a plan
7
or proposal that relates to a matter described in any of clauses (a)
through (j) of item 4 of Schedule 13D or (y) that number of UDI Shares
which, when added to the number of UDI Shares then beneficially owned,
directly or indirectly, by such Person or group of Persons, is 20% or
more of the then outstanding UDI Shares irrespective of any
announcement, or (iv) any other substantially similar transaction or
series of related transactions that would hinder the consummation of
the transactions contemplated by, or otherwise defeat the purposes of,
this Agreement, including for greater certainty any sale of UDI Shares
(other than pursuant to the exercise of UDI Options outstanding on the
date hereof and listed on Section E.4 of the UDI Disclosure Letter);
"AFFECTED EMPLOYEES" has the meaning set forth in Section 8.5;
"AFFILIATE" has the meaning set forth in the CBCA;
"AGREEMENT", "THIS AGREEMENT", "HEREIN", "HERETO", and "HEREOF" and
similar expressions refer to this Agreement, as the same may be amended
or supplemented from time to time and, where applicable, to the
appropriate Schedules annexed hereto;
"AMALCO" means the corporation resulting from the Amalgamation (as
defined in the Plan of Arrangement);
"AMALCO SPECIAL SHARE" means a special share in the capital of Amalco;
"ANTI-TRUST FILINGS" has the meaning set forth in Section 9.2(1);
"ARC" means an advance ruling certificate issued pursuant to Section
102 of the Competition Act;
"ARRANGEMENT" means an arrangement under Section 192 of the CBCA on the
terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with
the provisions hereof or the Plan of Arrangement or made at the
direction of the Court in the Interim Order or the Final Order;
"ARRANGEMENT RESOLUTION" means the special resolution of the UDI
Shareholders, to be substantially in the form and content of Schedule
"A" annexed hereto;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of UDI in
respect of the Arrangement that are required by the CBCA to be sent to
the Director after the Final Order is made;
"BUSINESS COMBINATION" has the meaning set forth in Section 11.2(2);
2
8
"BUSINESS DAY" means any day except a Saturday, Sunday or any other day
on which banking institutions in New York City (in the State of New
York) or Toronto (in the Province of Ontario) or Muskegon (in the State
of Michigan) are authorized or required by applicable Law to close;
"CANADIAN COMPETITION BUREAU" means the Competition Bureau
administered by the Competition Commissioner;
"CANADIAN PENSION PLAN" means any "registered pension plan" as that
term is defined in Subsection 248(1) of the ITA;
"CBCA" means the Canada Business Corporations Act, as the same has
been and may hereafter from time to time be amended;
"CERTIFICATE" means the certificate of arrangement to be issued by the
Director under the CBCA giving effect to the Arrangement;
"CIRCULAR" means the joint notice of the UDI Meeting and the SPX
Meeting and accompanying joint management proxy circular, including all
appendices thereto, to be sent to UDI Shareholders in connection with
the UDI Meeting, and to SPX Shareholders in connection with the SPX
Meeting, as the same may be amended from time to time or, if SPX and
UDI elect for UDI to utilize a separate management proxy circular and
for SPX to utilize a separate proxy statement, then "Circular" means
such management proxy circular and such proxy statement, or either of
them;
"CODE" means the United States Internal Revenue Code of 1986, as the
same has been and may hereafter from time to time be amended;
"COMPETITION ACT" means the Competition Act (Canada), as the same has
been and may hereafter from time to time be amended;
"COMPETITION ACT APPROVAL" means that (i) the Competition Commissioner
shall have issued an ARC in respect of the Transactions, or (ii) the
applicable waiting period under Section 123 of the Competition Act
shall have expired or been the subject of early termination by the
Competition Commissioner, the Competition Commissioner or his delegate
shall through a letter or favourable advisory opinion have advised SPX
in writing that he is of the view that grounds do not exist to initiate
proceedings in respect of the Transactions before the Competition
Tribunal under the merger provisions of the Competition Act at the then
current time and any terms and conditions attached to any such advice
shall be acceptable to SPX in its reasonable judgement, and the
Competition Commissioner shall not have advised SPX in writing that he
has determined to commence an inquiry in respect of the Transactions
under Section 10 of the Competition Act;
3
9
"COMPETITION COMMISSIONER" means the Commissioner of Competition
appointed under the Competition Act;
"COMPETITION TRIBUNAL" means the Competition Tribunal established
under the Competition Tribunal Act (Canada);
"CONFIDENTIALITY AGREEMENT" means the confidentiality and standstill
agreement between SPX and UDI dated August 9, 2000;
"CONTRACT" has the meaning set forth in Section D.21;
"COURT" means the Ontario Superior Court of Justice;
"DIRECTLY EXCHANGED UDI COMMON SHARES" has the meaning ascribed thereto
in the Plan of Arrangement.
"DIRECTOR" means the Director appointed pursuant to Section 260 of the
CBCA;
"DISSENT RIGHTS" has the meaning ascribed thereto in the Plan of
Arrangement;
"DISSENTING SHAREHOLDER" has the meaning ascribed thereto in the Plan
of Arrangement;
"EFFECTIVE DATE" means the date shown on the Certificate, provided
that such date occurs on or prior to the Outside Date;
"EFFECTIVE TIME" means 12:01 a.m. (Toronto time) on the Effective Date;
"ERISA" means the United States Employee Retirement Income Security Act
of 1974, as the same has been and may hereafter from time to time be
amended;
"ERISA AFFILIATE" means each business or entity which is a member of a
"controlled group of corporations," under "common control" or an
"affiliated service group" with UDI or SPX, as applicable, within the
meaning of Sections 414(b), (c) or (m) of the Code, or required to be
aggregated with UDI or SPX, as applicable, under Section 414(o) of the
Code, or is under "common control" with UDI or SPX, as applicable,
within the meaning of Section 4001(a)(14) of ERISA;
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as the same has been and may hereafter from time to time be amended;
"EXCHANGE RATIO" has the meaning ascribed thereto in the Plan of
Arrangement, which, unless adjusted pursuant to the terms of this
Agreement, shall be 0.2353;
"FINAL ORDER" means the final order of the Court approving the
Arrangement, as such order may be amended by the Court at any time
prior to the Effective Date
4
10
or, if appealed, then, unless such appeal is withdrawn or denied, as
granted or affirmed;
"GOVERNMENTAL AUTHORITY" means any government, parliament, legislature,
regulatory authority, governmental department, agency, commission,
board, tribunal, crown corporation, court or other law, rule or
regulation-making entity having jurisdiction or exercising executive,
legislative, judicial, regulatory or administrative powers on behalf of
any federation or nation, or any province, territory, state or other
subdivision thereof or any municipality, district or other subdivision
thereof, including, for greater certainty and without limitation, any
Securities Authorities, the United States Federal Trade Commission, the
Antitrust Division of the United States Department of Justice, the
Competition Commissioner and the Canadian Competition Bureau;
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction,
decree, stipulation, determination, award, directive or citation
entered by or with any Governmental Authority;
"HSR ACT" means the United States Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as the same has been and may hereafter from
time to time be amended;
"INCLUDING" or "INCLUDE" means including without limitation;
"INDEMNITY RIGHTS" has the meaning set forth in Section 8.4;
"INTERIM ORDER" means the interim order of the Court, as the same may
be amended, in respect of the Arrangement, as contemplated by Section
2.3;
"INVESTMENT CANADA ACT" means the Investment Canada Act, as the same
has been and may hereafter from time to time be amended;
"INVESTMENT CANADA ACT APPROVAL" means the receipt of a notice under
the Investment Canada Act that the Minister designated under the
Investment Canada Act is satisfied or deemed to be satisfied, on terms
and conditions reasonably satisfactory to SPX, that the Transactions
are likely to be of net benefit to Canada;
"ITA" has the meaning set forth in Section E.14(3);
"LAWS" means all statutes, codes, regulations, statutory rules, orders,
decrees, published policies, published guidelines and terms and
conditions of any grant of approval, permission, authority or license
of any Governmental Authority (including the TSE and the NYSE), and the
term "applicable" with respect to such Laws, and in the context that
refers to one or more Persons, means that such Laws apply to such
Person or Persons or its or their business, undertaking, property or
5
11
securities and emanate from a Governmental Authority having
jurisdiction over the Person or Persons or its or their business,
undertaking, property or securities (all references herein to a
specific statute being deemed to include all applicable rules,
regulations, rulings, orders and forms made or promulgated under such
statute and the published policies and published guidelines of the
Governmental Authorities administering such statute);
"LETTER OF TRANSMITTAL" means the Letter of Transmittal (including an
election form) for use by UDI Shareholders in connection with the
Arrangement;
"MATERIAL ADVERSE EFFECT" when used in connection with SPX or UDI,
means a change or effect that (i) is or would reasonably be expected to
be materially adverse to the assets, business, operations, results of
operations or financial condition of SPX and its subsidiaries, taken as
a whole, or UDI and its subsidiaries, taken as a whole, as applicable,
or (ii) would reasonably be expected to prevent or substantially delay
consummation of the Transactions;
"MERGECO" means a corporation which will, at the Effective Time, have
been duly incorporated under and be governed by the CBCA and be a
direct wholly-owned subsidiary of SPX Subco No. 4;
"MULTI-EMPLOYER PLAN" has the meaning set forth in Section D.16(g);
"NYSE" means The New York Stock Exchange, Inc.;
"OFFICER OBLIGATIONS" means any obligations or liabilities of UDI or
any of its subsidiaries to pay any amount to their respective officers,
directors, or employees, and, without limiting the generality of the
foregoing, shall include the obligations of UDI or any of its
subsidiaries to their respective officers, directors or employees: (i)
for severance or termination payments on the change of control of UDI
pursuant to any executive, change-in-control, involuntary severance or
termination Contract or severance policy (including those payments set
out in Section E.16 of the UDI Disclosure Letter) ("CHANGE IN CONTROL
PAYMENT OBLIGATIONS"); and (ii) for retention bonus payments pursuant
to any retention bonus program (including those payments set out in
Section E.16(k) of the UDI Disclosure Letter) ("RETENTION PAYMENT
Obligations");
"OUTSIDE DATE" means July 31, 2001, or such later date or dates as may
be mutually agreed to from time to time by the parties to this
Agreement;
"PENSION PLAN" means each benefit plan (other than a Multi-Employer
Plan) which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA;
6
12
"PERSON" includes any individual, firm, partnership, joint venture,
venture capital fund, association, trust, trustee, executor,
administrator, legal personal representative, estate, group, body
corporate (including a limited liability company and an unlimited
liability company), corporation, unincorporated association or
organization, Governmental Authority, syndicate or other entity,
whether or not having legal status;
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in
the form and content of Schedule "B" annexed hereto and any amendments
or variations thereto made in accordance with the provisions hereof or
the Plan of Arrangement or made at the direction of the Court in the
Interim Order or the Final Order;
"REGULATORY APPROVALS" means those sanctions, rulings, consents,
orders, exemptions, permits and other approvals (including the lapse,
without objection, of a prescribed time under a statute or regulation
that states that a transaction may be implemented if a prescribed time
lapses following the giving of notice without an objection being made)
of any Governmental Authority set out in Schedule "C" annexed hereto;
"REPLACEMENT OPTION" has the meaning ascribed thereto in the Plan of
Arrangement;
"REPRESENTATIVES" has the meaning set forth in Section 9.5(1);
"SEC" means the United States Securities and Exchange Commission;
"SECURITIES AUTHORITIES" means the appropriate securities commissions
or similar regulatory authorities in Canada and each of the provinces
and territories thereof and, if applicable, in the United States and
each of the states thereof, including the TSE and the NYSE;
"SECURITIES LAWS" means, collectively, the CBCA, the Securities Act
(Ontario) and the equivalent legislation in the other provinces and
territories of Canada, the 1933 Act, the Exchange Act, applicable "blue
sky" or securities laws of the United States or any state thereof and
any other applicable securities Laws, all as the same have been or may
from time to time be amended, as well as the rules, regulations,
by-laws and policies of the TSE and the NYSE;
"SPX" means SPX Corporation, a corporation duly incorporated under and
governed by the Laws of the State of Delaware;
"SPX BENEFIT PLANS" means all arrangements, agreements, programs or
policies, whether funded or unfunded, relating to any employees with
respect to which SPX or any of its subsidiaries has any liability or
contingent liability, including (A) any of the foregoing relating to
(i) retirement savings or pensions, including any
7
13
defined benefit pension plan, defined contribution plan, Canadian
Pension Plan or other registered retirement savings plan, thrift and
saving plan or supplemental pension or retirement plan, or (ii)
employee welfare benefits, as defined for purposes of Section 3(1) of
ERISA, and (B) all other employee benefit and compensation plans,
including salary continuation, vacation, unemployment benefits, profit
sharing, incentive, bonus, mortgage assistance, termination indemnity
or severance pay benefits;
"SPX BOARD RECOMMENDATION" has the meaning set forth in Section D(2);
"SPX CANADIAN PENSION PLAN" means any Canadian Pension Plan maintained
or contributed to, or required to be contributed to, by SPX or any of
its subsidiaries or with respect to which SPX or any of its
subsidiaries has any liability;
"SPX COMMON SHARES" means the common shares in the capital stock of
SPX, par value US$10.00 per share;
"SPX CONTRACT" has the meaning set forth in Section D.21;
"SPX DISCLOSURE LETTER" means that certain letter of SPX of even date
herewith and delivered by SPX to UDI;
"SPX GOVERNING DOCUMENTS" means the certificate of incorporation and
by-laws of SPX;
"SPX INTELLECTUAL PROPERTY" has the meaning set forth in Section D.18;
"SPX MEETING" means the special meeting of SPX Shareholders, including
any adjournment or postponement thereof, to be called and held in
accordance with applicable Laws to consider certain matters in
connection with the Arrangement;
"SPX PARTIES" means SPX, SPX Subco No. 1, SPX Subco No. 2, SPX Subco
Xx. 0, XXX Xxxxx Xx. 0, XxxxxXx and any other subsidiary of SPX that
may be organized by SPX to effectuate the Arrangement;
"SPX REGISTRATION STATEMENT" has the meaning set forth in Section
2.6(2);
"SPX RESOLUTION" means the resolution of SPX Shareholders to implement
certain matters referred to in this Agreement including, to the extent
required, the acquisition of UDI and the issuance of the SPX
Transaction Shares;
"SPX SECURITIES" has the meaning set forth in Section D.4;
"SPX SECURITIES REPORTS" has the meaning set forth in Section D.9;
"SPX SHARE ARRANGEMENTS" has the meaning set forth in Section D.4;
8
14
"SPX SHAREHOLDERS APPROVAL" has the meaning set forth in Section D.8;
"SPX SHAREHOLDERS" means the holders of SPX Common Shares;
"SPX SUBCO NO. 1" means a corporation which will, at the Effective
Time, have been duly incorporated under and be governed by the Laws of
the State of Delaware and be a direct wholly-owned subsidiary of SPX;
"SPX SUBCO NO. 2" means a corporation which will, at the Effective
Time, have been duly incorporated under and be governed by the Laws of
the State of Delaware and be a direct wholly-owned subsidiary of SPX;
"SPX SUBSIDIARY SECURITIES" has the meaning set forth in Section
D.11(a);
"SPX SUBCO NO. 3" means a corporation which will, at the Effective
Time, have been duly incorporated under and be governed by the Laws of
the State of Delaware, 50% of the voting shares of which will, at the
Effective Time, be held by each of SPX Subco No. 1 and SPX Subco No. 2;
"SPX SUBCO NO. 4" means an unlimited liability company which will, at
the Effective Time, have been duly formed under and be governed by the
Laws of the Province of Nova Scotia and be a direct wholly-owned
subsidiary of Subco No. 3;
"SPX TRANSACTION SHARES" means the SPX Common Shares to be delivered
pursuant to the Arrangement, together with the associated preferred
stock purchase rights;
"STOCK OPTION PLAN" means, collectively, the 1990 Stock Option and
Restricted Stock Plan of UDI, the 1994 Stock Option and Restricted
Stock Plan of UDI, and the 1999 Stock Option and Restricted Stock Plan
of UDI;
"SUBSIDIARY" has the meaning set forth in the CBCA;
"SUPERIOR ACQUISITION PROPOSAL" means any written Acquisition Proposal
which is for 50% or more of the outstanding UDI Shares or all or
substantially all of the assets of UDI and its subsidiaries, which is,
in the reasonable opinion of UDI's Board of Directors, more favorable
to UDI and its shareholders than the Transactions, and which is not
subject to any financing or due diligence condition; provided, however,
that, without limiting the foregoing, an Acquisition Proposal shall not
constitute a Superior Acquisition Proposal unless, in the written
opinion (with only customary qualifications) of UDI's independent
financial advisors, the value of the consideration to be paid in the
Acquisition Proposal is more favourable to the UDI Shareholders from a
financial point of view than the Transaction Consideration. Reference
in the foregoing definition to the Transactions and Transaction
Consideration shall include, as applicable, any
9
15
proposed alteration of the terms of this Agreement submitted by SPX in
writing in response to such Acquisition Proposal;
"TAXES" means any and all federal, state, provincial, local, foreign
or other taxes of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without
limitation, taxes or other charges on or with respect to income, net
income, alternative or add-on minimum tax, franchises, windfall or
other profits, capital, gross receipts, property, sale, use, goods and
services, capital stock, payroll, employment, Canada or Quebec Pension
Plan contributions, social security, workers' compensation,
unemployment compensation, or net worth, and taxes or other charges in
the nature of customs duties, excise, withholding, ad valorem or value
added, and includes, without limitation, any liability for Taxes of
another Person, as a transferee or successor, under U.S. Treas. Reg.
Section 1.1502-6 or any analogous provision of Law or otherwise;
"TAX RETURN" means any return, report or similar statement (including
the attached schedules) required to be filed with respect to any Tax,
including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax;
"TERMINATION FEE" has the meaning set forth in Section 11.2(2);
"TRIGGERING EVENT" has the meaning set forth in Section 11.2(2);
"THIRD PARTY" has the meaning set forth in Section 7.1(2);
"TRANSACTION EXPENSES" has the meaning set forth in Section 12.4(1);
"TRANSACTIONS" means the transactions contemplated by this Agreement;
"TRANSACTION CONSIDERATION" means (1) in respect of holders of Directly
Exchanged UDI Common Shares, in respect of such shares, SPX Transaction
Shares at the Exchange Ratio, and (2) in respect of holders of all
other UDI Common Shares (other than Dissenting Shareholders and
Mergeco), a fractional interest in an Amalco Special Share as provided
in the Plan of Arrangement and SPX Transaction Shares at the Exchange
Ratio;
"TSE" means the Toronto Stock Exchange Inc.;
"UDI" means United Dominion Industries Limited, a corporation duly
continued under and governed by the CBCA;
"UDI BENEFIT PLAN" means all arrangements, agreements, programs or
policies, whether funded or unfunded, relating to any employees with
respect to which UDI
10
16
or any of its subsidiaries has any liability or contingent liability,
including (A) any of the foregoing relating to (i) retirement savings
or pensions, including any defined benefit pension plan, defined
contribution plan, Canadian Pension Plan or other registered
retirement savings plan, thrift and saving plan or supplemental
pension or retirement plan, or (ii) employee welfare benefits, as
defined for purposes of Section 3(1) of ERISA, and (B) all other
employee benefit and compensation plans, including salary
continuation, vacation, unemployment benefits, profit-sharing,
incentive, bonus, mortgage assistance, termination indemnity, or
severance pay benefits, but excluding for purposes of Section 8.5 only
the UDI Deferred Compensation Plan and the UDI Non-Qualified Voluntary
Directors Deferred Compensation Plan (collectively, the "DEFERRED
COMPENSATION PLANS"), which SPX acknowledges that, immediately prior
to the Effective Time, UDI shall terminate in accordance with their
terms, fully vest all account balances thereunder to the extent not
previously vested and pay to each participant such participant's
accrued benefit thereunder in a lump sum as of the Effective Time, to
the extent permitted by the Deferred Compensation Plans.
"UDI BOARD RECOMMENDATION" has the meaning set forth in Section E.2;
"UDI CANADIAN PENSION PLAN" means any Canadian Pension Plan maintained
or contributed to, or required to be contributed to, by UDI or any of
its subsidiaries or with respect to which UDI or any of its
subsidiaries has any liability;
"UDI CONTRACT" has the meaning set forth in Section E.22;
"UDI DISCLOSURE LETTER" means that certain letter of UDI of even date
herewith and delivered by UDI to SPX;
"UDI 2000 FINANCIAL STATEMENTS" has the meaning set forth in Section
E.6;
"UDI GOVERNING DOCUMENTS" means the certificate and articles of
continuance and by-laws of UDI;
"UDI INTELLECTUAL PROPERTY" has the meaning set forth in Section E.18;
"UDI MEETING" means the special meeting of UDI Shareholders, including
any adjournment or postponement thereof, to be called and held in
accordance with the Interim Order to consider the Arrangement;
"UDI OPTIONS" means outstanding options to purchase UDI Shares under
the Stock Option Plan and "UDI OPTION" means each outstanding option to
purchase UDI Shares under the Stock Option Plan;
"UDI PHANTOM RIGHTS" has the meaning set forth in Section E.4;
11
17
"UDI SECURITIES" has the meaning set forth in Section E.4;
"UDI SECURITIES REPORTS" has the meaning set forth in Section E.9(1);
"UDI SHARE ARRANGEMENTS" has the meaning set forth in Section E.4;
"UDI SHAREHOLDERS" means the holders of UDI Shares;
"UDI SHAREHOLDERS APPROVAL" has the meaning set forth in Section E.23;
"UDI SHARES" means the common shares in the capital of UDI;
"UDI SUBSIDIARY PHANTOM RIGHTS" has the meaning set forth in Section
E.11;
"UDI SUBSIDIARY SECURITIES" has the meaning set forth in Section E.11;
and
"UDI'S 1999 FORM 10-K" has the meaning set forth in Section E.1.
SECTION 1.2 SINGULAR, PLURAL, ETC.
Words importing the singular number include the plural and vice versa
and words importing gender include the masculine, feminine and neuter genders.
SECTION 1.3 DEEMED CURRENCY.
In the absence of a specific designation of any currency, an
undescribed dollar amount herein shall be deemed to refer to United States
dollars.
SECTION 1.4 HEADINGS, ETC.
The division of this Agreement into Articles and Sections, the
provision of a table of contents hereto and the insertion of the recitals and
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement and, unless otherwise stated,
all references in this Agreement to Articles and Sections are to the respective
articles and sections of this Agreement.
SECTION 1.5 DATE FOR ANY ACTION.
In the event that any date on which any action is required to be taken
hereunder by any of the parties hereunder is not a Business Day, such action
shall be required to be taken on the next succeeding day which is a Business
Day.
SECTION 1.6 GOVERNING LAW.
This Agreement (other than Section 8.2, Section 8.3, Section 8.4 and
Section 8.5) shall be governed by and interpreted in accordance with the Laws of
the Province of
12
18
Ontario and the Laws of Canada applicable thereto. The provisions of Section
8.2, Section 8.3, Section 8.4 and Section 8.5 shall be governed by and
interpreted in accordance with the Laws of the State of North Carolina.
SECTION 1.7 ATTORNMENT.
The parties hereby irrevocably and unconditionally consent to and
submit to the nonexclusive jurisdiction of the courts of the Province of Ontario
for any actions, suits or proceedings arising out of or relating to this
Agreement or the matters contemplated hereby (other than for any actions, suits
or proceedings arising out of or relating to the matters contemplated in Section
8.2, Section 8.3, Section 8.4 and Section 8.5, in which case the parties hereby
irrevocably and unconditionally consent to the nonexclusive jurisdiction of the
United States District Court for the Western District of North Carolina
(Charlotte Division), and if such court lacks federal subject matter
jurisdiction, the Superior Court Division of the General Court of Justice of
Mecklenburg County, North Carolina), and further agree that service of any
process, summons, notice or document by single registered mail to the addresses
of the parties set forth in this Agreement shall be effective service of process
for any action, suit or proceeding brought against either party in such
applicable courts, as the case may be. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the matters contemplated hereby
in the courts of the Province of Ontario (other than with respect to any action,
suit or proceeding arising out of the matters contemplated in Section 8.2,
Section 8.3, Section 8.4 and Section 8.5, in which case the parties hereby
irrevocably and unconditionally waive any such objection to the laying of venue
of such action, suit or proceeding in the United States District Court for the
Western District of North Carolina (Charlotte Division), and if such court lacks
federal subject matter jurisdiction, the Superior Court Division of the General
Court of Justice of Mecklenburg County, North Carolina), and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such applicable courts, as the case may be, that any such action, suit or
proceeding so brought has been brought in an inconvenient forum.
SECTION 1.8 SCHEDULES.
The following Schedules are annexed to this Agreement and are hereby
incorporated by reference into this Agreement and form an integral part thereof:
13
19
Schedule "A" Arrangement Resolution
Schedule "B" Plan of Arrangement
Schedule "C" Regulatory Approvals
Schedule "D" Representations and Warranties of SPX
Schedule "E" Representations and Warranties of UDI
SECTION 1.9 OBJECTIVES.
(1) Subject to the terms and conditions set forth herein, UDI and SPX agree
that UDI and MergeCo (or another affiliate of SPX) will amalgamate
under the Arrangement in such a manner that achieves the following
objectives of SPX: (i) holders of issued and outstanding UDI Shares at
the Effective Time (other than Dissenting Shareholders and MergeCo)
shall receive the Transaction Consideration in respect of their UDI
Shares; (ii) receipt of the Transaction Consideration shall be a
taxable transaction to those UDI Shareholders who are liable to Tax
under the ITA and to those UDI Shareholders who are liable to United
States federal income Tax; and (iii) the Transactions, either singly or
in combination, shall not constitute a reorganization within the
meaning of Section 368 of the Code. Amalco will be continued under the
laws of the Province of Nova Scotia as soon as practicable after
obtaining a certificate of arrangement under the CBCA.
(2) SPX may at any time change the method of effecting the combination with
UDI, and corresponding changes shall be made to the Plan of Arrangement
contained in Schedule "B" in accordance with the provisions of Section
5.1 thereof, if and to the extent SPX deems such change to be
desirable, including without limitation to provide for an acquisition
of the UDI Shares; provided, however, that, without UDI's prior written
consent not to be unreasonably withheld, no such change shall (A) alter
or change the amount or kind of consideration to be issued to holders
of UDI Shares or UDI Options as provided in this Agreement (other than
with respect to the Amalco Special Share), (B) materially impede or
delay consummation of the Transactions or (C) otherwise adversely
affect the UDI Shareholders or the holders of the UDI Options.
SECTION 1.10 KNOWLEDGE.
Reference to the "knowledge" of any Person that is not an individual
shall be to the knowledge of the executive officers of such Person and, with
respect to representations and warranties made or deemed to be made as of the
Effective Time, unless expressly limited to a specified date in this Agreement,
shall include knowledge obtained at any time after the date hereof and prior to
the Effective Time.
14
20
ARTICLE 2
THE ARRANGEMENT
SECTION 2.1 IMPLEMENTATION STEPS BY UDI.
(1) UDI covenants in favour of SPX that UDI shall:
(a) as soon as reasonably practicable, apply in a manner
acceptable to SPX, acting reasonably, under Section 192 of the
CBCA for an order approving the Arrangement and for the
Interim Order, and thereafter proceed with and diligently seek
the Interim Order;
(b) subject to Section 2.5(1), as soon as reasonably practicable,
convene and hold the UDI Meeting for the purpose of
considering the Arrangement Resolution (and for any other
proper purpose as may be set out in the notice for such
meeting);
(c) not adjourn, postpone or cancel (or propose for adjournment,
postponement or cancellation), or fail to call, the UDI
Meeting without SPX's prior written consent except as required
by applicable Laws;
(d) solicit from the UDI Shareholders proxies in favour of the
approval of the Arrangement Resolution (in a commercially
reasonable manner) and use all commercially reasonable efforts
to take all other action that is necessary or desirable to
secure the requisite approval of the Arrangement Resolution by
the UDI Shareholders;
(e) subject to the terms of this Agreement and obtaining the
approvals as are required by the Interim Order, proceed with
and diligently pursue the application to the Court for the
Final Order;
(f) subject to the terms of this Agreement and obtaining the Final
Order and the satisfaction or waiver of the other conditions
herein contained in favour of each party, send to the
Director, for endorsement and filing by the Director, the
Articles of Arrangement and such other documents as may be
required in connection therewith under the CBCA to give effect
to the Arrangement; and
(g) not earlier than receipt of the UDI Shareholders Approval and
not later than the Effective Time, send by prepaid mail to
each Dissenting Shareholder who has not before that time
withdrawn its notice of dissent, to the address shown for such
shareholder on the share register for the UDI Shares, a
written offer to pay for such shareholder's UDI Shares in an
amount considered by the Board of Directors of UDI, with the
approval of SPX, to be the fair value thereof, accompanied by
a statement showing how the fair
15
21
value was determined or a notice contemplated under
Subsection 190(26) of the CBCA to the effect that UDI is
unable lawfully to pay Dissenting Shareholders for their UDI
Shares.
SECTION 2.2 IMPLEMENTATION STEPS BY SPX.
(1) SPX covenants in favour of UDI that SPX shall:
(a) subject to Section 2.5(1), as soon as reasonably practicable,
convene and hold the SPX Meeting for the purpose of
considering the SPX Resolution (and for any other proper
purpose as may be set out in the notice for such meeting);
(b) not adjourn, postpone or cancel (or propose for adjournment,
postponement or cancellation), or fail to call, the SPX
Meeting without UDI's prior written consent except as required
by applicable Laws;
(c) solicit from the SPX Shareholders proxies in favour of the
approval of the SPX Resolution (in a commercially reasonable
manner) and use all commercially reasonable efforts to take
all other action that is necessary or desirable to secure the
requisite approval of the SPX Resolution by the SPX
Shareholders;
(d) incorporate and organize SPX Subco No. 1, SPX Subco No. 2,
SPX Subco No. 3 and SPX Subco No. 4 and provide for SPX and
SPX Subco No. 4 to hold a sufficient number of SPX
Transaction Shares to be delivered by SPX or SPX Subco No.
4, as the case may be, to holders of UDI Shares under the
Arrangement;
(e) incorporate and organize MergeCo and cause MergeCo to perform
its obligations under the Arrangement; and
(f) cause Amalco to perform its obligations under the Arrangement.
(2) Notwithstanding anything to the contrary herein, SPX shall not be
obligated to convene, solicit proxies for, or hold the SPX Meeting or
prepare, file or distribute the Circular (other than to assist UDI in
the preparation of its Circular as provided herein), or take any other
action to secure SPX Shareholder approval of the SPX Resolution, and
receipt of such approval shall not be a condition precedent to either
party's obligation to complete the Transactions, if SPX determines, in
its sole judgment, that obtaining such approval is not required by Law
for the completion of the Transactions. SPX shall endeavor to make such
a determination as promptly as practicable after the date hereof and
shall promptly advise UDI after making such determination.
16
22
SECTION 2.3 INTERIM ORDER.
(1) The notice of motion for the application referred to in
Section 2.1(1)(a) shall request that the Interim Order provide:
(a) for the class of Persons to whom notice is to be provided
in respect of the Arrangement and the UDI Meeting and
for the manner in which such notice is to be provided;
(b) that the requisite approval for the Arrangement Resolution
shall be 66 2/3% of the votes cast on the Arrangement
Resolution by UDI Shareholders present in person or by proxy
at the UDI Meeting;
(c) that, in all other respects, the terms, restrictions and
conditions of the UDI Governing Documents, including quorum
requirements and all other matters, shall apply in respect of
the UDI Meeting;
(d) for the grant of the Dissent Rights as contemplated in the
Plan of Arrangement; and
(e) for the notice requirements respecting the presentation of
the application to the Court for a Final Order.
SECTION 2.4 ARTICLES OF ARRANGEMENT.
(1) The Articles of Arrangement shall, with such other matters as are
necessary to effect the Arrangement, implement the Plan of Arrangement,
as a result of which, among other things:
(a) each holder of UDI Shares (other than any holder who has
properly exercised its Dissent Rights and is entitled at the
Effective Time to be paid the fair value of its UDI Shares and
other than MergeCo) will be entitled to receive the
Transaction Consideration in respect thereof; and
(b) each UDI Option will be treated as set forth in
Section 2.2(n) of the Plan of Arrangement.
SECTION 2.5 CIRCULAR.
(1) As promptly as practicable after the execution and delivery of this
Agreement, SPX and UDI shall prepare the Circular and the Letter of
Transmittal in English, and, if required by Law or any Securities
Authorities, in French, together with any other documents required by
the Securities Laws, other applicable Laws or the Interim Order in
connection with the Arrangement, and shall file the foregoing with all
requisite Securities Authorities, including the SEC. As promptly as
17
23
practicable after the date of execution and delivery of this Agreement
and after obtaining the Interim Order, the parties hereto shall cause
the Circular and other documentation required in connection with the
UDI Meeting and the SPX Meeting to be sent to each UDI Shareholder
(together with a Letter of Transmittal) and to each SPX Shareholder and
filed as required by the Interim Order and applicable Laws. If a French
language version of the Circular and the Letter of Transmittal is
required, UDI shall procure opinions of legal counsel and of the
auditors of UDI in forms satisfactory to SPX, acting reasonably,
confirming the accuracy and completeness of the French translation.
(2) Subject to the fiduciary duties of the respective Boards of Directors
under applicable Law as advised by counsel, the Circular shall include
the SPX Board Recommendation and the UDI Board Recommendation.
SECTION 2.6 SECURITIES COMPLIANCE.
(1) SPX shall use its commercially reasonable efforts to obtain, prior to
the Effective Time and to the satisfaction of UDI acting reasonably,
all orders required from the applicable Canadian Securities Authorities
to permit the issuance and first resale of the SPX Transaction Shares
and the SPX Common Shares issuable upon the exercise of the Replacement
Options, in each case without qualification with or approval of, or the
filing of any document (including any prospectus or similar document)
with, or the taking of any proceeding before, or the obtaining of any
further order, ruling or consent from, any Governmental Authority under
any Canadian federal, provincial or territorial Laws, including
Securities Laws, or pursuant to the rules and regulations of any
Governmental Authority administering such Laws, or the fulfilment of
any other legal requirement in any such jurisdiction (other than, with
respect to such first resales, any restrictions on transfer by reason
of a holder being a "control person" of any SPX Party or UDI for
purposes of Canadian federal, provincial or territorial Securities
Laws).
(2) SPX shall file a registration statement on Form S-8 (or other
applicable form) (the "SPX REGISTRATION STATEMENT"), and take such
actions as necessary to keep the information therein current from time
to time, in order to register under the 1933 Act those SPX Common
Shares to be issued from time to time after the Effective Time upon the
exercise of the Replacement Options and shall use its commercially
reasonable efforts to cause the SPX Registration Statement to become
effective and to maintain the effectiveness of such registration for
the period that such Replacement Options remain outstanding.
SECTION 2.7 PREPARATION OF FILINGS.
(1) SPX and UDI shall co-operate and use their commercially reasonable
efforts in:
18
24
(a) the preparation and filing of any application for the orders
and the preparation of any required registration statements
and any other documents reasonably deemed by SPX or UDI to be
necessary to discharge their respective obligations under the
Securities Laws or otherwise under this Agreement in
connection with the Arrangement and the Transactions;
(b) the taking of all such actions as may be required under any
Securities Law in connection with the issuance of the SPX
Transaction Shares and the SPX Common Shares issuable upon the
exercise of the Replacement Options; provided, however, that
with respect to the United States "blue sky" and Canadian
provincial qualifications, neither SPX nor UDI shall be
required to register or qualify as a foreign corporation or to
take any action that would subject it to service of process in
any jurisdiction where such entity is not now so subject,
except as to matters and transactions arising solely from the
offer and sale of the SPX Transaction Shares or such SPX
Common Shares, as applicable; and
(c) the taking of all such action as may be required under the
CBCA in connection with the Transactions and the Plan of
Arrangement.
(2) Each of SPX and UDI shall furnish to the other all such information
concerning it and its shareholders as may be required (and, in the case
of its shareholders, available to it) for the effectuation of the
actions described in Sections 2.5 and 2.6 and the foregoing provisions
of this Section 2.7 and the obtaining of all Regulatory Approvals, and
each covenants that no information furnished by it (to its knowledge in
the case of information concerning its shareholders) in connection with
such actions or otherwise in connection with the consummation of the
Arrangement and the Transactions will contain any misrepresentation or
untrue statement of a material fact or omit to state a material fact
required to be stated in any such document or necessary in order to
make any information so furnished for use in any such document not
misleading in the light of the circumstances in which it is made.
(2) SPX and UDI shall each promptly notify the other if at any time before
the Effective Date it becomes aware that the Circular, an application
for an order, a registration statement, a filing or other document
described in Section 2.5, Section 2.6 or the foregoing provisions of
this Section 2.7 contains any misrepresentation or untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements contained therein not
misleading in light of the circumstances in which they are made, or
that otherwise requires an amendment or supplement to the Circular or
such application, registration statement, filing or other document. In
any such event, SPX and UDI shall co-operate in the preparation of a
supplement or amendment to the Circular, application, registration
statement, filing or other document, as required and as the
19
25
case may be, and, if required, shall cause the same to be distributed
to shareholders of SPX or UDI and/or filed with the relevant
Securities Authorities.
(3) UDI and SPX shall use their respective commercially reasonable efforts
to ensure that the Circular complies with all applicable Laws and,
without limiting the generality of the foregoing, that the Circular
does not contain any misrepresentation or untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein not
misleading in light of the circumstances in which they are made (other
than with respect to any information relating to and provided by the
other party hereto or any third party that is not an affiliate of
either of such parties). Without limiting the generality of the
foregoing, UDI and SPX shall use their respective commercially
reasonable efforts to ensure that the Circular provides UDI
Shareholders and SPX Shareholders with information in sufficient detail
to permit them to form a reasoned judgment concerning the matters to be
placed before them at the UDI Meeting and the SPX Meeting,
respectively, and each of UDI and SPX shall provide all information
regarding itself necessary to do so.
(5) SPX shall ensure that the SPX Registration Statement complies with all
applicable Laws and, without limiting the generality of the foregoing,
that the SPX Registration Statement, including any prospectus and any
other document incorporated by reference in the SPX Registration
Statement, does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading in
light of the circumstances in which they are made (other than with
respect to any information relating to and provided by UDI or any third
party that is not an affiliate of SPX) and UDI shall provide all
information regarding itself necessary to do so.
ARTICLE 3
PUBLICITY
SECTION 3.1 PUBLICITY.
Unless otherwise agreed between SPX and UDI, SPX and UDI and their
respective affiliates shall not issue any press release or cause any other
public announcement with respect to this Agreement or the Transactions unless
such action is required by applicable Law or by obligations pursuant to any
listing agreement with a stock exchange, in which case the party making such
release will use its commercially reasonable efforts to consult with the other
party before issuance of such release.
20
26
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SPX
SECTION 4.1 REPRESENTATIONS AND WARRANTIES.
SPX represents and warrants to and in favour of UDI as set out in
Schedule "D" annexed hereto and acknowledges that UDI is relying upon such
representations and warranties in connection with the entering into of this
Agreement and the consummation of the Transactions.
SECTION 4.2 SURVIVAL.
For greater certainty, the representations and warranties of SPX
contained herein shall survive the execution and delivery of this Agreement and
shall terminate on the earlier of the termination of this Agreement in
accordance with its terms (except as otherwise provided herein) and the
Effective Time. Any investigation by UDI and its advisors shall not mitigate,
diminish or affect the representations and warranties of SPX in this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF UDI
SECTION 5.1 REPRESENTATIONS AND WARRANTIES.
UDI represents and warrants to and in favour of SPX as set out in
Schedule "E" annexed hereto and acknowledges that SPX is relying upon such
representations and warranties in connection with the entering into of this
Agreement and the consummation of the Transactions.
SECTION 5.2 SURVIVAL.
For greater certainty, the representations and warranties of UDI
contained herein shall survive the execution and delivery of this Agreement and
shall terminate on the earlier of the termination of this Agreement in
accordance with its terms (except as otherwise provided herein) and the
Effective Time. Any investigation by SPX and its advisors shall not mitigate,
diminish or affect the representations and warranties of UDI in this Agreement.
21
27
ARTICLE 6
CONDUCT OF BUSINESS
SECTION 6.1 CONDUCT OF BUSINESS BY UDI.
Unless SPX shall otherwise agree in writing and/or except as required
by applicable Law or as alternatively expressly provided for in Section 6.2 and
Article 7 of this Agreement or as alternatively expressly permitted by Section
6.1 of the UDI Disclosure Letter, UDI covenants and agrees that, during the
period from the date of this Agreement until the Effective Time:
(a) the business of UDI and its subsidiaries shall be conducted
only in, and UDI and its subsidiaries shall not take any
action except in, the usual and ordinary course of business
and consistent with past practice, and UDI shall and shall
cause each of its subsidiaries to use all commercially
reasonable efforts to maintain and preserve its assets,
business organization and goodwill, to maintain the
availability of the services of its officers and employees as
a group, and to maintain its existing relationships with
suppliers, distributors, customers and others having business
relationships with it;
(b) without limiting the generality of Section 6.1(a), UDI shall
not directly or indirectly do or permit to occur any of the
following or permit any of its subsidiaries to do or permit
to occur any of the following: (i) amend the UDI Governing
Documents or the comparable documents of its subsidiaries;
(ii) authorize, declare, set aside or pay any dividend or
other distribution or payment (whether in cash, shares or
property) in respect of its shares (other than payment of
the $0.11 per share cash dividend declared on February 16,
2001); (iii) issue, grant, sell, transfer, or otherwise
permit to become outstanding, or enter into any UDI Share
Arrangements requiring the issuance, grant, sale or transfer
of, any UDI Securities, UDI Phantom Rights, UDI Subsidiary
Securities or UDI Subsidiary Phantom Rights, other than the
issuance of UDI Shares issuable pursuant to the terms of the
UDI Options listed in Section E.4 of the UDI Disclosure
Letter; (iv) effect any stock split or reverse stock split,
reduce its stated capital or otherwise change its equity
capitalization from that existing on the date hereof, or
redeem, repurchase or otherwise acquire any of its shares;
(v) adopt a plan of liquidation or resolutions providing for
the liquidation, dissolution, merger, consolidation or
reorganization or similar transaction of UDI or any of its
subsidiaries; or (vi) enter into or modify any Contract with
respect to any of the foregoing;
(c) other than pursuant to commitments entered into prior to the
date of this Agreement and disclosed in Section 6.1 of the
UDI Disclosure Letter,
22
28
neither UDI nor any of its subsidiaries shall directly or
indirectly: (i) transfer, lease, license, mortgage, sell,
pledge, dispose of or encumber any assets except for sales
of inventory and immaterial obsolete assets in the ordinary
course of business consistent with past practice; (ii)
acquire (by merger, amalgamation, consolidation or
acquisition of shares or assets, participation in a joint
venture, or other transaction) any corporation, partnership,
business organization, division or other Person, or any
product line thereof, or, except for investments in cash
equivalent securities made in the ordinary course of
business consistent with past practice, make any investment
in any Person, either by purchase of shares or other
securities, contributions of capital (other than to
wholly-owned subsidiaries), loans, property transfer, or,
except for purchases of raw materials or supplies in the
ordinary course of business consistent with past practice,
purchase of any property or assets of any other Person;
(iii) incur any indebtedness for borrowed money or any other
material liability or obligations or issue any debt
securities or assume, guarantee, endorse, or otherwise as an
accommodation become responsible for, the obligations of any
other Person, or make any loans or advances, except for
borrowings in the ordinary course of business consistent
with past practice under UDI's existing credit lines
disclosed in Section E.22 of the UDI Disclosure Letter; (iv)
pay, discharge or satisfy any claims, liabilities or
obligations, other than the payment, discharge or
satisfaction in the ordinary course of business consistent
with past practice of liabilities reflected or reserved
against in its financial statements included in the UDI
Securities Reports or incurred since September 30, 2000 in
the ordinary course of business consistent with past
practice which, individually or in the aggregate, are not
material in amount or effect; (v) authorize, recommend or
propose any release or relinquishment of any material
Contract right; (vi) waive, release, grant or transfer any
rights of material value or modify or change in any material
respect any existing material license, lease, production
sharing agreement, government land concession or other
document or Contract; (vii) enter into any interest rate
swaps, currency swaps or any other rate fixing agreement for
a financial transaction or enter into any call arrangement
of any sort or any forward sale agreement for commodities;
(viii) implement or adopt any change in its accounting
principles, practices or methods, other than as may be
required by generally accepted accounting principles in
Canada, or make any material Tax election or settle or
compromise any material Tax liability; (ix) incur or commit
to incur any capital expenditure in excess of $500,000
individually or $10 million in the aggregate; (x) make any
gift, charitable contribution, political contribution or
similar payment; (xi) enter into any Contract containing any
provision or covenant limiting the ability of UDI or any of
its subsidiaries to (A) sell any products of or to any
Person, (B) engage in any line of business or
23
29
(C) compete with or obtain products from any Person, or
limiting the ability of any Person to provide products or
services to UDI or any of its subsidiaries; or (xii)
authorize or propose any of the foregoing, or enter into or
modify any Contract to do any of the foregoing;
(d) neither UDI nor any of its subsidiaries shall: (i) create
any new Officer Obligations (except as permitted by clause
(iii) or (iv) below), (ii) grant to any officer or director
any increase in compensation or benefits in any form, (iii)
grant any general salary increase other than in accordance
with the requirements of any existing collective bargaining
or union contracts as in effect on the date hereof, (iv)
grant to any employee who is not an officer or director any
increase in compensation or benefits in any form other than
routine increases in salary in the ordinary course of
business consistent with past practices which are not,
individually or in the aggregate, material in amount or
effect, (v) make any loan to any officer or director, or
(vi) except for payment or funding of the existing Officer
Obligations which are then required to be paid or funded
pursuant to the terms of the Officer Obligations as in
effect on the date hereof, take action (x) with respect to
the grant of any severance or termination pay arising from
the Transactions, a change of control of UDI or the terms of
any employment agreement with any officer or director
(including any actions to accelerate the vesting or payment
of any compensation or benefit), or (y) with respect to any
increase of benefits payable under its current severance or
termination pay policies;
(e) without limiting the generality of paragraph (d) of this
Section 6.1, neither UDI nor any of its subsidiaries shall
adopt any new, or amend any existing, or make any contribution
to any, bonus, profit sharing, option, pension, retirement,
deferred compensation, insurance, incentive compensation,
other compensation or other UDI Benefit Plan or any trust,
fund or other arrangements for the benefit of employees,
except as is necessary to comply with applicable Laws or with
existing provisions of any such UDI Benefit Plans;
(f) each of UDI and its subsidiaries shall use its best efforts to
cause its current insurance (or re-insurance) policies not to
be cancelled or terminated or any of the coverage thereunder
to lapse, unless simultaneously with such termination,
cancellation or lapse, replacement policies underwritten by
insurance and re-insurance companies of nationally recognized
standing providing coverage equal to or greater than the
coverage under the cancelled, terminated or lapsed policies
for substantially similar premiums are in full force and
effect;
24
30
(g) neither UDI nor any of its subsidiaries shall take any action
that would, or that would reasonably be expected to, result in
any of the representations and warranties of UDI set forth in
this Agreement becoming untrue in any material respect;
(h) UDI shall use its commercially reasonable efforts to cooperate
with SPX with respect to the implementation of any Tax
strategies designed to minimize any adverse consequences with
respect to Taxes to UDI or Amalco relating to the Officer
Obligations or any similar arrangements provided that no
action shall be required to be taken by UDI if it reasonably
determines that any such Tax strategies could adversely affect
UDI or the other parties to the Officer Obligations; and
(i) UDI shall use its commercially reasonable efforts to take all
actions, and do or cause to be done all things necessary or
advisable (including the preparation of financial statements
and obtaining comfort letters and legal opinions) in order to
assist SPX in issuing any securities or obtaining any
financing.
SECTION 6.2 TRANSFER OF ASSETS.
UDI covenants and agrees that it will, if requested to do so in writing
by SPX at least 15 Business Days prior to the Effective Date, transfer,
convey and assign, after the Final Order but before the Effective Date,
such of its Canadian operating assets as may be specified by SPX to one
or more new wholly-owned subsidiaries of UDI formed under the laws of
such Canadian jurisdiction as may be specified by SPX, in each case for
consideration that includes shares of such wholly-owned subsidiary and
on such other reasonable terms and conditions as may be specified by
SPX, provided that such transfer may be effected on a tax-deferred
basis for income tax purposes pursuant to Subsection 85(1) of the ITA
and on a basis whereby no goods and services tax will be payable
pursuant to the election under Section 167 of the Excise Tax Act
(Canada).
ARTICLE 7
COVENANTS OF UDI
SECTION 7.1 NO SOLICITATION.
(1) UDI shall immediately cease and cause to be terminated and shall not
continue any discussions or negotiations, if any, with any Person
conducted before the date of this Agreement with respect to any
Acquisition Proposal and, without limitation, shall promptly, following
the execution of this Agreement, request the return of all confidential
information provided by UDI to all Persons who have
25
31
had such discussions or negotiations or who have entered into
confidentiality agreements with UDI pertaining to an Acquisition
Proposal.
(2) UDI shall immediately notify SPX of any Acquisition Proposal received
after the date of this Agreement by it or any of its subsidiaries or
any of their respective directors, officers, employees, financial
advisors, counsel or other agents or representatives or of any request
for confidential information relating to UDI in connection with an
Acquisition Proposal or for access to the properties, books or records
of UDI or any of its subsidiaries by any Person or group (other than
SPX and its subsidiaries and their respective directors, officers,
employees, financial advisors, counsel or other agents or
representatives) (a "THIRD PARTY") that is known by UDI, any of its
subsidiaries or any of the foregoing Persons to be considering making
an Acquisition Proposal. Any such notice to SPX shall be made orally
immediately following any such receipt or request, shall be confirmed
in writing, and shall indicate the details of the Acquisition Proposal
or request for information or access known to such Persons, including
the specific terms of, and the identity of the Third Party making, such
Acquisition Proposal or request. UDI shall keep SPX informed on a
timely basis of the status of any such Acquisition Proposal, of the
furnishing of access or information to the Third Party, and of any
negotiations or discussions relating thereto (including any changes or
adjustments to the material terms of such Acquisition Proposal as a
result of negotiations or otherwise).
(3) Neither UDI nor any of its subsidiaries, or any of their respective
directors, officers, employees, financial advisors, counsel or other
agents or representatives shall, directly or indirectly, (i) solicit,
initiate, encourage or facilitate any Acquisition Proposal from any
Third Party; or (ii) provide any confidential information to, or
participate in any discussions or negotiations relating to any
Acquisition Proposal with, any Third Party; or (iii) enter into any
agreement, arrangement or understanding requiring it to abandon,
terminate or fail to consummate the Transactions; provided, however,
that UDI may, prior to the receipt of the UDI Shareholders Approval,
subject to compliance with Section 7.1(2), furnish information to, and
participate in discussions or negotiations with, any Third Party that
(x) after the date hereof and prior to the date of the UDI Meeting
delivers a bona fide written proposal for an Acquisition Proposal that
was not solicited, initiated, encouraged or facilitated by UDI,
directly or indirectly, after the date of this Agreement or otherwise
resulted from a breach of this Section 7.1, and (y) enters into an
appropriate confidentiality agreement with UDI (which agreement shall
be no less favourable to UDI than the Confidentiality Agreement and a
copy of which will be delivered to SPX promptly after the execution
thereof), if, but only if, the Board of Directors of UDI determines in
good faith by a vote of a majority of the total number of directors
then in office (after consultation with UDI's independent financial
advisor) that
26
32
such proposal could reasonably be expected to lead to a Superior
Acquisition Proposal, and (after consultation with and receipt of
advice from its outside legal counsel) that failure to take such
action would constitute a breach of the fiduciary duties of UDI's
Board of Directors under applicable Law.
(4) If, prior to the receipt of the UDI Shareholders Approval, the Board of
Directors of UDI determines in good faith (based upon the written
advice of UDI's independent financial advisor and the advice of its
outside legal counsel) by a vote of a majority of the total number of
directors then in office, with respect to any bona fide written
proposal from a Third Party for an Acquisition Proposal received after
the date hereof and prior to the date of the UDI Meeting that was not
solicited, initiated, encouraged or facilitated by UDI, directly or
indirectly, after the date of this Agreement or otherwise resulted from
a breach of this Section 7.1, that such Acquisition Proposal is a
Superior Acquisition Proposal and is in the best interest of UDI and
its shareholders and failure to enter into such Acquisition Proposal
would constitute a breach of the fiduciary duties of the Board of
Directors of UDI under applicable Law, then UDI may terminate this
Agreement and enter into an acquisition agreement for the Superior
Acquisition Proposal; provided that, prior to any such termination, and
in order for such termination to be effective, (i) UDI shall provide
SPX two Business Days' written notice that it intends to terminate this
Agreement pursuant to this Section 7.1(4), identifying the Superior
Acquisition Proposal and the parties thereto and delivering an accurate
description of all material terms of the Superior Acquisition Proposal
to be entered into, and (ii) on the date of termination (provided that
the advice of the independent financial advisor and outside legal
counsel referred to above shall continue in effect without revocation,
revision or modification), UDI shall deliver to SPX (A) a written
notice of termination of this Agreement pursuant to this Section
7.1(4), (B) a wire transfer of immediately available funds in the
amount of the Termination Fee, (C) a written acknowledgement from UDI
that the termination of this Agreement and the entry into the Superior
Acquisition Proposal are a Triggering Event, and (D) a written
acknowledgement from each other party to the Superior Acquisition
Proposal that it has read UDI's acknowledgement referred to in clause
(C) above and will not contest the matters thus acknowledged by UDI,
including the payment of the Termination Fee.
SECTION 7.2 INTERIM ORDER AND FINAL ORDER.
(1) Subject to the terms and conditions hereof, UDI shall carry out the
terms of the Interim Order and Final Order applicable to it and use its
commercially reasonable efforts to comply promptly with all
requirements which applicable Laws may impose on UDI or its
subsidiaries with respect to the Transactions.
27
33
ARTICLE 8
COVENANTS OF SPX
SECTION 8.1 COVENANTS OF SPX.
SPX hereby covenants and agrees (and, if applicable, will cause its
subsidiaries):
(a) to reserve a sufficient number of SPX Transaction Shares and
a sufficient number of SPX Common Shares for issuance upon
the exercise of the Replacement Options;
(b) to use its commercially reasonable efforts to cause the
listing on the NSYE of the SPX Common Shares included in the
SPX Transaction Shares and the SPX Common Shares issuable upon
the exercise of the Replacement Options;
(c) to carry out the terms of the Interim Order and Final Order
applicable to it and use its commercially reasonable efforts
to comply promptly with all requirements which applicable Laws
may impose on SPX or its subsidiaries with respect to the
Transactions; and
(d) until the Effective Date or the earlier termination of this
Agreement in accordance with Article 11, except with the
consent of UDI to any deviation therefrom, which shall not be
unreasonably withheld, not to:
(i) split, combine or reclassify any of the outstanding
SPX Common Shares without making a corresponding
adjustment to the Exchange Ratio; or
(ii) declare, set aside or pay any dividends on or make
any other distributions on or in respect of the
outstanding SPX Common Shares.
SECTION 8.2 EMPLOYMENT AGREEMENT.
SPX acknowledges the existence of the Change in Control Payment
Obligations and Retention Payment Obligations listed in Section E.16(k) of the
UDI Disclosure Letter (and which UDI represents and warrants are the only Change
in Control Payment Obligations and Retention Payment Obligations required to be
listed in Section E.16(k) of the UDI Disclosure Letter), and SPX agrees, after
the Effective Time, to cause Amalco or any successor thereto to honour and
comply with the terms of those (but only those) Change in Control Payment
Obligations and Retention Payment Obligations that are so listed.
28
34
SECTION 8.3 OFFICERS AND DIRECTORS INSURANCE.
SPX agrees to use commercially reasonable efforts to secure directors
and officers liability insurance coverage for UDI's current and former directors
and officers on a six (6) year "trailing" or "runoff" basis from and after the
Effective Time; provided, however, if a "trailing" policy is not available, then
SPX agrees that for the entire period from the Effective Time until six (6)
years after the Effective Time, SPX will cause Amalco or any successor thereto
to maintain UDI's current directors' and officers' insurance policy or an
equivalent policy; and provided, further, that in no event shall SPX be required
to expend pursuant to this Section 8.3 more than an amount per year equal to
200% of current annual premiums paid by UDI and its subsidiaries for such
insurance. In either case (but subject to the foregoing proviso limiting the
amount required to be expended) such insurance shall be on terms and conditions
no less advantageous to the directors and officers of UDI than those contained
in the policy in effect on the date hereof and shall cover all present and
former directors and officers of UDI for claims made prior to or within six (6)
years after the Effective Time. The provisions of this Section 8.3 are intended
to be for the benefit of, and will be enforceable by, each indemnified party,
his or her heirs and his or her representatives, and are in addition to, and not
in substitution for, any rights to indemnification or contribution or cause of
action that any such Persons may have by contract or otherwise.
SECTION 8.4 INDEMNITIES.
SPX agrees that from and after the Effective Time it shall cause Amalco
and its subsidiaries to fulfill their respective obligations pursuant to
indemnities provided or available to past and present officers and directors of
UDI and its subsidiaries pursuant to the provisions of the UDI Governing
Documents, or articles of incorporation, bylaws and other organizational
documents of subsidiaries of UDI, as the case may be, the CBCA or corporate
statutes and equivalent Laws of the jurisdiction of incorporation of
subsidiaries of UDI, as the case may be, and any written indemnity agreements
entered into between UDI and its officers and directors (collectively the
"INDEMNITY RIGHTS"). Such obligations shall continue in full force and effect
(and the UDI Governing Documents, articles of incorporation, bylaws and other
organizational documents of subsidiaries of UDI and the written indemnity
agreements shall not be amended or modified to reduce such obligations in any
respect) for a period of six (6) years from the Effective Time. In addition, SPX
agrees to indemnify the directors of UDI for any liability they may incur as a
result of the performance of their obligations under Section 2.1(1)(g) to the
extent such liability is not covered by any directors and officers liability
insurance policy or under any of the Indemnity Rights. The provisions of this
Section 8.4 are intended to be for the benefit of, and will be enforceable by,
each indemnified party, his or her heirs and his or her representatives, and are
in addition to, and not in substitution for, any rights to indemnification or
contribution or cause of action that any such Persons may have by contract or
otherwise. Nothing herein shall limit the right of SPX to cause UDI or any of
29
35
its subsidiaries to be amalgamated or merged into or otherwise combined with any
other entity.
SECTION 8.5 COMPENSATION; BENEFIT PLANS.
SPX agrees to cause Amalco or any successor thereto to maintain, for a
period of at least one year from the Effective Date, salaries and bonus award
opportunities or other incentive compensation opportunities (other than stock
options, restricted stock awards or any other equity-based awards or plans),
profit sharing or deferred compensation at levels which for each active employee
of UDI or any of its subsidiaries at the Effective Time (the "AFFECTED
EMPLOYEES"), including members of management of UDI or any of its subsidiaries,
are comparable in the aggregate (after taking into account benefits that may be
provided to such employee under any employee benefit plan of SPX) either (i) to
those currently applicable to such Affected Employee or (ii) to those provided
to similarly situated employees of SPX from time to time (other than benefits
provided under the SPX Individual Account Retirement Plan). SPX further agrees
to cause Amalco and any successor to Amalco to maintain, for a period of at
least one year from the Effective Date, all UDI Benefit Plans which are employee
welfare benefit plans within the meaning of Section 3(1) of ERISA currently
available to Affected Employees or to make available alternative employee
welfare benefit plans which take into account, for purposes of eligibility and
vesting thereunder, the past service of Affected Employees to the same extent
such service is credited under comparable UDI Benefit Plans, so as to provide an
Affected Employee employee welfare benefits which are comparable in the
aggregate either (i) to those employee welfare benefits currently provided under
such UDI Benefit Plans to such Affected Employee or (ii) to those employee
welfare benefits provided to similarly situated employees of SPX from time to
time. Without limiting the generality of the foregoing, with respect to the
employee welfare benefits provided by SPX, (i) Affected Employees shall be
credited as at the Effective Time under the employee welfare benefit plans of
SPX for service with UDI to the extent such service was credited under the UDI
Benefit Plans for purposes of satisfying waiting periods related to eligibility
to participate and (ii) SPX shall waive any pre-existing conditions exclusion
for any Affected Employee to the extent such exclusion was not applicable to
such Affected Employee under the UDI Benefit Plans. To the extent Affected
Employees commence participation in employee welfare benefit plans of SPX other
than on the first day of a plan year, such Affected Employees shall be credited
under the employee welfare benefit plans of SPX for amounts expended by such
Affected Employee for such plan year under UDI's employee welfare benefit plans
in satisfaction of co-pay, deductible and other stop-loss provisions of UDI's
employee welfare benefit plans. Nothing in this Agreement shall be construed to
prevent the termination of employment of any employee or any amendment or
termination of any UDI Benefit Plan to the extent permitted by the terms and
conditions thereof as in effect on the date hereof.
30
36
ARTICLE 9
MUTUAL COVENANTS
SECTION 9.1 NOTIFICATION OF CERTAIN MATTERS.
SPX shall give prompt notice to UDI, and UDI shall give prompt notice
to SPX, of (a) the occurrence, or non-occurrence, at any time from the date
hereof until the Effective Date, of any event the occurrence, or non-occurrence,
of which would cause any representation or warranty made herein by the party
giving such notice to be materially untrue or inaccurate; and (b) any failure of
such party to comply with or satisfy any material covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 9.1 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 9.2 ANTI-TRUST AND INVESTMENT CANADA ACT FILINGS.
(1) SPX and UDI and/or any of their affiliates, as applicable, shall (i)
take promptly all actions necessary to make the filings required, or
which SPX and UDI jointly elect to make (collectively, the "ANTI-TRUST
FILINGS"), under the HSR Act, the Competition Act and any other
applicable anti-trust Laws in any other jurisdiction; and (ii) comply
at the earliest practicable date with any request for additional
information or documentary material received by the SPX Parties, UDI or
any of their affiliates from a Governmental Authority with respect to
an Anti-Trust Filing.
(2) SPX shall, as promptly as practicable hereafter, make any necessary
filings under the Investment Canada Act and shall respond as promptly
as practicable to any inquiry from the Governmental Authority under
such Law.
(3) All requests and enquiries from any Governmental Authority shall be
dealt with by SPX and UDI in consultation with each other, and SPX and
UDI shall promptly co-operate with and provide all necessary
information and assistance reasonably required by such Governmental
Authority upon being requested to do so by such authority. Furthermore:
(a) SPX and UDI shall promptly notify the other of written
communications of any nature from any Governmental Authority
and provide the other party with copies thereof;
(b) SPX and UDI shall permit the other party (or, where
appropriate, the other party's counsel) to review in advance
any proposed written communications of any nature with
Governmental Authorities, including without limitation filings
and submissions to the Canadian Competition
31
37
Bureau, and provide the other party (or, where appropriate,
the other party's counsel) with final copies thereof; and
(c) neither SPX nor UDI shall participate in any meeting or
discussion which it knows will be substantive (whether in
person, by telephone or otherwise) with any Governmental
Authority in respect of any filings, investigation or inquiry
concerning the Transactions unless it consults with the other
party in advance and gives the other party the opportunity to
attend and participate thereat (except to the extent that in
any such case the Governmental Authority expressly requests
that the other party should not be present at the meeting or
discussion or part or parts of the meeting or discussion).
SECTION 9.3 OTHER FILINGS.
SPX and UDI shall, as promptly as practicable hereafter, prepare and
file any filings required under the Securities Laws, the rules of TSE and the
NYSE, or any other applicable Laws relating to the Transactions.
SECTION 9.4 ADDITIONAL AGREEMENTS.
Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use its commercially 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 to achieve the objectives set out in Section 1.9
and to consummate and make effective as promptly as practicable the Transactions
and to cooperate with each other in connection with the foregoing, including
using its commercially reasonable efforts (i) to obtain all necessary waivers,
consents and approvals from other parties to Contracts; (ii) to obtain all
necessary consents, approvals and authorizations as are required to be obtained
under any Law; (iii) to defend all lawsuits or other legal, regulatory or other
proceedings to which it is a party challenging or affecting this Agreement or
the consummation of the Transactions; (iv) to cause to be lifted or rescinded
any injunction or restraining order or other order adversely affecting the
ability of the parties to consummate the Transactions; (v) to effect all
necessary registrations and other filings and submissions of information
requested by Governmental Authorities in respect of the completion of the
Arrangement and the Transactions (including the furnishing of information needed
to make such filings or to respond to any inquiry from any Governmental
Authority); and (vi) to fulfill all conditions and satisfy all provisions of
this Agreement and the Arrangement. For purposes of the foregoing, the
obligation to use "commercially reasonable efforts" to obtain waivers, consents
and approvals to Contracts shall not include any obligation to agree to a
materially adverse modification of the terms of such documents or to prepay or
incur additional material obligations to other parties to such documents.
32
38
SECTION 9.5 ACCESS TO INFORMATION.
(1) Subject to Section 9.5(2), upon reasonable notice, UDI shall (and shall
cause each of its subsidiaries to) afford officers, employees, counsel,
accountants and other authorized representatives and advisors
("REPRESENTATIVES") of SPX full access, from the date hereof and until
the earlier of the Effective Date or the termination of this Agreement,
to its and its subsidiaries' properties, books and records, Contracts,
management personnel and accountants (and use its commercially
reasonable efforts to cause its accountants to provide full access to
such accountants' work papers), and, during such period, UDI shall (and
shall cause each of its subsidiaries to) furnish promptly to SPX all
information concerning UDI and its subsidiaries and their businesses,
properties and personnel as SPX may reasonably request. Subject to
Section 9.5(2), upon reasonable notice, SPX shall (and shall cause each
of its subsidiaries to) afford UDI's Representatives full access, from
the date hereof and until the earlier of the Effective Date or the
termination of this Agreement, to its and its subsidiaries' properties,
books and records, Contracts, management personnel and accountants,
and, during such period, SPX shall (and shall cause each of its
subsidiaries to) furnish promptly to UDI all information concerning SPX
and its subsidiaries and their businesses, properties and personnel as
UDI may reasonably request.
(2) Each of SPX and UDI acknowledges that certain information provided to
it under Section 9.5(1) above will be non-public and/or proprietary in
nature and will be subject to the terms of the Confidentiality
Agreement. For greater certainty, the provisions of the Confidentiality
Agreement shall survive the termination of this Agreement, provided
that the Confidentiality Agreement shall terminate at the Effective
Time notwithstanding anything to the contrary contained therein.
SECTION 9.6 CLOSING MATTERS.
Each of SPX and UDI shall deliver, at the closing of the Transactions,
such customary certificates, resolutions and other closing documents as may be
required by the other party hereto, acting reasonably.
ARTICLE 10
CONDITIONS
SECTION 10.1 MUTUAL CONDITIONS PRECEDENT.
(1) The respective obligations of the parties hereto to complete the
Transactions shall be subject to the satisfaction, on or before the
Effective Date, of the following conditions precedent, each of which
may only be waived by the mutual consent of SPX and UDI:
33
39
(a) the Arrangement Resolution shall have been approved at the UDI
Meeting by not less than 66 2/3% or such other percentage as
set forth in the Interim Order of the votes cast by the UDI
Shareholders who are represented at the UDI Meeting;
(b) the Arrangement Resolution shall have been approved at the UDI
Meeting in accordance with any conditions in addition to those
set out in Section 10.1(1)(a) which may be imposed by the
Interim Order;
(c) the Interim Order and the Final Order shall each have been
obtained in form and terms satisfactory to each of UDI and
SPX, acting reasonably, and shall not have been set aside or
modified in a manner unacceptable to such parties on appeal or
otherwise;
(d) subject to the provisions of Section 2.2(2), the SPX
Shareholders shall have approved the SPX Resolution at the SPX
Meeting by the requisite levels required by applicable Laws;
(e) there shall not be in force any injunction, order or decree
restraining or enjoining the consummation of the
Transactions;
(f) this Agreement shall not have been terminated pursuant to
Article 11;
(g) other than the Regulatory Approvals, all consents, waivers,
permits, orders and approvals of any Governmental Authority,
and the expiry of any waiting periods, in connection with, or
required to permit, the consummation of the Arrangement, the
failure of which to obtain or the non-expiry of which,
individually or in the aggregate, would constitute a violation
of applicable Law or would have a Material Adverse Effect on
SPX or UDI, as the case may be, shall have been obtained or
received on terms that will not, individually or in the
aggregate, have a Material Adverse Effect on SPX or UDI;
(h) the Regulatory Approvals, including for greater certainty, the
Competition Act Approval and the Investment Canada Act
Approval, shall have been obtained or satisfied on terms and
conditions satisfactory to SPX and UDI, acting reasonably; and
(i) the SPX Common Shares included in the SPX Transaction Shares
and the SPX Common Shares issuable upon the exercise of the
Replacement Options shall have been approved for listing on
the NYSE subject to official notice of issuance.
34
40
SECTION 10.2 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SPX.
(1) The obligations of SPX to complete the Transactions shall also be
subject to the fulfilment of each of the following conditions precedent
(each of which is for the exclusive benefit of SPX and may be waived by
SPX):
(a) all covenants of UDI under this Agreement to be performed on
or before the Effective Date shall have been duly performed by
UDI in all material respects;
(b) the representations and warranties of UDI (which for purposes
of this paragraph shall be read as though none of them
contained any Material Adverse Effect or materiality
qualification) shall be true and correct in all respects as of
the Effective Date with the same effect as though made as of
the Effective Date, except where failure of the
representations and warranties to be true and correct in all
respects would not in the aggregate have a Material Adverse
Effect on UDI, and SPX shall have received a certificate of
UDI addressed to SPX and dated the Effective Date, signed on
behalf of UDI by the Chief Executive Officer and Chief
Financial Officer of UDI (on UDI's behalf and without personal
liability), confirming the same;
(c) between the date hereof and the Effective Date, there shall
not have been any event, occurrence or development, alone or
taken together with all other existing facts, that,
individually or in the aggregate, has a Material Adverse
Effect on UDI;
(d) the Board of Directors of UDI shall have adopted all necessary
resolutions, and all other necessary corporate action shall
have been taken by UDI and the subsidiaries, to permit the
consummation of the Arrangement;
(e) the holders of no more than 15% of the outstanding UDI Shares
shall have exercised Dissent Rights;
(f) the outstanding UDI Options shall have been dealt with in
accordance with Section 2.3(b) and the Plan of Arrangement;
and
(g) UDI shall have complied with its covenant contained in
Section 2.1(1)(g).
(2) SPX may not rely on the failure to satisfy any of the above conditions
precedent as a basis for non-compliance by SPX with its obligations
under this Agreement if the condition precedent would have been
satisfied but for a material default by SPX in complying with its
obligations hereunder.
35
41
SECTION 10.3 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF UDI.
(1) The obligations of UDI to complete the Transactions shall also be
subject to the fulfilment of each of the following conditions precedent
(each of which is for the exclusive benefit of UDI and may be waived by
UDI):
(a) all covenants of SPX under this Agreement to be performed on
or before the Effective Date shall have been duly performed by
SPX in all material respects;
(b) the representations and warranties of SPX (which for purposes
of this paragraph shall be read as though none of them
contained any Material Adverse Effect or materiality
qualification) shall be true and correct in all respects as of
the Effective Date with the same effect as though made as of
the Effective Date, except where failure of the
representations and warranties to be true and correct in all
respects would not in the aggregate have a Material Adverse
Effect on SPX, and UDI shall have received a certificate of
SPX addressed to UDI and dated the Effective Date, signed on
behalf of SPX by two executive officers of SPX (on SPX's
behalf and without personal liability), confirming the same;
(c) between the date hereof and the Effective Date, there shall
not have been any event, occurrence or development, alone or
taken together with all other existing facts, that,
individually or in the aggregate, has a Material Adverse
Effect on SPX; and
(d) the boards of directors of the SPX Parties shall have adopted
all necessary resolutions, and all other necessary corporate
action shall have been taken by the SPX Parties, to permit the
consummation of the Arrangement and the issue and delivery of
SPX Transaction Shares and the SPX Common Shares issuable upon
the exercise of the Replacement Options.
(2) UDI may not rely on the failure to satisfy any of the above conditions
precedent as a basis for non-compliance by UDI with its obligations
under this Agreement if the condition precedent would have been
satisfied but for a material default by UDI in complying with its
obligations hereunder.
SECTION 10.4 SATISFACTION OF CONDITIONS.
The conditions precedent set out in Sections 10.1, 10.2 and 10.3 shall
be conclusively deemed to have been satisfied, waived or released when, with the
agreement of SPX and UDI, the Certificate is issued by the Director.
36
42
ARTICLE 11
TERMINATION, AMENDMENT AND WAIVER
SECTION 11.1 TERMINATION.
This Agreement may be terminated by written notice given to the other
parties hereto, at any time prior to issuance of the Certificate:
(a) by mutual written consent of UDI and SPX; or
(b) by either SPX or UDI (provided that the terminating party is
not then in breach, in any material respect, of any covenant,
representation or warranty or other agreement contained herein
of such terminating party) if there shall have been a breach,
in any material respect, of any covenant, representation or
warranty or other agreement contained herein by such other
party at any time before the Effective Time and such breach
shall be incapable of being cured or, if capable of being
cured, shall not have been cured on or before the earlier of
(x) the 30th day after written notice thereof shall have been
received by the party alleged to be in breach and (y) the
Outside Date; or
(c) by UDI, following receipt of, and in order to accept or
recommend, a Superior Acquisition Proposal, but only in
compliance with Section 7.1; or
(d) by SPX, if the Board of Directors of UDI (i) modifies or
changes in any manner adverse to SPX, or withdraws, the UDI
Board Recommendation; (ii) approves, recommends or fails to
take a position that is adverse to any Business Combination;
(iii) refuses to affirm the UDI Board Recommendation as
promptly as practicable (but in any case within five days)
after receipt of any reasonable written request for such
affirmation from SPX; (iv) fails to comply with Section
2.1(1)(a); or (v) fails, as promptly as practicable after the
Circular has been approved for mailing, to call the UDI
Meeting or mail the Circular, or fails to include in such
Circular the UDI Board Recommendation; or
(e) by UDI, if the Board of Directors of SPX (i) modifies or
changes in any manner adverse to UDI, or withdraws, the SPX
Board Recommendation, (ii) refuses to affirm the SPX Board
Recommendation; as promptly as practicable (but in any case
within five days) after receipt of any reasonable written
request for such affirmation from UDI; or (iii) fails, as
promptly as practicable after the Circular has been approved
for mailing, to call the SPX Meeting or mail the Circular, or
fails to include in such Circular the SPX Board
Recommendation; provided, however, that this Section 11.1(e)
shall have no applicability if, as set forth in Section 2(2),
SPX Shareholder approval of the SPX Resolution is not required
to be obtained; or
37
43
(f) by either SPX or UDI, if (i) any Law shall have been enacted,
entered or promulgated prohibiting the consummation of the
Transactions on substantially the terms contemplated hereby or
otherwise making the Transactions illegal; or (ii) any order,
decree, ruling or injunction shall have been entered
permanently restraining, enjoining or otherwise prohibiting
the consummation of the Transactions on substantially the
terms contemplated hereby, and such order, decree, ruling or
injunction shall have become final and non-appealable;
provided, that the party seeking to terminate the Agreement
pursuant to this Section 11.1(f) shall have used its
commercially reasonable efforts to remove such order, decree,
ruling or injunction; or
(g) by either SPX or UDI if the Effective Date has not occurred on
or prior to the Outside Date; provided, however, that the
right to terminate under this Section 11.1(g) shall not be
available to any party whose failure to perform any covenant
or obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Date to occur on or
before the Outside Date; or
(h) by UDI or SPX if at the UDI Meeting (including any adjournment
or postponement thereof) the requisite vote of the UDI
Shareholders to approve the Arrangement Resolution shall not
have been obtained; or
(i) by UDI or SPX if at the SPX Meeting (including any adjournment
or postponement thereof) the requisite vote of the SPX
Shareholders to approve the SPX Resolution shall not have been
obtained; provided, however, that this Section 11.1(i) shall
have no applicability if, as set forth in Section 2(2), SPX
Shareholder approval of the SPX Resolution is not required to
be obtained; or
(j) by UDI or SPX (provided that the terminating party is not then
in breach, in any material respect, of any covenant,
representation or warranty or other agreement contained herein
of such terminating party) if there shall have occurred an
event, occurrence or development, alone or taken together with
all other existing facts, that, individually or in the
aggregate, has a Material Adverse Effect on SPX or UDI, as
applicable.
SECTION 11.2 EFFECT OF TERMINATION.
(1) In the event of the termination of this Agreement as provided in
Section 11.1, this Agreement shall forthwith have no further force or
effect and there shall be no obligation on the part of SPX or UDI
hereunder, except as set forth in Sections 3.1, 9.5(2) and 12.4 and
this Section 11.2, which provisions shall survive
38
44
the termination of this Agreement. Nothing herein shall relieve any
party from liability for any breach of this Agreement.
(2) (a) Upon the happening of a Triggering Event, UDI shall pay to
SPX (or to any subsidiary of SPX designated in writing by
SPX to UDI) the amount of $40 million (the "TERMINATION
FEE"). "TRIGGERING EVENT" means any one of the following:
(i) a termination of this Agreement by
SPX pursuant to Section 11.1(d);
(ii) a termination of this Agreement
by UDI or SPX pursuant to Section 11.1(h) or by UDI pursuant to
Section 11.1(g) or by SPX pursuant to Section 11.1(b) (but only if the
breach of covenant, representation, warranty or agreement that gives
rise to such termination is willful), if (A) any Acquisition Proposal
is received by UDI or is publicly proposed or announced on or after
the date hereof and during the term of this Agreement and (B) any
Business Combination is entered into, agreed to or consummated within
12 months of such termination of this Agreement;
(iii) a termination of this Agreement by
UDI pursuant to Section 11.1(j), if (A) any Acquisition Proposal is
received by UDI or is publicly proposed or announced on or after the
date hereof and during the term of this Agreement and (B) any Business
Combination is entered into, agreed to or consummated within 12 months
of such termination of this Agreement;
(iv) a termination of this Agreement by
UDI pursuant to Section 11.1(c); or
(v) a termination of this Agreement by
UDI or SPX pursuant to Section 11.1(h) or by UDI pursuant to Section
11.1(g) or by SPX pursuant to Section 11.1(b) (but only if the breach
of covenant, representation, warranty or agreement that gives rise to
such termination is willful) if any Business Combination is entered
into, agreed to or consummated within 3 months of such termination of
this Agreement.
Payment of the Termination Fee shall be made by wire transfer of immediately
available funds (1) on the second Business Day after such termination in the
case of clause (i) of the definition of Triggering Event, (2) on or prior to the
date of such termination, in the case of clause (iv) of the definition of
Triggering Event, or (3) on the earlier of the date a Contract is entered into
with respect to a Business Combination or a Business Combination is consummated,
in the case of clause (ii), (iii) or (v) of the definition of Triggering Event.
In no event shall more than one Termination Fee be payable under this Agreement.
39
45
(b) The parties acknowledge that the agreements
contained in this Section 11.2(2) and Sections 11.2(3) and 11.2(4) are an
integral part of the Transactions, and that, without these agreements, they
would not enter into this Agreement; accordingly, if either party fails to pay
promptly any amounts payable by it pursuant to this Section 11.2(2) or Section
11.2(3) or 11.2(4), then the party owing such amounts shall pay to the party
owed such amounts the latter party's costs and expenses (including attorneys'
fees) in connection with any litigation brought by the latter party to obtain
payment of such amounts, together with interest on such amounts at the prime or
base rate of The Chase Manhattan Bank from the date such amounts were due under
this Agreement until the date of payment.
(c) "BUSINESS COMBINATION" shall mean:
(i) any amalgamation, plan of
arrangement, merger, consolidation, business combination or other
similar transaction or series of transaction as a result of which the
UDI Shareholders would hold less than 66.67% of the voting securities
of UDI or the continuing entity resulting from the amalgamation or
plan of arrangement outstanding following that transaction;
(ii) the acquisition of 33.33% or more of
the outstanding UDI Shares; or
(iii) the acquisition of 50% or more (on a
book value basis or fair market value basis) of the assets of UDI and
its subsidiaries taken as a whole.
(3) In the event that SPX Shareholder approval of the SPX Resolution is
required by Law to be obtained and at the SPX Meeting (including any
adjournment or postponement thereof) the requisite vote of the SPX
Shareholders to approve the SPX Resolution shall not have been
obtained, then SPX shall pay to UDI (or to any subsidiary of UDI
designated in writing by UDI to SPX) all of the fees and other
out-of-pocket expenses reasonably incurred by UDI in respect of the
Transactions (including the fees of its financial and legal advisors),
up to a maximum payment of $8 million. Payment of such expenses by SPX
shall be made by wire transfer of immediately available funds on the
third Business Day after the date that the requisite vote of the SPX
Shareholders to approve the SPX Resolution shall not have been
obtained.
(4) In the event that at the UDI Meeting (including any adjournment or
postponement thereof) the requisite vote of the UDI Shareholders to
approve the Arrangement Resolution shall not have been obtained, then
UDI shall pay to SPX (or to any subsidiary of SPX designated in writing
by SPX to UDI) all of the fees and other out-of-pocket expenses
reasonably incurred by SPX in respect of the Transactions (including
the fees of its financial and legal advisors and lenders), up to a
40
46
maximum payment of $8 million. Payment of such expenses by UDI shall be
made by wire transfer of immediately available funds on the third
Business Day after the date that the requisite vote of the UDI
Shareholders to approve the Arrangement Resolution shall not have been
obtained. The amount of any Termination Fee payable under this Section
11.2 shall be reduced by the amount previously paid by UDI to SPX
pursuant to this paragraph (4).
SECTION 11.3 AMENDMENT.
This Agreement may be amended by mutual agreement between the parties
hereto. This Agreement may not be amended except by an instrument in writing
signed by the appropriate officers on behalf of each of the parties hereto.
SECTION 11.4 WAIVER.
Except as otherwise provided herein, SPX, on the one hand, and UDI, on
the other hand, may (i) extend the time for the performance of any of the
obligations or other acts of the other; (ii) waive compliance with any of the
other's agreement or the fulfilment of any conditions to its own obligations
contained herein; or (iii) waive inaccuracies in any of the other's
representations or warranties contained herein or in any document delivered by
the other party hereto; provided, however, that any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the
appropriate officer on behalf of such party.
ARTICLE 12
GENERAL PROVISIONS
SECTION 12.1 NOTICES.
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered if delivered personally or as of the date sent if sent by
cable, telegram, telecopier, telex or by prepaid overnight carrier to the
parties at the following addresses (or at such other addresses as shall be
specified by the parties by like notice):
(a) if to SPX:
SPX Corporation
000 Xxxxxxx Xxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxxxxxxxxxx X. Xxxxxxx
Senior Vice President, General Counsel and Secretary
Telecopy No: (000) 000-0000
41
47
With a copy to
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telecopy No: (000) 000-0000
and
Fasken Xxxxxxxxx XxXxxxxx XXX
Xxxxx 0000
Xxxxxxx Xxxxxxxx Xxxx Xxxxx
Xxx 00
Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx X. Xxxxx, Esq./Xxxxxxxxx X. Xxxxxxxx, Esq.
Telecopy No: (000) 000-0000
(b) if to UDI:
United Dominion Industries Limited
0000 Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx
Senior Vice President, General Counsel and Secretary
Telecopy No: (000) 000-0000
With a copy to
Stikeman Elliott
Barristers and Solicitors
000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxxxxxxx, Esq.
Telecopy No: (000) 000-0000
and
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy No. (000) 000-0000
42
48
SECTION 12.2 MISCELLANEOUS.
This Agreement, except for the Confidentiality Agreement, and the
agreements expressly provided for herein collectively constitute the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, between the parties, with respect to the subject matter hereof
and shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns. The parties hereto shall be entitled to
rely upon delivery of an executed facsimile copy of the Agreement, and such
facsimile copy shall be legally effective to create a valid and binding
agreement among the parties hereto. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the Province of
Ontario having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
SECTION 12.3 ASSIGNMENT.
Except as expressly permitted by the terms hereof, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties; provided, however, that any of the SPX Parties may assign any or
all of its rights and obligations under this Agreement and the Transactions to
any direct or indirect wholly owned subsidiary of SPX; provided, further,
however, that no such assignment shall relieve the assignor from any of its
obligations hereunder.
SECTION 12.4 EXPENSES.
(1) Except as provided in Section 11.2, the parties agree that all
out-of-pocket expenses of the parties relating to the Arrangement and
the Transactions, including legal fees, accounting fees, financial
advisory fees, regulatory filing fees, stock exchange fees, all
disbursements of advisors and printing and mailing costs ("TRANSACTION
EXPENSES"), shall be paid by the party incurring such expenses.
(2) UDI represents and warrants to SPX that, (i) except for any amounts
owing by UDI pursuant to and in accordance with the terms of written
and executed agreements existing as at the date hereof, which
agreements are disclosed in
43
49
Section 12.4 of UDI's Disclosure Letter, no broker, finder or
investment banker is or will be entitled to any brokerage, finder's or
other fee or commission from UDI or any subsidiary of UDI in
connection with the Transactions and (ii) UDI's other Transaction
Expenses will not exceed the respective amounts set forth in Section
12.4 of UDI's Disclosure Letter. Copies of each of the agreements
referred to in clause (i) of this Section 12.4(2) have been delivered
to SPX; such agreements contain a complete description of how to
calculate the payments owing thereunder.
SECTION 12.5 SEVERABILITY.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable Law.
Any provision of this Agreement that is invalid or unenforceable in any
jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 12.6 COUNTERPART EXECUTION.
This Agreement may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
SECTION 12.7 PARTIES IN INTEREST.
Except for Sections 8.3 and 8.4 which shall inure to the benefit of the
Persons identified therein, this Agreement shall be binding upon and inure
solely to the benefit of each party hereto and its successors and permitted
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
44
50
IN WITNESS WHEREOF, SPX and UDI have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
SPX CORPORATION
By: /s/ XXXXXXXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President, General
Counsel and Secretary
UNITED DOMINION INDUSTRIES
LIMITED
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
45
51
SCHEDULE "A"
FORM OF ARRANGEMENT RESOLUTION
SPECIAL RESOLUTION OF THE
UNITED DOMINION INDUSTRIES LIMITED SHAREHOLDERS
BE IT RESOLVED THAT:
1. The arrangement (the "Arrangement") under Section 192 of the Canada
Business Corporations Act (the "CBCA") involving United Dominion
Industries Limited ("UDI"), as more particularly described in the
Management Proxy Circular (the "Circular") of UDI dated _________, 2001
(as the Arrangement may be modified or amended) is hereby authorized,
approved and adopted.
2. The plan of arrangement (the "Plan of Arrangement") involving UDI, the
full text of which is set out as Schedule "B" to the Merger Agreement
made as of March 10, 2001 between SPX Corporation and UDI (the "Merger
Agreement") (as the Plan of Arrangement may be contemplated thereby or
may have been amended) is hereby authorized, approved and adopted.
3. Notwithstanding that this resolution has been passed (and the
Arrangement adopted) by the shareholders of UDI or that the Arrangement
has been approved by the Superior Court of Justice (Ontario), the
directors of UDI are hereby authorized and empowered (i) to amend the
Merger Agreement, or the Plan of Arrangement to the extent permitted by
the Merger Agreement, and (ii) without further approval of the
shareholders of UDI, to determine not to proceed with the Arrangement,
but only in accordance with the terms of the Merger Agreement.
4. Any one officer or director of UDI is hereby authorized and directed
for and on behalf of UDI to execute, under the seal of UDI or
otherwise, and to deliver articles of arrangement and such other
documents as are necessary or desirable to the Director under the CBCA
in accordance with the Merger Agreement for filing.
5. Any one officer or director of UDI is hereby authorized and directed
for and on behalf of UDI to execute or cause to be executed, under the
seal of UDI or otherwise, and to deliver or cause to be delivered, all
such other documents and instruments and to perform or cause to be
performed all such other acts and things as in such person's opinion
may be necessary or desirable to give full effect to the foregoing
resolution and the matters authorized thereby, such determination to be
conclusively evidenced by the execution and delivery of such document,
agreement or instrument or the doing of any such act or thing.
A-1
52
SCHEDULE "B"
PLAN OF ARRANGEMENT
UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS.
In this Plan of Arrangement, unless there is something in the subject
matter or context inconsistent therewith:
"AMALCO" means the corporation resulting from the Amalgamation;
"AMALCO COMMON SHARE" means a common share in the capital of Amalco;
"AMALCO SPECIAL SHARE" means a special share in the capital of Amalco;
"AMALGAMATION" has the meaning set out in Section 2.3(j);
"ARRANGEMENT" means the arrangement under Section 192 of the CBCA on
the terms and subject to the conditions set out in this Plan of
Arrangement, subject to any amendments or variations thereto made in
accordance with the provisions of this Plan of Arrangement or the
Merger Agreement or made at the direction of the Court in the Interim
Order or the Final Order;
"ARRANGEMENT RESOLUTION" means the special resolution of UDI
Shareholders to be substantially in the form and content of Schedule
"A" to the Merger Agreement;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of UDI in
respect of the Arrangement that are required by the CBCA to be sent to
the Director after the Final Order is made;
"BUSINESS DAY" means any day except a Saturday, Sunday or any other day
on which banking institutions in New York City (in the State of New
York) or Toronto (in the Province of Ontario) or Muskegon (in the State
of Michigan) are authorized or required by applicable law to close;
"CBCA" means the Canada Business Corporations Act, as the same has been
and may hereafter from time to time be amended;
B-1
53
"CERTIFICATE" means the certificate of arrangement giving effect to the
Arrangement, issued pursuant to subsection 192(7) of the CBCA after the
Articles of Arrangement have been filed with the Director under the
CBCA;
"COURT" means the Ontario Superior Court of Justice;
"CURRENT MARKET PRICE" means, in respect of an SPX Common Share, the
closing price of the SPX Common Shares on the New York Stock Exchange
on the trading day immediately preceding the Effective Date converted
into Canadian dollars based on the noon United States Dollar/Canadian
Dollar exchange rate as quoted by the Bank of Canada on such date;
"DEPOSITARY" means the company appointed by SPX to act as depositary
for the Transactions, at its offices set out in the Letter of
Transmittal;
"DIRECT EXCHANGE ELECTION" means an election by a Qualified Investor to
exchange a specified number of UDI Common Shares held by such Qualified
Investor directly with SPX for SPX Common Shares pursuant to this Plan
of Arrangement, which election shall be made by duly completing and
signing the Letter of Transmittal in the appropriate manner and
depositing it with the Depositary at one of its offices specified for
that purpose in the Letter of Transmittal, together with the share
certificates evidencing the UDI Common Shares in respect of which the
election is made, not less than 48 hours prior to the time fixed for
the UDI Meeting;
"DIRECTLY EXCHANGED UDI COMMON SHARES" means the total number of UDI
Common Shares that are the subject of Direct Exchange Elections,
provided that if the number of such UDI Common Shares would otherwise
exceed 30% of the total issued and outstanding UDI Common Shares
immediately before the Effective Time (rounded down to the nearest
whole share), the number of UDI Common Shares of each Electing
Qualified Investor that are the subject of a Direct Exchange Election
shall be reduced on a pro rata basis so that in aggregate the Directly
Exchanged UDI Common Shares shall be 30% of the total issued and UDI
Common Shares outstanding immediately before the Effective Time
(rounded down to the nearest whole share);
"DIRECTOR" means the Director appointed pursuant to Section 260 of the
CBCA;
"DISSENT PROCEDURES" has the meaning set out in Section 3.1;
"DISSENT RIGHTS" has the meaning set out in Section 3.1;
"DISSENTING SHAREHOLDER" means a holder of UDI Common Shares who
dissents in respect of the Arrangement in strict compliance with the
Dissent Procedures;
B-2
54
"EFFECTIVE DATE" means the date shown on the Certificate;
"EFFECTIVE TIME" means 12:01 a.m. (Toronto time) on the Effective Date;
"ELECTING QUALIFIED INVESTOR" means a Qualified Investor that has made
a Direct Exchange Election;
"EXCHANGE RATIO" means 0.2353;
"FINAL ORDER" means the final order of the Court approving the
Arrangement, as such order may be amended by the Court at any time
prior to the Effective Date or, if appealed, then, unless such appeal
is withdrawn or denied, as granted or affirmed;
"HOLDERS" means, when used with reference to UDI Common Shares, the
holders of UDI Common Shares shown from time to time in the register
maintained by or on behalf of UDI in respect of the UDI Common Shares;
"ITA" means the Income Tax Act (Canada) as the same has been and may
be hereafter from time to time amended;
"INTERIM ORDER" means the interim order of the Court, as the same may
be amended, in respect of the Arrangement, as contemplated by Section
2.3 of the Merger Agreement;
"LETTER OF TRANSMITTAL" means the Letter of Transmittal form (including
an election form) for use by UDI Shareholders in connection with the
Arrangement;
"MEETING DATE" means the date of the UDI Meeting;
"MERGECO" means a corporation which will, at the Effective Time, have
been incorporated under and be governed by the CBCA and be a direct
wholly-owned subsidiary of SPX Subco No. 4;
"MERGECO COMMON SHARE" means a common share in the capital of MergeCo;
"MERGER AGREEMENT" means the merger agreement dated as of March 10,
2001 between UDI and SPX, as it may be amended, supplemented and/or
restated in accordance therewith prior to the Effective Date, providing
for, among other things, the Arrangement;
"NOTICE OF DISSENT" has the meaning set out in Section 3.1;
"PERSON" includes any individual, firm, partnership, joint venture,
venture capital fund, association, trust, trustee, executor,
administrator, legal personal representative, estate, group, body
corporate (including a limited liability company
B-3
55
and an unlimited liability company), corporation, unincorporated
association or organization, government body, syndicate or other
entity, whether or not having legal status;
"QUALIFIED INVESTOR" means a holder of UDI Common Shares that is, and
certifies itself on the Letter of Transmittal to be, a taxpayer
described in any of paragraphs 205(a) to (f) of the ITA.
"REPLACEMENT OPTION" has the meaning set out in Section 2.2(n);
"SPX" means SPX Corporation, a corporation duly incorporated under and
governed by the laws of the State of Delaware;
"SPX COMMON SHARES" means the common shares in the capital stock of
SPX, par value US$10.00 per share, and the associated preferred share
purchase rights;
"SPX SUBCO NO. 1" means a corporation which will, at the Effective
Time, have been duly incorporated under and be governed by the laws of
the State of Delaware and be a direct wholly-owned subsidiary of SPX;
"SPX SUBCO NO. 2" means a corporation which will, at the Effective
Time, have been duly incorporated under and be governed by the laws of
the State of Delaware and be a direct wholly-owned subsidiary of SPX;
"SPX SUBCO NO. 3" means a corporation which will, at the Effective
Time, have been duly incorporated under and be governed by the laws of
the State of Delaware, 50% of the voting shares of which will, at the
Effective Time, be held by each of SPX Subco No. 1 and SPX Subco No. 2;
"SPX SUBCO NO. 4" means an unlimited liability company which will, at
the Effective Time, have been duly formed under and be governed by the
laws of the Province of Nova Scotia and be a direct wholly-owned
subsidiary of SPX Subco No. 3;
"UDI" means United Dominion Industries Limited, a corporation duly
continued under and governed by the CBCA;
"UDI CIRCULAR" means the management proxy circular and accompanying
notice of the UDI Meeting, including all appendices thereto, to be sent
to UDI Shareholders in connection with the UDI Meeting;
"UDI COMMON SHARES" means the common shares in the capital of UDI;
B-4
56
"UDI MEETING" means the special meeting of UDI Shareholders, including
any adjournment or postponement thereof, to be called and held in
accordance with the Interim Order to consider the Arrangement;
"UDI OPTIONS" means the outstanding options to purchase UDI Common
Shares under the UDI Stock Option Plans;
"UDI SHAREHOLDERS" means the holders of UDI Common Shares; and
"UDI STOCK OPTION PLANS" means, collectively, the 1990 Stock Option and
Restricted Stock Plan of UDI, the 1994 Stock Option and Restricted
Stock Plan of UDI, and the 1999 Stock Option and Restricted Stock Plan
of UDI.
SECTION 1.2 SECTIONS AND HEADINGS.
The division of this Plan of Arrangement into Sections and the
insertion of headings are for convenience of reference purposes only and shall
not affect the construction or interpretation of this Plan of Arrangement.
Unless otherwise indicated, any reference in this Plan of Arrangement to a
section, paragraph, appendix or an exhibit refers to the specified section or
paragraph of or appendix or exhibit to this Plan of Arrangement.
SECTION 1.3 CURRENCY.
Except as expressly set forth otherwise, all sums of money referred to
herein are expressed in lawful money of the United States of America.
SECTION 1.4 NUMBER, GENDER AND PERSONS.
In this Plan of Arrangement, unless the context otherwise requires,
words importing the singular number include the plural and vice versa and words
importing any gender include all genders.
ARTICLE 2
ARRANGEMENT
SECTION 2.1 BINDING EFFECT.
This Plan of Arrangement shall become effective at, and be binding at
and after, the Effective Time. In particular, and without limiting the
generality of the foregoing, this Plan of Arrangement shall be binding upon: (i)
UDI; (ii) MergeCo and all permitted assignees; (iii) SPX; (iv) SPX Subco No. 1;
(v) SPX Subco No. 2; (vi) SPX Subco No. 3; (vii) SPX Subco No. 4; (viii) all
registered and beneficial holders of UDI Common Shares; (ix) all holders of UDI
Options; and (x) all other holders of securities exchangeable for or convertible
into UDI Common Shares, if any.
B-5
57
SECTION 2.2 ARRANGEMENT.
Commencing at the Effective Time, the following shall occur and shall
be deemed to occur in the following order without any further act or formality:
(a) TRANSFER OF DISSENTING SHAREHOLDERS' SHARES. The UDI Common
Shares held by Dissenting Shareholders who have exercised
Dissent Rights which remain valid immediately prior to the
Effective Time shall, as of the Effective Time, be deemed to
have been transferred to UDI and be cancelled and cease to be
outstanding, and as of the Effective Time, such Dissenting
Shareholders shall cease to have any rights as shareholders of
UDI other than the right to be paid the fair value of their
shares in accordance with the Dissent Procedures.
(b) ISSUANCE OF SPX COMMON SHARES. SPX shall issue to SPX Subco
No. 1 that number of fully paid and non-assessable SPX
Common Shares that is equal to one plus 50% of the number
obtained when the Exchange Ratio is multiplied by the number
of UDI Common Shares outstanding immediately prior to the
Effective Time, after deducting the number of Directly
Exchanged UDI Common Shares and the number of UDI Common
Shares cancelled pursuant to Section 2.2(a). SPX Subco No. 1
shall issue to SPX, in exchange therefor, 1,000 common
shares in the capital of SPX Subco No. 1. SPX shall issue to
SPX Subco No. 2 the same number of fully paid and
non-assessable SPX Common Shares that it issues to Subco No.
1, less one share. SPX Subco No. 2 shall issue to SPX, in
exchange therefor, 1,000 common shares in the capital of SPX
Subco No. 2.
(c) TRANSFER OF SPX COMMON SHARES TO SPX SUBCO NO. 3. Each of
SPX Subco No. 1 and SPX Subco No. 2 shall transfer to SPX
Subco No. 3 all SPX Common Shares as it shall have received
pursuant to Section 2.2(b). SPX Subco No. 3 shall issue to
each of SPX Subco No. 1 and SPX Subco No. 2, in exchange
therefor, 500 common shares in the capital of SPX Subco No.
3.
(d) TRANSFER OF SPX COMMON SHARES TO SPX SUBCO NO. 4. SPX Subco
No. 3 shall transfer to SPX Subco No. 4 all SPX Common
Shares as it shall have received pursuant to Section 2.2(c).
SPX Subco No. 4 shall issue to SPX Subco No. 3, in exchange
for each such SPX Common Share, one common share in the
capital of SPX Subco No. 4.
(e) DIRECT EXCHANGE. The Directly Exchanged UDI Common Shares of
each Electing Qualified Investor who is not a Dissenting
Shareholder shall be exchanged for that number of SPX Common
Shares issued by SPX that is equal to the Exchange Ratio
multiplied by the number of Directly
B-6
58
Exchanged UDI Common Shares registered in the name of such
Electing Qualified Investor, rounded down to the nearest
whole number of SPX Common Shares. In lieu of any fractional
interest in an SPX Common Share, each Electing Qualified
Investor otherwise entitled to a fraction of an SPX Common
Share shall receive a cash payment as more fully described
in Section 4.4.
(f) TRANSFER OF DIRECTLY EXCHANGED UDI COMMON SHARES BY SPX TO
SPX SUBCO NO. 1 AND SPX SUBCO NO. 2. SPX shall contribute
one-half of the Directly Exchanged UDI Common Shares to each
of SPX Subco No. 1 and SPX Subco No. 2.
(g) TRANSFER OF DIRECTLY EXCHANGED UDI COMMON SHARES BY SPX
SUBCO NO. 1 AND SPX SUBCO NO. 2 TO SPX SUBCO NO. 3. Each of
SPX Subco No. 1 and SPX Subco No. 2 shall contribute all
Directly Exchanged UDI Common Shares as it shall have
received pursuant to Section 2.2(f) to SPX Subco No. 3.
(h) TRANSFER OF DIRECTLY EXCHANGED UDI COMMON SHARES BY SPX
SUBCO NO. 3 TO SPX SUBCO NO. 4. SPX Subco No. 3 shall
transfer all Directly Exchanged UDI Common Shares as it
shall have received pursuant to Section 2.2(g) to SPX Subco
No. 4. SPX Subco No. 4 shall issue to SPX Subco No. 3, in
exchange therefor, that number of its common shares that is
equal to the number of SPX Common Shares issued by SPX
pursuant to Section 2.2(e) hereof to the Electing Qualified
Investors.
(i) TRANSFER OF DIRECTLY EXCHANGED UDI COMMON SHARES BY SPX SUBCO
NO. 4 TO MERGECO. SPX Subco No. 4 shall transfer all Directly
Exchanged UDI Common Shares as it shall have received pursuant
to Section 2.2(h) to MergeCo. MergeCo shall issue to SPX Subco
No. 4, in exchange therefor, that number of MergeCo Common
Shares that is equal to the number of SPX Common Shares issued
by SPX pursuant to Section 2.2(e) hereof. MergeCo shall add to
its stated capital account in respect of the MergeCo Common
Shares an amount equal to the product of the number of SPX
Common Shares so issued by SPX and the Current Market Price.
(j) AMALGAMATION. UDI and MergeCo shall amalgamate to form Amalco
and shall continue as one corporation under the CBCA (the
"AMALGAMATION"), with the effect set forth in Subsections
186(b) to 186(f) inclusive of the CBCA, as follows:
(i) Amalco shall issue to each holder of UDI Common
Shares that are outstanding immediately prior to the
Amalgamation and after
B-7
59
completion of the steps contemplated by Sections
2.2(a) through (i) hereof, other than MergeCo, in
respect of each such outstanding UDI Common Share, a
fraction of one fully paid and non-assessable Amalco
Special Share the numerator of which is one (1) and
the denominator of which is equal to the aggregate
number of UDI Common Shares outstanding immediately
prior to the Amalgamation, after deducting the
number of Directly Exchanged UDI Common Shares, all
such that, in the aggregate, only one such whole
Amalco Special Share shall be issued.
(ii) SPX Subco No. 4 shall deliver to each holder of UDI
Common Shares that are outstanding immediately prior
to the Amalgamation and after completion of the
steps contemplated by Sections 2.2(a) through (i)
hereof, other than MergeCo, as additional
consideration in respect of such UDI Common Shares,
that number of SPX Common Shares that is equal to
the product of the Exchange Ratio and the number of
UDI Common Shares so held, and the name of each such
holder shall be removed from the register of holders
of UDI Common Shares and added to the register of
holders of SPX Common Shares. Each certificate
formerly representing such UDI Common Shares
thereafter shall entitle the holder thereof to
receive an SPX Common Share certificate representing
that whole number of SPX Common Shares equal to the
product of the number of UDI Common Shares
represented by such certificate immediately prior to
the Amalgamation and the Exchange Ratio, rounded
down to the nearest whole number of SPX Common
Shares, provided that if more than one certificate
formerly representing UDI Common Shares is
registered in the name of a single holder such
rounding down shall be based on the number of UDI
Common Shares formerly represented by the total of
such certificates. In lieu of any fractional
interest in an SPX Common Share, each Person
otherwise entitled to a fractional interest in an
SPX Common Share shall receive a cash payment as
more fully described in Section 4.4.
(iii) All Directly Exchanged UDI Common Shares (all of
which shall be held by MergeCo immediately before the
Amalgamation) shall be cancelled. Each outstanding
MergeCo Common Share shall be exchanged for one fully
paid and non-assessable Amalco Common Share (and no
further consideration) and the name of any holder of
MergeCo Common Shares shall be removed from the
register of holders of MergeCo Common Shares and
added to the register of holders of Amalco Common
Shares. Certificates formerly
B-8
60
representing such MergeCo Common Shares thereafter
shall be deemed to represent an equal number of
Amalco Common Shares.
(iv) In consideration of SPX Subco No. 4 delivering SPX
Common Shares to holders of UDI Common Shares as
provided in Section 2.2(j)(ii), Amalco shall issue to
SPX Subco No. 4, a number of fully paid and
non-assessable Amalco Common Shares equal to the
aggregate number of SPX Common Shares issued pursuant
to Section 2.2(b).
(v) The name of Amalco shall be _________.
(vi) The registered office of Amalco shall be located in
the City of Toronto in the Province of Ontario. The
address of the registered office of Amalco shall be
_______ Street, Toronto, Ontario, [POSTAL CODE].
(vii) There shall be no restrictions on the business that
Amalco may carry on or on the powers it may
exercise.
(viii) Amalco shall be authorized to issue an unlimited
number of common shares and an unlimited number of
special shares having the rights, privileges,
restrictions and conditions attaching to the common
shares and special shares which shall be set forth
in Appendix A attached hereto at the time of the
filing of Articles of Arrangement with the Director.
(ix) The board of directors of Amalco shall consist of
not less than a minimum of one nor more than a
maximum of ten which, until changed in accordance
with the CBCA, shall be fixed at three. The Persons
named below, a majority of whom are resident
Canadians, shall be the first directors of Amalco:
Name Residence Address
---- -----------------
____________ ________________
____________ ________________
____________ ________________
(x) The by-laws of Amalco shall be the same as the
by-laws of MergeCo.
(k) STATED CAPITAL. For the purposes of the CBCA, the aggregate
stated capital of the Amalco Common Shares issued pursuant to
the Arrangement shall be
B-9
61
equal to the maximum amount permitted to be added to the
paid-up capital of such shares having regard to subsection
87(3) of the ITA, which amount shall not be greater than
the amount permitted to be added pursuant to the CBCA; and
the stated capital of the issued and outstanding Amalco
Special Share issued pursuant to the Arrangement shall be
equal to the Current Market Price as though the Amalco
Special Share were one SPX Common Share.
(l) REDEMPTION OF AMALCO SPECIAL SHARE. The one (1) outstanding
Amalco Special Share shall be redeemed and cancelled, and
shall be deemed to have been redeemed and cancelled for all
purposes, upon the delivery by SPX Subco No. 4 to the persons
holding a fractional interest in the one (1) outstanding
Amalco Special Share, of an equal fractional interest in one
(1) fully paid and non-assessable SPX Common Share in the
aggregate. The fractional interest in such one (1) additional
SPX Common Share upon such redemption shall be distributed in
accordance with Article 4 to Persons who were holders of a
fractional interest in the Amalco Special Share, in
conjunction with the delivery of SPX Common Shares provided
for in Section 2.2(j)(ii).
(m) SHARE RESTRICTIONS. The following provisions shall take effect
with respect to the shares of Amalco:
(i) TRANSFER. The transfer of shares in the capital of Amalco
is restricted in that no share may be transferred without
either (i) the consent of the directors of Amalco expressed by
resolution passed by the Board of Directors of Amalco or by an
instrument or instruments in writing signed by all of such
directors, or (ii) the consent of the holders of shares to
which are attached more than 50% of the voting rights
attaching to all shares for the time being outstanding
entitled to vote at such time expressed by a resolution passed
by such shareholders at a meeting duly called and constituted
for that purpose or by an instrument or instruments in writing
signed by all of such shareholders.
(ii) NUMBER OF SHAREHOLDERS. The number of shareholders of
Amalco, exclusive of Persons who are in its employment and
exclusive of Persons who, having been formerly in the
employment of Amalco, were, while in that employment, and have
continued after termination of that employment to be,
shareholders of Amalco, is limited to not more than 50, two or
more Persons who are the joint registered owners of one or
more shares being counted as one shareholder.
(iii) PUBLIC DISTRIBUTIONS. Any invitation to the public to
subscribe for any securities of Amalco is prohibited.
X-00
00
(x) XXX OPTIONS. Subject to applicable laws and regulatory
requirements, each UDI Option that is unexercised and
outstanding immediately prior to the Effective Time shall
be exchanged for an option ("REPLACEMENT OPTION") to
purchase SPX Common Shares. Each Replacement Option shall
continue to have, and be subject to, the same terms and
conditions set forth in the relevant UDI Stock Option Plan
and the applicable stock option agreement as they exist
immediately prior to the Effective Time (and any document
or agreement previously evidencing an UDI Option shall
thereafter evidence such Replacement Option), except that
(i) such Replacement Option shall be exercisable for that
number of whole SPX Common Shares as is equal to the
product obtained by multiplying the number of UDI Common
Shares that were issuable upon the exercise of such UDI
Option immediately prior to the Effective Time by the
Exchange Ratio, rounded down to the nearest whole number of
SPX Common Shares, (ii) the exercise price per share for
the SPX Common Shares issuable upon exercise of such
Replacement Option shall be equal to the quotient
determined by dividing the exercise price per UDI Common
Share at which such UDI Option is exercisable immediately
prior to the Effective Time (adjusted, where necessary, for
the U.S. dollar/Canadian dollar exchange rate effective as
of the close of business on the Effective Date) by the
Exchange Ratio, rounded up to the nearest whole cent, and
(iii) such Replacement Option shall vest fully immediately
following the Effective Time.
SECTION 2.3 ANTI-DILUTION PROVISIONS.
If, between the date of signing the Merger Agreement and the Effective
Time, the outstanding SPX Common Shares shall have been changed into or
exchanged for a different number of shares or kind of shares and/or other
securities and/or property of SPX or another corporation or entity by reason of
any reclassification, split-up, stock dividend or stock combination or any
arrangement, amalgamation or similar statutory procedure (an "ADJUSTMENT
EVENT"), then the Exchange Ratio shall be appropriately adjusted so that each
holder of UDI Shares (other than a Dissenting Shareholder) shall be entitled to
receive at the Effective Time, in lieu of the consideration in SPX Common Shares
and provided for in Section 2.2 hereof, such number and kind of shares and/or
other securities and/or property as such holder would have received if the
record date and payment date for such Adjustment Event had been immediately
after the Effective Time. The consideration payable on the redemption of the
Amalco Special Share pursuant to Section 2.2(l) shall be similarly appropriately
adjusted.
If the record date for such Adjustment Event shall be prior to the
Effective Time but the payment date therefor shall be subsequent to the
Effective Time, SPX shall take such action as shall be required so that on such
payment date any former holder of XXX
X-00
00
Xxxxxx who shall have received or become entitled to receive SPX Common Shares
pursuant to the Arrangement shall be entitled to receive such number or kind of
shares and/or other securities and/or property as such holder would have
received as a result of such event if the record date therefor had been
immediately after the Effective Time.
ARTICLE 3
RIGHTS OF DISSENT
SECTION 3.1 RIGHTS OF DISSENT.
Holders of UDI Common Shares may exercise rights of dissent ("DISSENT
RIGHTS") with respect to such shares pursuant to and in the manner set forth in
Section 190 of the CBCA (subject to the provisions hereof), the Interim Order
and this Section 3.1 (the "DISSENT PROCEDURES") in connection with the
Arrangement; provided that, notwithstanding the provisions of Subsection 190(5)
of the CBCA, the written objection to the Arrangement Resolution referred to in
Subsection 190(5) of the CBCA ("NOTICE OF Dissent") must be received by UDI
prior to 5:00 p.m. (Toronto time) on the Business Day immediately preceding the
date of the UDI Meeting. Holders of UDI Common Shares who seek to exercise such
Dissent Rights and who:
(a) are entitled to be paid fair value for their UDI Common Shares
shall be deemed to have transferred such UDI Common Shares to
UDI at the Effective Time and such UDI Common Shares shall be
cancelled and cease to be outstanding at the Effective Time,
all as provided in Section 2.2(a); or
(b) for any reason prior to the Effective Time do not properly
fulfill each of the Dissent Procedures required to be
completed by a Dissenting Shareholder or, subsequent to giving
Notice of Dissent and prior to the Effective Time, act
inconsistently with such dissent, shall be deemed to have
participated in the Arrangement on the same basis as a
non-dissenting holder of UDI Common Shares that is not a
holder of Directly Exchanged UDI Common Shares and shall be
entitled to receive SPX Common Shares and a fractional
interest in the Amalco Special Share which shall be redeemed
for a fractional interest in one (1) SPX Common Share, all in
accordance with Section 2.2;
and in no case shall SPX, SPX Subco No. 1, SPX Subco No. 2, SPX Subco Xx. 0, XXX
Xxxxx Xx. 0, XxxxxXx, XXX, Xxxxxx or any other Person be required to recognize
such holders, or any other Person, as holders of UDI Common Shares after the
Effective Time and the names of such holders of UDI Common Shares shall be
deleted from the share register of UDI in respect of the UDI Common Shares as of
the Effective Time.
B-12
64
ARTICLE 4
CERTIFICATES, FRACTIONAL ENTITLEMENTS
AND SETTLEMENT PROCEDURES
SECTION 4.1 ISSUANCE OF CERTIFICATES REPRESENTING SPX COMMON SHARES.
At or promptly after the Effective Time, SPX Subco No. 4 shall deposit
with the Depositary, as custodian for the benefit of the holders of UDI Common
Shares who shall ultimately receive SPX Common Shares from SPX Subco No. 4
pursuant to the Arrangement, certificates representing that whole number of SPX
Common Shares to be delivered by SPX Subco No. 4 pursuant to Section 2.2. Upon
surrender to the Depositary for cancellation of a certificate which immediately
prior to the Effective Time represented one or more UDI Common Shares (other
than Directly Exchanged UDI Common Shares and UDI Common Shares cancelled
pursuant to Section 2.2(a)) together with a properly completed and executed
Letter of Transmittal and such other documents and instruments as would have
been required to effect the transfer of the shares formerly represented by such
certificate under the CBCA and the by-laws of UDI and such additional documents
and instruments as the Depositary may reasonably require, the holder of such
surrendered certificate shall be entitled to receive in exchange therefor, and
the Depositary shall deliver to such holder, a certificate representing that
number of whole SPX Common Shares which such holder has the right to receive
pursuant to Section 2.2 from SPX Subco No. 4 (together with any dividends or
distributions with respect thereto pursuant to Section 4.2 and any cash in lieu
of fractional SPX Common Shares pursuant to Section 4.4, less any amounts
withheld pursuant to Section 4.5), and the certificate so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership of UDI Common
Shares that is not registered in the share register for UDI Common Shares, a
certificate representing the proper number of SPX Common Shares may be issued to
the transferee if the certificate representing such UDI Common Shares is
presented to the Depositary, accompanied by all documents required to evidence
and effect such transfer and payment of all transfer taxes, if any. Until
surrendered as contemplated by this Section 4.1, each certificate which
immediately prior to the Effective Time represented UDI Common Shares (other
than Directly Exchanged UDI Common Shares and UDI Common Shares cancelled
pursuant to Section 2.2(a)) shall be deemed at all times after the Effective
Time to represent only the right to receive upon such surrender (i) the
certificate representing SPX Common Shares as contemplated by this Section 4.1,
(ii) a cash payment in lieu of fractional SPX Common Shares as contemplated by
Section 4.4, and (iii) any dividends or distributions with a record date after
the Effective Time theretofore paid or payable with respect to SPX Common Shares
as contemplated by Section 4.2. At or promptly after the Effective Time, SPX
shall deposit with the Depositary, as custodian for the benefit of holders of
Directly Exchanged UDI Common Shares, certificates representing that whole
number of SPX Common Shares issued by SPX to such holders pursuant to Section
2.2(e) and the provisions of this Section 4.1 shall apply mutatis mutandis to
the exchange of certificates representing
B-13
65
Directly Exchanged UDI Common Shares for certificates representing SPX Common
Shares.
SECTION 4.2 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES.
No dividends or other distributions declared or made after the
Effective Time with respect to SPX Common Shares, as applicable, with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Effective Time represented
outstanding UDI Common Shares, unless and until the holder of record of such
certificate shall surrender such certificate in accordance with Section 4.1.
Subject to applicable law, at the time of such surrender of any such
certificate, there shall be paid to the holder of record of a certificate
formerly representing UDI Common Shares, without interest, (i) the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such SPX Common Share, and (ii) on the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such SPX Common Share, as the
case may be.
SECTION 4.3 LOST CERTIFICATES.
In the event any certificate which immediately prior to the Effective
Time represented one or more outstanding UDI Common Shares shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such certificate to be lost, stolen or destroyed, the Depositary shall
issue in exchange for such lost, stolen or destroyed certificate, one or more
certificates representing one or more SPX Common Shares (and any dividends or
distributions with respect thereto and any entitlements of the holder thereof to
cash in lieu of fractional SPX Common Shares pursuant to Section 4.4)
deliverable in accordance with the Plan of Arrangement and such holder's Letter
of Transmittal. When authorizing such payment in exchange for any lost, stolen
or destroyed certificate, the Person to whom such certificates representing SPX
Common Shares are to be issued shall, as a condition precedent to the issuance
thereof, give a bond satisfactory to SPX in such sum as SPX may direct or
otherwise indemnify SPX in a manner satisfactory to SPX, against any claim that
may be made against SPX, with respect to the certificate alleged to have been
lost, stolen or destroyed.
SECTION 4.4 NO FRACTIONAL SHARES.
No certificates or scrip representing fractional SPX Common Shares
shall be issued or delivered upon the surrender for exchange of certificates
pursuant to Section 4.1 and no dividend, stock split or other change in the
capital structure of SPX shall relate to any such fractional security and such
fractional interests shall not entitle the owner thereof to exercise any rights
as a security holder of UDI or SPX. In lieu of any such fractional securities,
each Person otherwise entitled to a fractional interest in an SPX
B-14
66
Common Share shall receive a cash payment from the Depositary equal to the
product of (i) such fractional interest multiplied by (ii) the Current Market
Price, rounded up to the nearest whole cent. SPX and SPX Subco No. 4 shall from
time to time as necessary provide the Depositary with funds sufficient to
satisfy these obligations. On the sixth anniversary of the Effective Date, the
aggregate number of SPX Common Shares for which no certificates were issued as a
result of the foregoing provisions of this Section 4.4 shall be deemed to have
been surrendered by the Depositary for no consideration to SPX or SPX Subco No.
4 as appropriate.
SECTION 4.5 WITHHOLDING RIGHTS.
SPX, SPX Subco No. 4, Amalco and the Depositary shall be entitled to
deduct and withhold from any dividend or consideration otherwise payable to any
holder of UDI Common Shares or SPX Common Shares such amounts as SPX, SPX Subco
No. 4, Amalco or the Depositary is required to deduct and withhold with respect
to such payment under the ITA, the United States Internal Revenue Code of 1986,
as amended, or any provision of provincial, state, local or foreign tax law, in
each case, as amended. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes hereof as having been paid to the
holder of the shares in respect of which such deduction and withholding was
made, provided that such withheld amounts are actually remitted to the
appropriate taxing authority. To the extent that the amount so required to be
deducted or withheld from any payment to a holder exceeds the cash portion of
the consideration otherwise payable to the holder, SPX, SPX Subco No. 4, Amalco
and the Depositary are hereby authorized to sell or otherwise dispose of such
portion of the consideration as is necessary to provide sufficient funds to SPX,
SPX Subco No. 4, Amalco or the Depositary, as the case may be, to enable it to
comply with such deduction or withholding requirement and SPX, SPX Subco No. 4,
Amalco or the Depositary shall notify the holder thereof and remit to the holder
any unapplied balance of the net proceeds of such sale.
SECTION 4.6 EXTINCTION OF RIGHTS.
Any certificate which immediately prior to the Effective Time
represented outstanding UDI Common Shares that is not deposited with all other
instruments required by Section 4.1 on or prior to the sixth anniversary of the
Effective Date shall cease to represent a claim or interest of any kind or
nature as a shareholder of SPX. On such date, the SPX Common Shares to which the
former holder of the certificate referred to in the preceding sentence was
ultimately entitled shall be deemed to have been surrendered for no
consideration to SPX Subco No. 4, together with all entitlements to dividends,
distributions and interest in respect thereof held for such former holder. None
of SPX, SPX Subco No. 4, Amalco or the Depositary shall be liable to any Person
in respect of any SPX Common Shares (or dividends, distributions and interest in
respect thereof) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
B-15
67
ARTICLE 5
AMENDMENTS
SECTION 5.1 AMENDMENTS TO PLAN OF ARRANGEMENT.
UDI and MergeCo reserve the right to amend, modify and/or supplement
this Plan of Arrangement at any time and from time to time prior to the
Effective Date, provided that each such amendment, modification and/or
supplement must be (i) set out in writing, (ii) previously approved by SPX, and,
if required by the Merger Agreement, UDI, (iii) filed with the Court and, if
made following the UDI Meeting, approved by the Court, and (iv) communicated to
holders of UDI Common Shares and UDI Options if and as required by the Court.
Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by UDI at any time prior to the UDI Meeting (provided that SPX
shall have previously consented thereto) with or without any other prior notice
or communication (all as may be required under the Interim Order), and if
included in the Arrangement Resolution shall become part of this Plan of
Arrangement for all purposes.
Any amendment, modification or supplement to this Plan of Arrangement
that is approved by the Court following the UDI Meeting shall be effective only
if it is consented to by each of UDI and SPX.
ARTICLE 6
FURTHER ASSURANCES
SECTION 6.1 FURTHER ASSURANCES.
Notwithstanding that the transactions and events set out herein shall
occur and be deemed to occur in the order set out in this Plan of Arrangement
without any further act or formality, each of the parties to the Merger
Agreement shall make, do and execute, or cause to be made, done and executed all
such further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by any of them in order to further
document or evidence any of the transactions or events set out herein.
X-00
00
XXXXXXXX "X"
XXXXXXXXXX APPROVALS
SPX REGULATORY APPROVALS
1. Investment Canada Act Approval.
2. Competition Act Approval.
3. Orders of Securities Authorities permitting the various trades
of SPX Common Shares and the Amalco Special Share contemplated
in the Arrangement to be effected without compliance with the
prospectus and registration requirements under applicable
Securities Laws and the orders contemplated in Section 2.6 of
the Agreement.
4. Requisite European competition authority approvals.
5. HSR Approval.
UDI REGULATORY APPROVALS
1. Investment Canada Act Approval.
2. Competition Act Approval.
3. Requisite European competition authority approvals.
4. HSR Approval.
C-1
69
SCHEDULE "D"
REPRESENTATIONS AND WARRANTIES OF SPX
SPX hereby represents and warrants to and in favour of UDI as follows,
except as otherwise disclosed in the corresponding Sections or Subsections of
the SPX Disclosure Letter:
SECTION D.1 ORGANIZATION AND QUALIFICATION.
SPX is a corporation duly incorporated and organized and validly
existing under the Laws of the State of Delaware and has the requisite corporate
power and authority to carry on its business as it is now being conducted. Each
of SPX's subsidiaries is a corporation duly incorporated and organized and
validly existing under the Laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority to carry on its business as now
being conducted. SPX and each of its subsidiaries is duly registered to do
business and is in good standing in each jurisdiction in which the character of
its properties, owned or leased, or the nature of its activities make such
registration necessary, except where the failure to be so registered or in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect on SPX. The copies of SPX's certificate of incorporation and bylaws filed
or incorporated by reference in SPX's Annual Report on Form 10-K for the year
ended December 31, 1999 are complete and correct, have not been amended and are
in full force and effect.
SECTION D.2 AUTHORITY RELATIVE TO THIS AGREEMENT.
SPX has the requisite corporate authority to enter into this Agreement
and to carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the Transactions have been duly authorized by
SPX's Board of Directors, and no other corporate proceedings on the part of SPX
are necessary to authorize this Agreement and the Transactions (except for
possibly obtaining shareholder approval in respect of the SPX Resolution and the
approval of the issuance of the SPX Common Shares in the Plan of Arrangement).
The Board of Directors of SPX, at a meeting duly called and held at which a
quorum was present throughout, has unanimously determined (a) that the
Transactions are in the best interest of SPX and its shareholders and (b) to
recommend to SPX's shareholders that they vote their SPX Common Shares in favor
of the Transactions (the "SPX BOARD RECOMMENDATION"), and the SPX Board
Recommendation has not been revoked or modified. This Agreement has been duly
executed and delivered by SPX and constitutes the legal, valid and binding
obligation of SPX enforceable against SPX in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other Laws relating to or affecting creditors' rights generally and to general
principles of equity.
X-0
00
XXXXXXX X.0 XX VIOLATIONS.
(1) Neither the execution and delivery of this Agreement by SPX, the
consummation of the Transactions nor compliance by SPX with any of the
provisions hereof will: (i) violate, conflict with, or result in breach
of any provision of or the creation of any rights in favour of another
party under, require any consent, approval or notice under, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) or result in a right of
termination or acceleration or any other change in any of the rights or
obligations of any party under, or result in a creation of any lien,
security interest, charge or encumbrance upon any of the properties or
assets of SPX or any of its subsidiaries under, any of the terms,
conditions or provisions of (x) the SPX Governing Documents or the
comparable governing documents of any of its subsidiaries or (y) any
note, bond, mortgage, indenture, loan agreement, deed of trust,
agreement, lien or other Contract, instrument or obligation to which
SPX or any of its subsidiaries is a party or to which any of them, or
any of their respective properties or assets, may be subject or by
which SPX or any of its subsidiaries is bound; or (ii) subject to
compliance with the statutes and regulations referred to in Section
D.3(2) below, violate any judgment, ruling, order, writ, injunction,
determination, award, decree or Law applicable to SPX or any of its
subsidiaries (except, in the case of each of clauses (i) and (ii)
above, for such violations, conflicts, breaches, defaults or
terminations which would not, or any consents, approvals or notices
which, if not given or received, would not, individually or in the
aggregate, have a Material Adverse Effect on SPX).
(2) No consent, approval, order or authorization of, or declaration or
filing with, any Governmental Authority is required to be obtained in
connection with the execution and delivery by SPX of this Agreement or
the consummation by SPX of the Transactions other than (A) consents,
approvals, orders, authorizations, declarations or filings of or with
any Governmental Authority that are required to be disclosed pursuant
to Section E.3(2), as to which no representation or warranty is made,
and (B) any other consents, approvals, orders, authorizations,
declarations, or filings of or with a Governmental Authority which if
not obtained would not, individually or in the aggregate, have a
Material Adverse Effect on SPX.
SECTION D.4 CAPITALIZATION.
The authorized share capital of SPX consists of 100 million SPX Common
Shares and 3,000,000 shares of preferred stock, without par value, issuable in
series. As of March 8, 2001, 30,447,446 SPX Common Shares were issued and
outstanding and 500,000 shares were designated as Series A Preferred Stock, of
which none were outstanding, and 5,000,000 SPX Common Shares were reserved for
issuance pursuant to the exercise of options granted under the SPX stock option
plans and set
D-2
71
forth in Section D.4 of the SPX Disclosure Letter. Except for the aforesaid SPX
options, there are no options, warrants or other rights, agreements or
commitments of any character whatsoever ("SPX SHARE ARRANGEMENTS") requiring the
issuance, grant, sale or transfer by SPX of any shares of SPX (including the SPX
Common Shares) or any securities convertible into, or exchangeable or
exercisable for, or otherwise evidencing a right to acquire, any shares of SPX
including the SPX Common Shares) (collectively, with shares of SPX, "SPX
SECURITIES"), nor are there any outstanding stock appreciation rights, phantom
equity or similar rights, agreements, arrangements or commitments based upon the
book value, income or other attribute of SPX ("SPX PHANTOM RIGHTS"). Since
January 19, 2001, there have been no increases to any of the amounts set forth
above, other than increases in the number of outstanding SPX Common Shares by
reason of issuance of SPX Common Shares upon exercise of any of the outstanding
SPX options set forth above, which issuances have reduced the number of such
outstanding SPX options by a corresponding amount. There are no obligations of
SPX or any subsidiary to repurchase, redeem or otherwise acquire any SPX
Securities. All outstanding SPX Common Shares have been duly authorized and
validly issued, are fully paid and non-assessable and are not subject to, nor
were they issued in violation of, any preemptive rights, and all SPX Common
Shares issuable upon exercise of outstanding stock options in accordance with
their respective terms will be duly authorized and validly issued, fully paid
and non-assessable and will not be subject to any preemptive rights.
SECTION D.5 NO MATERIAL ADVERSE CHANGE.
Since December 31, 2000, there has not been any event, occurrence or
development, alone or taken together with all other existing facts, that,
individually or in the aggregate, has a Material Adverse Effect on SPX.
SECTION D.6 NO UNDISCLOSED MATERIAL LIABILITIES.
Neither SPX nor any of its subsidiaries has any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise (and
whether or not the subject of any other representation or warranty hereunder),
except (a) liabilities or obligations reserved against or disclosed in the
audited consolidated financial statements of SPX as of and for the fiscal year
ended December 31, 2000 contained in SPX's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, or disclosed in the footnotes thereto or
otherwise disclosed in such Annual Report on Form 10-K (in each case, in the
amount or of the magnitude so reserved against or disclosed), and (b)
liabilities or obligations which do not, individually or in the aggregate, have
a Material Adverse Effect on SPX.
SECTION D.7 BROKERAGE FEES.
SPX has not retained (nor will it retain) any financial advisor,
broker, agent or finder or paid or agreed to pay any financial advisor, broker,
agent or finder on account of this Agreement or any of the Transactions, except
that Chase Securities Inc. has been
D-3
72
retained as SPX's financial advisor in connection with certain matters,
including the Transactions. SPX has delivered to UDI a true and complete copy of
its agreement with Chase Securities Inc.
SECTION D.8 REQUIRED VOTE.
Assuming any approval by SPX Shareholders of the SPX
Resolution is required, then the requisite vote is the affirmative vote of the
holders of a majority of shares present at the SPX Shareholders Meeting (the
"SPX SHAREHOLDERS APPROVAL") and no other vote of SPX's shareholders is required
under Law, SPX's certificate of incorporation or otherwise in order for SPX to
consummate the Transactions.
SECTION D.9 REPORTS.
(1) SPX has timely filed with the Securities Authorities all forms,
reports, schedules, statements and other documents required to be filed
by it since December 31, 1997 under the Securities Laws (such
documents, as supplemented or amended since the time of filing, and
including all exhibits and schedules thereto and documents incorporated
by reference therein, the "SPX SECURITIES REPORTS"). SPX has heretofore
delivered to UDI true and complete copies of the SPX Securities
Reports. As of their respective dates, the SPX Securities Reports did
not contain any untrue statement of a material fact or omit to state a
material fact that is required to be stated therein or that is
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and complied in all material
respects with all applicable requirements of Law. The audited financial
statements and unaudited interim financial statements (including any
related notes or schedules) of SPX and its consolidated subsidiaries
publicly issued by SPX, or included or incorporated by reference in the
SPX Securities Reports, were prepared in accordance with generally
accepted accounting principles in the United States consistently
applied (except (i) as otherwise indicated in such financial statements
and the notes thereto or, in the case of audited statements, in the
related report of SPX's independent accountants; or (ii) in the case of
unaudited interim financial statements, to the extent they may not
include footnotes or may be condensed or summary statements), and
fairly present the consolidated financial position, results of
operations and changes in financial position of SPX and its
consolidated subsidiaries as of the dates thereof and for the periods
indicated therein (subject, in the case of any unaudited interim
financial statements, to normal year-end audit adjustments which,
individually or in the aggregate, would not be material in amount or
effect).
(2) SPX will deliver to UDI as soon as they become available true and
complete copies of any SPX Securities Report filed by it with
Securities Authorities subsequent to the date hereof. As of their
respective dates, such SPX Securities Reports (excluding any
information therein provided by UDI, as to which SPX makes no
representation) will not contain any misrepresentation or untrue
D-4
73
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 are made, not misleading
and will comply in all material respects with all applicable
requirements of Law. The financial statements of SPX and its
consolidated subsidiaries (including any related notes or schedules)
issued thereby or to be included or incorporated by reference in such
SPX Securities Reports (excluding any information therein provided by
UDI, as to which SPX makes no representation) will be prepared in
accordance with generally accepted accounting principles in the United
States consistently applied (except (i) as otherwise indicated in such
financial statements and the notes thereto or, in the case of audited
statements, in the related report of SPX's independent accountants; or
(ii) in the case of unaudited interim financial statements, to the
extent they may not include footnotes or may be condensed or summary
statements) and will present fairly the consolidated financial
position, results of operations and changes in financial position of
SPX and its consolidated subsidiaries as of the dates thereof and for
the periods indicated therein (subject, in the case of any unaudited
interim financial statements, to normal year-end audit adjustments
which, individually or in the aggregate, would not be material in
amount or effect).
SECTION D.10 U.S. REGISTRATION.
The SPX Common Shares were not issued by a closed-end investment
company registered under the United States Investment Company Act of 1940.
SECTION D.11 SUBSIDIARIES.
(a) All of the capital stock of, or other ownership interest in, each
of SPX's subsidiaries is validly issued, fully paid and nonassessable and is
beneficially owned, directly or indirectly, by SPX, free and clear of any and
all liens, charges, security interests, adverse claims, encumbrances and demands
of any nature or kind whatsoever. There are no existing SPX Share Arrangements
requiring the issuance, grant, sale or transfer by any SPX subsidiary of any
shares of any SPX subsidiary or any securities convertible into, or exchangeable
or exercisable for, or otherwise evidencing a right to acquire, any shares of
any SPX subsidiary (collectively with shares of any SPX subsidiary, "SPX
SUBSIDIARY SECURITIES"), nor are there any outstanding stock appreciation
rights, phantom equity or similar rights, agreements, arrangements or
commitments based upon the book value, income or other attribute of any SPX
subsidiary ("SPX SUBSIDIARY PHANTOM RIGHTS"). There are no obligations of SPX or
any subsidiary to repurchase, redeem or otherwise acquire any SPX Subsidiary
Securities. None of the certificates of incorporation or bylaws or other
organizational documents of any of SPX's subsidiaries purport to grant rights to
any Person or group other than (1) customary rights with respect to corporate
governance given to all shareholders pro rata in accordance with their holdings
and (2) customary rights of indemnification of directors and officers.
D-5
74
(b) A complete listing of SPX's subsidiaries, other than inactive
subsidiaries with less than $1,000,000 in assets or liabilities (including
contingent liabilities) (the "SPX INACTIVE SUBSIDIARIES") is set forth in
Section D.11(b) of the SPX Disclosure Letter. Except as set forth in Section
D.11(b) of the SPX Disclosure Letter, neither SPX nor any of its subsidiaries
directly or indirectly owns any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture, business association
or other entity other than the SPX Inactive Subsidiaries.
SECTION D.12 LITIGATION.
There is no litigation, suit, claim, action, prosecution, proceeding or
governmental investigation pending or, to the knowledge of SPX, threatened
against or relating to SPX or any of its subsidiaries (including, for greater
certainty, with respect to any environmental or employee matters) that (i)
involves a claim against SPX or any of its subsidiaries that (x) could
reasonably be expected to result in damages in excess of $1,000,000 or seeks
damages in excess of $5,000,000, (y) seeks injunctive or other equitable relief
or (z) individually or in the aggregate, would, if successful (and regardless of
amount), have a Material Adverse Effect on SPX; or (ii) in any manner challenges
or seeks to prevent, enjoin, alter or materially delay or limit the performance
of this Agreement by SPX or any of the transactions contemplated hereby. Neither
SPX (or any of its subsidiaries) nor any property or asset of SPX (or any of its
subsidiaries) is subject to any Governmental Order which, individually or in the
aggregate, would prevent SPX from performing its material obligations under this
Agreement or has a Material Adverse Effect on SPX.
SECTION D.13 ENVIRONMENTAL.
(1) SPX and its subsidiaries have been and are in compliance with all
applicable environmental Laws, except for non-compliance that does not,
individually or in the aggregate, have a Material Adverse Effect on
SPX.
(2) Since December 31, 1998, neither SPX nor any of its subsidiaries has
ever received any notice of or been prosecuted for material
non-compliance with any environmental Laws, nor has SPX or any of its
subsidiaries settled any allegation of non-compliance short of
prosecution.
(3) There are no actual or, to the knowledge of SPX, threatened orders,
warnings or directions relating to environmental matters requiring any
work, repair or construction or capital expenditures to be made with
respect to any of SPX's or any of its subsidiaries' properties or
operations, nor has SPX or any of its subsidiaries received notice of
any of the same, that, individually or in the aggregate, have a
Material Adverse Effect on SPX.
D-6
75
(4) There is not on, in or under any property currently or, to SPX's
knowledge, previously owned, leased, managed, controlled or operated by
SPX or any of its subsidiaries any of the following: (1) underground
storage tanks or surface impoundments, (2) asbestos-containing
materials, (3) polychlorinated biphenyls, or (4) other "Hazardous
Substances" (as such term is defined under the Comprehensive
Environmental, Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601, et seq., as amended as of the date hereof) or
petroleum products, in each case which would reasonably be expected to
form the basis of liability or other obligation of SPX or any of its
subsidiaries under any applicable environmental Laws, except for such
liabilities or obligations which do not, individually or in the
aggregate, have a Material Adverse Effect on SPX.
SECTION D.14 TAX MATTERS.
(1) SPX and its subsidiaries have timely filed all Tax Returns required to
be filed by applicable Law with respect to each of SPX and its
subsidiaries or any of their income, properties or operations, except
where the failure to file does not, individually or in the aggregate,
have a Material Adverse Effect on SPX. All such Tax Returns are true,
accurate and complete and accurately set forth all items required to be
reflected or included in such Tax Returns by applicable Tax Laws,
except to the extent that any inaccuracies in filed Tax Returns do not,
individually or in the aggregate, have a Material Adverse Effect on
SPX. SPX and its subsidiaries have timely paid all Taxes attributable
to each of SPX and its subsidiaries that were due and payable without
regard to whether such Taxes have been assessed, except to the extent
that failure to pay does not, individually or in the aggregate, have a
Material Adverse Effect on SPX. SPX has made available to UDI complete
and accurate copies of all United States federal, state, provincial,
local and foreign income tax and corporate tax returns, and any
amendments thereto, filed by or on behalf of SPX or any of its
subsidiaries or any member of a group of corporations including SPX or
any of its subsidiaries for the taxable years ending 1997, 1998 and
1999.
(2) There are no pending or, to the knowledge of SPX, threatened audits,
examinations, investigations, deficiencies, claims or other proceedings
relating to Taxes of SPX or any of its subsidiaries. SPX and its
subsidiaries have made adequate provisions in accordance with United
States generally accepted accounting principles appropriately and
consistently applied to each of SPX and its subsidiaries in the
consolidated financial statements included in the SPX Securities
Reports referred to in Section D.9(1) for the payment of all Taxes for
which SPX and its subsidiaries may be liable for the periods covered
thereby that were not yet due and payable as of the dates thereof,
regardless of whether the liability for such Taxes is disputed. None of
SPX or any of its subsidiaries is liable for Taxes in respect of the
period after the date of such consolidated financial statements other
than in respect of Taxes arising in the ordinary course of
D-7
76
business and Taxes that do not, individually or in the aggregate,
have a Material Adverse Effect on SPX.
(3) There are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any material Tax Return of SPX or
any of its subsidiaries, including, without limitation, any waiver or
other arrangement providing for an extension of time with respect to
the filing of any such Tax Return, the payment of any Tax or the
issuance of an assessment or reassessment. Neither SPX nor any of its
subsidiaries has made an election under Section 341(f) of the Code.
Neither SPX nor any of its subsidiaries (i) has any Tax liability under
United States Treasury Regulation Section 1.1502-6 or analogous state,
local, or foreign law provision for the Tax liabilities of any entity
other than SPX or any of its subsidiaries, or as a transferee or
successor, except to the extent any such liabilities do not,
individually or in the aggregate, have a Material Adverse Effect on
SPX, or (ii) is a party to a Tax sharing or Tax indemnity agreement or
any other agreement of a similar nature with any entity other than SPX
or any of its subsidiaries that remains in effect and under which SPX
or any such subsidiary could have any material liability for Taxes. No
claim has been made in writing by a taxing authority in a jurisdiction
where SPX or any of its subsidiaries does not file Tax Returns that SPX
or any of its subsidiaries is or may be subject to taxation by that
jurisdiction where such claim, if determined adversely to SPX or such
subsidiary, would, individually or in the aggregate, have a Material
Adverse Effect on SPX.
(4) SPX and each of its subsidiaries has withheld or collected all amounts
required to be withheld or collected by it on account of Taxes and has
remitted all such amounts to the appropriate Tax authority when
required by Law to do so, except where the failure to do so would not,
individually or in the aggregate, have a Material Adverse Effect on
SPX. With respect to any taxable period ended prior to January 1, 1990,
all United States federal income Tax Returns of SPX and its
subsidiaries have been audited by the relevant Taxing Authority or are
closed by the applicable statue of limitations. SPX and each of its
subsidiaries is in full compliance with all terms and conditions of any
Tax exemptions or other Tax-sparing agreement or order of a foreign
government and the consummation of the Transactions shall not have any
adverse effect on the continued validity and effectiveness of any such
Tax exemptions or other Tax-sparing agreement or order.
SECTION D.15 COMPLIANCE WITH LAWS.
SPX and each of its subsidiaries each:
(a) conducts its businesses in compliance with all Laws
applicable thereto or to its employees or properties;
D-8
77
(b) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit it to conduct its
businesses substantially as presently conducted; all such permits, licenses,
authorizations, orders and approvals are in full force and effect and, to SPX's
knowledge, no suspension or cancellation of any of them is threatened; and
(c) has received, since December 31, 1998, no notification or
communication from any Governmental Authority (i) asserting that it is not in
compliance with any Laws or Governmental Orders, (ii) threatening to revoke any
permit, license, authorization, order or approval, or (iii) failing to approve
any proposed acquisition, or stating the intention not to approve any
acquisition proposed to be effected by it within a certain time period or
indefinitely;
except for instances which do not, individually or in the aggregate, have a
Material Adverse Effect on SPX.
SECTION D.16 EMPLOYEE BENEFITS.
(a) True and complete copies of all SPX Benefit Plans and
related documents, and all amendments thereto, have been made available to UDI.
(b) SPX has administered each SPX Benefit Plan in all material
respects in accordance with the terms thereof and all applicable Laws and all
contributions, premiums and payments required to be made under the terms of any
SPX Benefit Plan have been made. Each SPX Benefit Plan which is intended to be
qualified under Section 401(a) of the Code has received a favourable
determination letter from the Internal Revenue Service, and SPX is not aware of
any circumstances reasonably likely to adversely affect the qualified status of
such plan. SPX has made available to UDI reasonably acceptable evidence that
each SPX Canadian Pension Plan and all amendments thereto have been accepted for
registration by Canada Customs and Revenue Agency and any provincial
Governmental Authority having jurisdiction over such SPX Canadian Pension Plan.
Nothing has occurred which would result in the revocation of the registration of
any SPX Canadian Pension Plan under the ITA and any applicable provincial
pension legislation. All amounts paid by SPX under the provisions of the SPX
Canadian Pension Plans will be deductible for income tax purposes.
(c) No material liability under Title IV of ERISA has been or
is reasonably expected to be incurred by SPX or any of its subsidiaries or any
ERISA Affiliate. No Pension Plan of SPX or any of its subsidiaries or any ERISA
Affiliate has incurred any "accumulated funding deficiency," as defined in
Section 412 of the Code and Section 302 of ERISA, whether or not waived.
(d) Each SPX Canadian Pension Plan that is a defined benefit
pension plan is not underfunded on either a "going concern" and a "solvency"
basis by more than
D-9
78
$3,000,000, as determined in accordance with the actuarial assumptions and
methods used in the most recent actuarial report filed with (and accepted for
filing by) the applicable Governmental Authorities in respect of each such SPX
Canadian Pension Plan. There has been no withdrawal by SPX of assets from any
SPX Canadian Pension Plan and no application for approval of a withdrawal of
assets has been made to any Governmental Authority. Any application of surplus
assets in any of the SPX Canadian Pension Plans to offset required employer
contributions to such SPX Canadian Pension Plans has been permitted by Law and
was permitted under the terms of the relevant SPX Canadian Pension Plan and
associated funding agreement.
(e) All liabilities for benefits arising out of or relating to
each SPX Benefit Plan established or operated pursuant to the Laws of any
jurisdiction other than the United States or Canada (i) have been determined in
accordance with the terms of the applicable plan document, applicable Law and
actuarial assumptions appropriate for such jurisdiction and in a manner that
fairly reflects the total liabilities of the applicable SPX Benefit Plan, and
(ii) have been accurately reserved against or disclosed in the audited
consolidated financial statements of SPX.
(f) The execution of this Agreement or performance of the
Transactions will not (either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any SPX Benefit Plan,
employment, termination or severance Contract, trust or loan that will or may
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any current or former employee,
officer or director, or (ii) result in the triggering or imposition of any
restrictions or limitations on the right of SPX to amend or terminate any SPX
Benefit Plan and receive the full amount of any excess assets remaining or
resulting from such amendment or termination, subject to applicable Taxes. The
execution of this Agreement or performance of the Transactions will not (either
alone or upon the occurrence of any additional or subsequent events) result in
any payment or benefit being made by SPX or any of its affiliates with respect
to any employee of SPX that will be characterized as an "excess parachute
payment," within the meaning of Section 280G(b)(1) of the Code.
(g) Neither SPX, any of its subsidiaries, nor any ERISA
Affiliate has any material liability with respect to any benefit plan which
provides life insurance, medical, severance or other employee welfare benefits
to any of its employees upon his retirement or termination of employment, except
as may be required by Section 4980B of the Code or any other Law.
(h) Neither SPX, any of its subsidiaries, nor any ERISA
Affiliate has incurred or reasonably expects to incur any withdrawal liability
(within the meaning of Section 4201 of ERISA) with respect to any
"multi-employer plan" within the meaning of Sections 3(37) or 4001(a)(3) of
ERISA (a "MULTI-EMPLOYER PLAN"), which liability has not been fully paid as of
the date hereof. As of the Effective Time, SPX, each of its
D-10
79
subsidiaries and each ERISA Affiliate will not have completely or partially
withdrawn from any Multi-Employer Plan and will not be subject to any withdrawal
liability as described in Section 4201 of ERISA for withdrawals that have
occurred on or prior to the Effective Date. Neither SPX, any of its subsidiaries
nor any ERISA Affiliate has knowledge that any Multi-Employer Plan fails to
qualify under Section 401(a) of the Code, is insolvent or is in reorganization
within the meaning of Part 3 of Subtitle E of Title IV of ERISA.
(i) SPX and each of its subsidiaries (i) is in compliance in
all material respects with all applicable Laws respecting employment, employment
practices, labor, terms and conditions of employment and wages and hours; and
(ii) has withheld all material amounts required by Law or by agreement to be
withheld from the wages, salaries and other payments to its employees.
(j) No work stoppage or labor strike against SPX or any of its
subsidiaries is pending or, to the knowledge of SPX, threatened. Neither SPX nor
any of its subsidiaries (i) is involved in or, to the knowledge of SPX,
threatened with any material labor dispute, grievance, or litigation relating to
labor matters, including, without limitation, violation of any federal, state or
local labor, safety or employment laws (domestic or foreign), charges of unfair
labor practices or discrimination complaints; or (ii) has engaged in any
material unfair labor practices within the meaning of the National Labor
Relations Act or the Railway Labor Act.
SECTION D.17 INSURANCE.
Section D.17 of the SPX Disclosure Letter is a true and
complete description of all policies of fire, liability, production, completion
bond, errors and omissions, workmen's compensation and other forms of insurance
owned or held by SPX or any of its subsidiaries currently in effect or in effect
at any time since December 31, 1999 covering the assets, business, operations,
officers, directors or employees of SPX or any of its subsidiaries. All current
insurance policies are in full force and effect, all premiums with respect
thereto covering all periods up to and including the Effective Time have been
paid or will be paid prior to the Effective Time, and no notice of cancellation
or termination has been received with respect to any such policy. Such policies
(i) are sufficient for compliance with all requirements of Law and of all
Contracts to which SPX or any of its subsidiaries is a party, (ii) cover the
respective policy periods and the risks or matters, and provide the coverage
(including any deductibles or retentions), set forth in Section D.17 of the SPX
Disclosure Letter and (iii) will not in any way be affected by, or terminate or
lapse by reason of, the Transactions. During the last three years, neither SPX
nor any of its subsidiaries has been refused any insurance with respect to its
assets or operations, nor has its coverage been limited, by any insurance
carrier to which it has applied for any such insurance or with which it has
carried insurance. Neither SPX nor any of its subsidiaries has received any
notice of increase in premiums with respect to, or cancellation or non-renewal
D-11
80
of, any of its insurance policies, and neither SPX nor any of its subsidiaries
has made any claim against an insurance policy as to which the insurer is
denying coverage or defending the claim under a reservation of rights.
SECTION D.18 INTELLECTUAL PROPERTY.
With respect to each item of intellectual property or
proprietary information used in the business of SPX and its subsidiaries ("SPX
INTELLECTUAL PROPERTY"), SPX and its subsidiaries own or are validly licensed,
or otherwise possess legally enforceable rights, to use the SPX Intellectual
Property and the consummation of the transactions contemplated hereby will not
alter or impair such ability in any respect, except for instances which do not,
individually or in the aggregate, have a Material Adverse Effect on SPX. To
SPX's knowledge, the conduct of the business of SPX and its subsidiaries and the
SPX Intellectual Property do not infringe any rights of any Third Party, and,
neither SPX nor any of its subsidiaries has received any written notice from any
other third party pertaining to or challenging the right of SPX or any of its
subsidiaries to use any of the SPX Intellectual Property. To SPX's knowledge, no
third party is infringing upon any of the SPX Intellectual Property, except as
do not, individually or in the aggregate, have a Material Adverse Effect on SPX.
With respect to each item of SPX Intellectual Property that is an application,
either SPX or the applicable subsidiary is the applicant or has the right to
require the applicant to transfer ownership to SPX or such subsidiary of the
application and of the registration once it issues. All rights of SPX and its
subsidiaries in the SPX Intellectual Property are valid and subsisting and in
full force and effect, except for instances which do not, individually or in the
aggregate, have a Material Adverse Effect on SPX. The SPX Intellectual Property
is all the intellectual property that is necessary for conduct of the business
of SPX and its subsidiaries, as is currently conducted.
SECTION D.19 TITLE TO ASSETS.
SPX and its subsidiaries own or hold under valid Contracts all
of the assets, tangible or intangible, necessary for the conduct of their
business as currently conducted except where the failure to own or so hold such
assets does not, individually or in the aggregate, have a Material Adverse
Effect on SPX.
SECTION D.20 OPINION OF FINANCIAL ADVISOR.
The Board of Directors of SPX has received the opinion of
Chase Securities Inc. to the effect that, as of the date of this Agreement, the
Exchange Ratio is fair, from a financial point of view, to SPX and such opinion
has not been revoked or modified in any respect. A copy of the written opinion
of Chase Securities Inc. to the foregoing effect will be delivered to UDI as
soon as practicable after the date of this Agreement.
D-12
81
SECTION D.21 MATERIAL CONTRACTS.
Each note, mortgage, indenture, nongovernmental permit or
license, lease or other contract, agreement, commitment or arrangement (each, a
"CONTRACT") binding upon SPX or any of its subsidiaries (each, an "SPX
CONTRACT"), that is required to be described in the SPX Securities Reports has
been described in the SPX Securities Reports, and all of the SPX Contracts that
are required to be filed as exhibits thereto are filed as exhibits thereto.
Neither SPX nor any of its subsidiaries nor, to SPX's knowledge, any other party
is in breach of or in default under any SPX Contract except for such breaches
and defaults which do not, individually or in the aggregate, have a Material
Adverse Effect on SPX.
D-13
82
SCHEDULE "E"
REPRESENTATIONS AND WARRANTIES OF UDI
UDI hereby represents and warrants to and in favour of SPX as follows,
except as otherwise disclosed in the corresponding Sections or Subsections of
the UDI Disclosure Letter:
SECTION E.1 ORGANIZATION AND QUALIFICATION.
UDI is a corporation duly continued under and governed by the CBCA and
has the requisite corporate power and authority to carry on its business as it
is now being conducted. Each of UDI's subsidiaries is a corporation duly
incorporated and organized and validly existing under the Laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to carry on its business as now being conducted. UDI and each of its
subsidiaries is duly registered to do business and is in good standing in each
jurisdiction in which the character of its properties, owned or leased, or the
nature of its activities make such registration necessary, except where the
failure to be so registered or in good standing would not, individually or in
the aggregate, have a Material Adverse Effect on UDI. The copies of UDI's
certificate of incorporation and bylaws filed or incorporated by reference in
UDI's Annual Report on Form 10-K for the year ended December 31, 1999 (as
amended by Amendment No. 1 on Form 10-K/A), ("UDI'S 1999 FORM 10-K") are
complete and correct, have not been amended and are in full force and effect.
SECTION E.2 AUTHORITY RELATIVE TO THIS AGREEMENT.
UDI has the requisite corporate authority to enter into this Agreement
and to carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the Transactions have been duly authorized by
UDI's Board of Directors, and no other corporate proceedings on the part of UDI
are necessary to authorize this Agreement and the Transactions (except for
obtaining shareholder approval of the Arrangement Resolution). The Board of
Directors of UDI, at a meeting duly called and held at which a quorum was
present throughout, has unanimously determined (a) that the Transactions are in
the best interest of UDI and its shareholders and (b) to recommend to UDI's
shareholders that they vote their UDI Shares in favor of the Transactions (the
"UDI BOARD RECOMMENDATION"), and the UDI Board Recommendation has not been
revoked or modified. This Agreement has been duly executed and delivered by UDI
and constitutes the legal, valid and binding obligation of UDI enforceable
against UDI in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other Laws relating to or
affecting creditors' rights generally and to general principles of equity.
X-0
00
XXXXXXX X.0 XX VIOLATIONS.
(1) Neither the execution and delivery of this Agreement by UDI, the
consummation of the Transactions nor compliance by UDI with any of the
provisions hereof will: (i) violate, conflict with, or result in breach
of any provision of or the creation of any rights in favour of another
party under, require any consent, approval or notice under, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) or result in a right of
termination or acceleration or any other change in any of the rights or
obligations of any party under, or result in a creation of any lien,
security interest, charge or encumbrance upon any of the properties or
assets of UDI or any of its subsidiaries under, any of the terms,
conditions or provisions of (x) the UDI Governing Documents or the
comparable governing documents of any of its subsidiaries or (y) any
note, bond, mortgage, indenture, loan agreement, deed of trust,
agreement, lien, or other Contract, instrument or obligation to which
UDI or any of its subsidiaries is a party or to which any of them, or
any of their respective properties or assets, may be subject or by
which UDI or any of its subsidiaries is bound; or (ii) subject to
compliance with the statutes and regulations referred to in Section
E.3(2) below, violate any judgment, ruling, order, writ, injunction,
determination, award, decree or Law applicable to UDI or any of its
subsidiaries (except, in the case of each of clauses (i) and (ii)
above, for such violations, conflicts, breaches, defaults or
terminations which would not, or any consents, approvals or notices
which, if not given or received, would not, individually or in the
aggregate, have a Material Adverse Effect on UDI).
(2) No consent, approval, order or authorization of, or declaration or
filing with, any Governmental Authority is required to be obtained in
connection with the execution and delivery of this Agreement or the
consummation of the Transactions other than (A) any approvals required
by the Interim Order, (B) the Final Order, (C) filings with the
Director under the CBCA, (D) the Regulatory Approvals relating to UDI,
(E) consents, approvals, orders, authorizations, declarations or
filings of or with any Governmental Authority that are required solely
as a result of the identity or legal or regulatory status of SPX and
(F) any other consents, approvals, orders, authorizations,
declarations, or filings of or with a Governmental Authority which if
not obtained would not, individually or in the aggregate, have a
Material Adverse Effect on UDI.
SECTION E.4 CAPITALIZATION.
The authorized share capital of UDI consists of an unlimited number of
common shares and an unlimited number of preferred shares, issuable in series.
As of March 1, 2001, 39,134,539 UDI Shares and no preferred shares were issued
and outstanding, and 3,040,020 UDI Shares were reserved for issuance pursuant to
the exercise of outstanding UDI Options in that amount granted under the Stock
Option Plan and set forth in Section
E-2
84
E.4 of the UDI Disclosure Letter. Except for the aforesaid 3,040,020 UDI
Options, there are no options, warrants or other rights, agreements or
commitments of any character whatsoever ("UDI SHARE ARRANGEMENTS") requiring the
issuance, grant, sale or transfer by UDI of any shares of UDI (including the UDI
Shares) or any securities convertible into, or exchangeable or exercisable for,
or otherwise evidencing a right to acquire, any shares of UDI (including the UDI
Shares) (collectively with the shares of UDI, "UDI SECURITIES"), nor are there
any outstanding stock appreciation rights, phantom equity or similar rights,
agreements, arrangements or commitments based upon the book value, income or
other attribute of UDI ("UDI PHANTOM RIGHTS"). Since March 1, 2001, there have
been no increases to any of the amounts set forth above, other than increases in
the number of outstanding UDI Shares by reason of issuance of UDI Shares upon
exercise of any of the outstanding UDI Options set forth above, which issuances
have reduced the number of such outstanding UDI Options by a corresponding
amount. There are no obligations of UDI or any subsidiary to repurchase, redeem
or otherwise acquire any UDI Securities. All outstanding UDI Shares have been
duly authorized and validly issued, are fully paid and non-assessable and are
not subject to, nor were they issued in violation of, any preemptive rights, and
all UDI Shares issuable upon exercise of outstanding UDI Options in accordance
with their respective terms will be duly authorized and validly issued, fully
paid and non-assessable and will not be subject to any preemptive rights.
SECTION E.5 NO MATERIAL ADVERSE CHANGE.
Since December 31, 2000, there has not been any event, occurrence or
development, alone or taken together with all other existing facts, that,
individually or in the aggregate, has a Material Adverse Effect on UDI.
SECTION E.6 NO UNDISCLOSED MATERIAL LIABILITIES.
Neither UDI nor any of its subsidiaries has any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise (and
whether or not the subject of any other representation or warranty hereunder),
except (a) liabilities or obligations reserved against or disclosed in the
audited consolidated financial statements of UDI as of and for the fiscal year
ended December 31, 2000 (the "UDI 2000 FINANCIAL STATEMENTS") (copies of which
audited consolidated financial statements have been previously delivered to SPX)
or disclosed in the footnotes thereto or otherwise disclosed in UDI's Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000 or UDI's 1999 Form
10-K to the extent not superceded by the UDI 2000 Financial Statements (in each
case, in the amount or of the magnitude so reserved against or disclosed), and
(b) liabilities or obligations which do not, individually or in the aggregate,
have a Material Adverse Effect on UDI.
SECTION E.7 BROKERAGE FEES.
UDI has not retained (nor will it retain) any financial advisor,
broker, agent or finder or paid or agreed to pay any financial advisor, broker,
agent or finder on account of
E-3
85
this Agreement, any of the Transactions or any other transactions presently
ongoing or contemplated, except that BMO Xxxxxxx Xxxxx, Inc. ("BMO XXXXXXX
XXXXX"), X.X. Xxxxxx Securities, Inc. ("X.X. XXXXXX") and Lincoln Partners LLC
have been retained as UDI's financial advisors in connection with certain
matters, including the Transactions. UDI has delivered to SPX a true and
complete copy of its agreements with each of BMO Xxxxxxx Xxxxx, X.X. Xxxxxx and
Lincoln Partners LLC.
SECTION E.8 CONDUCT OF BUSINESS.
Since September 30, 2000, neither UDI nor any of its subsidiaries has
taken any action (i) that would be in violation of Section 6.1(b), Section
6.1(c)(x), Section 6.1(d) or Section 6.1(e) of the Agreement if such provision
had been in effect since such date or (ii) that would be in violation in any
material respect of any other provision of Section 6.1 of the Agreement if such
provision had been in effect since such date.
SECTION E.9 REPORTS.
(1) UDI has timely filed with the Securities Authorities all forms,
reports, schedules, statements and other documents required to be filed
by it since December 31, 1997 under the Securities Laws (such
documents, as supplemented or amended since the time of filing, and
including all exhibits and schedules thereto and documents incorporated
by reference therein, the "UDI SECURITIES REPORTS"). UDI has heretofore
delivered to SPX true and complete copies of the UDI Securities
Reports. As of their respective dates, the UDI Securities Reports did
not contain any untrue statement of a material fact or omit to state a
material fact that is required to be stated therein or that is
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and complied in all material
respects with all applicable requirements of Law. The audited financial
statements and unaudited interim financial statements (including any
related notes or schedules) of UDI and its consolidated subsidiaries
publicly issued by UDI, or included or incorporated by reference in the
UDI Securities Reports and the UDI 2000 Financial Statements, were
prepared in accordance with generally accepted accounting principles in
Canada consistently applied (except (i) as otherwise indicated in such
financial statements and the notes thereto or, in the case of audited
statements, in the related report of UDI's independent accountants; or
(ii) in the case of unaudited interim financial statements, to the
extent they may not include footnotes or may be condensed or summary
statements), and fairly present the consolidated financial position,
results of operations and changes in financial position of UDI and its
consolidated subsidiaries as of the dates thereof and for the periods
indicated therein (subject, in the case of any unaudited interim
financial statements, to normal year-end audit adjustments which,
individually or in the aggregate, would not be material in amount or
effect).
E-4
86
(2) UDI will deliver to SPX as soon as they become available true and
complete copies of any UDI Securities Report filed by it with
Securities Authorities subsequent to the date hereof. As of their
respective dates, such UDI Securities Reports (excluding any
information therein provided by SPX, as to which UDI makes no
representation) will not contain any misrepresentation or 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 are made, not misleading
and will comply in all material respects with all applicable
requirements of Law. The financial statements of UDI and its
consolidated subsidiaries (including any related notes or schedules)
issued thereby or to be included or incorporated by reference in such
UDI Securities Reports (excluding any information therein provided by
SPX, as to which UDI makes no representation) will be prepared in
accordance with generally accepted accounting principles in Canada
consistently applied (except (i) as otherwise indicated in such
financial statements and the notes thereto or, in the case of audited
statements, in the related report of UDI's independent accountants; or
(ii) in the case of unaudited interim financial statements, to the
extent they may not include footnotes or may be condensed or summary
statements) and will present fairly the consolidated financial
position, results of operations and changes in financial position of
UDI and its consolidated subsidiaries as of the dates thereof and for
the periods indicated therein (subject, in the case of any unaudited
interim financial statements, to normal year-end audit adjustments
which, individually or in the aggregate, would not be material in
amount or effect).
(3) UDI is a reporting issuer not in default of any of its obligations
under Canadian Securities Laws.
(4) UDI is a "foreign private issuer" within the meaning of Rule 3b-4 under
the Exchange Act and is not subject to Regulation 14A under the
Exchange Act.
SECTION E.10 U.S. REGISTRATION.
The UDI Shares were not issued by a closed-end investment company
registered under the United States Investment Company Act of 1940.
SECTION E.11 SUBSIDIARIES.
(a) All of the capital stock of, or other ownership interest in, each
of UDI's subsidiaries is validly issued, fully paid and nonassessable and is
beneficially owned, directly or indirectly, by UDI, free and clear of any and
all liens, charges, security interests, adverse claims, encumbrances and demands
of any nature or kind whatsoever. There are no existing UDI Share Arrangements
requiring the issuance, grant, sale or transfer by any UDI subsidiary of any
shares of any UDI subsidiary or any securities convertible into, or exchangeable
or exercisable for, or otherwise evidencing a right to acquire, any shares of
any UDI subsidiary (collectively with shares of any XXX
X-0
00
subsidiary, "UDI SUBSIDIARY SECURITIES"), nor are there any outstanding stock
appreciation rights, phantom equity or similar rights, agreements, arrangements
or commitments based upon the book value, income or other attribute of any UDI
subsidiary ("UDI SUBSIDIARY PHANTOM RIGHTS"). There are no obligations of UDI or
any subsidiary to repurchase, redeem or otherwise acquire any UDI Subsidiary
Securities. None of the certificates of incorporation or bylaws or other
organizational documents of any of UDI's subsidiaries purport to grant rights to
any Person or group other than (1) customary rights with respect to corporate
governance given to all shareholders pro rata in accordance with their holdings
and (2) customary rights of indemnification of directors and officers.
(b) A complete listing of UDI's subsidiaries, other than inactive
subsidiaries with less than $1,000,000 in assets or liabilities (including
contingent liabilities) (the "UDI INACTIVE SUBSIDIARIES") is set forth in
Section E.11(b) of the UDI Disclosure Letter. Except as set forth in Section
E.11(b) of the UDI Disclosure Letter, neither UDI nor any of its subsidiaries
directly or indirectly owns any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture, business association
or other entity other than the UDI Inactive Subsidiaries.
SECTION E.12 LITIGATION.
There is no litigation, suit, claim, action, prosecution, proceeding or
governmental investigation pending or, to the knowledge of UDI, threatened
against or relating to UDI or any of its subsidiaries (including, for greater
certainty, with respect to any environmental or employee matters) that (i)
involves a claim against UDI or any of its subsidiaries that (x) could
reasonably be expected to result in damages in excess of $1,000,000 or seeks
damages in excess of $5,000,000, (y) seeks injunctive or other equitable relief
or (z) individually or in the aggregate, would, if successful (and regardless of
amount), have a Material Adverse Effect on UDI; or (ii) in any manner challenges
or seeks to prevent, enjoin, alter or materially delay or limit the performance
of this Agreement by UDI or any of the transactions contemplated hereby. Neither
UDI (or any of its subsidiaries) nor any property or asset of UDI (or any of its
subsidiaries) is subject to any Governmental Order which, individually or in the
aggregate, would prevent UDI from performing its material obligations under this
Agreement or has a Material Adverse Effect on UDI.
SECTION E.13 ENVIRONMENTAL.
(1) UDI and its subsidiaries have been and are in compliance with all
applicable environmental Laws, except for non-compliance that does not,
individually or in the aggregate, have a Material Adverse Effect on
UDI.
(2) Since December 31, 1998, neither UDI nor any of its subsidiaries has
ever received any notice of or been prosecuted for material
non-compliance with any
E-6
88
environmental Laws, nor has UDI or any of its subsidiaries settled any
allegation of non-compliance short of prosecution.
(3) There are no actual or, to the knowledge of UDI, threatened orders,
warnings or directions relating to environmental matters requiring any
work, repair or construction or capital expenditures to be made with
respect to any of UDI's or any of its subsidiaries' properties or
operations, nor has UDI or any of its subsidiaries received notice of
any of the same, that, individually or in the aggregate, have a
Material Adverse Effect on UDI.
(4) There is not on, in or under any property currently or, to UDI's
knowledge, previously owned, leased, managed, controlled or operated by
UDI or any of its subsidiaries any of the following: (1) underground
storage tanks or surface impoundments, (2) asbestos-containing
materials, (3) polychlorinated biphenyls, or (4) other "Hazardous
Substances" (as such term is defined under the Comprehensive
Environmental, Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601, et seq., as amended as of the date hereof) or
"contaminants" (as such term is defined in the Ontario Environmental
Protection Act) or petroleum products, in each case which would
reasonably be expected to form the basis of liability or other
obligation of UDI or any of its subsidiaries under any applicable
environmental Laws except for such liabilities or obligations which do
not, individually or in the aggregate, have a Material Adverse Effect
on UDI.
SECTION E.14 TAX MATTERS.
(1) UDI and its subsidiaries have timely filed all Tax Returns required to
be filed by applicable Law with respect to each of UDI and its
subsidiaries or any of their income, properties or operations, except
where the failure to file does not, individually or in the aggregate,
have a Material Adverse Effect on UDI. All such Tax Returns are true,
accurate and complete and accurately set forth all items required to be
reflected or included in such Tax Returns by applicable Tax Laws,
except to the extent that any inaccuracies in filed Tax Returns do not,
individually or in the aggregate, have a Material Adverse Effect on
UDI. UDI and its subsidiaries have timely paid all Taxes attributable
to each of UDI and its subsidiaries that were due and payable without
regard to whether such Taxes have been assessed, except to the extent
that failure to pay does not, individually or in the aggregate, have a
Material Adverse Effect on UDI. UDI has made available to SPX complete
and accurate copies of all United States and Canadian federal, state,
provincial, local and foreign income tax and corporate tax returns, and
any amendments thereto, filed by or on behalf of UDI or any of its
subsidiaries or any member of a group of corporations including UDI or
any of its subsidiaries for the taxable years ending 1997, 1998 and
1999.
E-7
89
(2) There are no pending or, to the knowledge of UDI, threatened audits,
examinations, investigations, deficiencies, claims or other proceedings
relating to Taxes of UDI or any of its subsidiaries. UDI and its
subsidiaries have made adequate provisions in accordance with Canadian
generally accepted accounting principles appropriately and consistently
applied to each of UDI and its subsidiaries in the consolidated
financial statements included in the UDI Securities Reports referred to
in Section E.9(1) and in the UDI 2000 Financial Statements for the
payment of all Taxes for which UDI and its subsidiaries may be liable
for the periods covered thereby that were not yet due and payable as of
the dates thereof, regardless of whether the liability for such Taxes
is disputed. None of UDI or any of its subsidiaries is liable for Taxes
in respect of the period after the date of such consolidated financial
statements other than in respect of Taxes arising in the ordinary
course of business and Taxes that do not, individually or in the
aggregate, have a Material Adverse Effect on UDI.
(3) There are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any material Tax Return of UDI or
any of its subsidiaries, including, without limitation, any waiver or
other arrangement providing for an extension of time with respect to
the filing of any such Tax Return, the payment of any Tax or the
issuance of an assessment or reassessment. Neither UDI nor any of its
subsidiaries has made an election under Section 341(f) of the Code.
Neither UDI nor any of its subsidiaries (i) has any Tax liability under
United States Treasury Regulation Section 1.1502-6 or analogous state,
provincial, local, or foreign law provision for the Tax liabilities of
any entity other than UDI or any of its subsidiaries, or as a
transferee or successor, except to the extent any such liabilities do
not, individually or in the aggregate, have a Material Adverse Effect
on UDI, or (ii) is a party to a Tax sharing or Tax indemnity agreement
or any other agreement of a similar nature with any entity other than
UDI or any of its subsidiaries that remains in effect and under which
UDI or any such subsidiary could have any material liability for Taxes.
Neither UDI nor any of its subsidiaries has liability for the Taxes of
another Person pursuant to Section 160 of the Income Tax Act (Canada)
(the "ITA")or any analogous provincial provision. No claim has been
made in writing by a taxing authority in a jurisdiction where UDI or
any of its subsidiaries does not file Tax Returns that UDI or any of
its subsidiaries is or may be subject to taxation by that jurisdiction
where such claim, if determined adversely to UDI or such subsidiary,
would, individually or in the aggregate, have a Material Adverse Effect
on UDI. Neither UDI nor any subsidiary that is not a domestic
corporation within the meaning of Section 7701 of the Code is or has
ever been engaged in a trade or business in the United States for
United States federal income tax purposes, nor does UDI or any such
subsidiary own any "United States real property Interest" within the
meaning of Section 897 of the Code. Neither UDI nor any of its
subsidiaries is or has been a controlled foreign corporation within the
meaning of Section 957 of the Code.
E-8
90
(4) There has been no change in ownership of UDI or any of its subsidiaries
that has caused the utilization of any losses of such entities to be
limited pursuant to Subsections 111(4) or (5) of the ITA or any similar
provincial provisions. UDI and each of its subsidiaries has withheld or
collected all amounts required to be withheld or collected by it on
account of Taxes and has remitted all such amounts to the appropriate
Tax authority when required by Law to do so, except where the failure
to do so would not, individually or in the aggregate, have a Material
Adverse Effect on UDI. With respect to any taxable period ended prior
to December 31, 1994, all United States federal and state income Tax
Returns and Canadian federal and provincial income and capital Tax
Returns of UDI and its subsidiaries have been audited by the relevant
Taxing Authority or are closed by the applicable statue of limitations.
None of UDI or any of its subsidiaries has entered into an agreement
contemplated by Section 191.3 of the ITA. For all transactions between
UDI or any of its subsidiaries, on the one hand, and any non-resident
Person with whom UDI or such subsidiary was not dealing at
arm's-length, for the purposes of the ITA, on the other hand, during a
taxation year commencing after 1998 and ending before the Effective
Date, UDI or such subsidiary has made or obtained records or documents
that satisfy the requirements of paragraphs 247(4)(a) to (c) of the
ITA. UDI and each of its subsidiaries is in full compliance with all
terms and conditions of any Tax exemptions or other Tax-sparing
agreement or order of a foreign government and the consummation of the
Transactions shall not have any adverse effect on the continued
validity and effectiveness of any such Tax exemptions or other
Tax-sparing agreement or order.
SECTION E.15 COMPLIANCE WITH LAWS.
UDI and each of its subsidiaries each:
(a) conducts its businesses in compliance with all Laws
applicable thereto or to its employees or properties;
(b) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit it to conduct its
businesses substantially as presently conducted; all such permits, licenses,
authorizations, orders and approvals are in full force and effect and, to UDI's
knowledge, no suspension or cancellation of any of them is threatened; and
(c) has received, since December 31, 1998, no notification or
communication from any Governmental Authority (i) asserting that it is not in
compliance with any Laws or Governmental Orders, (ii) threatening to revoke any
permit, license, authorization, order or approval, or (iii) failing to approve
any proposed
E-9
91
acquisition, or stating the intention not to approve any acquisition proposed to
be effected by it within a certain time period or indefinitely;
except for instances which do not, individually or in the aggregate, have a
Material Adverse Effect on UDI.
SECTION E.16 EMPLOYEE BENEFITS.
(a) True and complete copies of all UDI Benefit Plans and
related documents, and all amendments thereto, have been made available to SPX.
(b) UDI has administered each UDI Benefit Plan in all material
respects in accordance with the terms thereof and all applicable Laws and all
contributions, premiums and payments required to be made under the terms of any
UDI Benefit Plan have been made. Each UDI Benefit Plan which is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service, and UDI is not aware of
any circumstances reasonably likely to adversely affect the qualified status of
such plan. UDI has made available to SPX reasonably acceptable evidence that
each UDI Canadian Pension Plan and all amendments thereto have been accepted for
registration by Canada Customs and Revenue Agency and any provincial
Governmental Authority having jurisdiction over such UDI Canadian Pension Plan.
Nothing has occurred which would result in the revocation of the registration of
any UDI Canadian Pension Plan under the ITA and any applicable provincial
pension legislation. All amounts paid by UDI under the provisions of the UDI
Canadian Pension Plans will be deductible for income tax purposes.
(c) No material liability under Title IV of ERISA has been or
is reasonably expected to be incurred by UDI or any of its subsidiaries or any
ERISA Affiliate. No Pension Plan of UDI or any of its subsidiaries or any ERISA
Affiliate has incurred any "accumulated funding deficiency," as defined in
Section 412 of the Code and Section 302 of ERISA, whether or not waived.
(d) Each UDI Canadian Pension Plan that is a defined benefit
pension plan is fully funded on both a "going concern" and a "solvency" basis,
as determined in accordance with the actuarial assumptions and methods used in
the most recent actuarial report filed with (and accepted for filing by) the
applicable Governmental Authorities in respect of each such UDI Canadian Pension
Plan. There has been no withdrawal by UDI of assets from any UDI Canadian
Pension Plan and no application for approval of a withdrawal of assets has been
made to any Governmental Authority. Any application of surplus assets in any of
the UDI Canadian Pension Plans to offset required employer contributions to such
UDI Canadian Pension Plans has been permitted by Law and was permitted under the
terms of the relevant UDI Canadian Pension Plan and associated funding
agreement.
E-10
92
(e) All liabilities for benefits arising out of or relating to
each UDI Benefit Plan established or operated pursuant to the Laws of any
jurisdiction other than the United States or Canada (i) have been determined in
accordance with the terms of the applicable plan document, applicable Law and
actuarial assumptions appropriate for such jurisdiction and in a manner that
fairly reflects the total liabilities of the applicable UDI Benefit Plan, and
(ii) have been accurately reserved against or disclosed in the audited
consolidated financial statements of UDI.
(f) The execution of this Agreement or the performance of the
Transactions will not (either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any UDI Benefit Plan,
employment, termination or severance Contract or other Officer Obligation, trust
or loan that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any current
or former employee, officer or director, or (ii) result in the triggering or
imposition of any restrictions or limitations on the right of UDI or SPX to
amend or terminate any UDI Benefit Plan and receive the full amount of any
excess assets remaining or resulting from such amendment or termination, subject
to applicable Taxes. The execution of this Agreement or performance of the
Transactions will not (either alone or upon the occurrence of any additional or
subsequent events) result in any payment or benefit being made by UDI, SPX, or
any of their respective affiliates with respect to any employee of UDI that will
be characterized as an "excess parachute payment," within the meaning of Section
280G(b)(1) of the Code.
(g) Neither UDI, any of its subsidiaries, nor any ERISA
Affiliate has any material liability with respect to any benefit plan which
provides life insurance, medical, severance or other employee welfare benefits
to any of its employees upon his retirement or termination of employment, except
as may be required by Section 4980B of the Code or any other Law.
(h) Neither UDI, any of its subsidiaries, nor any ERISA
Affiliate has incurred or reasonably expects to incur any withdrawal liability
(within the meaning of Section 4201 of ERISA) with respect to any Multi-Employer
Plan which liability has not been fully paid as of the date hereof. As of the
Effective Time, UDI, each of its subsidiaries and each ERISA Affiliate will not
have completely or partially withdrawn from any Multi-Employer Plan and will not
be subject to any withdrawal liability as described in Section 4201 of ERISA for
withdrawals that have occurred on or prior to the Effective Date. Neither UDI,
any of its subsidiaries nor any ERISA Affiliate has knowledge that any
Multi-Employer Plan fails to qualify under Section 401(a) of the Code, is
insolvent or is in reorganization within the meaning of Part 3 of Subtitle E of
Title IV of ERISA.
(i) UDI and each of its subsidiaries (i) is in compliance in
all material respects with all applicable Laws respecting employment, employment
practices, labor,
E-11
93
terms and conditions of employment and wages and hours; and (ii) has withheld
all material amounts required by Law or by agreement to be withheld from the
wages, salaries and other payments to its employees.
(j) No work stoppage or labor strike against UDI or any of its
subsidiaries is pending or, to the knowledge of UDI, threatened. Neither UDI nor
any of its subsidiaries (i) is involved in or, to the knowledge of UDI,
threatened with any material labor dispute, grievance, or litigation relating to
labor matters, including, without limitation, violation of any federal, state or
local labor, safety or employment laws (domestic or foreign), charges of unfair
labor practices or discrimination complaints; or (ii) has engaged in any
material unfair labor practices within the meaning of the National Labor
Relations Act or the Railway Labor Act.
(k) Schedule E.16(k) of the UDI Disclosure Letter lists all
Officer Obligations to (a) any directors or officers of UDI or any subsidiary,
and (ii) any employee of UDI or any subsidiary involving payments to such
employee in excess of $100,000 per year or $200,000 in the aggregate. True and
complete copies of all Contracts reflecting or relating to Officer Obligations
that are required to be disclosed on Schedule E.16 (k) of the UDI Disclosure
Letter have been delivered to SPX.
SECTION E.17 INSURANCE.
Section E.17 of the UDI Disclosure Letter is a true and
complete description of all policies of fire, liability, production, completion
bond, errors and omissions, workmen's compensation and other forms of insurance
owned or held by UDI or any of its subsidiaries currently in effect or in effect
at any time since December 31, 1999 covering the assets, business, operations,
officers, directors or employees of UDI or any of its subsidiaries. All current
insurance policies are in full force and effect, all premiums with respect
thereto covering all periods up to and including the Effective Time have been
paid or will be paid prior to the Effective Time, and no notice of cancellation
or termination has been received with respect to any such policy. Such policies
(i) are sufficient for compliance with all requirements of Law and of all
Contracts to which UDI or any of its subsidiaries is a party, (ii) cover the
respective policy periods and the risks or matters, and provide the coverage
(including any deductibles or retentions), set forth in Section E.17 of the UDI
Disclosure Letter and (iii) will not in any way be affected by, or terminate or
lapse by reason of, the Transactions. During the last three years, neither UDI
nor any of its subsidiaries has been refused any insurance with respect to its
assets or operations, nor has its coverage been limited, by any insurance
carrier to which it has applied for any such insurance or with which it has
carried insurance. Neither UDI nor any of its subsidiaries has received any
notice of increase in premiums with respect to, or cancellation or non-renewal
of, any of its insurance policies, and neither UDI nor any of its subsidiaries
has made any claim against an insurance policy as to which the insurer is
denying coverage or defending the claim under a reservation of rights.
E-12
94
SECTION E.18 INTELLECTUAL PROPERTY.
With respect to each item of intellectual property or
proprietary information used in the business of UDI and its subsidiaries ("UDI
INTELLECTUAL PROPERTY"), UDI and its subsidiaries own or are validly licensed,
or otherwise possess legally enforceable rights, to use the UDI Intellectual
Property and the consummation of the transactions contemplated hereby will not
alter or impair such ability in any respect, except for instances which do not,
individually or in the aggregate, have a Material Adverse Effect on UDI. To
UDI's knowledge, the conduct of the business of UDI and its subsidiaries and the
UDI Intellectual Property do not infringe any rights of any Third Party, and,
neither UDI nor any of its subsidiaries has received any written notice from any
other third party pertaining to or challenging the right of UDI or any of its
subsidiaries to use any of the UDI Intellectual Property. To UDI's knowledge, no
third party is infringing upon any of the UDI Intellectual Property, except as
do not, individually or in the aggregate, have a Material Adverse Effect on UDI.
With respect to each item of UDI Intellectual Property that is an application,
either UDI or the applicable subsidiary is the applicant or has the right to
require the applicant to transfer ownership to UDI or such subsidiary of the
application and of the registration once it issues. All rights of UDI and its
subsidiaries in the UDI Intellectual Property are valid and subsisting and in
full force and effect, except for instances which do not, individually or in the
aggregate, have a Material Adverse Effect on UDI. The UDI Intellectual Property
is all the intellectual property that is necessary for conduct of the business
of UDI and its subsidiaries, as is currently conducted.
SECTION E.19 TITLE TO ASSETS.
UDI and its subsidiaries own or hold under valid Contracts all
of the assets, tangible or intangible, necessary for the conduct of their
business as currently conducted except where the failure to own or so hold such
assets does not, individually or in the aggregate, have a Material Adverse
Effect on UDI.
SECTION E.20 OPINION OF FINANCIAL ADVISOR.
The Board of Directors of UDI has received the opinion of BMO
Xxxxxxx Xxxxx, to the effect that, as of the date of this Agreement, the
Transaction Consideration is fair to UDI's shareholders from a financial point
of view, and such opinion has not been revoked or modified in any respect. A
copy of the written opinion of BMO Xxxxxxx Xxxxx to the foregoing effect will be
delivered to SPX as soon as practicable after the date of this Agreement.
SECTION E.21 SHAREHOLDER LIST.
A list of UDI's shareholders of record as of March 5, 2001 is
included in Section E.21 of the UDI Disclosure Letter. The list accurately
reflects the information contained in the books and records of UDI and its
transfer agent as to the name and address of each shareholder of record of UDI
as of such date.
E-13
95
SECTION E.22 MATERIAL CONTRACTS.
Each Contract binding upon UDI or any of its subsidiaries
(each, an "UDI CONTRACT"), that is required to be described in the UDI
Securities Reports has been described in the UDI Securities Reports, and all of
the UDI Contracts that are required to be filed as exhibits thereto are filed as
exhibits thereto. Neither UDI nor any of its subsidiaries nor, to SPX's
knowledge, any other party is in breach of or in default under any UDI Contract
except for such breaches and defaults which do not, individually or in the
aggregate, have a Material Adverse Effect on UDI. Neither UDI nor any of its
subsidiaries is a party to any Contract (a) containing any provision or covenant
limiting in any material respect the ability of UDI or any of its subsidiaries
to (i) sell any product or service of or to any other Person, (ii) engage in any
line of business or (iii) compete with or to obtain products or services from
any Person, (b) relating to the pending purchase or sale of any material amount
of assets of UDI or any of its subsidiaries, or (c) relating to the pending
acquisition, merger or purchase of all or substantially all of the business, or
any product line or the capital stock of any Person.
SECTION E.23 REQUIRED VOTE.
Subject to receipt of the Interim Order, the affirmative vote
of the holders of 66 2/3% of the votes cast on the Arrangement Resolution by UDI
Shareholders present in person or by proxy at the UDI Shareholders Meeting is
required for the approval of the Transactions (the "UDI SHAREHOLDERS APPROVAL").
No other vote of UDI's shareholders is required under Law, UDI's articles or
otherwise in order for UDI to consummate the Transactions.
SECTION E.24 SOLVENCY.
UDI is not "insolvent" for the purposes of Section 192(2) of
the CBCA.
E-14
