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EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
AMONG
FLP HOLDINGS III LLC,
XXXXX FOODS, INC.
AND
RFI ACQUISITION, INC.
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of April
10, 2001 between FLP HOLDINGS III LLC, an Illinois limited liability company
("Parent"), XXXXX FOODS, INC., a Delaware corporation ("Xxxxx"), and RFI
ACQUISITION, INC., a Delaware corporation ("Merger Sub").
RECITALS
WHEREAS, the respective Boards of Directors of Xxxxx and Parent have
approved and declared advisable a merger of Merger Sub with and into Xxxxx upon
the terms and subject to the conditions set forth in this Agreement, with Xxxxx
to be the surviving corporation in the Merger, and the Board of Directors of
Xxxxx has resolved to recommend that the stockholders of Xxxxx approve the
Merger upon the terms of this Agreement;
WHEREAS, the Boards of Directors of Merger Sub and Xxxxx have
determined that the Merger is fair to and in the best interests of their
respective stockholders;
WHEREAS, pursuant to provisions contained in the Certificate of
Incorporation of Xxxxx, the Merger is subject to the approval of a two-thirds
(2/3) majority of the outstanding shares of the $0.04 par value common stock of
Xxxxx (the "Xxxxx Common Stock");
WHEREAS, certain stockholders of Xxxxx holding not less than seventeen
and three-tenths percent (17.3%) of the outstanding Xxxxx Common Stock have
entered into voting agreements, dated as of the date hereof (collectively, the
"Voting Agreements"), pursuant to which they have agreed, among other things, to
vote all shares of Xxxxx Common Stock owned by such stockholders in favor of the
Merger; and
WHEREAS, Parent has caused Merger Sub to be formed for the purpose of
effecting the Merger and the Board of Directors and sole stockholder of Merger
Sub have each approved the Merger and this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.01 The Merger. Subject to the terms and conditions
of this Agreement, and in accordance with Section 251 of the General Corporation
Law of the State of Delaware ("DGCL"), at the Effective Time (as defined below)
Merger Sub shall be merged with and into Xxxxx (the "Merger"). As a result of
the Merger, the separate corporate existence of Merger Sub shall cease, and
Xxxxx shall continue its existence as a Delaware corporation, shall be the
surviving corporation in the Merger (the "Surviving Corporation"), and shall
change its name to "Xxxxx Foods, Inc."
Section 1.02 Closing; Effective Time. As promptly as
practicable, and in no event later than five business days after the
satisfaction or waiver of the conditions set forth in Article VII (including,
without limitation, the approval of the Merger by the requisite vote of the
holders of the outstanding shares of Xxxxx Common Stock), the parties hereto
shall cause the Merger to be consummated by filing a Certificate of Merger (the
"Certificate of Merger") with the Secretary of State of the State of Delaware,
in such form as is required by, and executed in accordance with the DGCL. The
term "Effective Time" means the date and time of the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware (or such later
time as may be agreed by the parties hereto and specified in the Certificate of
Merger). Immediately prior to the filing of the Certificate of Merger, a closing
(the "Closing") will be held at the offices of Xxxxxxx Xxxx & Xxxxxxxxx LLC, 00
Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx or such other place as the parties may
agree (the date on which such closing takes place being the "Closing Date").
Section 1.03 Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
and after the Effective Time: (a) all the property, rights, immunities,
privileges, powers and franchises of Xxxxx and Merger Sub shall vest in the
Surviving Corporation, without further act or deed and without reversion or
impairment; (b) all debts, liabilities, obligations, restrictions, disabilities
and duties of each of Xxxxx and Merger Sub shall become the debts, liabilities,
obligations, restrictions, disabilities and duties of the Surviving Corporation
and be enforceable against the Surviving Corporation to the same extent as if
the same had been contracted by the Surviving Corporation; and (c) a civil,
criminal, administrative or investigatory proceeding against either of Xxxxx or
Merger Sub may be continued as if the Merger did not occur or the Surviving
Corporation may be substituted in the proceeding for Xxxxx or Merger Sub, as the
case may be.
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Section 1.04 Certificate of Incorporation; By-laws.
(a) From and after the Effective Time, the Certificate of Incorporation
of the Surviving Corporation shall be the Certificate of Incorporation of Merger
Sub as in effect immediately prior to the Effective Time until thereafter
amended in accordance with its terms and as provided by applicable Law and this
Agreement, except that, as of the Effective Time, Article I of such Certificate
of Incorporation shall be amended to read as follows: "The name of the
Corporation is `Xxxxx Foods, Inc.'".
(b) From and after the Effective Time, the By-laws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter amended as provided by applicable Law,
the Certificate of Incorporation of the Surviving Corporation and such By-laws.
Section 1.05 Directors and Officers.
(a) Directors. From and after the Effective Time, the directors of
Merger Sub immediately prior to the Effective Time shall be the directors of the
Surviving Corporation until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, as the case may be,
in accordance with the Certificate of Incorporation and By-laws of the Surviving
Corporation and applicable Law.
(b) Officers. From and after the Effective Time, the officers of Merger
Sub immediately prior to the Effective Time shall be the officers of the
Surviving Corporation and shall hold office until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be, in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation and applicable Law.
Section 1.06 Additional Actions. If, at any time at or after
the Effective Time, the Surviving Corporation shall consider or be advised that
any further deeds, assignments or assurances in Law or any other acts are
necessary or desirable to (a) vest, perfect or confirm, of record or otherwise,
in the Surviving Corporation its rights, title or interest in, to or under any
of the rights, properties or assets of Xxxxx or its subsidiaries, or (b)
otherwise carry out the provisions of this Agreement, Xxxxx and its officers and
directors shall be deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such deeds, assignments
or assurances in Law and to take all acts necessary, proper or desirable to
vest, perfect or confirm title to and possession of such rights, properties or
assets in the Surviving Corporation and otherwise to carry out the provisions of
this Agreement, and the officers and directors of the Surviving Corporation are
authorized in the name of Xxxxx or otherwise to take any and all such action.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF
CERTIFICATES; DISSENTERS' RIGHTS
Section 2.01 Effect on Capital Stock and Xxxxx Stock Options.
As of the Effective Time, by virtue of the Merger and without any action on the
part of the holder of any Xxxxx Common Stock or any other holder of capital
stock of Xxxxx or any shares of capital stock of Merger Sub:
(a) Cancellation of Xxxxx Owned Stock. All shares of Xxxxx Common Stock
that are held (i) in the treasury of Xxxxx, (ii) by any wholly owned subsidiary
of Xxxxx or (iii) by Merger Sub shall be canceled and retired and shall cease to
exist without any consideration payable therefor.
(b) Conversion of Xxxxx Common Stock. Each share of Xxxxx Common Stock
issued and outstanding immediately prior to the Effective Time (other than
Dissenting Shares (as herein defined) and shares of Xxxxx Common Stock referred
to in Section 2.01(a)) shall be converted into the right to receive from the
Surviving Corporation in cash $0.525 per share of Xxxxx Common Stock, subject to
adjustment to reflect the payment by Xxxxx of certain Transaction Costs as set
forth in and in the manner described in Section 8.03(a) hereof (the "Merger
Consideration") without interest thereon upon surrender of the certificate
previously representing such share of Xxxxx Common Stock. As of the Effective
Time, all such shares of Xxxxx Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such share of Xxxxx Common Stock shall
cease to have any rights with respect thereto, except the right to receive the
cash into which their shares of Xxxxx Common Stock have been converted by the
Merger as provided in this Section 2.01(b).
(c) Conversion of Common Stock of Merger Sub. Each share of common
stock of Merger Sub which is issued and outstanding immediately prior to the
Effective Time shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01, of the Surviving
Corporation upon the surrender of the certificates previously representing such
share(s) of Merger Sub's common stock.
(d) Conversion of Xxxxx Stock Options. Subject to the provisions of
Section 8.03(c) hereof, each Xxxxx Stock Option (as defined in Section 2.03(a)
hereof), issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive from the Surviving Corporation the Option
Consideration (as defined in Section 2.03(a) hereof) without interest thereon.
As of the Effective Time, all such Xxxxx Stock Options shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of any such Xxxxx Stock Option shall cease to have any
rights with respect thereto, except the right to receive the cash into which
their Xxxxx Stock Options have been converted by the Merger as provided in this
Section 2.01(d) and Section 2.03(a).
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Section 2.02 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Merger Sub shall
designate a bank or trust company, reasonably satisfactory to Xxxxx, to act as
paying agent in the Merger (the "Paying Agent").
(b) At the Closing, Merger Sub or Surviving Corporation shall
deliver:
(i) to the Parent, who shall have surrendered to the
Merger Sub at the Closing the certificates which, immediately
prior to the Effective Time, represented shares of outstanding
common stock of Merger Sub, the securities of the Surviving
Corporation into which the shares of common stock of Merger
Sub represented by such certificates have been converted
pursuant to the provisions of this Article II;
(ii) to the Paying Agent, for the benefit of the
holders of Xxxxx Common Stock entitled to receive Merger
Consideration, the amount of Merger Consideration which such
holders of Xxxxx Common Stock are entitled to receive pursuant
to the provisions of this Article II; and
(iii) to the holders of Xxxxx Stock Options entitled
to receive Option Consideration, the amount of Option
Consideration which such holders of Xxxxx Stock Options are
entitled to receive pursuant to the provisions of this Article
II.
(c) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall mail or caused to be mailed to
each holder of record of any certificate, which as of immediately prior to the
Effective Time represented shares of Xxxxx Common Stock and as of the Effective
Time represents the right to receive Merger Consideration (all such
certificates, the "Certificates"), (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the address
specified therein) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the applicable Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor from the Paying Agent the amount of
cash into which the shares of Xxxxx Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 2.01, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of the shares of Xxxxx Common Stock that is not registered
in the transfer records of Xxxxx, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
Taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such Tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the shares of Xxxxx
Common Stock theretofore represented by such Certificate shall have been
converted pursuant to Section 2.01. No interest will be paid or will accrue on
the cash payable upon the surrender of any Certificate. In the event any
Certificate shall have been lost, stolen or destroyed, upon making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed, the Surviving Corporation will pay in exchange for such
lost, stolen or destroyed Certificate, the amount of cash into which the shares
of Xxxxx Common Stock theretofore represented by such Certificate have been
converted pursuant to Section 2.01, except that when authorizing such payment,
the Board of Directors of the Surviving Corporation, may, in its discretion and
as a condition precedent to such payment, require the owner of such lost, stolen
or destroyed Certificate to deliver a bond in such sum as it may reasonably
direct as indemnity against any claim that may be made against the Surviving
Corporation or the Paying Agent with respect to such Certificate.
(d) Withholding. Merger Sub, Surviving Corporation and Paying Agent
shall be entitled to deduct and withhold from the Merger Consideration otherwise
payable or issuable pursuant to this Agreement to any holder of Xxxxx Common
Stock or Xxxxx Stock Option such amount as Merger Sub, Surviving Corporation or
Paying Agent is required to deduct and withhold with respect to such payment or
issuance under the Code, or any provision of state, local or foreign Tax Law. To
the extent that amounts are so withheld, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of Xxxxx
Common Stock in respect of which such deduction and withholding was made.
(e) No Further Ownership Rights in Xxxxx Common Stock. All cash paid
upon the surrender of Certificates in accordance with the terms of this Article
II shall be deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Xxxxx Common Stock theretofore represented by such
Certificates. At the Effective Time, the stock transfer books of Xxxxx shall be
closed, and there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Xxxxx Common Stock
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or the
Paying Agent for any reason, they shall be canceled and exchanged as provided in
this Article II.
(f) No Liability. At any time following the expiration of six months
after the Effective Time, the Surviving Corporation shall, in its sole
discretion, be entitled to require the Paying Agent to deliver to it any funds
(including any interest received with respect thereto) which had been made
available to the Paying Agent and which have not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to look to the
Surviving Corporation (subject to any applicable abandoned property, escheat or
similar Law) only as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates, without any
interest thereon. Notwithstanding the foregoing, none of Merger Sub, Xxxxx, the
Surviving Corporation or the
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Paying Agent shall be liable to any person in respect of any cash delivered to a
public official or entity pursuant to any applicable abandoned property, escheat
or similar Law.
Section 2.03 Xxxxx Stock Options; Plans.
(a) Except as set forth in this Section 2.03, Section 8.03(a) and
except to the extent that Merger Sub and the holder of any option otherwise
agree, the Surviving Corporation shall promptly after the Effective Time pay to
each holder of an outstanding option to purchase Xxxxx Common Stock (a "Xxxxx
Stock Option") issued pursuant to Xxxxx'x 1997 Stock Option Plan, as amended
(the "Xxxxx Stock Option Plan"), in settlement of each such Xxxxx Stock Option,
whether or not exercisable or vested, an amount of cash in respect thereof equal
to the product of (x) the excess, if any, of the Merger Consideration over the
exercise price of each such Xxxxx Stock Option, and (y) the number of shares of
Xxxxx Common Stock subject to Xxxxx Stock Option immediately prior to its
settlement (the "Option Consideration") (such payment to be net of applicable
withholding Taxes). Upon receipt of the Option Consideration, such Xxxxx Stock
Option shall be canceled. The surrender of a Xxxxx Stock Option to Xxxxx in
exchange for the Option Consideration shall be deemed a release of all rights
the holder had or may have had in respect of that Xxxxx Stock Option.
(b) Prior to the Effective Time, Xxxxx shall use its best efforts to
obtain any consents from holders of Xxxxx Stock Options and make any amendments
to the terms of Xxxxx Stock Option Plan or arrangements that are necessary to
give effect to the transactions contemplated by Section 2.01(d) and this Section
2.03.
(c) The Xxxxx Stock Option Plan shall terminate as of the Effective
Time, and no holder of Xxxxx Stock Options or any participant in Xxxxx Stock
Option Plan shall have any rights thereunder, including any rights to acquire
any equity securities of Xxxxx, the Surviving Corporation or any subsidiary
thereof, other than to receive Option Consideration payable pursuant to Section
2.03(a).
(d) Except as may otherwise be agreed by Merger Sub and Xxxxx, all
other plans, programs or arrangements providing for the issuance or grant of any
other interest in respect of the capital stock of Xxxxx or any of its
subsidiaries shall terminate as of the Effective Time, and no participant in any
such plans, programs or arrangements shall have any rights thereunder to acquire
any equity securities of Xxxxx, the Surviving Corporation or any subsidiary
thereof.
Section 2.04 Shares of Dissenting Stockholders.
(a) Notwithstanding anything in this Agreement to the contrary, any
shares of Xxxxx Common Stock that are issued and outstanding as of the Effective
Time and that are held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has properly exercised his or her appraisal
rights under the DGCL (the "Dissenting Shares"), shall not be converted into the
right to receive the Merger Consideration, unless and until such holder shall
have failed to perfect, or shall have effectively withdrawn or lost, his or her
right to dissent from the Merger under the DGCL and to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to and subject to the requirements of the DGCL. If, after the
Effective Time, any such holder shall have failed to perfect or shall have
effectively withdrawn or lost such right, each share of such holder's Xxxxx
Common Stock shall thereupon be deemed to have been converted into and to have
become, as of the Effective Time, the right to receive, without interest or
dividends thereon, the Merger Consideration.
(b) Xxxxx shall give Merger Sub and Parent (i) prompt notice of any
notices or demands for appraisal or payment for shares of Xxxxx Common Stock
received by Xxxxx and (ii) the opportunity to participate in all negotiations
and proceedings with respect to any such demands or notices. Xxxxx shall not,
without prior written consent of Merger Sub and Parent (which consent shall not
be unreasonably withheld or delayed), make any payments with respect to, or
settle, offer to settle or otherwise negotiate, with respect to any such
demands.
(c) Dissenting Shares, if any, after payments of fair value in respect
thereto have been made to the holders thereof pursuant to the DGCL, shall be
canceled.
Section 2.05 Adjustment of Merger Consideration and Option
Consideration. In the event that, subsequent to the date of this Agreement but
prior to the Effective Time, the outstanding shares of Xxxxx Common Stock shall
have been changed into a different number of shares of Xxxxx Common Stock or
shares of a different class as a result of a stock split, reverse stock split,
stock dividend, subdivision, reclassification, split, combination, exchange,
recapitalization or other similar transaction, the Merger Consideration and the
Option Consideration shall be appropriately adjusted. The Merger Consideration
and the Option Consideration have been calculated based upon the representations
and warranties made by Xxxxx in Section 3.06 hereof. The provisions of this
Section 2.05 shall not, in any event, derogate from the representation and
warranty made by Xxxxx in Section 3.06.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx hereby makes the following representations and warranties to
Parent and Merger Sub, each of which shall be deemed to be independently
material and relied upon by the Parent and Merger Sub, regardless of any
investigation made by, or information known to, the Parent and Merger Sub. Each
of the following representations and warranties are qualified by reference to
the disclosures made by Xxxxx with respect to a specific section or subsection
of this Agreement on a separate disclosure schedule delivered by Xxxxx to Parent
and Merger Sub prior to the execution of this Agreement and made a part hereof
(the "Disclosure Schedule").
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Section 3.01 Organization and Qualification. Each of Xxxxx and
its subsidiaries is duly formed and organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or formation,
as applicable, and has the requisite power and authority and all necessary and
material governmental approvals to own, lease and operate the properties and
assets it currently owns, operates or holds under lease and to carry on its
business as it is now being conducted. Each of Xxxxx and its subsidiaries is
duly qualified or licensed as a foreign corporation or other entity to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect.
Section 3.02 Authority Relative to this Agreement. Xxxxx has all
necessary power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the Merger, except that with
respect to the Merger, Xxxxx cannot consummate the Merger unless and until this
Agreement has been adopted by the holders of the shares of Xxxxx Common Stock in
accordance with the Certificate of Incorporation of Xxxxx and the provisions of
the DGCL. The execution and delivery of this Agreement by Xxxxx and the
consummation by Xxxxx of the Merger have been duly and validly authorized by all
necessary corporate action on the part of Xxxxx and, except as expressly
described in this Agreement, no other proceedings on the part of Xxxxx are
necessary to authorize this Agreement or to consummate the Merger (other than,
with respect to the Merger, the adoption of this Agreement by the holders of the
shares of Xxxxx Common Stock and the filing and recordation of appropriate
merger documents as required by the DGCL). This Agreement has been duly and
validly executed and delivered by Xxxxx and constitutes the legal, valid and
binding obligation of Xxxxx, enforceable against Xxxxx in accordance with its
terms, except insofar as enforcement may be limited by bankruptcy, insolvency or
similar Laws affecting the enforcement of creditors rights generally and by
principles of equity.
Section 3.03 No Conflict; Required Filings and Consents.
(a) Subject to compliance with applicable provisions of the DGCL, the
execution and delivery of this Agreement by Xxxxx does not, and the consummation
of the Merger by Xxxxx will not (i) conflict with or violate the Certificate of
Incorporation or By-laws of Xxxxx, (ii) assuming compliance with the matters
referred to in Section 3.03(b), conflict with or violate any domestic (federal,
state or local) or foreign law, rule, regulation, order, judgment or decree
(collectively, "Laws") applicable to Xxxxx or by which any of its properties or
assets are bound or affected, or (iii) result in a violation or any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a violation, breach or default) or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Lien (as defined below) on any property or asset of Xxxxx or its
subsidiaries pursuant to or under any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Xxxxx is a party or by which it or any of its properties or assets is
bound or affected, except, in the case of clauses (ii) and (iii), for
violations, breaches or defaults which would not, individually or in the
aggregate, be reasonably expected to prevent or materially delay the
consummation of the Merger or result in a Material Adverse Effect.
(b) The execution and delivery of this Agreement by Xxxxx does not, and
the consummation of the Merger by Xxxxx will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority (as defined below), except (i) for applicable requirements, if any, of
the Securities Act of 1933, as amended (the "1933 Act") the Securities Exchange
Act of 1934, as amended (the "1934 Act"), state securities or "blue sky" laws
("Blue Sky Laws"), the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), applicable state takeover Laws and the DGCL, and (ii)
where the failure to obtain such other consents, approvals, authorizations, or
permits, or to make such filings or notifications, would not, individually or in
the aggregate, be reasonably expected to prevent or materially delay the
consummation of the Merger or result in a Material Adverse Effect.
Section 3.04 Certificate of Incorporation and By-laws. The
Disclosure Schedule includes complete and correct copies of its Certificate of
Incorporation and By-laws, each as amended to the date hereof. Such Certificate
of Incorporation and By-laws are in full force and effect and have not been
modified or amended in any way.
Section 3.05 Subsidiaries and Affiliates. Except as set forth
on the Disclosure Schedule, Xxxxx does not directly or indirectly own any equity
or similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
limited liability company, joint venture or other business association or
entity. The Disclosure Schedule sets forth the name, owner, jurisdiction of
organization and type and percentages of outstanding equity securities owned,
directly or indirectly, by Xxxxx, with respect to each corporation, partnership,
limited liability company, joint venture or other business association or entity
of which Xxxxx owns, directly or indirectly, any equity or equity related
securities. Except as set forth on the Disclosure Schedule, all outstanding
shares of stock or other equity securities of each subsidiary of Xxxxx have been
duly authorized and validly issued and are fully paid and non-assessable, and
are owned, directly or indirectly, by Xxxxx free and clear of any Lien, and
there are no outstanding options, warrants, convertible securities, calls,
rights, commitments, preemptive rights or agreements or instruments or
understandings of any character, obligating any subsidiary of Xxxxx to issue,
deliver or sell, or cause to be issued, delivered or sold, contingently or
otherwise, additional shares of such subsidiary or any securities or obligations
convertible or exchangeable for such shares or to grant, extend or enter into
any such option, warrant, convertible security, call, right, commitment,
preemptive right or agreement. All references in this Agreement to Xxxxx, its
business, assets, condition (financial or otherwise) or business prospects and
all references to documents, instruments or other agreements to be delivered at
Closing shall mean and include Xxxxx and each subsidiary (past and present),
unless the context clearly and specifically limits the meaning solely to Xxxxx.
Section 3.06 Capitalization. The authorized capital stock of
Xxxxx consists of 20,000,000 shares of common stock, $0.04 par value per share
and 400,000 shares of preferred stock, of which 4,291,855 shares of common stock
and no shares of preferred stock are issued and outstanding as of the date of
this Agreement. All of the outstanding shares of Xxxxx Common
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Stock have been issued pursuant to and in accordance with the 1933 Act, and any
applicable state securities Laws and rules and regulations under such Laws. All
of the outstanding shares of Xxxxx Common Stock are duly authorized, validly
issued, fully paid and nonassessable, with no liability attaching by virtue of
share ownership, and all such shares are free of pre-emptive rights. The
Disclosure Schedule identifies and describes the number of shares of Xxxxx
Common Stock to be received upon exercise or conversion and the exercise or
conversion price of each outstanding Xxxxx Stock Option (the "Xxxxx Common Stock
Equivalents") as well as the aggregate number of shares of Xxxxx Common Stock
and the aggregate exercise price for all of the outstanding Xxxxx Common Stock
Equivalents. All of Xxxxx Common Stock Equivalents will become fully vested upon
a change of control of Xxxxx. Except for Xxxxx Common Stock Equivalents, there
are no existing options, warrants, convertible securities, calls, subscriptions,
or other rights or other agreements or commitments obligating Xxxxx to issue,
transfer or sell, or caused to be issued, transferred or sold, contingently or
otherwise, any shares of capital stock of Xxxxx or any other securities
convertible into or evidencing the right to subscribe for any such shares. There
are no outstanding stock appreciation rights or similar phantom equity
securities with respect to the capital stock of Xxxxx. To Xxxxx'x knowledge,
other than the Voting Agreements, there are no voting trusts or shareholder
agreements with respect to the voting of the capital stock of Xxxxx, and to
Xxxxx'x knowledge, there are no such agreements among its stockholders. To
Xxxxx'x knowledge, other than the Voting Agreements, there are no irrevocable
proxies with respect to shares of capital stock of Xxxxx or any Subsidiary that
cover more than one percent (1%) of Xxxxx'x outstanding capital stock. A list of
the holders of record of shares of Xxxxx'x capital stock and their respective
state of residency as of a recent date is set forth on the Disclosure Schedule.
Section 3.07 Financial Statements. Attached to the Disclosure
Schedule are (i) the audited consolidated financial statements (including
balance sheet and statements of income and cash flow and including all notes and
schedules thereto) of Xxxxx for its fiscal years ended October 25, 1997, October
31, 1998, October 30, 1999 and October 28, 2000, including in each case the
footnotes thereto, certified by Xxxxx'x independent accountants (the audited
balance sheet as of October 28, 2000 being herein referred to as the "Xxxxx
Balance Sheet"), and (ii) the unaudited consolidated financial statements
(including balance sheet and statements of income and cash flow) for the three
months ended January 31, 2001 (collectively, the "Financial Statements").
Xxxxx'x books and records of accounts accurately reflect all of the assets,
liabilities, transactions and results of operations of Xxxxx, and the Financial
Statements have been prepared based upon and in conformity therewith. The
Financial Statements complied as to form in all material respects with the
applicable accounting requirements and rules and regulations of the SEC and have
been prepared in accordance with generally accepted accounting principles
maintained and applied on a consistent basis throughout the indicated periods
("GAAP"), and fairly present the financial condition and results of operation of
Xxxxx at the dates and for the relevant periods indicated in accordance with
GAAP (subject, in the case of unaudited statements to normal and recurring
year-end adjustments and the absence of footnotes none of which would,
individually or in the aggregate, have or be reasonably expected to have a
Material Adverse Effect). True and correct copies have been delivered to Parent
of all written reports submitted to Xxxxx by Xxxxx'x auditors since January 1,
1997, relating to the findings of audits or examination of the books and records
of Xxxxx. The Disclosure Schedule sets forth a list of all of Xxxxx'x and its
subsidiaries' indebtedness for borrowed money which is outstanding as of the
date hereof, except for amounts of indebtedness which are not in excess of Ten
Thousand Dollars ($10,000) individually or Fifty Thousand Dollars ($50,000) in
the aggregate.
Section 3.08 SEC Filings. Xxxxx has filed all forms, reports
and documents required to be filed by it with the Securities and Exchange
Commission (the "SEC") since January 1, 1997, and has made available to the
Merger Sub all registration statements (on all forms applicable to the
registration of securities), periodic reports and other documents filed by Xxxxx
with the SEC, including all exhibits filed in connection therewith since January
1, 1997, and prior to the date of this Agreement (collectively, the "Xxxxx SEC
Reports"). As of their respective dates, the Xxxxx SEC Reports (i) complied in
all material respects with the requirements of the 1933 Act or the 1934 Act, as
the case may be, and the rules and regulations thereunder and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. Xxxxx will deliver to Parent and Merger Sub, as soon as they become
available, true and complete copies of any Xxxxx SEC Reports filed subsequent to
the date hereof and prior to the Effective Time.
Section 3.09 Receivables. All accounts, notes and other
receivables of Xxxxx, whether reflected in the Financial Statements or
otherwise, represent bona fide sales in the ordinary course of business, and to
the extent not previously collected, are fully collectible, subject to reserves
as set forth on the Financial Statements, and none of such receivables or other
debts is or will be at the date of the Closing subject to any counterclaim or
set-off and, to the knowledge of Xxxxx, no customer has disputed any such
receivable or other debt.
Section 3.10 Inventories. The inventories of Xxxxx consist
solely of raw materials, supplies, work-in-process and finished goods and have
been valued at the lower of cost or market. The inventories consist of a quality
and quantity which are usable and salable at normal profit margins and within
customary time periods in the ordinary course of business consistent with past
practice (including as to quantity and frequency) and contain no material amount
of slow-moving, obsolete, spoiled or damaged items. The finished goods inventory
of Xxxxx is merchantable and fit for its particular use, including, in the case
of food products, human consumption. The inventories which consist of
work-in-process are being completed on schedule and there are no forfeitures,
chargebacks or penalties which have been or will be incurred due to the failure
of Xxxxx to complete the work-in-process in a timely manner. The values at which
inventories are reflected on the Financial Statements have been determined on a
FIFO basis in accordance with GAAP consistently applied for all periods, with
appropriate write-downs for slow-moving, obsolete and damaged merchandise. None
of the inventories have been consigned to others, nor are any inventories
consigned to Xxxxx. All inventories are located at 0000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxx, XX 00000.
Section 3.11 Absence of Certain Changes. Since January 1,
2000, Xxxxx has conducted its business only in the ordinary course thereof
consistent with past custom and practice (including with respect to quantity and
frequency) and has not experienced any changes in its financial condition,
assets, liabilities, business or operations which individually or in the
aggregate had or could have a Material Adverse Effect. For purposes of this
Section, an item shall be deemed "material" if the dollar amount or value
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associated with such item exceeds Twenty-Five Thousand Dollars ($25,000).
Without limiting the generality of the foregoing sentence, since January 1,
2000, Xxxxx has not:
(i) in a single transaction or a series of
related transactions, sold (including by sale-leaseback),
leased, licensed, or otherwise disposed of any assets which,
individually or in the aggregate, have a fair market value in
excess of Fifty Thousand Dollars ($50,000);
(ii) paid, discharged or satisfied any
material liability or obligation (whether accrued, absolute,
contingent or otherwise) other than liabilities and
obligations which were paid, discharged or satisfied in the
ordinary and usual course of business, or liabilities or
obligations shown or reflected on the Xxxxx Balance Sheet, or
incurred any material liability or obligation except for this
Agreement and except in the ordinary course of business
consistent with past practice since the date of the Xxxxx
Balance Sheet;
(iii) prepaid any material expenses, indebtedness or
other obligations;
(iv) except in the ordinary and usual course
of business, permitted or allowed any assets (whether real,
personal or mixed, tangible or intangible) to be subjected to
any Lien of any kind;
(v) written off as uncollectible any notes or
accounts receivable;
(vi) released, waived or terminated any material
obligation of any third party to Xxxxx;
(vii) disposed of or permitted to lapse any
rights in, to or for the use of any patent, trademark, trade
name or copyright;
(viii) settled any material claim, action or
lawsuit involving Xxxxx, or amended any Tax Return in any
respect;
(ix) granted any increase in the base compensation or
other payment to any director, officer or employee, whether
now or hereafter payable or granted (other than increases in
compensation in the ordinary course consistent in timing and
amount with past practice) or granted any severance or
termination pay (other than for severance pay to employees who
are not Related Parties (as defined in Section 3.25) in
amounts consistent with Xxxxx'x established severance pay
practices), terminated any employee earning greater than
Thirty-Five Thousand Dollars ($35,000) per year, entered into
amended or become obligated under any employment, severance,
bonus, profit sharing or other employee benefit arrangement or
entered into, established, adopted, amended or renewed any
employment, consulting, severance or similar agreement or
arrangement with any director, officer or stockholder (other
than in the ordinary course of business consistent with past
custom and practice);
(x) made any material capital expenditure or
commitment for additions to property, plant or equipment, or
leased or agreed to lease any assets which, if purchased,
would be reflected in the property, plant or equipment
accounts;
(xi) made any change in any method of
accounting or keeping its books of account or accounting
practices;
(xii) paid any amounts to, or sold or
otherwise disposed of any assets to, assets from, or entered
into any agreement or arrangement with, any Related Party;
(xiii) except for this Agreement, incurred
any obligation or liability, including without limitation any
liability for nonperformance or termination of any contract,
except liabilities incurred in the ordinary and usual course
of the business;
(xiv) other than under Xxxxx'x existing credit
facilities as in effect as of the date hereof, incurred or
become contingently liable with respect to any indebtedness
for borrowed money or guaranteed any such indebtedness, where
the aggregate amount of indebtedness so incurred or guaranteed
exceeded Ten Thousand Dollars ($10,000), redeemed any
long-term debt; issued any debt securities or assumed,
guaranteed or endorsed, or otherwise as an accommodation
become responsible for, the obligations of any person, or made
any loans, advances, or capital contributions to or
investments in, any other person;
(xv) entered into or amended any contract,
agreement or commitment, or engaged in any transaction, in
each case which is material to Xxxxx and which is not in the
usual and ordinary course of the business;
(xvi) amended or proposed to amend its
Certificate of Incorporation or By-laws;
(xvii) acquired or agreed to acquire by
merging with, or by purchasing a substantial equity interest
in or a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership,
association or other business entity, in a transaction or
series of related transactions;
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(xviii) solicited or encouraged any
inquiries or proposals regarding, or offers for, or entered
into or continued any discussions with any third party
concerning any sale or transfer of Xxxxx or any of its assets
or entered into or consummated any agreement or understanding
providing for a sale or transfer of Xxxxx or any of its
assets, other than as contemplated herein;
(xix) redeemed, purchased, otherwise acquired, or
agreed to redeem, purchase or otherwise acquire, any shares of
capital stock of Xxxxx, or declared, set aside or paid any
dividend or otherwise made a distribution (whether in cash,
stock or property or any combination thereof) in respect of
Xxxxx'x capital stock;
(xx) issued, sold, pledged, disposed of, granted or
encumbered, or authorized the issuance, sale, pledge,
disposition, grant or encumbrance of, any shares of capital
stock or other equity securities of any type or class, or any
options, warrants, convertible securities or other rights of
any kind to acquire any shares of such capital stock or other
equity securities, or any other ownership interest (including,
without limitation, any phantom interests);
(xxi) reclassified, combined, split, subdivided or
redeemed, purchased or otherwise acquired, or proposed to
redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock or other equity securities;
(xxii) commenced any voluntary petition, proceeding
or action under any bankruptcy, insolvency or other similar
Law;
(xxiii) authorized, proposed or agreed,
whether or not in writing, to take any of the actions
described in clauses (i)-(xxii) above.
Section 3.12 Litigation. Other than as set forth on the
Disclosure Schedule, Xxxxx is not a party to any pending claim, action, suit,
investigation or proceeding nor, to Xxxxx'x knowledge, is any such claim,
action, suit, investigation or proceeding threatened against Xxxxx or any of its
properties or assets, before any court, arbitrator or Governmental Authority.
Other than as set forth on the Disclosure Schedule, since January 1, 2000 Xxxxx
has not been a party to any claim, action, suit, investigation or proceeding.
The Disclosure Schedule discloses, with respect to each item described thereon,
the name or title of the action (and parties or potential parties thereto), a
description of the nature of the action or claim, and a good faith estimate of
the maximum liability of Xxxxx in the event of an adverse result (however, Xxxxx
makes no representation or warranty regarding the actual amount of liability
which Xxxxx may suffer as a result of any such action). There is no outstanding
order, judgment, decree or stipulation issued by any federal, state or local
authority to which Xxxxx is a party or subject and which adversely affects or
may adversely affect Xxxxx'x properties, business or prospects.
Section 3.13 Compliance with Laws and Licenses.
(a) Xxxxx has conducted and is conducting its business in compliance
with all applicable Laws, regulations and requirements in each jurisdiction in
which it conducts (or in the past has conducted) business, except where the
failure to comply would not have a Material Adverse Effect.
(b) In addition to, but not in limitation of the foregoing, Xxxxx has
prepared, manufactured and sold all of its products (including product in
process and in inventory on the Effective Date) in full compliance with the
applicable provisions of the United States Food, Drug and Cosmetic Act, as
amended, and the United States Meat Inspection Act, as amended, and all rules
and regulations promulgated thereunder and all other applicable Laws adopted or
promulgated by any Governmental Authority which govern the quality or purity of
food sold for human consumption (collectively, the "Food Acts"). All of the
products of Xxxxx satisfy all federal and state nutritional labeling
requirements, and all regulations under the Food Acts. All ingredients used in
such products conform to the requirements of the Food Acts. All products of
Xxxxx (i) in process or in inventory on the Effective Date are not and (ii) all
products manufactured or packaged by Xxxxx at the time of delivery thereof to
the customers of Xxxxx were not, "adulterated" or "contaminated" within the
meaning of any of Food Act, nor did any such products constitute an article
prohibited from introduction into interstate commerce under the Food Acts at the
time of such delivery.
(c) The Disclosure Schedule lists all licenses, registrations and
permits, and applications with respect to the business and operations of Xxxxx.
Xxxxx currently possesses all governmental approvals, consents, licenses,
registrations, and permits (collectively, the "Licenses") necessary to carry on
its business as presently conducted and has not received any notice of violation
of any Laws or notice of any proposed regulations or changes in the requirement
of such approvals, consents, licenses, registrations, or permits. True and
complete copies of each written document evidencing or affecting any of the
Licenses have been previously delivered to Parent. Xxxxx is in compliance with
the terms and conditions of all of the Licenses. Neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby will
result in the revocation, or a material adverse change in the terms or
conditions, of any of the Licenses, and all Licenses shall continue in full
force and effect in accordance with their present terms unaffected by the
consummation of the transactions contemplated hereby.
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Section 3.14 Taxes.
(a) Each of Xxxxx and its Subsidiaries (current or former) has timely
filed with the appropriate Governmental Authorities all Tax Returns required to
be filed by it and has timely paid, or fully reserved on the Xxxxx Balance Sheet
for the most recent fiscal quarter (such reserve being for Tax liability as
opposed to any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) for the payment of, all Taxes of every
type and description which have or may become due (whether or not shown on any
Tax Return), and such Tax Returns accurately reflect Xxxxx'x obligations to pay
Taxes for the periods covered therein. Neither Xxxxx nor any Subsidiary of Xxxxx
currently is the beneficiary of any extension of time within which to file any
Tax Return. No examination or audit relating to any Tax Returns is currently in
progress of which Xxxxx or any Subsidiary has received either written or oral
notice. No waivers of statutes of limitation in respect of Taxes have been given
or requested and no extensions of time with respect to a Tax assessment or
deficiency have been agreed to. The Disclosure Schedule lists all Tax Returns of
Xxxxx and its Subsidiaries which have been audited from January 1, 1995 to the
present, and all of such audits have been closed and all deficiencies,
penalties, assessments and other amounts required to be paid have been paid. No
claim for a refund of any Tax has been filed or is currently pending. No oral or
written communication has been received by Xxxxx or any Subsidiary from any
authority in a jurisdiction where Xxxxx or any of its Subsidiaries do not file
Tax Returns requesting information concerning the extent of its contact with
such jurisdiction or asserting that Xxxxx or any Subsidiary is or may be subject
to taxation in such jurisdiction. None of Xxxxx and its Subsidiaries has contact
with any jurisdiction in which it does not currently file Tax Returns which
would allow such jurisdiction to impose its taxing jurisdiction on Xxxxx or any
Subsidiary. All taxes and assessments which Xxxxx or any of its Subsidiaries
were or are required by Law to withhold or collect have been and are being
withheld or collected by it and have been timely paid over to the proper
Governmental Authorities or, if not yet due, are being held by Xxxxx or its
Subsidiary for such payment. Xxxxx and its Subsidiaries have disclosed on their
federal income tax returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Code Section 6662.
Parent has been provided with correct and complete copies of all income Tax
Returns, examination reports and statements of deficiencies assessed against or
agreed to by Xxxxx and any Subsidiary since July 1, 1995. There are no Liens for
Taxes upon the assets of Xxxxx or any of its Subsidiaries, other than Liens for
Taxes that are not yet due, Liens that are being contested in good faith in
accordance with applicable law and liens disclosed on the Disclosure Schedule
(and for which adequate reserves have been provided).
(b) None of Xxxxx and its Subsidiaries: (i) has filed any consent or
agreement under Section 341(f) of the Code; (ii) has applied for a tax ruling
from any taxing authority; (iii) has entered into a closing agreement with any
taxing authority; (iv) has made any payments, is obligated to make any payments,
or is a party to any agreement that under certain circumstances could obligate
it to make any payments that will not be deductible under Code Section 280G or
Section 162(m); (v) is a party to any tax allocation or sharing agreement; (vi)
has been a member of an affiliated group filing a consolidated federal income
Tax Return (other than a group of which Xxxxx was the common parent) or has any
liability for Taxes of any Person other than Xxxxx and its Subsidiaries under
Regs. Section 1.1502-6 or any similar provision of state, local or foreign law,
as a transferee or successor, by contract or otherwise; or (vii) has been a
United States real property holding company within the meaning of Code Section
897 during the applicable period specified in Code Section 897(c)(1)(A)(ii).
(c) Xxxxx and its Subsidiaries have timely filed all required returns
or reports and remitted all property as required under any applicable abandoned
property, escheat or similar Laws.
(d) The Disclosure Schedule sets forth the following information with
respect to Xxxxx and each Subsidiary as of the last Tax period: (i) basis in
assets for federal and state tax purposes; (ii) Xxxxx'x basis in the stock of
its Subsidiaries or its excess loss account as determined under the federal
income tax consolidated return rules or similar provisions of state, local or
foreign Law; (iii) the amount of any net operating loss, net capital loss,
unused credits or excess charitable contributions and the extent to which such
tax attributes are presently subject to limitation under Code Section 382, 383
or 384 or similar provisions of any state, local or foreign law; (iv) the amount
of any deferred gain or loss arising from any deferred intercompany transaction
under the Code Section 1502 consolidated return rules or similar provisions of
any state, local or foreign law; (v) any elections made with respect to Taxes,
including, but not limited to, elections under Code Sections 382, 338, 1031 and
1033; (vi) any adjustments to income under Code Section 481; (vii) and any
installment sales or open transactions.
Section 3.15 Properties.
(a) Xxxxx has good and marketable title to all of its properties and
assets, real, personal and mixed, including intangibles, free and clear of all
Liens, except for installments of special assessments not yet paid (however,
Xxxxx has no knowledge of any such special assessments), recorded easements,
covenants, and zoning restrictions, and other easements and restrictions
existing generally with respect to properties of similar character (which,
individually or in the aggregate do not have a Material Adverse Effect), and has
taken all steps necessary or otherwise required to perfect and protect its
rights in and to its properties and assets, including intangibles. All personal
property of Xxxxx is located upon Xxxxx'x premises described on the Disclosure
Schedule and all of such personal property (except for personal property
acquired or disposed of in the ordinary course of business consistent with past
practice (including as to quantity and frequency)) is reflected on the Financial
Statements. Xxxxx owns or, pursuant to a written contract or License, possesses
valid and enforceable rights to use all assets which are used in or necessary
for the conduct of Xxxxx'x business as presently conducted and as presently
planned to be conducted in the future. Xxxxx has no present plan to purchase or
lease any other real estate or tangible personal property so as to be able to
continue Xxxxx'x business as presently conducted or presently planned to be
conducted in the future and to Xxxxx'x knowledge no capital expenditures
(excluding only normal maintenance and repairs made consistently with past
practice and which are required to be expensed for federal income tax purposes)
or remediations suggested or required by any applicable Governmental Authority
or insurer, in the next twelve months in an amount exceeding Twenty-Five
Thousand Dollars ($25,000) in the aggregate are necessary to carry on Xxxxx'x
business as it is presently conducted, nor are any such expenditures planned.
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(b) All properties and assets owned and/or currently used by Xxxxx in
Xxxxx'x business are in good condition and repair and are not in violation of
any applicable Laws, including without limitation building and zoning Laws, and
no notice of any violation of building or other Laws, statutes, ordinances or
regulations relating to such business, property or assets has been received by
Xxxxx.
(c) The Disclosure Schedule sets forth: (i) a true and complete list of
all real property leases of Xxxxx and all personal property leases to which
Xxxxx is a party as lessee as of the date hereof involving an annual lease
payment of more than One Thousand Dollars ($1,000), including an identification
of the parties, the property, the term of the lease and the rent or lease
payments thereunder, and (ii) a true and complete list of all real property
owned or leased by Xxxxx as of the date hereof (collectively, the "Real
Property"), including an identification of the property, the record owner and
the principal structures on it.
Section 3.16 Contracts and Commitments. Except as set forth on
the Disclosure Schedule, Xxxxx has no written or oral contracts, commitments, or
other agreements or arrangements, including any notes, loan agreements,
guarantees or other evidences of indebtedness of Xxxxx, which individually or in
the aggregate of all similar instances involve consideration with a value in
excess of Ten Thousand Dollars ($10,000) or which, in the aggregate of all such
items (whether similar or dissimilar) involve consideration with a value in
excess of One Hundred Thousand Dollars ($100,000), or any contracts,
commitments, or other agreements or arrangements with any Related Party. All of
such contracts, commitments, or other agreements or arrangements to which Xxxxx
is a party or by which any of its assets or properties are bound or affected are
in full force and effect and no event or condition has occurred or exists, or is
alleged by any of the other parties thereto to have occurred or exist, which
constitutes, or with lapse of time or giving of notice might constitute, a
default or basis for acceleration under any such contract, commitment,
arrangement or other agreement, except where the occurrence or existence of such
event or condition would not have a Material Adverse Effect. Xxxxx has listed on
the Disclosure Schedule and, except with respect to the Company's plan of
reorganization under Chapter 11 of the United States Bankruptcy Code which
became effective in April 1993, has previously delivered to Parent a complete
and correct copy of all of the following contracts, commitments, agreements or
arrangements that are in written form (and written descriptions of all such oral
contracts, commitments, agreements or arrangements):
(a) Leases. All leases of real or personal property which obligate
Xxxxx to make aggregate payments of more than One Thousand Dollars ($1,000)
annually;
(b) Purchase Orders. All contracts relating to the purchase or sale of
products, services or supplies by Xxxxx, other than individual purchase or sales
orders issued in the ordinary course of business consistent with past practice
(including as to quantity and frequency) for amounts in each case not in excess
of Five Thousand Dollars ($5,000) individually or Twenty-Five Thousand Dollars
($25,000) in the aggregate of all such orders with the same or related parties;
(c) Certain Agreements. A list of the following described types of
contracts or documents: (i) dealership, distributorship, sales representative or
similar contracts; (ii) license, royalty or similar contracts; (iii) service or
maintenance; (iv) protective services or security; (v) railroad track or spur
track; and (vi) royalty, commission or other contingent contracts, pursuant to
which Xxxxx'x obligation to make payments is in excess of Five Thousand Dollars
($5,000) per year, or pursuant to which Xxxxx'x obligation to make contingent
payments is dependant upon sales, revenues, income, success or other performance
standard;
(d) Other Financial Obligations. A list of any other contract which
requires Xxxxx to pay or expend, after the Closing, more than Ten Thousand
Dollars ($10,000) in any single instance or Twenty-Five Thousand Dollars
($25,000) in the aggregate of all such instances with the same or related
parties;
(e) Employment Contracts. A list of all employment, bonus, incentive
compensation, profit-sharing, retirement, pension, salary-continuation,
post-retirement benefit, death benefit, vacation or other fringe benefit
contracts in effect, or under which any amounts remain unpaid, on the date of
this Agreement or to become payable or effective after the date of this
Agreement;
(f) Loans and Borrowing Agreements. A list of each (i) loan, credit or
borrowing arrangement or contract; or (ii) contract by which Xxxxx has
guaranteed or otherwise become liable or contingently liable for the debt of
another;
(g) Non-Compete Covenants. A list of any written or oral covenants not
to compete, non-solicitation covenants and non-disclosure covenants in favor of
Xxxxx, or binding upon or against Xxxxx;
(h) Powers of Attorney. The names of all persons holding powers of
attorney from Xxxxx and a summary statement of the terms thereof;
(i) Discounts. A list of any contract, arrangement or program pursuant
to which Xxxxx has offered, promised or made available to its customers any
volume discount, rebate, credit or allowance which, individually or in the
aggregate involves a discount, rebate, credit or allowance in excess of $5,000;
(j) Non-Ordinary Course Agreements. A list and description of any
contract or arrangement upon Xxxxx and which was made or entered into other than
in the ordinary course of business consistent with past practice (including as
to quantity and frequency);
(k) Bankruptcy Judgments. A list of all bankruptcy judgments involving
Xxxxx or any of its Subsidiaries.
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Section 3.17 Employee Relations. Except as set forth on the
Disclosure Schedule, Xxxxx is not a party to any collective bargaining agreement
covering or relating to any of its employees and has not recognized, is not
required to recognize and during the past five years has not received a demand
for recognition by any collective bargaining representative or experienced any
strikes or work stoppages or slowdowns. Xxxxx is in compliance with all
applicable Laws, rules and regulations relating to employment or employment
practices, including those relating to wages, hours, collective bargaining and
the withholding and payment of Taxes and contributions, and Xxxxx is in
compliance with the Occupational Safety and Health Act and applicable federal
civil rights Laws. There are no controversies pending or, to the knowledge of
Xxxxx, threatened between Xxxxx and any of its employees. Xxxxx has complied in
all material respects with its payment obligations to all employees in respect
of all wages, salaries, commissions, bonuses, benefits and other compensation
due and payable to such employees under any Xxxxx policy, practice, agreement,
plan, program and applicable Law. Xxxxx is not liable for any severance pay or
other payments to any employee or former employee arising from the termination
of employment under any benefit or severance policy, practice, agreement, plan,
or program of Xxxxx, nor will Xxxxx have any liability that exists or arises, or
may be deemed to exist or arise, under any applicable Law or otherwise, as a
result of or in connection with the transactions contemplated hereunder or as a
result of the termination by Xxxxx of any persons employed by Xxxxx on or prior
to the Effective Time of the Merger except as required by Code Section 4980B.
Xxxxx is in compliance with its obligations pursuant to the Worker Adjustment
and Retraining Notification Act of 1988 and part 6 and 7 of Title I of ERISA (as
defined below), to the extent applicable, and all other employee notification
and bargaining obligations arising under any collective bargaining agreement or
Law. To the knowledge of Xxxxx, the employment of any employee or independent
contractor by Xxxxx does not violate any legal or contractual rights of any
third party, including any rights with respect to Intellectual Property.
Section 3.18 Employee Benefit Plans.
(a) General. The Disclosure Schedule sets forth a true and complete
list and brief description of each "employee pension benefit plan" (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), "employee welfare benefit plan" (as defined in Section 3(1)
of ERISA) and other employee benefit plans (including, without limitation, those
providing any stock option, stock purchase, stock appreciation right, bonus,
deferred compensation, excess benefits, profit sharing, pension, thrift,
savings, stock bonus, employee stock ownership, salary continuation, severance,
retirement, supplemental retirement, short- or long-term disability, dental,
vision care, hospitalization, major medical, life insurance, accident insurance,
vacation, holiday and/or sick leave pay, tuition reimbursement, executive
perquisite or other employee benefits) maintained, or contributed to, or
required to be contributed to, by Xxxxx for the benefit of any officers or
employees, current or former, active or inactive, of Xxxxx, whether on an active
or frozen basis (all the foregoing being herein called "Benefit Plans"). Xxxxx
does not have any formal plan or commitment, whether legally binding or not, to
create any additional plan or modify or change any existing Benefit Plan that
would affect any employee or former employee of Xxxxx, except as required by
applicable Law, including the Code. True, complete and correct copies of the
following have been previously delivered to Parent: (i) each Benefit Plan,
including any amendments thereto (or, in the case of any unwritten Benefit Plan,
descriptions thereof); (ii) the most recent annual report (Form 5500 series)
filed with the Internal Revenue Service ("IRS") with respect to each Benefit
Plan (if any such report was filed); (iii) each trust agreement or other funding
arrangement relating to any Benefit Plan; (iv) the most recent summary plan
description together with each subsequent summary of material modifications
required under ERISA with respect to each such Benefit Plan, and all material
employee communications relating to each such Benefit Plan; and (v) all
currently effective IRS rulings or determination letters relating to any Benefit
Plan.
(b) Administration. Each Benefit Plan has been administered in all
respects in accordance with its terms. All of the Benefit Plans and Xxxxx are in
compliance in all respects with the applicable provisions of ERISA and the Code,
except where the failure to comply would not have a Material Adverse Effect. All
material reports, returns and similar documents with respect to the Benefit
Plans required to be filed with any Governmental Authority or distributed to any
Benefit Plan participant have been duly and timely filed or distributed, except
where such failure to file or distribute would not have a Material Adverse
Effect. There are no investigations by any Governmental Authority, termination
proceedings or other claims (except claims for benefits payable in the normal
operation of the Benefit Plans), suits or proceedings pending, or to the
knowledge or Xxxxx, threatened against or involving any Benefit Plan or
asserting any rights or claims to benefits under any Benefit Plan that could
give rise to any liability, and there are not any facts that could give rise to
any liability in the event of any such investigation, claim, suit or proceeding,
except such facts as would not have a Material Adverse Effect.
(c) Contributions; Funding. All contributions to, and payments from,
the Benefit Plans that may have been required to be made in accordance with the
Benefit Plans and applicable Law have been timely made. No Benefit Plan is
subject to the minimum funding requirements of Section 302 of ERISA or Section
412 of the Code.
(d) Compliance. All the Benefit Plans, as and from the date adopted or
as they may have been amended, as, when, and to the extent required, comply, and
at all applicable times complied with, the applicable provisions of the Code;
ERISA; the Equal Pay Act of 1963, as amended; the Age Discrimination in
Employment Act of 1967, as amended; Title VII of the Civil Rights Act of 1964,
as amended; all other Laws regulating employment and employee benefits; and all
Laws and Orders enacted, issued or promulgated by Government Authorities
responsible for the administration or enforcement of one or more of such Laws,
except where the failure to comply would not have a Material Adverse Effect.
Each Benefit Plan that is an employee pension benefit plan within the meaning of
Section 3(2) of ERISA has received a determination letter from the IRS to the
effect that such Benefit Plan is currently qualified and exempt from Federal
income taxes under Sections 401(a) and 501(a), respectively, of the Code, and no
such determination letter has been revoked, nor has revocation been threatened,
nor has any such Benefit Plan been amended since the date of its most recent
determination letter or application therefor in any respect that would adversely
affect its qualification or increase its cost. No Benefit Plan, nor any trust
established thereunder, will be amended or terminated by formal action of Xxxxx
after the date copies thereof are disclosed, and no Benefit Plan or trust will
be amended or terminated by formal action of Xxxxx prior to the Closing Date,
except as an amendment may be necessary to effect the transactions contemplated
by this Agreement so long as any such amendment does not adversely affect
Parent's
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interests in the Benefit Plan being amended, or as may be adopted as a
condition to the issuance of a favorable determination letter by the IRS, or as
otherwise may be required to comply with the requirements of ERISA and the Code.
(e) Prohibited Transactions; Reportable Events. No "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 of ERISA)
has occurred which involves the assets of any Benefit Plan which could subject
any employees of Xxxxx or any of its subsidiaries, a trustee, administrator or
other fiduciary of any trusts created under any Benefit Plan to the tax or
penalty on prohibited transactions imposed by Section 4975 of the Code or the
sanctions and penalties imposed on prohibited transactions under Title I of
ERISA. No Benefit Plan has been terminated, nor have there been any "reportable
events" (as defined in Section 4043 of ERISA and the regulations thereunder)
with respect thereto. Neither Xxxxx nor any trustee, administrator or other
fiduciary of any Benefit Plan, nor any agent of any of the foregoing has engaged
in any transaction or acted or failed to act in a manner which could subject
Xxxxx or any Benefit Plan to any material tax, penalty or other liability under
ERISA or any other applicable Law, whether by way of indemnity or otherwise. No
Benefit Plan or related trust has any liability of any nature, accrued or
contingent, including, without limitation, liabilities for federal, state or
local taxes, other than for routine payments to be made in due course to
participants, investment managers, trustees and beneficiaries.
(f) PBGC. No Benefit Plan is subject to Title IV of ERISA, and there
are no facts which might give rise to any liability of Xxxxx under Title IV of
ERISA and which could reasonably be anticipated to result in any claims being
made against Xxxxx by the Pension Benefit Guaranty Corporation, except such
facts as would not have a Material Adverse Effect. For purposes of the preceding
sentence the term Xxxxx shall be deemed to refer also to any entity which is
under common control or affiliated with Xxxxx, within the meaning of Section
4001 of ERISA, and the rules and regulations promulgated thereunder and/or
Sections 414(b), (c), (m) or (o) of the Code and the rules and regulations
promulgated thereunder.
(g) Foreign Employees. There are no officers or employees, current or
former, active or inactive, of Xxxxx working outside the United States.
(h) Certain Matters. The execution and performance of the transactions
contemplated by this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) constitute an event under any Benefit Plan
that will or may result in any payment (whether of severance pay or otherwise),
acceleration, vesting or increase in benefits with respect to any employee,
former employee, officer or director of Xxxxx. No payment which will be or may
be made by Xxxxx to any employee, former employee, director or agent thereof
will or may be characterized as an "excess parachute payment" within the meaning
of Section 280F(b)(1) of the Code. Except for the payment of the Option
Consideration, no payments of any kind will become due in connection with the
execution and performance of the transactions contemplated in this Agreement
(either alone or upon the occurrence of any additional or subsequent events)
under any Benefit Plan.
(i) Post-Retirement Benefits. No Benefit Plan provides benefits,
including without limitation, death, disability, or medical benefits (whether or
not insured), with respect to current or former employees of Xxxxx beyond their
retirement or other termination of service other than: (i) coverage mandated by
applicable Law; (ii) death benefits or retirement benefits under any "employee
pension plan", as that term is defined in Section 3(2) of ERISA; (iii) deferred
compensation benefits accrued as liabilities on the books of Xxxxx; or (iv)
benefits the full cost of which is borne by the current or former employee (or
his beneficiary).
(j) COBRA. Each "group health plan" (within the meaning of Section
5000(b)(1) of the Code) maintained by Xxxxx as of the first day of each group
health plan's first plan year beginning on or after July 1, 1986, has been
administered in compliance with the continuation coverage requirements initially
enacted as part of the Consolidated Omnibus Budget Reconciliation Act of 1985
and as formerly provided under Section 162(k) and as currently provided under
Section 4980B of the Code and any regulations promulgated or proposed
thereunder.
(k) Multiemployer Plans. At no time has Xxxxx been required to
contribute to, or incurred any withdrawal liability (within the meaning of
Section 4201 of ERISA) to any Benefit Plan which is a multiemployer plan as
defined in ERISA Section 3(37).
(l) Health Plan Coverage. Xxxxx does not have any notice of, and has no
knowledge of, any disease, injury or illness which might reasonably be expected
to result in claims against any Benefit Plan which could exceed $20,000 for any
participant in any calendar year.
Section 3.19 Intellectual Property. The Disclosure Schedule
lists (or, in the case of trade secrets and secret processes, generally
describes) all of the following which are owned by Xxxxx or used or intended to
be used by Xxxxx in Xxxxx'x business: (i) patents and patent applications, (ii)
trademarks, trade names, service marks and registrations and applications for
registrations thereof (including, but not limited to, "Xxxxx Foods"), (iii)
copyrights and copyright registrations, and (iv) trade secrets and secret
processes (the "Intellectual Property"). The Disclosure Schedule lists for each
item of Intellectual Property owned by Xxxxx and which is patented or registered
with the United States or any foreign or state agency or office, the patent or
registration number thereof, the date of patent issuance or registration and the
agency or office where so patented or registered. Except as otherwise described
on the Disclosure Schedule, Xxxxx is the sole owner of all right, title and
interest in the Intellectual Property. With respect to any Intellectual Property
which is not owned by Xxxxx, Xxxxx has valid, binding and enforceable rights to
use such Intellectual Property. There are no interference, opposition or
cancellation proceedings pending or, to the knowledge of Xxxxx, threatened,
against Xxxxx or the Intellectual Property. The use of the Intellectual Property
does not infringe upon the rights of any third party. No claim, suit or action
is pending or, to the knowledge of Xxxxx, threatened, alleging that Xxxxx is
infringing upon the intellectual property rights of others. Except as set forth
on the Disclosure Schedule, Xxxxx has not licensed or permitted any third party
to use any of the Intellectual Property.
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Section 3.20 Environmental Matters.
(a) No Violations. Xxxxx has never violated or been threatened with or
received a notice, directive, violation report or charge asserting any violation
of any Environmental Law (as defined below).
(b) No Proceedings. No suit, proceeding or other administrative or
legal action has ever been instituted against Xxxxx by any federal, state or
local Governmental Authority or any other person or entity concerning any
Environmental Laws.
(c) Claims for Remediation. Xxxxx has not received from any federal,
state or local Governmental Authority or any other person or entity any claim,
demand, directive, order or request to investigate, restore, repair, clean up or
otherwise remediate, or to contribute to the costs of investigating, restoring,
repairing, cleaning up or otherwise remediating the Real Property.
(d) Compliance. (i) Xxxxx is, and at all times in the past has been, in
compliance with all Environmental Laws, except where such failure would not have
a Material Adverse Effect, (ii) Xxxxx has obtained all permits, authorizations,
licenses, or approvals which are necessary or required under Environmental Laws
in connection with the operation of Xxxxx'x business, and Xxxxx is in compliance
with such permits, authorizations, licenses, and approvals, except where such
failure would not have a Material Adverse Effect, (iii) no asbestos, urea
formaldehyde or polychlorinated biphenyls are present on, at, in or under the
Real Property, and (iv) none of the assets or operations of Xxxxx is required to
be upgraded, modified, or replaced in order to be in compliance with
Environmental Laws.
(e) No Releases. (i) Xxxxx has not disposed of, spilled, discharged,
released or otherwise placed any Environmental Materials, on, at, in or under
the Real Property, (ii) to the knowledge of Xxxxx, no third party has disposed
of, spilled, discharged, released or otherwise placed any Environmental
Materials on, at, in or under the Real Property, and (iii) other than the
information provided in (i) and (ii), there has been no release, discharge,
leakage, seepage or migration of any Environmental Materials from any
aboveground or underground storage tank or any other structure currently or
previously located on, at, in or under the Real Property, except for such
matters as would not have a Material Adverse Effect.
(f) Certain Uses. (i) no septic systems or xxxxx exist on, at, in or
under the Real Property, (ii) to Xxxxx'x knowledge, the Real Property has never
been used as a landfill, dump site or any other use which involves the disposal
of Environmental Materials on the Real Property in a manner which may subject
the Surviving Corporation to any claim for investigation, remediation or
damages, and (iii) except with respect to the storage, use, generation, handling
or removal from the Real Property of Environmental Materials in the ordinary
course of business consistent with past practice and in compliance with all
Environmental Laws, no Environmental Materials are currently located at or ever
have been used, generated, treated, stored, disposed of, handled on or removed
from the Real Property, except where such existence or use would not have a
Material Adverse Effect.
(g) Storage Tanks. To Xxxxx'x knowledge, no aboveground or underground
storage tanks have ever been located on, at, in or under the Real Property.
(h) List of Reports and Disposal Sites. The Disclosure Schedule
includes a list of, (i) all environmental investigative reports, studies or
assessments (including, but not limited to, Phase I and Phase II assessments),
compliance audits, laboratory analytical data, technical reviews, or the like
with respect to Xxxxx, the Real Property, Xxxxx'x business or any of Xxxxx'x
assets, copies of which are attached hereto, and (ii) all past and present
locations where Environmental Materials, which currently are or have been
controlled by Xxxxx have been sent, spilled, released, discharged or disposed.
(i) Assumption of Liability. Xxxxx has not assumed, either
contractually or by operation of Law, any liability of any person or entity
under any Environmental Laws.
Section 3.21 Contingent or Undisclosed Liabilities. Xxxxx does
not have any debts, liabilities or obligations (whether known or unknown,
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated and whether due or to become due, including any liability for
Taxes), and there are no claims or causes of action that may be asserted against
Xxxxx by any Governmental Authority or third party which arise with respect to
or relate to any period or periods on or prior to the date hereof, regardless of
whether such obligations, liabilities or claims are known or unknown, absolute,
accrued, contingent or otherwise, except as and to the extent set forth on the
Xxxxx Balance Sheet or disclosed on the Disclosure Schedule, and except for
liabilities incurred since October 28, 2000 in the ordinary course of business
consistent with past practice (none of which liabilities were incurred in
connection with any breach of contract, tortuous conduct or violation of Law).
Section 3.22 Insurance. The Disclosure Schedule lists and
contains a description of each policy of insurance owned or held by Xxxxx
currently in effect (including without limitation, policies for fire and
casualty, liability, workers' compensation, business interruption, umbrella
coverage, products liability, medical, disability and other forms of insurance)
specifying the insurer, amount of coverage, type of insurance, policy number,
deductible limits and any pending claim in excess of Five Thousand Dollars
($5,000), whether or not covered by insurance (the "Insurance"). Xxxxx is not
self-insured for any insurable risks. The Insurance is in full force and effect,
all premiums with respect thereto covering all periods up to and including the
date hereof have been paid, and no notice of cancellation or termination has
been received by Xxxxx with respect to any such policy. The policies evidencing
the Insurance are valid, outstanding and enforceable policies subject to the
terms and conditions contained therein, and there has not occurred any act or
omission of Xxxxx which could result in cancellation of any such policy prior to
its scheduled expiration date. Xxxxx has not received any notice from or on
behalf of any insurance carrier issuing any such policy to the effect that: (i)
insurance rates will hereafter be substantially increased; (ii) there will
hereafter be no renewal of any such policy; or (iii) alteration of any personal
or real property or purchase of additional equipment, or modification of any
method of doing business, is required or suggested. None of such policies will
in any way be affected by, or terminate or lapse by reason of,
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the transactions contemplated by this Agreement. Xxxxx has not been refused any
insurance with respect to Xxxxx'x assets or operations, nor has Xxxxx'x coverage
been limited by any insurance carrier to which it has applied for or with which
it has carried insurance. The Disclosure Schedule sets forth a summary of
information pertaining to all claims of property damage and personal injury or
death against Xxxxx which are currently pending or were made during the
preceding five fiscal years or the current fiscal year. Except as set forth on
the Disclosure Schedule, all of such claims are fully satisfied or are being
defended by an insurance carrier and involve no exposure to Xxxxx.
Section 3.23 Products Liability; Warranties. There exists no
(a) material defect in the design or manufacture of any product designed,
manufactured or sold by Xxxxx or any predecessor in interest to Xxxxx, or (b)
pending or, to the knowledge of Xxxxx, threatened action, suit, inquiry,
proceeding or investigation by or before any Governmental Authority or
commission relating to any product alleged to have been manufactured,
distributed or sold by Xxxxx, or any predecessor in interest to Xxxxx, to
others, and alleged to have been defective, or improperly designed or
manufactured, or in breach of any express or implied product warranty ("Products
Liability"); (ii) there exists no pending or, to the knowledge of Xxxxx,
threatened Products Liability claims; and (iii) there is no valid basis for any
such suit, inquiry, action, proceeding, investigation or claim. Xxxxx is
insured, and has been insured continuously since November 1, 1990, against
Products Liabilities, in accordance with the insurance policies identified on
the Disclosure Schedule. The Financial Statements contain adequate reserves
(calculated in accordance with Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 5) for all Products Liability claims which
are probable or reasonably possible to be asserted. The Disclosure Schedule sets
forth the material terms and conditions of all express product warranties under
which Xxxxx may have liability after the Closing. Except as set forth on the
Disclosure Schedule, all product warranties given by Xxxxx in connection with
Xxxxx'x business: (a) limit the remedy available to Xxxxx'x customers to the
repair and replacement of the warranted goods by Xxxxx, or alternatively, a
refund of the sales price of such goods to the customer; (b) expressly disallow
claims for all other damages, including direct, immediate, incidental,
foreseeable, consequential or special damages; and (c) expressly disclaim all
other warranties not expressly stated therein, whether express or implied,
including warranties of merchantability, fitness for a particular purpose,
performance or otherwise.
Section 3.24 Certain Payments. Neither Xxxxx, nor to the
knowledge of Xxxxx, any other person or entity has, directly or indirectly, on
behalf of or with respect to Xxxxx: (a) made an unreported political
contribution; (b) made or received any payment which was not legal to make or
receive; (c)engaged in any material transaction or made or received any material
payment which was not properly recorded in the books and records of Xxxxx; (d)
created or used any "off-book" bank or cash account or "slush fund"; or (e)
engaged in any conduct constituting a violation of the Foreign Corrupt Practices
Act of 1977.
Section 3.25 Related Party Transactions. Xxxxx, (a) has not
had any financial transactions or arrangements (other than payment of regular
salary to Related Parties who are employees) with any Related Party since
January 1, 1999, and (b) has not and will not have any present or future
obligation to enter into any transaction or arrangement with any Related Party.
For purposes of this Agreement, the term "Related Party" shall mean (i) any
subsidiary, (ii) any shareholder, employee, officer or director of Xxxxx or any
subsidiary, and (iii) any spouse, in-law or lineal descendant of any
shareholder, employee, officer or director of Xxxxx or any subsidiary. To the
knowledge of Xxxxx, no Related Party owns, directly or indirectly, or is a
director, member, officer or employee of, or consultant to, any business
organization which is a competitor, supplier, or customer having business
dealings with Xxxxx or any subsidiary, nor does any Related Party own any assets
or properties which are used in Xxxxx'x or any subsidiary's business.
Section 3.26 Proxy Statement, Etc. None of the information to
be supplied by Xxxxx for use in (i) the Proxy Statement to be filed with the SEC
and to be mailed to the stockholders of Xxxxx in connection with the meeting of
stockholders to be called to consider and vote upon the Merger, and (ii) any
other documents to be filed with the SEC in connection with the transactions
contemplated hereby, at the respective times such documents are filed with the
SEC and, in the case of the Proxy Statement, when mailed, shall be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading. In the case of
the Proxy Statement or any amendment thereof, none of such information at the
time of the stockholders' Meeting referred to in Section 6.03 hereof shall be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for such meeting. The Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder. All documents filed
by Xxxxx with the SEC in connection with the Merger will comply in all material
respects with the provisions of applicable federal and state securities Laws.
Section 3.27 Change of Control Provisions. No director,
officer or employee of Xxxxx will be entitled to receive additional
compensation, other payments or other rights (whether as a result of any
employee benefit plan, program or arrangement, any contract or other agreement,
or otherwise) as a result of the execution of this Agreement, the consummation
of the Merger, the consummation of any of the other transactions contemplated
hereby or otherwise in connection with a change of control of Xxxxx.
Section 3.28 Stockholder Vote Required. The affirmative vote
of the holders of two-thirds (2/3) of the outstanding shares of Xxxxx Common
Stock in accordance with Certificate of Incorporation of Xxxxx and the DGCL is
the only vote of the holders of any class or series of securities of Xxxxx
necessary to approve the Merger, this Agreement and the other transactions
contemplated hereby.
Section 3.29 Opinion of Financial Advisor. The Board of
Directors has received the opinion, dated the date hereof, of The Xxxxxxxx
Group, Inc. to the effect that the Merger Consideration is fair to Xxxxx'x
stockholders from a financial point of view.
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Section 3.30 Board Action; State Takeover Statutes.
(a) Xxxxx'x Board of Directors (at a meeting duly called and held) has
by requisite vote of directors: (i) approved and adopted this Agreement, the
Merger and all of the other transactions contemplated hereby, (ii) determined
that the transactions contemplated hereby are advisable, fair to and in the best
interests of the holders of Xxxxx Common Stock, (iii) approved in advance the
Voting Agreements, and all of the transactions contemplated thereby, (iv)
approved in advance the transfer of Xxxxx Common Stock (or voting power with
respect thereto) contemplated by Section 8.01(h) hereof, (v) agreed to recommend
that the stockholders of Xxxxx approve and adopt this Agreement, the Merger and
all of the other transactions contemplated hereby; and (vi) directed that
adoption of this Agreement be submitted to Xxxxx'x stockholders. Subject to the
provisions of Section 6.14, Xxxxx hereby agrees to the inclusion in the Proxy
Statement of the recommendations of the Board of Directors described in this
Section.
(b) The board approvals described in Section 3.28(a) hereof are
sufficient to render the restrictions on "business combinations" set forth in
Section 203 of the DGCL inapplicable to this Agreement, the Merger and the other
transactions contemplated hereby. No other state takeover Laws are applicable to
the execution of this Agreement, the consummation of the Merger or the
consummation of any of the other transactions contemplated hereby, and no
provision of the Certificate of Incorporation or By-Laws of Xxxxx or similar
governing instruments of any of Xxxxx'x subsidiaries would, directly or
indirectly, restrict or impair the ability of Merger Sub or Parent to vote, or
otherwise to exercise the rights of a stockholder with respect to, shares of
Xxxxx and its subsidiaries that may be acquired or controlled by Parent or
Merger Sub.
Section 3.31 Brokers and Finders. Neither of Xxxxx nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any financial advisory fees, investment banking fees,
brokerage fees, commissions or finders' fees, and no investment banker, broker
or finder has acted directly or indirectly for Xxxxx in connection with this
Agreement or the transactions contemplated hereby and thereby except for the
fees of The Xxxxxxxx Group, Inc. pursuant to that engagement letter with Xxxxx
dated February 8, 2001 and a copy of which is attached to the Disclosure
Schedule.
Section 3.32 Disclosure. No representation, warranty or other statement
by Xxxxx herein or in the schedules hereto, or in any other document entered
into in connection with this Agreement, contains or will contain an untrue
statement of material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
Xxxxx that:
Section 4.01 Organization and Authority. Each of Merger Sub
and Parent is duly organized, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or formation, as applicable, and
has the requisite power and authority to carry on its respective business as now
being conducted, except where the failure to have such power of authority would
not be reasonably expected to prevent or materially delay the consummation of
the Merger.
Section 4.02 Authorization. Each of Merger Sub and Parent has
all necessary power and authority to execute and deliver this Agreement, to
perform its respective obligations hereunder and to consummate the Merger. The
execution and delivery of this Agreement by each of Merger Sub and Parent and
the consummation by each of Merger Sub and Parent of the Merger have been duly
and validly authorized by all necessary action and no other proceedings on the
part of Merger Sub or Parent are necessary to authorize this Agreement or to
consummate the Merger (other than the filing and recordation of appropriate
merger documents as required by the DGCL). This Agreement has been duly and
validly executed and delivered by each of Merger Sub and Parent and constitutes
a legal, valid and binding obligation of each of Merger Sub and Parent,
enforceable against each of Merger Sub and Parent in accordance with its terms,
except insofar as enforcement may be limited by bankruptcy, insolvency or
similar Laws affecting the enforcement of creditors rights generally and by
principles of equity. Other than in connection with or in compliance with the
provisions of the DGCL, applicable state takeover Laws, the 1933 Act, the 1934
Act, Blue Sky Laws and the HSR Act, no notice to, filing with, or authorization,
consent or approval of, any public body or authority is necessary for the
consummation by Merger Sub or Parent of the transactions contemplated by this
Agreement.
Section 4.03 Information Supplied. None of the information
supplied in writing or to be supplied in writing by Parent or Merger Sub
specifically for inclusion or incorporation by reference in the Proxy Statement,
at the time filed with the SEC and at the date it is first mailed to Xxxxx'x
stockholders or at the time of the Stockholders' Meeting, will contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
Section 4.04 No Conflict. To the knowledge of any director or
officer of Parent or Merger Sub, neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
Governmental Authority, or court to which either parent or Merger Sub is subject
or any provision of the charter or bylaws of either parent or Merger Sub or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which either Parent or Merger Sub is a party
or by which it is bound or to which any of its assets is subject, except where
the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, or failure to give notice would not have a material
adverse effect on the ability of the parties to consummate the transactions
contemplated by this Agreement. To the
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knowledge of any director or officer of Parent or Merger Sub, and other than in
connection with the provisions of the XXX Xxx, xxx XXXX, xxx 0000 Xxx, the 1934
Act, and state securities laws, neither Parent or Merger Sub needs to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority in order for the parties to consummate
the transactions contemplated by this Agreement, except where the failure to
give notice, to file, or to obtain any authorization, consent, or approval would
not have a material adverse effect on the ability of the parties to consummate
the transactions contemplated by this Agreement.
Section 4.05 Interim Operations of Merger Sub. Merger Sub was
formed solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities (other than those incident
to its organization and the execution of this Agreement) and has conducted its
operations only as contemplated hereby. Merger Sub owns no assets [other than
capital stock of Xxxxx] and has no liabilities, except for liabilities under
this Agreement and under other agreements entered into hereunder and in
connection with the transactions contemplated by this Agreement.
Section 4.06 Brokers and Finders. Except for costs and fees
payable to Forest Lake Partners, LLC, neither Parent, Merger Sub nor any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, investment
banking fees, brokerage fees, commission or finders' fees and no investment
banker, broker or finder has acted directly or indirectly for Parent on
connection with the Agreement or the transactions contemplated thereby.
Section 4.07 Disclosure No representation, warranty or other
statement by Parent or Merger Sub herein or any other document made in
connection with this Agreement, contains or will contain an untrue statement of
material fact, or omits or will omit to state a material fact necessary to make
statements contained herein or therein misleading.
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME
Section 5.01 Conduct of Business Prior to the Effective Time.
During the period from the date of this Agreement to the Effective Time, Xxxxx
shall conduct its operations in the ordinary and usual course of business
consistent with past and current practices (including with respect to quantity
and frequency) and use its best efforts to, (i) keep available the services of
the current officers, employees and consultants of Xxxxx, (ii) preserve the
current relationships of Xxxxx with customers, distributors, suppliers,
licensors, licensees, contractors and other persons with which Xxxxx has
significant business relations, (iii) maintain all of its assets in good repair
and condition (except for ordinary wear and tear) other than those disposed of
in the ordinary course of business consistent with past custom and practice,
(iv) maintain all insurance currently used in the conduct of Xxxxx'x business as
currently conducted, (v) maintain Xxxxx'x books of account and records in the
usual, regular and ordinary manner and (vi) maintain and protect all of its
material intellectual property rights, in each case, in a manner consistent in
all material respects with Xxxxx'x ordinary course of business, consistent with
past practice. In addition, Xxxxx shall not, without the prior written consent
of the Parent, take any action or permit to occur any event described in Section
3.11 that would be required to be disclosed by Xxxxx on the Disclosure Schedule
with reference to Section 3.11 had such event occurred with respect to Xxxxx
prior to the date of this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 Access and Information. Prior to the Effective
Time, Xxxxx shall permit Parent, Merger Sub (and their respective lenders, other
financing sources, officers, directors, employees, accountants, consultants,
legal counsel, agents and other representatives and advisers) full and complete
access during reasonable business hours and in a manner so as not to interfere
with the normal business operations of Xxxxx, to all properties, books,
contracts, commitments, records, documents and facilities of Xxxxx, and Xxxxx
shall furnish promptly to such parties all other information concerning the
business, properties and personnel of Xxxxx as such parties may reasonably
request, and Xxxxx will make its officers, employees, agents, independent
accountants and actuaries available to such parties during reasonable business
hours to discuss such matters as may be reasonably requested by the other. Until
the Effective Time, all information obtained hereunder shall be subject to the
Confidentiality Agreement by and between Xxxxx and Parent dated November 14,
2000 (the "Confidentiality Agreement").
Section 6.02 Preparation of Proxy Statement.
(a) Xxxxx, Merger Sub and Parent shall furnish to each other all
information concerning such person or such person's business that is required by
applicable Law to be included in the Proxy Statement. As soon as reasonably
practicable after the date hereof, but in any event not later than April 25,
2001, Xxxxx shall prepare and file with the SEC (after providing Merger Sub and
Parent with a reasonable opportunity to review and comment thereon) preliminary
proxy materials relating to the Stockholders' Meeting (together with any
amendments thereof or supplements thereto, the "Proxy Statement") and shall use
its best efforts to promptly respond to any comments of the staff ("Staff") of
the SEC (after providing Merger Sub and Parent with a reasonable opportunity to
review and comment thereon) and to cause the Proxy Statement to be mailed to
Xxxxx'x stockholders as promptly as practicable after responding to all such
comments to the satisfaction of the Staff. Xxxxx shall notify Merger Sub and
Parent promptly of the receipt of any comments from the SEC and of any request
by the SEC for amendments or supplements to the Proxy Statement or for
additional information and shall supply Merger Sub with copies of all
correspondence between Xxxxx or any of its representatives, on the one hand, and
the SEC, on the other hand, with respect to the Proxy Statement or the Merger.
Xxxxx will cause the Proxy Statement to comply in all material respects with the
applicable provisions of the 1934 Act and the rules and regulations thereunder
applicable to the Proxy Statement and the solicitation of proxies for the
Stockholders' Meeting (including any requirement to amend or supplement the
Proxy Statement) and each party shall furnish to the other such information
relating to it and its affiliates to ensure that the statements regarding the
parties hereto and their affiliates and such transactions contained in the Proxy
Statement will not on the date the Proxy Statement is mailed or on
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the date of the Stockholders' Meeting or at the Effective Time include any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading. If at any time prior to the Stockholders' Meeting there shall occur
any event that should be set forth in an amendment or supplement to the Proxy
Statement, Xxxxx shall promptly prepare and mail to its stockholders such an
amendment or supplement; provided, that no such amendment or supplement to the
Proxy Statement will be made by Xxxxx without providing the Merger Sub and
Parent the reasonable opportunity to review and comment thereon and without the
approval of Merger Sub and Parent, which approval shall not be unreasonably
withheld. Xxxxx and its counsel shall permit Merger Sub, Parent and their
respective counsel to participate in all communications with the SEC and its
Staff, including all meetings and telephone conferences, relating to the Proxy
Statement, this Agreement or the Merger; provided that in the event that such
participation by Merger Sub and Parent is not practicable, the Board of
Directors shall promptly inform Merger Sub and Parent of the content of all such
communications and the participants involved therein.
(b) Subject to the provisions of Section 6.14 hereof, Xxxxx will
include in the Proxy Statement the unanimous recommendation of Xxxxx'x Board of
Directors to the stockholders of Xxxxx that this Agreement and the Merger be
adopted and approved in all respects subject to any modification, amendment or
withdrawal thereof as provided in this Agreement. The Proxy Statement shall
contain a copy of the written opinion of the Xxxxx Financial Advisor described
in Section 3.29.
(c) Xxxxx, acting through its Board of Directors, shall, in accordance
with its Certificate of Incorporation and By-laws, send the Proxy Statement to
all beneficial owners of Xxxxx Common Stock and shall comply with the delivery
requirements of Regulation 14A or Regulation 14C of the 1934 Act, whichever
shall apply to the Proxy Statement.
Section 6.03 Xxxxx Stockholders Approval. Xxxxx shall call a
special meeting of its stockholders (the "Stockholders' Meeting") to be held no
later than 35 days following the mailing of the Proxy Statement for the purpose
of considering and voting upon the approval and adoption of this Agreement and
the Merger. Xxxxx, through its Board of Directors, shall recommend to its
stockholders approval and adoption of this Agreement and the Merger, which
recommendation shall be contained in the Proxy Statement; provided, however,
that the Board of Directors may fail to make its recommendation to the
stockholders of Xxxxx or may withdraw, modify or change its recommendation to
the stockholders of Xxxxx, in accordance with Section 6.14 hereof. Subject to
the foregoing, Xxxxx shall solicit from the holders of shares of Xxxxx Common
Stock proxies in favor of the approval and adoption of the Merger, and shall
take all other action necessary or advisable to secure the vote or consent of
such holders required by the DGCL. Subject to the provisions of Section 6.14,
Xxxxx shall take all reasonable action necessary in accordance with the DGCL and
its Certificate of Incorporation and By-laws to obtain the requisite approval
and adoption of this Agreement and the Merger by the stockholders of Xxxxx.
Section 6.04 Miscellaneous Agreements and Consents
(a) Subject to the terms and conditions herein provided, each of the
parties hereto shall use all reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws and regulations to consummate and make effective
the Merger as promptly as practicable, including, without limitation, using
commercially reasonable efforts to satisfy the conditions contained in Article
VII hereof. Merger Sub, Xxxxx and Parent will use their best efforts to obtain
expeditiously all consents, licenses, permits, waivers, approvals,
authorizations or orders of all third parties and Governmental Authorities
necessary or, in the reasonable opinion of Parent, desirable for the
consummation of the transactions contemplated by this Agreement. In case at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and/or directors
of Merger Sub, Xxxxx or Parent, as the case may be, shall take all such
necessary action.
(b) From the date of this Agreement until the Effective Time, each
party shall promptly notify the other party in writing of any pending or, to the
knowledge of the first party, threatened action, proceeding or investigation by
any Governmental Authority or any other person (i) challenging or seeking
material damages in connection with the Merger or the conversion of Xxxxx Common
Stock into cash pursuant to the Merger or (ii) seeking to restrain or prohibit
the consummation of the Merger or otherwise limit the right of Surviving
Corporation to own or operate all or any portion of the businesses or assets of
Xxxxx, which in either case would have a Material Adverse Effect prior to or
after the Effective Time.
(c) Each party shall give (or shall cause its respective subsidiaries
to give) any notices to third parties and use their commercially reasonable
efforts to obtain any third party consents, (1) necessary, proper or advisable
to consummate the Merger, (2) disclosed or required to be disclosed in
Disclosure Schedule, or (3) required to prevent a Material Adverse Effect from
occurring prior to or after the Effective Time. In the event that Merger Sub,
Parent or Xxxxx shall fail to obtain any third party consent described in the
immediately preceding sentence, it shall use its commercially reasonable efforts
and shall take any such actions reasonably requested by the other party, to
minimize any adverse effect upon Xxxxx, Merger Sub and Parent, their respective
subsidiaries, and their respective businesses resulting, or which could
reasonably be expected to result after the Effective Time, from the failure to
obtain such consent.
(d) If any state takeover statute or similar statute or regulation
becomes applicable to this Agreement or the Merger, Xxxxx, Merger Sub and Parent
will take all action reasonably necessary to ensure that the Merger may be
lawfully consummated as promptly as practicable on the terms contemplated by
this Agreement and otherwise to minimize the effect of such statute or
regulation on the Merger. Xxxxx shall take all reasonably necessary steps to
exempt the Merger from the requirements of any applicable state takeover Law and
to assist Merger Sub in any challenge to the validity or applicability to the
Merger of any state takeover Law.
Section 6.05 Interim Financial Statements During the period
prior to the Effective Time, Xxxxx shall deliver to Parent monthly an unaudited
balance sheet as of the end of such month and the unaudited statements of income
of Xxxxx for the period then ended (the "Interim Financial Statements"). The
Interim Financial Statements shall be correct and complete in all
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material respects and shall in material respects fairly present the financial
condition, and results of operations of Xxxxx as of the respective dates, and
the Interim Financial Statements shall be prepared in accordance with GAAP
consistently applied throughout the periods involved.
Section 6.06 Xxxx-Xxxxx-Xxxxxx Compliance; Governmental
Consents. If required by applicable law, Parent, Merger Sub and Xxxxx shall as
soon as practicable file Notification and Report Forms under the HSR Act with
the Federal Trade Commission ("FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use reasonable
efforts to respond as promptly as practicable to all inquiries received from the
FTC or the Antitrust Division for additional information or documentation. All
costs associated with any such filing shall be borne by Parent. Parent and Xxxxx
will take all such action as may be necessary under any Laws applicable to or
necessary for, and will file and, if appropriate, use their reasonable efforts
to have declared effective or approved, all documents and notifications with
such Governmental Authority or regulatory bodies which they deem necessary or
appropriate for the consummation of the Merger and the transactions contemplated
hereby, and each party shall give the other information reasonably requested by
such other party pertaining to it and its subsidiaries and affiliates reasonably
necessary to enable such other party to take such actions.
Section 6.07 Certain Notifications. At all times until the
Effective Time, each party shall promptly notify the other in writing of the
occurrence of:
(a) the occurrence, or non-occurrence, of any event the occurrence or
non-occurrence of which would be reasonably likely to cause any (i)
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (ii) any covenant or any condition to the
obligations of any party to effect the Merger not to be complied with or
satisfied;
(b) the failure of any party hereto to, in any material respect, comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it pursuant to this Agreement;
(c) the receipt of any notice or other communication from any person
alleging that the consent of such person is or may be required in connection
with the Merger;
(d) the receipt of any notice or other communication from any
Governmental Authority in connection with the Merger; and
(e) any actions, suits, claims, investigations or proceedings commenced
or, to the knowledge of the party, threatened against, relating to or involving
or otherwise affecting Xxxxx or Merger Sub, which relates to the consummation of
the Merger;
in each case, to the extent such event or circumstance is or becomes known to
the party required to give such notice; provided, however, that the delivery of
any notice pursuant to this Section 6.07 shall not be deemed to be an amendment
of this Agreement or any Section in Disclosure Schedule and shall not cure any
breach of any representation or warranty requiring disclosure of such matter
prior to the date of this Agreement.
Section 6.08 Compliance with Laws. From the date hereof and
until the Closing Date, Xxxxx shall comply with all laws applicable to, or
binding upon, Xxxxx or its business or properties, except where the failure to
comply would not have a Material Adverse Effect.
Section 6.09 Voting Agreements. Xxxxx shall cause the Voting
Agreements to be delivered to Parent and Merger Sub, which in the aggregate
shall represent the power to vote not less than 17.3% of Xxxxx Common Stock.
Section 6.10 Best Efforts. Each party agrees to use its or his
best efforts to take all necessary actions to cause the Merger to be
consummated.
Section 6.11 Press Releases. The parties agree that, except as
otherwise provided by Law, no press release or other public announcement with
respect to this Agreement or the transactions contemplated hereby shall be made
without the prior consultation (and reasonable opportunity for comment by) of
all parties hereto.
Section 6.12 Exchange Act Filings. Unless an exemption shall
be expressly applicable to Xxxxx, Xxxxx will file with the SEC all reports
required to be filed by it pursuant to the rules and regulations of the SEC
(including, without limitation, all required financial statements). Such reports
and other information shall comply in all material respects with all of the
requirements of the SEC rules and regulations, and when filed, to Xxxxx'x
knowledge, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 6.13 Cooperation with Financing. In order to assist
with the financing of the transactions contemplated by this Agreement, at or
prior to Closing, Xxxxx shall take such commercially reasonable steps as are
necessary to cause the following to occur:
(a) At Merger Sub's request, (i) with respect to each parcel of real
property leased by Xxxxx or its subsidiaries within the United States, Xxxxx
shall use its commercially reasonable best efforts to deliver to Merger Sub, if
required by the lender of any such financing, a nondisturbance agreement, a
consent and waiver and/or an estoppel letter executed by the landlord, lessor
and/or
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licensor of such leased property and (ii) with respect to each parcel of
real property owned by Xxxxx or its subsidiaries that is located within the
United States, Xxxxx shall deliver title insurance and surveys, in each case, in
form and substance reasonably acceptable to Merger Sub, however, the parties
acknowledge that Xxxxx is presently on a month-to-month lease in its primary
location and may be unable to procure any of the foregoing from such landlord;
(b) At Merger Sub's request, Xxxxx shall furnish such financial
statements as may be reasonably requested by Merger Sub in connection with the
financing of the transactions contemplated by this Agreement; and
(c) At Merger Sub's request, Xxxxx shall cause its officers, employees,
consultants, agents, accountants and attorneys to cooperate with Merger Sub and
its lenders and authorized representatives in connection with a review of Xxxxx
and the financing of the transactions contemplated hereby, including the
preparation by Merger Sub and its financing sources of any offering memorandum
or other documents related to the financing of the Transactions and making
senior management available to meet with any prospective providers of financing
during reasonable business hours.
Section 6.14 No Solicitation; Fiduciary Responsibilities.
(a) Xxxxx shall not, and Xxxxx shall cause its subsidiaries not to, and
Xxxxx agrees that it shall not authorize nor permit any of its directors,
officers, employees, agents, representatives or affiliates to, directly or
indirectly, solicit, initiate, encourage or facilitate (including by way of
furnishing or disclosing non-public information) any inquiries, discussions or
the making of any proposal (a "Third Party Inquiry") with respect to any sale,
merger, consolidation, recapitalization or other business combination involving
Xxxxx or acquisition of any kind of a material portion of the assets or capital
stock of Xxxxx or its subsidiaries (a "Third Party Transaction") or negotiate,
in any way with any person (other than Parent, Merger Sub or their respective
directors, officers, employees and representatives), or enter into any
agreement, with respect to any Third Party Inquiry or Third Party Transaction or
enter into or consummate any agreement, arrangement, or understanding requiring
it to abandon, terminate or fail to consummate the Merger or any other
transaction contemplated by this Agreement; provided, however, that prior to the
Stockholders' Meeting, Xxxxx may, if and only for so long as the Board of
Directors of Xxxxx determines in good faith by a majority vote, based upon the
advice of its outside counsel that failing to take such action would constitute
a breach of the fiduciary duties of the Board of Directors of Xxxxx under
applicable law, in response to a written Third Party Inquiry with respect to a
proposed Third Party Transaction from any person that was not solicited by Xxxxx
and that did not otherwise result from the breach of this Section 6.14, and
subject to compliance with Section 6.14(c), (x) furnish information with respect
to Xxxxx and its subsidiaries to such person pursuant to a customary
confidentiality agreement and (y) participate in discussions or negotiations
with such person regarding any Third Party Transaction; provided, that the Third
Party Inquiry (1) is not subject to any material contingency, to which the other
party thereto has not demonstrated in its written inquiry its ability to
overcome, including receipt of government consents or approvals, (2) is from a
person whom the Board of Directors of Xxxxx has concluded in good faith has the
financial capacity to consummate the Third Party Transaction, (3) is in the good
faith judgment of the Board of Directors of Xxxxx reasonably likely to be
consummated and is in the best interests of the stockholders of Xxxxx, and (4)
such proposal is more favorable to the stockholders of Xxxxx from a financial
point of view than the transactions contemplated by this Agreement. Xxxxx agrees
that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Third Party Transaction or similar transaction or
arrangement.
(b) Neither Xxxxx (or any of its subsidiaries) nor the Board of
Directors of Xxxxx nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Merger Sub, the
approval, adoption or recommendation by the Board of Directors of Xxxxx (or any
such committee) of this Agreement, the Merger or the other transactions
contemplated hereby, (ii) approve or recommend, or propose to approve or
recommend, any Third Party Transaction, (iii) approve or recommend, or propose
to approve or recommend, or execute or enter into, any letter of intent,
agreement in principle, merger agreement, acquisition agreement, option
agreement or other agreement relating to any Third Party Transaction or propose
or agree to do any of the foregoing, or (iv) submit any Third Party Transaction
at the Stockholders' Meeting for purposes of voting upon approval and adoption
of the Third Party Transaction; provided, however, that prior to the
Stockholders' Meeting, Xxxxx may, only if determined in good faith by a majority
vote of the members of the Board of Directors of Xxxxx based on the advice of
its outside counsel that the failure to take such action would constitute a
breach of the fiduciary duties of the Board of Directors of Xxxxx under
applicable Law, and after compliance with the following sentence, terminate this
Agreement pursuant to Section 8.01(i) (provided that concurrently with such
termination Xxxxx enters into a definitive agreement containing the terms of a
Third Party Transaction). If Xxxxx shall exercise its right to terminate this
Agreement pursuant to this Section 6.14(b), Xxxxx shall deliver to Parent (or at
Parent's direction, such other person as Parent may designate in writing), and
any such termination shall be conditioned upon Parent's or such other person'
receipt of, (i) the Termination Fee and Parent Costs specified in Section
8.03(e), and (ii) written acknowledgment from Xxxxx and from the other person to
the Third Party Transaction that Xxxxx and such other person have irrevocably
waived any right to contest such payment. Xxxxx shall give Parent and Merger Sub
five business days' prior written notice of its intent to terminate the
Agreement pursuant to Section 8.01(i) hereof, which notice shall include all of
the information described in Section 6.14(c) as of the date of such notice.
(c) Xxxxx promptly (and in any event within two days of the relevant
event) shall advise Merger Sub and Parent orally and in writing of any Third
Party Inquiry or Third Party Transaction or any other inquiry with respect to or
that could reasonably be expected to lead to any Third Party Transaction and the
identity of the person making any such Third Party Inquiry, Third Party
Transaction or other inquiry, and, in each case, the terms and conditions
thereof, including any amendment or other modification to the terms of any such
Third Party Inquiry, Third Party Transaction or other inquiry. Xxxxx shall keep
Merger Sub and Parent fully informed of the status of any proposal relating to a
Third Party Inquiry or Third Party Transaction on a current basis and will
notify Parent 24 hours in advance before an agreement is executed with respect
to any Third Party Transaction.
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(d) Subject to Section 6.14(a) hereof, nothing contained in this
Section 6.14 shall prohibit the Board of Directors of Xxxxx from taking and
disclosing to the stockholders of Xxxxx a position with respect to a tender or
exchange offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated
under the 1934 Act or from making such disclosure to the stockholders of Xxxxx
which, in the judgment of the Board of Directors, after consultation with its
legal counsel, is necessary under applicable Law or the rules of any stock
exchange to meet the fiduciary duties of the Board of Directors under applicable
Law. Xxxxx shall give Parent prompt written notice and a copy of any such
disclosure.
Section 6.15 Xxxxxxx Money. The parties each acknowledge that
Parent has paid One Hundred Thousand Dollars ($100,000) in refundable xxxxxxx
money (the "Xxxxxxx Money") in trust to Xxxxxxx Xxxx & Xxxxxxxxx LLP (the
"Escrow Agent"). Xxxxx shall direct the Escrow Agent to transfer the Xxxxxxx
Money to the Paying Agent (for application to the payment of the Merger
Consideration) not less than one full business day prior to the Closing. If (i)
this Agreement is terminated for any reason, or (ii) Merger Sub, Parent or any
of their respective affiliates purchases more than two percent (2.0%) of the
outstanding Xxxxx Common Stock or lends any money to Xxxxx (directly or
indirectly by purchasing an interest in any of the Company's existing
indebtedness with institutional lenders), then in any such case any party to
this Agreement shall be entitled to direct the Escrow Agent to refund all of the
Xxxxxxx Money to Parent.
ARTICLE VII
CONDITIONS
Section 7.01 Conditions to Each Party's Obligations to
Consummate the Merger. The respective obligations of each party to consummate
the Merger shall be subject to the fulfillment (or, if permitted by applicable
Law, waiver by the party for whose benefit such condition exist) at or prior to
the Effective Time of the following conditions:
(a) Stockholder Vote. This Agreement and the Merger shall have been
approved and adopted by the affirmative vote of the requisite holders of the
outstanding shares of Xxxxx Common Stock in accordance with the DGCL and Xxxxx'x
Certificate of Incorporation;
(b) HSR Act. Any applicable waiting period under the HSR Act relating
to the Merger shall have expired or been terminated;
(c) Prohibitive Orders. No order, statute, rule, regulation, executive
order, stay, decree, judgment or injunction shall have been enacted, entered,
issued, promulgated or enforced by any Governmental Authority or a court of
competent jurisdiction or shall be in effect which has the effect of making the
Merger illegal or otherwise prohibiting consummation of the Merger or of
limiting or restricting the Surviving Corporation's conduct or operation of the
business of Xxxxx after the Merger; and
(d) Litigation. There shall be no action or proceeding initiated by any
Governmental Authority or any third party pending which seeks to restrain,
prohibit or invalidate any material transaction contemplated by this Agreement
or to recover substantial damages or other substantial relief with respect
thereto and no injunction or restraining order shall have been issued by any
court restraining, prohibiting or invalidating any such material transaction.
Section 7.02 Conditions to Obligations of Xxxxx to Consummate
the Merger. The obligations of Xxxxx to consummate the Merger shall be subject
to the fulfillment (or waiver by Xxxxx) at or prior to the Effective Time of the
following conditions:
(a) Representations and Warranties. The representations and warranties
of Parent and Merger Sub set forth in Article IV hereof (i) that are qualified
by materiality shall be true and correct and (ii) that are not qualified by
materiality, shall be true and correct in all material respects, in each case as
of the date of this Agreement and as of the Effective Time as though made on and
as of the Effective Time, and Xxxxx shall have received a certificate signed by
an officer of Parent and Merger Sub to that effect; and
(b) Performance of Obligations. Parent and Merger Sub shall each have
in all material respects performed all obligations required to be performed by
them under this Agreement prior to the Effective Time, and Xxxxx shall have
received a certificate signed by an officer of Parent and Merger Sub to that
effect.
Section 7.03 Conditions to Obligations of Parent and Merger
Sub to Consummate the Merger. The obligations of Parent and Merger Sub to
consummate the Merger shall be subject to the fulfillment (or waiver by Parent
and Merger Sub) at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Xxxxx set forth in Article III hereof (i) that are qualified by materiality
shall be true and correct and (ii) that are not qualified by materiality, shall
be true and correct in all material respects, in each case as of the date of
this Agreement and as of the Effective Time as though made on and as of the
Effective Time, and Parent and Merger Sub shall have received a certificate
signed by the appropriate officers of Xxxxx to that effect;
(b) Performance of Obligations. Xxxxx shall have performed in all
material respects all obligations required to be performed by it under this
Agreement prior to the Effective Time, and Parent and Merger Sub shall have
received a certificate signed by the appropriate officers of Xxxxx to that
effect;
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(c) Permits, Authorizations, Etc. Xxxxx and Merger Sub shall have
obtained any and all consents or waivers from other parties to loan agreements
or other contracts material to their respective businesses for the lawful
consummation of the Merger;
(d) Proceedings and Instruments Satisfactory. All proceedings,
corporate or otherwise, to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to Parent and Merger Sub; and,
Xxxxx shall have made available to the Parent and Merger Sub for examination the
originals or true and correct copies of all documents which the Parent and
Merger Sub reasonably may request in connection with the transaction
contemplated by this Agreement;
(e) Due Diligence. Parent and Merger Sub shall have conducted a due
diligence investigation and review of Xxxxx, its business and all matters
pertaining thereto (including a continuing review of all matters described on
the Disclosure Schedule) that Parent and Merger Sub deems relevant and the
results of such investigation and review shall be satisfactory to the Parent and
Merger Sub in their sole discretion; provided, however, that this condition
shall be deemed satisfied if Parent and Merger Sub have not terminated this
Agreement pursuant to Section 8.01(c) hereof within 30 days after execution of
this Agreement;
(f) Financing. Surviving Corporation shall have obtained debt and
equity financing sufficient to consummate the Merger (including the payment of
the Merger Consideration, the Option Consideration and the repayment of
indebtedness for borrowed money of Xxxxx or any of its subsidiaries that is
required to be repaid as a result of the Merger, if any) and to pay all fees and
expenses in connection therewith and to provide working capital for the
Surviving Corporation, all on terms reasonably satisfactory to Merger Sub;
(g) Repayment of Indebtedness; Release of Liens and Guaranties. Except
as set forth on EXHIBIT A hereto, all outstanding indebtedness for borrowed
money of Xxxxx or any of its subsidiaries shall be paid in full, (ii) any
letters of credit of Xxxxx or any of its subsidiaries shall be terminated, and
(iii) Xxxxx shall have obtained (x) the release of all Liens on the capital
stock of Xxxxx or any of its subsidiaries and all assets of Xxxxx or any of its
subsidiaries securing indebtedness and (y) the release of all guarantees by
Xxxxx or any of its subsidiaries of indebtedness for borrowed money. At the
Closing, Xxxxx shall provide or arrange to be provided to Merger Sub all
releases and other documents in form and substance reasonably satisfactory to
Merger Sub demonstrating the release of such Liens and guarantees;
(h) Third-Party Consents. Xxxxx shall have obtained all consents,
authorizations, approvals and waivers from third parties, in form reasonably
acceptable to Merger Sub (x) which are necessary in order to enable (i) the
consummation of the Merger and (ii) the Surviving Corporation to conduct its
business in all material respects after the Closing Date on the same basis as
conducted prior to the date hereof, in each case, except for those failure of
which to obtain would not have, individually or in the aggregate, a Material
Adverse Effect and (y) which are listed on EXHIBIT B hereto;
(i) Financial Statements. Parent shall have received the Interim
Financial Statements;
(j) Termination of Xxxxx Stock Options. All Xxxxx Stock Options shall
be extinguished and, as of immediately prior to Closing, Xxxxx shall have no
liability or obligation with respect to any such Xxxxx Stock Options, except as
provided in Section 2.03;
(k) Employment Agreements. Xxxx Xxxxx and Xxxxxx Xxxxxxxxxx shall have
entered into employment agreements with Xxxxx in a form acceptable to Xxxx
Xxxxx, Parent and Merger Sub;
(l) DAR Agreement. The Intellectual Property Purchase Agreement, dated
January 27, 1999, between Xxxxx and DAR Foods Corporation shall have been
terminated and the liabilities evidenced thereby shall have been compromised and
converted into a promissory note with terms and conditions which are
satisfactory to Xxxx Xxxxx, Parent and Merger Sub;
(m) Phase I Environmental Report. Parent shall have received a Phase I
Environmental Report from an independent environmental consulting or engineering
firm, and such report shall not have disclosed environmental concerns and
liabilities which, in the reasonable estimation of such firm, are reasonably
likely to exceed $100,000 to cure or remediate (and if such firm does not give
an estimated amount, then in the reasonable estimation of Parent);
(n) Material Adverse Effect. No Material Adverse Effect shall have
occurred with respect to Xxxxx after the date hereof and prior to the Effective
Time, or prior to the date hereof, unless such Material Adverse Effect is fully
reflected in the Financial Statements;
(o) Dissenting Shares. The Dissenting Shares, if any, shall not include
greater than seven and one-half percent (7.5%) of the issued and outstanding
shares of Xxxxx Common Stock;
(p) Net Worth. The net worth of Xxxxx (defined as the book value of
Xxxxx'x assets over the book value of Xxxxx'x liabilities, each calculated on a
consolidated basis) on the Closing Date is not less than Eight Hundred
Eighty-Five Thousand Dollars ($885,000); and
(q) Opinion of Counsel. Xxxxxxx & Xxxxxxxx Ltd., counsel for Xxxxx,
shall have furnished to Parent its opinion as of the Closing in the form and to
the effect set forth in EXHIBIT C hereto.
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ARTICLE VIII
TERMINATION, AMENDMENT, WAIVER
Section 8.01 Termination. This Agreement may be terminated
upon written notice by the terminating party to each other party at any time
prior to the Effective Time, whether before or after approval by the
stockholders of Xxxxx; provided, however, that the right to terminate this
Agreement under this Section 8.01 shall not be available to any party whose
breach or default of this Agreement (or any part hereof) or failure to fulfill
any obligation under this Agreement has been the cause of or resulted in the
failure of a condition resulting in such party's right to terminate this
Agreement:
(a) by unanimous consent of Xxxxx, Parent and Merger Sub;
(b) by Parent, Merger Sub or Xxxxx, if the Stockholders' Meeting shall
have been held and the holders of outstanding shares of Xxxxx Common Stock shall
have failed to approve and adopt this Agreement and the Merger in accordance
with Xxxxx'x Certificate of Incorporation and the DGCL upon a vote taken at such
meeting (including any adjournment or postponement thereof);
(c) by Parent, or Merger Sub if any of the conditions contained in
Sections 7.01 or 7.03 have not been satisfied prior to August 31, 2001 or if the
Closing has not occurred on or prior to August 31, 2001;
(d) by Xxxxx, if any of the conditions contained in Sections 7.01 or
7.02 have not been satisfied prior to August 31, 2001 or if the Closing has not
occurred on or prior to August 31, 2001;
(e) by Xxxxx, if Parent or Merger Sub has committed a material breach
of any representation, warranty or agreement contained in this Agreement and
such breach remains uncured by Merger Sub and Parent for a period of ten days
after written notice to such parties of such breach;
(f) by Parent or Merger Sub, if Xxxxx has committed a material breach
of any representation, warranty or agreement contained in this Agreement and
such breach remains uncured by Xxxxx for a period of ten days after written
notice to Xxxxx of such breach;
(g) by Parent or Merger Sub, if the Board of Directors of Xxxxx or any
committee thereof (i) shall withdraw, modify in a manner adverse to Merger Sub,
or refrain from giving its approval or recommendation of this Agreement or any
of the Transactions or (ii) recommends a potential Third Party Transaction to
Xxxxx'x stockholders pursuant to Section 6.14;
(h) by Parent or Merger Sub, if the condition contained in Section
7.03(e) has expired or been waived in writing by Parent and Merger Sub and Xxxxx
has not within three business days thereafter delivered to Parent and Merger Sub
(or their designee) voting power (in addition to the voting power contemplated
by the Voting Agreements) with regard to at least 42% of the outstanding Xxxxx
Common Stock in the form of shares or a continuing commitment to immediately
sell shares (in either case without a written purchase agreement) of Xxxxx
Common Stock at any time after such three business day period upon demand by
Parent and Merger Sub at a price per share equal to the Merger Consideration;
(i) By Xxxxx in accordance with Section 6.14 hereof; provided, however,
that in order for the termination of this Agreement pursuant to this Section
8.01(i) to be deemed effective, Xxxxx shall have complied with all of the
provisions of Section 6.14, including the notice provisions contained therein
and the payment of the Termination Fee and the Parent Costs; or
(j) By Parent or Merger Sub, if any person or group (as defined in
Section 13(d)(3) of the 1934 Act) (other than Parent, Merger Sub or any of their
affiliates) shall have become the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of at least seven and one-half percent
(7.5%) of the outstanding shares of Xxxxx Common Stock (excluding only persons
who are party to a Voting Agreement in favor of Merger Sub and any stockholder
which on the date hereof owns more than forty percent (40%) of the voting power
of Xxxxx Common Stock, on a fully diluted basis).
Section 8.02 Method of Termination; Effect of Termination.
(a) Any such right of termination hereunder shall be exercised by
written notice of termination given by the terminating party to the applicable
other parties hereto in the manner hereinafter provided in Section 11.01.
(b) In the event of the termination of this Agreement pursuant to
Section 8.01, this Agreement shall forthwith become void, there shall be no
liability under this Agreement on the part of any of the parties hereto or any
of their respective officers or directors and all rights and obligations of any
party hereto shall cease, except for (i) as described in Article IX, (ii) as set
forth in Section 8.03 and (iii) the provisions of the Confidentiality Agreement;
provided, however, that nothing herein shall relieve any party from liability
for, or be deemed to waive any rights of specific performance of this Agreement
available to a party by reason of, any intentional breach by the other party or
parties of this Agreement.
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Section 8.03 Fees and Expenses.
(a) Except as provided in Section 6.06 and this Section 8.03, each
party shall pay or be responsible for all expenses incurred by such party in
connection with the transactions contemplated by this Agreement. The fees,
expenses and other costs (including but not limited to legal, accounting, due
diligence, securities, proxy solicitation and printing fees, expenses and costs)
of Xxxxx in connection with the transactions contemplated by this Agreement
(collectively "Transaction Costs") which have been or will be incurred by Xxxxx
between November 15, 2000 and the Closing shall be paid as follows (with any
balance remaining unpaid at Closing to be paid at Closing):
(i) The first One Hundred Six Thousand Five Hundred Dollars
($106,500) of Transaction Costs shall be paid by Xxxxx;
(ii) The next Forty Three Thousand Five Hundred Dollars
($43,500) of Transaction Costs shall be paid as follows:
(A) Forty-two and seven one hundredths percent
(42.07%) of such Transaction Costs shall be paid by Xxxxx if,
but only if, prior to the Closing, one or more members of the
Board of Directors of Xxxxx affiliated with X.X. Xxxx Asset
Management surrenders, without consideration therefor, Xxxxx
Stock Options which, but for such surrender, otherwise would
be entitled to receive Option Consideration in an aggregate
amount equal to forty-two and seven one hundredths percent
(42.07%) of such Transaction Costs; and
(B) Fifty-seven and ninety-three one hundredths
percent (57.93%) of such Transaction Costs shall be paid at
Closing by Xxxxx through a reduction in the aggregate Merger
Consideration and Option Consideration payable at Closing by
Parent and Merger Sub on a dollar-for-dollar basis.
Accordingly, in the event the aggregate Merger Consideration
and Option Consideration is reduced by application of the
preceding sentence, the per share Merger Consideration payable
to the holders of Xxxxx Common Stock (other than X.X. Xxxx
Asset Management, which will pay its ratable share of such
expenses pursuant to the preceding subparagraph (A)) and the
Option Consideration payable to holders of Xxxxx Stock Options
shall also be reduced ratably; and
(iii) All Transaction Costs not paid as specified in
subsections (i) and (ii) above shall be paid at Closing by Xxxxx
through a reduction in the aggregate Merger Consideration and Option
Consideration payable at Closing by Parent and Merger Sub on a
dollar-for-dollar basis. Accordingly, in the event the aggregate Merger
Consideration and Option Consideration is reduced by application of the
preceding sentence, the per share Merger Consideration payable to the
holders of Xxxxx Common Stock and the Option Consideration payable to
holders of Xxxxx Stock Options shall also be reduced ratably.
Except to the extent specifically described in the last sentence of
Section 8.03(f), the remedies described in Sections 8.03 (b) - (e) hereof shall
be mutually exclusive and shall constitute the sole remedy for money damages for
termination of this Agreement pursuant to the sections of this Agreement
described therein.
(b) In the event that this Agreement is terminated pursuant to Section
8.01(e), on the date of such termination, Parent shall pay Xxxxx (or at Xxxxx'x
direction, to such other person as Xxxxx may designate in writing) by wire
transfer of immediately available funds to an account specified by Xxxxx an
amount in cash (which amount may be estimated by Xxxxx in good faith prior to
the date of such payment, subject to an adjustment payment between the parties
upon Xxxxx'x definitive determination of such amount) equal to the aggregate
amount of the costs, fees and expenses of counsel, accountants, financial
advisors, financing sources and other experts and advisors as well as fees and
expenses incident to the investigation, negotiation, preparation and execution
of this Agreement and the attempted consummation of the transactions
contemplated by this Agreement, the related documentation and the stockholders'
meetings and consents, including without limitation, the commitment, legal and
other costs, fees and expenses of financing sources for which Xxxxx is
responsible, up to a maximum amount of Fifty Thousand Dollars ($50,000).
(c) In the event that this Agreement is terminated pursuant to Section
8.01(j), on the date of such termination, Xxxxx shall pay Parent (or at Parent's
direction, to such other person as Parent may designate in writing) by wire
transfer of immediately available funds to an account specified by Parent an
amount in cash (which amount may be estimated by Parent in good faith prior to
the date of such payment, subject to an adjustment payment between the parties
upon Parent's definitive determination of such amount) equal to (i) the
aggregate amount of the costs, fees and expenses of counsel, accountants,
financial advisors, financing sources and other experts and advisors as well as
fees and expenses incident to the investigation, negotiation, preparation and
execution of this Agreement and the attempted financing and consummation of the
transactions contemplated by this Agreement, the related documentation and the
stockholders' meetings and consents, including without limitation, the
commitment, legal and other costs, fees and expenses of financing sources for
which Parent is responsible (such amount, the "Parent Costs"), plus (ii)
Twenty-Five Thousand Dollars ($25,000) up to a maximum combined amount of One
Hundred Seventy-Five Thousand Dollars ($175,000).
(d) In the event that this Agreement is terminated pursuant to Section
8.01(h), within 60 days following the date of such termination, Xxxxx shall pay
Parent (or at Parent's direction, such other person as Parent may designate in
writing) by wire transfer of immediately available funds to an account specified
by Parent a payment in the amount equal to One Hundred Fifty Thousand Dollars
($150,000).
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(e) In the event that this Agreement is terminated pursuant to Section
8.01(f), (g) or (i), on the date of such termination, Xxxxx shall pay Parent (or
at Parent's direction, such other person as Parent may designate in writing) by
wire transfer of immediately available funds to an account specified by Parent a
payment in the amount equal to Two Hundred Thousand Dollars ($200,000) (the
"Termination Fee") plus Parent Costs up to a maximum of One Hundred Thousand
Dollars ($100,000).
(f) If this Agreement is terminated pursuant to any of subsections (a)
- (d) of Section 8.01 (except only for a termination by Xxxxx under Section
8.01(d) as a result of the failure of a condition contained in Section 7.02) and
Xxxxx enters into any agreement or understanding with a third party with respect
to a potential Third Party Transaction within 180 days after such termination,
then if the potential Third Party Transaction is consummated (whether or not
during the 180 day period following termination of this Agreement), on the date
of the consummation of such Third Party Transaction, Xxxxx shall pay the
Termination Fee to Parent (or at Parent's direction, such other person as Parent
may designate in writing) by wire transfer of immediately available funds to an
account specified by Parent plus Parent Costs up to a maximum of One Hundred
Thousand Dollars ($100,000). Notwithstanding the foregoing, if Xxxxx has
previously paid any amount pursuant to Section 8.03(c) or this Section 8.03(f),
then Xxxxx'x obligation to pay Parent Costs hereunder shall be reduced by the
amount of Parent Costs previously paid pursuant to Section 8.03(c) or this
Section 8.03(f).
Section 8.04 Amendment. This Agreement may be amended by the
parties hereto at any time prior to the Effective Time; provided, that after the
approval and adoption of this Agreement by the stockholders of Xxxxx, no
amendment may be made which would (a) change the amount or the type of Merger
Consideration to be received by the stockholders of Xxxxx pursuant to the
Merger, (b) change any other term or condition of the Agreement if such change
would materially and adversely affect Xxxxx or the holders of shares of Xxxxx
Common Stock or (c) without the vote of the stockholders entitled to vote on the
matter, change any term of the Certificate of Incorporation of Xxxxx. This
Agreement may not be amended nor may any provision of this Agreement be waived
except by an instrument in writing signed by the parties hereto.
Section 8.05 Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any obligation
or other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties of the other party contained herein or in any
document, certificate or writing delivered by the other party pursuant hereto
and (c) waive compliance with any agreement or condition to its obligations
(other than the conditions set forth in Sections 7.01(a) and (b)) contained
herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
ARTICLE IX
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 9.01 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement and
any certificate delivered pursuant hereto shall terminate at the Effective Time
or upon the termination of this Agreement pursuant to Section 8.01, as the case
may be, except that (a) those covenants and agreements that by their terms apply
or are to be performed in whole or in part after the Effective Time and this
Article IX shall survive the Effective Time for the respective periods set forth
therein or, if no such period is specified, for four years, and (b) the
representations, warranties and agreements set forth in Section 3.29, 6.11,
Article VIII and this Article IX shall survive termination for the respective
periods set forth therein or, if no such period is specified, for four years.
Nothing in this Article IX shall relieve any party for any willful breach of any
representation, warranty, covenant or other agreement in this Agreement
occurring prior to termination.
ARTICLE X
DEFINITIONS
Section 10.01 Certain Definitions.
(a) As used in this Agreement, the following terms shall have
the following meanings:
"affiliate" of a specified person means a person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
"business day" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or,
in the case of determining a date when any payment is due, any day on
which banks are not required or authorized to close in the City of
Milwaukee, Wisconsin;
"Code" means the Internal Revenue Code of 1986, as
amended;
"control" (including the terms "controlled by" and
"under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause
the direction of the management and policies of a person, whether
through the ownership of voting securities, as trustee or executor, by
contract or credit arrangement or otherwise;
"Environmental Laws" shall mean, collectively, the
federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act, the federal Comprehensive
Environmental Response, Compensation and Liability Act, the federal
Toxic Substances Control Act, principles of common Law and any other
federal, state or local Laws, including rules and regulations
thereunder, regulating or otherwise affecting or relating to human
health or the environment;
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"Environmental Materials" shall mean, collectively,
any material, substance, chemical, waste, contaminant or pollutant
which is regulated, listed, defined as or determined to be hazardous,
extremely hazardous, toxic, dangerous, restricted or a nuisance, or
otherwise harmful to human health or the environment, under any
Environmental Laws;
"Governmental Authority" means any United States
(federal, state, local or any subdivision thereof), foreign or
supra-national Government, or governmental, judicial, regulatory or
administrative authority, agency, commission, tribunal or body.
"Hazardous Substances" means hazardous substances as
defined under the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C.ss.9601, et seq. applicable Illinois Law,
and all regulations promulgated thereunder;
"knowledge" or "knowledge of Xxxxx" or the like,
shall mean the knowledge of Xxxx Xxxxx, Xxx Xxxxxxxxxx or Xxxxxxx
Xxxxxxxxx after making a commercially reasonable inquiry and, if such
persons fail to make such inquiry, shall include constructive knowledge
of such facts as would have been learned had such inquiry been made;
"Lien" shall mean, with respect to any property or
asset, any mortgage, pledge, security interest, lien (statutory or
other), charge, encumbrance or other similar restrictions or
limitations of any kind or nature whatsoever on or with respect to such
property or asset;
"Material Adverse Effect." As used in this Agreement,
the term "Material Adverse Effect" shall mean, when used in connection
with Xxxxx and its subsidiaries (or, after the Effective Time, the
Surviving Corporation and its subsidiaries), any change, effect, event,
occurrence, condition or development that is or is reasonably likely to
be materially adverse to (i) the business, assets, liabilities,
properties, results of operations, condition (financial or otherwise)
or prospects of Xxxxx (or, as applicable, the Surviving Corporation)
and its subsidiaries, taken as a whole (including any change or effect
resulting from general economic conditions or relating to those
industries specific to the business of Xxxxx (or, as applicable, the
Surviving Corporation) and its subsidiaries), (ii) the right or ability
of Xxxxx (or, as applicable, the Surviving Corporation) and its
subsidiaries, taken as a whole, to carry on their respective businesses
as now or proposed to be conducted, or (iii) the ability of the Merger
Sub, Xxxxx or the Surviving Corporation to perform their respective
obligations under this Agreement. A Material Adverse Effect shall be
deemed to have occurred if the cumulative effect of an individual event
and all other then existing events would result in a Material Adverse
Effect. In addition to, and not in limitation of, the foregoing, a
"Material Adverse Effect" shall be deemed to have occurred if the
relevant change, effect, event, occurrence, condition or development
(or the cumulative effect of all changes, effects, events, occurrences,
conditions or developments) is valued at $100,000 or greater.
"person" means an individual, corporation, limited
liability company, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in Section
13(d)(3) of the Exchange Act), trust, association or entity or
Governmental Authority, political subdivision, agency or
instrumentality of a Governmental Authority;
"subsidiary" or "subsidiaries" of any person means
any corporation, partnership, joint venture or other legal entity of
which such person (either above or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body
of such corporation or other legal entity;
"Tax" or "Taxes" means any federal, state, county,
local, foreign or other income, gross receipts, ad valorem, franchise,
profits, sales, use, transfer, registration, excise, utility,
environmental, communications, real or personal property, capital
stock, license, payroll, wage or other withholding, unemployment,
social security (or similar), severance, disability, customs duties,
stamp, occupation, alternative or add-on minimum, estimated and other
taxes, charges, fees, assessments, levies or charges of any kind
whatsoever including deficiencies, penalties, additions to tax, and
interest attributable thereto, whether disputed or not; and
"Tax Return" means any return, declaration, estimate,
information return, report, statement, and claim for refund or filing
with respect to any Taxes, including any schedules attached thereto and
including any amendment thereof.
(b) As used in this Agreement, the following terms shall have the
meanings ascribed thereto in the Section or paragraph of this Agreement
indicated below:
1933 Act Section 3.03(b)
--------
1934 Act Section 3.03(b)
--------
Agreement Introductory Paragraph
---------
Antitrust Division Section 6.06
------------------
Benefit Plans Section 3.18(a)
-------------
Blue Sky Laws Section 3.03(b)
-------------
Certificate of Merger Section 1.02
---------------------
Certificates Section 2.02(c)
------------
Closing Section 1.02
-------
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Closing Date Section 1.02
------------
Confidentiality Agreement Section 6.01
-------------------------
DGCL Section 1.01
----
Disclosure Schedule Article III
-------------------
Dissenting Shares Section 2.04(a)
-----------------
Xxxxxxx Money Section 6.15
-------------
Effective Time Section 1.02
--------------
Escrow Agent Section 6.15
------------
ERISA Section 3.18(a)
-----
Financial Statements Section 3.07
--------------------
Food Acts Section 3.13(a)
---------
FTC Section 6.06
---
GAAP Section 3.07
----
HSR Act Section 3.03(b)
-------
Insurance Section 3.22
---------
Intellectual Property Section 3.19
---------------------
Interim Financial Statements Section 6.05
----------------------------
IRS Section 3.18(a)
---
Laws Section 3.03(a)
----
Licenses Section 3.13(b)
--------
Merger Section 1.01
------
Merger Consideration Section 2.01(b)
--------------------
Merger Sub Introductory Paragraph
----------
Option Consideration Section 2.03(a)
--------------------
Parent Introductory Paragraph
------
Parent Costs Section 8.03(c)
------------
Paying Agent Section 2.02(a)
------------
Products Liability Section 3.23
------------------
Proxy Statement Section 6.02(a)
---------------
Real Property Section 3.15(c)
-------------
Related Party Section 3.25
-------------
Xxxxx Introductory Paragraph
-----
Xxxxx Balance Sheet Section 3.07
-------------------
Xxxxx Common Stock Recitals
------------------
Xxxxx Common Stock Equivalents Section 3.06
------------------------------
Xxxxx SEC Reports Section 3.08
-----------------
Xxxxx Stock Option Section 2.03(a)
------------------
Xxxxx Stock Option Plan Section 2.03(a)
-----------------------
SEC Section 3.08
---
Staff Section 6.02(a)
-----
Stockholders' Meeting Section 6.03
---------------------
Surviving Corporation Section 1.01
---------------------
Termination Fee Section 8.03(e)
---------------
Third Party Inquiry Section 6.14(a)
-------------------
Third Party Transaction Section 6.14(a)
-----------------------
Transaction Costs Section 8.03(a)
-----------------
Voting Agreements Recitals
-----------------
ARTICLE XI
GENERAL PROVISIONS
Section 11.01 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given (i) when delivered
personally, (ii) the second business day after being deposited in the United
States mail registered or certified (return receipt requested), or (iii) the
first business day after being deposited with Fed Ex or any other recognized
national overnight courier service, in each case to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to Parent or Merger Sub:
FLP Holdings III LLC
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
With copies to:
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Xxxxxxx Xxxx & Friedrich LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
(b) If to Xxxxx:
Xxxxx Foods, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
With a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxx.
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Section 11.02 Miscellaneous. Except for the provisions of the
Confidentiality Agreement, this Agreement (including the exhibits, schedules,
documents and instruments referred to herein or therein):
(i) constitutes the entire agreement, and supersedes
all other prior agreements and understandings, both written
and oral, among the parties, or any of them, with respect to
the subject matter hereof;
(ii) shall not be assigned by operation of Law or
otherwise (except that Parent and Merger Sub may assign their
respective rights and obligations hereunder as collateral
security to any person providing financing to Parent and/or
Merger Sub; provided, that no such assignment shall change the
amount or nature of the Merger Consideration or relieve the
assigning party of its obligations hereunder if such assignee
does not perform such obligations); and
(iii) may be executed in two or more counterparts
which together shall constitute a single agreement.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, heirs, next of kin,
distributees, executors, administrators and personal representatives.
Section 11.03 Waiver; Remedies. No delay or failure on the
part of any party hereto to exercise any right, power, or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
hereto of any right, power, or privilege hereunder operate as a waiver of any
other right, power, or privilege hereunder, nor shall any single or partial
exercise of any right, power, or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power, or privilege
hereunder.
Section 11.04 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule,
Law or regulation, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the Merger is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the Merger be consummated as originally contemplated to the
fullest extent possible.
Section 11.05 Construction. This Agreement and any documents
or instruments delivered pursuant hereto or in connection herewith shall be
construed without regard to the identity of the person who drafted the various
provisions of the same. Each and every provision of this Agreement and such
other documents and instruments shall be construed as though all of the parties
participated equally in the drafting of the same. Consequently, the parties
acknowledge and agree that any rule of construction that a document is to be
construed against the drafting party shall not be applicable either to this
Agreement or such other documents and instruments.
Section 11.06 Governing Law. This Agreement shall be construed
in accordance with the Laws of the State of Delaware (without regard to
principles of conflicts of Laws) applicable to contracts made and to be
performed within such State.
Section 11.07 Third-Party Beneficiaries. No third parties are
intended to benefit from this Agreement, and no third-party beneficiary rights
shall be implied from anything contained in this Agreement.
Section 11.08 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to an
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injunction or injunctions to prevent breaches of this Agreement and to specific
performance of the terms hereof, in addition to any other remedy at Law or in
equity.
Section 11.09 Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 11.10 Counterparts. This Agreement may be executed and
delivered in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement.
Section 11.11 Accounting Terms. All accounting terms used
herein which are not expressly defined in this Agreement shall have the
respective meanings given to them in accordance with GAAP.
Section 11.12 Further Assurances. Each party hereto from time
to time hereafter, and upon request, shall execute, acknowledge and deliver such
other instruments as reasonably may be required to more effectively carry out
the terms and conditions of this Agreement.
Section 11.13 Recitals. The Recitals to this Agreement are
true and correct and are a part of this Agreement hereby incorporated by
reference.
[SIGNATURES ON NEXT PAGE FOLLOWING]
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IN WITNESS WHEREOF, Parent, Merger Sub and Xxxxx have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
FLP HOLDINGS III LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Its: Managing Member of Forest Lake
----------------------------------------
Partners, LLC, its Manager
--------------------------------------------
XXXXX FOODS, INC.
By: Xxxx Xxxxx
-----------------------------------------
Its: Chief Executive Officer
---------------------------------------
RFI ACQUISITION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Its: President
---------------------------------------
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