EXHIBIT 2.5
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Illinois Tool Works Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
April 10, 2001
Estate of Xxxxx X. Xxxxx, Xx.
c/o Xxxxx X. Xxxxx, Xx.
Foilmark, Inc.
0 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Dear Xxxxx X. Xxxxx, Xx. (on behalf of the Estate of Xxxxx X. Xxxxx, Xx.):
This letter is to confirm the agreement between Illinois Tool Works
Inc., a Delaware corporation ("Buyer") and the Estate of Xxxxx X. Xxxxx, Xx.
("you") regarding all of the 222,724 shares, $.01 par value, ("Common Stock") of
Foilmark, Inc., a Delaware corporation (the "Company"), beneficially owned
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) by you and any other shares of Common Stock as to which you may
hereafter acquire beneficial ownership (the "Shares"). In order to induce Buyer
to enter into an Agreement and Plan of Merger to be dated as of the date hereof
between the Company and Buyer (the "Merger Agreement"), you hereby agree as
follows (capitalized terms used herein but not otherwise defined shall have the
meanings ascribed to them in the Merger Agreement):
Subject to the terms and conditions hereof, as soon as practicable
after the commencement of the tender offer to be commenced by Buyer pursuant to
the Merger Agreement (the "Tender Offer"), but in no event later than the
expiration date of the Tender Offer, you will tender to Buyer, or cause to be
tendered, all of the Shares, regardless of whether a higher offer for such
Shares has been made. If you withdraw your tender of Shares in the Tender Offer,
you shall immediately, but in no event later than the expiration date of the
Tender Offer, re-tender such Shares to Buyer.
You hereby grant to Buyer the option (the "Option") to purchase all of
the Shares, at the higher of U.S. $6.36 per Share in cash or such higher price
per Share in cash as Buyer or any of its subsidiaries may offer to pay for
shares of Common Stock in the Tender Offer (the "Per Share Option Price"),
beginning on the date of an Applicable Termination (as defined below) and ending
on the date (the "Expiration Date") that is the later of (A) ten business days
following such Applicable Termination and (B) ten business days following the
receipt by Buyer of any of the governmental consents or approvals or the
termination or expiration of any waiting periods
April 10, 2001
Page 2
referred to in Section 8.01(b) of the Merger Agreement. An "Applicable
Termination" shall mean any termination of the Merger Agreement after an
Alternative Acquisition Proposal (as defined in the Merger Agreement) has been
made, proposed, communicated or disclosed in any manner.
If (i) Buyer acquires the Shares upon exercise of the Option, (ii)
Buyer does not acquire a number of shares of Common Stock representing at least
the Minimum Tender Condition within twelve months after such exercise of the
Option and (iii) within such twelve-month period, Buyer or any affiliate of
Buyer, directly or indirectly, sells, transfers or otherwise disposes of
(including, without limitation, pursuant to a merger, liquidation,
reorganization or business combination involving the Company) the Shares
acquired by Buyer upon exercise of the Option, other than to any affiliate of
Buyer (any of the foregoing, a "Covered Disposition"), then upon consummation of
any such Covered Disposition, Buyer shall pay to you in cash the amount, if any,
by which the aggregate of the cash consideration per Share and the fair market
value (as of the time of such Covered Disposition) of any securities or other
property or assets obtained by Buyer in the Covered Disposition exceeds the Per
Share Option Price, multiplied by the number of Shares sold, transferred or
disposed of in the Covered Disposition (the amount so payable to you, the
"Covered Amount"). In the case of any securities so obtained by Buyer in a
Covered Disposition that are traded on any national securities exchange or
through any inter-dealer quotation system, the "fair market value" of such
securities as of the time of such Covered Disposition shall be the closing
market price as reported on the securities exchange or quotation system that is
the principal trading market for such securities on the last trading day before
the Covered Disposition. In the case of any other non-cash consideration so
obtained by Buyer in a Covered Disposition, the "fair market value" of such
consideration shall be the value actually attributed to such consideration under
the terms of the Covered Disposition or, if no such attribution was made under
the terms of the Covered Disposition, the fair market value of such
consideration as determined by Buyer and you in good faith. If Buyer and you
cannot agree on the fair market value of such consideration within ten (10) days
after the consummation of the Covered Disposition, then the fair market value
shall be determined by arbitration in accordance with the rules of the American
Arbitration Association. The Covered Amount shall be treated as additional
purchase price paid for the Shares for tax and other purposes.
You hereby agree not to sell, transfer or encumber the Shares (except
in the Tender Offer or to Buyer and for transfers of Shares to a trust which
unconditionally and irrevocably agrees to be bound by the terms of this letter
agreement with respect to the Shares being transferred) prior to the Expiration
Date.
You hereby represent and warrant as to the Shares issued, outstanding
and beneficially owned by you as of the date of this letter agreement that
except as disclosed on Schedule I hereto (i) you are the sole owner of and have
full right, power and authority to sell and vote the Shares, or if you are not
the sole owner, you have the full right, power and authority to sell the Shares,
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April 10, 2001
Page 3
and in either event, this letter agreement is a valid and binding agreement,
enforceable against you, in accordance with its terms; (ii) neither the
execution of this letter agreement nor the consummation by you of the
transactions contemplated hereby will constitute a violation of, or conflict
with, or default under, any contract, commitment, agreement, understanding,
arrangement or restriction of any kind to which you are a party or by which you
or the Shares are bound; and (iii) Buyer or its subsidiary shall, upon purchase
of the Shares, receive good and marketable title to the Shares, free and clear
of all liens, claims, encumbrances and security interests of any kind.
Buyer hereby represents and warrants that it has the corporate power
and it is duly authorized to enter into this letter agreement.
You hereby agree to vote or cause to be voted all of the Shares (i) in
favor of approval and adoption of the Merger Agreement, the Merger and the
transactions contemplated by this Agreement and the Merger Agreement and (ii)
against any other mergers, recapitalizations, business combinations, sales of
assets, liquidations or similar transactions involving the Company, or any other
matters which could reasonably be expected to impede, interfere, delay or
adversely affect the Offer, the Merger and the transactions contemplated by this
Agreement and the Merger Agreement. In furtherance of your voting agreement in
this paragraph, you hereby revoke any and all previous proxies with respect to
any of the Shares and grant to Buyer and such individuals or corporations as
Buyer may designate an irrevocable proxy to vote all of the Shares owned by you
in accordance with this paragraph on any matters which may be presented to
shareholders of the Company with respect to the matters referred to in (i) and
(ii) above in this paragraph. You hereby acknowledge that the proxy granted by
the foregoing is coupled with an interest and is irrevocable. In addition, you
hereby agree to execute such additional documents as Buyer may reasonably
request to effectuate its proxy and voting rights under this paragraph.
Notwithstanding anything to the contrary contained herein, the proxy granted to
Buyer hereby shall automatically terminate and be of no further force and effect
upon the termination of this letter agreement in accordance with its terms.
We each hereby agree that you are not making any agreement or
understanding herein in any capacity other than in your capacity as a
stockholder of the Company. If you are a member of a Board of Directors of the
Company, nothing herein shall in any way limit or affect actions taken by you in
such capacity, and no action taken in furtherance of your fiduciary duties shall
be deemed to be a breach of the provisions of this letter agreement.
We each hereby agree that this letter agreement creates legally binding
commitments, enforceable in accordance with their terms. This letter agreement
(i) constitutes the entire agreement among the parties hereto with respect to
the subject matter hereof and (ii) supersedes all other prior agreements and
understandings, both written and oral, between the parties with
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April 10, 2001
Page 4
respect to the subject matter hereof. This letter agreement is not intended to
confer upon any other person any rights or remedies hereunder.
This letter agreement may be terminated at any time (i) by mutual
written consent of the parties hereto, (ii) by either party on or after the
termination of the Merger Agreement other than pursuant to an Applicable
Termination or (iii) by either party on or after the Expiration Date; provided,
however, that the provisions of the fourth paragraph of this letter agreement
(related to Covered Dispositions) shall survive any such termination in
accordance with its terms. Notwithstanding the foregoing, such right of
termination shall not be available to any party whose breach of any
representation, warranty, agreement or obligation hereunder has been the cause
of or resulted in the failure of the transactions contemplated hereunder to be
consummated. No such termination shall relieve any party from liability for any
breach of this letter agreement.
Each party shall be entitled, without prejudice to the rights and
remedies otherwise available to such party, to specific performance of all of
the other party's obligations hereunder. This letter agreement shall be governed
by and construed in accordance with the internal laws (and not the law of
conflicts) of the State of Delaware. Each of the parties shall pay its own
expenses in connection with the execution and performance of this letter
agreement.
If any term, provision, covenant or restriction of this letter
agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this letter agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
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April 10, 2001
Page 5
Please indicate your agreement to the foregoing by signing this letter
agreement in the space provided below, whereupon a binding agreement will have
been formed between us in respect of the foregoing.
Sincerely,
ILLINOIS TOOL WORKS INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
Acknowledged and agreed as of the date first written above:
ESTATE OF XXXXX X. XXXXX, XX.
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
Title: Executor
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April 10, 2001
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SCHEDULE I
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No Exceptions.
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