EXHIBIT 10.3
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXXXXX INTERNATIONAL CORPORATION,
EMPIRE MERGER CORP.
AND
THE YORK GROUP, INC.
Dated as of May 24, 2001
TABLE OF CONTENTS
PAGE
AGREEMENT AND PLAN OF MERGER.....................................1
ARTICLE I THE MERGER............................................1
Section 1.3. Effects of the Merger....................................1
Section 1.4. Charter and By-Laws; Board of Directors; Management
Succession...............................................1
Section 1.5. Conversion of Securities.................................2
Section 1.6. Xxxxxxxx to Make Certificates Available..................9
Section 1.7. Transfer Taxes; Withholding..............................9
Section 1.8. Return of Exchange Fund.................................10
Section 1.9. No Further Ownership Rights in York Common Stock........10
Section 1.10. Closing of York Transfer Books.........................10
Section 1.11. Lost Certificates......................................10
Section 1.12. Further Assurances.....................................10
Section 1.13. Closing................................................11
ARTICLE II REPRESENTATIONS AND WARRANTIES OF YORK..............11
Section 2.1. Corporate Organization..................................11
Section 2.2. Capitalization..........................................12
Section 2.3. Authority; No Violation.................................13
Section 2.4. Consents and Approvals..................................13
Section 2.5. SEC Documents and Other Reports.........................14
Section 2.6. Proxy Statement.........................................14
Section 2.7. Absence of Certain Changes or Events....................14
Section 2.8. Permits and Compliance..................................15
Section 2.9. Tax Matters.............................................15
Section 2.10. Actions and Proceedings................................16
Section 2.11. Certain Agreements.....................................16
Section 2.12. ERISA..................................................16
Section 2.13. Labor Matters..........................................18
Section 2.14. Intellectual Property..................................18
Section 2.15. Environmental and Safety Matters.......................20
Section 2.16. Insurance..............................................20
Section 2.17. Required Vote of York Stockholders.....................21
Section 2.18. State Take Over Laws...................................21
Section 2.19. Opinion of Financial Advisor...........................21
Section 2.20. Broker's Fees..........................................21
Section 2.21. Disclosure.............................................21
Section 2.22. Unlawful Payments and Contributions....................21
Section 2.23. Material Contracts.....................................21
Section 2.24. Warranties.............................................22
Section 2.25. Restrictions on Business Activities....................22
Section 2.26. Real Property..........................................22
Section 2.27. Rights Plan............................................23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF XXXXXXXX.........23
Section 3.1. Corporate Organization..................................23
Section 3.2. Capitalization..........................................23
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Section 3.3. Authority; No Violation.................................23
Section 3.4. Consents and Approvals..................................24
Section 3.5. SEC Documents and Other Reports.........................24
Section 3.6. Proxy Statement.........................................25
Section 3.7. Absence of Certain Changes or Events....................25
Section 3.8. Litigation..............................................25
Section 3.9. Brokers, Finders, etc...................................25
Section 3.10. Vote of Stockholders...................................25
Section 3.11. Financing..............................................25
ARTICLE IV CONDUCT OF BUSINESS.................................25
Section 4.1. Conduct of York.........................................25
ARTICLE V ADDITIONAL AGREEMENTS................................27
Section 5.1. No Solicitation.........................................27
Section 5.2. Proxy Statement.........................................28
Section 5.3. Stockholders Meeting....................................29
Section 5.4. Access to Information...................................29
Section 5.5. Notices of Certain Events...............................30
Section 5.6. Appropriate Action; Consents; Filings...................30
Section 5.7. Public Disclosure.......................................31
Section 5.8. Indemnification of Directors and Officers...............32
Section 5.9. State Takeover Laws.....................................34
Section 5.10. Rights Agreement.......................................34
ARTICLE VI CONDITIONS TO MERGER................................34
Section 6.1. Conditions to Each Party's Obligations..................34
Section 6.2. Additional Conditions to Obligations of York............35
Section 6.3. Additional Conditions to Obligations of Xxxxxxxx........35
ARTICLE VII TERMINATION........................................36
Section 7.1. Termination.............................................36
Section 7.2. Effect of Termination...................................37
Section 7.3. Fees and Expenses.......................................37
Section 7.4. Post-Termination Obligations............................38
ARTICLE VIII MISCELLANEOUS.....................................38
Section 8.1. Nonsurvival of Representations, Warranties and
Agreements..............................................38
Section 8.2. Notices.................................................38
Section 8.3. Interpretation and Construction; Severability;
Interpretation of Obligations...........................39
Section 8.4. Counterparts............................................40
Section 8.5. Entire Agreement; No Third Party Beneficiaries..........40
Section 8.6. Governing Law...........................................40
Section 8.7. Assignment..............................................40
Section 8.8 Amendment...............................................40
Section 8.9 Extension; Waiver.......................................40
Section 8.10 Consent to Jurisdiction: Appointment of Agent for
Service of Process......................................40
EXHIBITS
Exhibit 1.5(x) Stock Option Valuation
Exhibit 1.5(y) Agreed Upon Procedures
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TABLE OF DEFINED TERMS
TERM SECTION
1990 Plan 2.2(a)
1991 Plan 2.2(a)
1996 Director Plan 2.2(a)
1996 Plan 2.2(a)
Adjusted Working Capital 1.5(c)(ii)
Adjusted Working Capital Statement 1.5(c)(ii)
Agent 8.10
Agreed-Upon Procedures 1.5(c)(iii)
Agreement Preamble
Antitrust Laws 5.6(b)
Appraisal Shares 1.5(e)
Appraised Value 1.5(c)(ii)
Bronze Business 1.5(c)(ii)
Certificate of Merger 1.2
Certificates 1.6(b)
Closing 1.13
Code 1.7
Confidentiality Agreement 5.4
Constituent Corporations Preamble
Deferred Stock 1.5(d)
Domain Names 2.14(a)
DGCL 1.1
EBITDA 1.5(c)(ii)
EBITDA Statement 1.5(c)(ii)
ERISA 2.12(a)
ERISA Affiliate 2.12(d)
Effective Time 1.2
End Date 7.1(b)
Environmental Laws 2.15(a)
Excess Cash Increment 1.5(c)(ii)
Exchange Act 2.5
Exchange Agent 1.6(a)
Exchange Fund 1.6(a)
Excess Cash Increment 1.5(c)(ii)
Financial Statements 1.5(c)(ii)
GAAP 1.5(c)(ii)
Governmental Entity 2.4
HSR Act 2.4
Indemnified Parties 5.8(a)
Independent Auditor 1.5(c)(iv)
Intellectual Property 2.14(a)
IRS 2.9
Knowledge of York 2.8
Liens 2.2(b)
Material Adverse Effect 2.1(a)
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Material Agreement 2.3(b)
Xxxxxxxx Preamble
Xxxxxxxx Disclosure Letter Article III
Xxxxxxxx SEC Documents 3.5
Merger Recitals
Merger Sub Preamble
Order 5.6(b)
Outstanding Shares 1.5(c)(ii)
Patents 2.14(a)
Person 4.1(c)
Proxy Statement 2.4
Registered Intellectual Property 2.14(a)
SEC 2.4
Securities Act 2.1(a)
Selected Property Value 1.5(c)(ii)
Significant Subsidiary 5.1(a)
State and Foreign Approvals 2.4
Stockholders Meeting 5.3
Subsidiary 2.1(a)
Superior Proposal 5.1(a)
Surviving Corporation 1.1
Takeover Proposal 5.1(a)
Taxes 2.9
Tax Return 2.9
Threshold EBITDA 1.5(c)(iii)
Trademarks 2.14(a)
Unusual Charges 1.5(c)(ii)
URLs 2.14(a)
Vault Business 1.5(c)(ii)
wholly-owned Subsidiary 2.1(a)
Worker Safety Laws 2.15(a)
York Preamble
York By-Laws 2.1(a)
York Cash 1.5(c)(ii)
York Certificate of Incorporation 2.1(a)
York Common Stock Recitals
York Disclosure Letter Article II
York Equity Value 1.5(c)(ii)
York Intellectual Property 2.14(a)
York Leased Property 2.27(b)
York Leases 2.27(b)
York Non Plan Options 2.2(a)
York Material Contracts 2.24
York Multiemployer Plan 2.12(d)
York Owned Property 2.27(a)
York Permits 2.8
York Plan 2.12(d)
York Preferred Stock 2.2(a)
York Products 2.14(a)
York Real Property 2.27(b)
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York Registered Intellectual Property 2.14(a)
York Rights Recitals
York Rights Agreement 2.28
York SEC Documents 2.5
York Stock Options 2.2(a)
York Stock Plans 2.2(a)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is entered into as of May 24, 2001
(this "AGREEMENT") by and among XXXXXXXX INTERNATIONAL CORPORATION, a
Pennsylvania corporation ("XXXXXXXX"), EMPIRE MERGER CORP., a Delaware
corporation and a wholly-owned subsidiary of Xxxxxxxx ("MERGER SUB"), and THE
YORK GROUP, INC., a Delaware corporation ("YORK") (Xxxxxxxx, Merger Sub and York
being hereinafter collectively referred to as the "CONSTITUENT CORPORATIONS").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Xxxxxxxx, Merger Sub
and York have approved and declared advisable the merger of Merger Sub with and
into York (the "MERGER"), upon the terms and conditions set forth herein,
whereby each issued and outstanding share of Common Stock of York, par value
$.01 per share (the "YORK COMMON STOCK"), together with any associated York
preferred stock purchase rights ("YORK RIGHTS"), not owned directly or
indirectly by Xxxxxxxx will be converted into an amount in cash; and
WHEREAS, the respective Boards of Directors of Xxxxxxxx and York
have determined that the Merger is in furtherance of and consistent with their
respective long-term business strategies and is in the best interests of their
respective stockholders;
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
THE MERGER
THE MERGER. Upon the terms and subject to the conditions hereof, and in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), Merger Sub shall be merged with and into York at the Effective Time (as
defined in SECTION 1.2). Following the Merger, the separate corporate existence
of Merger Sub shall cease and York shall continue as the surviving corporation
(the "SURVIVING CORPORATION") and shall succeed to and assume all the rights and
obligations of Merger Sub in accordance with the DGCL and shall continue under
the name The York Group, Inc.
EFFECTIVE TIME. Concurrently with the Closing (as defined in SECTION 1.13),
Xxxxxxxx, Merger Sub and York will cause a Certificate of Merger (the
"CERTIFICATE OF MERGER"), executed in accordance with the relevant provisions of
the DGCL, to be filed with the Secretary of State of Delaware. The Merger shall
become effective on the date and at the time when the Certificate of Merger has
been duly filed with the Secretary of State of Delaware (the "EFFECTIVE TIME").
EFFECTS OF THE MERGER. The Merger shall have the effects set forth in Section
259 of the DGCL.
CHARTER AND BY-LAWS; BOARD OF DIRECTORS; MANAGEMENT SUCCESSION.
At the Effective Time, the Certificate of Incorporation of Merger Sub as in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until changed or amended as provided
therein or by applicable law; PROVIDED, HOWEVER, that at the Effective Time, the
Certificate of Incorporation shall be amended so that the name of the Surviving
Corporation shall be "The York Group, Inc." At the Effective Time, the By-Laws
of Merger Sub, as in effect immediately prior to the
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Effective Time shall be the By-Laws of the Surviving Corporation until changed
or amended as provided therein or by applicable law.
From and after the Effective Time, until duly changed in compliance with
applicable law and the certificate of incorporation and by-laws of the Surviving
Corporation, the board of directors of the Surviving Corporation shall consist
of the board of directors of Merger Sub immediately prior to the Effective Time.
From and after the Effective Time, the officers of the Surviving Corporation
shall be the officers of Merger Sub immediately prior to the Effective Time,
until their respective successors are duly elected or appointed and qualified in
accordance with applicable law.
CONVERSION OF SECURITIES. As of the Effective Time, by virtue of the Merger and
without any action on the part of Xxxxxxxx, Merger Sub, York or the holders of
any securities of the Constituent Corporations:
All shares of York Common Stock, together with any associated York Rights, that
are held in the treasury of York or by any wholly-owned Subsidiary of York and
any shares of York Common Stock, together with any associated York Rights, owned
by Xxxxxxxx or by any wholly-owned Subsidiary or Affiliate of Xxxxxxxx shall be
cancelled and no capital stock of Xxxxxxxx or other consideration shall be
delivered in exchange therefor.
Each share of common stock, par value $.01 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into one
share of common stock, par value $.01 per share, of the Surviving Corporation
with the same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
(c) (i) Each share of York Common Stock, together with any
associated York Rights, issued and outstanding immediately prior to the
Effective Time (other than shares of York Common Stock referred to in
SECTION 1.5(A) hereof and Appraisal Shares as defined in SECTION 1.5(e)),
shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into an amount in cash, per share of York
Common Stock held, together with any associated York Rights, as determined
in SECTION 1.5(C)(II) below.
(ii) The calculation of the amount of cash to be paid to the
holders of York Common Stock for each share of York Common Stock together
with any associated York Rights shall be (x) $10 per share of York Common
Stock together with any associated York Rights, plus (y) the Excess Cash
Increment (such per share calculation being herein referred to as the
"YORK EQUITY VALUE"); PROVIDED, HOWEVER, (i) for the avoidance of doubt,
the York Equity Value shall not be less than $10 per share of York Common
Stock together with any associated York Rights and (ii) that if York's
EBITDA (as defined below) for the nine months ended September 30, 2001
does not at least equal $9.0 million (the "THRESHOLD EBITDA"), then
Xxxxxxxx shall be permitted to terminate this Agreement in accordance with
SECTION 7.1(J) hereof. Notwithstanding the foregoing, Xxxxxxxx shall not
be required to pay more than $11 per share of York Common Stock.
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(iii) (A) As used herein,
Excess Cash Increment = A - ($6.9 million + B + C + D + E + F + G) + (H + I)
----------------------------------------------------
Outstanding Shares
Excess Cash Increment shall not be less than zero.
"A" is "YORK CASH." "YORK CASH" shall mean the total cash and Cash
Equivalents of York and its Subsidiaries at October 31, 2001, plus the Selected
Property Value. "CASH EQUIVALENTS" shall mean all highly liquid investments of
York purchased with original maturities of three months or less. "SELECTED
PROPERTY VALUE" shall mean (i) 50% of the aggregate Appraised Value on the
following properties of York not sold nor subject to a Pending Contract to sell
by York on or before October 31, 2001: Aiken, South Carolina; Portland, Oregon;
Lawrenceville, Georgia; Richmond, Indiana (at 000 X. X. "T" Street) and New
Orleans, Louisiana (the "SELECTED PROPERTIES"), plus (ii) the agreed upon
purchase price for any or all of the Selected Properties that are subject to a
Pending Contract for sale. "APPRAISED Value" shall mean the fair market value of
such properties held for sale, determined as soon as practicable after the date
hereof, but in no event determined later than October 31, 2001, by a certified
real estate appraisal firm selected by Xxxxxxxx, using appraisal criteria
determined by the appraisal firm and reasonably acceptable to Xxxxxxxx and York,
including consideration of environmental issues with respect to such properties,
and "PENDING CONTRACT" shall mean a standard contract for sale of real estate in
the applicable jurisdiction with respect to which the contingency period has
expired or which does not contain a contingency period of more than 60 days.
"B" is "PRESENT VALUE ENVIRONMENTAL REMEDIATION COSTS." "PRESENT VALUE
ENVIRONMENTAL REMEDIATION COSTS" shall mean the present value cost (discounted
at 7.5%) of the Environmental Remediation Costs which are not paid on or before
October 31, 2001. "ENVIRONMENTAL REMEDIATION COSTS" shall mean the estimated
remediation costs to meet applicable environmental clean-up requirements and to
conduct any ongoing environmental monitoring and maintenance activities for the
following locations: Anniston, Alabama, West Point, Mississippi and Xxxx,
Indiana, with such costs to be determined as follows:
(1) York shall, at York's expense, engage an environmental consulting
company to perform a limited Phase II subsurface environmental
investigation of the three sites consistent with a scope of work, which
was proposed by Xxxxxxxx and approved by York before the date of this
Agreement ("LIMITED PHASE II INVESTIGATION"). York and Xxxxxxxx have
preapproved RMT, Inc. ("RMT") to perform the Limited Phase II
Investigation. RMT or, if both York and Xxxxxxxx approve, another
environmental consulting company ("CONTRACTOR"), shall be instructed to
perform its work so as to reach a probable-cost estimate or a range of
estimates in accordance with (i) the provisions herein and (ii) the
scope of work, including specifically to produce a range of estimates
(if necessary) with a confidence range of plus or minus $1 million as
provided for in subsection (4) below. York will allow Xxxxxxxx or its
representatives to observe the Limited Phase II Investigation at all
three sites and shall provide Xxxxxxxx with copies of all field notes,
boring logs and analytical data within a reasonable time after receipt
and prior to the preparation of the Phase II Report. York shall
authorize Contractor to discuss its work with Xxxxxxxx or its
representatives if York's representatives participate in such
discussions.
(2) York shall use commercially reasonable efforts to cause the Limited
Phase II Investigation to be completed, and a report regarding the same
to be issued, on or before July 15, 2001 ("Phase
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II Report"). The Phase II Report will contain recommendations for
additional investigation and/or remediation, if appropriate. York will
consider, in good faith, reasonable comments by Xxxxxxxx or its
representatives on the draft Phase II Report before finalizing.
(3) Based upon the Limited Phase II Investigation, the Phase II Report
shall include a probable-cost estimate (on a facility specific basis) of
costs to conduct remediation activities necessary (if any) to address
the presence of contaminants in soil and/or groundwater at each of the
facilities in concentrations greater than permitted for
commercial/industrial property under applicable Environmental Laws, as
revealed by the Limited Phase II Investigation. The probable-cost
estimate shall be based upon the lowest cost methods for investigation,
remediation, removal, corrective action, containment and/or monitoring
permitted by applicable Environmental Laws and to minimize liability
under Environmental Laws. It is understood that any required corrective
action may include the use of risk-based remedies (including without
limitation natural attenuation remedies), institutional and/or
engineering controls or deed restrictions, if such remedies or controls
have been approved or accepted by the relevant state agency in similar
situations and provided that such remedies or controls do not
unreasonably restrict or interfere with the current use of the facility.
It is further understood that the probable-cost estimate shall include
all investigation, remediation, removal, corrective action, containment
and/or monitoring requirements of applicable state or federal
environmental agencies.
(4) If Contractor's probable-cost estimate for any of the three
facilities cannot be refined to an estimate with a confidence range of
plus or minus $1 million (e.g. $1-3 million) after the Limited Phase II
Investigation, then York and Xxxxxxxx will cooperate with Contractor to
approve such additional investigation by Contractor at any of the three
facilities as will facilitate the refinement of the probable-cost
estimate to an estimate with a confidence range of plus or minus $1
million. Such additional investigation shall be at York's expense and
shall be completed on or before August 31, 2001 or such later date as
the parties may agree upon; provided that a final characterization
report and probable-cost estimate with a confidence range of plus or
minus $1 million must be delivered by Contractor to York and Xxxxxxxx no
later than September 30, 2001. York will allow Xxxxxxxx or its
representatives to observe any additional investigation and shall
provide Xxxxxxxx with copies of all field notes, boring logs and
analytical data within a reasonable time after receipt and prior to the
preparation of the final characterization report. York shall authorize
contractor to discuss its work with Xxxxxxxx or its representatives if
York's representatives participate in such discussions. Subject to
Subsection (5), Environmental Remediation Costs for any given facility
shall be the midpoint of any probable cost estimate range for such
facility that meets the requirements of this Subsection (4) (e.g. with a
$1-3 million range, midpoint would be $2 million). Environmental
Remediation Costs for all three facilities shall be the aggregate
midpoints of such ranges, which meet the requirements of this subsection
(4).
(5) If the midpoint of the probable-cost estimate for any one facility
is equal to or less than $100,000, then the Environmental Remediation
Cost for such facility shall be deemed to be zero. Without giving effect
to the preceding sentence, if the aggregate midpoints of the
probable-cost estimates for all three facilities, in the aggregate, is
less than or equal to $300,000, then the Environmental Remediation Cost
for all three facilities shall be deemed to be zero.
If as a result of the Limited Phase II Investigation, York must commence
remediation activities before the Closing Date to comply with applicable
Environmental Laws, York and Xxxxxxxx agree to reasonably cooperate with respect
to such activities, and Xxxxxxxx will identify the name and contact information
for a person representing Xxxxxxxx who will coordinate with York, and if
desired, provide comment regarding the scope, timing, and performance of such
activities.
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"C" is the premium not paid on or before October 31, 2001 for cost cap coverage
from AIG or a similarly rated insurance company for each facility having a
probable-cost estimate exceeding $100,000 so that the parties may protect
against actual costs of remediation at such facility exceeding the amount of the
Environmental Remediation Costs applicable to such facility. In determining the
Insurance Premium, the policy shall have (a) a self-insured retention/deductible
equal to the Environmental Remediation Costs for each facility having a
probable-cost estimate exceeding $100,000, (b) limits of liability equal to 100%
of the Environmental Remediation Costs for each facility having a probable-cost
estimate exceeding $100,000, and (c) a policy term of 10 years, unless a shorter
or longer remediation period is applicable, in which case the term shall not be
shorter than the projected remediation period. If cost cap coverage meeting the
specifications set forth herein cannot be bound by York despite York's
commercially reasonable efforts to do so on or before October 31, 2001 (it being
understood that York shall have no obligation to purchase such insurance if the
premium exceeds 25% of the Environmental Remediation Costs), then cost cap
coverage need not be procured and for purposes of the Excess Cash Increment
calculation, the premium shall be deemed to be 25% of the Environmental
Remediation Costs with respect to such facilities for which such cost cap
coverage has not been obtained.
"D" is the legal, accounting, environmental consulting and investment
banking fees and expenses incurred or accrued by York and its Subsidiaries on or
before October 31, 2001 in connection with this Agreement and closing the Merger
(and not yet paid), or are reasonably anticipated by York to be incurred by York
prior to the Closing.
"E" is the costs of settling, cashing out or causing to be cancelled all
York Stock Options not exercised on or before October 31, 2001 and Deferred
Stock (as defined in Section 1.5(d)), as determined in accordance with the
formula set forth in EXHIBIT 1.5(X) less, in the case of York Stock Options, any
exercise price to be paid to York by the optionee (but for avoidance of doubt
not decreased by any unpaid cash accruals under the Director Deferral Plan (as
defined in Section 1.5(d)) or York's Non-Qualified Deferred Compensation Plan).
"F" is the amount by which Adjusted Working Capital is greater that $13.2
million or less than $10.2 million on October 31, 2001. If Adjusted Working
Capital as of October 31, 2001 is greater than $13.2 million, the excess amount
shall be a negative number and have the effect of increasing the Excess Cash
Increment, but if the Adjusted Working Capital as of October 31, 2001 is less
than $10.2 million, the deficiency shall be a positive number and have the
effect of decreasing the Excess Cash Increment. "ADJUSTED WORKING CAPITAL" shall
mean the difference between (a) the sum of (1) trade accounts and notes
receivable (net of allowance for doubtful accounts), (2) inventory, (3) pre-paid
expenses, (4) deferred tax amount, (5) income tax receivable, (6) assets held
for sale, (7) other current assets, (8) any amounts which are reflected in
Adjusted Working Capital and are being deducted from the Excess Cash Increment
calculation pursuant to letters "D" and "E" above and (9) any indemnity to which
York would be entitled under the Purchase Agreements (as defined herein), but
which has not been paid due to the Basket Amount provided for in Section
5.03(b)(ii) of the Stock Purchase Agreement or the Asset Purchase Agreement (as
such agreements are defined herein) or for any other reason and (b) the sum of
(1) accounts payable, (2) accrued expenses and (3) other current liabilities,
and specifically excluding any calculation of cash, Cash Equivalents or Funded
Indebtedness, all determined in accordance with generally accepted accounting
principles ("GAAP") applied consistently with the audited financial statements
(the "FINANCIAL STATEMENTS") of York as of December 31, 2000. The foregoing
notwithstanding, Adjusted Working Capital shall not be reduced by any decreases
in York's assets, liabilities or financial position resultant from or arising
out of claims for indemnification under the Purchase Agreements.
"G" is all funded indebtedness, and any capitalized lease obligations
first incurred after the date of this Agreement, of York and its Subsidiaries
("Funded Indebtedness") on October 31, 2001.
"H" is any cash paid for severance, retention, transition or integration
costs to the extent that York and Xxxxxxxx agree to the same in a writing
referring to this Section 1.5(c)(ii) and/or the Excess Cash Increment.
"I" is any indemnity to which York would be entitled under the Asset
Purchase Agreement dated
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concurrently herewith among Xxxxxxxx, Empire Stock Corp., York, York Bronze
Company and OMC Industries, Inc. (the "ASSET PURCHASE AGREEMENT"), the Stock
Purchase Agreement by and between Xxxxxxxx, Empire Stock Corp. and York dated
concurrently herewith (the "STOCK PURCHASE AGREEMENT") and any other document
related thereto (together with the Stock Purchase Agreement and the Asset
Purchase Agreement, the "PURCHASE AGREEMENTS"), but which has not been paid due
to the Basket Amount provided for in Section 5.03(b)(ii) of the Stock Purchase
Agreement or the Asset Purchase Agreement or for any other reason.
"Outstanding Shares" shall mean the total number of shares of York Common Stock
outstanding on October 31, 2001.
Neither York Cash nor Excess Cash Increment
will be reduced by any decreases in York's Cash or Cash Equivalents resulting
from or arising out of claims for indemnification under the Purchase Agreements.
For the avoidance of doubt, York has not agreed at this time and is not
obligated under this Agreement or any of the Purchase Agreements to pay any
transition or integration costs.
(B) As used herein, "EBITDA" shall mean the York net income for the
nine months ended September 30, 2001 as shown in the Financial Statements
of York filed with York's September 30, 2001 Form 10-Q Report, (i) plus
interest, taxes, depreciation and amortization for such nine month period
as shown in such Financial Statements of York, (ii) plus any Unusual
Charges for such nine month period (as defined below), (iii) less any
Non-recurring Gains during such nine month period (as defined below), (iv)
and including a pro forma adjustment to remove the EBITDA effect for such
nine month period of the Bronze Business, the Selected Properties, the
Vault Business, and all other businesses, assets and properties disposed
of or discontinued by York on or after January 1, 2001. As used herein,
"UNUSUAL CHARGES" shall mean (w) any legal, accounting, investment
banking, proxy solicitation and printing fees, costs and expenses,
incurred in conjunction with this Agreement and the Purchase Agreements
and closing the Merger and the transactions contemplated by the Purchase
Agreements, (x) legal, accounting, investment banking, proxy solicitation,
printing and other fees, costs, expenses and charges incurred in
evaluating and responding to the proposals, offers and communications of
stockholders and other potential strategic or financial partners,
acquirors or investors plus those incurred in conjunction with York's
credit facilities and refinancing efforts, (y) any transition,
integration, consolidation, severance and retention fees, costs and
expenses incurred in conjunction with this Agreement and closing the
Merger and determined in accordance with GAAP, and (z) any other items of
a non-recurring nature (whether or not related to this Agreement or
closing the Merger, such as plant closing expenses or environmental costs
of a non recurring nature) accruing during 2001 (and determined in
accordance with GAAP). For avoidance of doubt with respect to subsection
(y) of the immediately preceding sentence, York has not agreed at this
time and is not obligated under this Agreement or any of the Purchase
Agreements to pay any transition, integration and consolidation fees,
costs and expenses. As used herein, "NON-RECURRING GAINS" shall mean any
gain (or loss) on the sale or other disposition, except for any sales or
dispositions in the ordinary course of the business of York and its
Subsidiaries at the time of such disposition, of any fixed assets or
business units (determined in accordance with GAAP). The foregoing
notwithstanding, EBITDA shall not be reduced by any decreases in York's
assets, liabilities or financial position resultant from or arising out of
claims for indemnification under the Purchase Agreements.
(C) As used herein, "BRONZE BUSINESS" shall mean the bronze business
discontinued by York prior to the date hereof and the business conducted
by York's York Bronze, Inc. and OMC Industries, Inc. subsidiaries sold to
Xxxxxxxx pursuant to the Stock Purchase Agreement.
(D) As used herein, "VAULT BUSINESS" shall mean the business being
sold by York pursuant to the Asset Purchase Agreement dated May 2, 2001
between Doric Products, Inc. and York.
(iv) As promptly as practicable after September 30, 2001 (but
in no event later
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than November 12, 2001), York will deliver to Xxxxxxxx a statement of
EBITDA as of September 30, 2001 (the "EBITDA STATEMENT"). As promptly as
practicable after September 30, 2001 (but in no event later than October
31, 2001), York will deliver to Xxxxxxxx a Statement of Adjusted Working
Capital as of September 30, 2001 (the "September Adjusted Working Capital
Statement"). The Adjusted Working Capital Statements (as defined below)
and the EBITDA Statement will be prepared in accordance with GAAP, applied
consistently with the Financial Statements of York as of December 31,
2000, and subjected to the Agreed-Upon Procedures to be performed by
Xxxxxx Xxxxxxxx LLP.
As promptly as practicable after October 31, 2001 (but in no event
later than November 19, 2001), York will deliver to Xxxxxxxx a Statement
of Adjusted Working Capital as of October 31, 2001 (the "October Adjusted
Working Capital Statement and together with the September Adjusted Working
Capital Statement, the "Adjusted Working Capital Statements"). Such
October Adjusted Working Capital Statement will be prepared on a basis
consistent in all material respects with the September Adjusted Working
Capital Statement. Xxxxxxxx shall cause such October Adjusted Working
Capital Statement to be reviewed by PricewaterhouseCoopers LLP prior to
November 27, 2001.
As used herein, "AGREED-UPON PROCEDURES" shall mean the assumptions
and determinations used to calculate EBITDA and Adjusted Working Capital
which are described as Exhibit 1.5(y) hereto to be used by York and York's
auditors in preparing the Adjusted Working Capital Statements and the
EBITDA Statement.
(v) If Xxxxxxxx objects to the Adjusted Working Capital
Statements or the EBITDA Statement by November 27, 2001, and Xxxxxxxx and
York are unable to resolve such objections by November 30, 2001, then all
disagreements will be submitted for resolution to Xxxxxx Xxxxxxxx LLP (the
"INDEPENDENT AUDITOR"). The Independent Auditor will have up to 10 days
after its appointment to resolve the disputes submitted to it. The
Adjusted Working Capital Statements and the EBITDA Statement, either as
agreed to by Xxxxxxxx and York or as adjusted by the Independent Auditor
pursuant to the preceding sentence, will be final and binding. The fees
and expenses of the Independent Auditor will be shared equally by Xxxxxxxx
and York.
Immediately prior to the Effective Time, York shall settle, cash out or cause to
be cancelled all York Stock Options (as defined in Section 2.2(a)) and any
shares of Common Stock which have been deferred ("Deferred Stock") pursuant to
the York Non-Employee Director Cash and Equity Compensation Plan (the "Director
Deferral Plan"), such that all York Stock Options and rights to Deferred Stock
are terminated prior to the Effective Time. For the avoidance of doubt, Xxxxxxxx
shall not be required to pay for, as part of the Merger Consideration, any
Deferred Stock, and any York Stock Options which are not vested and exercised
prior to October 31, 2001.
Notwithstanding any portion of this Agreement to the contrary, any shares of
York Common Stock, together with any associated York Rights, held by a holder
who has demanded and perfected appraisal rights for such shares permitted by and
in accordance with the DGCL and who, as of the Effective Time, has not
effectively withdrawn or lost such appraisal rights ("APPRAISAL SHARES") shall
not be converted into or represent a right to receive, pursuant to SECTION
1.5(C), cash, but the holder thereof shall only be entitled to receive such
rights as granted by the DGCL.
Notwithstanding the foregoing, if any holder of shares of York Common Stock,
together with any associated York Rights, shall effectively withdraw or lose
(through failure to perfect or otherwise) such holder's appraisal rights, then
as of the later of (A) the Effective Time or (B) the occurrence of such event,
such holder's shares, together with any associated York Rights, shall
automatically be converted into and
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represent only the right to receive, as provided in SECTION 1.5(C), cash with no
interest thereon upon surrender of the certificate formally representing such
shares.
York will give Xxxxxxxx prompt notice of its receipt of any written demands for
purchase of any shares of York Common Stock, together with any associated York
Rights, together with copies of such demands. York shall permit Xxxxxxxx to
participate in all negotiations and proceedings with respect to demands for
purchase of any shares of York Common Stock, together with any associated York
Rights, as may be demanded under the DGCL.
XXXXXXXX TO MAKE CONSIDERATION AVAILABLE. (a) EXCHANGE OF CERTIFICATES. Xxxxxxxx
shall authorize First Chicago Trust Company of New York (or such other person or
persons as shall be reasonably acceptable to Xxxxxxxx and York) to act as the
depository and exchange agent hereunder (the "EXCHANGE AGENT"). Prior to the
Effective Time, Xxxxxxxx shall deposit with the Exchange Agent, and in trust for
the holders of shares of York Common Stock, together with any associated York
Rights, converted in the Merger, via wire transfer in immediately available
funds cash sufficient to make all payments as required pursuant to Section
1.5(c) (the "EXCHANGE FUND"). The Exchange Agent shall deliver the cash
contemplated to be issued pursuant to SECTION 1.5(C) out of the Exchange Fund.
(b) EXCHANGE PROCEDURES. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each record holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of York Common Stock converted in the Merger (the
"CERTIFICATES") 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 actual delivery of the Certificates to the Exchange Agent, and shall
contain instructions for use in effecting the surrender of the Certificates in
exchange for cash, pursuant to SECTION 1.5(C). Upon surrender for cancellation
to the Exchange Agent of all Certificates held by any record holder of a
Certificate, together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor cash,
pursuant to SECTION 1.5(C), and any Certificate so surrendered shall forthwith
be cancelled.
TRANSFER TAXES; WITHHOLDING. If any cash is to be paid to a name other than that
in which the Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the Certificate so surrendered shall
be properly endorsed and otherwise in proper form for transfer and that the
person requesting such exchange shall pay to the Exchange Agent any transfers or
other taxes required, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Xxxxxxxx or the Exchange
Agent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement such amounts as Xxxxxxxx or the Exchange
Agent is required to deduct and withhold with respect to the making of any such
payment under the Internal Revenue Code of 1986, as amended (the "CODE") or
under any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Xxxxxxxx or the Exchange Agent and paid to the
appropriate authority, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the person in respect of which such
deduction and withholding was made by Xxxxxxxx or the Exchange Agent.
RETURN OF EXCHANGE FUND. Any portion of the Exchange Fund which remains
undistributed to the former stockholders of York for one (1) year after the
Effective Time shall be delivered to the Surviving Corporation, upon demand of
the Surviving Corporation, and any such former stockholders who have not
theretofore complied with this Article I shall thereafter look only to Xxxxxxxx
and the Surviving Corporation for payment of their claim for cash pursuant to
SECTION 1.5(C). Neither Xxxxxxxx, the Exchange Agent nor the Surviving
Corporation shall (absent manifest error) be liable to any former holder of York
Common Stock for any cash held in the Exchange Fund which is delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
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NO FURTHER OWNERSHIP RIGHTS IN YORK COMMON STOCK. All cash paid upon the
surrender for exchange of Certificates in accordance with the terms hereof shall
be deemed to have been issued in full satisfaction of all rights pertaining to
the shares of York Common Stock, together with any associated York Rights,
represented by such Certificates.
CLOSING OF YORK TRANSFER BOOKS. At the Effective Time, the stock transfer books
of York shall be closed and no transfer of shares of York Common Stock, together
with any associated York Rights, shall thereafter be made on the records of
York. If, after the Effective Time, Certificates are presented to the Surviving
Corporation, the Exchange Agent or Xxxxxxxx, such Certificates shall be
cancelled and exchanged as provided in this ARTICLE I.
LOST CERTIFICATES. If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if reasonably required by
Xxxxxxxx or the Exchange Agent, the posting by such person of a bond, in such
reasonable amount as Xxxxxxxx or the Exchange Agent may direct as indemnity
against any claim that may be made against them with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the cash pursuant to SECTION 1.5(C).
FURTHER ASSURANCES. If at any time after the Effective Time the Surviving
Corporation shall consider or be advised that any deeds, bills of sale,
assignments or assurances or any other acts or things are necessary, desirable
or proper (a) to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties, permits, licenses or assets
of either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations, all such
deeds, bills of sale, assignments and assurances and to do, in the name and on
behalf of either Constituent Corporation, all such other acts and things as may
be necessary, desirable or proper to vest, perfect or confirm the Surviving
Corporation's right, title or interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of such Constituent
Corporation and otherwise to carry out the purposes of this Agreement.
CLOSING. The closing of the transactions contemplated by this Agreement (the
"CLOSING") and all actions specified in this Agreement to occur at the Closing
shall take place at the offices of Xxxx Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx, at 10:00 a.m., local time, no later than the second business day
following the day on which the last of the conditions set forth in Article VI
shall have been fulfilled or waived (if permissible), which is expected to be on
or about November 30, 2001, or at such other time and place as Xxxxxxxx and York
shall agree; PROVIDED, HOWEVER, that in no event shall the Closing take place
prior to November 27, 2001 or later than the End Date (as defined in SECTION
7.1(B)).
REPRESENTATIONS AND WARRANTIES OF YORK
Except as disclosed in York's filings with the Securities and
Exchange Commission, the letter delivered to Xxxxxxxx concurrently herewith and
designated therein as the York Disclosure Letter (the "YORK DISCLOSURE LETTER")
or the Disclosure Schedules to the Purchase Agreements, York hereby represents
and warrants to Xxxxxxxx and Merger Sub as follows:
CORPORATE ORGANIZATION. (a) York is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. York has
the corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in which the nature of
the business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification
-9-
necessary, except where the failure to be so licensed or qualified would not
reasonably be expected to have a Material Adverse Effect on York. As used in
this Agreement, the term "MATERIAL ADVERSE EFFECT" means, with respect to York
or Xxxxxxxx, as the case may be, a material adverse effect on (i) the business,
operations, results of operations or financial condition of such party and its
Subsidiaries taken as a whole, or (ii) the ability of such party to consummate
the transactions contemplated hereby, except to the extent resulting from,
related to or otherwise arising by virtue of (u) noncompliance with
Environmental Laws by York, its Subsidiaries or their Affiliates, agents or
predecessors, with the exception of an intentional misrepresentation of Section
2.15 which to York's knowledge would reasonably be expected to have a Material
Adverse Effect, (v) with respect to each party, the effect of any event,
occurrence, fact, condition, change, development or effect that is set forth in
this Agreement or in the York Disclosure Letter, (w) with respect to each party,
the effect of any other transaction or transactions with respect to which such
party or its Affiliates, prior to the date hereof, has announced (generally or
specifically) its intention to investigate, evaluate or consummate, (x) with
respect to York, the effect of the public announcement or pendency of the
transactions contemplated hereby on current customers or revenues of York or the
effect of the announcement or pendency of any other agreement, agreements,
transaction or transactions among any of the parties hereto, among any of their
Affiliates, or among any party hereto and any Affiliate of a party hereto (each
a "CONSTITUENT AGREEMENT", (y) with respect to each party, any changes in
general, local, regional, state, United States or global economic or political
conditions or (z) with respect to each party, any changes affecting the industry
or industries generally in which such party operates. As used in this Agreement,
the word "SUBSIDIARY" means any corporation, partnership, limited liability
company, joint venture or other legal entity of which York or Xxxxxxxx, as the
case may be (either alone or through or together with any other Subsidiary) (i)
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, partnership,
limited liability company, joint venture or other legal entity, (ii) is a
general partner, trustee or other entity or person performing similar functions,
or (iii) has control (as defined in Rule 405 under the Securities Act of 1933,
as amended (together with the rules and regulations promulgated thereunder, the
"SECURITIES ACT")). True and complete copies of the Certificate of Incorporation
(the "YORK CERTIFICATE OF INCORPORATION") and by-laws of York (the "YORK
BY-LAWS"), as in effect as of the date of this Agreement, have previously been
made available by York to Xxxxxxxx.
(b) Each York Subsidiary (i) is duly organized and validly existing
under the laws of its jurisdiction of organization, (ii) is duly qualified to do
business and in good standing in all jurisdictions (whether federal, state,
local or foreign) where its ownership or leasing of property or the conduct of
its business requires it to be so qualified and in which the failure to be so
qualified would reasonably be expected to have a Material Adverse Effect on York
and (iii) has all requisite corporate power and authority to own or lease its
properties and assets and to carry on its business as now conducted except as
would not reasonably be expected to have a Material Adverse Effect on York.
(c) The minute books of each of York and the York Subsidiaries
accurately reflect in all material respects all material corporate actions held
or taken since January 1, 1998 of its respective stockholders and respective
boards of directors (including committees of the board of directors of York)
except as would not reasonably be expected to have a Material Adverse Effect on
York.
Section 1.1. CAPITALIZATION. (a) As of December 31, 2000, the
authorized capital stock of York consists of (i) 25,000,000 shares of York
Common Stock, of which 8,940,950 shares were issued and outstanding and 0 shares
were held in treasury, and (ii) 1,000,000 shares of Preferred Stock, par value
$.01 per share, of York (the "YORK PREFERRED STOCK"), 100,000 of which shares
have been designated as the Series A Junior Participating Preferred Stock, par
value $.01 per share, in connection with the York Rights Agreement and none of
which, as of the date hereof, are issued and outstanding. All of the issued and
outstanding shares of York Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and were not issued in violation of any
preemptive right. As of the date of this Agreement,
-10-
except (i) pursuant to the terms of options issued pursuant to the 1990 Stock
Incentive Plan (the "1990 PLAN"), the 1991 Stock Incentive Plan (the "1991
Plan"), the 1996 Employee Stock Option Plan (the "1996 PLAN"), and the 1996
Independent Director Stock Option Plan (the "1996 DIRECTOR PLAN"; together with
the 1990 Plan, the 1991 Plan and the 1996 Plan, the "YORK STOCK PLANS"), (ii)
York Rights under the York Rights Agreement, (iii) as contemplated in any
Constituent Agreement, and (iv) as contemplated hereby, York does not have and
is not bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of York Common Stock or any other equity securities of York or any
securities representing the right to purchase or otherwise receive any shares of
York Common Stock or York Preferred Stock. As of the date of this Agreement, no
shares of York Common Stock or York Preferred Stock are reserved for issuance,
except for (A) 822,608 shares of York Common Stock reserved for issuance upon
exercise of stock options granted pursuant to the York Stock Plans (the "YORK
STOCK OPTIONS") and (B) 100,000 shares of York Preferred Stock reserved for
issuance in connection with the York Rights Agreement. Since March 31, 2001,
York has not issued any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock, other than
pursuant to the exercise of York Stock Options granted prior to such date. York
has previously provided Xxxxxxxx with a list of the option holders, the date of
each option to purchase York Common Stock granted, the number of shares subject
to each such option, the expiration date of each such option and the price at
which each such option may be exercised under an applicable York Stock Plan. In
no event will the aggregate number of shares of York Common Stock outstanding at
the Effective Time exceed the number specified in SECTION 2.2(A) of the York
Disclosure Letter.
(d) York owns, directly or indirectly, all of the issued and
outstanding shares of capital stock or other equity ownership interests of each
of the York Subsidiaries as set forth in SECTION 2.2(B) of the York Disclosure
Letter, free and clear of any liens, pledges, charges, encumbrances and security
interests whatsoever ("LIENS") other than as set forth in SECTION 2.2(B) of the
York Disclosure Letter, and all of such shares or equity ownership interests are
duly authorized and validly issued and are fully paid, nonassessable and were
not issued in violation of any preemptive right. No York Subsidiary has or is
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of capital stock or any other equity security of such Subsidiary or any
securities representing the right to purchase or otherwise receive any shares of
capital stock or any other equity security of such Subsidiary.
AUTHORITY; NO VIOLATION. (a) Subject to obtaining stockholder approval, York has
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and thereby have been duly and validly approved and declared advisable by
the board of directors of York. The board of directors of York has directed that
this Agreement and the transactions contemplated hereby be submitted to York's
stockholders for adoption at the Stockholders Meeting (as defined in SECTION
5.3) and, except for the adoption of this Agreement by the affirmative vote of
the holders of a majority of the outstanding shares of York Common Stock, no
other corporate proceeding on the part of York is necessary to approve and adopt
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by York and (assuming
due authorization, execution and delivery by Xxxxxxxx and Merger Sub of this
Agreement) constitutes a valid and binding obligation of York, enforceable
against York in accordance with its terms.
(b) Subject to obtaining stockholder approval, neither the execution
and delivery of this Agreement by York nor the consummation by York of the
transactions contemplated hereby, nor compliance by York with any of the terms
or provisions hereof, will (i) violate any provision of the York Certificate of
Incorporation or the York By-Laws or (ii) assuming that the consents and
approvals referred to in SECTION 2.4 are duly obtained, (x) violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to York or any of its Subsidiaries or any of their respective
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properties or assets, or (y) violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
result in the termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of any Lien
upon any of the respective properties or assets of York or any of its
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture or other agreement, instrument for borrowed money, any
guarantee of any agreement or instrument for borrowed money or any license,
lease or any other agreement or instrument ("MATERIAL AGREEMENT") to which York
or any of its Subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected, except (in the case of
clause (ii) above) for such violations, conflicts, breaches or defaults which,
either individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on York.
CONSENTS AND APPROVALS. Except (i) in connection, or in compliance, with the
provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR ACT")
and any filings required under foreign laws regulating competition, investment
or exchange controls, (ii) for the filing of any required applications or
notices with any state or foreign agencies and approval of such applications and
notices as listed in SECTION 2.4 of the York Disclosure Letter (the "STATE AND
FOREIGN APPROVALS"), (iii) for the filing with the Securities and Exchange
Commission (the "SEC") of a proxy statement in definitive form relating to the
Stockholders Meeting to be held in connection with this Agreement and the
transactions contemplated hereby (the "PROXY STATEMENT"), (iv) for the filing of
the Certificate of Merger with the Secretary of State of Delaware, (v) for the
approval of this Agreement by the requisite vote of the stockholders of York,
(vi) those consents listed in SECTION 2.4 of the York Disclosure Letter and
(vii) consents, approvals, filings and registrations which if not made or
obtained would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on York, no consents or approvals of or filings
or registrations with any court, administrative agency or commission or other
governmental authority or instrumentality (each a "GOVERNMENTAL ENTITY") or with
any third party are necessary in connection with (A) the execution and delivery
by York of this Agreement, and (B) the consummation by York of the Merger and
the other transactions contemplated by this Agreement.
SEC DOCUMENTS AND OTHER REPORTS. Except as would not have a Material Adverse
Effect on York, York has filed all required documents with the SEC since January
1, 1998 (the "YORK SEC DOCUMENTS"). As of their respective dates, the York SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Securities Exchange Act of 1934, as amended (together with
the rules and regulations promulgated thereunder, the "EXCHANGE ACT"), as the
case may be, and, at the respective times they were filed, none of the York SEC
Documents contained any untrue statement of a material fact or omitted 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. Except as would not have a Material Adverse Effect on York, the
consolidated financial statements (including, in each case, any notes thereto)
of York included in the York SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as of their respective dates of
filing, were prepared in accordance with GAAP (except, in the case of the
unaudited statements, as permitted by Regulation S-X of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto) and fairly presented in all material respects the
consolidated financial position of York and its consolidated Subsidiaries as of
the respective dates thereof and the consolidated results of their operations
and their consolidated cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments and to any
other adjustments described therein). Except as disclosed in the York SEC
Documents or as required by GAAP, York has not, since December 1, 2000, made any
material change in the accounting practices or policies applied in the
preparation of its financial statements.
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PROXY STATEMENT. None of the information to be supplied by York for inclusion or
incorporation by reference in the Proxy Statement will at the time of the
mailing of the Proxy Statement and at the time of the Stockholders Meeting,
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.
If at any time prior to the Effective Time any event with respect to
York, its officers and directors or any of its Subsidiaries shall occur that is
required to be described in the Proxy Statement, such event shall be so
described, and an appropriate supplement shall be promptly filed with the SEC
and, as required by law, disseminated to the stockholders of York. The Proxy
Statement will comply (with respect to York) as to form in all material respects
with the provisions of the Exchange Act.
Section 1.2. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in the York SEC Documents filed prior to the date of this Agreement,
except as set forth in Section 2.7 of the York Disclosure Letter or except as
contemplated in any Constituent Agreement, since December 31, 2000, (A) York and
its Subsidiaries have not incurred any material liability or obligation
(indirect, direct or contingent), or entered into any material oral or written
agreement or other transaction, that is not in the ordinary course of business
or that would have a Material Adverse Effect on York, (B) York and its
Subsidiaries have not sustained any loss or interference with their business or
properties from fire, flood, windstorm, accident or other calamity (whether or
not covered by insurance) that has had or that would have a Material Adverse
Effect on York, (C) there has been no change in the capital stock of York and no
dividend or distribution of any kind declared, paid or made by York on any class
of its stock, (D) there has not been (y) any granting by York or any of its
Subsidiaries to any executive officer or material modification of any severance
or termination benefits or (z) any entry by York or any of its Subsidiaries into
or material modification of any employment, severance or termination agreement
with any such executive officer and (E) York and its Subsidiaries have not
prepared or filed any Tax Return (as defined in SECTION 2.9) inconsistent with
past practice or, on any such Tax Return, taken any position, made any election,
or adopted any method that is inconsistent with positions taken, elections made
or methods used in preparing or filing similar Tax Returns in prior periods. Set
forth in SECTION 2.7 of the York Disclosure Letter is a description of any
changes between December 31, 2000 and the date of this Agreement (excluding any
intervening fluctuations between such dates) to the amount and terms of the
indebtedness of York and its Subsidiaries as described in York's Annual Report
on Form 10-K for the year ended December 31, 2000, as filed with the SEC (other
than any changes in, or the incurrence of, indebtedness of York or any of its
Subsidiaries with a principal amount not in excess of $100,000).
Section 1.3. PERMITS AND COMPLIANCE. Each of York and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, charters, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity necessary for York
or any of its Subsidiaries to own, lease and operate its properties or to carry
on its business as it is now being conducted (the "YORK PERMITS"), except where
the failure to have any of the York Permits would not, individually or in the
aggregate, have a Material Adverse Effect on York, and, as of the date of this
Agreement, no suspension or cancellation of any of the York Permits is pending
or, to the Knowledge of York, threatened, except where the suspension or
cancellation of any of the York Permits, individually or in the aggregate, would
not have a Material Adverse Effect on York. Except as set forth in SECTION 2.8
of the York Disclosure Letter and assuming the filings, notices, approvals and
consents referred to in Section 2.4 are duly obtained, neither York nor any of
its Subsidiaries is in violation of (i) its charter, by-laws or equivalent
documents, (ii) any applicable law, ordinance, administrative or governmental
rule or regulation or (iii) any order, decree or judgment of any Governmental
Entity having jurisdiction over York or any of its Subsidiaries, except, in the
case of clauses (i), (ii) and (iii), for any violations that, individually or in
the aggregate, would not have a Material Adverse Effect on York. "KNOWLEDGE OF
YORK" means the actual knowledge, after reasonable inquiry, of the individuals
identified in SECTION 2.8 of the York Disclosure Letter.
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Section 1.4. TAX MATTERS. Except as otherwise set forth in SECTION
2.9 of the York Disclosure Letter, (i) York and each of its Subsidiaries have
filed all federal, and all material state, local, foreign and provincial, Tax
Returns required to have been filed or appropriate extensions therefor have been
properly obtained, and such Tax Returns are correct and complete, except to the
extent that any failure to so file or any failure to be correct and complete,
individually or in the aggregate, would not have a Material Adverse Effect on
York; (ii) all Taxes shown to be due on such Tax Returns have been timely paid
or extensions for payment have been properly obtained, or such Taxes are being
timely and properly contested, (iii) York and each of its Subsidiaries have
complied in all material respects with all rules and regulations relating to the
withholding of Taxes except to the extent that any failure to comply with such
rules and regulations, individually or in the aggregate, would not have a
Material Adverse Effect on York; (iv) neither York nor any of its Subsidiaries
has waived any statute of limitations in respect of its Taxes which waiver is
currently in effect; (v) any Tax Returns referred to in clause (i) for tax years
prior to 1998 relating to federal and state income Taxes have been examined by
the Internal Revenue Service (the "IRS") or the appropriate state taxing
authority or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired; (vi) no issues that have been
raised in writing by the relevant taxing authority in connection with the
examination of the Tax Returns referred to in clause (i) are currently pending;
(vii) all deficiencies asserted or assessments made as a result of any
examination of such Tax Returns by any taxing authority have been paid in full;
and (viii) neither York nor any of its Subsidiaries 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 Section 280G of the Code. For purposes of this Agreement: (i) "TAXES"
means (A) any federal, state, local, foreign or provincial income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, value-added, transfer or
excise tax, or other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty imposed by any Governmental Entity, and (B) any liability for the
payment of amounts with respect to payments of a type described in clause (A) as
a result of being a member of an affiliated, consolidated, combined or unitary
group, and (ii) "TAX RETURN" means any return, report or similar statement
(including the attached schedules) required to be filed with respect to any Tax,
including any information return, claim for refund, amended return or
declaration of estimated Tax.
Section 1.5. ACTIONS AND PROCEEDINGS. Except as set forth in the
York Disclosure Letter or in the York SEC Documents filed prior to the date of
this Agreement, there are no outstanding orders, judgments, injunctions, awards
or decrees of any Governmental Entity against or involving York or any of its
Subsidiaries, or against or involving any of the directors, officers or
employees of York or any of its Subsidiaries, as such, any of its or their
properties, assets or business or any York Plan that, individually or in the
aggregate, would have a Material Adverse Effect on York. Except as set forth in
SECTION 2.10 of the York Disclosure Letter, as of the date of this Agreement,
there are no actions, suits or claims or legal, administrative or arbitrative
proceedings or investigations pending or, to the Knowledge of York, threatened
against or involving York or any of its Subsidiaries or any of its or their
directors, officers or employees as such, or any of its or their properties,
assets or business or any York Plan that, individually or in the aggregate,
would have a Material Adverse Effect on York. There are no actions, suits, labor
disputes or other litigation, legal or administrative proceedings or
governmental investigations pending or, to the Knowledge or York, threatened
against or affecting York or any of its Subsidiaries or any of its or their
officers, directors or employees, as such, or any of its or their properties,
assets or business relating to the transactions contemplated by this Agreement.
Section 1.6. CERTAIN AGREEMENTS. Except as set forth in SECTION 2.11
of the York Disclosure Letter, neither York nor any of its Subsidiaries is a
party to any oral or written agreement or plan, including any employment
agreement, severance agreement, retention agreement, stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan, any of
the benefits of which will be increased, the vesting of the benefits of which
will be accelerated, or which will become payable or
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which at the participant's or holder's option may become payable, due to or by
the occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will, or may at the option of the holder
or participant, be calculated on the basis of any of the transactions
contemplated by this Agreement.
Section 1.7. ERISA. (a) SECTION 2.12(A)(X) of the York Disclosure
Letter contains a list of each York Plan. With respect to each York Plan, York
has made available to Xxxxxxxx a true and correct copy of (i) the most recent
annual report (Form 5500) filed with the IRS, (ii) such York Plan and all
amendments thereto, (iii) each trust agreement, insurance contract or
administration agreement relating to such York Plan, (iv) the most recent
summary plan description for each York Plan for which a summary plan description
is required, (v) the most recent actuarial report or valuation relating to a
York Plan subject to Title IV of the Employee Retirement Income Security Act of
1974 and the regulations promulgated thereunder ("ERISA"), (vi) the most recent
determination letter, if any, issued by the IRS with respect to any York Plan
intended to be qualified under Section 401(a) of the Code, (vii) any request for
a determination currently pending before the IRS and (viii) all correspondence
with the IRS, the Department of Labor or the Pension Benefit Guaranty
Corporation relating to any outstanding controversy. Each York Plan complies
with ERISA, the Code and all other applicable statutes and governmental rules
and regulations, except any failure to comply as would not have, individually or
in the aggregate, a Material Adverse Effect on York. Except as set forth in
SECTION 2.12(A)(Y) of the York Disclosure Letter, (i) no "reportable event"
(within the meaning of Section 4043 of ERISA) has occurred within the past three
years with respect to any York Plan which could result in liability to York,
(ii) neither York nor any of its ERISA Affiliates (as hereinafter defined) has
withdrawn from any York Multiemployer Plan (as hereinafter defined) at any time
or instituted, or is currently considering taking, any action to do so, and
(iii) no action has been taken, or is currently being considered, to terminate
any York Plan subject to Title IV of ERISA.
(b) There has been no failure to make any contribution or pay any
amount due to any York Plan as required by Section 412 of the Code, Section 302
of ERISA, or the terms of any such Plan, and no York Plan, nor any trust created
thereunder, has incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived.
(c) With respect to York Plans, no event has occurred and, to the
Knowledge of York, there exists no condition or set of circumstances in
connection with which York or any of its ERISA Affiliates would be subject to
any liability under the terms of such York Plans, ERISA, the Code or any other
applicable law which has had, or would have, individually or in the aggregate, a
Material Adverse Effect on York. Except as listed on SECTION 2.12(C) of the York
Disclosure Letter, all York Plans that are intended to be qualified under
SECTION 401(A) of the Code have been determined by the IRS to be so qualified,
or a timely application for such determination is now pending or will be filed
on a timely basis and, except as listed on SECTION 2.12(C) of the York
Disclosure Letter, there is no reason why any York Plan is not so qualified in
operation. Neither York nor any of its ERISA Affiliates has been notified by any
York Multiemployer Plan that such York Multiemployer Plan is currently in
reorganization or insolvency under and within the meaning of Section 4241 or
4245 of ERISA or that such York Multiemployer Plan intends to terminate or has
been terminated under Section 4041A of ERISA. Neither the termination of any
York Multiemployer Plan nor the complete or partial withdrawal by YORK or any of
its ERISA Affiliates from any York Multiemployer Plan would result in any
liability of York or any of its ERISA Affiliates that would have, individually
or in the aggregate, a Material Adverse Effect on York. Except as set forth in
SECTION 2.12(C) of the York Disclosure Letter, neither York nor any of its ERISA
Affiliates has any liability or obligation under any welfare plan to provide
life insurance or medical benefits after termination of employment to any
employee or dependent other than as required by Part 6 of Title 1 of ERISA.
(d) As used in this Agreement, (i) "YORK PLAN" means a "pension
plan" (as defined in Section 3(2) of ERISA (other than a York Multiemployer Plan
(as hereinafter defined)), a "welfare plan"
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(as defined in Section 3(1) of ERISA), or any material bonus, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, vacation, severance, death benefit, insurance or
other plan, arrangement or understanding, in each case established or maintained
or contributed to by York or any of its ERISA Affiliates or as to which York or
any of its ERISA Affiliates or otherwise may have any liability, whether or not
covered by ERISA), (ii) "YORK MULTIEMPLOYER PLAN" means a "multiemployer plan"
(as defined in Section 4001(a)(3) of ERISA) to which York or any of its ERISA
Affiliates is or has been obligated to contribute or otherwise may have any
liability, and (iii) with respect to any person, "ERISA AFFILIATE" means any
corporation or trade or business (whether or not incorporated) which is under
common control, or otherwise would be considered a single employer with such
person pursuant to Section 414(b), (c), (m) or (o) of the Code and the
regulations promulgated thereunder or pursuant to Section 4001(b) of ERISA and
the regulations promulgated thereunder.
(e) SECTION 2.12(E) of the York Disclosure Letter contains a list,
as of the date of this Agreement, of all (i) severance and employment agreements
with officers of York and each ERISA Affiliate, (ii) severance programs and
policies of York with or relating to its employees and (iii) plans, programs,
agreements and other arrangements of York with or relating to its employees
which contain change of control or similar provisions, in each case involving a
severance or employment agreement or arrangement with an individual officer or
employee, only to the extent such agreement or arrangement provides for minimum
annual payments in excess of $50,000. York has provided to Xxxxxxxx a true and
complete copy of each of the foregoing.
(f) Except as otherwise provided in SECTION 2.12(F) of the York
Disclosure Letter, the consummation of the transactions contemplated by this
Agreement will not accelerate the time of payment or vesting under any York Plan
nor obligate any of York, the Surviving Corporation or Xxxxxxxx to provide any
current or former officer, director or employee of York or any of its Subsidiary
with severance pay, unemployment compensation or similar payment.
Section 1.8. LABOR MATTERS. Except as disclosed in SECTION 2.13 of
the York Disclosure Letter, (i) neither York nor any of its Subsidiaries is
party to any collective bargaining agreement or other labor agreement with any
union or labor organization and no union or labor organization has been
recognized by York or any of its Subsidiaries as an exclusive bargaining
representative for employees of York or any of its Subsidiaries, (ii) neither
York nor any of its Subsidiaries is the subject of any material proceeding
asserting that it or any of its Subsidiaries has committed an unfair labor
practice or is seeking to compel it to bargain with any labor union or labor
organization, and (iii) to the Knowledge of York there is no pending,
threatened, nor has there been for the past three years, any labor strike,
dispute, walkout, work stoppage, slow-down or lockout involving it or any of its
Subsidiaries: except in each case as would not, individually or in the
aggregate, have a Material Adverse Effect on York.
Section 1.9. INTELLECTUAL PROPERTY. (a) For the purposes of this
Agreement, the following terms have the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following and
all worldwide common law and statutory rights in, arising out of, or associated
therewith: (i) patents and applications therefor and all reissues, divisions,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof ("PATENTS"); (ii) inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary information, know how,
technology, technical data and customer lists, and all documentation relating to
any of the foregoing; (iii) copyrights, copyrights registrations and
applications therefor, and all other rights corresponding thereto throughout the
world; (iv) domain names, uniform resource locators ("URLS") and other names and
locators associated with the Internet (collectively, "DOMAIN NAMES"); (v)
industrial designs and any registrations and applications therefor; (vi) trade
names, logos, common law trademarks and service marks, trademark and service
xxxx registrations and applications therefor
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(collectively, "TRADEMARKS"); (vii) all databases and data collections and all
rights therein; (viii) all moral and economic rights of authors and inventors,
however denominated, and (ix) any similar or equivalent rights to any of the
foregoing (as applicable). The foregoing notwithstanding, generally available
commercial software shall be excluded from the meaning of Intellectual Property.
"YORK INTELLECTUAL PROPERTY" shall mean any Intellectual Property that is owned
by, or exclusively licensed to, York or any of its Subsidiaries, excluding any
Intellectual Property that is the subject of any Constituent Agreement.
"REGISTERED INTELLECTUAL PROPERTY" means all Intellectual Property
that is the subject of an application, certificate, filing, registration or
other document issued, filed with, or recorded by any private, state, government
or other legal authority. "YORK REGISTERED INTELLECTUAL PROPERTY" means all of
the Registered Intellectual Property owned by, or filed in the name of, York or
any of its Subsidiaries.
"YORK PRODUCTS" means all current versions of products or service
offerings of York or any of its Subsidiaries.
(b) Except as disclosed in SECTION 2.14 of the York Disclosure
Letter, no York Intellectual Property or York Product is subject to any
proceeding or outstanding decree, order, judgment, contract, license, agreement
or stipulation restricting in any manner the use, transfer or licensing thereof
by York or any of its Subsidiaries, or which may affect the validity, use or
enforceability of such York Intellectual Property or York Product, which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on York.
(c) Each item of York Registered Intellectual Property is valid and
subsisting, all necessary registration, maintenance and renewal fees currently
due in connection with such York Registered Intellectual Property have been made
an all necessary documents, recordations and certificates in connection with
such York Registered Intellectual Property have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of maintaining such
York Registered Intellectual Property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on York.
(d) Except as disclosed in SECTION 2.14 of the York Disclosure
Letter or as would not have a Material Adverse Effect on York, York owns and has
good and exclusive title to, each material item of York Intellectual Property,
free and clear of any lien or encumbrance (excluding non-exclusive licenses and
related restrictions granted in the ordinary course); and York is the exclusive
owner of all Trademarks used in connection with the operation or conduct of the
business of York including the sale of any products or the provision of any
services by York. Without limiting the foregoing, (i) York owns exclusively, and
has good title to, all copyrighted works that are York Products or which York or
any of its Subsidiaries otherwise purports to own and (ii) except as,
individually or in the aggregate, could not reasonable be expected to have a
Material Adverse Effect on York, to the extent that any Patents would be
infringed by any York Products, York or any of its Subsidiaries is the exclusive
owner of such Patents.
(e) Except as would not have a Material Adverse Effect on York,
neither York nor any of its Subsidiaries has transferred ownership of, or
granted any exclusive license with respect to, any Intellectual Property that is
York Intellectual Property, to any third party, or knowingly permitted York's or
such Subsidiary's rights in such York Intellectual Property to lapse or enter
the public domain.
(f) SECTION 2.14 of the York Disclosure Letter lists all contracts,
licenses and agreements to which York and each of its Subsidiaries is a party
and that remain in effect: (i) with respect to York Intellectual Property
licenses or transferred to any third party resulting in, or which may result in,
annual payments of $50,000 or more to York; or (ii) pursuant to which a third
party has licensed or
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transferred any Intellectual Property to York.
(g) The operation of the business of York as such business currently
is conducted, including (i) York's design, development, manufacture,
distribution, reproduction, marketing or sale of the products or services of
York (including York Products) and (ii) York's use of any product device or
process, to its Knowledge and except as could not reasonably be expected to have
a Material Adverse Effect, has not and does not and will not infringe or
misappropriate the Intellectual Property of any third party or constitute unfair
competition or trade practices under the laws of any jurisdiction.
(h) York has not received written notice from any third party that
the operation of the business of York or any act, product or service of York,
infringes or misappropriates the Intellectual Property of any third party or
constitutes unfair competition or trade practices under the laws of any
jurisdiction, except (i) as disclosed in SECTION 2.14 of the York Disclosure
Letter and (ii) as could not reasonably be expected to have a Material Adverse
Effect on York.
(i) No person has infringed or is infringing or misappropriating any
York Intellectual Property, except as could not reasonably be expected to have a
Material Adverse Effect on York.
Section 1.10. ENVIRONMENTAL AND SAFETY MATTERS. (a) Except as set
forth in SECTION 2.15 of the York Disclosure Letter, the properties, assets and
operations of York and its Subsidiaries (i) are in compliance with all
applicable federal, state, local, regional and foreign laws, rules and
regulations, orders, decrees, common law, judgments, permits and licenses
relating to public and worker health and safety (collectively, "WORKER SAFETY
LAWS") and relating to the protection, regulation and clean-up of the indoor and
outdoor environment , including, without limitation, those relating to the
generation, handling, disposal, transportation or release of hazardous or toxic
materials, substances, wastes, pollutants and contaminants including, without
limitation, asbestos, petroleum, radon and polychlorinated biphenyls
(collectively, "ENVIRONMENTAL LAWS"), except for any violations that,
individually or in the aggregate, would not have a Material Adverse Effect on
York; and (ii) to the Knowledge of York, with respect to such properties, assets
and operations, including any previously owned, leased or operated properties,
assets or operations, there are no past or present conditions, circumstances,
activities, practices or incidents of York or its Subsidiaries, that would
interfere with or prevent compliance or continued compliance with or give rise
to any liabilities or investigatory, corrective or remedial obligations under
applicable Worker Safety Laws and Environmental Laws, other than any such
interference, prevention, liability or obligation that, individually or in the
aggregate, has not had, or would not have, a Material Adverse Effect on York.
(b) To the Knowledge of York, except as disclosed in SECTION 2.15 of
the York Disclosure Letter, York and its Subsidiaries, and their respective
predecessors, have not caused or permitted any property, asset, operation,
including any previously owned property, asset or operation, to use, generate,
manufacture, refine, transport, treat, store, handle, dispose, transfer or
process hazardous or toxic materials, substances, wastes, pollutants or
contaminants, except in material compliance with all Environmental Laws and
Worker Safety Laws, other than any such activity that, individually or in the
aggregate, would not have a Material Adverse Effect on York. Except as disclosed
in SECTION 2.15 of the York Disclosure Letter, York and its Subsidiaries have
not reported to any Governmental Entity, or been notified by any Governmental
Entity of the existence of, any material violation of an Environmental Law or
any release, discharge or emission of any hazardous or toxic materials,
substances, wastes, pollutants or contaminants that was in violation of
Environmental Laws, other than any such violation, release, discharge or
emission that, individually or in the aggregate, would not have a Material
Adverse Effect on York.
(c) With respect to York and its Subsidiaries, neither this
Agreement nor the consummation of the transactions that are the subject of this
Agreement will result in any obligations for site investigation or cleanup, or
notification to or consent of any Governmental Entity or third party,
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pursuant to any of the so-called "transaction-triggered" or "responsible
property transfer" Environmental Laws, other than any such obligations that are
disclosed in SECTION 2.15 of the York Disclosure Letter or that, individually or
in the aggregate, would not have a Material Adverse Effect on York.
Section 1.11. INSURANCE. York and its Subsidiaries have in effect
insurance coverage with reputable insurers, which in respect of amounts,
premiums, types and risks insured, constitutes reasonably adequate coverage
against all risks customarily insured against by companies of comparable size
and with similar operations.
Section 1.12. REQUIRED VOTE OF YORK STOCKHOLDERS. The affirmative
vote of the holders of a majority of the outstanding shares of York Common Stock
is required to adopt this Agreement. No other vote of the stockholders of York
is required by law, the York Certificate of Incorporation or the York By-Laws or
otherwise in order for York to consummate the Merger and the transactions
contemplated by this Agreement.
Section 1.13. STATE TAKEOVER LAWS. The board of directors of York
has, to the extent such statute is applicable, taken all action (including
appropriate approvals of the Board of directors of York) necessary to exempt
York, its Subsidiaries and affiliates, the Merger, this Agreement, and the
transactions contemplated hereby from Section 203 of the DGCL. To the knowledge
of York, no other state takeover statutes are applicable to the Merger, this
Agreement, or the transactions contemplated hereby.
Section 1.14. OPINION OF FINANCIAL ADVISOR. York has received the written
opinion of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx, dated the date hereof, to the effect
that, as of the date hereof the consideration to be received by the York
stockholders is fair from a financial point of view, a copy of which opinion has
been delivered to Xxxxxxxx.
Section 1.15. BROKER'S FEES. Neither York nor any York Subsidiary
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with the Merger or related transactions contemplated by this
Agreement other than the fixed fee paid Xxxxxxxx Xxxxx Xxxxxx & Xxxxx with
respect to its engagement by York and the fairness opinion delivered by it.
Section 1.16. DISCLOSURE. To the Knowledge of York, York has made
available to Xxxxxxxx true and complete copies of all agreements, instruments
and other documents requested by Xxxxxxxx, its counsel and its financial advisor
in connection with their legal and financial review of York and its
Subsidiaries.
Section 1.17. UNLAWFUL PAYMENTS AND CONTRIBUTIONS. To the Knowledge
of York, neither York, any Subsidiary nor any of their respective directors,
officers or any of their respective employees or agents has (i) used any York
funds for any unlawful contribution, endorsement, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic governmental official or
employee; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any person.
Section 1.18. MATERIAL CONTRACTS. There have been made available to
Xxxxxxxx, its affiliates and their representatives true and complete copies of
all of the following contracts to which York or any of its Subsidiaries is a
party or by which any of them is bound (collectively, the "YORK MATERIAL
CONTRACTS"): (i) contracts with any current officer or director of York or any
of its Subsidiaries; (ii) contracts for the sale of any of the material assets
of York or any of its Subsidiaries other than in the ordinary course of business
or for the grant to any person of any preferential rights to purchase any of its
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material assets other than inventory in the ordinary course of business; (iii)
contracts containing covenants of York or any of its Subsidiaries not to compete
in any line of business or with any person in any geographical area or covenants
of any other person not to compete with York or any of its Subsidiaries in any
line of business or in any geographical area; (iv) material indentures, credit
agreements, mortgages, promissory notes, and other contracts relating to the
borrowing of money; and (v) all other agreements, contracts or instruments
which, in the reasonable opinion of York, are material to York or any of its
Subsidiaries. Except as set forth in SECTION 2.23 of the York Disclosure Letter
or, individually or in the aggregate as could not reasonably be expected to have
a Material Adverse Effect on York, all of the York Material Contracts are in
full force and effect and are the legal, valid and binding obligation of York or
its Subsidiaries, enforceable against them in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as set forth
in SECTION 2.23 of the York Disclosure Letter, neither York nor any Subsidiary
is in default under any York Material Contract no is any other party to any York
Material Contract in default thereunder except, in each case, for those defaults
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect on York.
Section 1.19. WARRANTIES. The accrual for warranty related expenses
as of December 31, 2000 reported in York's audited financial statement contained
in York's Form 10-K for the year ended December 31, 2000, adequately reflects an
amount required for satisfaction of warranty claims due in respect of goods sold
or services provided by York or any of its Subsidiaries prior to such date. Such
provision has been established in accordance with GAAP. Neither York nor its
Subsidiaries have agreed to provide any express product or service warranties
other than standard warranties, the terms of which have been provided to
Xxxxxxxx and identified as York's standard warranties.
Section 1.20. RESTRICTIONS ON BUSINESS ACTIVITIES. Excepting the
Constituent Agreements and the Vault Agreement, there is no agreement,
commitment, judgment, injunction, order or decree binding upon York or to which
York is a party which has or could reasonably be expected to have the effect of
prohibiting or materially impairing any business practice of York, any
acquisition of property by York or the conduct of business by York as currently
conducted other than such effects, individually or in the aggregate, which have
not had and would not reasonably be expected to have, a Material Adverse Effect
on York.
Section 1.21. REAL PROPERTY. (a) SECTION 2.26 of the York Disclosure
Letter lists each parcel of real property owned in fee by York or any of its
Subsidiaries (the "YORK OWNED PROPERTY"). York or its applicable Subsidiary has
good and indefeasible title in and to all of the York Owned Property, subject to
no Liens that would have a Material Adverse Effect on York or materially impair
York's rights to or ability to use any such property, except as described on
SECTION 2.26(A) of the York Disclosure Letter.
(b) SECTION 2.26(B) of the York Disclosure Letter sets forth a list
of all leases, subleases and other occupancy agreements, including all
amendments, extensions and other modifications (the "YORK LEASES") for real
property (the "YORK LEASED PROPERTY"; the York Owned Property and the York
Leased Property collectively the "YORK REAL PROPERTY") to which York or any of
its subsidiaries is a party. York or its applicable Subsidiary has a valid
leasehold interest in and to all of the York Leased Property, subject to no
Liens except as described in SECTION 2.26(B) of the York Disclosure Letter. Each
York Lease is in full force and effect and is enforceable in accordance with its
terms. There exists no default or condition on the part of York which, with the
giving of notice, the passage of time or both, could become a default under any
York Lease in any case, that would have a Material Adverse Effect on York or
impair York's rights to or ability to use any such property. York has previously
delivered to Xxxxxxxx true and complete copies of all of the York Leases. Except
as described on SECTION 2.26(B) of the York Disclosure Letter, no consent,
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waiver, approval or authorization is required from the landlord under any York
Lease as a result of the execution of this Agreement or the consummation of the
transactions contemplated hereby the failure to obtain would have a Material
Adverse Effect on York or materially impair York's right to or ability to use
any such property.
Section 1.22. RIGHTS PLAN. York has amended its Rights Agreement dated as of
September 28, 2000 between York and Computershare Investor Services, LLC, as
Rights Agent (the "York Rights Agreement") to make the rights thereunder
inapplicable to this Agreement, and all of the transactions contemplated hereby.
After such amendment, and subject to York's rights under Section 5.1, York will
not thereafter amend the York Rights Agreement to make the rights thereunder
applicable to the Merger or so as to make the rights thereunder inapplicable to
any acquisition of York capital stock other than pursuant to this Agreement or
any of the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX
Except as disclosed in the letter delivered to York concurrently
herewith and designated therein as the Xxxxxxxx Disclosure Letter (the "XXXXXXXX
DISCLOSURE LETTER"), in each case with specific reference to the Section to
which exception is taken, Xxxxxxxx and Merger Sub represent and warrant to York
as follows:
Section 3.1. CORPORATE ORGANIZATION. Xxxxxxxx is a company duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Merger Sub is a company duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
Xxxxxxxx and Merger Sub has the corporate power and authority to own or lease
all of its respective properties and assets and to carry on its respective
business as now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the failure to
be so licensed or qualified could not reasonably be expected to have a Material
Adverse Effect on Xxxxxxxx.
Section 3.2. CAPITALIZATION. As of the date hereof, the authorized
capital stock of Merger Sub consists of 1,000 shares of Common Stock, par value
$.01 per share, of which 100 are issued and outstanding. Xxxxxxxx owns, directly
or indirectly, all of the issued and outstanding shares of capital stock of
Merger Sub.
Section 3.3. AUTHORITY; NO VIOLATION. (a) Each of Xxxxxxxx and
Merger Sub has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
requisite action of Xxxxxxxx and Merger Sub. This Agreement has been duly and
validly executed and delivered by Xxxxxxxx and Merger Sub and (assuming due
authorization, execution and delivery by York of this Agreement) constitutes a
valid and binding obligation of each of Xxxxxxxx and Merger Sub, enforceable
against each in accordance with its terms, subject to bankruptcy, insolvency or
other similar laws of general applicability relating to or affecting creditors'
rights generally and to general principles of equity.
(b) Neither the execution and delivery of this Agreement by Xxxxxxxx
or the Merger Sub nor the consummation by Xxxxxxxx or the Merger Sub of the
transactions contemplated hereby, nor compliance by Xxxxxxxx or the Merger Sub
with any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Xxxxxxxx or Merger Sub charter documents or (ii) assuming that
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the consents and approvals referred to in SECTION 3.4 are duly obtained, (x)
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to Xxxxxxxx or any of its Subsidiaries or any of
their respective properties or assets, or (y) violate, conflict with, result in
a breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of Xxxxxxxx or any of its Subsidiaries under, any of the terms,
conditions or provisions of any Material Agreement to which Xxxxxxxx or any of
its Subsidiaries is a party, or by which they or any of their respective
properties or assets may be bound or affected, except (in the case of clause
(ii) above) for such violations, conflicts, breaches or defaults which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Xxxxxxxx.
Section 3.4. CONSENTS AND APPROVALS. Except (i) in connection, or in
compliance, with the provisions of the HSR Act and any filings required under
foreign laws regulating competition, investment or exchange controls, (ii) for
the filing of any required State and Foreign Approvals, (iii) for the filing
with the SEC and The Nasdaq National Market of the Proxy Statement, (iv) for the
filing of the Certificate of Merger with the Secretary of State of Delaware, (v)
those consents listed in SECTION 3.4 of the Xxxxxxxx Disclosure Letter and (vi)
consents, approvals, filings and registrations which if not made or obtained
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Xxxxxxxx or the Merger Sub, no consents or approvals
of or filings or registrations with any Governmental Entity or with any third
party are necessary in connection with (A) the execution and delivery by
Xxxxxxxx and the Merger Sub of this Agreement, and (B) the consummation by
Xxxxxxxx and the Merger Sub of the Merger and the other transactions
contemplated by this Agreement.
Section 3.5. SEC DOCUMENTS AND OTHER REPORTS. Xxxxxxxx has filed all
required documents with the SEC since January 1, 1998 (the "XXXXXXXX SEC
DOCUMENTS"). As of their respective dates, the Xxxxxxxx SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Xxxxxxxx SEC Documents contained any untrue statement of a material
fact or omitted 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. The consolidated financial statements
(including, in each case, any notes thereto) of Xxxxxxxx included in the
Xxxxxxxx SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto as of their respective dates of filing, were
prepared in accordance with the published rules and regulations of the SEC and
fairly presented in all material respects the consolidated financial position of
Xxxxxxxx and its consolidated Subsidiaries as at the respective dates thereof
and the consolidated results of their operations and their consolidated cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments and to any other adjustments described
therein). Except as disclosed in the Xxxxxxxx SEC Documents, Xxxxxxxx has not,
since December 31, 2000, made any change in the accounting practices or policies
applied in the preparation of its financial statements.
Section 3.6. PROXY STATEMENT. None of the information to be supplied
by Xxxxxxxx for inclusion or incorporation by reference in the Proxy Statement
will, at the time of the mailing of the Proxy Statement and at the time of the
Stockholders Meeting, 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 3.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in the Xxxxxxxx SEC Documents filed prior to the date of this
Agreement, since December 31, 2000, (a) Xxxxxxxx and its Subsidiaries, taken as
a whole, have conducted their business in the ordinary course of business and
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have not incurred any material liability or obligation (indirect, direct or
contingent), or entered into any material oral or written agreement or other
transaction, that is not in the ordinary course of business or that could
reasonably be expected to have a Material Adverse Effect on Xxxxxxxx, and (b)
there has been no other event causing a Material Adverse Effect on Xxxxxxxx, nor
any development that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Xxxxxxxx.
Section 3.8. LITIGATION. There is no litigation pending or, to the
knowledge of Xxxxxxxx or Merger Sub, threatened, against Xxxxxxxx or Merger Sub
that could reasonably be expected to have or result in a material adverse effect
on the ability of Xxxxxxxx or Merger Sub to consummate the transactions
contemplated by this Agreement. There are no actions, suits, labor disputes or
other litigation, legal or administrative proceedings or governmental
investigations pending or, to the knowledge of Xxxxxxxx, threatened against or
affecting Xxxxxxxx or any of its Subsidiaries or any of its or their officers,
directors or employees, as such, or any of its or their properties, assets or
business relating to the transactions contemplated by this Agreement.
Section 3.9. BROKERS, FINDERS, ETC. Neither Xxxxxxxx nor Merger Sub
has employed any broker or finder in connection with the transactions
contemplated herein so as to give rise to any claim for any brokerage or
finder's commission, fee or similar compensation.
Section 3.10. VOTE OF STOCKHOLDERS. No vote or approval of any class
of Xxxxxxxx stockholders is required for Xxxxxxxx to execute this Agreement or
to consummate the transactions contemplated herein. Merger Sub has obtained the
unanimous written consent of its sole stockholder approving Merger Sub's
execution of this Agreement and consummation of the transactions contemplated
herein.
Section 3.11. FINANCING. As of the Closing Date, Xxxxxxxx will have
immediately available funds for payment in full of the purchase price per share
for each share of York Common Stock outstanding, in immediately available funds.
ARTICLE IV
CONDUCT OF BUSINESS
Section 4.1. CONDUCT OF YORK. York agrees that from the date hereof
until the Effective Time, except as set forth in SECTION 4.1 of the York
Disclosure Letter, as otherwise contemplated by this Agreement or with the prior
written consent of Xxxxxxxx, York and its Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their reasonable efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Effective Time, except as set forth in
SECTION 4.1 of the York Disclosure Letter or as expressly contemplated by this
Agreement, without the prior written consent of Xxxxxxxx, York will not, and
will not permit any of its Subsidiaries to:
(a) adopt or propose any change in its charter, bylaws or
equivalent documents;
(b) amend any material term of any outstanding security of York or
any of its Subsidiaries, except for outstanding stock option plans or agreements
in order to effectuate Section 1.5(d) herein, and subject to York's rights under
Section 5.1, the York Rights Agreement and the Rights to make them inapplicable
to this Agreement and the Merger;
(c) merge or consolidate with any corporation, limited liability
company, partnership, trust, association, individual or any other entity or
organization ("PERSON");
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(d) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance of, (i)
any shares of capital stock of York or any of its Subsidiaries (other than the
issuance of shares by a wholly-owned Subsidiary of York to York or another
wholly-owned Subsidiary of York), or securities convertible or exchangeable or
exercisable for any shares of such capital stock, or any options, warrants or
other rights of any kind to acquire any shares of such capital stock or such
convertible or exchangeable securities, or any stock appreciation rights or
limited stock appreciation rights, or any other ownership interest of York or
any of its Subsidiaries or (ii) except in the ordinary course of business and in
a manner consistent with past practice (such as the sale of inventory to
customers), any property or assets (tangible or intangible) (including, without
limitation, by merger, consolidation, spinoff or other dispositions of stock or
assets) of York or any of its Subsidiaries (it is understood and agreed that
sales by York of its operating and non-operating assets are not deemed to be in
the ordinary course of business under this subsection (ii)), except in the case
of either clause (i) or (ii) (A) the issuance of York Common Stock upon the
exercise of stock options issued pursuant to the York Stock Plans prior to the
date hereof, (B) pursuant to existing obligations under contracts or agreements
in force at the date of this Agreement and (C) sales or other dispositions of
non-operating property and assets of York and its Subsidiaries; PROVIDED,
HOWEVER, that York shall provide at least ten (10) days prior written notice to
Xxxxxxxx of any such proposed sale or other disposition of non-operating
property or assets; and PROVIDED, FURTHER, that York shall not sell or otherwise
dispose of non-operating property and assets of York and its Subsidiaries in a
manner which includes continuing indemnity obligations by York without the
written consent of Xxxxxxxx, which will not be unreasonably withheld;
(e) create or incur any Lien on any asset (tangible or intangible)
other than in the ordinary course of business and consistent with past practice;
(f) make any loan, advance or capital contributions to or
investments in any Person other than loans, advances or capital contributions to
or investments in wholly-owned Subsidiaries of York made in the ordinary course
and consistent with past practices;
(g) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for dividends paid by any direct or indirect
wholly-owned Subsidiary of York to York or to any other direct or indirect
wholly-owned Subsidiary of York) or enter into any agreement with respect to the
voting of its capital stock;
(h) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(i) (i) acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any interest in any Person or
any division thereof (other than a wholly-owned Subsidiary) or any assets, other
than acquisitions of assets in the ordinary course of business and consistent
with past practice and any other acquisitions for consideration that is not, in
the aggregate, in excess of $200,000, (ii) incur any indebtedness for borrowed
money or guarantee such indebtedness of another Person, or issue or sell any
debt securities or warrants or other rights to acquire any debt security of York
or any of its Subsidiaries, except for (A) indebtedness for borrowed money
incurred in the ordinary course of business and consistent with past practice or
in connection with transactions otherwise permitted under this SECTION 4.1, and
(B) other indebtedness for borrowed money incurred under York 's credit
agreement (or any replacement thereof) for working capital purposes only not to
exceed $15,000,000 at any time outstanding, (iii) terminate, cancel, waive any
rights under or request any material change in, or agree to any material change
in, any material contract or agreement of York or, except in connection with
transactions permitted under this SECTION 4.1(I), enter into any contract or
agreement material to the business, results of operations
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or financial condition of York and its Subsidiaries, taken as a whole, in either
case other than in the ordinary course of business and consistent with past
practice, or (v) enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under this SECTION
4.1(I);
(j) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and consistent
with past practice or except as required by changes in GAAP;
(k) make any material election with respect to Taxes or take any
position on any Tax Return filed on or after the date of this Agreement or adopt
any method therefor that is inconsistent with elections made, positions taken or
methods used in preparing or filing similar Tax Returns in prior periods;
(l) except as may be required by changes in law, contractual
commitments or corporate policies with respect to severance pay, termination pay
or bonus programs in existence on the date hereof, and additional commitments
for retention bonuses of up to $300,000 in the aggregate, (i) increase the
compensation payable or to become payable to its officers or employees (except
for increases in the ordinary course of business and consistent with past
practice in salaries or wages of employees of York or any of its Subsidiaries),
(ii) establish, adopt, enter into or amend any collective bargaining, bonus,
profit sharing, thrift, compensation, employment, termination, severance or
other plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee, except as contemplated by this Agreement or to
the extent required by applicable law or the terms of a collective bargaining
agreement, or (iii) increase the benefits payable under any existing severance
or termination pay policies or employment or other agreements;
(m) take any action that, individually or in the aggregate, makes
any representation and warranty of York hereunder untrue in any material respect
at, or as of any time prior to, the Effective Time; or
(n) agree or commit to do any of the foregoing.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1. NO SOLICITATION. (a) York agrees that it shall not, nor
shall it permit any of its Subsidiaries to, nor shall it authorize any officer,
director or employee or any investment banker, attorney, accountant, agent or
other advisor or representative of York, or any of its respective Subsidiaries
to, (i) solicit, initiate or knowingly encourage the submission of any Takeover
Proposal, (ii) enter into any agreement with respect to a Takeover Proposal or
(iii) participate in any discussions or negotiations regarding, or furnish to
any Person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover Proposal; PROVIDED, HOWEVER,
that to the extent required by the fiduciary obligations of the board of
directors of York as determined in good faith by a majority of the members
thereof (after consultation with outside legal counsel), York may, in response
to unsolicited requests therefor, participate in discussions or negotiations
with, and furnish information pursuant to a confidentiality agreement no less
favorable to such party than the Confidentiality Agreement (as defined in
SECTION 5.4) to, any Person who indicates a willingness to make a Superior
Proposal. York immediately shall cease all existing discussions or negotiations
with any Persons conducted heretofore with respect to, or that could reasonably
be expected to lead to, any Takeover Proposal. For all purposes of this
Agreement, (i) "TAKEOVER PROPOSAL" means any proposal for a merger,
consolidation, share exchange, business combination or other similar transaction
involving York, or any of its Significant Subsidiaries (as hereinafter defined)
or any proposal or offer to acquire, directly or indirectly, an equity interest
in, at least 15% of the voting securities of, or a substantial portion of the
assets of, York or any of its Significant Subsidiaries, other than the
transactions contemplated
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by this Agreement, (ii) "SUPERIOR PROPOSAL" means a bona fide written proposal
made by a third party to acquire all of the outstanding equity interests in or
substantially all of the assets of York pursuant to a tender or exchange offer,
a merger, a share exchange, a sale of all or substantially all its assets or
otherwise on terms which a majority of the members of the board of directors of
York determines in good faith (taking into account the advice of independent
financial advisors) to be more favorable to York and its stockholders than the
Merger , and (iii) a "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would
constitute a "significant subsidiary" within the meaning of Rule 1-02 of
Regulation S-X of the SEC.
(b) Except as otherwise provided in this SECTION 5.1(B), neither the
board of directors of York nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Xxxxxxxx, the
approval or recommendation by the board of directors of York or any such
committee of this Agreement or the Merger or (ii) approve or recommend, or
propose to approve or recommend, any Takeover Proposal. Notwithstanding the
foregoing, (i) the board of directors of York, to the extent required by its
fiduciary obligations, as determined in good faith by a majority of the members
thereof (after consultation with outside legal counsel), may approve or
recommend a Superior Proposal or withdraw or modify its approval or
recommendation of this Agreement or the Merger and (ii) nothing contained in
this Agreement shall prevent the board of directors of York from complying with
Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to a
Takeover Proposal.
(c) York shall notify Xxxxxxxx promptly (but in no event later than
one business day) after receipt by York (or its advisors) of any Takeover
Proposal or any request for nonpublic information in connection with a Takeover
Proposal or for access to the properties, books or records of York by any Person
or entity that informs York that it is considering making, or has made, a
Takeover Proposal. Such notice shall be made orally and in writing. York shall
keep Xxxxxxxx informed, on a current basis, of the status of any such Takeover
Proposal or request.
Section 5.2. PROXY STATEMENT. (a) York shall prepare and file with
the SEC the Proxy Statement at a time which is appropriate in view of the
anticipated Closing Date. The Proxy Statement shall include the recommendation
of the board of directors of York in favor of approval and adoption of this
Agreement and the Merger, except to the extent the board of directors of York,
in accordance with the terms of SECTION 5.1(B), shall have withdrawn or modified
its approval or recommendation of this Agreement and the Merger. Xxxxxxxx shall
assist and cooperate with York in preparing the Proxy Statement and shall
provide York with information required to be disclosed in the Proxy Statement
relating to Xxxxxxxx. York shall use its commercially reasonable efforts to
cause the Proxy Statement to be mailed to its stockholders as promptly as
practicable after SEC approval. If at any time prior to the Effective Time any
event with respect to any party or its officers and directors or any of its
Subsidiaries shall occur that is required to be described in the Proxy
Statement, the parties will work together in good faith to ensure that such
event shall be so described, and an appropriate amendment or supplement shall be
promptly filed with the SEC and, as required by law, disseminated to the
stockholders of York. Each party agrees that the Proxy Statement will comply
(with respect to such party) as to form in all material respects with the
provisions of the Exchange Act.
(b) York and Xxxxxxxx shall make all necessary filings with respect
to the Merger and the transactions contemplated thereby under the Securities Act
and the Exchange Act and applicable "Blue Sky" laws and the rules and
regulations thereunder. No filing of, or supplement to, the Proxy Statement will
be made by York without providing Xxxxxxxx the opportunity to review and comment
thereon. If at any time prior to the Effective Time any information relating to
York or Xxxxxxxx, or any of their respective affiliates, officers or directors,
should be discovered by York or Xxxxxxxx which should be set forth in a
supplement to the Proxy Statement, so that such Proxy Statement would not
include any misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the party which discovers such
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information shall promptly notify the other parties hereto and an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and, to the extent required by law, disseminated to York stockholders.
Section 5.3. STOCKHOLDERS MEETING. York shall duly call, give notice
of, convene and hold a meeting of its stockholders (the "STOCKHOLDERS MEETING")
for the purpose of voting on the adoption of this Agreement and, through its
board of directors, will recommend to its stockholders adoption of this
Agreement, except to the extent that the board of directors of York shall have
withdrawn or modified its approval or recommendation of this Agreement and the
Merger as permitted by SECTION 5.1(B). In a manner consistent with its fiduciary
duties to its stockholders and as it may reasonably determine to be consistent
with the objective of consummating the Merger, York shall use commercially
reasonable efforts to convene the Stockholders Meeting within 45 days of the
Proxy Statement being approved by the SEC. So long as the York board continues
to recommend the Merger, York shall use its commercially reasonable efforts to
solicit from its stockholders proxies in favor of the Merger and to take all
other action necessary or advisable to secure the vote or consent of the
stockholders required to effect the Merger. In the Proxy, York will take all
actions required under the DGCL to notify its stockholders that appraisal rights
are available for York Common Stock pursuant to Section 262 of the DGCL
including sending a copy of Section 262 of the DGCL to its stockholders.
Section 5.4. ACCESS TO INFORMATION. Upon reasonable notice and
subject to applicable law and other legal obligations, York shall, and shall
cause each of its Subsidiaries to, afford to the officers, employees,
accountants, counsel and other representatives of Xxxxxxxx, access, during the
period prior to the Effective Time, to all its properties, books, contracts,
commitments and records and, during such period, York shall, and shall cause
each of its Subsidiaries to, furnish promptly to Xxxxxxxx (a) a copy of each
report, schedule, registration statement and other document filed or received by
it during such period pursuant to the requirements of federal securities laws
and (b) all other information concerning its business, properties and personnel
as Xxxxxxxx may reasonably request. Unless otherwise required by law, the
parties will hold any such information which is nonpublic in confidence in
accordance with Confidentiality Agreement dated as of January 16, 2001 between
York and Xxxxxxxx (the "CONFIDENTIALITY AGREEMENT"). No information or knowledge
obtained in any investigation pursuant to this SECTION 5.4 shall affect or be
deemed to modify any representation or warranty contained in this Agreement or
the conditions to the obligations of the parties to consummate the Merger.
Section 5.5. NOTICES OF CERTAIN EVENTS. (a) York and Xxxxxxxx
shall promptly notify each other of:
(i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement; and
(ii) any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by this Agreement.
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the knowledge of either party, threatened
against, relating to or involving or otherwise affecting either party or
any of their Subsidiaries which, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to SECTION 2.10
or which relate to the consummation of the transactions contemplated by
this Agreement;
(iv) any fact or event which would be reasonably likely to
demonstrate that any representation or warranty of any party hereto
contained in this Agreement was or is untrue
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or inaccurate in any material respect as of the date of this Agreement;
(v) the occurrence or non-occurrence of any fact or event
which would be reasonably likely to cause any material covenant, condition
or agreement of any party hereto under this Agreement not to be complied
with or satisfied in all material respects;
(vi) any failure of any party hereto to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by
it hereunder in any material respect;
PROVIDED, HOWEVER, that no such notification shall affect the
representations or warranties of any party or the conditions to the
obligations of any party hereunder.
Section 5.6. APPROPRIATE ACTION; CONSENTS; FILINGS. (a) Subject to
the terms and conditions of this Agreement and except to the extent that the
board of directors of York shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger, as permitted by SECTION 5.1(B),
York and Xxxxxxxx shall use their reasonable best efforts to (A) take, or cause
to be taken, all actions, and do, or cause to be done, all things, necessary,
proper or advisable under applicable laws to consummate the Merger and the other
transactions contemplated by this Agreement as promptly as practicable, (B)
obtain from any Governmental Entity any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by York and
Xxxxxxxx or any of their Subsidiaries, or to avoid any action or proceeding by
any Governmental Entity (including, without limitation, those in connection with
the HSR Act or other foreign laws or regulations), in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated herein, and (C) make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Merger required under the Securities Act, the Exchange Act and any other
applicable law; PROVIDED, HOWEVER, that York and Xxxxxxxx shall cooperate with
each other in connection with the making of all such filings, including
providing copies of all such documents to the non-filing party and its advisors
prior to filing and, if requested, accepting all reasonable additions, deletions
or changes suggested in connection therewith. York and Xxxxxxxx shall furnish to
each other all information required for any application or other filing to be
made pursuant to the rules and regulations of any applicable law in connection
with the transactions contemplated by this Agreement. Subject to the terms and
conditions of this Agreement and except to the extent that the board of
directors of York shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger, as permitted by SECTION 5.1(b),
York and Xxxxxxxx shall not take any action, or refrain from taking any action,
the effect of which would be to delay or impede the ability of York and Xxxxxxxx
to consummate the transactions contemplated by this Agreement.
(b) Each of Xxxxxxxx and York shall use their reasonable best
efforts to resolve such objections, if any, as may be asserted by any
Governmental Entity with respect to the transactions contemplated by this
Agreement under HSR, the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended,
the Federal Trade Commission Act, as amended, and any other Federal, state or
foreign statutes, rules, regulations, orders or decrees that are designed to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade (collectively, "ANTITRUST Laws"). In
connection therewith, if any administrative or judicial action or proceeding is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Antitrust Law, each of
Xxxxxxxx and York shall cooperate and use their reasonable best efforts to
contest and resist any such action or proceeding and to have vacated, lifted,
reversed, or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent (each, an "ORDER"), that is in effect and
that prohibits, prevents, or restricts consummation of the Merger or any such
other transactions, unless by mutual agreement Xxxxxxxx and York decide that
litigation is not in their respective best interests. Each of Xxxxxxxx and York
shall use their reasonable best efforts to take such action as may be required
to cause the expiration of the notice
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periods under the HSR or other Antitrust Laws with respect to the Merger and the
other transactions contemplated by this Agreement as promptly as possible after
the execution of this Agreement. Xxxxxxxx and York also agree to take any and
all of the following actions to the extent necessary to obtain the approval of
any Governmental Entity with jurisdiction over the enforcement of any applicable
laws regarding the transactions contemplated hereby: entering into negotiations;
providing information required by law or governmental regulation; and complying
with any additional requests for information pursuant to the Antitrust Laws.
(c) (i) York and Xxxxxxxx shall give, or shall cause their
respective Subsidiaries to give, any notices to third parties, and use, and
cause their respective Subsidiaries to use, commercially reasonable efforts to
obtain any third party consents necessary, proper or advisable in order to
consummate the transactions contemplated by this Agreement.
(ii) In the event that either party shall fail to obtain any third
party consent described in Section 5.6(c)(i) above, such party shall use
commercially reasonable efforts, and shall take any such actions reasonably
requested by the other party hereto, to minimize any adverse effect upon York
and Xxxxxxxx, 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.
Section 5.7. PUBLIC DISCLOSURE. York and Xxxxxxxx will consult with
each other before issuing any press release or otherwise making any public
statement with respect to the Merger, this Agreement or the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement without the prior consent of the other party, which shall not
be unreasonably withheld or delayed. York will consult with Xxxxxxxx before
issuing any press releases or making any other public statements containing
forward looking information and shall not issue any such press release or make
any such statement without the prior consent of Xxxxxxxx, which shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, any such press
release or public statement as may be required by applicable law or any listing
agreement with any national securities exchange may be issued prior to
consultation, if the party making such release or statement has used its
reasonable efforts to consult with the other party.
Section 5.8. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) After the
Effective Time, Xxxxxxxx and the Surviving Corporation shall jointly and
severally, to the fullest extent permitted by applicable law, indemnify, hold
harmless, and defend each and every present and former director, officer,
employee, fiduciary, and agent of York and each Subsidiary of York
(collectively, the "INDEMNIFIED PARTIES") from and against all attorneys' fees,
judgments, fines, losses, claims, damages, liabilities, settlement amounts,
costs and expenses ("ADVERSE CONSEQUENCES") in connection with any claim,
action, suit, proceeding or investigation (whether arising or relating to facts
occurring before, at or after the Effective Time), whether civil, administrative
or investigative ("PROCEEDING"), arising out of or pertaining to any action or
omission in their capacity as an officer, director, employee, fiduciary or agent
(including the transactions contemplated by this Agreement) provided that any
determination required to be made with respect to whether an Indemnified Party's
conduct complies with the standards set forth under Delaware law or the
provisions hereunder, as the case may be, shall be made by independent counsel
selected by the Indemnified Party and reasonably acceptable to Xxxxxxxx; and
that nothing herein shall impair any rights or obligations of any Indemnified
Party. In the event that any claim or claims are brought against any Indemnified
Party (whether arising before or after the Effective Time), such Indemnified
Party may select counsel for the defense of such claim, which counsel shall be
reasonably acceptable to York (if selected prior to the Effective Time) and
Xxxxxxxx (if selected after the Effective Time).
(b) For a period of six years from the Effective Time, the Surviving
Corporation and Xxxxxxxx shall provide to the Indemnified Parties liability
insurance protection substantially equivalent in kind and scope as that provided
by York's current directors' and officers' liability insurance policies (copies
of which
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have been made available to Xxxxxxxx); PROVIDED, HOWEVER, that in no event shall
the Surviving Corporation and Xxxxxxxx be required to expend in any one year an
amount in excess of 150% of the annual premiums currently paid by York for such
insurance; PROVIDED, FURTHER, that if during such period the annual premiums for
such comparable insurance coverage exceed such amount, the Surviving Corporation
and Xxxxxxxx shall be obligated to provide a policy which, in the reasonable
judgment of the Surviving Corporation and Xxxxxxxx, provides the best coverage
available for a cost not exceeding such amount.
(c) To the extent there is any Proceeding (whether arising before or after
the Effective Time) against an Indemnified Party that arises out of or pertains
to any action or omission in his or her capacity as director, officer, employee,
fiduciary or agent of York occurring prior to the Effective Time, or arises out
of or pertains to the transactions contemplated by this Agreement for a period
of six years after the Effective Time (whether arising before or after the
Effective Time), in each case for which such Indemnified Party is indemnified
under this SECTION 5.11, such Indemnified Party shall be entitled to be
represented by counsel, reasonable costs and fees of which shall be paid when
due by Xxxxxxxx following the Effective Time. Neither the Surviving Corporation
nor Xxxxxxxx shall be bound by any settlement effected unless one or the other
gives written consent (which consent shall not be unreasonably withheld by
either). In the event that any claim or claims for indemnification are asserted
or made prior to the date that is six years after the Effective Time, all rights
to indemnification and defense in respect to any such claim or claims shall
continue until the disposition of any and all such claims.
(d) If any Indemnified Party is entitled under any provision of this
Agreement to indemnification by Xxxxxxxx or the Surviving Corporation for only a
portion (but not, however, for the total amount) of any Adverse Consequences
actually incurred by Indemnitee in connection with any Proceeding, Xxxxxxxx and
the Surviving Corporation shall nevertheless indemnify such Indemnified Party
for the portion of such Adverse Consequences to which such Indemnified Party is
entitled. If the indemnification provided for herein in respect of any Adverse
Consequences actually incurred by such Indemnified Party in connection with any
Proceeding is finally determined by a court of competent jurisdiction to be
prohibited by applicable law, then Xxxxxxxx and the Surviving Corporation, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable as a result of such Adverse Consequences in such proportion as is
appropriate to reflect (i) the relative benefits received by Xxxxxxxx, the
Surviving Corporation, York and/or any Subsidiary on the one hand and the
Indemnified Party on the other hand from the events, circumstances, conditions,
happenings, actions or transactions from which such Adverse Consequences arose,
(ii) the relative fault of Xxxxxxxx, the Surviving Corporation, York and/or any
Subsidiary (including its representatives) on the one hand and of the
Indemnified Party on the other hand in connection with the events, circumstances
and happenings which resulted in such Adverse Consequences, such relative fault
to be determined by reference to, among other things, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
the events, circumstances and/or happenings resulting in such Adverse
Consequences, and (iii) any other relevant equitable considerations, it being
agreed that it would not be just and equitable if such contribution were
determined by pro rata or other method of allocation which does not take into
account the foregoing equitable considerations.
(e) The indemnification provided herein shall be applicable whether or not
negligence of the Indemnified Party is alleged or proved, and regardless of
whether such negligence be contributory or sole.
(f) If requested to do so by the Indemnified Party with respect to any
Proceeding, Xxxxxxxx shall advance to or for the benefit of the Indemnified
Party, prior to the final disposition of such Proceeding, the expenses actually
incurred by such Indemnified Party in investigating, defending or appealing such
Proceeding. Any judgments, fines or amounts to be paid in settlement of any
Proceeding shall also be advanced by Xxxxxxxx upon request by the Indemnified
Party. Advances made by Xxxxxxxx are subject to refund as provided in the
following paragraph.
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(g) If Xxxxxxxx advances or pays any amount to the Indemnified Party under
this Section and if it shall thereafter be finally adjudicated that the
Indemnified Party was not entitled to be indemnified hereunder for all or any
portion of such amount, then the Indemnified Party shall promptly repay such
amount or such portion thereof, as the case may be, to Xxxxxxxx. If Xxxxxxxx
advances or pays any amount to an Indemnified Party under this Section and if
the Indemnified Party shall thereafter receive all or a portion of such amount
under one or more policies of directors and officers liability insurance, such
Indemnified Party shall promptly repay such amount or such portion thereof, as
the case may be, to Xxxxxxxx.
(h) If any change after the date of this Agreement in any applicable law,
statute or rule expands the power of Xxxxxxxx or the Surviving Corporation to
indemnify any Indemnified Party, such change shall be within the purview of such
Indemnified Party's rights and Matthew's and the Surviving Corporation's
obligations under this Agreement. If any change after the date of this Agreement
in any applicable law, statute or rule narrows the right of Xxxxxxxx or the
Surviving Corporation to indemnify an Indemnified Party, such change shall, to
the fullest extent permitted by applicable law, leave this Agreement and the
parties' rights and obligations hereunder unaffected.
(i) The indemnification and other rights provided by any provisions of
this Agreement shall not be deemed exclusive of any other rights to which any
Indemnified Party may be entitled under (i) any statutory or common law, (ii)
Matthew's, the Surviving Corporation's, York's or any Subsidiary's articles or
certificate of incorporation, (iii) Xxxxxxxx, the Surviving Corporation's,
York's, or any Subsidiary's bylaws, (iv) any other agreement or (v) any vote of
stockholders or disinterested directors or otherwise, both as to action in the
Indemnified Party's official capacity and as to action in another capacity while
occupying any of the positions or having any of the relationships referred to in
this Agreement. Nothing in this Agreement shall in any manner affect, impair or
compromise any indemnification, any Indemnified Party has or may have by virtue
of any agreement previously entered into between such Indemnified Party and
Xxxxxxxx, the Surviving Corporation, York or any Subsidiary.
(j) The indemnification provisions of this SECTION 5.8 of this Agreement
shall inure to the benefit of and be enforceable by (i) each Indemnified Party
and any Indemnified Party's personal or legal representatives, executors,
administrators, heirs, devisees and legatees and (ii) Xxxxxxxx, the Surviving
Corporation, York, the Subsidiaries and their respective successors and assigns.
This SECTION 5.8 shall not inure to the benefit of any other Person. Xxxxxxxx
and the Surviving Corporation agree to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Xxxxxxxx or the Surviving
Corporation, as applicable, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Xxxxxxxx and/or the
Surviving Corporation, as applicable, would be required to perform it if no such
succession had taken place. As used in this Section, the term "Xxxxxxxx" and the
term "Surviving Corporation" shall include any successor to their respective
businesses and/or assets as aforesaid which executes and delivers the assumption
and agreement provided for in this Section or which otherwise becomes bound by
all terms and provisions of this Agreement by operation of law.
Section 5.9. STATE TAKEOVER LAWS. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby, York
shall use its reasonable best efforts to grant such approvals and take such
actions as are necessary so that the transactions contemplated hereby and
thereby may be consummated as promptly as practicable on the terms contemplated
hereby and thereby and otherwise act to minimize the effects of any such statute
or regulation on the transactions contemplated hereby and thereby.
Section 5.10. RIGHTS AGREEMENT. York hereby agrees that it has taken
and will continue to
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take all necessary action to ensure that none of the transactions contemplated
in this Agreement will cause Xxxxxxxx, the Merger Sub or any of Xxxxxxxx'
affiliates or associates to become an Acquiring Person under the York Rights
Agreement or subject to York's rights under Section 5.1, otherwise affect in any
way the rights under the York Rights Agreement, including causing such rights to
separate from the underlying shares or by giving such holders the rights to
acquire securities of any party hereto.
Section 5.11. EMPLOYEES. For at least two (2) years following the
Closing, Xxxxxxxx agrees to provide employee benefits to the employees of York
and its Subsidiaries which are in the aggregate no less favorable than such
benefits that were provided by York and the Subsidiaries as of the Closing. For
these purposes, the employees of York and their Subsidiaries will be given
credit for years of service with York, its subsidiaries and their predecessors
for all employee benefit purposes, with the exception of the defined benefit
pension plans of Xxxxxxxx.
ARTICLE VI
CONDITIONS TO MERGER
Section 6.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to this Agreement to consummate the Merger and the
transactions contemplated hereby shall be subject to the satisfaction of the
following conditions:
(a) STOCKHOLDER APPROVALS. This Agreement and the Merger shall
have been approved and adopted by the stockholders of York.
(b) WAITING PERIODS; APPROVALS. The waiting period applicable
to the consummation of the Merger under the HSR Act shall have expired or
been terminated.
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint shall prohibit the
consummation of the Merger.
Section 6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF YORK. The
obligations of York to consummate the Merger and the transactions contemplated
hereby shall be subject to the satisfaction of the following additional
conditions, any of which may be waived in writing exclusively by York:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Xxxxxxxx set forth in Article III shall be true and correct as of
the date of the Agreement and as of the Closing Date, in each case as though
made on and as of such date (except to the extent any such representation or
warranty expressly speaks as of an earlier date), except for such breaches or
inaccuracies that do not (without giving effect as to any limitation as to
"materiality" or "Material Adverse Effect" set forth therein), individually or
in the aggregate, materially affect the ability of Xxxxxxxx to consummate the
Merger; and York shall have received a certificate signed on behalf of Xxxxxxxx
by an executive officer of Xxxxxxxx to such effect.
(b) PERFORMANCE OF OBLIGATIONS. Xxxxxxxx shall have performed in all
material respects each obligation and agreement and shall have complied in all
material respects with each covenant required to be performed and complied with
by it under this Agreement at or prior to the Effective Time; and York shall
have received a certificate signed on behalf of Xxxxxxxx by an executive officer
of Xxxxxxxx to such effect.
Section 6.3. ADDITIONAL CONDITIONS TO OBLIGATIONS OF XXXXXXXX. The
obligation of Xxxxxxxx to effect the Merger is subject to the satisfaction of
each of the following additional conditions,
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any of which may be waived in writing exclusively by Xxxxxxxx:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of York set forth in Article II shall be true and correct as of the
date of this Agreement and as of the Closing Date, in each case as though made
on and as of such date (except to the extent any such representation or warranty
expressly speaks as of an earlier date), except for such breaches or
inaccuracies that do not (without giving effect as to any limitation as to
"materiality" or "Material Adverse Effect" set forth therein except for any
materiality limitations relating to the disclosure of documents by York),
individually or in the aggregate, have a Material Adverse Effect on York; and
Xxxxxxxx shall have received a certificate signed on behalf of York by an
executive officer of York to such effect. For purposes of determining whether a
Material Adverse Effect on York has occurred, due consideration shall be given
to whether York achieved the Threshold EBITDA.
(b) PERFORMANCE OF OBLIGATIONS. York shall have performed in all
material respects each obligation and agreement and shall have complied in all
material respects with each covenant required to be performed or complied with
by it under this Agreement at or prior to the Effective Time; and Xxxxxxxx shall
have received a certificate signed on behalf of York by an executive officer of
York to such effect.
ARTICLE VII
TERMINATION
Section 7.1. TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time (with respect to SECTIONS 7.1(B) through
7.1(J), by written notice by the terminating party to the other party), whether
before or after approval of the matters presented in connection with the Merger
by the stockholders of York:
(a) by mutual written consent of York and Xxxxxxxx; or
(b) by York or Xxxxxxxx, if the Merger shall not have been
consummated by December 31, 2001 (the "END DATE"); PROVIDED, HOWEVER, that the
right to terminate this Agreement under this SECTION 7.1(B) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before the End Date; and PROVIDED, FURTHER, that the End Date may be
extended by York until five days after the earlier of the expiration or
termination of any applicable waiting period under the HSR Act; or
(c) by York or Xxxxxxxx, if a court of competent jurisdiction or
other Governmental Entity shall have issued a final, non-appealable order,
decree or ruling, or taken any other action, having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger; or
(d) by York or Xxxxxxxx if, at the Stockholders Meeting (including
any adjournment or postponement thereof), the requisite vote of the stockholders
of York in favor of adoption of this Agreement shall not have been obtained; or
(e) by Xxxxxxxx if the Board of Directors of York shall not have
recommended or shall have withdrawn its recommendation of this Agreement and the
Merger, except in the case of 7.1(f) below; or
(f) by Xxxxxxxx or York, if the Board of Directors of York shall
have determined to recommend a Takeover Proposal to its shareholders and to
enter into a binding written agreement concerning such Takeover Proposal after
determining, pursuant to SECTION 5.1, that such Takeover Proposal constitutes a
Superior Proposal; PROVIDED, HOWEVER, that York may not terminate this Agreement
pursuant
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to this SECTION 7.1(F) unless (i) York has delivered to Xxxxxxxx a written
notice of York's intent to enter into such an agreement to effect the Superior
Proposal and (ii) five business days have elapsed following delivery to Xxxxxxxx
of such written notice by York; or
(g) by Xxxxxxxx, if a material breach of or failure to perform any
representation, warranty, covenant or agreement on the part of York set forth in
this Agreement shall have occurred which remains uncured for a period of ten
(10) business days after the notice of such breach or failure and such breach or
failure would cause the conditions set forth in SECTIONS 6.3(A) or 6.3(b) not to
be satisfied, and such conditions are incapable of being satisfied by the End
Date; or
(h) by York, if a material breach of or failure to perform any
representation, warranty, covenant or agreement on the part of Xxxxxxxx set
forth in this Agreement shall have occurred which remains uncured for a period
of ten (10) business days after the notice of such breach or failure and such
breach or failure would cause the conditions set forth in SECTIONS 6.2(A) or
6.2(B) not to be satisfied, and such conditions are incapable of being satisfied
by the End Date; or
(i) by York, if the Threshold EBITDA is achieved and the York
Equity Value is greater than $11 per share; or
(j) by Xxxxxxxx if the Threshold EBITDA is not achieved.
Section 7.2. EFFECT OF TERMINATION. In the event of termination of
this Agreement pursuant to SECTION 7.1, there shall be no liability or
obligation on the part of York, Xxxxxxxx or their respective officers,
directors, stockholders or Affiliates, except as set forth in SECTION 7.3, or
except to the extent that such termination results from willful breach by a
party of any of its representations, warranties, covenants or agreements
contained in this Agreement; PROVIDED, HOWEVER, that the provisions of SECTIONS
7.3 and 7.4, of this Agreement and the Confidentiality Agreement shall remain in
full force and effect and survive any termination of this Agreement.
Section 7.3. FEES AND EXPENSES. (a) Except as set forth in this
SECTION 7.3 or elsewhere in this Agreement, all fees and expenses incurred in
connection with this Agreement and closing the Merger contemplated hereby shall
be paid by the party incurring such expenses, whether or not the Merger is
consummated; PROVIDED, HOWEVER, that York and Xxxxxxxx shall share equally all
fees and expenses, other than attorneys' and accounting fees and expenses,
incurred in relation to the printing and filing of the Proxy Statement
(including any related preliminary materials).
(b) If this Agreement is terminated (i) by Xxxxxxxx pursuant to
Section 7.1(e) and the Threshold EBITDA is achieved and the York Equity Value is
greater than $11 per share, or (ii) by York pursuant to SECTION 7.1(I), York
shall pay to Xxxxxxxx a termination fee of $6,000,000 by wire transfer within
one business day after such termination. If the Threshold EBITDA is achieved and
the York Equity Value is greater than $11 per share, any termination by York
under Section 7.1(d) shall be presumed to be under Section 7.1(i) rather than
Section 7.1(d).
(c) If (i) this Agreement is terminated by York pursuant to SECTION
7.1(D) and either (x) a Takeover Proposal with respect to York shall have been
made after the date of this Agreement and prior to the Stockholders Meeting or
(y) York's Board of Directors shall not have recommended or shall have withdrawn
its recommendation of this Agreement and the Merger or (ii) this Agreement is
terminated by York or Xxxxxxxx pursuant to SECTION 7.1(F), and, in the case of
either (i) or (ii) above, York or its stockholders consummate the sale or
transfer, by way of merger, consolidation or otherwise, of a majority interest
in the equity of York or substantially all of York's assets to any other Person
within nine months of the date of termination of this Agreement, then York shall
pay the $6,000,000 termination fee within one
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day after the closing of such transaction.
(d) If this Agreement is terminated by Xxxxxxxx pursuant to SECTION
7.1(B), 7.1(C), 7.1(D), 7.1(G) (except in the case of an intentional
misrepresentation by York), OR 7.1(J), Xxxxxxxx shall pay to York a termination
fee of $6,000,000 by wire transfer within one business day after such
termination.
(e) If this Agreement is terminated by York pursuant to SECTION
7.1(B), 7.1(C) OR 7.1(H), Xxxxxxxx shall pay York a termination fee of
$6,000,000 by wire transfer within one business day after such termination.
(f) If any party is obligated to pay a termination fee under any of
the subsections of SECTION 7.3 described above, in any such case it shall only
be obligated to pay such fee once. If one party fails to promptly pay to the
other any fee or expense due hereunder, the defaulting party shall pay the costs
and expenses (including reasonable legal fees and expenses) in connection with
any action, including the filing of any lawsuit or other legal action, taken to
collect payment, together with interest on the amount of any unpaid fee at the
publicly announced prime rate of Mellon Bank, N.A. from the date such fee was
required to be paid.
Section 7.4. POST-TERMINATION OBLIGATIONS. In the event of
termination of this Agreement, Xxxxxxxx and Merger Sub shall and shall cause
their Affiliates to return all documents and copies and other materials received
from or on behalf of York, its Affiliates, its Subsidiaries and its agents
relating to the transactions contemplated hereby, whether so obtained before or
after the execution hereof, to York, and York shall and shall cause its
Affiliates to return all documents and copies and other materials received from
or on behalf of Xxxxxxxx and Merger Sub relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to Xxxxxxxx; and all information received or accumulated by the parties hereto
shall be treated as "Confidential Information" in accordance with the
Confidentiality Agreement (as modified or supplemented by this Agreement) which
shall remain in full force and effect, as modified or supplemented by this
Agreement, notwithstanding the termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for covenants and agreements which, by their
terms, are to be performed after the Effective Time. The Confidentiality
Agreement shall survive the execution and delivery of this Agreement but shall
terminate and be of no further force and effect as of the Effective Time.
Section 8.2. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to a nationally recognized overnight courier or when
telecopied (with a confirmatory copy sent by such overnight courier) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
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(a) if to York, to:
The York Group, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Legal Department
Telecopy: 713/984-5569
with copies (which shall not constitute notice) to:
Xxxxx Liddell & Xxxx LLP
Attn: Xxxxx X. Xxxxxx
3400 Chase Tower
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopy: 713/223-3717
and
(b) if to Xxxxxxxx, to:
Xxxxxxxx International Corporation
Two XxxxxXxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, CFO
Facsimile No.: 412/442-8290
with copies (which shall not constitute notice) to:
Xxxx Xxxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Xx.
Facsimile No.: 412/288-3063
Section 8.3. INTERPRETATION AND CONSTRUCTION, SEVERABILITY;
INTERPRETATION OF OBLIGATIONS.
(a) INTERPRETATION AND CONSTRUCTION. Xxxxxxxx and York have
participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by Xxxxxxxx and York and no presumption or
burden of proof shall arise favoring or disfavoring either Xxxxxxxx or York
because of the authorship of any of the provisions of this Agreement. Any
reference to any United States Federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Unless the context of this
Agreement otherwise requires, (a) words of any gender are deemed to include each
other gender; (b) words using the singular or plural number also include the
plural or singular number, respectively; (c) the terms "hereof," "herein,"
"hereby," "hereto," and derivative or similar words refer to this entire
Agreement; (d) the terms "ARTICLE" or "Section" refer to the specified ARTICLE
or Section of this Agreement; (e) the term "party" means, on the one hand,
Xxxxxxxx, on the other hand, York, (f) the word "including" means "including
without limitation"; and (g) all references to "dollars" or "$" refer to
currency of the United States of America. The exhibits and schedules specified
in this Agreement are incorporated herein by reference and made a part hereof.
The article and section
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headings hereof are for convenience only and shall not affect the meaning or
interpretation of this Agreement.
(b) SEVERABILITY. The invalidity or unenforceability of one or
more of the provisions of this Agreement in any situation in any jurisdiction
shall not affect the validity or enforceability of any other provision hereof or
the validity or enforceability of the offending provision in any other situation
or jurisdiction.
(c) INTERPRETATION OF OBLIGATIONS. Notwithstanding anything in
this Agreement to the contrary, Xxxxxxxx shall not be permitted to terminate
this Agreement solely because of an Order to divest any business, product line
or assets, regardless of whether such action could result in a Material Adverse
Effect on York, Xxxxxxxx or the benefits to Xxxxxxxx of the consummation of the
Merger. Xxxxxxxx agrees to divest such business, product line or assets, as the
case may be, pursuant to such Order, or as may be required to cause the
expiration of the notice periods under the HSR or other Antitrust Laws, after an
opportunity to negotiate, contest or appeal any such Order or requirement;
PROVIDED, HOWEVER, that such right of Xxxxxxxx to negotiate, contest or appeal
shall not extend beyond December 20, 2001.
Section 8.4. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 8.5. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (including the documents and the instruments referred to herein), (a)
constitute the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in SECTION 5.8 and SECTION
5.11 of this Agreement and this SECTION 8.5, are not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder or
thereunder.
Section 8.6. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under the applicable principles of
conflicts of laws thereof.
Section 8.7. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, and any attempted assignment thereof
without such consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
Section 8.8 AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective boards of directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of York, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
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Section 8.9 EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto may, to the extent legally allowed, (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto contained herein, (ii) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered hereto and (iii) waive compliance with any of the agreements or
conditions of the other parties hereto contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
Section 8.10 CONSENT TO JURISDICTION: APPOINTMENT OF AGENT FOR
SERVICE OF PROCESS. Each party hereto hereby (a) submits to the jurisdiction of
any court of the State of Delaware and the Federal courts sitting in the State
of Delaware with respect to such matters arising out of or relating to, this
Agreement and the transactions contemplated hereby, (b) agrees that all claims
with respect to such action or proceeding may be heard and determined in such
Delaware state or Federal court, (c) waives the defense of an inconvenient forum
in connection therewith, (d) consents to service of process upon it by mailing
or delivering such service to CT Corporation System, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx (the "AGENT") and authorizes and directs its Agent to
accept such service, (e) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law, and (f) to the
extent that it or its properties have or hereafter may acquire immunity from
jurisdiction of any such court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise), waives such immunity in respect of its obligations
under this Agreement.
[Signature page to follow]
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IN WITNESS WHEREOF, Xxxxxxxx, Merger Sub and York have caused this
Merger Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
XXXXXXXX INTERNATIONAL CORPORATION
By:
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Name:
----------------------------------
Title:
---------------------------------
EMPIRE MERGER CORP.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE YORK GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit 1.5(x)
COST OF YORK STOCK OPTIONS AND DEFERRED STOCK CALCULATION
C= Q ($10 + Y - P) Given that C cannot be less than zero, nor can it exceed
--------------- Q($11 - P).
1 + Q/S
This amount is the cost of settling the York Stock Options and Deferred
Stock (Item "E" in Excess Cash Increment Calculation).
Y= Excess Cash Increment, excluding the per share impact of the cost of
settling the York Stock Options and Deferred Stock.
Q= Shares corresponding to outstanding stock options as of October 31, 2001
which have exercise prices less than $11.00 per share and the total number
of shares of deferred stock.
P= Weighted Average Exercise Price for shares corresponding to outstanding
stock options which have exercise prices less than $11.00 per share,
including an exercise price of zero for any shares of deferred stock.
S = Outstanding Shares as of October 31, 2001.
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Exhibit 1.5(y)
THE YORK GROUP, INC.
AGREED UPON PROCEDURES
Perform the procedures outlined below, summarizing all adjustments greater than
$10,000.
I. Perform SAS 71 Review as of September 30, 2001
II. Inventory
1) Perform the following physical inventory procedures as of
September 30, 2001
o Perform 50 test counts at all locations with inventory in
excess of $500,000 (25 counts sheet to floor and 25 counts
floor to sheet)
o Obtain a comparative analysis of inventory by location as of
September 30, 2001 and October 31, 2001 and investigate
variances greater than 10%.
2) Perform testing of inventory cut-off as of October 31, 2001 for each
location where test counts are performed.
o Review shipping documents, invoices and general ledger entries
for last five shipments of October 2001 and first five
shipments of November 2001, noting that cut-off is proper
based on shipping document dates.
o Review receiving documents and general ledger entries for last
five receipts of October 2001 and first five receipts of
November 2001, noting that general ledger cut-off is proper
based on receiving document dates.
3) Perform inventory price testing on a FIFO basis for 25 items at each
location where test counts are performed.
o Compare inventory pricing as of October 31, 2001 to the
pricing used at December 31, 2000 and investigate differences
in excess of 10%.
III. Accounts Receivable
1) Obtain reconciliation of the accounts receivable sub-ledger and
general ledger as of August 31, 2001 and investigate all reconciling
items in excess of $25,000.
2) Perform the following procedures on accounts receivable as of August
31, 2001
o Confirm accounts receivable balances greater than $50,000
o For all non-replies, review subsequent receipts greater than
$5,000 through October 31, 2001
o For non-replies for which there are no subsequent receipts,
review invoices and shipping documents for two invoices
(judgmentally selected)
3) Review rollforward of accounts receivable sub-ledger from August 31,
2001 to October 31, 2001.
o Obtain a detail of xxxxxxxx and cash receipts from August 31,
2001 to October 31, 2001 and examine supporting documentation
for 25 xxxxxxxx and 25 cash receipts.
IV. Accounts Payable and Accrued Liabilities
1) Obtain reconciliation between accounts payable sub-ledger and
general ledger as of August 31, 2001 and investigate all reconciling
items in excess of $25,000.
2) Perform a test of subsequent disbursements
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o For disbursements greater than $25,000 made after August 31,
2001 through October 31, 2001, (excluding rebate payments),
review check copy, related invoice and sub-ledger detail,
noting that disbursements for goods or services received prior
to August 31, 2001 are accrued at August 31, 2001.
o Obtain a comparative analysis of payables and accruals as of
August 31, 2001 and October 31, 2001 and investigate all
variances in excess of 10%.
V. Current Assets
1) Review check copy and invoice support for current asset balances as
of August 31, 2001, for which the balance increased by more than
$25,000 from December 31, 2000, exclusive of operations sold during
2000.
2) Obtain rollforward of current asset balances from August 31, 2001 to
October 31, 2001 and review check copy and invoice support for
individual current asset additions in excess of $25,000.
3) Verify amortization for applicable current asset balances in excess
of $25,000 as of October 31, 2001.
VI. Perform the Following Additional Procedures as of October 31, 2001
1) Recompute the Company's calculations of "Working Capital," "Adjusted
EBITDA," and "York Cash," as defined in the Merger Agreement.
Recomputations will be based on the Company's reported financial
results, as provided by management, subject to adjustments resulting
from the above procedures.
VII. Review the components of working capital as of September 30, 2001 and
investigate any changes in underlying general ledger account balances that
exceed 10% and $50,000 of the corresponding balance at December 31, 2000.
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