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EXHIBIT 2.3
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") is entered into as
of May 21, 1998 by and among Staples, Inc., a Delaware corporation (the
"BUYER"), Staples Illinois, Inc., a Delaware corporation and a wholly owned
subsidiary of the Buyer (the "TRANSITORY SUBSIDIARY"), Milbro, Inc., a Delaware
corporation (the "COMPANY"), and those stockholders of the Company listed on
EXHIBIT A hereto, each of which is a signatory hereto (the "COMPANY
STOCKHOLDERS"). The Buyer, the Transitory Subsidiary, the Company and the
Company Stockholders are referred to collectively herein as the "PARTIES".
This Agreement contemplates a tax-free merger of the Transitory
Subsidiary into the Company. In such merger, the Company Stockholders will
receive capital stock of the Buyer in exchange for their capital stock of the
Company.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the Parties agree as follows.
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon and subject to the terms and conditions of
this Agreement, the Transitory Subsidiary shall merge with and into the Company
(with such merger referred to herein as the "MERGER") at the Effective Time (as
defined below). From and after the Effective Time, the separate corporate
existence of the Transitory Subsidiary shall cease and the Company shall
continue as the surviving corporation of the Merger (the "SURVIVING
CORPORATION"). The "EFFECTIVE TIME" shall be the time at which the Surviving
Corporation files a certificate of merger or other appropriate documents
prepared and executed in accordance with the relevant provisions of the Delaware
General Corporation Law (the "CERTIFICATE OF MERGER") with the Secretary of
State of the State of Delaware. The Merger shall have the effects set forth in
Section 259 of the Delaware General Corporation Law.
1.2 THE CLOSING. Subject to Sections 7.1(c) and 7.1(d), the
closing of the transactions contemplated by this Agreement (the "CLOSING") shall
take place at the offices of Xxxx and Xxxx LLP in Boston, Massachusetts,
commencing at 9:00 a.m. local time on the Closing Date, as defined in the
Agreement and Plan of Merger dated as of April 6, 1998, as amended (the "MERGER
AGREEMENT"), by and among the Buyer, Quill Corporation ("QUILL"), Musketeer
Acquisition Corp. and certain stockholders of Quill, or at such other place and
time as the parties shall mutually agree in writing.
1.3 ACTIONS AT THE CLOSING. At the Closing:
(i) the Company and the Company Stockholders
shall deliver to the Buyer and the Transitory Subsidiary the various
certificates, instruments and documents referred to in Section 5.1;
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(ii) the Buyer and the Transitory Subsidiary
shall deliver to the Company and the Company Stockholders the various
certificates, instruments and documents referred to in Section 5.2;
(iii) the Surviving Corporation shall file with
the Secretary of State of the State of Delaware the Certificate of Merger;
(iv) each Company Stockholder shall deliver to
the Buyer the certificate(s) representing its Company Shares (as defined below);
(v) the Buyer shall deliver certificates for the
Merger Shares (as defined below) to each Company Stockholder in accordance with
Section 1.5; and (vi) the Buyer shall, on behalf of the Company, pay the Loan
Amount (as defined below) to the Lender.
1.4 ADDITIONAL ACTION. The Surviving Corporation may, at any time
after the Effective Time, take any action, including executing and delivering
any document, in the name and on behalf of either the Company or the Transitory
Subsidiary, in order to consummate the transactions contemplated by this
Agreement.
1.5 CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part of any Party or the holder of any of
the following securities:
(i) Each share of common stock, without
par value, of the Company (the "COMPANY SHARES") issued and outstanding
immediately prior to the Effective Time (other than Company Shares held in the
Company's treasury and other than Dissenting Shares (as defined below)) shall be
converted into and represent the right to receive (subject to the provisions of
Sections 1.6 and 5.1(e)) such number of shares of common stock, $.0006 par value
per share, of the Buyer (including the associated 16/81sts of a right issuable
pursuant to the Rights Agreement dated as of February 3, 1994 between the Buyer
and BankBoston, N.A., as rights agent, collectively, "BUYER COMMON STOCK") as is
equal to the Conversion Ratio. The "CONVERSION RATIO" shall be the result
(rounded down to six decimal places) obtained by subtracting from $49,000,000
(the "PURCHASE PRICE") the Loan Amount (as defined in subparagraph (iv) below),
the Taxes and Utilities Amount (as defined in Section 8.1), the Rent Proration
Amount (as defined in Section 8.2) and the Expense Amount (as defined in Section
9.11) (the difference being referred to as the "NET PURCHASE PRICE") and then
dividing (1) the sum of (a) 50% of the Net Purchase Price divided by $22 plus
(b) the number determined by dividing (x) 50% of the Net Purchase Price by (y)
the average of the last reported sale prices per share of the Buyer Common Stock
on the Nasdaq National Market over the 20 consecutive trading days ending on the
trading day that is three trading days prior to the Closing Date, by (2) the
number of outstanding Company Shares immediately prior to the Effective Time;
PROVIDED that the Conversion Ratio shall be subject to equitable adjustment in
the event of any reclassification, recapitalization, stock split, stock
dividend, reverse stock split, exchange of shares or other similar events
affecting the
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Buyer Common Stock between the date hereof and the Closing. The shares of Buyer
Common Stock into which the Company Shares are converted pursuant to this
Section 1.5 shall be referred to herein as the "MERGER SHARES."
(ii) Each Company Share held in the
Company's treasury immediately prior to the Effective Time shall be cancelled
and retired without payment of any consideration therefor.
(iii) Each share of common stock, $.01 par
value per share, of the Transitory Subsidiary issued and outstanding immediately
prior to the Effective Time shall be converted into and thereafter evidence one
share of common stock, $.01 par value per share, of the Surviving Corporation.
(iv) "LOAN AMOUNT" shall mean all amounts
required to be paid by the Company to American National Bank and Trust Company
of Chicago ("LENDER") in order to satisfy all of the Company's obligations to
Lender as of the Effective Time under that certain loan in the original
principal amount of $6,000,000 (the "LOAN"), including without limitation the
principal outstanding, and all interest accrued thereon, as of the date of
Closing.
(v) "DISSENTING SHARES" shall mean
Company Shares held as of the date of this Agreement by any stockholder of the
Company (other than a Company Stockholder) who has not voted such Company Shares
in favor of the adoption of the Agreement and the Merger and with respect to
which appraisal shall have been duly demanded in accordance with Section 262 of
the Delaware General Corporation Law. The Company shall not, except with the
prior written consent of the Buyer, settle, or offer to settle, any demand for
appraisal by a holder of Dissenting Shares.
1.6 FRACTIONAL SHARES. No certificates or scrip representing
fractional Merger Shares shall be issued to Company Stockholders, and such
Company Stockholders shall not be entitled to any voting rights, rights to
receive any dividends or distributions or other rights as a stockholder of the
Buyer with respect to any fractional Merger Shares that would otherwise be
issued to such Company Stockholders. In lieu of any fractional Merger Shares
that would otherwise be issued, each Company Stockholder that would have been
entitled to receive a fractional Merger Share shall receive such whole number of
Merger Shares as is equal to the number of Merger Shares to which such person
would be entitled, rounded up or down to the nearest whole number (with a
fractional interest equal to .5 rounded to the nearest odd number).
1.7 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation
of the Surviving Corporation immediately following the Effective Time shall be
the same as the Certificate of Incorporation of the Transitory Subsidiary
immediately prior to the Effective Time, except that the reference therein to
the identity of the sole incorporator shall be deleted.
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1.8 BY-LAWS. The By-laws of the Surviving Corporation immediately
following the Effective Time shall be the same as the By-laws of the Transitory
Subsidiary immediately prior to the Effective Time.
1.9 NO FURTHER RIGHTS. From and after the Effective Time, no
Company Shares outstanding prior to the Effective Time shall be deemed to be
outstanding, and holders of certificates formerly representing Company Shares
shall cease to have any rights with respect thereto, except as provided herein
or by law.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE COMPANY STOCKHOLDERS
The Company and each of the Company Stockholders jointly and severally
represent and warrant to the Buyer and the Transitory Subsidiary that the
statements contained in this Article II are true and correct, except as set
forth in the disclosure schedule provided by the Company and the Company
Stockholders to the Buyer on the date hereof (the "DISCLOSURE SCHEDULE"). The
Disclosure Schedule shall be arranged in paragraphs corresponding to the
numbered and lettered paragraphs contained in this Article II, and the
disclosures in any paragraph of the Disclosure Schedule shall qualify other
paragraphs in this Article II only to the extent it is clear from a reading of
the disclosure that such disclosure is applicable to such other paragraphs.
2.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. The Company
is a corporation duly organized, validly existing and in corporate and franchise
tax good standing under the laws of the State of Delaware. The Company is duly
qualified to conduct business and is in corporate and franchise tax good
standing under the laws of each jurisdiction in which the nature of its
businesses or the ownership or leasing of its properties requires such
qualification, except for any such failure to be so qualified and in good
standing that would not, either individually or in the aggregate, have a Company
Material Adverse Effect (as defined below). The Company has all requisite
corporate power and authority to carry on the business in which it is engaged.
The Company has furnished to the Buyer true and complete copies of its
Certificate of Incorporation and By-laws, each as amended and as in effect on
the date hereof. The Company is not in default under or in violation of any
provision of its Certificate of Incorporation or By-laws. When used in this
Article II or elsewhere in this Agreement in connection with the Company, the
term "COMPANY MATERIAL ADVERSE EFFECT" means any change, event or effect that is
materially adverse to the value of the Property (as hereinafter defined) or the
ability to use the Property for the uses contemplated under the lease to Quill
dated as of May 15, 1981, as amended (the "QUILL LEASE"), excluding any changes
in general economic conditions in the general economy as a whole, or that
adversely affects the ability of the Company to consummate the Merger.
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2.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
1,000 shares of common stock, without par value, of which 300 shares are issued
and outstanding and no shares are held in the treasury of the Company. Section
2.2 of the Disclosure Schedule sets forth a complete and accurate list of all
stockholders of the Company, indicating the number and class of Company Shares
held by each stockholder. All of the issued and outstanding Company Shares are
duly authorized, validly issued, fully paid, nonassessable and free of all
preemptive rights that have not been, or will not prior to the Effective Time
be, duly waived. Except as set forth in this Agreement, there are no (i)
outstanding or authorized options, warrants, rights, agreements or commitments
to which the Company is a party or which are binding upon the Company providing
for the issuance, disposition or acquisition of any of its capital stock, or
(ii) stock appreciation, phantom stock or similar rights with respect to the
Company, or (iii) agreements, voting trusts, proxies, or understandings with
respect to the voting, or registration under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), of any Company Shares. All of the issued and
outstanding Company Shares were issued in compliance with applicable federal and
state securities laws.
(b) Each Company Stockholder has good and marketable title to
the Company Shares listed in Section 2.2 of the Disclosure Schedule as being
owned by it, and at the Effective Time, all such Company Shares will be free and
clear of any lien, pledge, charge, claim, right, interest, mortgage, security
interest, contractual restriction or covenant, option or other encumbrance or
adverse claim, in each case whether arising by contract or by operation of law
(an "ENCUMBRANCE").
2.3 AUTHORIZATION OF TRANSACTION. The Company and each Company
Stockholder has all requisite power and authority to execute and deliver this
Agreement and to perform its respective obligations hereunder. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of the Company. Without limiting the
generality of the foregoing: (a) the Board of Directors of the Company, at a
meeting duly called and held, by the unanimous vote of all directors, or by the
unanimous written consent of the directors, (i) determined that the Merger is
fair and in the best interests of the Company and its stockholders, (ii) adopted
this Agreement in accordance with the provisions of the Delaware General
Corporation Law, and (iii) directed that this Agreement and the Merger be
submitted to the stockholders of the Company for their adoption and approval and
recommended that the stockholders of the Company vote in favor of the adoption
of this Agreement and the approval of the Merger; (b) the Company provided to
each holder of common stock of the Company, prior to the vote by the
stockholders of the Company with respect to the Merger and this Agreement,
copies of the Buyer Reports (as defined in Section 3.5) and all information
required under the Delaware General Corporation Law concerning their appraisal
rights; and (c) the holders of the requisite percentage of the
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Company's outstanding common stock have duly approved this Agreement and the
Merger, in accordance with the provisions of the Delaware General Corporation
Law, by written consent, and otherwise consented to, this Agreement, the Merger
and each of the other transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Company and each Company
Stockholder and constitutes a valid and binding obligation of the Company and
each Company Stockholder, enforceable against the Company and each Company
Stockholder in accordance with its terms, subject to (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting or relating to creditors'
rights generally and (ii) the availability of injunctive relief and other
equitable remedies.
2.4 NONCONTRAVENTION. Subject to compliance with the applicable
requirements of the Securities Act and any applicable state securities laws, the
terms and conditions of any Permitted Encumbrances (as hereinafter defined) and
the filing of the Certificate of Merger as required by the Delaware General
Corporation Law, neither the execution and delivery of this Agreement by the
Company or any of the Company Stockholders, nor the consummation by the Company
or any of the Company Stockholders of the transactions contemplated hereby, will
(i) conflict with or violate any provision of the charter or By-laws of the
Company, (ii) require on the part of the Company or any of the Company
Stockholders any filing with, or any permit, authorization, consent or approval
of, any court, arbitrational tribunal, administrative agency or commission or
other governmental or regulatory authority or agency (a "GOVERNMENTAL ENTITY"),
(iii) conflict with, result in a breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any material contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness or other arrangement to
which the Company or any of the Company Stockholders is a party or by which any
is bound or to which any or all of their assets or properties are subject,
except to the extent any such conflict, breach, default, acceleration,
termination, modification or cancellation, or the failure to give or obtain any
such notice, consent or waiver, would not have a Company Material Adverse
Effect, (iv) result in the imposition of any Encumbrance upon the Company Shares
or the Property or any other material assets or properties of the Company or (v)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company, any of the Company Stockholders or any of their
respective assets or properties, which violation could reasonably be expected to
have a Company Material Adverse Effect.
2.5 SUBSIDIARIES. The Company owns no equity interest in any
corporation, partnership, limited liability company or other entity.
2.6 [intentionally omitted]
2.7 [intentionally omitted]
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2.8 LIABILITIES. As of the date hereof, except as set forth in
Section 2.8 of the Disclosure Schedule, the Company has no liabilities (whether
known or unknown, whether absolute or contingent, whether liquidated or
unliquidated and whether due or to become due) except for liabilities under the
Quill Lease, liabilities for which Quill is responsible under the Quill lease
and liabilities in connection with the Loan. The foregoing is not intended and
shall not be construed to expand the representations and warranties set forth in
Section 2.22.
2.9 TAX MATTERS.
(a) The Company has filed on a timely basis all Tax Returns
(as defined below) that it was required to file and all such Tax Returns were
correct and complete in all material respects. The Company has paid, or will
pay, on a timely basis all Taxes (as defined below) imposed on the Company and
due on or before the Closing Date, whether or not shown to be due on any such
Tax Returns. The Company does not have accruals or reserves for Taxes. Except in
connection with the assessment of the Property under a "Property Identification
Number" that includes certain other real property owned by one or more
affiliates of the Company, the Company has no actual liability for any Tax
obligations of any other taxpayer (including without limitation any affiliated
group of corporations or other entities that included the Company during a prior
period). All Taxes that the Company is or was required by law to withhold or
collect have been duly withheld or collected and, to the extent required, have
been paid to the proper Governmental Entity. For purposes of this Agreement,
"TAXES" means all taxes, charges, fees, levies or other similar assessments or
liabilities, including without limitation income, gross receipts, ad valorem,
premium, value-added, excise, severance, stamp, occupation, windfall profits,
real property, personal property, sales, use, transfer, withholding, employment,
unemployment insurance, social security, business license, business
organization, environmental, payroll and franchise taxes imposed by the United
States of America or any state, local or foreign government, or any agency
thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any tax or any
contest or dispute thereof. For purposes of this Agreement, "TAX RETURNS" means
all reports, returns, declarations, statements, forms or other information
required to be supplied to a taxing authority in connection with Taxes.
(b) The Company was incorporated on April 1, 1998 and, as of
the date hereof, the Company has not been required to, and has not, filed any
Tax Returns. Except as set forth in Section 2.9(b) of the Disclosure Schedule,
the Company has not waived any statute of limitations with respect to taxes or
agreed to an extension of time with respect to an assessment of or deficiency in
Taxes.
(c) The Company is not a "consenting corporation" within the
meaning of Section 341(f) of the Internal Revenue Code of 1986, as amended (the
"CODE"), and none of the assets of the Company is subject to an election under
Section 341(f) of the Code. The Company has not been a United States real
property
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holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(l)(A)(ii) of the Code.
(d) Other than the Quill Lease, the Company is not a party to
any Tax allocation or sharing agreement or Tax indemnity agreement. The Company
has never filed Tax Returns on a combined, consolidated or unitary basis with
any other business entity in any jurisdiction or has otherwise been liable, by
contract or otherwise, for any Taxes of any other business entity. The Company
has not participated in or cooperated with, nor will it, prior to the Closing
Date, participate in or cooperate with, an international boycott within the
meaning of Section 999 of the Code. Except as set forth in Section 2.9(d) of the
Disclosure Schedule, the Company is not a party to any agreement, contract,
arrangement or plan that has resulted, or would result, separately or in the
aggregate, in the payment of any excess "parachute payments" within the meaning
of Section 280G of the Code.
(e) The Company is not and has never been a member of an
"affiliated group" of corporations (within the meaning of Section 1504 of the
Code).
(f) The Company is a not party to any tax litigation nor, to
the knowledge of the Company and any Company Stockholder, the subject of any tax
audit. The Company Stockholders have no reason to suspect any tax litigation
attributable to periods ended before or including the Closing Date.
Classifications, definitions, valuation and principles used in the accounts of
the Company are in accordance with classifications, definitions, valuations and
principles used in the Tax Returns of the Company. To the knowledge of the
Company and any Company Stockholder, the Company is not and has never been a
party to any transaction or agreement which is in conflict with the tax rules on
transfer pricing in any relevant jurisdiction.
(g) Since April 1, 1998, the Company has been an S corporation
pursuant to an election validly made under Subchapter S of the Code (which
election has not been revoked or terminated) and the Company has not been
subject to federal income taxes for such periods.
(h) The Company is not required, and will not be required, to
include any adjustment in taxable income for any Tax period prior to the Closing
Date (or portion thereof) as a result of the Merger, a termination of the
Company's S corporation status or accounting methods employed prior to such
termination.
(i) The Company has not agreed to make, nor is it required to
make, any adjustments under Section 481(a) of the Code by reason of a change in
accounting method or otherwise.
2.10 ASSETS. Other than the Property (as defined in Section 2.11),
the Company holds no rights in any assets of any kind.
2.11 OWNED PROPERTY. The Company owns fee simple title to the
following real property and holds good and marketable title to the personal
property described
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below (hereinafter collectively called the "PROPERTY") free and clear of all
liens and encumbrances other than the Permitted Encumbrances (defined in Section
5.1(e)):
(a) All that certain property located in Lincolnshire, Lake
County, Illinois, as more particularly described in EXHIBIT B attached hereto,
together with all easements, rights and privileges appurtenant thereto
(hereinafter called the "LAND");
(b) The building situated on the Land, together with all
improvements appurtenant thereto, located at 000 Xxxxx Xxxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000 (hereinafter called the "BUILDING"; the Building
and such appurtenant improvements being hereinafter collectively called the
"IMPROVEMENTS", and the Land and the Improvements being hereinafter collectively
called the "REAL PROPERTY");
(c) All fixtures, equipment, supplies and other personal
property of every nature and description attached or pertaining to, or otherwise
used in connection with, the Real Property, and located within the Real
Property, other than any such property owned or leased by Quill or any of its
employees or agents (hereinafter called the "PERSONALTY"); and
(d) All intangible property used in connection with the
foregoing, other than intangible property owned or leased by Quill, including,
without limitation, all contract rights, unexpired guarantees and warranties,
and transferrable licenses and permits held by the Company or to which the
Company is a party (hereinafter called the "INTANGIBLE PROPERTY").
2.12 REAL PROPERTY LEASES; USE. Except for the Quill Lease, a true,
correct and complete copy of which has been delivered by the Company to the
Buyer, there are no leases or other occupancy agreements encumbering the
Property and, subject to the Permitted Encumbrances, no person or party other
than Quill has any right to occupancy or possession of any portion of the
Property. The Property is used solely for the business operations of Quill,
subject to the Permitted Encumbrances. No security deposit is required or is
being held under the Quill Lease.
2.13 [intentionally omitted]
2.14 [intentionally omitted]
2.15 CONTRACTS. Except for the Quill Lease and the Permitted
Encumbrances, there are no material construction management, leasing, service,
equipment, supply, maintenance or other agreements of any kind entered into by
the Company.
2.16 [intentionally omitted]
2.17 [intentionally omitted]
2.18 [intentionally omitted]
2.19 LITIGATION. Except as set forth in Schedule 2.19 of the
Disclosure Schedule, there is no action, suit, proceeding or claim before any
Governmental Entity or arbitrator pending, or, to the knowledge of the Company
and the Company Stockholders, threatened against the Company, any of its
officers or directors (in their
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capacities as such) or the Property that, individually or in the aggregate, is
reasonably likely to have a Company Material Adverse Effect. There is no
judgment, injunction, decree or order against the Company that is reasonably
likely to have a Company Material Adverse Effect.
2.20 [intentionally omitted]
2.21 [intentionally omitted]
2.22 ENVIRONMENTAL MATTERS.
(a) To the knowledge of the Company and the Company
Stockholders, the Company has complied in all material respects with all
applicable Environmental Laws (as defined below). There is no pending or, to the
knowledge of the Company and the Company Stockholders, threatened civil or
criminal litigation, written notice of material violation, formal administrative
proceeding, or investigation, inquiry or information request by any Governmental
Entity, relating to any Environmental Law involving the Company. For purposes of
this Agreement, "ENVIRONMENTAL LAW" means any federal, state or local law,
statute, rule or regulation or the common law relating to the environment or
occupational health and safety, including without limitation any statute,
regulation or order pertaining to (i) treatment, storage, disposal, generation
and transportation of industrial, toxic or hazardous materials or substances or
solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater
and soil contamination; (iv) the release or threatened release into the
environment of industrial, toxic or hazardous materials or substances, or solid
or hazardous waste, including without limitation emissions, discharges,
injections, spills, escapes or dumping of pollutants, contaminants or chemicals;
(v) the protection of wildlife, marine life and wetlands, including without
limitation all endangered and threatened species; (vi) storage tanks, vessels,
abandoned or discarded barrels, and other closed receptacles; (vii) health and
safety of employees and other persons; and (viii) manufacture, processing, use,
distribution, treatment, storage, disposal, transportation or handling of
pollutants, contaminants, toxic or hazardous materials or substances or oil or
petroleum products or solid or hazardous waste. As used above, the terms
"release" and "environment" shall have the meaning set forth in the federal
Comprehensive Environmental Response, Compensation and Liability and Response
Act of 1980 ("CERCLA").
(b) To the knowledge of the Company and the Company
Stockholders, there have been no releases of any Materials of Environmental
Concern (as defined below) into the environment at any parcel of real property
or any facility formerly or currently owned, operated or controlled by the
Company, except in compliance with Environmental Laws. With respect to any such
releases of Materials of Environmental Concern, the Company or Quill has given
all required notices to Governmental Entities (copies of which have been made
available to the Buyer). Neither the Company nor any Company Stockholder is
aware of any releases of Materials of Environmental Concern at parcels of real
property or facilities other than the Property that could reasonably be expected
to have an impact on the Property. For purposes of this
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Agreement, "MATERIALS OF ENVIRONMENTAL CONCERN" means any chemicals, pollutants
or contaminants, hazardous substances (as such term is defined under CERCLA),
solid wastes and hazardous wastes (as such terms are defined under the federal
Resource Conservation and Recovery Act), toxic materials, oil or petroleum and
petroleum products, or any other material subject to regulation under any
Environmental Law.
(c) Set forth in Section 2.22(c) of the Disclosure Schedule is
a list of all environmental reports, investigations and audits known to the
Company or any Company Stockholder relating to premises currently or previously
owned or operated by the Company (whether conducted by or on behalf of the
Company or a third party, and whether done at the initiative of the Company or
directed by a Governmental Entity or other third party) which the Company has
possession of or access to. Complete and accurate copies of each such report, or
the results of each such investigation or audit, have been made available to the
Buyer.
(d) Neither the Company nor any Company Stockholder is aware
of any material environmental liability of any solid and hazardous waste
transporter or treatment, storage or disposal facilities that have been utilized
by the Company.
2.23 LEGAL COMPLIANCE. The Company, the Property and the conduct
and operations of the Company's business are currently in compliance with each
law (including rules and regulations thereunder) of any federal, state, local or
foreign government, or any Governmental Entity, which (i) affects or relates to
this Agreement or the transactions contemplated hereby or (ii) is applicable to
the Company, its business or the Property, except for any violation of or
default under a law referred to in clause (ii) above which reasonably may be
expected not to have a Company Material Adverse Effect.
2.24 PERMITS. Section 2.24 of the Disclosure Schedule sets forth a
list of all material permits, licenses, registrations, certificates, orders or
approvals from any Governmental Entity (including without limitation those
issued or required under Environmental Laws and those relating to the occupancy
or use of owned or leased real property) ("PERMITS") issued to or held by the
Company. Such listed Permits are the only material Permits that are required for
the Company to conduct its business as presently conducted or as proposed to be
conducted by the Company, except for those the absence of which would not have a
Company Material Adverse Effect. Each such Permit is in full force and effect
and, to the knowledge of the Company and the Company Stockholders, no suspension
or cancellation of such Permit is threatened and there is no basis for believing
that such Permit will not be renewable upon expiration. Each such Permit will
continue in full force and effect immediately following the Closing.
2.25 [intentionally omitted]
2.26 BROKERS' FEES. The Company has no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions
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contemplated by this Agreement.
2.27 [intentionally omitted]
2.28 [intentionally omitted]
2.29 [intentionally omitted]
2.30 INVESTMENT REPRESENTATIONS.
(a) Each Company Stockholder is acquiring the Merger Shares
for its own account for investment only, and not with a view to, or for sale in
connection with, any distribution of the Merger Shares in violation of the
Securities Act or any rule or regulation under the Securities Act.
(b) Each Company Stockholder has had adequate opportunity to
obtain from representatives of the Buyer such information about the Buyer as is
necessary to evaluate the merits and risks of its investment in the Buyer.
(c) Each Company Stockholder has sufficient expertise in
business, financial and investment matters to be able to evaluate the risks
involved in the acquisition of the Merger Shares and to make an informed
investment decision with respect to such acquisition.
(d) Each Company Stockholder understands that the Merger
Shares have not been registered under the Securities Act and are "restricted
securities" within the meaning of Rule 144 under the Securities Act; and the
Merger Shares cannot be sold, transferred or otherwise disposed of unless they
are subsequently registered under the Securities Act or an exemption from
registration is then available.
(e) Each Company Stockholder understands that a legend
substantially in the following form will be placed on each certificate
representing the Merger Shares:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold, transferred or otherwise disposed of in the
absence of an effective registration statement under such Act
or an opinion of counsel satisfactory to the corporation to
the effect that such registration is not required."
(f) Each Company Stockholder is an "accredited investor"
within the meaning of Regulation D under the Securities Act.
2.31 [intentionally omitted]
2.32 DISCLOSURE. No representation or warranty by the Company or
any Company Stockholder contained in this Agreement, and no statement contained
in the Disclosure Schedule or any other document, certificate or other
instrument delivered to or to be delivered by or on behalf of the Company or any
Company Stockholder pursuant to this Agreement, contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary, in light of the
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circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading.
2.33 GOVERNMENTAL ACTIONS. The Company has received no notice of
and, to the knowledge of the Company and the Company Stockholders, there are no
threatened, pending or proposed (i) proceedings or governmental actions to
modify the zoning classification of, or to condemn, or to purchase in lieu
thereof, all or any part of the Property, (ii) reassessment or special
assessments or penalties or interest with respect to the Land or any other
assessments applicable to the Property, other than periodic reassessments in the
ordinary course or as a result of or in connection with any of the transactions
contemplated by this Agreement, including, without limitation, the application
to have the Property assessed as a separate tax parcel, or (iii) proceedings
before any court or administrative agency, the adverse resolution of which would
reasonably be expected to have a Company Materially Adverse Effect.
2.34 IMPROVEMENTS. To the actual knowledge of the Company and the
Company Stockholders, the Improvements, including, without limitation, the roof,
HVAC and all mechanical systems, loading facilities and electrical systems, are
in good working order and repair.
2.35 OPTIONS. There are no outstanding options or rights of first
refusal to purchase the Property or any portion thereof or interest therein.
2.36 INDEPENDENT PARCEL. Except as set forth in the Permitted
Encumbrances, the Real Property is an independent unit which does not rely on
any facilities (other than the facilities of public utility and water companies)
located on any other property (i) to fulfill any zoning, building code, or other
municipal or governmental requirement, (ii) for structural support or the
furnishing of any essential building systems or utilities, including, but not
limited to electric, plumbing, mechanical, heating, ventilating, and air
conditioning systems, or (iii) to fulfill the requirements of any lease. Except
as set forth in the Permitted Encumbrances, no building or other improvement not
included in the Real Property relies on any part of the Real Property to fulfill
any zoning, building code, or other municipal or governmental requirement or for
structural support or the furnishing of any essential building systems or
utilities.
2.37 FIRPTA. Neither the Company nor any of the Company
Stockholders is a "foreign person" as defined in Section 1145(f)(3) of the
Internal Revenue Code.
2.38 SOLE BUSINESS. The Company is engaged solely in the business
of owning and operating the Property and has no other businesses, properties or
assets. The Company has no employees.
2.39 DOCUMENTS. The Company has provided the Buyer with, or
otherwise made available to the Buyer, copies of the following material and
information (hereinafter called the "DOCUMENTS"): the existing survey for the
Property; the certificate of occupancy for the Property; all permits, licenses,
zoning and other approval issues in connection with operation of the Property;
all existing environmental site assessments, engineering reports, inspections
and appraisals for the
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Property; and such other materials in the possession and control of the Company
or Quill as would reasonably be reviewed in connection with the acquisition of
the Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
AND THE TRANSITORY SUBSIDIARY
Each of the Buyer and the Transitory Subsidiary jointly and severally
represents and warrants to the Company and the Company Stockholders that the
statements contained in this Article III are true and correct, except as set
forth in the disclosure schedule provided by Buyer to the Company on the date
hereof (the "BUYER DISCLOSURE SCHEDULE"). The Buyer Disclosure Schedule shall be
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article III, and the disclosures in any paragraph of the Buyer
Disclosure Schedule shall qualify other paragraphs in this Article III only to
the extent it is clear from a reading of the disclosure that such disclosure is
applicable to such other paragraphs.
3.1 ORGANIZATION. Each of the Buyer and the Transitory Subsidiary
is a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation. Each of the Buyer and the Transitory
Subsidiary is duly qualified to conduct business and is in corporate and tax
good standing under the laws of each jurisdiction in which the nature of its
business or the ownership or leasing of its properties requires such
qualification, except for any such failure to be so qualified and in good
standing that would not, either individually or in the aggregate, have a Buyer
Material Adverse Effect. Each of the Buyer and the Transitory Subsidiary has all
requisite corporate power and authority to carry on the businesses in which it
is engaged and to own and use the properties owned and used by it. Each of the
Buyer and the Transitory Subsidiary has furnished to the Company true and
complete copies of its Certificate of Incorporation and By-laws, each as amended
and as in effect on the date hereof. Neither the Buyer or the Transitory
Subsidiary is in default under or in violation of any provision of its
Certificate of Incorporation or By-laws.
3.2 CAPITALIZATION. The authorized capital stock of the Buyer
consists of (i) 500,000,000 shares of Buyer Common Stock, of which 252,154,564
shares were issued and outstanding and 59,149 shares were held in the treasury
of the Buyer as of March 1, 1998 and (ii) 5,000,000 shares of preferred stock,
$0.01 par value, none of which are outstanding. All of the issued and
outstanding shares of Buyer Common Stock are duly authorized, validly issued,
fully paid, nonassessable and free of all preemptive rights and are associated
with 16/81sts of a right issuable pursuant to the Rights Agreement referred to
in Section 1.5(i). All of the Merger Shares will be, when issued in accordance
with this Agreement, duly authorized, validly issued, fully paid, nonassessable
and free of all preemptive rights. Except as disclosed in Section 3.2 of the
Buyer Disclosure Schedule or the Buyer Reports (as defined below), as of
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March 1, 1998 there were no (i) outstanding or authorized options, warrants,
rights, agreements or commitments to which the Buyer is a party or which are
binding on the Buyer providing for the issuance, disposition or acquisition of
any of its capital stock, (ii) outstanding or authorized stock appreciation,
phantom stock or similar rights with respect to the Buyer, and (iii) agreements,
voting trusts, proxies or understandings with respect to the voting, or
registration under the Securities Act of any shares of the capital stock (or
rights related thereto) of the Buyer.
3.3 AUTHORIZATION OF TRANSACTION. Each of the Buyer and the
Transitory Subsidiary has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing: the Board of Directors of the Buyer
and the Transitory Subsidiary, at meetings duly called and held (or by written
consent) duly determined (in the case of the Buyer) that the Merger is fair and
in the best interests of the Buyer and its stockholders and adopted this
Agreement in accordance with the provisions of the Delaware General Corporation
Law. The execution and delivery of this Agreement by the Buyer and the
Transitory Subsidiary and the consummation by the Buyer and the Transitory
Subsidiary of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Buyer and
Transitory Subsidiary. This Agreement has been duly and validly executed and
delivered by the Buyer and the Transitory Subsidiary and constitutes a valid and
binding obligation of the Buyer and the Transitory Subsidiary, enforceable
against them in accordance with its terms, subject to (i) bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting or relating to
creditors' rights generally and (ii) the availability of injunctive relief and
other equitable remedies.
3.4 NONCONTRAVENTION. Subject to compliance with the applicable
requirements of the Securities Act and any applicable state securities laws, the
Exchange Act, the Xxxx-Xxxxx-Xxxxxx Act and applicable foreign antitrust laws
(if any), and the filing of the Certificate of Merger as required by the
Delaware General Corporation Law, neither the execution and delivery of this
Agreement by the Buyer or the Transitory Subsidiary, nor the consummation by the
Buyer or the Transitory Subsidiary of the transactions contemplated hereby, will
(i) conflict with or violate any provision of the charter or By-laws of the
Buyer or the Transitory Subsidiary, (ii) require on the part of the Buyer or the
Transitory Subsidiary any filing with, or any permit, authorization, consent or
approval of, any Governmental Entity, (iii) conflict with, result in breach of,
constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of, create in any party any right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any material contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness or other arrangement to which the Buyer or Transitory
Subsidiary is a party or by which either is bound or to which any of their
assets or properties are subject, except to the extent any such conflict,
breach, default, acceleration, termination, modification or cancellation, or the
failure to give or obtain any such notice, consent or waiver, would not have a
Buyer Material Adverse Effect (as defined below), or (iv) violate any order,
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writ, injunction, decree, statute, rule or regulation applicable to the Buyer or
the Transitory Subsidiary or any of their assets or properties. The term "BUYER
MATERIAL ADVERSE EFFECT" means any change, event or effect that is materially
adverse to the business, financial condition or results of operations of the
Buyer or the Transitory Subsidiary, excluding any changes in general economic
conditions in the general economy as a whole, or that adversely affects the
ability of the Buyer to consummate the Merger.
3.5 REPORTS AND FINANCIAL STATEMENTS. The Buyer has previously
furnished to the Company and the Company Stockholders complete and accurate
copies, as amended or supplemented, of its (a) Annual Report on Form 10-K for
the fiscal year ended February 1, 1997, as filed with the Securities and
Exchange Commission (the "SEC"), and (b) all other reports filed by the Buyer
under Section 13 of the Exchange Act with the SEC since February 1, 1997 (such
reports are collectively referred to herein as the "BUYER REPORTS"). The Buyer
Reports constitute all of the documents required to be filed by the Buyer under
Section 13 of the Exchange Act with the SEC since February 1, 1997. As of their
respective dates, the Buyer Reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited financial statements and
unaudited interim financial statements of the Buyer included in the Buyer
Reports (i) comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, (ii) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby (except as may be
indicated therein or in the notes thereto, and in the case of quarterly
financial statements, as permitted by Form 10-Q under the Exchange Act and
except for normal recurring year-end adjustments (which will not be material)),
(iii) fairly present the consolidated financial condition, results of operations
and cash flows of the Buyer and its subsidiaries as of the respective dates
thereof and for the periods referred to therein, and (iv) are consistent with
the books and records of the Buyer and its subsidiaries.
3.6 LITIGATION. There is no action, suit, proceeding, or claim
before any Government Entity or arbitrator pending, or, to the Buyer's
knowledge, threatened against, the Buyer or any of its officers or directors (in
their capacities as such) that, individually or in the aggregate, is reasonably
likely to have a Buyer Material Adverse Effect. There is no judgment,
injunction, decree or order against the Buyer that is reasonably likely to have
a Buyer Material Adverse Effect.
3.7 [intentionally omitted]
3.8 ABSENCE OF CERTAIN CHANGES. Since January 31, 1998, there has
occurred no event or development which has had, or could reasonably be expected
to have in the future, a Buyer Material Adverse Effect.
3.9 TAXES. Buyer has (i) filed all federal, state, local and
foreign tax returns and reports required to be filed by it prior to the date of
this Agreement (taking into
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account extensions), (ii) paid or accrued all Taxes due and payable, and (iii)
paid or accrued all Taxes for which a notice of assessment or collection has
been received (other than amounts being contested in good faith by appropriate
proceedings), except in the case of clause (i), (ii) or (iii) for any such
filings, payments or accruals which are not reasonably likely, individually or
in the aggregate, to have a Buyer Material Adverse Effect. Neither the Internal
Revenue Service nor any other taxing authority has asserted any claim for taxes,
or to the knowledge of Buyer, is threatening to assert any claim for Taxes,
which claims, individually or in the aggregate, are reasonably likely to have a
Buyer Material Adverse Effect. There are no liens for taxes upon the assets of
Buyer (other than liens for Taxes that are not yet due or that are being
contested in good faith by appropriate proceedings), except for liens which are
not reasonably likely, individually or in the aggregate, to have a Buyer
Material Adverse Effect.
3.10 ENVIRONMENTAL MATTERS. The Buyer has complied in all material
respects with all applicable Environmental Laws. Except for such matters that,
individually or in the aggregate, are not reasonably likely to have a Buyer
Material Adverse Effect, (i) there is no pending or, to the knowledge of the
Buyer, threatened civil or criminal litigation, written notice of material
violation, formal administrative proceeding, or investigation, inquiry or
information request by any Governmental Entity, relating to any Environmental
Law involving the Buyer, and (ii) there have been no releases of any Materials
of Environmental Concern into the environment at any parcel of real property or
any facility formerly or currently owned, operated or controlled by the Buyer,
except in compliance with Environmental Law.
3.11 EMPLOYEE BENEFIT PLANS
(a) Buyer has listed in Section 3.11 of the Buyer Disclosure
Schedule all employee benefit plans (as defined in Section 3(3) of ERISA) for
the benefit of, or relating to, any employee of Buyer or any ERISA Affiliate of
Buyer (together, the "BUYER EMPLOYEE PLANS"). For purposes of this Agreement,
"ERISA AFFILIATE" means any entity which is or at any applicable time was a
member of (i) a controlled group of corporations (as defined in Section 414(b)
of the Code), (ii) a group of trades or businesses under common control (as
defined in Section 414(c) of the Code), or (iii) an affiliated service group (as
defined under Section 414(m) of the Code), any of which includes the Company.
(b) With respect to the Buyer Employee Plans, individually and
in the aggregate, no event has occurred, and to the knowledge of Buyer, there
exists no condition or set of circumstances in connection with which Buyer could
be subject to any liability that is reasonably likely to have a Buyer Material
Adverse Effect under ERISA, the Code or any other applicable law.
(c) With respect to the Buyer Employee Plans, individually and
in the aggregate, there are no funded benefit obligations for which
contributions have not been made or properly accrued and there are no unfunded
benefit obligations which have not been accounted for by reserves, or otherwise
properly footnoted in
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accordance with generally accepted accounting principles, on the financial
statements of Buyer, which obligations are reasonably likely to have a Buyer
Material Adverse Effect.
3.12 COMPLIANCE WITH LAWS. Buyer has complied with, is not in
violation of, and has not received any notices of violation with respect to, any
United States or foreign federal, state or local statute, law or regulation with
respect to the conduct of its business, or the ownership or operation of its
business, except for failures to comply or violations which, individually or in
the aggregate, have not had and are not reasonably likely to have a Buyer
Material Adverse Effect.
3.13 INTERIM OPERATIONS OF THE TRANSITORY SUBSIDIARY. The
Transitory Subsidiary was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement, has engaged in no other business
activities and has conducted its operations only as contemplated by this
Agreement.
3.14 BROKERS' FEES. Neither the Buyer nor the Transitory Subsidiary
has any liability or obligation to pay any fees or commissions to any broker,
finder or agent with respect to the transactions contemplated by this Agreement.
3.15 DISCLOSURE. The representations and warranties by the Buyer
contained in this Agreement, and any other document, certificate or other
instrument delivered by or on behalf of the Buyer pursuant to this Agreement,
including the Buyer Reports, taken together, do not contain any untrue statement
of a material fact or omit to state any material fact necessary, in light of the
circumstances under which they were made, in order to make the statements herein
or therein not misleading.
ARTICLE IV
COVENANTS
4.1 REASONABLE BEST EFFORTS; NOTICE AND CONSENTS.
(a) Each of the Company and the Buyer shall use its best
efforts, to the extent commercially reasonable ("REASONABLE BEST EFFORTS") (i)
to take, or cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary and proper under applicable law to consummate and
make effective the transactions contemplated hereby as promptly as practicable,
(ii) to obtain from any Governmental Entity or any other third party any
consents, licenses, permits, waivers, approvals, authorizations, or orders
required to be obtained or made by the Parties or any of their affiliates, as
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
("AFFILIATES"), in connection with the authorization, execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
including, without limitation, the Merger, and (iii) as promptly as practicable,
to make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under any
applicable federal or state securities laws and any other applicable law. The
Parties shall cooperate with each
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other in connection with the making of all such filings, including providing
copies of all such documents to the non-filing Parties and its advisors prior to
filing and, if requested, to accept all reasonable additions, deletions or
changes suggested in connection therewith. Each of the Parties shall use its
Reasonable Best Efforts to furnish to the other Parties 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.
(b) The Parties agree, and shall cause each of their
respective Affiliates, to cooperate and to use their respective Reasonable Best
Efforts to obtain any governmental clearances or approvals required for Closing
under the Antitrust Laws (as defined in the Merger Agreement), to respond to any
government requests for information under any Antitrust Law, and to contest and
resist any action, including any legislative, administrative or judicial action,
and to have vacated, lifted, reversed or overturned any decree, judgment
injunction or other order (an "ANTITRUST ORDER") that restricts, prevents or
prohibits the consummation of the Merger or any other transactions contemplated
by this Agreement under any Antitrust Law. The Parties hereto will consult and
cooperate with one another, in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments, opinions and proposals made or
submitted by or on behalf of any Party hereto in connection with proceedings
under or relating to any Antitrust Law. The Buyer shall be entitled to direct
any proceedings or negotiations with any Governmental Entity relating to any of
the foregoing, provided that it shall afford the Company a reasonable
opportunity to participate therein. Notwithstanding the foregoing, no Party
shall be required to take any action under Section 4.1(a) or Section 4.1(b) if
the U.S. Department of Justice or U.S. Federal Trade Commission authorizes its
staff to seek a preliminary injunction or restraining order to enjoin
consummation of the Merger unless the Buyer agrees to pay all costs and expenses
(including, without limitation attorneys' fees and expenses) necessary to resist
and defend against any such order or injunction.
(c) Each of the Parties shall give (and shall use their
Reasonable Best Efforts to cause their respective Affiliates to give) any
notices to third parties, and use (and cause their respective Affiliates to use)
their Reasonable Best Efforts to obtain any third party consents related to or
required in connection with the Merger that are (A) necessary to consummate the
transactions contemplated hereby, (B) disclosed or required to be disclosed in
the Disclosure Schedule or (C) required to prevent a Company Material Adverse
Effect or a Buyer Material Adverse Effect from occurring prior to or after the
Effective Time.
(d) No Company Stockholder shall take any action to rescind or
modify the written consent of stockholders of the Company approving the Merger.
4.2 OPERATION OF THE PROPERTY. The Company shall not during the
term of this Agreement enter into any lease or other occupancy agreement or any
contract relating to the Property without the prior written consent of the
Buyer, which the Buyer may withhold in its sole and absolute discretion. Except
as contemplated by Section 4.2 of
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the Disclosure Schedule, the Company shall continue to operate the Property
during the term of this Agreement in the manner in which it currently is being
operated.
4.3 FULL ACCESS. From and after the date of this Agreement, the
Company shall permit the Buyer, its agents and representatives, to enter upon
the Property upon reasonable prior notice to the Company, to perform, at the
Buyer's sole cost and expense, inspections and tests of the Property, including
surveys and building measurement, environmental studies, examinations and tests
of all structural and mechanical systems within the Improvements, PROVIDED that
in exercising the foregoing rights, Buyer shall use reasonable efforts to
minimize disruption to Quill's business and operations at the Property. The
Buyer shall repair any damage to the Property caused by any such tests or
investigations and shall be responsible for any and all liability and costs for
personal or property damage attributable thereto.
4.4 EXCLUSIVITY. Neither the Company nor any of the Company
Stockholders shall, and the Company shall use its Reasonable Best Efforts, to
cause its Affiliates and each of its officers, directors, employees,
representatives and agents not to, directly or indirectly, (a) encourage,
solicit, initiate, engage or participate in discussions or negotiations with any
person or entity (other than the Buyer) concerning any merger, consolidation,
sale of material assets, sale of Company Shares, the Property or any portion of
either, or other business combination involving the Company or any division or
business unit of the Company or (b) provide any non-public information
concerning the business, properties or assets of the Company to any person or
entity (other than the Buyer). The Company shall immediately notify the Buyer
of, and shall disclose to the Buyer all details of, any inquiries, discussions
or negotiations of the nature described in the first sentence of this Section
4.4.
4.5 NASDAQ LISTING. The Buyer shall use its Reasonable Best
Efforts to cause the Merger Shares to be approved for listing on the Nasdaq
National Market prior to or as of the Effective Time and to cause all fees
applicable thereto to be paid prior to Closing.
4.6 REGISTRATION OF MERGER SHARES. The Buyer and the Company
Stockholders hereby agree that the Merger Shares shall be entitled to
registration rights as Registrable Shares (as such term is defined in the Merger
Agreement). In particular, each of the Company Stockholders hereunder shall be
entitled to all rights and privileges granted to, and bound by all duties and
obligations of, the Rightsholders (as such term as defined in the Merger
Agreement), as more particularly set forth in Article VII of the Merger
Agreement which Article VII is hereby incorporated by reference.
4.7 EASEMENTS, COVENANTS, ETC. The Property shall, at or prior to
the Closing, become subject to a Declaration of Covenants, Conditions, Easements
and Restrictions containing such commercially reasonable terms as shall be
agreed upon by the Parties prior to the Closing.
4.8 FUNDING OF SETTLEMENT AMOUNTS. Buyer agrees that, at the
Closing, it shall contribute to or otherwise make available to the Company
and/or the Surviving
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Corporation, funds sufficient to satisfy the payment obligation to the Xxxxxx
Xxxxxx Trust Dated May 11, 1983 pursuant to the Settlement Agreement between
such stockholder and the Company dated as of May ____, 1998. The Parties agree
that such payment is, and shall be, required to be funded by the Buyer, the
Company and/or the Surviving Corporation at or following the Closing and shall
not in any manner be deemed the obligation or responsibility of any Company
Stockholder or the Company prior to the Closing.
4.9 REPAYMENT OF LOAN. The Buyer, on behalf of the Company, shall
pay, or cause to be paid, the Loan Amount to the Lender at the Closing.
ARTICLE V
CONDITIONS TO CONSUMMATION OF MERGER
5.1 CONDITIONS TO OBLIGATIONS OF THE BUYER AND THE TRANSITORY
SUBSIDIARY. The obligation of each of the Buyer and the Transitory Subsidiary to
consummate the Merger is subject to the satisfaction or waiver by the Buyer of
the following conditions:
(a) GOVERNMENTAL APPROVALS. The Company shall have obtained
from each Governmental Entity all approvals, issuances, permits, consents and
other authorizations necessary for the consummation of the Merger.
(b) PENDING PROCEEDINGS AND ORDERS. No action, suit or
proceeding shall be pending by or before any Governmental Entity wherein an
unfavorable judgment, order, decree, stipulation or injunction would (i) prevent
consummation of the Merger, (ii) cause the Merger to be rescinded following
consummation or (iii) be reasonably likely to result in a Company Material
Adverse Effect following the Merger, and no such judgment, order, decree,
stipulation or injunction shall be in effect.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company and the Company Stockholders set forth in this
Agreement that are qualified as to materiality shall be true and correct, and
the representations and warranties of the Company and the Company Stockholders
set forth in this Agreement that are not so qualified shall be true and correct
in all material respects, in each case as of the date of this Agreement and as
of the Effective Time as though made on and as of the Effective Time, except to
the extent such representations and warranties address matters only as of a
particular date (in which case such representations and warranties shall remain
true and correct or true and correct in all material respects, as the case may
be, as of such earlier date).
(d) COVENANTS. The Company shall have performed or complied in
all material respects with its agreements and covenants required to be performed
or complied with under this Agreement as of or prior to the Effective Time.
(e) TITLE. The Company shall have good and clear record and
marketable fee simple title to the Real Property and good and marketable title
to the Personalty and Intangible Property, in each case, free and clear of all
liens and
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encumbrances other than (i) taxes for the immediately preceding and then current
tax period which are not due and payable as of the date of Closing; (ii) liens
for municipal betterments assessed prior to the date of Closing to the extent
not due and payable on the date of Closing; (iii) easements for utilities
serving the Property; (iv) applicable laws and regulations; (v) the covenants,
conditions, easements and restrictions provided under Section 4.7; (vi) matters
which do not interfere materially with the use of the Property for the uses
contemplated under the Quill Lease; and (vii) encumbrances securing the
Company's obligations under the Loan. The matters set forth in (i) through (vii)
above are referred to collectively herein as the "PERMITTED ENCUMBRANCES". If
the Buyer elects, in its sole discretion, to proceed to Closing notwithstanding
the failure of the condition set forth in this Section 5.1(e) to be satisfied,
the Conversion Ratio (after being determined as required by Section 1.5(i))
shall be reduced by a fraction thereof, such fraction being the total amount
required to remove all mortgages, attachments, mechanic's liens or other
monetary liens divided by $49,000,000.
(f) CONDITION OF PROPERTY. The Property shall be in the
same physical condition as it is on the date of this Agreement, reasonable wear
and tear and, subject to Section 7.1(e), damage by casualty excepted, and there
shall not have occurred any event that would entitle Quill to terminate the
Quill Lease.
(g) CERTIFICATE. The Company and the Company Stockholders
shall have delivered to the Buyer and the Transitory Subsidiary a certificate
(the "COMPANY CERTIFICATE") to the effect that each of the conditions specified
in clauses (a) through (f) of this Section 5.1 is satisfied in all respects.
(h) THIRD PARTY CONSENTS. The Buyer shall have been
furnished with evidence satisfactory to it of the consent or approval of those
third parties whose consent or approval shall be required in connection with the
Merger, including without limitation, to the extent required under the Loan, the
consent of Lender.
(i) OTHER DOCUMENTS. The Company shall have delivered to
the Buyer or to the title insurer the following:
(i) such affidavits relating to corporate and
title matters, such as parties in possession and mechanic's or materialmen's
liens for work performed on behalf of the Company prior to Closing, as the title
insurer reasonably shall require in order to issue an owner's policy of title
insurance free of any exceptions for such matters, with a so-called
"non-imputation" endorsement; and
(ii) a certification and affidavit of the Company
and each Company Stockholder as required by the Foreign Investors Real Property
Tax Act, as amended.
(j) LEGAL OPINION. The Buyer and the Transitory
Subsidiary shall have received from Xxxx, Gerber & Xxxxxxxxx, counsel to the
Company, an opinion substantially in the form of EXHIBIT A attached to the
Disclosure Schedule, addressed to the Buyer and the Transitory Subsidiary and
dated as of the Closing Date.
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(k) MERGER AGREEMENT. The transactions contemplated by
the Merger Agreement shall have been consummated prior to or concurrently with
the consummation of the Merger hereunder.
(l) INSPECTION. Buyer shall have determined, in its sole and
absolute judgment, that (a) environmental remediation is not necessary or
desirable at the Property, (b) the Merger would not expose Buyer or the
Surviving Corporation to material liability in connection with Environmental
Laws, and (c) the Property can legally be used for the uses contemplated under
the Quill Lease.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE COMPANY
STOCKHOLDERS. The obligation of each of the Company and the Company Stockholders
to consummate the Merger is subject to the satisfaction or waiver by the Company
of the following conditions:
(a) GOVERNMENTAL APPROVAL. The Buyer and the Transitory
Subsidiary shall have obtained from each Governmental Entity all approvals,
issuances, permits, consents and other authorizations necessary for the
consummation of the Merger.
(b) PENDING PROCEEDINGS AND ORDERS. No action, suit or
proceeding shall be pending by or before any Governmental Entity wherein an
unfavorable judgment, order, decree, stipulation or injunction would (i) prevent
consummation of the Merger, (ii) cause the Merger to be rescinded following
consummation, or (iii) be reasonably likely to result in a Buyer Material
Adverse Effect after the Effective Time, and no such judgment, order, decree,
stipulation or injunction shall be in effect.
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Buyer and Transitory Subsidiary set forth in this Agreement
that are qualified as to materiality shall be true and correct, and the
representations and warranties of the Buyer and Transitory Subsidiary set forth
in this Agreement that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Effective Time as though made on and as of the Effective Time, except to the
extent such representations and warranties address matters only as of a
particular date (in which case such representations and warranties shall remain
true and correct or true and correct in all material respects, as the case may
be, as of such earlier date).
(d) COVENANTS. Each of the Buyer and the Transitory Subsidiary
shall have performed or complied in all material respects with its agreements
and covenants required to be performed or complied with under this Agreement as
of or prior to the Effective Time.
(e) CERTIFICATE. The Buyer and Transitory Subsidiary shall
have delivered to the Company a certificate (the "BUYER CERTIFICATE") to the
effect that each of the conditions specified in clauses (a) through (d) of this
Section 5.2 is satisfied in all respects.
(f) LEGAL OPINION. The Company Stockholders shall have
received from Xxxx and Xxxx LLP, counsel to the Buyer and the Transitory
Subsidiary, an
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opinion substantially in the form of EXHIBIT A attached to the Buyer Disclosure
Schedule, addressed to the Company Stockholders and dated as of the Closing
Date.
(g) NASDAQ NATIONAL MARKET. The Merger Shares shall have been
authorized for listing on the Nasdaq National Market.
(h) MERGER AGREEMENT. The transactions contemplated by the
Merger Agreement shall have been consummated prior to or concurrently with the
consummation of the Merger hereunder.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION BY THE COMPANY STOCKHOLDERS. The Company
Stockholders (the "INDEMNIFYING PARTIES") shall jointly and severally indemnify
the Surviving Corporation and the Buyer (the "INDEMNIFIED PARTIES"), without
duplication, in respect of, and hold them harmless against, any and all debts,
obligations and other liabilities, monetary damages, fines, fees, penalties,
interest obligations, deficiencies, losses, and reasonable costs and expenses
(including without limitation amounts paid in settlement, interest, court costs,
costs of investigators, fees and expenses of attorneys, accountants, financial
advisors and other experts, and other expenses of litigation) (collectively,
"DAMAGES") incurred or suffered by the Surviving Corporation or the Buyer
resulting from or relating to any breach by the Company or Company Stockholders
of any representation, warranty, covenant or agreement of the Company or Company
Stockholders contained in this Agreement (including representations and
warranties in the Company Certificate).
6.2 INDEMNIFICATION CLAIMS.
(a) An Indemnified Party seeking to assert rights to
indemnification under this Article VI shall give written notification to Xxxx
Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxx Xxxxxx (the "STOCKHOLDER REPRESENTATIVES")
of the commencement of any action, suit or proceeding relating to a third party
claim for which indemnification pursuant to this Article VI may be sought. Such
notification shall be given within 20 business days after receipt by the
Indemnified Party of notice of such action, suit or proceeding, and shall
describe (to the extent known by the Indemnified Party) the facts constituting
the basis for such action, suit or proceeding and the amount of the claimed
damages; provided, however, that no delay on the part of the Indemnified Party
in notifying the Stockholder Representatives shall relieve the Indemnifying
Parties of any liability or obligation hereunder except to the extent of any
damage or liability caused by or arising out of such failure. Within 20 days
after delivery of such notification, the Stockholder Representatives may, upon
written notice thereof to the Indemnified Party, assume control of the defense
of such action, suit or proceeding with counsel reasonably satisfactory to the
Indemnified Party, provided the Stockholder Representatives acknowledge in
writing to the Indemnified Party that any damages, fines, costs or other
liabilities that may be assessed against the Indemnified Party in
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connection with such action, suit or proceeding constitute Damages for which the
Indemnified Party shall, subject to the limitations set forth in Section 6.4, be
indemnified pursuant to this Article VI. If the Stockholder Representatives do
not so assume control of such defense, the Indemnified Party shall control such
defense. The Party not controlling such defense (the "NON-CONTROLLING PARTY")
may participate therein at their own expense; provided that if the Stockholder
Representatives assume control of such defense and the Indemnified Party
reasonably concludes that the Indemnifying Parties and the Indemnified Party
have conflicting interests or different defenses available with respect to such
action, suit or proceeding, the reasonable fees and expenses of one counsel to
the Indemnified Party shall be considered "DAMAGES" for purposes of this
Agreement. The Party controlling such defense (the "CONTROLLING PARTY") shall
keep the Non-Controlling Party reasonably advised of the status of such action,
suit or proceeding and the defense thereof and shall consider in good faith
recommendations made by the Non-Controlling Party with respect thereto. The
Non-Controlling Party shall furnish the Controlling Party such information as it
may have with respect to such action, suit or proceeding (including copies of
any summons, complaint or other pleadings which may have been served on such
party and any written claim, demand, invoice, billing or other document
evidencing or asserting the same) and shall otherwise cooperate with and assist
the Controlling Party in the defense of such action, suit or proceeding and
provide the Controlling Party and its counsel access to (and the right to make
copies of) the Surviving Corporation's books and records pertaining to such
matter. The Stockholder Representatives shall not agree to any settlement of, or
the entry of any judgment arising from, any such action, suit or proceeding
without the prior written consent of the Indemnified Party, which shall not be
unreasonably withheld, conditioned or delayed. The Indemnified Party shall not
agree to any settlement of, or the entry of any judgment arising from, any such
action, suit or proceeding without the prior written consent of the Stockholder
Representatives, which shall not be unreasonably withheld, conditioned or
delayed; provided that if the Stockholder Representatives do not assume the
defense of such action, suit or proceeding pursuant to this Section 6.2(a), the
Indemnified Party shall be entitled to agree to a settlement of, or the entry of
any judgment arising from, such action, suit or proceeding, after giving notice
of the same to the Stockholder Representatives, on such terms as the Indemnified
Party in good faith may deem appropriate.
(b) In order to seek indemnification under this Article VI, an
Indemnified Party shall give a written notification (a "CLAIM NOTICE") to the
Stockholder Representatives which contains (i) a description and the amount (the
"CLAIMED AMOUNT") of any Damages incurred as a result of any final, unappealable
judgment, settlement or acknowledgment of the Stockholder Representatives or
reasonably expected to be incurred by the Indemnified Party as a result of such
claim, (ii) a statement that the Indemnified Party is entitled to
indemnification under this Article VI for such Damages and a reasonable
explanation of the basis therefor, and (iii) a demand for payment in the amount
of such Damages.
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(c) Within 20 days after delivery of a Claim Notice, the
Stockholder Representatives shall deliver to the Indemnified Party a written
response (the "RESPONSE") in which the Stockholder Representatives shall: (i)
agree that the Indemnified Party is entitled to receive all of the Claimed
Amount (in which case the Response shall be accompanied by a cash payment equal
to the Claimed Amount), (ii) agree that the Indemnified Party is entitled to
receive part, but not all, of the Claimed Amount (the "AGREED AMOUNT") (in which
case the Response shall be accompanied by a cash payment equal to the Agreed
Amount) or (iii) dispute that the Indemnified Party is entitled to receive any
of the Claimed Amount. If the Stockholder Representatives in the Response
contest the payment of all or part of the Claimed Amount, the Stockholder
Representatives and the Indemnified Party shall follow the procedures set forth
in Section 6.2(d) for the resolution of such dispute (a "DISPUTE").
(d) During the 60-day period following the delivery of a
Response that reflects a Dispute, the Stockholder Representatives and the
Indemnified Party shall use good faith efforts to resolve the Dispute. If the
Dispute is not resolved within such 60- day period, the Stockholder
Representatives and the Indemnified Party shall discuss in good faith the
submission of the Dispute to a mutually acceptable alternative dispute
resolution procedure (which may be non-binding or binding upon the parties, as
they agree in advance), including without limitation one administered by the
American Arbitration Association or the Center for Public Resources (the "ADR
PROCEDURE"). In the event the Stockholder Representatives and the Indemnified
Party agree upon an ADR Procedure, such parties shall, in consultation with the
chosen dispute resolution service (the "ADR SERVICE"), promptly agree upon a
format and timetable for the ADR Procedure, agree upon the rules applicable to
the ADR Procedure, and promptly undertake the ADR Procedure. The provisions of
this Section 6.2(d) shall not obligate the Stockholder Representatives and the
Indemnified Party to pursue an ADR Procedure or prevent either such party from
pursuing the Dispute in a court of competent jurisdiction; provided that, if the
Stockholder Representatives and the Indemnified Party agree to pursue an ADR
Procedure, neither the Stockholder Representatives nor the Indemnified Party may
commence litigation or seek other remedies with respect to the Dispute prior to
the completion of such ADR Procedure. Any ADR Procedure undertaken by the
Stockholder Representatives and the Indemnified Party shall be considered a
compromise negotiation for purposes of federal and state rules of evidence, and
all statements, offers, opinions and disclosures (whether written or oral) made
in the course of the ADR Procedure by or on behalf of the Stockholder
Representatives, the Indemnified Party or the ADR Service shall be treated as
confidential and, where appropriate, as privileged work product. Such
statements, offers, opinions and disclosures shall not be discoverable or
admissible for any purposes in any litigation or other proceeding relating to
the Dispute (provided that this sentence shall not be construed to exclude from
discovery or admission any matter that is otherwise discoverable or admissible).
The fees and expenses of any ADR Service used by the Stockholder Representatives
and the Indemnified Party shall be shared equally by the Indemnifying Parties
and the Indemnified Party.
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(e) Each Company Stockholder irrevocably agrees that the
Stockholder Representatives shall have full power and authority on behalf of
each Company Stockholder to take any and all actions on behalf of, execute any
and all instruments on behalf of, and execute or waive any and all rights of,
the Company Stockholders under this Article VI, including, without limitation,
the power and authority to agree to, negotiate, enter into settlements of and
demand arbitration of any claim made under this Article VI. A written decision,
act, consent or instruction of a majority of the Stockholder Representatives
shall constitute a decision of the Stockholder Representatives and all Company
Stockholders and shall be final, binding and conclusive upon each such Company
Stockholder, and the Buyer may rely upon any written decision, act, consent or
instruction of a majority of the Stockholder Representatives as being the
decision, act, consent or instruction of the Stockholder Representatives and
each and every such Company Stockholder. The Buyer is hereby relieved from any
liability to any Company Stockholder for any acts done by them in accordance
with such decision, act, consent or instruction of the Stockholder
Representatives. The Stockholder Representatives shall have no liability to any
Company Stockholder for any action taken or omitted on behalf of the Company
Stockholders pursuant to this Article VI.
6.3 SURVIVAL. All representations and warranties contained in this
Agreement, the Company Certificate and the Buyer Certificate (including, without
limitation, those set forth in Section 2.8) shall survive the execution and
delivery hereof and the Closing and continue until the first anniversary of the
Closing Date and shall not be affected by any examination made for or on behalf
of any Party or the knowledge of any of the Party's officers, directors,
stockholders, employees or agents; provided that the representations and
warranties set forth in Sections 2.2(b) and 2.35 (and the portion of the Company
Certificate relating thereto) shall survive the Closing without limitation. If
an Indemnified Party delivers to the Stockholder Representatives before
expiration of a representation or warranty, either a Claim Notice based upon a
breach of such representation or warranty, or a notice that, as a result a legal
proceeding instituted by or written claim made by a third party, the Indemnified
Party reasonably expects to incur Damages as a result of a breach of such
representation or warranty (an "EXPECTED CLAIM NOTICE"), then such
representation or warranty shall survive until, but only for purposes of, the
resolution of the matter covered by such notice. If the legal proceeding or
written claim with respect to which an Expected Claim Notice has been given is
definitely withdrawn or resolved in favor of the Indemnified Party, the
Indemnified Party shall promptly so notify the Stockholder Representatives.
6.4 LIMITATIONS.
(a) Notwithstanding anything to the contrary herein, (i) the
Indemnifying Parties shall be liable under this Article VI for only that portion
of the aggregate Damages which exceeds $200,000, and (ii) the maximum liability
of the Company Stockholders hereunder shall not exceed $4,900,000; provided that
the limitation set forth in clause (ii) above shall be deemed to be $49,000,000
for purposes of a claim pursuant to Section 6.1 relating to a breach of the
representations and
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warranties set forth in Sections 2.2(b), 2.8 or 2.35 (or the portion of the
Company Certificate relating thereto). For purposes solely of this Article VI,
all representations and warranties in Article II (other than Section 2.32) shall
be construed as if the terms "material" and references to "Company Material
Adverse Effect" (and variations thereof) were omitted from such representations
and warranties.
(b) Except with respect to claims based on fraud on behalf of
the Company or the Company Stockholders, after the Closing, the rights of the
Indemnified Parties under this Article VI shall be the exclusive remedy of the
Indemnified Parties with respect to claims resulting from or relating to any
representation or warranty contained in this Agreement.
(c) No Company Stockholder, in its capacity as such, shall
have any right of contribution against the Company or the Surviving Corporation
with respect to any breach by the Company of any of its representations or
warranties contained in this Agreement.
(d) The amount of any Damages of any Indemnified Party shall
be determined net of any United States or foreign federal, state or local income
Tax benefit realized by the Indemnified Party as a result of the incurrence of
such Damages (net of any increased tax liability that results from the receipt
of such indemnity payment) and shall be reduced by any amount received by the
Indemnified Party under any insurance policy with respect to the matter giving
rise to such Damages.
ARTICLE VII
TERMINATION
7.1 TERMINATION OF AGREEMENT. The Parties may terminate this
Agreement prior to the Effective Time as provided below:
(a) the Parties may terminate this Agreement by mutual written
consent; or
(b) the Buyer or the Company may terminate this Agreement if
there has been a breach of any representation, warranty, covenant or agreement
on the part of the other Party set forth in this Agreement, which breach (i)
causes the condition set forth in Sections 5.1(c) or (d) (in the case of
termination by the Buyer) or Section 5.2(c) or (d) (in the case of termination
by the Company) not to be satisfied and (ii) shall not have been cured within 20
days following receipt by the breaching party of written notice of such breach
from the other party; or
(c) the Buyer or the Transitory Subsidiary may terminate this
Agreement by giving written notice to the Company if the Closing shall not have
occurred on or before September 30, 1998 by reason of the failure of any
condition precedent under Section 5.1 hereof (unless the failure results
primarily from a breach by the Buyer or the Transitory Subsidiary of any
representation, warranty, covenant or agreement contained in this Agreement); or
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(d) the Company may terminate this Agreement by giving written
notice to the Buyer and the Transitory Subsidiary if the Closing shall not have
occurred on or before September 30, 1998 by reason of the failure of any
condition precedent under Section 5.2 hereof (unless the failure results
primarily from a breach by the Company or the Company Stockholders of any
representation, warranty, covenant or agreement contained in this Agreement); or
(e) the Buyer or the Transitory Subsidiary may terminate this
Agreement by giving written notice to the Company if at any time prior to the
date of Closing, the Property is destroyed or damaged as a result of fire or any
other casualty whatsoever, or taken by condemnation or eminent domain, in each
case, to such extent that Quill is entitled to terminate the Quill Lease; or
(f) this Agreement shall be deemed terminated if and when the
Merger Agreement is terminated.
7.2 EFFECT OF TERMINATION. If this Agreement terminates pursuant
to Section 7.1, all obligations of the Parties hereunder shall terminate without
any liability of any Party to any other Party (except for any liability of any
Party for a willful breach of this Agreement).
ARTICLE VIII
APPORTIONMENTS
8.1 TAXES AND UTILITIES. All utilities, real estate taxes,
assessments and other municipal charges (including betterment assessments)
affecting the Property and not the responsibility of Quill under the Quill
Lease, if any (the "TAXES AND UTILITIES AMOUNT"), shall be pro-rated on a per
diem basis as of the date of Closing, and the Purchase Price shall be adjusted
pursuant to Section 1.5(i) to reflect such pro-ration.
8.2 RENTS AND ADDITIONAL RENTS. Rents payable to the Company under
the Quill Lease shall be pro-rated on a per diem basis as of the date of Closing
(the "RENT PRORATION AMOUNT"), and the Purchase Price shall be adjusted pursuant
to Section 1.5(i) to reflect such pro-ration.
ARTICLE IX
OTHER AGREEMENTS
9.1 PRESS RELEASES AND ANNOUNCEMENTS. No Party shall issue any
press release or other public disclosure relating to the subject matter of this
Agreement without the prior written approval of the other Parties; PROVIDED,
HOWEVER, that the Buyer may make any public disclosure it believes in good faith
is required by law or regulation or stock market rules (in which case the Buyer
shall use its Reasonable Best Efforts to advise the Company of the proposed
disclosure prior to making the disclosure).
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9.2 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns.
9.3 ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, with respect to the subject matter hereof.
9.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the prior written
approval of the other Parties; provided that the Transitory Subsidiary may
assign its rights, interests and obligations hereunder to an Affiliate of the
Buyer.
9.5 COUNTERPARTS; FACSIMILE SIGNATURE. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument. This
Agreement may be executed by facsimile signature.
9.6 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.7 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly delivered two
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:
If to the Company or a Milbro, Inc.
Company Stockholder: 000 Xxxx Xxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Copy to: Xxxx, Gerber & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxx Gerber, Esq.
If to the Stockholder Xxxx Xxxxxx, Xxxxxx X. Xxxxxx and
Representatives: Xxxxxx Xxxxxx
000 Xxxx Xxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
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Copy to: Xxxx, Gerber & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxx Gerber, Esq.
If to the Buyer: Staples, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Secretary
Copy to: Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
If to the Transitory Subsidiary: Staples Illinois, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Secretary
Copy to: Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
9.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
laws of any jurisdictions other than those of the State of Delaware.
9.9 AMENDMENTS AND WAIVERS. This Agreement may be amended at any
time prior to the Effective Time by written agreement of all of the Parties
hereto. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant
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hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
9.10 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
9.11 EXPENSES. Except as set forth in Article VI, each of the
Parties shall bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby. Notwithstanding the foregoing to the contrary, the Party,
as between Buyer and the Sellers, that is customarily responsible for payment of
transfer taxes, title insurance premiums and survey costs in the jurisdiction in
which the Property is located, shall be responsible for payment of any and all
such taxes, premiums and costs payable in connection with the transactions
contemplated under this Agreement. If any such taxes, premiums or costs payable
by the Sellers in accordance with the immediately preceding sentence have not
been paid prior to the Closing (the aggregate of such amounts, if any, the
"EXPENSE AMOUNT"), the Purchase Price shall be reduced by the Expense Amount
pursuant to Section 1.5(i), and the Buyer and/or the Surviving Corporation shall
be responsible for the payment of such amounts at or following the Closing.
9.12 CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against any Party. Any
reference to any 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.
9.13 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
9.14 FURTHER ASSURANCES. Each of the Parties agrees to execute,
acknowledge and deliver, prior to, at or subsequent to Closing, such other
instruments, documents and other materials as the other may reasonably request
and as shall be necessary in order to effect the consummation of the transaction
contemplated hereby.
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9.15 TRUSTEE EXCULPATION. When this Agreement is executed by the
trustee of any trust, such execution is by the trustee, not individually but
solely as trustee in the exercise of and under the power and authority conferred
upon and invested in such trustee, and it is expressly understood and agreed
that nothing herein contained shall be construed as creating any liability on
any such trustee personally to pay any amount required to be paid hereunder, or
to perform any covenant, either express or implied, contained herein, all such
liability, if any, being expressly waived by the Parties by their execution
hereof (provided that this shall not be construed to release the trust of any
such liability).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
THE BUYER
STAPLES, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Title:_____________________________
THE TRANSITORY SUBSIDIARY
STAPLES ILLINOIS, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Title:_____________________________
THE COMPANY
MILBRO, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------
Title: /s/ President
----------------------------
THE COMPANY STOCKHOLDERS
XXXX XXXXXX TRUST DATED
JANUARY 18, 1984
By: /s/ Xxxx Xxxxxx
-------------------------------
Xxxx Xxxxxx, Trustee
XXXXXX X. XXXXXX TRUST DATED
JANUARY 31, 1983
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx, Trustee
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
AMONG STAPLES, INC., MILBRO, INC. AND OTHER PARTIES THERETO
35
The undersigned, being the duly elected Secretary of the Transitory
Subsidiary, hereby certifies that this Agreement has been adopted by a majority
of the votes represented by the outstanding shares of capital stock of the
Transitory Subsidiary entitled to vote on this Agreement.
/s/ Xxxxx Xxxxxxxxxxxxx
------------------------------------
Secretary
The undersigned, being the duly elected Secretary of the Company,
hereby certifies that this Agreement has been adopted by a majority of the votes
represented by the outstanding Company Shares entitled to vote on this
Agreement.
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Secretary
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
AMONG STAPLES, INC., MILBRO, INC. AND OTHER PARTIES THERETO
