Exhibit 2.2
Amendment to the Agreement
and Plan of Merger between
the Company and Solite Corporation
AMENDMENT NO. 3, dated as of February 26, 1998 (the "Amendment') to the
AGREEMENT AND PLAN OF MERGER, dated as of September 10, 1997, as amended (the
"Merger Agreement") by and between Giant Cement Holding, Inc. (the "Parent"),
GCHI Acquisition Corp. (the "Acquisition Sub"), and Solite Corporation (the
"Company").
RECITALS
Parent, Acquisition Sub, and the Company have heretofore entered into the
Merger Agreement and now desire to amend certain provisions thereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
1. Amendments.
(a) Section 2.1 (a)(i) shall be deleted in its entirety and the
following inserted in lieu thereof:
"a number of shares of the voting common stock, par value $.01 per share (the
"Parent Common Stock"), of the Parent, payable upon the surrender of the
certificate formerly representing such share of Company Common Stock, equal to
the quotient derived by dividing (A) 325,000 minus the number of shares to be
placed in the Escrow Account and the Indemnity Escrow Account described below,
by (B) the number of outstanding shares of Company Common Stock at the Closing
(hereinafter referred to collectively, as the "Outstanding Stock")."
(b) Section 2.2(b) shall be deleted in its entirety and the
following inserted in lieu thereof:
"Promptly after the Effective Time, the Parent shall (i) deliver to the escrow
agent (the "Escrow Agent") under the escrow agreement dated the Effective Date,
substantially in the form attached hereto as Exhibit B, a certificate
representing 75,000 shares of Parent Common Stock (the "Escrow Account") to be
held pursuant to such escrow agreement for dissemination pursuant to Section
2.4(c), and (iii) deliver to the escrow agent (the "Indemnity Escrow Agent")
under the escrow agreement dated the Effective Time, substantially in the form
of Exhibit C, a certificate representing 75,000 shares of Parent Common Stock
(the "Indemnity Escrow Account") to be held pursuant to the provisions of
Section 9.4. The shares of Parent Common Stock shall be deemed to have been
issued at the Effective Time."
(c) Section 2.4(c) shall be deleted in its entirety and the
following inserted in lieu thereof:
"If the consolidated net book value of the Company reflected in the Final
Closing Balance Sheet is less than $4.5 million, then (i) the Parent shall be
entitled to receive from the Escrow Account and to cancel the number of whole
shares of Parent Common Stock as shall equal the quotient derived by dividing
(A) the amount by which $4.5 million exceeds the consolidated net book value of
the Company reflected in the Final Closing Balance Sheet by (B) $22 per share of
Parent Common Stock, and (ii) subject to Section 2.4(d), the balance of the
shares of Parent Common Stock in the Escrow Account shall be available
immediately for distribution pursuant to Section 2. 1 (a)(ii). If the
consolidated net book value of the Company reflected in the Final Closing
Balance Sheet is more than $4.5 million, then, subject to Section 2.4(d), all
the shares of Parent Common Stock in the Escrow Account shall be available
immediately for distribution pursuant to Section 2.1(a)(ii). For purposes of
calculating net book value, no effect will be given to (i) up to $1,000,000 of
valuation allowance recorded against the net deferred tax assets of the Company
and (ii) the cost of the AF Old Container Management Handling Facility
(estimated at $250,000), if the Company writes-off the cost of such facility."
(d) Section 2.4(d) shall be deleted in its entirety and the
following inserted in lieu thereof:
"If the net current assets of the Company reflected in the Final Closing Balance
Sheet is less than $5.0 million then (i) the Parent shall be entitled to receive
from the Escrow Account and to cancel the number of whole shares of Parent
Common Stock as shall equal the quotient derived by dividing (A) the amount by
which $5.0 million exceeds the net current assets of the Company reflected in
the Final Closing Balance Sheet by (B) $22 per share of Parent Common Stock, and
(ii) subject to Section 2.4(c), the balance of the shares of Parent Common Stock
in the Escrow Account shall be available immediately for distribution pursuant
to Section 2.1(a)(ii). If the net current assets of the Company reflected in the
Final Closing Balance Sheet is more than $5.0 million, then, subject to Section
2.4(c), all the shares of Parent Common Stock in the Escrow Account shall be
available immediately for distribution pursuant to Section 2.l(a)(ii). For
purposes of calculating net current assets no effect will be given to current
installments to indebtedness for borrowed money in an aggregate amount not
exceeding $20 million. For the purposes hereof net current assets shall be equal
to (x) the sum of cash accounts receivable less than 60 days past due and
inventories less (y) the sum of accounts payable, accrued expenses and other
current liabilities."
(e) Section 4.7 shall be deleted in its entirety and the
following inserted in lieu thereof:
"Except as set forth in the Parent's current report on Form 8-K , dated December
8, 1997 and except for this Agreement, there is no material agreement, judgment,
injunction, order or decree binding upon the Parent or any of its subsidiaries
which has or could reasonably be expected to have the effect of prohibiting or
materially impairing the business practice of the Parent or any of its
subsidiaries, acquisition of property by the Parent or any of its subsidiaries
or the conduct of business by the Parent or any of its subsidiaries as currently
conducted or as proposed to be conducted by the Parent.
(f) Section 8.1(b) shall be deleted in its entirety and the
following inserted in lieu thereof:
"by either the Parent or the Company, if the Merger shall not have been
consummated before April 30, 1998,"
(g) Section 9.4 shall be deleted in its entirety and the
following inserted in lieu thereof:
The shares of Parent Common Stock held in the Escrow Account and the
Indemnity Escrow Account shall be available to satisfy the indemnification
claims of Parent Claimants pursuant to this Section 9. The shares of Parent
Common Stock in the Escrow Account shall be available to satisfy the
indemnification claims of Parent Claimants to the extent such shares of Parent
Common Stock have not been released pursuant to Section 2.4. Unless a claim or
claims by Parent Claimants are then pending, in amounts in excess of the then
value of 37,500 shares of Parent Common Stock, 37,500 shares of Parent Common
Stock held in the Indemnity Escrow Account shall be released on the second
anniversary of the Closing Date, and unless any claim or claims by Parent
Claimants are then pending, the balance of the shares of Parent Common Stock
held in the Indemnity Escrow Account shall be released on the third anniversary
of the Closing Date. For the purposes of this Section 9.4, the value of Parent
Common Stock shall be the average of the closing bid and asked prices per share
of Parent Common Stock as quoted on NASDAQ for the twenty trading days
immediately preceding any release of Parent Common Stock. Any dispute relating
to or in respect of the rights of any Indemnitee to receive shares of Parent
Common Stock from the Escrow Account or the Indemnity Escrow Account in
satisfaction of an indemnification claim pursuant to 9.2 hereof (an
"Indemnification Dispute") shall be submitted to, and resolved exclusively
pursuant to arbitration in accordance with the commercial arbitration rules of
the American Arbitration Association. Such arbitration shall take place in
Richmond, Virginia and shall be subject to the substantive law of the State of
Virginia. Decisions pursuant to such arbitration shall be final, conclusive and
binding upon the parties. Upon the conclusion of arbitration, the parties may
apply to any court of competent jurisdiction to enforce the decision pursuant to
such arbitration. The parties hereto waive and shall not seek jury trial in any
lawsuit, proceeding, claim, counterclaim, defense or other litigation or dispute
relating to or in respect of an Indemnification Dispute. Neither party shall
submit a dispute to arbitration before that party has sought to resolve the
dispute through direct negotiation with the other party. If the dispute is not
resolved within three weeks after a demand for direct negotiation, the parties
shall attempt to resolve the dispute through mediation. If the parties do not
promptly agree on a mediator, either party may request the then senior judge of
the civil division of the Circuit Court for the City of Richmond, Virginia to
appoint a mediator. If the mediator is unable to facilitate a settlement of the
dispute within a reasonable period of time, as determined by the mediator, the
mediator shall issue a written statement to the parties to that effect and
either party may then submit the dispute to arbitration as provided herein. The
fees and expenses of the mediator shall be shared equally by the parties. If the
dispute is submitted to arbitration, the arbitrator shall award the prevailing
or substantially prevailing party its expenses and costs, including costs of
arbitration and reasonable attorney's fees.
(h) Schedule A-1 to the Merger Agreement shall be amended as
follows:
(i) Section 2.1(a)(i)shall be deleted in its entirety and
the following inserted in lieu thereof:
"a number of shares of the voting common stock, par value S.01 per share (the
"Parent Common Stock"), of the Parent, payable upon the surrender of the
certificate formerly representing such share of Company Common Stock, equal to
the quotient derived by dividing (A) 325,000 minus the number of shares to be
placed in the Escrow Account and the Indemnity Escrow Account described below,
by (B) the number of outstanding shares of Company Common Stock at the Closing
(hereinafter referred to collectively, as the "Outstanding Stock")."
(ii) Section 2.2(b) shall be deleted in its entirety and
the following inserted in lieu thereof:
"Promptly after the Effective Time, the Parent shall (i) deliver to the escrow
agent (the "Escrow Agent") under the escrow agreement dated the Effective Date,
a certificate representing 75,000 shares of Parent Common Stock (the "Escrow
Account") to be held pursuant to such escrow agreement for dissemination
pursuant to Section 2.4(c), and (iii) deliver to the escrow agent (the
"Indemnity Escrow Agent") under the escrow agreement dated the Effective Time, a
certificate representing 75,000 shares of Parent Common Stock (the "Indemnity
Escrow Account") to be held pursuant to the provisions of Section 9.4 of the
Agreement and Plan of Merger, dated September 10, 1997, as amended among Parent,
Acquisition Sub and the Company. The shares of Parent Common Stock shall be
deemed to have been issued at the Effective Time."
(iii) Section 2.4(c) shall be deleted in its entirety and
the following inserted in lieu thereof:
"If the consolidated net book value of the Company reflected in the Final
Closing Balance Sheet is less than $4.5 million, then (i) the Parent shall be
entitled to receive from the Escrow Account and to cancel the number of whole
shares of Parent Common Stock as shall equal the quotient derived by dividing
(A) the amount by which $4.5 million exceeds the consolidated net book value of
the Company reflected in the Final Closing Balance Sheet by (B) $22 per share of
Parent Common Stock, and (ii) subject to Section 2.4(d), the balance of the
shares of Parent Common Stock in the Escrow Account shall be available
immediately for distribution pursuant to Section 2.l(a)(ii). If the consolidated
net book value of the Company reflected in the Final Closing Balance Sheet is
more than $4.5 million, then, subject to Section 2.4(d), all the shares of
Parent Common Stock in the Escrow Account shall be available immediately for
distribution pursuant to Section 2.1(a)(ii). For purposes of calculating net
book value, no effect will be given to (i) up to $ 1,000,000 of valuation
allowance recorded against the net deferred tax assets of the Company and (ii)
the cost of the AF Old Container Management Handling Facility (estimated at
$250,000), if the Company writes-off the cost of such facility."
(iv) Section 2.4(d)shall be deleted in its entirety and the
following inserted in lieu thereof:
"If the net current assets of the Company reflected in the Final Closing Balance
Sheet is less than $5.0 million, then (i) the Parent shall be entitled to
receive from the Escrow Account and to cancel the number of whole shares of
Parent Common Stock as shall equal the quotient derived by dividing (A) the
amount by which $5.0 million exceeds the net current assets of the Company
reflected in the Final Closing Balance Sheet by (B) $22 per share of Parent
Common Stock, and (ii) subject to Section 2.4(c), the balance of the shares of
Parent Common Stock in the Escrow Account shall be available immediately for
distribution pursuant to Section 2.1 (a)(ii). If the net current assets of the
Company reflected in the Final Closing Balance Sheet is more than $5.0 million,
then, subject to Section 2.4(c), all the shares of Parent Common Stock in the
Escrow Account shall be available immediately for distribution pursuant to
Section 2.1(a)(ii). For purposes of calculating net current assets no effect
will be given to current installments to indebtedness for borrowed money in an
aggregate amount not exceeding $20 million. For the purposes hereof, net current
assets shall be equal to (x) the sum of cash, accounts receivable less than 60
days past due and inventories less (y) the sum of accounts payable, accrued
expenses and other current liabilities."
2. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Merger Agreement.
3. Terms of Merger Agreement. Except as amended hereby , all of the
terms of the Merger Agreement shall remain in full force and effect and are
hereby confirmed in all respects.
4. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
5 . Governing Law. This Amendment shall be governed by, and construed in
accordance with the laws of the Commonwealth of Virginia without giving effect
to the provisions thereof relating to the conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed in counterparts by their duly authorized officers, all as of the day
and year first written above.
SOLITE CORPORATION
By: /s/ X. X. Xxxxxx, III.
X. X. Xxxxxx, III.
Vice President and Secretary
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and Chief Financial
Officer
GCHI ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and Chief Financial
Officer
