AGREEMENT AND PLAN OF MERGER
AMONG
IMPERIAL XXXXX CORPORATION,
IHK MERGER SUB CORPORATION
AND
SAVANNAH FOODS & INDUSTRIES, INC.
DATED AS OF SEPTEMBER ___, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I THE OFFER
SECTION 1.01 The Offer..........................................2
SECTION 1.02 Company Actions....................................3
SECTION 1.03 Stockholder Lists..................................4
SECTION 1.04 Directors..........................................4
ARTICLE II THE MERGER
SECTION 2.01 The Merger.........................................5
SECTION 2.02 Effective Time; Closing............................5
SECTION 2.03 Effects of the Merger..............................6
SECTION 2.04 Certificate of Incorporation and By-Laws...........6
SECTION 2.05 Directors and Officers.............................6
SECTION 2.06 Conversion of Shares...............................6
SECTION 2.07 Conversion of Common Stock of Merger Sub...........8
SECTION 2.08 Stockholders' Meetings.............................9
SECTION 2.09 Rights Under Stock Plans...........................9
SECTION 2.10 Exchange of Certificates..........................10
SECTION 2.11 Elections.........................................12
SECTION 2.12 Dissenting Shares.................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01 Organization and Qualification; Subsidiaries......14
SECTION 3.02 Certificate of Incorporation and By-Laws..........15
SECTION 3.03 Capitalization....................................15
SECTION 3.04 Authority Relative to this Agreement..............16
SECTION 3.05 No Conflict; Required Filings and Consents........17
SECTION 3.06 Permits; Compliance...............................17
SECTION 3.07 SEC Filings; Financial Statements.................18
SECTION 3.08 Absence of Certain Changes or Events..............19
SECTION 3.09 Absence of Litigation.............................20
SECTION 3.10 Employee Benefit Plans; Labor Matters.............20
SECTION 3.11 Intellectual Property.............................23
SECTION 3.12 Taxes.............................................24
SECTION 3.13 Environmental Matters.............................24
SECTION 3.14 Products..........................................25
SECTION 3.15 Properties and Assets; Real Property and
Leases..........................................25
SECTION 3.16 Insurance.........................................26
SECTION 3.17 Opinion of Financial Advisor......................27
SECTION 3.18 Vote Required.....................................27
SECTION 3.19 Brokers...........................................27
SECTION 3.20 Company Rights Agreement..........................28
SECTION 3.21 Information Supplied..............................28
SECTION 3.22 Termination of Existing Merger Agreement..........29
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF IHK AND MERGER SUB
SECTION 4.01 Organization and Qualification; Subsidiaries......29
SECTION 4.02 Certificate of Incorporation and By-Laws..........30
SECTION 4.03 Capitalization....................................30
SECTION 4.04 Authority Relative to this Agreement..............31
SECTION 4.05 No Conflict; Required Filings and Consents........31
SECTION 4.06 Permits; Compliance...............................32
SECTION 4.07 SEC Filings; Financial Statements.................32
SECTION 4.08 Absence of Certain Changes or Events..............33
SECTION 4.09 Absence of Litigation.............................34
SECTION 4.10 Employee Benefit Plans; Labor Matters.............35
SECTION 4.11 Intellectual Property.............................37
SECTION 4.12 Taxes.............................................38
SECTION 4.13 Environmental Matters.............................38
SECTION 4.14 Products..........................................39
SECTION 4.15 Properties and Assets; Real Property and
Leases..........................................39
SECTION 4.16 Insurance.........................................40
SECTION 4.17 Opinion of Financial Advisor......................40
SECTION 4.18 Vote Required.....................................40
SECTION 4.19 Brokers...........................................41
SECTION 4.20 Information Supplied..............................41
SECTION 4.21 Financing.........................................42
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 Conduct of Business by the Company Pending
the Merger.....................................42
SECTION 5.02 Conduct of Business by IHK and the IHK
Subsidiaries Pending the Merger................45
SECTION 5.03 Government Filings................................47
ARTICLE VI ADDITIONAL AGREEMENTS
SECTION 6.01 Stockholders' Meetings............................48
SECTION 6.02 Registration Statement; Proxy Statement...........49
SECTION 6.03 Access to Information; Confidentiality............51
SECTION 6.04 Approvals and Consents; Cooperation...............52
SECTION 6.05 No Solicitation of Transactions...................52
SECTION 6.06 Employee Benefits Matters.........................53
SECTION 6.07 Directors' and Officers' Indemnification
and Insurance..................................53
SECTION 6.08 Obligations of IHK and Merger Sub.................54
SECTION 6.09 Affiliates' Letters...............................54
SECTION 6.10 Letters of Accountants............................55
SECTION 6.11 Listing Market....................................55
SECTION 6.12 IHK Board Representation..........................55
SECTION 6.13 Company Rights Plan...............................56
SECTION 6.14 Public Announcements..............................56
SECTION 6.15 Subsequent Financial Statements...................56
ARTICLE VII CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to
Effect the Merger..............................57
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 Termination.......................................58
SECTION 8.02 Effect of Termination.............................60
SECTION 8.03 Amendment.........................................60
SECTION 8.04 Waiver............................................60
SECTION 8.05 Fees and Expenses.................................60
ARTICLE IX GENERAL PROVISIONS
SECTION 9.01 Non-Survival of Representations, Warranties
and Agreements.................................62
SECTION 9.02 Notices...........................................62
SECTION 9.03 Severability......................................63
SECTION 9.04 Assignment........................................63
SECTION 9.05 Interpretation....................................64
SECTION 9.06 Specific Performance..............................64
SECTION 9.07 Governing Law.....................................64
SECTION 9.08 Parties in Interest...............................64
SECTION 9.09 Counterparts......................................65
SECTION 9.10 Waiver of Jury Trial..............................65
SECTION 9.11 Entire Agreement..................................65
SECTION 9.12 Certain Definitions...............................65
TABLE OF DEFINED TERMS
(not a part of the Agreement)
SECTION
Acquisition Proposal................................... 6.05(a)
Affiliate.............................................. 9.12(a)
Agreement.............................................. Preamble
AMEX................................................... 9.12(o)
Beneficial Owner....................................... 9.12(b)
Benefit Trust.......................................... 3.03
Benefit Trust Agreement................................ Annex B
Benefit Trust Shares................................... 3.03
Blue Sky Laws.......................................... 3.05(b)
Business Day........................................... 9.12(c)
Cash Consideration..................................... 2.06(a)
Claim.................................................. 6.07(b)
Closing................................................ 2.02
Closing Price.......................................... 9.12(d)
Code................................................... 2.09(a)
Company................................................ Preamble
Company Affiliate...................................... 6.09
Company Common Stock................................... 1.01(a)
Company Disclosure Schedule............................Article III Preamble
Company Environmental Permits.......................... 3.13(b)
Company ERISA Affiliate................................ 3.01(3)
Company Executive Deferred Compensation Plans.......... 3.10(h)
Company Financial Statements........................... 3.07(b)
Company Material Adverse Effect........................ 3.01
Company Options........................................ 2.09(a)
Company Permits........................................ 3.06
Company Plans.......................................... 3.10(a)
Company Preferred Stock................................ 3.03
Company Products....................................... 3.14
Company Rights......................................... 3.03
Company Rights Agreement............................... 3.03
Company Rights Agreement Amendment..................... 3.20
Company SEC Reports.................................... 3.07(a)
Company Specified Stockholders......................... 9.12(e)
Company Stock Option Plan.............................. 2.09(a)
Company Stockholder Approval........................... 2.08
Company Stockholder Meeting............................ 6.01(a)
Company Subsequent Financial Statements................ 6.15(a)
Company Subsidiary..................................... 3.01
Confidentiality Agreement.............................. 6.03(b)
Continuing Director.................................... 1.04(a)
Control................................................ 9.12(e)
Deed Reservations...................................... 3.15(c)
Dissenting Shares...................................... 2.12
DGCL................................................... 1.02
DLJ.................................................... 1.02
Effective Time......................................... 2.02(b)
Election Date.......................................... 2.11(c)
Environmental Laws..................................... 3.13(a)
ERISA.................................................. 3.10(a)
Exchange Act........................................... 9.12(f)
Exchange Agent......................................... 2.10(a)
Exchange Fund.......................................... 2.10(f)
Excluded Shares........................................ 2.06(a)
Expense Amount......................................... 8.05(b)
Expenses............................................... 8.05(a)
Flo-Sun Agreement...................................... 3.22
Governmental Entity.................................... 9.12(g)
Hazardous Substances................................... 3.13
HSR Act................................................ 1.01(a)
IHK.................................................... Preamble
IHK Disclosure Schedule................................Article IV Preamble
IHK Environmental Permits.............................. 4.13
IHK ERISA Affiliate.................................... 4.10(b)
IHK Financial Statements............................... 4.07(b)
IHK Junior Preferred Stock............................. 2.06(a)
IHK Material Adverse Effect............................ 4.01
IHK Permits............................................ 4.06
IHK Plans.............................................. 4.10(a)
IHK Preferred Stock.................................... 4.03
IHK Products........................................... 4.14
IHK Purchase Rights.................................... 2.06(a)
IHK Rights Agreement................................... 2.06(a)
IHK SEC Reports........................................ 4.07(a)
IHK Shareholders' Meeting.............................. 6.01(b)
IHK Specified Stockholders............................. 9.12(i)
IHK Stockholder Approval............................... 2.08
IHK Subsequent Financial Statements.................... 6.15(b)
IHK Subsidiary......................................... 4.01
Indemnified Parties.................................... 6.07(a)
Intellectual Property Rights........................... 3.11
Knowledge or Known..................................... 9.12(h)
Law.................................................... 9.12(i)
Xxxxxx Brothers........................................ 4.17
Liens.................................................. 3.15(c)
Listing Market......................................... 6.11
Merger................................................. Recitals
Merger Consideration................................... 2.06(a)
Merger Shares.......................................... 2.06(b)
Merger Sub............................................. Preamble
Multiemployer Plan..................................... 3.10(b)
Multiple Employer Plan................................. 3.10(b)
NYSE................................................... 9.12(o)
Offer.................................................. 1.01(a)
Offer Documents........................................ 1.01(b)
Offer Price............................................ 1.01(a)
Order.................................................. 9.12(j)
Permitted Liens........................................ 3.15(c)
Person................................................. 9.12(k)
Proxy Statement........................................ 6.02(b)
Registration Statement................................. 3.21
Representatives........................................ 6.03(a)
Schedule 14D-1......................................... 1.01(b)
Schedule 14D-9......................................... 1.02
SEC.................................................... 1.01(b)
Securities Act......................................... 9.12(l)
Special Meetings....................................... 2.08
Stock Consideration.................................... 9.12(m)
Stockholder Approvals.................................. 2.08
Stockholders' Meetings................................. 2.08
Subsidiary or Subsidiaries............................. 9.12(n)
Substitute Options..................................... 6.05(a)
Superior Proposal...................................... 7.05(a)
Surviving Corporation.................................. 2.01
Terminating Company Breach............................. 8.01(g)
Terminating IHK Breach................................. 8.01(g)
Termination Fee........................................ 8.05(b)
Total Shares........................................... 2.06(b)
Trading Day............................................ 9.12(o)
U.S. GAAP.............................................. 3.07(b)
WARN................................................... 3.10(f)
Waterway Works......................................... 3.15(c)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
September ---, 1997 among IMPERIAL XXXXX CORPORATION, a Texas
corporation ("IHK"), IHK MERGER SUB CORPORATION, a Delaware corporation
("Merger Sub"), and SAVANNAH FOODS & INDUSTRIES, INC., a Delaware
corporation (the "Company").
R E C I T A L S:
WHEREAS, the Board of Directors of each of IHK and the Company has
determined that it is in the best interests of their respective
stockholders for Merger Sub to acquire the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company has unanimously
adopted resolutions approving the acquisition of the Company by Merger
Sub, this Agreement and the transactions contemplated hereby, and has
unanimously agreed to recommend that the Company's stockholders approve
this Agreement and the transactions contemplated hereby and tender their
shares of Company Common Stock (as defined below) in the Offer (as
defined below);
WHEREAS, if at least 50.1% of the outstanding shares of Company
Common Stock are purchased pursuant to the Offer, IHK, Merger Sub and
the Company have agreed (subject to the terms and conditions of this
Agreement), after the expiration or termination of the Offer and as soon
as practicable following the approval of the stockholders of the
Company, to effect the merger of Merger Sub with and into the Company
(the "Merger") as more fully described herein; and
WHEREAS, the Company has advised IHK, Merger Sub and the IHK
Specified Stockholders (as hereinafter defined) that it will not enter
into this Agreement unless the IHK Specified Stockholders execute and
deliver to the Company an Agreement and Irrevocable Proxy in the form
set forth in Annex C to this Agreement; and
WHEREAS, IHK has advised the Company and the Company Specified
Stockholders that IHK will not enter into this Agreement unless the
Company Specified Stockholders (as hereinafter defined) execute and
deliver to IHK the Stockholders Agreement in form set forth as Annex D
to this Agreement and providing that the Company Specified Stockholders
will tender their shares of Company Common Stock into the Offer under
the terms set forth therein; and
WHEREAS, IHK, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with
this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and intending to be legally bound hereby,
the parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.01 hereof, promptly (but in no event later
than five Business Days (as defined below) following the date hereof),
Merger Sub shall commence (within the meaning of Rule 14d-2 under the
Exchange Act) an offer to purchase (the "Offer") at least 50.1% of all
shares outstanding (on a fully diluted basis) of common stock, par value
$.25 per share, of the Company ("Company Common Stock") at a price of
$20.25 per share, net to the seller in cash (such price, or any such
higher price as may be paid in the Offer, being referred to herein as
the "Offer Price"). The obligation of Merger Sub to consummate the Offer
and to accept for payment and to pay for any shares of Company Common
Stock tendered pursuant thereto shall be subject only to those
conditions set forth in Annex A hereto. The Company agrees that no
shares of Company Common Stock held by the Company or any of the Company
Subsidiaries (as defined below) will be tendered pursuant to the Offer;
provided, however, that prior to the Effective Time (as defined below),
shares of Company Common Stock held by the Company may be allocated,
issued, delivered or transferred pursuant to the Company Stock Option
Plan (as such term is defined in Section 2.09) in accordance with the
terms thereof or Section 2.09. Merger Sub will not, without the prior
written consent of the Company, (i) decrease or change the form of the
consideration payable in the Offer, (ii) decrease the number of shares
of Company Common Stock sought pursuant to the Offer, (iii) impose
additional conditions to the Offer, (iv) change the conditions to the
Offer, except that Merger Sub in its sole discretion may waive any of
the conditions to the Offer (but may not waive the condition that not
less than 50.1% of the Company Common Stock outstanding on a fully
diluted basis shall have been validly tendered and not withdrawn), or
(v) make any other change in the terms or conditions of the Offer which
is adverse to the holders of the shares of Company Common Stock. Merger
Sub agrees that, subject to the terms and conditions of the Offer and
this Agreement, it will accept for payment and pay for all shares of
Company Common Stock validly tendered and not withdrawn pursuant to the
Offer promptly after expiration of the Offer; provided, however, that
Merger Sub shall not be obligated to accept for payment and pay for in
the Offer, in the aggregate, more than 50.1% of the outstanding shares
of Company Common Stock. The Offer shall initially provide that it shall
expire 20 Business Days after it is commenced, and may not be extended
except as provided below. If the conditions set forth in Annex A are not
satisfied or, to the extent permitted by this Agreement, waived by
Merger Sub as of any scheduled expiration date, Merger Sub may extend
the Offer from time to time until the earlier of the consummation of the
Offer or 30 Business Days after the date hereof, and shall extend the
Offer (x) to the extent necessary to comply with the waiting period
requirements (including any extension or second request) under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules and regulations thereunder (the "HSR Act") and (y) upon the
request of the Company, to a date no later than November 30, 1997 to the
extent necessary for IHK to satisfy the condition set forth in clause
(2) of Annex A. The Company and Merger Sub shall use commercially
reasonable efforts to satisfy the conditions set forth in Annex A as
soon as practicable.
(b) On the date of commencement of the Offer, IHK and Merger Sub
shall file or cause to be filed with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1
(together with all amendments thereto, the "Schedule 14D-1") with
respect to the Offer, which shall contain the offer to purchase and
related letter of transmittal and other ancillary Offer documents and
instruments pursuant to which the Offer will be made (collectively with
any supplements or amendments thereto, the "Offer Documents"). Merger
Sub will disseminate the Offer Documents to holders of shares of Company
Common Stock. IHK, Merger Sub and the Company will promptly correct any
information provided by them for use in the Offer Documents that becomes
false or misleading in any material respect, and Merger Sub will take
all steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and to be disseminated to holders of shares of
Company Common Stock, in each case as and to the extent required by
applicable law. The Company and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-1 (including the
Offer Documents) prior to its filing with the SEC. Merger Sub agrees to
provide the Company with any comments that may be received from the SEC
or its staff with respect to the Schedule 14D-1 (including the Offer
Documents) and any amendments thereto, promptly after receipt thereof.
SECTION 1.02 Company Actions. The Company hereby consents to the
Offer and represents and warrants that (a) its Board of Directors (at a
meeting duly called and held), has (i) determined that the Offer and the
Merger are fair to and in the best interests of the stockholders of the
Company, (ii) resolved to approve the Offer and the Merger and recommend
(subject to its fiduciary duties after taking into account advice of
legal counsel) acceptance of the Offer and approval and adoption of this
Agreement by such stockholders of the Company, (iii) taken all necessary
steps to render Section 203 of the Delaware General Corporation Law (the
"DGCL") inapplicable to the Merger, (iv) resolved to elect not to be
subject, to the extent permitted by law, to any state takeover law other
than Section 203 of the DGCL that may purport to be applicable to the
Offer, the Merger or the transactions contemplated by this Agreement and
(v) approved the Company Rights Agreement Amendment (as defined below),
and (b) Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ"), the
Company's financial advisor, has advised the Company's Board of
Directors that, in their opinion, the consideration to be paid in the
Offer and the Merger to the Company's stockholders is fair, from a
financial point of view, to such stockholders. Upon commencement of the
Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") containing the
recommendations of its Board of Directors in favor of the Offer and the
Merger and shall permit the inclusion in the Offer Documents of such
recommendations, in each case subject to the fiduciary duties of the
Board of Directors of the Company. The Company, IHK and Merger Sub will
promptly correct any information provided by them for use in the
Schedule 14D-9 that becomes false or misleading in any material respect,
and the Company will take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to
holders of shares of Company Common Stock, in each case as and to the
extent required by applicable law. IHK and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 prior
to its filing with the SEC. The Company agrees to provide IHK with any
comments that may be received from the SEC or its staff with respect to
the Schedule 14D-9 and any amendments thereto, promptly after receipt
thereof.
SECTION 1.03 Stockholder Lists. In connection with the Offer, the
Company shall promptly furnish Merger Sub with mailing labels, security
position listings and any available listing or computer file containing
the names and addresses of the record holders of shares of Company
Common Stock as of a recent date and shall furnish Merger Sub with such
information and assistance as Merger Sub or its agents may reasonably
request in communicating the Offer to the record and beneficial
stockholders of the Company. Subject to the requirements of applicable
law, IHK and Merger Sub will hold such listings and other information in
confidence and in accordance with the terms of the Confidentiality
Agreement (as defined below), shall use such information only in
connection with the Offer and the Merger and, if this Agreement is
terminated, shall deliver to the Company all copies of all such
information (and extracts or summaries thereof) then in their or their
agents' or advisors' possession.
SECTION 1.04 Directors.
(a) Promptly upon the purchase by Merger Sub pursuant to the Offer
of such number of shares of Company Common Stock as represents at least
50.1% of the outstanding shares of Company Common Stock and from time to
time thereafter, Merger Sub shall be entitled to designate such number
of directors, rounded up to the next whole number, on the Board of
Directors of the Company as will give Merger Sub representation on the
Board of Directors of the Company equal to the product of the number of
directors on the Board of Directors of the Company and the percentage
that such number of shares of Company Common Stock so purchased bears to
the number of shares of Company Common Stock outstanding, and the
Company shall promptly, to the extent permitted by the Company's
Certificate of Incorporation and By-Laws and the DGCL, upon request by
Merger Sub, either (at the Company's election) increase the size of the
Board of Directors of the Company or exercise all reasonable efforts to
secure the resignations of such number of directors as is necessary to
provide Merger Sub with such level of representation and to enable
Merger Sub's designees to be so elected. Notwithstanding the foregoing,
at all times prior to the Effective Time (as hereinafter defined) of the
Merger the Board of Directors of the Company shall include at least two
directors in office as of the date hereof (any such director remaining
in office being a "Continuing Director"). The Company's obligations to
appoint designees to the Board of Directors of the Company shall be
subject to Section 14(f) of the Exchange Act. At the request and expense
of Merger Sub, the Company shall take all action necessary to effect any
such election, including mailing to its stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. IHK and Merger Sub will timely supply to the Company in
writing and IHK and Merger Sub will be solely responsible for any and
all information with respect to themselves and their respective
officers, directors and affiliates and director designees required by
such Section and Rule.
(b) Following the election or appointment of Merger Sub's
designees pursuant to this Section and prior to the Effective Time, such
designees shall abstain from acting upon, and the approval of a majority
of the Continuing Directors shall be required to authorize and shall be
sufficient to authorize, any resolution with respect to any termination
of this Agreement by the Company, any amendment of this Agreement
requiring action by the Board of Directors of the Company, any extension
of time for the performance of any of the obligations or other acts of
IHK or Merger Sub under this Agreement, any waiver of compliance with
any of the agreements or conditions under this Agreement for the benefit
of the Company, and any action to seek to enforce any obligation of IHK
or Merger Sub under this Agreement. The Continuing Directors shall be
appointed as a Special Committee of the Board of Directors of the
Company and, in addition to having all of the powers of the Continuing
Directors set out in the preceding sentence, the Special Committee shall
have the full power over all issues relating to the relationship between
the Company on the one hand and IHK and Merger Sub on the other and the
Company shall not take any action if, in the opinion of a majority of
the Special Committee, such action would frustrate or be reasonably
likely to impair or delay the ability of the parties to consummate the
Merger. In connection herewith, the Continuing Directors (as such or in
their capacity as the Special Committee) shall be authorized, on behalf
of and at the expense of the Company, to retain financial and legal
advisors.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the relevant provisions of the
DGCL, the Merger shall occur as soon as practicable following the
satisfaction or waiver, if permissible, of the conditions set forth in
Article VII hereof. The Company shall be the surviving corporation in
the Merger (the "Surviving Corporation") under the name SAVANNAH FOODS &
INDUSTRIES, INC. (or such other name as the parties shall agree) and
shall continue its existence under the laws of Delaware. The separate
corporate existence of Merger Sub shall cease.
SECTION 2.02 Effective Time; Closing.
(a) The closing of the Merger (the "Closing") will take place on
the day that is two Business Days (as defined below) after satisfaction
or waiver (subject to applicable Law (as defined below)) of the
conditions set forth in Article VII (excluding conditions that, by their
terms, cannot be satisfied until the Closing Date), unless another time
or date is agreed to in writing by the parties hereto. The Closing shall
be held at the offices of Xxxxxxx & Xxxxx L.L.P., 4200 Texas Commerce
Tower, 000 Xxxxxx, Xxxxxxx, Xxxxx 00000, unless another place is agreed
to in writing by the parties hereto.
(b) As soon as practicable following the Closing, the parties
hereto shall cause the Merger to be consummated by filing a Certificate
of Merger with the Secretary of State of Delaware in such form as is
required by, and executed in accordance with, the relevant provisions of
the DGCL. The term "Effective Time" means the date and time of the
filing of the Certificate of Merger with the Secretary of State of the
State of Delaware (or such later time as may be agreed in writing by
each of the parties hereto and specified in the Certificate of Merger;
provided, however, that for financial accounting purposes, the Effective
Time shall be the first day of the month in which the Closing occurs.
SECTION 2.03 Effects of the Merger. The Merger shall have the
effects set forth in the applicable provisions of the DGCL and set forth
herein. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities, obligations,
restrictions, disabilities and duties of each of the Company and Merger
Sub shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
SECTION 2.04 Certificate of Incorporation and By-Laws. The
Certificate of Incorporation and the By-Laws of Merger Sub, in each case
as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation and By-Laws of the Surviving Corporation;
provided, however, that Article I of the Certificate of Incorporation of
the Surviving Corporation shall be amended to read in its entirety as
follows: "ARTICLE I. The name of the Corporation is SAVANNAH FOODS &
INDUSTRIES, INC." (or such other name as the parties shall agree).
SECTION 2.05 Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time and the officers of the Company
immediately prior to the Effective Time shall be the directors and
officers, respectively, of the Surviving Corporation until their
respective successors are duly elected and qualified.
SECTION 2.06 Conversion of Shares.
(a) At the Effective Time, except as otherwise provided herein and
subject to Section 2.06(b), each share of Company Common Stock, issued
and outstanding immediately prior to the Effective Time (other than the
shares of Company Common Stock owned by IHK, Merger Sub or any of their
Subsidiaries or held in the treasury of the Company, all of which shall
be canceled and cease to exist, without consideration being payable
therefore (the "Excluded Shares"), shall, by virtue of the Merger and,
except as provided in Section 2.11, without any action on the part of
the holder thereof, be converted into, exchanged for and represent the
right to receive (without interest), subject to the proration procedures
described below, either (i) the Stock Consideration (as defined below)
or (ii) cash in an amount equal to the Offer Price ("Cash Consideration"
and, together with the Stock Consideration, the "Merger
Consideration")); provided, however, that, in any event, if between the
date of this Agreement and the Effective Time the outstanding shares of
IHK Common Stock or Company Common Stock shall have been changed into a
different number of shares or a different class by reason of any stock
dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the Cash Consideration and the Stock
Consideration shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares. All shares of Company Common Stock so
converted or exchanged shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
certificate previously evidencing any such shares shall thereafter
represent the right to receive, upon the surrender of such certificate
in accordance with the provisions of Section 2.11, only the applicable
Merger Consideration and any cash to be paid in lieu of fractional
shares of IHK Common Stock and associated fractional rights ("IHK
Purchase Rights") to purchase one one-hundredth of a share of Series A
Junior Participating Preferred Stock, without par value, of IHK ("IHK
Junior Preferred Stock") pursuant to the Rights Agreement, dated as of
September 14, 1989, as amended (the "IHK Rights Agreement"), between IHK
and The Bank of New York, as rights agent, to which such holder is
entitled pursuant to Section 2.10(e) (without interest thereon). The
holders of such certificates previously evidencing such shares of
Company Common Stock outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such shares of Company
Common Stock except as otherwise provided herein or by law. IHK shall
prepare a statement setting forth the calculations required or otherwise
contemplated by this Section 2.06 in reasonable detail prior to the
Closing Date and shall furnish a copy thereof to the Company.
(b) Notwithstanding anything in this Agreement to the contrary,
the number of shares of Company Common Stock (the "Cash Election
Number") to be converted into the right to receive the Cash
Consideration in the Merger shall be equal to 70% of the number of
shares of Company Common Stock issued and outstanding immediately prior
to the Effective Time less the sum of (i) the number of Dissenting
Shares (as hereinafter defined) and (ii) the number of Excluded Shares.
(c) In the event that the aggregate number of shares in respect of
which Cash Elections (as defined below) have been made (the "Cash
Election Shares") exceeds the Cash Election Number, each share of
Company Common Stock in respect of which a Cash Election has not been
made shall be converted into the right to receive the Stock
Consideration, and each of the Cash Election Shares shall be converted
into the right to receive the Stock Consideration or the Cash
Consideration in the following manner:
(i) A proration factor (the "Proration Factor") shall be
determined by dividing the Cash Election Number by the total
number of Cash Election Shares.
(ii) The number of Cash Election Shares as to which each
stockholder who made a Cash Election shall be converted into the
right to receive the Cash Consideration (on a consistent basis
among stockholders who made a Cash Election pro rata to the number
of shares as to which they made such elections) shall be equal to
the product of the Proration Factor multiplied by the total number
of Cash Election Shares beneficially owned by such stockholder.
(iii) Subject to Section 2.10(e), each Cash Election Share
other than those shares that shall receive the Cash Election
Amount in accordance with Section 2.06(c)(ii), shall be converted
into the right to receive the Stock Consideration.
(d) Subject to Section 2.10(e), if the number of Cash Election
Shares is less than the Cash Election Number, then:
(i) Each Cash Election Share shall be converted into the
right to receive the Cash Consideration; and
(ii) Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time other than
Cash Election Shares, the shares of Company Common Stock to be
canceled in accordance with Section 2.06(e) and Dissenting Shares
(the "Eligible Shares"), shall be converted into the right to
receive the Cash Consideration or the Stock Consideration in the
following manner:
(A) The number of Eligible Shares to be converted into
the right to receive the Cash Consideration shall be equal
to the excess of the Cash Election Number over the number of
Cash Election Shares (which shall be allocated on a basis
consistent among all stockholders who beneficially own
Eligible Shares pro rata to the number of Eligible Shares
beneficially owned by each such stockholder).
(B) Each other Eligible Share shall be converted into
the right to receive the Stock Consideration.
(e) At the Effective Time, each Excluded Share shall be canceled
without any conversion thereof and no payment or distribution shall be
made with respect thereto.
SECTION 2.07 Conversion of Common Stock of Merger Sub. Each share
of common stock of Merger Sub issued and outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and become
at the Effective Time one share of common stock of the Surviving
Corporation.
SECTION 2.08 Stockholders' Meetings. Subject to applicable law,
each of IHK and the Company, acting through its respective Board of
Directors, shall, in accordance with applicable law, duly call, give
notice of, convene and hold a special meeting (the "Special Meetings" or
the "Stockholders' Meetings") of its respective stockholders as soon as
practicable for the purpose (in the case of the Company) of approving
and adopting the agreement of merger (within the meaning of Section 251
of the DGCL) set forth in this Agreement and approving the Merger (the
"Company Stockholder Approval") or (in the case of IHK) the issuance of
the shares of IHK Common Stock to the stockholders of the Company in the
Merger (the "IHK Stockholder Approval" and together with the Company
Stockholder Approval, the "Stockholder Approvals"), and, subject to the
fiduciary duties of the respective Boards of Directors under applicable
law as determined by such directors in good faith after consultation
with and based upon the advice of outside counsel, include in the Proxy
Statement (as defined in Section 6.02) of each of the Company and IHK
for use in connection with the Special Meetings, the recommendation of
their Boards of Directors that stockholders vote in favor of the Company
Stockholder Approval or IHK Stockholder Approval, as the case may be.
The Company and IHK agree to use commercially reasonable efforts to
cause the Special Meetings to occur within 30 days after the
Registration Statement (as defined below in Section 3.21) is effective
under the Securities Act. IHK and Merger Sub agree that, at the Company
Stockholders' Meeting, all of the shares of Company Common Stock
acquired pursuant to the Offer or otherwise by IHK or Merger Sub will be
voted in favor of the Company Stockholder Approval.
SECTION 2.09 Rights Under Stock Plans.
(a) Each unexpired and unexercised option to purchase shares of
Company Common Stock (the "Company Options") issued pursuant to the
Company's 1996 Equity Incentive Plan (the "Company Stock Option Plan"),
or otherwise granted by the Company outside the Company Stock Option
Plan, each of which issued and outstanding Company Options are set forth
in Section 3.03 of the Company Disclosure Schedule (as defined below),
shall, at the Effective Time and at the election of the holder of such
Company Options, either (i) be assumed by IHK and shall constitute an
option to acquire, on the same terms and conditions as were applicable
under such assumed Company Option, a number of shares of IHK Common
Stock equal to the product of (A) the Stock Consideration and (B) the
number of shares of Company Common Stock subject to such Company Option,
at a price per share equal to the amount obtained by dividing the
exercise price of such Company Option by the Stock Consideration (the
"Substitute Options") or (ii) each Company Option which is vested or
exercisable or shall become vested or exercisable as a result of the
Offer or the Merger shall be canceled by the Company, and each holder of
a Company Option so canceled shall be entitled to receive an amount in
cash equal to the difference between the Offer Price and the exercise
price of such Company Option. Each holder of a Company Option shall make
such election by notifying the Company and IHK by 5:00 p.m. New York
City time on the Election Date (as defined below). At the Effective
Time, IHK shall deliver to holders of Company Options, who make the
election set forth in clause (i) of the preceding sentence, appropriate
option agreements representing the right to acquire shares of IHK Common
Stock on the same terms and conditions as contained in the outstanding
Company Options. IHK shall adopt and comply with the terms of the
Company Stock Option Plan as it applies to Company Options assumed as
set forth above including, without limitation, provisions regarding the
accelerated vesting of Company Options which shall occur by virtue of
consummation of the Merger, to the extent required by the terms of such
Company Options or the Company Stock Option Plan. The date of grant of
each Substitute Option shall be deemed to be the date on which the
corresponding Company Option was granted. It is the intention of the
parties that, subject to applicable Law, the Substitute Options qualify
following the Effective Time as incentive stock options as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), to the extent that the Company Options qualified as incentive
stock options prior to the Effective Time.
(b) IHK shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of IHK Common Stock for delivery
upon exercise of Company Options assumed in accordance with this Section
2.09. Promptly after the Effective Time, the shares of IHK Common Stock
subject to Substitute Options shall be covered by an effective
registration statement on Form S-8 (or any successor form) or another
appropriate form and IHK shall use commercially reasonable efforts to
maintain the effectiveness of such registration statement or
registration statements for so long as Substitute Options remain
outstanding. In addition, IHK shall use commercially reasonable efforts
to cause the shares of IHK Common Stock subject to Substitute Options to
be listed on the Listing Market (as defined below).
SECTION 2.10 Exchange of Certificates.
(a) Prior to the mailing of the Proxy Statement, IHK shall appoint
a bank or trust company to act as paying agent (the "Exchange Agent")
for the payment of the Merger Consideration. As of or promptly after the
Effective Time, IHK shall deposit the aggregate Merger Consideration
with the Exchange Agent for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance with this Article II.
(b) As soon as practicable after the Effective Time, each holder
of an outstanding certificate or certificates which prior thereto
represented shares of Company Common Stock shall, upon surrender to the
Exchange Agent of such certificate or certificates and acceptances
thereof by the Exchange Agent, be entitled to a certificate or
certificates representing the number of full shares of IHK Common Stock
received as Stock Consideration and the Cash Consideration, if any, into
which the number of shares of Company Common Stock previously
represented by such certificate or certificates surrendered shall have
been converted pursuant to this Agreement. The Exchange Agent shall
accept such certificates upon compliance with such reasonable terms and
conditions as the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with normal exchange practices. After the
Effective Time, there shall be no further transfer on the records of the
Company or its transfer agent of certificates representing shares of
Company Common Stock, and if such certificates are presented to the
Surviving Corporation for transfer, they shall be canceled against
delivery of cash and/or certificates for shares of IHK Common Stock in
accordance with this Agreement. If any certificate for such shares of
IHK Common Stock is to be issued in, or if cash is to be remitted to, a
name other than that in which the certificate for shares of Company
Common Stock surrendered for exchange is registered, it shall be a
condition of such exchange that the certificate so surrendered shall be
properly endorsed, with signature guaranteed or otherwise in proper form
for transfer and that the person requesting such exchange shall pay to
the Surviving Corporation or its transfer agent any transfer or other
taxes required by reason of the issuance of certificates for such shares
of IHK Common Stock in a name other than that of the registered holder
of the certificate surrendered, or establish to the satisfaction of the
Surviving Corporation or its transfer agent that such tax has been paid
or is not applicable. Until surrendered as contemplated by this Section
2.10(b), each certificate for shares of Company Common Stock shall be
deemed at any time after the Effective Time of the Merger to represent
only the right to receive upon such surrender the Merger Consideration
as contemplated by Section 2.06.
(c) No dividends or other distributions with respect to shares of
IHK Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered certificate for shares of
Company Common Stock with respect to the shares of IHK Common Stock
represented thereby and no cash payment in lieu of fractional shares of
IHK Common Stock shall be paid to any such holder pursuant to Section
2.10(e) until the surrender of the certificate for shares of Company
Common Stock with respect to the shares of IHK Common Stock represented
thereby in accordance with this Article II. Subject to the effect of
applicable laws, following surrender of any such certificates, these
shall be paid to the holder of the certificate representing whole shares
of IHK Common Stock issued in connection therewith, without interest (i)
at the time of such surrender the amount of any cash payable in lieu of
fractional shares to which such holder is entitled pursuant to Section
2.10(e) and the proportionate amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with
respect to such shares of IHK Common Stock, and (ii) at the appropriate
payment date, the proportionate amount of dividends or other
distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable
with respect to such whole shares of IHK Common Stock.
(d) All cash paid upon the surrender for exchange of certificates
representing shares of Company Common Stock in accordance with the terms
of this Article II (including any cash paid pursuant to Section 2.10(e))
shall be deemed to have been issued (and paid) in full satisfaction of
all rights pertaining to the shares of Company Common Stock exchanged
for cash theretofore represented by such certificates.
(e) Notwithstanding any other provisions of this Agreement, each
holder of shares of Company Common Stock after the Effective Time who
would otherwise have been entitled to receive as Stock Consideration a
fraction of a share of IHK Common Stock (after taking into account all
shares of Company Common Stock delivered by such holder) shall receive,
in lieu thereof, a cash payment (without interest) equal to such
fraction multiplied by the Cash Consideration.
(f) Any portion of the Merger Consideration deposited with the
Exchange Agent pursuant to this Section 2.10 (the "Exchange Fund") which
remains undistributed to the holders of the certificates representing
shares of Company Common Stock for six months after the Effective Time
shall be delivered to IHK, and any holders of shares of Company Common
Stock prior to the Effective Time who have not theretofore complied with
this Article II shall thereafter look only to IHK and only as general
creditors thereof for payment of their claim for cash or shares of IHK
Common Stock, if any.
(g) None of Merger Sub, the Company, IHK or the Exchange Agent
shall be liable to any person in respect of any cash or any shares of
IHK Common Stock from the Exchange Fund delivered to a public office
pursuant to any applicable abandoned property, escheat or similar law.
If any certificates representing shares of Company Common Stock shall
not have been surrendered immediately prior to the date on which any
Merger Consideration in respect of such certificate would otherwise
escheat to or become the property of any Government Authority, any such
Merger Consideration in respect of such certificate shall, as such time
and to the extent permitted by applicable law, become the property of
the Surviving Corporation, free and clear of all claims or interest of
any person previously entitled thereto.
(h) The Exchange Agent shall invest any cash included in the
Exchange Fund, as directed by IHK, on a daily basis, provided that such
investments shall be in obligations of the United States of America or
obligations fully guaranteed as to principal and interest by the United
States of America, any of which may be made through a repurchase
agreement in commercially reasonable form with any bank or other
financial institution having capital, surplus and undivided profits of
at least $500,000,000. Any interest and other income resulting from such
investments shall be paid to IHK. To the extent that there are losses
with respect to such investments, or the Exchange Fund diminishes for
other reasons below the level required to make prompt payments of the
Merger Consideration as contemplated hereby, IHK shall promptly replace
or restore the portion of the Exchange Fund lost through investments or
other events so as to ensure that the Exchange Fund is, at all times,
maintained at a level sufficient to make such payments.
(i) The Company shall pay all charges and expenses of the Exchange
Agent.
SECTION 2.11 Elections.
(a) Each person who, on or prior to the Election Date referred to
in paragraph (c) below, is a record holder of shares of Company Common
Stock (other than holders of shares to be canceled as set forth in
Section 2.06(a)) will be entitled, with respect to all or any portion of
his shares, to make an unconditional election (a "Cash Election") on or
prior to such Election Date to receive the Cash Consideration (subject
to Section 2.06), on the basis hereinafter set forth.
(b) Prior to the mailing of the Proxy Statement, IHK shall appoint
the Exchange Agent for the payment of the Merger Consideration.
(c) The Company shall prepare and mail a form of election, which
form shall be subject to the reasonable approval of IHK and Merger Sub
(the "Form of Election"), with the Proxy Statement to the record holders
of shares of Company Common Stock as of the record date for the Company
Stockholders' Meeting, which Form of Election shall be used by each
record holder of shares of Company Common Stock who wishes to make a
Cash Election, subject to the provisions of Section 2.06 hereof, for any
or all shares of Company Common Stock held by such holder. The Company
will use commercially reasonable efforts to make the Form of Election
and the Proxy Statement available to all persons who become holders of
shares of Company Common Stock during the period between such record
date and the Election Date referred to below. Any such holder's Cash
Election shall have been properly made only if the Exchange Agent shall
have received at its designated office, by 5:00 p.m., New York City time
on the Business Day (the "Election Date") next preceding the day on
which the vote is taken at the Company Stockholders' Meeting (or any
adjournment thereof) a Form of Election properly completed and signed
and accompanied by certificates for the shares of Company Common Stock
to which such Form of Election relates (or by an appropriate guarantee
of delivery of such certificates as set forth in such Form of Election
from a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in
the United States, provided such certificates are in fact delivered to
the Exchange Agent within three NYSE trading days after the date of
execution of such guarantee of delivery). Failure to deliver shares
covered by such a guarantee of delivery within the time set forth
therein shall invalidate an otherwise properly made Cash Election.
(d) Any Form of Election may be revoked by the stockholder
submitting it to the Exchange Agent only by written notice received by
the Exchange Agent (i) prior to 5:00 p.m., New York City time, on the
Election Date or (ii) after the date of the Company Stockholders
Meeting, if (and to the extent that) the Exchange Agent is legally
required to permit revocations and the Effective Time shall not have
occurred prior to such date. In addition, all Forms of Election shall
automatically be revoked if the Exchange Agent is notified in writing by
IHK, Merger Sub and the Company that the Merger has been abandoned. If a
Form of Election is revoked, the certificate or certificates (or
guarantees of delivery, as appropriate) for the shares of Company Common
Stock to which such Form of Election relates shall be promptly returned
to the stockholder submitting the same to the Exchange Agent.
(e) The determination of the Exchange Agent shall be binding as to
whether or not elections to receive the Cash Consideration have been
properly made or revoked pursuant to this Section 2.11 with respect to
shares of Company Common Stock and when elections and revocations were
received by it. If the Exchange Agent determines that any Cash Election
was not properly made with respect to shares of Company Common Stock,
such shares of Company Common Stock shall be treated by the Exchange
Agent as shares of Company Common Stock which were not Cash Election
Shares at the Effective Time, and such shares of Company Common Stock
shall be exchanged in the Merger for Stock Consideration pursuant to
Section 2.06. The Exchange Agent shall also make all computations as to
the allocation and the proration contemplated by Section 2.06, and any
such computation shall be conclusive and binding on the holders of
shares of Company Common Stock. The Exchange Agent may, with the mutual
agreement of IHK and Merger Sub, make such rules as are consistent with
this Section 2.11 for the implementation of the elections provided for
herein as shall be necessary or desirable fully to effect such
elections.
SECTION 2.12 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding shares of Company
Common Stock which are held by stockholders who did not vote in favor of
the Merger and who comply with all of the relevant provisions of Section
262 of the DGCL (the "Dissenting Shares") shall not be converted into or
be exchanged for the right to receive the Merger Consideration (but
instead shall be converted into the right to receive payment from the
Surviving Corporation with respect to such Dissenting Shares in
accordance with the DGCL), unless and until such holders shall have
failed to perfect or shall have effectively withdrawn or lost their
rights to appraisal under the DGCL. If any such holder shall have failed
to perfect or shall have effectively withdrawn or lost such right, such
holder's shares of Company Common Stock shall be entitled to receive
either (i) the Stock Consideration or (ii) the Cash Consideration in
accordance with Section 2.06. The Company shall give prompt notice to
Merger Sub and IHK of any demands received by the Company for appraisal
of shares of Company Common Stock, and Merger Sub and IHK shall have the
right to participate in and direct all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior
written consent of Merger Sub and IHK, make any payment with respect to,
or settle or offer to settle, any such demands. IHK agrees to invest in,
or lend to, the Surviving Corporation sufficient funds to permit any
payment with respect to Dissenting Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by the
Company concurrently with the execution of this Agreement (the "Company
Disclosure Schedule") (each section of which qualifies the
correspondingly numbered representation and warranty or covenant to the
extent specified therein), the Company hereby represents and warrants to
IHK and the Merger Sub that:
SECTION 3.01 Organization and Qualification; Subsidiaries. Each of
the Company and each subsidiary of the Company (a "Company Subsidiary")
is a corporation duly incorporated, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation and has
the requisite power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate,
have a Company Material Adverse Effect (as defined below). The Company
and each Company Subsidiary are duly qualified or licensed as a foreign
corporation to do business, and are in good standing, in each
jurisdiction where the character of the properties owned, leased or
operated by the Company and the respective Company Subsidiaries or the
nature of their respective businesses makes such qualification or
licensing necessary, except for such failures to be so qualified or
licensed and in good standing that would not, individually or in the
aggregate, have a Company Material Adverse Effect. The term "Company
Material Adverse Effect" means any adverse change, circumstance or
effect that, individually or in the aggregate with all other adverse
changes, circumstances and effects, is or is reasonably likely to be
materially adverse to the business, operations, assets, liabilities
(including, without limitation, contingent liabilities), financial
condition or results of operations of the Company and the Company
Subsidiaries taken as a whole. Section 3.01 of the Company Disclosure
Schedule sets forth, as of the date of this Agreement, a true and
complete list of all of the Company Subsidiaries, together with the
jurisdiction of incorporation of each Company Subsidiary and the
percentage of each Company Subsidiary's outstanding capital stock or
other equity interests owned by the Company and the Company
Subsidiaries, as the case may be, and the name of each other holder of
any such outstanding capital stock or other equity interests and the
percentage so held with respect to each such Company Subsidiary. There
are no partnerships or joint venture arrangements or other business
entities in which the Company or any Company Subsidiary owns an equity
interest that are material to the business of the Company and the
Company Subsidiaries taken as a whole.
SECTION 3.02 Certificate of Incorporation and By-Laws. The Company
has made available to IHK complete and correct copies of its Certificate
of Incorporation and By-Laws and the certificates of incorporation and
by-laws or other comparable charter or organizational documents of the
Company Subsidiaries, in each case as amended to the date of this
Agreement. The Company is not in violation of any of the provisions of
its Certificate of Incorporation or ByLaws. Except as would not have a
Company Material Adverse Effect, no Company Subsidiary is in violation
of any of the provisions of its Certificate of Incorporation or By-Laws
or other comparable charter or organizational documents.
SECTION 3.03 Capitalization. The authorized capital stock of the
Company consists of 64,000,000 shares of Company Common Stock and
1,000,000 shares of preferred stock ("Company Preferred Stock"). As of
September 1, 1997, (i) 28,738,196 shares of Company Common Stock are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable and 2,500,000 of which are held by Wachovia Bank, N.A.
(formerly Wachovia Bank of North Carolina N.A.), as trustee of the trust
created pursuant to the Savannah Foods & Industries, Inc. Benefit Trust
Agreement (the "Benefit Trust"; shares held by the trustee of the
Benefit Trust immediately prior to the Effective Time being referred to
herein as the "Benefit Trust Shares"); (ii) 2,568,604 shares of Company
Common Stock are held in the treasury of the Company; (iii) 1,250,000
shares of Company Common Stock are reserved for future issuance pursuant
to Company Options and (iv) 1,000,000 shares of Company Preferred Stock
are reserved for issuance pursuant to the Rights Agreement, dated as of
March 31, 1989, between the Company and Citizens and Southern Trust
Company, as Rights Agent (as amended, the "Company Rights Agreement").
Except for Company Options heretofore granted pursuant to the Company
Stock Option Plan or pursuant to agreements or arrangements described in
Section 3.03 of the Company Disclosure Schedule and the Preferred Stock
Purchase Rights (the "Company Rights") issued pursuant to the Company
Rights Agreement, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or any Company
Subsidiary or obligating the Company or any Company Subsidiary to issue
or sell any shares of capital stock of, or other equity interests in,
the Company or any Company Subsidiary. All shares of Company Common
Stock and Company Preferred Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, will be duly authorized, validly
issued, fully paid and nonassessable. There are no outstanding
contractual obligations of the Company or any Company Subsidiary to
repurchase, redeem or otherwise acquire any shares of Company Common
Stock or Company Preferred Stock or any capital stock of any Company
Subsidiary. Each outstanding share of capital stock of each Company
Subsidiary is duly authorized, validly issued, fully paid and
nonassessable and each such share owned by the Company or another
Company Subsidiary is free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Company Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever. Neither
the Company nor any Company Subsidiary directly or indirectly owns, or
has agreed to purchase or otherwise acquire, 5% or more of the capital
stock of any corporation, partnership, joint venture or other business
association or entity, assuming for such purpose the conversion of all
securities convertible into such capital stock held by the Company or
any Company Subsidiary and the exercise of all warrants, options and
other rights of the Company or any Company Subsidiary to purchase such
capital stock (other than the Company Subsidiaries set forth in Section
3.01 of the Company Disclosure Schedule). There are no material
outstanding contractual obligations of the Company or any Company
Subsidiary to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Company Subsidiary or
any other Person. There are no voting trusts or other agreements or
understandings to which the Company or any Company Subsidiary is a party
with respect to the voting of capital stock of the Company or any
Company Subsidiary.
SECTION 3.04 Authority Relative to this Agreement.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. 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 and no other
corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby (other than, with respect to the Merger, the approval and
adoption of this Agreement by the holders of a majority of the then
outstanding shares of Company Common Stock, and the filing and
recordation of appropriate merger documents as required by the DGCL).
This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by
IHK and Merger Sub, constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms (except insofar as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or principles governing the
availability of equitable remedies).
(b) The Company's Board of Directors has approved the Offer, the
Merger and this Agreement, and such approval is sufficient to render
inapplicable to the Offer, the Merger and this Agreement and the
transactions contemplated by this Agreement the provisions of Section
203 of the DGCL. To the Knowledge of the Company, no other state
takeover statute or similar statute or regulation applies or purports to
apply to the Merger, this Agreement or any of the transactions
contemplated by this Agreement.
SECTION 3.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company
will not, (i) conflict with or violate the Certificate of Incorporation
or By-laws or equivalent organizational documents of the Company or any
Company Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 3.05(b) have been
obtained and all filings and obligations described in Section 3.05(b)
have been made, conflict with or violate any foreign or domestic Law
applicable to the Company or any Company Subsidiary or by which any
property or asset of the Company or any Company Subsidiary is bound or
affected, or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of the Company or any Company
Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults, or other occurrences which
would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company will not
require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Entity, except (i) for
applicable requirements, if any, of the Exchange Act, state securities
or "blue sky" Laws ("Blue Sky Laws"), the NYSE, the Listing Market and
state takeover Laws, the pre-merger notification requirements of the HSR
Act, and filing and recordation of appropriate merger documents as
required by the DGCL and (ii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Merger, or
otherwise prevent the Company from performing its obligations under this
Agreement, and would not, individually or in the aggregate, have a
Company Material Adverse Effect.
SECTION 3.06 Permits; Compliance. Each of the Company and the
Company Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and orders of any Governmental Entity
necessary for the Company or any Company Subsidiary to own, lease and
operate its properties or to carry on its business as it is now being
conducted (the "Company Permits"), except where the failure to have, or
the suspension or cancellation of, any of the Company Permits would not,
individually or in the aggregate, have a Company Material Adverse
Effect, and, as of the date hereof, no suspension or cancellation of any
of the Company Permits is pending or, to the Knowledge of the Company,
threatened, except where the failure to have, or the suspension or
cancellation of, any of the Company Permits would not, individually or
in the aggregate, have a Company Material Adverse Effect. Neither the
Company nor any Company Subsidiary is in conflict with, or in default or
violation of, (i) any Law applicable to the Company or any Company
Subsidiary or by which any property or asset of the Company or any
Company Subsidiary is bound or affected, (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which the Company or any Company Subsidiary
or any property or asset of the Company or any Company Subsidiary is
bound or affected or (iii) any Company Permits, except for any such
conflicts, defaults or violations that would not, individually or in the
aggregate, have a Company Material Adverse Effect.
SECTION 3.07 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents
required to be filed by it with the SEC since October 1, 1995
(collectively, the "Company SEC Reports"). The Company SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act,
or the Exchange Act, as the case may be, and (ii) did not at the time
they were filed contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. No Company
Subsidiary is required to file any form, report or other document with
the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the Company SEC Reports (the
"Company Financial Statements"), (i) was prepared from the books of
account and other financial records of the Company and the consolidated
Company Subsidiaries, (ii) was prepared in accordance with United States
generally accepted accounting principles ("U.S. GAAP") applied on a
consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and (iii) presented fairly, in all
material respects, the consolidated financial position of the Company
and the consolidated Company Subsidiaries as at the respective dates
thereof and the results of their operations and their cash flows for the
respective periods indicated therein except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring
year-end adjustments which were not and are not expected, individually
or in the aggregate, to have a Company Material Adverse Effect and the
omission of footnotes).
(c) The books of account and other financial records of the
Company and the Company Subsidiaries from which the Company Financial
Statements were prepared: (i) reflect all items of income and expense
and all assets and liabilities required to be reflected therein in
accordance with U.S. GAAP applied on a basis consistent with the past
practices of the Company, (ii) are in all material respects complete and
correct, and do not contain or reflect any material inaccuracies or
discrepancies and (iii) have been maintained in accordance with good
business and accounting practices.
(d) Except for liabilities and obligations reflected on the
September 29, 1996 consolidated balance sheet of the Company (including
the notes thereto), liabilities and obligations disclosed in the Company
SEC Reports filed prior to the date of this Agreement and other
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since September 29, 1996, neither the
Company nor any Company Subsidiary has any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) which,
individually or in the aggregate, are or are reasonably likely to be
material to the Company and the Company Subsidiaries taken as a whole.
(e) The Company has heretofore furnished to IHK complete and
correct copies of (i) all agreements, documents and other instruments
not yet filed by the Company with the SEC but that are currently in
effect and that the Company expects to file with the SEC after the date
of this Agreement and (ii) all amendments and modifications that have
not been filed by the Company with the SEC to all agreements, documents
and other instruments that previously have been filed by the Company
with the SEC and are currently in effect.
SECTION 3.08 Absence of Certain Changes or Events. Since September
29, 1996, except as contemplated by this Agreement or as disclosed in
the Company SEC Reports filed prior to the date of this Agreement, the
Company and the Company Subsidiaries have conducted their businesses
only in the ordinary course and in a manner consistent with past
practice and, since such date, there has not been (a) any Company
Material Adverse Effect, (b) any change by the Company in its accounting
methods, principles or practices, except as may be required by U.S.
GAAP, (c) any damage, destruction or loss (whether or not covered by
insurance) with respect to properties or assets of the Company or any
Company Subsidiary that, individually or in the aggregate, would result
in a Company Material Adverse Effect, (d) any declaration, setting aside
or payment of any dividend or distribution in respect of shares of
Company Common Stock or any redemption, purchase or other acquisition of
any of its securities other than the previously declared regular
quarterly dividend of $0.0375 per share of Company Common Stock, (e) any
revaluation by the Company and the Company Subsidiaries of any asset
(including, without limitation, any writing down of the value of
inventory or writing off of notes or accounts receivable), other than in
the ordinary course of business consistent with past practice, (f) any
entry by the Company or any Company Subsidiary into any commitment or
transaction material to the Company and the Company Subsidiaries taken
as a whole, except in the ordinary course of business consistent with
past practice, (g) any increase in or establishment of any bonus,
insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option (including, without limitation, the granting of
stock options, stock appreciation rights, performance awards, or
restricted stock awards), stock purchase or other employee benefit plan,
or any other increase in the compensation payable or to become payable
to any officers or key employees of the Company or any Company
Subsidiary, except in the ordinary course of business consistent with
past practice, (h) any acquisition or disposition by the Company or any
Company Subsidiary of any material asset, except in the ordinary course
of business consistent with past practice, (i) any incurrence,
assumption or guarantee of any indebtedness or obligation relating to
any lending or borrowing except current liabilities and commitments
incurred in the ordinary course of business consistent with past
practice, or (j) any amendment, modification or termination of any
existing, or entering into any new, material contract, or any material
plan, lease, license, permit or franchise, except in the ordinary course
of business consistent with past practice.
SECTION 3.09 Absence of Litigation.
(a) Except as set forth in Section 3.09 of the Company Disclosure
Schedule, there is no litigation, suit, claim, action, proceeding or
investigation pending or, to the Knowledge of the Company, threatened
against or affecting the Company or any Company Subsidiary, or any
property or asset of the Company or any Company Subsidiary, before any
court, arbitrator or Governmental Entity, which (i) individually or in
the aggregate has had or is reasonably likely to have a Company Material
Adverse Effect or (ii) seeks to delay or prevent the consummation of the
Offer or the Merger.
(b) Neither the Company nor any Company Subsidiary nor any
property or asset of the Company or any Company Subsidiary is subject to
any continuing order of, consent decree, settlement agreement or other
similar written agreement with, or, to the Knowledge of the Company,
continuing investigation by, any Governmental Entity, or any Order,
determination or award of any Governmental Entity or arbitrator having
or reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
SECTION 3.10 Employee Benefit Plans; Labor Matters.
(a) Section 3.10(a) of the Company Disclosure Schedule contains a
true and complete list of (i) all "employee benefit plans" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) and all bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, retiree
medical or life insurance, supplemental retirement, severance or other
benefit plans, programs or arrangements, and all employment,
termination, severance or other contracts or agreements to which the
Company or any Company Subsidiary is a party, by which the Company or
any Company Subsidiary is bound, with respect to which the Company or
any Company Subsidiary has any obligation or which are maintained,
contributed to or sponsored by the Company or any Company Subsidiary for
the benefit of any current or former employee, officer or director of
the Company or any Company Subsidiary and (ii) each employee benefit
plan for which the Company or any Company Subsidiary could incur
liability under Section 4069 of ERISA, in the event such plan were
terminated, or under Section 4212(c) of ERISA, or in respect of which
the Company or any Company Subsidiary remains secondarily liable under
Section 4204 of ERISA (collectively, the "Company Plans"). Each Company
Plan is in writing and the Company has previously made available to IHK
a true and complete copy of each Company Plan and a true and complete
copy of (1) each trust or other funding arrangement, (2) each summary
plan description and summary of material modifications, (3) the most
recently filed Internal Revenue Service ("IRS") Form 5500, (4) the most
recently received IRS determination letter for each such Company Plan,
and (5) the most recently prepared actuarial report and financial
statement in connection with each such Company Plan. Neither the Company
nor any Company Subsidiary has any express or implied commitment (I) to
create, to incur liability with respect to, or to cause to exist any
other employee benefit plan, program or arrangement, (II) to enter into
any contract or agreement to provide compensation or benefits to any
individual or (III) to modify, change or terminate any Company Plan
(other than with respect to a modification, change or termination
required by ERISA or the Code).
(b) None of the Company Plans is a multiemployer plan, within the
meaning of Section 3(37) or 4001(a)(3) of ERISA (a "Multiemployer
Plan"), or a single employer pension plan, within the meaning of Section
4001(a)(15) of ERISA, for which the Company or any Company Subsidiary
could incur liability under Section 4063 or 4064 of ERISA (a "Multiple
Employer Plan"). With respect to each Company Plan, neither the Company
nor any Company Subsidiary nor any trade or business, whether or not
incorporated (a "Company ERISA Affiliate") that together with the
Company or any Company Subsidiary would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA has made or suffered a
"complete withdrawal" or a "partial withdrawal" as such terms are
respectively defined in Sections 4203 and 4205 of ERISA (or any
liability resulting therefrom has been satisfied in full). None of the
Company Plans (i) provides for the payment of separation, severance,
termination or similar-type benefits to any Person, (ii) obligates the
Company or any Company Subsidiary to pay separation, severance,
termination or other benefits as a result of the Merger or (iii)
obligates the Company or any Company Subsidiary to make any payment or
provide any benefit that would be subject to a tax under Section 4999 of
the Code. None of the Company Plans provides for or promises retiree
medical, disability or life insurance benefits to any current or former
employee, officer or director of the Company or any Company Subsidiary.
(c) Each Company Plan which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter
from the IRS that such Company Plan is so qualified and each trust
established in connection with any Company Plan which is intended to be
exempt from federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that such trust is so
exempt. To the Company's Knowledge, no fact or event has occurred since
the date of any such determination letter from the IRS that would
adversely affect the qualified status of any such Company Plan or the
exempt status of any such trust. Each trust maintained or contributed to
by the Company or any Company Subsidiary which is intended to be
qualified as a voluntary employees' beneficiary association exempt from
federal income taxation under Sections 501(a) and 501(c)(9) of the Code
has received a favorable determination letter from the IRS that it is so
qualified and so exempt, and, to the Company's Knowledge, no fact or
event has occurred since the date of such determination by the IRS that
would adversely affect such qualified or exempt status.
(d) To the Company's Knowledge, there has been no non-exempt
prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) with respect to any Company Plan. Neither the
Company nor any Company Subsidiary is currently liable or has previously
incurred any liability for any tax or penalty (other than any tax or
penalty that would not have a Company Material Adverse Effect) arising
under Section 4971, 4972, 4979, 4980 or 4980B of the Code or Section
502(c) of ERISA, and to the Company's Knowledge, no fact or event exists
which would give rise to any such liability. Neither the Company nor any
Company Subsidiary has incurred any liability (other than any liability
that would not have a Company Material Adverse Effect) under, arising
out of or by operation of Title IV of ERISA that has not been satisfied
in full (other than liability for premiums to the Pension Benefit
Guaranty Corporation arising in the ordinary course), including, without
limitation, any liability in connection with (i) the termination or
reorganization of any employee pension benefit plan subject to Title IV
of ERISA or (ii) the withdrawal from any Multiemployer Plan or Multiple
Employer Plan, and, to the Company's Knowledge, no fact or event exists
which would give rise to any such liability. No complete or partial
termination has occurred within the five years preceding the date hereof
with respect to any Company Plan. No reportable event (within the
meaning of Section 4043 of ERISA) for which the 30-day notice
requirement to the Pension Benefit Guaranty Corporation has not been
waived has occurred or is expected to occur with respect to any Company
Plan subject to Title IV of ERISA. No asset of the Company or any
Company Subsidiary is the subject of any lien arising under Section
302(f) of ERISA or Section 412(n) of the Code; neither the Company nor
any Company Subsidiary has been required to post any security under
Section 307 of ERISA or Section 401(a)(29) of the Code; and no fact or
event exists which would give rise to any such lien or requirement to
post any such security.
(e) Each Company Plan is now and has been operated in all respects
in accordance with the requirements of all applicable Laws, including,
without limitation, ERISA and the Code, except where any failure to so
operate would not have a Company Material Adverse Effect. No Company
Plan has incurred an "accumulated funding deficiency" (within the
meaning of Section 302 of ERISA or Section 412 of the Code), whether or
not waived. The Company's September 29, 1996 balance sheet reflects an
accrual of all amounts of employer contributions and premiums accrued
but unpaid with respect to the Company Plans. With respect to each
Company Plan subject to Title IV of ERISA, the accumulated benefit
obligations of such Company Plan are set forth in the footnotes to the
Company's September 29, 1996 balance sheet.
(f) The Company and the Company Subsidiaries have not incurred any
liability under, and have complied in all respects with, the Worker
Adjustment and Retraining Notification Act and the regulations
promulgated thereunder ("WARN") and do not reasonably expect to incur
any such liability as a result of actions taken or not taken prior to
the Effective Time. Section 3.10(f) of the Company Disclosure Schedule
lists all notices given by the Company and the Company Subsidiaries in
connection with WARN.
(g) (i) Neither the Company nor any Company Subsidiary is a party
to any collective bargaining agreement or other labor union contract
applicable to Persons employed by the Company or any Company Subsidiary,
nor, to the Knowledge of the Company, are there any activities or
proceedings of any labor union to organize any such employees; (ii)
except as would not have a Company Material Adverse Effect, neither the
Company nor any Company Subsidiary has breached or otherwise failed to
comply with any provision of any such agreement or contract and there
are no grievances outstanding against the Company or any Company
Subsidiary under any such agreement or contract; (iii) there are no
unfair labor practice complaints pending against the Company or any
Company Subsidiary before the National Labor Relations Board or any
current union representation questions involving employees of the
Company or any Company Subsidiary; and (iv) there is no strike,
slowdown, work stoppage or lockout, or, to the Knowledge of the Company,
threat thereof, by or with respect to any employees of the Company or
any Company Subsidiary. The consent of the labor unions which are
parties to the collective bargaining agreements listed in Section
3.10(g) of the Company Disclosure Schedule is not required to consummate
the Merger.
(h) The Board of Directors of the Company has, prior to its
execution of this Agreement, amended each of (i) the Company's
Supplemental Executive Retirement Plan, (ii) the Deferred Compensation
Plan for Key Employees of Michigan Sugar Company, (iii) the Deferred
Compensation Plan for Key Employees of the Company, as amended and
restated as of August 12, 1983, and (iv) the Deferred Compensation Plan
for Key Employees of the Company, as amended and restated as of August
1, 1990 (collectively, the "Company Executive Deferred Compensation
Plans"), to provide that neither the execution of this Agreement, nor
the consummation of the transactions contemplated by this Agreement,
shall constitute a "change in control" for purposes of such Company
Executive Deferred Compensation Plans or otherwise will result in the
acceleration of vesting or payment of any benefit, or the triggering of
any ancillary or supplemental benefit or subsidy, under such plan. The
Company has the authority and power to amend the Company Executive
Deferred Compensation Plans as described in this Section 3.10(h) without
limitation or restriction with respect to any current participants or
beneficiaries, and none of such participants or beneficiaries shall have
a valid claim in law or equity that such amendment was not effective
against them, or otherwise that they are entitled to rights or benefits
that would have accrued to them under such plans had they not been so
amended.
SECTION 3.11 Intellectual Property. "Intellectual Property Rights"
means trademarks, trademark rights, trade names, trade name rights,
patents, patent rights, industrial models, inventions, copyrights,
service marks, trade secrets, applications for trademarks and for
service marks, know-how and other proprietary rights and information.
The Company and the Company Subsidiaries own, or possess adequate
licenses or other valid rights to use, all Intellectual Property Rights
used or held for use in connection with the business of the Company and
the Company Subsidiaries as currently conducted. The conduct of the
business of the Company and the Company Subsidiaries as currently
conducted does not and will not conflict in any way with any
Intellectual Property Rights of any third party that, individually or in
the aggregate, would have a Company Material Adverse Effect. To the
Knowledge of the Company, there are no infringements of an Intellectual
Property Right owned by or licensed by or to the Company or any Company
Subsidiary that, individually or in the aggregate, would have a Company
Material Adverse Effect. Neither the Company nor any Company Subsidiary
has licensed or otherwise permitted the use by any third party of any
Intellectual Property Rights on terms or in a manner which, individually
or in the aggregate, would have a Company Material Adverse Effect.
Neither the Company nor any Company Subsidiary is in breach of any
agreements pursuant to which the Company or any Company Subsidiary has a
license to use Intellectual Property Rights, which breach has had or is
reasonably likely to have a Company Material Adverse Effect, and the
Merger will not constitute such a breach or otherwise reduce or impair,
in any material respect, the rights of the Company or any Company
Subsidiary under such license agreements. No claims are pending or, to
the Knowledge of the Company, threatened by any Person with respect to
the ownership, validity or enforceability of any Intellectual Property
Rights owned by or licensed to or by the Company or any Company
Subsidiary or challenging or questioning the right of the Company or any
Company Subsidiary to use any Intellectual Property Rights, except
claims that would not, if determined adversely to the Company or any
Company Subsidiary, individually or in the aggregate, have a Company
Material Adverse Effect.
SECTION 3.12 Taxes. The Company and each of the Company
Subsidiaries have (a) filed all federal, state, local and foreign tax
returns required to be filed by them prior to the date of this Agreement
(taking into account extensions), (b) paid or accrued all taxes shown to
be due on such returns and have paid all applicable ad valorem and value
added taxes as are due, and (c) 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 any failure to file such returns or to pay or accrue such taxes
which would not individually or in the aggregate, have a Company
Material Adverse Effect. The Company has open years for federal income
tax returns and state income and franchise tax returns only as set forth
in the Section 3.12 of the Company Disclosure Schedule. The Company and
each Company Subsidiary have withheld or collected and paid over to the
appropriate Governmental Entity (or are properly holding for such
payment) all taxes required by Law to be withheld or collected. Neither
the Company nor any Company Subsidiary has made an election under
Section 341(f) of the Code. Except as set forth in Section 3.12 of the
Company Disclosure Schedule, no requests for waivers of the time to
assess any taxes against the Company or any Company Subsidiary have been
granted or are pending, except for requests with respect to such taxes
that have been adequately reserved for in the most recent financial
statements contained in the Company SEC Reports, or, to the extent not
adequately reserved, the assessment of which would not, in the
aggregate, have a Company Material Adverse Effect. Except as set forth
in Section 3.12 of the Company Disclosure Schedule, neither the Company
nor any Company Subsidiary has made any payments, is obligated to make
any payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be
deductible under Section 280G of the Code. As used in this Agreement the
term "taxes" includes all federal, state, local and foreign income,
franchise, property, sales, use, excise and other taxes, including
without limitation obligations for withholding taxes from payments due
or made to any other person and any interest, penalties or additions to
tax.
SECTION 3.13 Environmental Matters.
(a) For purposes of this Agreement, the following terms shall have
the following meanings: (i) "Hazardous Substances" means (A) those
substances defined in or regulated under the following federal statutes
and their state counterparts, as each may be amended from time to time,
and all regulations thereunder: the Hazardous Materials Transportation
Act, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Clean Water
Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide and Rodenticide Act and the Clean Air Act; (B)
petroleum and petroleum products including crude oil and any fractions
thereof; (C) natural gas, synthetic gas and any mixtures thereof; (D)
radon; (E) any other pollutant or contaminant; and (F) any substance
with respect to which a federal, state or local agency requires
environmental investigation, monitoring, reporting or remediation; and
(ii) "Environmental Laws" means any Law relating to (A) releases or
threatened releases of Hazardous Substances or materials containing
Hazardous Substances; (B) the manufacture, handling, transport, use,
treatment, storage or disposal of Hazardous Substances or materials
containing Hazardous Substances; or (C) otherwise relating to pollution
of the environment or the protection of human health and safety and
natural resources.
(b) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect: (i) neither the Company nor any Company
Subsidiary has violated or is in violation of any Environmental Law;
(ii) none of the properties owned or leased by the Company or any
Company Subsidiary (including, without limitation, soils and surface and
ground waters) are contaminated with any Hazardous Substance; (iii)
neither the Company nor any Company Subsidiary is actually or
potentially or, to the Knowledge of the Company, allegedly liable for
any off-site contamination; (iv) neither the Company nor any Company
Subsidiary is actually or potentially or, to the Knowledge of the
Company, allegedly liable under any Environmental Law (including,
without limitation, pending or threatened liens); (v) each of the
Company and each Company Subsidiary has all permits, licenses and other
authorizations required under any Environmental Law ("Company
Environmental Permits"); and (vi) each of the Company and each Company
Subsidiary has always been and is in compliance with its Company
Environmental Permits.
SECTION 3.14 Products. Except as would not have a Company Material
Adverse Effect, (a) there have been no written notices, citations or
decisions by any Governmental Entity that any product produced,
manufactured, marketed or distributed by the Company or any Company
Subsidiary (the "Company Products") is defective or fails to meet any
applicable standards promulgated by such Governmental Entity, (b) the
Company and the Company Subsidiaries have complied with all Laws
applicable to design, manufacture, labeling, testing and inspection of
Company Products, and (c) there have been no recalls ordered or, to the
knowledge of the Company, threatened by any Governmental Entity with
respect to any of the Company Products. Neither the Company nor any
Company Subsidiary has entered into any agreement or arrangement that
limits or otherwise restricts the Company or any Company Subsidiary or
any successor thereto, or that would limit IHK or any subsidiary thereof
or any successor thereto, from engaging or competing in any line of
business or in any geographic area.
SECTION 3.15 Properties and Assets; Real Property and Leases.
(a) The Company and the Company Subsidiaries have sufficient title
to all their respective properties and assets to conduct their
respective businesses as currently conducted or as contemplated to be
conducted, with only such exceptions as, individually or in the
aggregate, would not have a Company Material Adverse Effect.
(b) Set forth in Section 3.15(b) of the Company's Disclosure
Schedule is a true, correct and complete list (including a general
description of the uses for such real property) of all real property
owned or leased by the Company and each of the Company Subsidiaries.
(c) Except as would not have a Company Material Adverse Effect,
each parcel of real property owned or leased by the Company or any
Company Subsidiary (i) is owned or leased free and clear of all
mortgages, pledges, liens, security interests, conditional and
installment sale agreements, encumbrances, charges or other claims of
third parties of any kind (collectively, "Liens"), other than (A) Liens
for current taxes and assessments not yet past due, (B) inchoate
mechanics' and materialmen's Liens for construction in progress, (C)
workmen's, repairmen's, warehousemen's and carriers' Liens arising in
the ordinary course of business of the Company or such Company
Subsidiary consistent with past practices and (D) all matters of record,
Liens and other imperfections of title and encumbrances (including,
without limitation, (l) reservations specified in instruments of
conveyance such as deeds and indentures, reserving in favor of the
grantor under such instrument ("Deed Reservations"), the right to make
or construct canals, cuts, sluice-ways, dikes and other works ("Waterway
Works") for the drainage or reclamation of any lands, (2) Deed
Reservations for the exclusive possession of a portion of the land on
either side of such Waterway Works, (3) Deed Reservations reserving an
interest in mineral rights, including without limitation, petroleum,
petroleum products, phosphate minerals, oil and gas, (4) any covenant or
restriction pursuant to any deed or recorded plat affecting the Property
and (5) any other Deed Reservation) which, individually or in the
aggregate, would not adversely affect the use of the property for its
intended purpose (Liens described in clauses (A) through (D) being
referred to herein as "Permitted Liens"), and (ii) is neither subject to
any governmental decree or order to be sold nor is being condemned,
expropriated or otherwise taken by any public authority with or without
payment of compensation therefor, nor, to the Knowledge of the Company,
has any such condemnation, expropriation or taking been proposed.
(d) All leases of real property leased for the use or benefit of
the Company or any Company Subsidiary to which the Company or any
Company Subsidiary is a party or by which the Company or any Company
Subsidiary is bound, and all amendments and modifications thereto are in
full force and effect and have not been modified or amended, and there
exists no default under any such lease by the Company or any Company
Subsidiary or any other party thereto, nor any event which with notice
or lapse of time or both would constitute a default thereunder by the
Company or any Company Subsidiary or any other party thereto, except as,
individually or in the aggregate, would not have a Company Material
Adverse Effect.
SECTION 3.16 Insurance. The Company and the Company Subsidiaries
have obtained and maintained in full force and effect insurance with
responsible and reputable insurance companies or associations in such
amounts, on such terms, with such deductibles, and covering such risks,
including fire and other risks insured against by extended coverage, as
is customarily carried by reasonably prudent Persons conducting
businesses or owning assets similar to those of the Company and the
Company Subsidiaries, and each has maintained in full force and effect
liability insurance against claims for personal injury or death or
property damage occurring in connection with the activities of the
Company and the Company Subsidiaries or any properties owned, occupied
or controlled by the Company or any Company Subsidiary in such amount as
is customarily carried by reasonably prudent Persons conducting
businesses or owning assets similar to those of the Company and the
Company Subsidiaries. The Company and each of the Company Subsidiaries
may terminate each of its insurance policies or binders at or after the
Closing and will incur no penalties or other costs in doing so that
would, individually or in the aggregate, have a Company Material Adverse
Effect. None of such policies or binders was obtained through the use of
false or misleading information or the failure to provide the insurer
with all information requested in order to evaluate the liabilities and
risks. There is no material default with respect to any provision
contained in any such policy or binder, nor has the Company or any of
the Company Subsidiaries failed to give any material notice or present
any material claim under any such policy or binders in due and timely
fashion. There are no billed but unpaid premiums past due under any such
policy or binder, the failure of which to be paid would result in the
cancellation of such policy or binder. Except as otherwise set forth in
the Company SEC Reports or in Section 3.16 of the Company Disclosure
Schedule, (a) there are no outstanding claims in excess of normal
retentions that are not covered under any such policies or binders and,
to the Knowledge of the Company, there has not occurred any event that
might reasonably form the basis of any claim in excess of normal
retentions that is not covered against or relating to the Company or any
of the Company Subsidiaries that is not covered by any of such policies
or binders; (b) no notice of cancellation or non-renewal of any such
policies or binders has been received; and (c), except as set forth in
Section 3.16 of the Company Disclosure Schedule, there are no
performance bonds outstanding with respect to the Company or any of the
Company Subsidiaries.
SECTION 3.17 Opinion of Financial Advisor. The Company has
received a fairness opinion of DLJ on the date of this Agreement and the
Company will promptly, upon the execution of this Agreement, deliver a
copy of such opinion to IHK.
SECTION 3.18 Vote Required. The only vote of the holders of any
class or series of capital stock of the Company necessary to approve
this Agreement and the transactions contemplated hereby is the
affirmative vote of the holders of a majority of the outstanding shares
of Company Common Stock.
SECTION 3.19 Brokers. Except as set forth in Section 3.19 of the
Company's Disclosure Schedule, other than DLJ and The Xxxxxxxx-Xxxxxxxx
Company, Inc. ("Xxxxxxxx-Xxxxxxxx"), no broker, finder or investment
banker is entitled to a brokerage, finder's or other fee or commission
in connection with the Transactions based upon arrangements made by or
on behalf of the Company. The Company has heretofore made available to
IHK a complete and correct copy of all agreements between the Company
and either DLJ or Xxxxxxxx-Xxxxxxxx pursuant to which such firms would
be entitled to any payment relating to the Transactions.
SECTION 3.20 Company Rights Agreement. The Company Rights
Agreement has been amended (the "Company Rights Agreement Amendment") so
as to provide that neither IHK nor Merger Sub will become an "Acquiring
Person" and that no "Stock Acquisition Date" or "Distribution Date" (as
such terms are defined in the Company Rights Agreement) will occur as a
result of the approval, execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby. In addition, the
Company Rights Agreement contains no exception from the definition of
"Acquiring Person" for Flo-Sun Incorporated and its Affiliates.
SECTION 3.21 Information Supplied. The Schedule 14D-9 and any
other documents to be filed by the Company with the SEC or any other
governmental or regulatory authority in connection with the Offer and
the other transactions contemplated hereby will not, on the date of its
filing or, with respect to the Schedule 14D-9, on the date it is filed
with the SEC and first published, sent or given to stockholders, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading, except that no representation is made by the
Company with respect to information supplied in writing by or on behalf
of IHK or Merger Sub expressly for inclusion therein and information
incorporated by reference therein from documents filed by IHK or Merger
Sub with the SEC. The Schedule 14D-9 and any such other documents filed
by the Company with the SEC under the Exchange Act or with any other
Governmental Entity under applicable law will comply as to form in all
material respects with the requirements of the Exchange Act or other
applicable law, as the case may be. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by
reference in the Offer Documents or the Registration Statement on Form
S-4 (together with all amendments thereto, the "Registration Statement")
to be filed with the SEC by IHK in connection with the issuance of
shares of IHK Common Stock in the Merger and as contemplated by Section
2.06 will at the time the Registration Statement becomes effective under
the Securities Act or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and none of the information supplied or to be supplied by
the Company and included or incorporated by reference in the Proxy
Statement (as defined in Section 6.02), as supplemented if necessary,
will, at the date mailed to stockholders of the Company, or at the time
of the Company Stockholder Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. If at
any time prior to the time of such meeting, any event with respect to
the Company or any Company Subsidiary, or with respect to other
information supplied by the Company for inclusion in the Proxy Statement
or the Registration Statement, shall occur which is required to be
described in an amendment of, or a supplement to, the Proxy Statement or
the Registration Statement, such event shall be so described, and such
amendment or supplement shall be promptly filed with the SEC. The Proxy
Statement, insofar as it relates to other information supplied by the
Company for inclusion therein, will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
SECTION 3.22 Termination of Existing Merger Agreement. The Company
has terminated the Agreement and Plan of Merger dated as of July 14,
1997 among XSF Holdings, Inc., DXE Merger Corp., the Company and Flo-Sun
Incorporated (the "Flo-Sun Agreement"), in accordance with the
provisions thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IHK AND
MERGER SUB
Except as set forth in the Disclosure Schedule delivered by IHK
and Merger Sub concurrently with the execution of this Agreement (the
"IHK Disclosure Schedule") (each section of which qualifies the
correspondingly numbered representation and warranty or covenant to the
extent specified therein), IHK and Merger Sub, jointly and severally,
hereby represent and warrant to the Company that:
SECTION 4.01 Organization and Qualification; Subsidiaries.
(a) Each of IHK and each subsidiary of IHK (an "IHK Subsidiary")
is a corporation duly incorporated, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation and has
the requisite power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate,
have an IHK Material Adverse Effect (as defined below). IHK and each IHK
Subsidiary are duly qualified or licensed as a foreign corporation to do
business, and are in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by IHK and the
respective IHK Subsidiaries or the nature of their respective businesses
makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would
not, individually or in the aggregate, have an IHK Material Adverse
Effect. The term "IHK Material Adverse Effect" means any adverse change,
circumstance or effect that, individually or in the aggregate with all
other adverse changes, circumstances and effects, is or is reasonably
likely to be materially adverse to the business, operations, assets,
liabilities (including, without limitation, contingent liabilities),
financial condition or results of operations of IHK and the IHK
Subsidiaries taken as a whole. Section 4.01 of the IHK Disclosure
Schedule sets forth, as of the date of this Agreement, a true and
complete list of all of the IHK Subsidiaries, together with the
jurisdiction of incorporation of each IHK Subsidiary and the percentage
of each IHK Subsidiary's outstanding capital stock or other equity
interests owned by IHK and the IHK Subsidiaries, as the case may be, and
the name of each other holder of any such outstanding capital stock or
other equity interests and the percentage so held with respect to each
such IHK Subsidiary. Except as set forth in Schedule 4.01 of the IHK
Disclosure Schedule, there are no partnerships or joint venture
arrangements or other business entities in which IHK or any IHK
Subsidiary owns an equity interest that are material to the business of
IHK and the IHK Subsidiaries taken as a whole.
(b) Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the Laws of Delaware. Merger Sub has
not conducted any activities other than in connection with the
organization of Merger Sub, the negotiation and execution of this
Agreement and the consummation of the transactions contemplated hereby.
Merger Sub has no Subsidiaries. Except for obligations or liabilities
incurred in connection with its incorporation or organization and the
transactions contemplated by this Agreement, Merger Sub has not
incurred, directly or indirectly, through any Subsidiary or Affiliate,
any obligations or liabilities or engaged in any business activities of
any type or kind whatsoever or entered into any agreements or
arrangements with any Person. From the date of this Agreement until the
Effective Time, all of the outstanding capital stock of Merger Sub will
be owned directly by IHK.
SECTION 4.02 Certificate of Incorporation and By-Laws. IHK has
made available to the Company complete and correct copies of its
Articles of Incorporation and By-Laws and the certificates of
incorporation and by-laws or other comparable charter or organizational
documents of the IHK Subsidiaries, in each case as amended to the date
of this Agreement. IHK is not in violation of any of the provisions of
its Articles of Incorporation or By-Laws. Except as would not have an
IHK Material Adverse Effect, no IHK Subsidiary is in violation of any of
the provisions of its Certificate of Incorporation or By-Laws or other
comparable charter or organizational documents.
SECTION 4.03 Capitalization. The authorized capital stock of IHK
consists of 50,000,000 shares of IHK Common Stock and 5,000,000 shares
of preferred stock ("IHK Preferred Stock"). As of September 1, 1997, (i)
14,282,728 shares of IHK Common Stock are issued and outstanding, all of
which are validly issued, fully paid and nonassessable; (ii) no shares
of IHK Common Stock are held in the treasury of IHK; (iii) 773,860
shares of IHK Common Stock are reserved for future issuance pursuant to
IHK Options and (iv) 333,334 shares of IHK Preferred Stock are reserved
for issuance pursuant to the IHK Rights Agreement. Except for IHK
Options heretofore granted pursuant to the IHK Stock Option Plan as set
forth in Section 4.03 of the IHK Disclosure Schedule or pursuant to
agreements or arrangements described in Section 4.03 of the IHK
Disclosure Schedule and the IHK Purchase Rights, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of IHK or any
IHK Subsidiary or obligating IHK or any IHK Subsidiary to issue or sell
any shares of capital stock of, or other equity interests in, IHK or any
IHK Subsidiary. All shares of IHK Common Stock and IHK Preferred Stock
subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of IHK
or any IHK Subsidiary to repurchase, redeem or otherwise acquire any
shares of IHK Common Stock or IHK Preferred Stock or any capital stock
of any IHK Subsidiary. Each outstanding share of capital stock of each
IHK Subsidiary is duly authorized, validly issued, fully paid and
nonassessable and except as set forth in Section 4.03 of the IHK
Disclosure Schedule each such share owned by IHK or another IHK
Subsidiary is free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on
IHK's or such other IHK Subsidiary's voting rights, charges and other
encumbrances of any nature whatsoever. Neither IHK nor any IHK
Subsidiary directly or indirectly owns, or has agreed to purchase or
otherwise acquire, 5% or more of the capital stock of any corporation,
partnership, joint venture or other business association or entity,
assuming for such purpose the conversion of all securities convertible
into such capital stock held by IHK or any IHK Subsidiary and the
exercise of all warrants, options and other rights of IHK or any IHK
Subsidiary to purchase such capital stock (other than the IHK
Subsidiaries set forth in Section 4.01 of the IHK Disclosure Schedule).
Except as set forth in Section 4.03 of the IHK Disclosure Schedule,
there are no material outstanding contractual obligations of IHK or any
IHK Subsidiary to provide funds to, or make any investment (in the form
of a loan, capital contribution or otherwise) in, any IHK Subsidiary or
any other Person. Except for the Investor Agreement dated August 27,
1996, among IHK, Greencore Group plc and Earlsfort Holdings B.V., there
are no voting trusts or other agreements or understandings to which IHK
or any IHK Subsidiary is a party with respect to the voting of capital
stock of IHK or any IHK Subsidiary.
SECTION 4.04 Authority Relative to this Agreement. IHK and Merger
Sub have all necessary corporate power and authority to execute and
deliver this Agreement, to perform their respective obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by IHK and Merger Sub and the
consummation by IHK and Merger Sub of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of IHK or Merger
Sub are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the
Merger, the approval of the issuance of the Stock Consideration by the
holders of a majority of the shares of IHK Common Stock voted at the IHK
Shareholders' Meeting (as defined in Section 6.01(b)), and the filing
and recordation of appropriate merger documents as required by the
DGCL). This Agreement has been duly and validly executed and delivered
by IHK and Merger Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes the legal, valid and binding
obligation of IHK and Merger Sub, enforceable against them in accordance
with its terms (except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally, or principles governing the
availability of equitable remedies).
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by IHK and Merger
Sub will not, (i) conflict with or violate the Articles of Incorporation
or By-laws or equivalent organizational documents of IHK, Merger Sub or
any other IHK Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 4.05(b) have been
obtained and all filings and obligations described in Section 4.05(b)
have been made, conflict with or violate any foreign or domestic Law
applicable to IHK, Merger Sub or any other IHK Subsidiary or by which
any property or asset of IHK, Merger Sub or any other IHK Subsidiary is
bound or affected, or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of
a lien or other encumbrance on any property or asset of IHK, Merger Sub
or any other IHK Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clauses (ii) and
(iii), for any such conflicts, violations, breaches, defaults, or other
occurrences which would not, individually or in the aggregate, have an
IHK Material Adverse Effect.
(b) The execution and delivery of this Agreement by IHK and Merger
Sub do not, and the performance of this Agreement by IHK and Merger Sub
will not require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except (i) for
applicable requirements, if any, of the Exchange Act, Blue Sky Laws, the
Listing Market and state takeover Laws, the pre-merger notification
requirements of the HSR Act, and filing and recordation of appropriate
merger documents as required by the DGCL and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make
such filings or notifications, would not prevent or delay consummation
of the Merger, or otherwise prevent IHK or Merger Sub from performing
their respective obligations under this Agreement, and would not,
individually or in the aggregate, have an IHK Material Adverse Effect.
SECTION 4.06 Permits; Compliance. Each of IHK and the IHK
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity necessary
for IHK or any IHK Subsidiary to own, lease and operate its properties
or to carry on its business as it is now being conducted (the "IHK
Permits"), except where the failure to have, or the suspension or
cancellation of, any of the IHK Permits would not, individually or in
the aggregate, have an IHK Material Adverse Effect, and, as of the date
hereof, no suspension or cancellation of any of the IHK Permits is
pending or, to the Knowledge of IHK, threatened, except where the
failure to have, or the suspension or cancellation of, any of the IHK
Permits would not, individually or in the aggregate, have an IHK
Material Adverse Effect. Neither IHK nor any IHK Subsidiary is in
conflict with, or in default or violation of, (i) any Law applicable to
IHK or any IHK Subsidiary or by which any property or asset of IHK or
any IHK Subsidiary is bound or affected, (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which IHK or any IHK Subsidiary is a
party or by which IHK or any IHK Subsidiary or any property or asset of
IHK or any IHK Subsidiary is bound or affected or (iii) any IHK Permits,
except for any such conflicts, defaults or violations that would not,
individually or in the aggregate, have an IHK Material Adverse Effect.
SECTION 4.07 SEC Filings; Financial Statements.
(a) IHK has filed all forms, reports and documents required to be
filed by it with the SEC since March 31, 1995 (collectively, the "IHK
SEC Reports"). The IHK SEC Reports (i) were prepared in accordance with
the requirements of the Securities Act or the Exchange Act, as the case
may be, and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made,
not misleading. No IHK Subsidiary is required to file any form, report
or other document with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the IHK SEC Reports (the "IHK
Financial Statements"), (i) was prepared from the books of account and
other financial records of IHK and the consolidated IHK Subsidiaries,
(ii) was prepared in accordance with U.S. GAAP applied on a consistent
basis throughout the periods indicated (except as may be indicated in
the notes thereto) and (iii) presented fairly, in all material respects,
the consolidated financial position of IHK and the consolidated IHK
Subsidiaries as at the respective dates thereof and the results of their
operations and their cash flows for the respective periods indicated
therein except as otherwise noted therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments which
were not and are not expected, individually or in the aggregate, to have
an IHK Material Adverse Effect and the omission of footnotes).
(c) The books of account and other financial records of IHK and
the IHK Subsidiaries from which the IHK Financial Statements were
prepared: (i) reflect all items of income and expense and all assets and
liabilities required to be reflected therein in accordance with U.S.
GAAP applied on a basis consistent with the past practices of IHK, (ii)
are in all material respects complete and correct, and do not contain or
reflect any material inaccuracies or discrepancies and (iii) have been
maintained in accordance with good business and accounting practices.
(d) Except for liabilities and obligations reflected on the March
31, 1997 consolidated balance sheet of IHK (including the notes
thereto), liabilities and obligations disclosed in the IHK SEC Reports
filed prior to the date of this Agreement and other liabilities and
obligations incurred in the ordinary course of business consistent with
past practice since March 31, 1997, neither IHK nor any IHK Subsidiary
has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which, individually or in the
aggregate, are or are reasonably likely to be material to IHK and the
IHK Subsidiaries taken as a whole.
(e) IHK has heretofore furnished to the Company complete and
correct copies of (i) all agreements, documents and other instruments
not yet filed by IHK with the SEC but that are currently in effect and
that IHK expects to file with the SEC after the date of this Agreement
and (ii) all amendments and modifications that have not been filed by
IHK with the SEC to all agreements, documents and other instruments that
previously have been filed by IHK with the SEC and are currently in
effect.
SECTION 4.08 Absence of Certain Changes or Events. Since March 31,
1997, except as contemplated by this Agreement or as disclosed in the
IHK SEC Reports filed prior to the date of this Agreement, IHK and the
IHK Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since such
date, there has not been (a) any IHK Material Adverse Effect, (b) any
change by IHK in its accounting methods, principles or practices, except
as may be required by U.S. GAAP, (c) any damage, destruction or loss
(whether or not covered by insurance) with respect to properties or
assets of IHK or any IHK Subsidiary that, individually or in the
aggregate, would result in an IHK Material Adverse Effect, (d) any
declaration, setting aside or payment of any dividend or distribution in
respect of shares of IHK Common Stock or any redemption, purchase or
other acquisition of any of its securities other than the previously
declared regular quarterly dividend of $0.03 per share of IHK Common
Stock, (e) any revaluation by IHK and the IHK Subsidiaries of any asset
(including, without limitation, any writing down of the value of
inventory or writing off of notes or accounts receivable), other than in
the ordinary course of business consistent with past practice, (f) any
entry by IHK or any IHK Subsidiary into any commitment or transaction
material to IHK and the IHK Subsidiaries taken as a whole, except in the
ordinary course of business consistent with past practice, (g) any
increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards),
stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any officers or key
employees of IHK or any IHK Subsidiary, except in the ordinary course of
business consistent with past practice, (h) any acquisition or
disposition by IHK or any IHK Subsidiary of any material asset, except
in the ordinary course of business consistent with past practice, (i)
any incurrence, assumption or guarantee of any indebtedness or
obligation relating to any lending or borrowing except current
liabilities and commitments incurred in the ordinary course of business
consistent with past practice, or (j) any amendment, modification or
termination of any existing, or entering into any new, material
contract, or any material plan, lease, license, permit or franchise,
except in the ordinary course of business consistent with past practice.
SECTION 4.09 Absence of Litigation.
(a) Except as set forth in Section 4.09 of the IHK Disclosure
Schedule, there is no litigation, suit, claim, action, proceeding or
investigation pending or, to the Knowledge of IHK, threatened against or
affecting IHK or any IHK Subsidiary, or any property or asset of IHK or
any IHK Subsidiary, before any court, arbitrator or Governmental Entity,
which (i) individually or in the aggregate has had or is reasonably
likely to have an IHK Material Adverse Effect or (ii) seeks to delay or
prevent the consummation of the Merger.
(b) Neither IHK nor any IHK Subsidiary nor any property or asset
of IHK or any IHK Subsidiary is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement
with, or, to the Knowledge of IHK, continuing investigation by, any
Governmental Entity, or any Order, determination or award of any
Governmental Entity or arbitrator having or reasonably likely to have,
individually or in the aggregate, an IHK Material Adverse Effect.
SECTION 4.10 Employee Benefit Plans; Labor Matters.
(a) Section 4.10(a) of the IHK Disclosure Schedule contains a true
and complete list of (i) all "employee benefit plans" (within the
meaning of Section 3(3) of ERISA) and all bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, retiree
medical or life insurance, supplemental retirement, severance or other
benefit plans, programs or arrangements, and all employment,
termination, severance or other contracts or agreements to which IHK or
any IHK Subsidiary is a party, by which IHK or any IHK Subsidiary is
bound, with respect to which IHK or any IHK Subsidiary has any
obligation or which are maintained, contributed to or sponsored by IHK
or any IHK Subsidiary for the benefit of any current or former employee,
officer or director of IHK or any IHK Subsidiary and (ii) each employee
benefit plan for which IHK or any IHK Subsidiary could incur liability
under Section 4069 of ERISA, in the event such plan were terminated, or
under Section 4212(c) of ERISA, or in respect of which IHK or any IHK
Subsidiary remains secondarily liable under Section 4204 of ERISA
(collectively, the "IHK Plans"). Each IHK Plan is in writing and IHK has
previously made available to the Company a true and complete copy of
each IHK Plan and a true and complete copy of (1) each trust or other
funding arrangement, (2) each summary plan description and summary of
material modifications, (3) the most recently filed IRS Form 5500, (4)
the most recently received IRS determination letter for each such IHK
Plan, and (5) the most recently prepared actuarial report and financial
statement in connection with each such IHK Plan. Neither IHK nor any IHK
Subsidiary has any express or implied commitment (I) to create, to incur
liability with respect to, or to cause to exist any other employee
benefit plan, program or arrangement, (II) to enter into any contract or
agreement to provide compensation or benefits to any individual or (III)
to modify, change or terminate any IHK Plan (other than with respect to
a modification, change or termination required by ERISA or the Code).
(b) Each of the IHK Plans that is a Multiemployer Plan or a
Multiple Employer Plan is designated as such on Section 4.10(b) of the
IHK Disclosure Schedule and, with respect to each IHK Plan so
designated, except as would not have an IHK Material Adverse Effect: (i)
neither IHK nor any IHK Subsidiary nor any trade or business, whether or
not incorporated (an "ERISA Affiliate") that together with IHK or any
IHK Subsidiary would be deemed a "single employer" within the meaning of
Section 4001(b) of ERISA has made or suffered a "complete withdrawal" or
a "partial withdrawal," as such terms are respectively defined in
Sections 4203 and 4205 of ERISA (or any liability resulting therefrom
has been satisfied in full), (ii) no event has occurred that presents a
risk of a partial withdrawal, (iii) neither IHK, nor any IHK Subsidiary,
nor any ERISA Affiliate has any contingent liability under Section 4204
of ERISA, and (iv) no circumstances exist that present a risk that any
such plan will go into reorganization. With respect to Multiemployer
Plans and Multiple Employer Plans, except as would not have an IHK
Material Adverse Effect, neither IHK nor any IHK Subsidiary would incur
withdrawal liability in the event of a complete withdrawal within the
meaning of Title IV of ERISA from any such Plan. None of the IHK Plans
(i) provides for the payment of separation, severance, termination or
similar-type benefits to any Person, (ii) obligates IHK or any IHK
Subsidiary to pay separation, severance, termination or other benefits
as a result of the Merger or (iii) obligates IHK or any IHK Subsidiary
to make any payment or provide any benefit that would be subject to a
tax under Section 4999 of the Code. None of the IHK Plans provides for
or promises retiree medical, disability or life insurance benefits to
any current or former employee, officer or director of IHK or any IHK
Subsidiary.
(c) Each IHK Plan which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from
the IRS that such IHK Plan is so qualified and each trust established in
connection with any IHK Plan which is intended to be exempt from federal
income taxation under Section 501(a) of the Code has received a
determination letter from the IRS that such trust is so exempt. To IHK's
Knowledge, no fact or event has occurred since the date of any such
determination letter from the IRS that would adversely affect the
qualified status of any such IHK Plan or the exempt status of any such
trust. Each trust maintained or contributed to by the IHK or any IHK
Subsidiary which is intended to be qualified as a voluntary employees'
beneficiary association exempt from federal income taxation under
Sections 501(a) and 501(c)(9) of the Code has received a favorable
determination letter from the IRS that it is so qualified and so exempt,
and, to IHK's Knowledge, no fact or event has occurred since the date of
such determination by the IRS that would adversely affect such qualified
or exempt status.
(d) To IHK's Knowledge, there has been no non-exempt prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975
of the Code) with respect to any IHK Plan. Neither IHK nor any IHK
Subsidiary is currently liable or has previously incurred any liability
for any tax or penalty (other than any tax or penalty that would not
have an IHK Material Adverse Effect) arising under Section 4971, 4972,
4979, 4980 or 4980B of the Code or Section 502(c) of ERISA, and to IHK's
Knowledge, no fact or event exists which would give rise to any such
liability. Neither IHK nor any IHK Subsidiary has incurred any liability
(other than any liability that would not have an IHK Material Adverse
Effect) under, arising out of or by operation of Title IV of ERISA that
has not been satisfied in full (other than liability for premiums to the
Pension Benefit Guaranty Corporation arising in the ordinary course),
including, without limitation, any liability in connection with (i) the
termination or reorganization of any employee pension benefit plan
subject to Title IV of ERISA or (ii) the withdrawal from any
Multiemployer Plan or Multiple Employer Plan, and, to IHK's Knowledge,
no fact or event exists which would give rise to any such liability. No
complete or partial termination has occurred within the five years
preceding the date hereof with respect to any IHK Plan. No reportable
event (within the meaning of Section 4043 of ERISA) for which the 30-day
notice requirement to the Pension Benefit Guaranty Corporation has not
been waived has occurred or is expected to occur with respect to any IHK
Plan subject to Title IV of ERISA. No asset of IHK or any IHK Subsidiary
is the subject of any lien arising under Section 302(f) of ERISA or
Section 412(n) of the Code; neither IHK nor any IHK Subsidiary has been
required to post any security under Section 307 of ERISA or Section
401(a)(29) of the Code; and no fact or event exists which would give
rise to any such lien or requirement to post any such security.
(e) Each IHK Plan is now and has been operated in all respects in
accordance with the requirements of all applicable Laws, including,
without limitation, ERISA and the Code, except where any failure to so
operate would not have an IHK Material Adverse Effect. No IHK Plan has
incurred an "accumulated funding deficiency" (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived.
IHK's March 31, 1997 balance sheet reflects an accrual of all amounts of
employer contributions and premiums accrued but unpaid with respect to
the IHK Plans. With respect to each IHK Plan subject to Title IV of
ERISA, the accumulated benefit obligations of such IHK Plan are set
forth in the footnotes to IHK's March 31, 1997 balance sheet.
(f) IHK and the IHK Subsidiaries have not incurred any liability
under, and have complied in all respects with, WARN and do not
reasonably expect to incur any such liability as a result of actions
taken or not taken prior to the Effective Time.
(g) (i) Except as set forth in Section 4.10(g) of the IHK
Disclosure Schedule, neither IHK nor any IHK Subsidiary is a party to
any collective bargaining agreement or other labor union contract
applicable to Persons employed by IHK or any IHK Subsidiary, nor, to the
Knowledge of IHK, are there any activities or proceedings of any labor
union to organize any such employees; (ii) except as would not have an
IHK Material Adverse Effect, neither IHK nor any IHK Subsidiary has
breached or otherwise failed to comply with any provision of any such
agreement or contract and there are no grievances outstanding against
IHK or any IHK Subsidiary under any such agreement or contract; (iii)
there are no unfair labor practice complaints pending against IHK or any
IHK Subsidiary before the National Labor Relations Board or any current
union representation questions involving employees of IHK or any IHK
Subsidiary; and (iv) there is no strike, slowdown, work stoppage or
lockout, or, to the Knowledge of IHK, threat thereof, by or with respect
to any employees of IHK or any IHK Subsidiary. The consent of the labor
unions which are parties to the collective bargaining agreements listed
in Section 4.10(g) of the IHK Disclosure Schedule is not required to
consummate the Merger.
SECTION 4.11 Intellectual Property. IHK and the IHK Subsidiaries
own, or possess adequate licenses or other valid rights to use, all
Intellectual Property Rights used or held for use in connection with the
business of IHK and the IHK Subsidiaries as currently conducted. The
conduct of the business of IHK and the IHK Subsidiaries as currently
conducted does not and will not conflict in any way with any
Intellectual Property Rights of any third party that, individually or in
the aggregate, would have an IHK Material Adverse Effect. To the
Knowledge of IHK, there are no infringements of an Intellectual Property
Right owned by or licensed by or to IHK or any IHK Subsidiary that,
individually or in the aggregate, would have an IHK Material Adverse
Effect. Neither IHK nor any IHK Subsidiary has licensed or otherwise
permitted the use by any third party of any Intellectual Property Rights
on terms or in a manner which, individually or in the aggregate, would
have an IHK Material Adverse Effect. Neither IHK nor any IHK Subsidiary
is in breach of any agreements pursuant to which IHK or any IHK
Subsidiary has a license to use Intellectual Property Rights, which
breach has had or is reasonably likely to have an IHK Material Adverse
Effect, and the Merger will not constitute such a breach or otherwise
reduce or impair, in any material respect, the rights of IHK or any IHK
Subsidiary under such license agreements. No claims are pending or, to
the Knowledge of IHK, threatened by any Person with respect to the
ownership, validity or enforceability of any Intellectual Property
Rights owned by or licensed to or by IHK or any IHK Subsidiary or
challenging or questioning the right of IHK or any IHK Subsidiary to use
any Intellectual Property Rights, except claims that would not, if
determined adversely to IHK or any IHK Subsidiary, individually or in
the aggregate, have an IHK Material Adverse Effect.
SECTION 4.12 Taxes. IHK and each of the IHK Subsidiaries have (a)
filed all federal, state, local and foreign tax returns required to be
filed by them prior to the date of this Agreement (taking into account
extensions), (b) paid or accrued all taxes shown to be due on such
returns and have paid all applicable ad valorem and value added taxes as
are due, and (c) 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 any failure to file such returns or to pay or accrue such taxes which
would not individually or in the aggregate, have an IHK Material Adverse
Effect. IHK has open years for federal income tax returns and state
income and franchise tax returns only as set forth in the Section 4.12
of the IHK Disclosure Schedule. IHK and each IHK Subsidiary have
withheld or collected and paid over to the appropriate Governmental
Entity (or are properly holding for such payment) all taxes required by
Law to be withheld or collected. Neither IHK nor any IHK Subsidiary has
made an election under Section 341(f) of the Code. No requests for
waivers of the time to assess any taxes against IHK or any IHK
Subsidiary have been granted or are pending, except for requests with
respect to such taxes that have been adequately reserved for in the most
recent financial statements contained in the IHK SEC Reports, or, to the
extent not adequately reserved, the assessment of which would not, in
the aggregate, have an IHK Material Adverse Effect. Except as set forth
in Section 4.12 of the IHK Disclosure Schedule, neither IHK nor any IHK
Subsidiary has made any payments, is obligated to make any payments, or
is a party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible under
Section 280G of the Code. As used in this Agreement the term "taxes"
includes all federal, state, local and foreign income, franchise,
property, sales, use, excise and other taxes, including without
limitation obligations for withholding taxes from payments due or made
to any other person and any interest, penalties or additions to tax.
SECTION 4.13 Environmental Matters. Except as would not,
individually or in the aggregate, have an IHK Material Adverse Effect:
(i) neither IHK nor any IHK Subsidiary has violated or is in violation
of any Environmental Law; (ii) none of the properties owned or leased by
IHK or any IHK Subsidiary (including, without limitation, soils and
surface and ground waters) are contaminated with any Hazardous
Substance; (iii) neither IHK nor any IHK Subsidiary is actually or
potentially or, to the Knowledge of IHK, allegedly liable for any
off-site contamination; (iv) neither IHK nor any IHK Subsidiary is
actually or potentially or, to the Knowledge of IHK, allegedly liable
under any Environmental Law (including, without limitation, pending or
threatened liens); (v) each of IHK and each IHK Subsidiary has all
permits, licenses and other authorizations required under any
Environmental Law ("IHK Environmental Permits"); and (vi) each of IHK
and each IHK Subsidiary has always been and is in compliance with its
IHK Environmental Permits.
SECTION 4.14 Products. Except as would not have an IHK Material
Adverse Effect, (a) there have been no written notices, citations or
decisions by any Governmental Entity that any product produced,
manufactured, marketed or distributed by IHK or any IHK Subsidiary (the
"IHK Products") is defective or fails to meet any applicable standards
promulgated by such Governmental Entity, (b) IHK and the IHK
Subsidiaries have complied with all Laws applicable to design,
manufacture, labeling, testing and inspection of IHK Products, and (c)
there have been no recalls ordered or, to the knowledge of IHK,
threatened by any Governmental Entity with respect to any of the IHK
Products. Neither IHK nor any IHK Subsidiary has entered into any
agreement or arrangement that limits or otherwise restricts IHK or any
IHK Subsidiary or any successor thereto, or that would limit IHK or any
subsidiary thereof or any successor thereto, from engaging or competing
in any line of business or in any geographic area.
SECTION 4.15 Properties and Assets; Real Property and Leases.
(a) IHK and the IHK Subsidiaries have sufficient title to all
their respective properties and assets to conduct their respective
businesses as currently conducted or as contemplated to be conducted,
with only such exceptions as, individually or in the aggregate, would
not have an IHK Material Adverse Effect.
(b) Set forth in Section 4.15(b) of IHK's Disclosure Schedule is a
true, correct and complete list (including a general description of the
uses for such real property) of all real property owned or leased by IHK
and each of the IHK Subsidiaries.
(c) Except as would not have an IHK Material Adverse Effect, each
parcel of real property owned or leased by IHK or any IHK Subsidiary (i)
is owned or leased free and clear of all Liens, other than (A) Liens for
current taxes and assessments not yet past due, (B) inchoate mechanics'
and materialmen's Liens for construction in progress, (C) workmen's,
repairmen's, warehousemen's and carriers' Liens arising in the ordinary
course of business of IHK or such IHK Subsidiary consistent with past
practices and (D) all matters of record, Liens and other imperfections
of title and encumbrances (including, without limitation, Deed
Reservations), (2) Deed Reservations reserving an interest in mineral
rights, including without limitation, petroleum, petroleum products,
phosphate minerals, oil and gas, (3) any covenant or restriction
pursuant to any deed or recorded plat affecting the Property and (4) any
other Deed Reservation) which, individually or in the aggregate, would
not adversely affect the use of the property for its intended purpose,
and (ii) is neither subject to any governmental decree or order to be
sold nor is being condemned, expropriated or otherwise taken by any
public authority with or without payment of compensation therefor, nor,
to the Knowledge of IHK, has any such condemnation, expropriation or
taking been proposed.
(d) All leases of real property leased for the use or benefit of
IHK or any IHK Subsidiary to which IHK or any IHK Subsidiary is a party
or by which IHK or any IHK Subsidiary is bound, and all amendments and
modifications thereto are in full force and effect and have not been
modified or amended, and there exists no default under any such lease by
IHK or any IHK Subsidiary or any other party thereto, nor any event
which with notice or lapse of time or both would constitute a default
thereunder by IHK or any IHK Subsidiary or any other party thereto,
except as, individually or in the aggregate, would not have an IHK
Material Adverse Effect.
SECTION 4.16 Insurance. IHK and the IHK Subsidiaries have obtained
and maintained in full force and effect insurance with responsible and
reputable insurance companies or associations in such amounts, on such
terms, with such deductibles, and covering such risks, including fire
and other risks insured against by extended coverage, as is customarily
carried by reasonably prudent Persons conducting businesses or owning
assets similar to those of IHK and the IHK Subsidiaries, and each has
maintained in full force and effect public liability insurance,
insurance against claims for personal injury or death or property damage
occurring in connection with the activities of IHK and the IHK
Subsidiaries or any properties owned, occupied or controlled by IHK or
any IHK Subsidiary in such amount as is customarily carried by
reasonably prudent Persons conducting businesses or owning assets
similar to those of IHK and the IHK Subsidiaries. IHK and each of the
IHK Subsidiaries may terminate each of its insurance policies or binders
at or after the Closing and will incur no material penalties or other
material costs in doing so. None of such policies or binders was
obtained through the use of false or misleading information or the
failure to provide the insurer with all information requested in order
to evaluate the liabilities and risks. There is no material default with
respect to any provision contained in any such policy or binder, nor has
IHK or any of the IHK Subsidiaries failed to give any material notice or
present any material claim under any such policy or binders in due and
timely fashion. There are no billed but unpaid premiums past due under
any such policy or binder, the failure of which to be paid would result
in the cancellation of such policy or binder. Except as otherwise set
forth in the IHK SEC Reports or in Schedule 4.16 of the IHK Disclosure
Schedule, (a) there are no outstanding claims in excess of normal
retentions that are not covered under any such policies or binders and,
to the Knowledge of IHK, there has not occurred any event that might
reasonably form the basis of any claim in excess of normal retentions
that is not covered against or relating to IHK or any of the IHK
Subsidiaries that is not covered by any of such policies or binders; (b)
no notice of cancellation or non-renewal of any such policies or binders
has been received; and (c) there are no performance bonds outstanding
with respect to IHK or any of the IHK Subsidiaries.
SECTION 4.17 Opinion of Financial Advisor. IHK has received a
fairness opinion of Xxxxxx Brothers Inc. ("Xxxxxx Brothers") on the date
of this Agreement and IHK will promptly, upon the execution of this
Agreement by the Company, deliver a copy of such opinion to the Company.
SECTION 4.18 Vote Required. The only vote of the holders of any
class or series of capital stock of IHK necessary to approve the
transactions contemplated by this Agreement is the approval of the
issuance of the Stock Consideration by the affirmative vote of the
holders of a majority of the shares of IHK Common Stock voted at the IHK
Shareholders' Meeting (as defined in Section 6.01(b)).
SECTION 4.19 Brokers. Except as set forth in Section 4.19 of the
IHK Disclosure Schedule, other than Xxxxxx Brothers, no broker, finder
or investment banker is entitled to a brokerage, finder's or other fee
or commission in connection with the Merger based upon arrangements made
by or on behalf of IHK. IHK has heretofore made available to the Company
a complete and correct copy of all agreements between IHK and Xxxxxx
Brothers pursuant to which such firm would be entitled to any payment
relating to the Merger.
SECTION 4.20 Information Supplied.
(a) The Offer Documents and any other documents to be filed by IHK
and Merger Sub with the SEC or any other governmental or regulatory
authority in connection with the Offer and the other transactions
contemplated hereby will not, on the date of its filing or, with respect
to the Offer Documents, on the date they are filed with the SEC and
first published, sent or given to stockholders of the Company and the
date shares of Company Common Stock are purchased pursuant to the Offer,
as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation is made by IHK or Merger Sub with respect to information
supplied in writing by or on behalf of the Company expressly for
inclusion therein and information incorporated by reference therein from
documents filed by the Company or any of the Company Subsidiaries with
the SEC. The Offer Documents and any other such documents filed by IHK
or Merger Sub with the SEC under the Exchange Act or with any other
governmental or regulatory authority under applicable law will comply as
to form in all material respects with the requirements of the Exchange
Act or applicable law, as the case may be.
(b) Neither the information supplied or to be supplied in writing
by or on behalf of IHK or Merger Sub for inclusion, nor the information
incorporated by reference from documents filed by IHK or any of the IHK
Subsidiaries including Merger Sub, with the SEC, in the Schedule 14D-9,
or any other documents to be filed by IHK or Merger Sub or the Company
with the SEC or any other governmental or regulatory authority in
connection with the Offer and the other transactions contemplated hereby
will on the date of its filing or, with respect to the Schedule 14D-9,
on the date it is filed with the SEC and first published, sent or given
to stockholders of the Company, contains any untrue statement of a
material fact or omit to state any material fact required to be stated
therein, in light of the circumstances under which they are made, not
misleading.
(c) None of the information supplied or to be supplied by IHK for
inclusion or incorporation by reference in the Registration Statement
will at the time the Registration Statement becomes effective under the
Securities Act or at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
none of the information supplied or to be supplied by IHK and included
or incorporated by reference in the Proxy Statement, as supplemented if
necessary, will, at the date mailed to shareholders of IHK, or at the
time of the IHK Shareholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. If at
any time prior to the time of such meeting, any event with respect to
IHK or any IHK Subsidiary, or with respect to other information supplied
by IHK for inclusion in the Proxy Statement or the Registration
Statement, shall occur which is required to be described in an amendment
of, or a supplement to, the Proxy Statement or the Registration
Statement, such event shall be so described, and such amendment or
supplement shall be promptly filed with the SEC. The Proxy Statement,
insofar as it relates to other information supplied by IHK for inclusion
therein, will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder.
SECTION 4.21 Financing. In connection with the transactions
contemplated by this Agreement, Xxxxxx Brothers Commercial Paper Inc.
("LBCPI") has issued a commitment letter (the "Xxxxxx Brothers
Commitment") to IHK, a true and correct copy of which has been delivered
to the Company, for funds which, together with cash available to IHK,
will enable IHK (or cause Merger Sub) to (a) pay the Offer Price
pursuant to the Offer, (b) pay the Cash Consideration pursuant to the
Merger, (c) refinance such of its existing indebtedness as shall be
necessary to consummate the Offer and the Merger and the financing
therefor and provide working capital prior to the Effective Time and (d)
pay related fees and expenses. Upon consummation of the Offer, IHK will
provide funds obtained from the Xxxxxx Brothers Commitment to Merger Sub
sufficient to pay for all amounts described above.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 Conduct of Business by the Company Pending the
Merger. The Company covenants and agrees that, between the date of this
Agreement and the Effective Time, except as set forth in Section 5.01 of
the Company Disclosure Schedule or as specifically contemplated by any
other provision of this Agreement, unless IHK shall otherwise agree in
writing:
(a) the Company and the Company Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore
conducted, and shall use commercially reasonable efforts to preserve
intact their present lines of business, maintain their rights and
franchises and preserve their relationships with employees, customers,
suppliers and others having business dealings with them to the end that
their ongoing businesses shall not be impaired in any material respect
at the Effective Time; provided, however, that no action by the Company
or any Company Subsidiary specifically permitted by any other provision
of this Section 5.01 shall be deemed a breach of this Section 5.01(a);
(b) neither the Company nor any Company Subsidiary shall amend or
otherwise change its Certificate of Incorporation or By-Laws or
equivalent organizational documents;
(c) neither the Company nor any Company Subsidiary shall issue,
sell, pledge, dispose of, grant or encumber, or authorize the issuance,
sale, pledge, disposition, grant or encumbrance of, (i) any shares of
capital stock of the Company or any Company Subsidiary of any class or
any options, warrants, convertible securities or other rights of any
kind to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the
Company or any Company Subsidiary (except for (A) the issuance of a
maximum of 200,000 shares of Company Common Stock issuable pursuant to
Company Options outstanding on the date hereof in accordance with the
terms thereof and (B) issuances by a direct or indirect wholly owned
subsidiary of the Company of capital stock to such subsidiary's parent)
or (ii) any assets of the Company or any Company Subsidiary, except in
the ordinary course of business and in a manner consistent with past
practice;
(d) neither the Company nor any Company Subsidiary shall declare,
set aside, make or pay any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to any of its capital
stock, other than (i) any regular quarterly dividends declared and paid
in accordance with past practice and not in excess of $0.0375 per share
of Company Common Stock and (ii) dividends by a direct or indirect
wholly owned subsidiary of the Company to such subsidiary's parent;
(e) neither the Company nor any Company Subsidiary shall
reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock, except for
any such transaction by a wholly owned subsidiary of the Company that
remains a wholly owned subsidiary of the Company after the consummation
of such transaction;
(f) neither the Company nor any Company Subsidiary shall (i)
acquire or dispose of (including, without limitation, by merger,
consolidation, acquisition or disposition of stock or assets, or by
liquidation or dissolution) any interest in any corporation,
partnership, other business organization or any division thereof or any
assets, other than the acquisition or disposition of assets in the
ordinary course of business consistent with past practice and any other
acquisitions for consideration which is not, in the aggregate, in excess
of $10,000,000 and any other dispositions for consideration which is
not, in the aggregate, in excess of $10,000,000; (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person, or make any loans or
advances, except for (A) indebtedness incurred in the ordinary course of
business and consistent with past practice, (B) indebtedness of the
Company to a direct or indirect wholly owned Company Subsidiary or
indebtedness of a direct or indirect wholly owned Company Subsidiary to
the Company or another direct or indirect wholly owned Company
Subsidiary and (C) other indebtedness with a maturity of not more than
one year incurred in the ordinary course of business consistent with
past practice; (iii) enter into, amend or terminate any contract or
agreement material to the business, results of operations or financial
condition of the Company and the Company Subsidiaries taken as a whole
other than in the ordinary course of business, consistent with past
practice; (iv) authorize any capital expenditure, other than capital
expenditures for the Company and the Company Subsidiaries as a whole, in
an aggregate amount not exceeding the sum of (A) the amount provided in
the capital expenditure budget for the fiscal year ending September 28,
1997 previously provided to IHK and (B) $5,000,000; or (v) enter into or
amend any contract, agreement, commitment or arrangement that, if fully
performed, would not be permitted under this subsection (f);
(g) neither the Company nor any Company Subsidiary shall (i)
increase the compensation payable or to become payable to its officers
or employees, except for increases in accordance with past practices in
salaries or wages of employees of the Company or any Company Subsidiary
who are not officers of the Company, or (ii) except pursuant to existing
policies and agreements, grant any severance or termination pay to any
director, officer or other employee of the Company or any Company
Subsidiary, or (iii) enter into or amend any employment or severance
agreement with any director, officer or other employee of the Company or
any Company Subsidiary or (iv) establish, adopt, enter into, extend,
amend or terminate any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or
other agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee;
(h) neither the Company nor any Company Subsidiary shall take any
action, other than as required by the SEC or by U.S. GAAP, with respect
to accounting policies or procedures (including, without limitation,
procedures with respect to the payment of accounts payable and
collection of accounts receivable);
(i) neither the Company nor any Company Subsidiary shall make any
tax election or settle or compromise any material federal, state, local
or foreign income tax liability;
(j) neither the Company nor any Company Subsidiary shall take any
action that would prevent or impede any party to this Agreement from
obtaining any consent or approval the receipt of which is a condition to
the consummation of the Offer or the Merger;
(k) neither the Company nor any Company Subsidiary shall enter
into any agreement or arrangement that would limit or otherwise restrict
the Company or any Company Subsidiary or any successor thereto or, after
consummation of the Merger, IHK or any subsidiary thereof or any
successor thereto, from engaging or competing in any line of business or
in any geographic area;
(l) neither the Company nor any Company Subsidiary shall pay,
discharge or satisfy any claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction, in the ordinary course business
and consistent with past practice, of liabilities reflected or reserved
against in the September 29, 1996 consolidated balance sheet of the
Company (including the notes thereto) or subsequently incurred in the
ordinary course of business and consistent with past practice;
(m) neither the Company nor any Company Subsidiary shall take any
action that would result in (i) any of the representations or warranties
of the Company set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations or
warranties that are not so qualified becoming untrue in any material
respect or (iii) except as otherwise permitted by Section 6.05, any of
the conditions to the Offer set forth in Annex A or the conditions to
the Merger set forth in Article VII not being satisfied; and
(n) neither the Company nor any Company Subsidiary shall authorize
or enter into an agreement to do anything prohibited by Sections 5.01(b)
through (m).
SECTION 5.02 Conduct of Business by IHK and the IHK Subsidiaries
Pending the Merger. Except with respect to any action taken to incur
indebtedness to fund the Offer, the Cash Consideration and any expenses
incurred in connection therewith and to fund working capital
requirements in the ordinary course of business prior to the Effective
Time, IHK covenants and agrees that, between the date of this Agreement
and the Effective Time, except as set forth in Section 5.02 of the IHK
Disclosure Schedule or as specifically contemplated by any other
provision of this Agreement, unless the Company shall otherwise agree in
writing:
(a) IHK and the IHK Subsidiaries shall carry on their respective
businesses in the usual, regular and ordinary course in all material
respects, in substantially the same manner as heretofore conducted, and
shall use commercially reasonable efforts to preserve intact their
present lines of business, maintain their rights and franchises and
preserve their relationships with employees, customers, suppliers and
others having business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at the
Effective Time; provided, however, that no action by IHK or any IHK
Subsidiary specifically permitted by any other provision of this Section
5.02 shall be deemed a breach of is Section 5.02(a);
(b) Neither IHK nor any IHK Subsidiary shall amend or otherwise
change its Articles of Incorporation or By-Laws or equivalent
organizational documents;
(c) Neither IHK nor any IHK Subsidiary shall issue, sell, pledge,
dispose of, grant or encumber, or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of, (i) any shares of capital stock of
IHK or any IHK Subsidiary of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares
of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of IHK or any IHK Subsidiary
(except for (A) the issuance of a maximum of 590,870 shares of IHK
Common Stock pursuant to the IHK Option Plan, (B) pursuant to the IHK
Employee Stock Purchase Plan and (C) issuances by a direct or indirect
wholly owned subsidiary of IHK of capital stock to such subsidiary's
parent or (ii) any assets of IHK or any IHK Subsidiary, except in the
ordinary course of business and in a manner consistent with past
practice;
(d) Neither IHK nor any IHK Subsidiary shall declare, set aside,
make or pay any dividend or other distribution, payable in cash, stock,
property or otherwise, with respect to any of its capital stock, other
than (i) any quarterly dividends declared and paid in accordance with
past practice and not in excess of $0.03 per share of IHK Common Stock
and (ii) such dividends by a direct or indirect wholly owned subsidiary
of IHK to such subsidiary's parent;
(e) Neither IHK nor any IHK Subsidiary shall reclassify, combine,
split, subdivide or redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock, except for any such transaction by
a direct or indirect wholly owned subsidiary of IHK that remains a
wholly-owned subsidiary of IHK after the consummation of such
transaction;
(f) Neither IHK nor any IHK Subsidiary shall (i) acquire or
dispose of (including, without limitation, by merger, consolidation, or
acquisition or disposition of stock or assets, or by liquidation or
dissolution) any interest in any corporation, partnership, other
business organization or any division thereof or any assets, other than
the acquisition or disposition of assets in the ordinary course of
business consistent with past practice and any other acquisitions for
consideration which is not, in the aggregate, in excess of $10,000,000
and any other dispositions for consideration which is not, in the
aggregate, in excess of $10,000,000; (ii) incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any Person, or make any loans or advances, except for (A)
indebtedness incurred in the ordinary course of business and consistent
with past practice, (B) indebtedness of IHK to a direct or indirect
wholly owned IHK Subsidiary or indebtedness of IHK or a direct or
indirect wholly owned IHK Subsidiary to another direct or indirect
wholly owned IHK Subsidiary, (C) other indebtedness with a maturity of
not more than one year incurred in the ordinary course of business
consistent with past practice and (D) indebtedness to fund the Offer and
the Cash Consideration and the expenses incurred in connection therewith
and to refinance the Company's and IHK's existing indebtedness; (iii)
enter into, amend or terminate any contract or agreement material to the
business, results of operations or financial condition of IHK and the
IHK Subsidiaries taken as a whole other than in the ordinary course of
business, consistent with past practice; (iv) authorize any capital
expenditure, other than capital expenditures for IHK and the IHK
Subsidiaries as a whole, in an aggregate ate amount not exceeding the
sum of (A) the amount provided in the capital expenditure budget for the
fiscal year ending March 31, 1998 previously provided to the Company and
(B) $5,000,000; or (v) enter into or amend any contract, agreement,
commitment or arrangement that, if fully performed, would not be
permitted under this subsection (f);
(g) Neither IHK nor any IHK Subsidiary shall (i) increase the
compensation payable or to become payable to its officers or employees,
except for increases in accordance with past practices in salaries or
wages of employees of IHK or any IHK Subsidiary who are not officers of
IHK, or (ii) except pursuant to existing policies and agreements, grant
any severance or termination pay to any director, officer or other
employee of IHK or any IHK Subsidiary, or (iii) except for change of
control agreements specified in Section 5.02(g) of the IHK Disclosure
Schedule enter into or amend any employment or severance agreement with
any director, officer or other employee of IHK or any IHK Subsidiary or
(iv) establish, adopt enter into, extend, amend or terminate any
collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee;
(h) Neither IHK nor any IHK Subsidiary shall take any action,
other than as required by the SEC or U.S. GAAP, with respect to
accounting policies or procedures (including, without limitation,
procedures with respect to the payment of accounts payable and
collection of accounts receivable);
(i) Neither IHK nor any IHK Subsidiary shall make any tax election
or settle or compromise any material federal, state, local or foreign
income tax liability;
(j) Neither IHK nor any IHK Subsidiary shall take any action that
would prevent or impede any party to this Agreement from obtaining any
consent or approval the receipt of which is a condition to the
consummation of the Offer or the Merger;
(k) Neither IHK nor any IHK Subsidiary shall enter into any
agreement or arrangement that would limit or otherwise restrict IHK or
any IHK Subsidiary or any successor thereto, after the consummation of
the Merger, from engaging or competing in any line of business or in any
geographic area;
(l) Neither IHK nor any IHK Subsidiary shall pay, discharge or
satisfy any claim, liability or obligation (absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business and
consistent with past practice, of liabilities reflected or reserved
against in the March 31, 1997 consolidated balance sheet of IHK or
subsequently incurred in the ordinary course of business and consistent
with past practice;
(m) Neither IHK nor any IHK Subsidiary shall take any action that
would result in (i) any of the representations or warranties of IHK and
the Merger Sub set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations or
warranties that are not so qualified becoming untrue in any material
respect or (iii) any of the conditions to the Offer set forth in Annex A
or the conditions to the Merger set forth in Article VII not being
satisfied; and
(n) Neither IHK nor any IHK Subsidiary shall authorize or enter
into an agreement to do anything prohibited by Sections 5.02(b) through
(m).
SECTION 5.03 Government Filings.
(a) The Company shall use commercially reasonable efforts to
promptly file and shall cause the Company Subsidiaries to promptly file
all reports required to be filed by any of them with any Governmental
Entities between the date of this Agreement and the Effective Time and
shall (to the extent permitted by Law or regulation or any applicable
confidentiality agreement) deliver to IHK copies of all such reports
promptly after the same are filed.
(b) IHK shall use commercially reasonable efforts to promptly file
and shall cause each IHK Subsidiary to promptly file all reports
required to be filed by any of them with any Governmental Entities
between the date of this Agreement and the Effective Time and shall (to
the extent permitted by Law or regulation or any applicable
confidentiality agreement) deliver to the Company copies of all such
reports promptly after the same are filed.
(c) Subject to applicable Laws, IHK shall have the right to review
in advance, and to the extent practicable to consult with the Company,
with respect to all the information relating to IHK or any IHK
Subsidiary or the Merger which appears in any Company or Company
Subsidiary filings made with, or written materials submitted to, any
Governmental Entity.
(d) Subject to applicable Laws, the Company shall have the right
to review in advance, and to the extent practicable to consult with IHK,
with respect to all the information relating to the Company or any
Company Subsidiary or the Merger which appears in any IHK or IHK
Subsidiary filings made with, or written materials submitted to, any
Governmental Entity.
(e) In exercising the rights provided by Sections 5.03(c) and
5.03(d), each of the parties hereto agrees to act reasonably and as
promptly as practicable.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Stockholders' Meetings.
(a) Unless otherwise required pursuant to the applicable fiduciary
duties of the Company's Board of Directors to the stockholders of the
Company (as determined in good faith by the Company's Board of Directors
based upon the advice of outside counsel), (i) the Company shall call
and hold a meeting of its stockholders (the "Company Stockholders'
Meeting") as promptly as practicable to consider and vote upon the
approval of this Agreement and the Merger, and the Company shall use
commercially reasonable efforts to hold the Company Stockholders'
Meeting as soon as practicable after the date on which shares of Company
Common Stock are purchased in the Offer and the Registration Statement
becomes effective, (ii) the Company's Board of Directors shall recommend
such approval (as well as acceptance of the Offer), and (iii) the
Company shall take all lawful action to solicit such approval,
including, without limitation, timely mailing the Proxy Statement.
(b) Unless otherwise required pursuant to the applicable fiduciary
duties of IHK's Board of Directors to the shareholders of IHK (as
determined in good faith by IHK's Board of Directors based upon the
advice of outside counsel), (i) IHK shall call and hold a meeting of its
shareholders (the "IHK Shareholders' Meeting") as promptly as
practicable to consider and vote upon the approval of the issuance of
the Stock Consideration, and IHK shall use commercially reasonable
efforts to hold the IHK Shareholders' Meeting as soon as practicable
after the date on which shares of Company Common Stock are purchased in
the Offer and the Registration Statement becomes effective, (ii) the
IHK's Board of Directors shall recommend such approval, and (iii) IHK
shall take all lawful action to solicit such approval, including,
without limitation, timely mailing the Proxy Statement.
SECTION 6.02 Registration Statement; Proxy Statement.
(a) As promptly as practicable after the execution of this
Agreement (i) IHK and the Company shall prepare and IHK shall file with
the SEC the Registration Statement in connection with the registration
under the Securities Act of the shares of IHK Common Stock to be issued
to the stockholders of the Company in the Merger, a portion of which
Registration Statement shall also serve as the joint proxy
statement/prospectus (together with any amendments thereof or
supplements thereto, the "Proxy Statement") relating to the
Stockholders' Meetings. The Registration Statement shall also register
the resale of IHK Common Stock received in the Offer and the Merger by
Affiliates of the Company by such Affiliates and IHK shall maintain the
effectiveness of the Registration Statement with respect to such resales
of such IHK Common Stock for a period of one year after the Effective
Time. At any time during such one year period, upon IHK's request, any
such Affiliates shall not be allowed to sell IHK Common Stock pursuant
to such Registration Statement for a period of 45 days if (i) IHK or any
IHK Subsidiary is engaged in confidential negotiations or other
confidential business activities, disclosure of which would be required
in such registration statement (but would not be required if such sales
were not made), and IHK determines in good faith that such disclosure
would be materially detrimental to IHK and its stockholders, or (ii) IHK
determines to effect a registered underwritten public offering of IHK's
equity securities or of securities convertible to IHK's equity
securities for IHK's account and IHK takes substantial steps (including,
but not limited to, selecting the managing underwriter for such
offering) and is proceeding with reasonable diligence to effect such
offering; provided, however, that IHK may only make such a request twice
during such one year period. A deferral of such sales shall be lifted,
if, in the case of a deferral pursuant to clause (i) of the preceding
sentence, the negotiations or other activities are disclosed or
terminated, or, in the case of a deferral pursuant to clause (ii) of the
preceding sentence, the proposed registration for IHK's account is
abandoned. The Company and such Affiliates shall furnish all information
concerning the Company and such Affiliates as IHK may reasonably request
in connection with such actions and the preparation of the Registration
Statement and the Proxy Statement. IHK shall use commercially reasonable
efforts, and the Company and such Affiliates will cooperate with IHK, to
cause the Registration Statement to become effective as promptly as
practicable and to keep the Registration Statement effective as long as
is necessary to consummate the Merger. Prior to the effective date of
the Registration Statement, IHK shall take all action required under any
applicable federal or state securities Laws in connection with the
issuance of shares of IHK Common Stock pursuant to the Merger. IHK
shall, as promptly as practicable, provide copies of any written
comments received from the SEC with respect to the Registration
Statement to the Company and advise the Company of any verbal comments
with respect to the Registration Statement received from the SEC. IHK
and the Company shall each give the other and its counsel the
opportunity to review the Registration Statement and each document to be
incorporated by reference therein and all responses to requests for
additional information by and replies to comments of the SEC before
their being filed with, or sent to, the SEC. IHK and the Company shall
each use commercially reasonable efforts, after consultation with the
other party, to respond promptly to all such comments of and requests by
the SEC. Unless otherwise required by the applicable fiduciary duties of
the respective Boards of Directors to their respective stockholders (as
determined in good faith by each respective Board of Directors based
upon the advice of its outside counsel), as promptly as practicable
after the Registration Statement shall have become effective, the
Company and IHK shall mail the Proxy Statement to their respective
stockholders.
(b) Unless otherwise required pursuant to the applicable fiduciary
duties of the respective Boards of Directors to their respective
stockholders (as determined in good faith by each respective Board of
Directors based upon the advice of its outside counsel), no amendment or
supplement to the Proxy Statement or the Registration Statement will be
made by IHK or the Company without the approval of the other party,
which approval shall not be unreasonably withheld. IHK will advise the
Company, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order, of the
suspension of the qualification of IHK Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or
of any request by the SEC for amendment of the Proxy Statement or the
Registration Statement.
(c) Notwithstanding anything to the contrary in this Agreement,
(i) IHK shall have no obligation to mail the Proxy Statement to its
shareholders unless and until IHK shall have received the "comfort
letter" referred to in Section 6.10(a) and (ii) the Company shall have
no obligation to mail the Proxy Statement to its stockholders unless and
until the Company shall have received the "comfort letter" referred to
in Section 6.10(b).
(d) The information supplied by IHK for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the
time the Registration Statement is declared effective, (ii) the time the
Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to its shareholders and (iii) the time of the IHK
Shareholders' Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If at
any time prior to the time of the IHK Shareholders' Meeting, any event
or circumstance relating to IHK or any IHK Subsidiary, or their
respective officers or directors, should be discovered by IHK which
should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, IHK shall promptly inform the Company.
(e) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the
time the Registration Statement is declared effective, (ii) the time the
Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to the stockholders of the Company and (iii) the time of
the Company Stockholders' Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. If at any time prior to the time of the Company
Stockholders' Meeting any event or circumstance relating to the Company
or any Company Subsidiary, or their respective officers or directors,
should be discovered by the Company which should be set forth in an
amendment or a supplement to the Registration Statement or Proxy
Statement, the Company shall promptly inform IHK.
(f) All documents that IHK is responsible for filing with the SEC
in connection with the transactions contemplated herein will comply as
to form and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations
thereunder.
(g) All documents that the Company is responsible for filing with
the SEC in connection with the transactions contemplated herein will
comply as to form and substance in all material aspects with the
applicable requirements of the Securities Act and the rules and
regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
SECTION 6.03 Access to Information; Confidentiality.
(a) To the fullest extent possible, consistent with applicable
Law, the Company shall afford to IHK and its officers, employees,
accountants, counsel, financial advisors and other representatives
("Representatives") reasonable access during normal business hours
during the period prior to the Effective Time to all the officers,
employees, agents, properties, books, contracts, commitments and records
of the Company and the Company Subsidiaries, and will cooperate in
furnishing and cause its officers, employees and agents to furnish
information regarding the Company and the Company Subsidiaries
reasonably required in connection with the indebtedness contemplated by
the Xxxxxx Brothers Commitment and during such period, the Company shall
furnish promptly to IHK and its Representatives all information
concerning the businesses, properties and personnel of the Company and
the Company Subsidiaries as IHK may reasonably request.
(b) Until the Effective Time, IHK and the Company will be bound
by, and will hold any information received pursuant to this Agreement in
confidence in accordance with the terms of, the confidentiality
agreement between the Company and IHK dated August 26, 1997 (the
"Confidentiality Agreement").
(c) To the fullest extent possible, consistent with applicable
Law, IHK shall, and shall cause the IHK Subsidiaries to, afford to the
Company and its Representatives reasonable access during normal business
hours during the period prior to the Effective Time to all the officers,
employees, agents, properties, books, contracts, commitments and records
of IHK and the IHK Subsidiaries, and during such period, IHK shall
furnish promptly to the Company and its Representatives all information
concerning the businesses, properties and personnel of IHK and the IHK
Subsidiaries as the Company may reasonably request.
(d) No investigation by either the Company or IHK shall affect the
representations and warranties of the other.
SECTION 6.04 Approvals and Consents; Cooperation.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties (i) shall make promptly its filings, and
thereafter make any other required submissions, under the HSR Act with
respect to the Offer and the Merger and (ii) shall use all commercially
reasonable efforts to obtain as promptly as practicable (A) all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities, including opposing any attempt by any
Governmental Entity to obtain a preliminary or permanent injunction, or
to affirm on appeal any such injunction, from the Federal Trade
Commission or a federal or state court to enjoin the consummation of the
Offer and the Merger under any antitrust Law, and provided that IHK
shall consider in good faith but shall not be required to agree to any
proposal to make any material modification to the business transaction
contemplated by this Agreement in order to obtain the agreement of any
Governmental Entity to permit the Offer and Merger to be consummated,
and (B) all necessary consents, approvals or waivers from third parties
and (iii) shall execute and deliver any additional instruments necessary
to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement.
(b) The Company and IHK each agrees that it will consult with the
other party with respect to the obtaining of all permits, consents,
approvals and authorizations of all third parties and Governmental
Entities necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the other party
apprised of the status of matters relating to completion of the
transactions contemplated by this Agreement.
SECTION 6.05 No Solicitation of Transactions.
(a) The Company agrees that neither it nor any Company Subsidiary
shall, and that it shall cause its and each Company Subsidiary's
Representatives not to, directly or indirectly, initiate, solicit,
encourage or otherwise facilitate (including by way of furnishing
information) any inquiries or the making of any proposal, or offer with
respect to a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or
similar transaction involving, or any purchase or sale of all or any
significant portion of the assets or 20% or more of the equity
securities of, the Company or any Company Subsidiary that, in any such
case, could reasonably be expected to interfere with the completion of
the Merger or the other transactions contemplated by this Agreement (any
such proposal or offer being hereinafter referred to as an "Acquisition
Proposal"). The Company further agrees that neither it nor any Company
Subsidiary shall, and that it shall cause its and each Company
Subsidiary's Representatives not to, directly or indirectly, have any
discussion with or provide any confidential information or data to any
Person relating to an Acquisition Proposal or engage in any negotiations
concerning an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal or accept an
Acquisition Proposal; provided, however, that nothing contained in this
Agreement shall prevent the Company or the Company's Board of Directors
from (i) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal; (ii) engaging in any discussions
or negotiations with, or providing any information to, any Person in
response to an unsolicited bona fide written Acquisition Proposal by any
such Person; or (iii) recommending such an unsolicited bona fide written
Acquisition Proposal to the holders of Company Common Stock if and only
to the extent that, in any such case as is referred to in clause (ii) or
(iii), (A) the Company's Board of Directors concludes in good faith
(after consultation with its legal counsel and financial advisors) that
such Acquisition Proposal is reasonably capable of being completed,
taking into account all legal, financial, regulatory and other aspects
of the Acquisition Proposal and the Person making the Acquisition
Proposal, and would, if consummated, result in a transaction more
favorable to holders of Company Common Stock than the transaction
contemplated by this Agreement (any such more favorable Acquisition
Proposal being hereinafter referred to as a "Superior Proposal"), (B)
the Company's Board of Directors determines in good faith after
consultation with legal counsel that such action is necessary for it to
act in a manner consistent with its fiduciary duties under applicable
law, (C) prior to providing any information or data to any Person in
connection with a Superior Proposal by any such Person, the Company's
Board of Directors receives from such Person an executed confidentiality
agreement on terms substantially similar to those contained in the
Confidentiality Agreement and (D) prior to providing any information or
data to any Person or entering into discussions or negotiations with any
Person, the Company's Board of Directors notifies IHK promptly of such
inquiries, proposals or offers received by, any such information
requested from, or any such discussions or negotiations sought to be
initiated or continued with, the Company, any Company Subsidiary or any
of their Representatives indicating, in connection with such notice, the
name of such Person and the terms and conditions of any proposals or
offers. The Company agrees that it will immediately cease and cause to
be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any Acquisition
Proposal. The Company agrees that it shall keep IHK informed, on a
current basis, of the status and terms of any such proposals or offers
and the status of any such discussions or negotiations.
(b) The Company agrees that it will take the necessary steps to
promptly inform each Company Subsidiary and each Representative of the
Company or any Company Subsidiary of the obligations undertaken in this
Section 6.05.
SECTION 6.06 Employee Benefits Matters. Annex B hereto sets forth
certain agreements among the parties hereto with respect to employee
benefits matters and is incorporated herein by this reference.
SECTION 6.07 Directors' and Officers' Indemnification and Insurance.
(a) From and after the Effective Time, IHK shall, and shall cause
the Surviving Corporation to, indemnify and hold harmless, each present
and former director, officer, employee and fiduciary the Company and
each Company Subsidiary and each Person who served at the request of the
Company or any Company Subsidiary as a director, officer, trustee,
partner, fiduciary or employee of another corporation, partnership,
joint venture, trust pension or other employee benefit plan or
enterprise (collectively, the "Indemnified Parties"), to the fullest
extent permitted under applicable Law, against all costs and expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim,
action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action or omission in
their capacity as an officer, director, employee or fiduciary, whether
occurring before or after the Effective Time, including, without
limitation, the transactions contemplated by this Agreement (and shall
also advance, or cause to be advanced, expenses as incurred to the
fullest extent permitted under the DGCL, provided that the Person to
whom expenses are advanced provides the undertaking to repay such
advances contemplated by Section 145(e) of the DGCL). IHK and Merger Sub
agree that all rights to indemnification existing in favor of the
Indemnified Parties as provided in the Company's By-Laws, as in effect
as of the date hereof, with respect to matters occurring through the
Effective Time, shall survive the Merger and shall continue in full
force and effect for a period of not less than six years from the
Effective Time.
(b) Without limiting the foregoing, in the event any claim,
action, suit, proceeding or investigation (a "Claim") is brought against
any Indemnified Party (whether arising before or after the Effective
Time) after the Effective Time (i) the Indemnified Parties may retain
counsel satisfactory to them and reasonably satisfactory to IHK and the
Surviving Corporation, (ii) IHK and the Surviving Corporation shall pay
all reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received and (iii) IHK and
the Surviving Corporation will use commercially reasonable efforts to
assist in the vigorous defense of any such matter, provided that neither
IHK nor the Surviving Corporation shall be liable for any settlement of
any Claim effected without its written consent, which consent, however,
shall not be unreasonably withheld. Any Indemnified Party wishing to
claim indemnification under this Section 6.07, upon learning of any such
Claim, shall notify IHK (but the failure so to notify IHK shall not
relieve IHK from any liability that IHK may have under this Section 6.07
except to the extent such failure materially prejudices IHK), and shall
deliver to IHK the undertaking contemplated by Section 145(e) of the
DGCL. The Indemnified Parties as a group may retain only one law firm to
represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more Indemnified
Parties.
(c) For a period of six years after the Effective Time, IHK shall
cause to be maintained in effect the current directors' and officers'
liability insurance policies maintained by the Company (provided that
IHK may substitute therefor policies of at least the same coverage
containing terms and conditions which are no less advantageous) with
respect to claims arising from facts or events that occurred prior to
the Effective Time; provided, however, that in no event shall IHK be
required to expend pursuant to this Section 6.07(c) more than an amount
per year equal to 200% of current annual premiums paid by the Company
for such insurance (which premiums the Company represents and warrants
to be approximately $260,000 per year in the aggregate).
SECTION 6.08 Obligations of IHK and Merger Sub. IHK shall take all
action necessary to perform, and shall cause Merger Sub to perform, its
obligations under this Agreement and to consummate the Merger on the
terms and subject to conditions set forth in this Agreement.
SECTION 6.09 Affiliates' Letters. No later than 5 days from the
date of this Agreement, the Company shall deliver to IHK a list of names
and addresses of those persons who were, in the Company's reasonable
judgment, on such date, affiliates within the meaning of Rule 145 of the
rules and regulations promulgated under the Securities Act of the
Company (each such person being a "Company Affiliate"). The Company
shall provide IHK with such information and documents as IHK shall
reasonably request for purposes of reviewing such list. The Company
shall use its reasonable efforts to deliver or cause to be delivered to
IHK, prior to the Effective Time, a letter substantially in the form
attached hereto as Exhibit 6.09, executed by each of the Company
Affiliates identified in the foregoing list and of any person who shall
have become a Company Affiliate subsequent to the delivery of such list.
SECTION 6.10 Letters of Accountants.
(a) The Company shall use commercially reasonable efforts to cause
to be delivered to IHK a "comfort" letter of Price Waterhouse LLP or
Xxxxxx Xxxxxxxx LLP, the Company's independent public accountants, dated
and delivered the date on which the Registration Statement shall become
effective and addressed to IHK, in the form, scope and content
contemplated by Statement on Auditing Standards No. 72, as amended
issued by the American Institute of Certified Public Accountants, Inc.
("SAS 72"), relating to the financial statements and other financial
data with respect to the Company and its consolidated subsidiaries
included or incorporated by reference in the Proxy Statement and such
other matters as may be reasonably required by IHK, and based upon
procedures carried out to a specified date not earlier than five days
prior to the date thereof.
(b) IHK shall use commercially reasonable efforts to cause to be
delivered to the Company a "comfort letter" of Deloitte & Touche LLP,
IHK's independent public accountants, dated the date on which the
Registration Statement shall become effective, and addressed to the
Company, in the form, scope and content contemplated by SAS 72, relating
to the financial statements and other financial data with respect to IHK
and the IHK Subsidiaries included in or incorporated by reference in the
Proxy Statement and such other matters as may be reasonably required by
the Company, and based upon procedures carried out to a specified date
not earlier than five days prior to the date thereof.
SECTION 6.11 Listing Market. IHK shall promptly prepare and submit
to the American Stock Exchange or such other stock exchange or market as
the parties reasonably agree (the "Listing Market") a listing
application covering the shares of IHK Common Stock to be issued in the
Merger and pursuant to Substitute Options, and shall use commercially
reasonable efforts to obtain, prior to the Effective Time, approval for
the listing of such IHK Common Stock, subject to official notice to the
Listing Market of issuance, and the Company shall cooperate with IHK
with respect to such listing.
SECTION 6.12 IHK Board Representation. Prior to the Effective
Time, IHK shall cause two nominees of the Company ("Company Nominees"),
subject to the reasonable approval of IHK, to be elected as directors of
IHK (and to be in office immediately prior to the Effective Time). For a
period of one or two years after the Effective Time, depending on the
class to which such Company Nominee is initially elected, IHK shall
cause each such Company Nominee to be nominated for re-election to an
additional three year term at the expiration of his initial term in
office.
SECTION 6.13 Company Rights Plan. The Company's Board of Directors
shall take all further action (in addition to that described in Section
3.20) necessary in order to render the Company Rights inapplicable to
the Offer, the Merger and the other transactions contemplated by this
Agreement, to terminate the Company Rights Agreement as of the Effective
Time and to ensure that IHK and Merger Sub will not have any obligations
in connection with the Rights Agreement or the Company Rights (including
by redeeming the Company Rights immediately prior to the Effective Time
or by amending the Company Rights Agreement). Except as otherwise
provided in this Section 6.13 and Section 3.20, the Company shall not,
prior to the Effective Time, redeem the Company Rights or amend or
terminate the Company Rights Agreement unless (a) required to do so by
order of a court of competent jurisdiction or (b) required by the
applicable fiduciary duties of the Company's Board of Directors to the
stockholders of the Company (as determined in good faith by the
Company's Board or Directors based upon the advice of outside counsel).
SECTION 6.14 Public Announcements. Unless otherwise required by
applicable Law or stock exchange requirements, IHK and the Company shall
consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or any
transaction contemplated thereby and shall not issue any such press
release or make any such public statement prior to such consultation.
SECTION 6.15 Subsequent Financial Statements.
(a) As soon as practicable following filing, the Company shall
deliver to IHK a copy of each periodic report on Forms 10-Q or 10-K, so
filed prior to the Effective Time. The financial statements contained
therein are referred to as the "Company Subsequent Financial
Statements." The Company Subsequent Financial Statements (i) will be
prepared from the books of account and other financial records of the
Company and the consolidated Company Subsidiaries, (ii) will be prepared
in accordance with U.S. GAAP applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes thereto)
and (iii) will present fairly, in all material respects, the
consolidated financial position of the Company and the consolidated
Company Subsidiaries as at the respective dates thereof and the results
of their operations and cash flows for the respective periods indicated
therein except as otherwise noted therein (subject in the case of
unaudited statements, to normal and recurring year-end adjustments which
shall not be expected, individually or in the aggregate, to have a
Company Material Adverse Effect and the omission of footnotes).
(b) As soon as practicable following filing, IHK shall deliver to
the Company a copy of each periodic report on Forms 10-Q or 10-K, so
filed prior to the Effective Time. The financial statements contained
therein are referred to as the "IHK Subsequent Financial Statements."
The IHK Subsequent Financial Statements (i) will be prepared from the
books of account and other financial records of IHK and the consolidated
IHK Subsidiaries, (ii) will be prepared in accordance with U.S. GAAP
applied on a consistent basis throughout the periods indicated (except
as may be indicated in the notes thereto) and (iii) will present fairly,
in all material respects, the consolidated financial position of IHK and
the consolidated IHK Subsidiaries as at the respective dates thereof and
the results of their operations and cash flows for the respective
periods indicated therein except as otherwise noted therein (subject in
the case of unaudited statements, to normal and recurring year-end
adjustments which shall not be expected, individually or in the
aggregate, to have an IHK Material Adverse Effect and the omission of
footnotes).
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to Effect the
Merger. The obligations of the Company, IHK and Merger Sub to consummate
the Merger are subject to the satisfaction of the following conditions:
(a) this Agreement and the transactions contemplated hereby shall
have been approved and adopted by the affirmative vote of the
stockholders of the Company in accordance with the DGCL and the
Company's Certificate of Incorporation and the issuance of the IHK
Common Stock pursuant to the Merger shall have been approved by the
affirmative vote of the shareholders of IHK in accordance with the
applicable rules and regulations of the Listing Market;
(b) any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or
been terminated;
(c) no Governmental Entity (as defined in Section 9.12(g)) or
court of competent jurisdiction located or having jurisdiction in the
United States shall have enacted, issued, promulgated, enforced or
entered any Law, rule, regulation, executive order or Order which is
then in effect and has the effect of restraining or making the Merger
illegal or otherwise prohibiting consummation of the Merger;
(d) the Registration Statement shall have been declared effective,
and no stop order suspending the effectiveness of the Registration
Statement shall be in effect;
(e) the shares of IHK Common Stock to be issued in the Merger and
pursuant to Substitute Options shall have been authorized for listing on
the Listing Market, subject to official notice of issuance; and
(f) Merger Sub shall have purchased shares of Company Common Stock
pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of this Agreement
and the transactions contemplated hereby, as follows:
(a) by mutual written consent of IHK and the Company;
(b) by either IHK or the Company, if the Effective Time shall not
have occurred on or before May 31, 1998 (the "Termination Date");
provided, however, that the right to terminate this Agreement under this
Section 8.01(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before the
Termination Date;
(c) by either IHK or the Company, if any court of competent
jurisdiction in the United States or other Governmental Entity, based
otherwise than on any antitrust Law, (i) shall have issued an Order or
taken any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such
Order or other action shall have become final and nonappealable or (ii)
shall have failed to issue an Order or to take any other action
necessary to fulfill the conditions to the Closing of the Merger and
such denial of a request to issue such Order or take such other action
shall have become final and nonappealable;
(d) (x) by either IHK or the Company, if this Agreement and the
transactions contemplated hereby shall fail to receive the requisite
vote for approval and adoption at the Company Stockholders' Meeting or
(y) by the Company, if the issuance of the IHK Common Stock as part of
the Merger shall fail to receive the requisite vote for approval at the
IHK Shareholders' Meeting;
(e) by IHK, if prior to the payment for shares of Company Common
Stock pursuant to the Offer (i) the Company's Board of Directors
withdraws, modifies or changes its approval or recommendation (including
by amendment of the Schedule 14D-9) of this Agreement, the Offer or the
Merger in a manner adverse to IHK or Merger Sub, (ii) the Company's
Board of Directors shall, at a time when there is an Acquisition
Proposal with respect to the Company, fail to reaffirm such approval or
recommendation of this Agreement, the Offer or the Merger upon the
reasonable request of IHK and Merger Sub, (iii) the Company's Board of
Directors shall approve or recommend any acquisition of the Company or a
material portion of its assets or any tender offer for shares of its
capital stock, in each case, other than by the other parties hereto or
an affiliate thereof; (iv) a tender offer or exchange offer for 20% or
more of the outstanding shares of capital stock of the Company is
commenced, and the Company's Board of Directors fails to recommend
against acceptance of such tender offer or exchange offer by its
stockholders (including by taking no position with respect to the
acceptance of such tender offer or exchange offer by its stockholders);
or (v) the Company's Board of Directors shall resolve to take any of the
actions specified in clauses (i) through (iv) of this Section 8.01(e);
(f) by the Company, prior to the payment for shares of Company
Common Stock pursuant to the Offer, upon five Business Days' prior
notice to IHK and Merger Sub (which notice shall be revocable by the
Company), if, as a result of a Superior Proposal received by the Company
from a Person other than a party to this Agreement or any of its
affiliates, the Company's Board of Directors determines in good faith
that their fiduciary obligations under applicable Law require that such
Superior Proposal be accepted; provided, however, that (i) the Company's
Board of Directors shall have concluded in good faith, after considering
applicable provisions of Law and after giving effect to all concessions
which may be offered by IHK and Merger Sub pursuant to clause (ii)
below, on the basis of advice of counsel, that such action is necessary
for the Company's Board of Directors to act in a manner consistent with
its fiduciary duties under applicable laws and (ii) prior to the
effective date of any such termination, the Company shall provide IHK
and Merger Sub with an opportunity to make such adjustments in the terms
and conditions of this Agreement, the Offer or the Merger as would
enable the Company to proceed with the transactions contemplated hereby;
provided, however, that it shall be a condition to the effectiveness of
termination by the Company pursuant to this Section 8.01(f) that the
Company shall have made the payment of the Termination Fee (as defined
below) to IHK required by Section 8.05(b);
(g) by IHK, prior to the payment for shares of Company Common
Stock pursuant to the Offer, upon a breach of any representation,
warranty, covenant or agreement on the part of the Company set forth in
this Agreement, or if any representation or warranty of the Company
shall have become untrue, in either case such that the conditions to the
Offer set forth in clauses (c) or (d) of Annex A would be satisfied (a
"Terminating Company Breach"); provided, however, that, if such
Terminating Company Breach is curable by the Company and for so long as
the Company continues to exercise all reasonable efforts to cure such
Terminating Company Breach, IHK may not terminate this Agreement under
this Section 8.01(g);
(h) by the Company, prior to the payment for shares of Company
Common Stock pursuant to the Offer, upon breach of any representation,
warranty, covenant or agreement on the part of IHK or Merger Sub set
forth in this Agreement, or if any representation or warranty of IHK and
Merger Sub shall have become untrue, in either case except for such
breaches or failures (i) which, individually or in the aggregate, would
not have an IHK Material Adverse Effect and (ii) which, individually or
in the aggregate, would not materially impair or delay the ability of
Merger Sub to consummate the Offer or the ability of IHK, Merger Sub and
the Company to effect the Merger ("Terminating IHK Breach"); provided,
however, that, if such Terminating IHK Breach is curable by IHK and
Merger Sub and for so long as IHK and Merger Sub continue to exercise
all reasonable efforts to cure such Terminating IHK Breach, the Company
may not terminate this Agreement under this Section 8.01(h);
(i) by IHK, if the Offer is terminated or expires without the
purchase of any shares of Company Common Stock thereunder, unless such
termination or expiration has been caused by or resulted from the
failure in any material respect of IHK or Merger Sub to perform any of
its covenants and agreements contained in this Agreement or in the
Offer;
(j) by the Company, if all of the conditions to the Offer set
forth in Annex A except for clause (2) have been satisfied and IHK fails
to accept and pay for shares of Company Common Stock in the Offer solely
because of the failure of LBCPI to fund its loan commitment contained in
the Xxxxxx Brothers Commitment; and
(k) by the Company, if on May 29, 1998, the Effective Time shall
not have occurred because IHK and Merger Sub have not been permitted to
consummate the Offer and the Merger by reason of any antitrust Law.
SECTION 8.02 Effect of Termination. In the event of termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith
become void and, except as provided in Section 8.05, there shall be no
liability under this Agreement on the part of IHK, Merger Sub or the
Company or any of their respective officers or directors and all rights
and obligations of each party hereto shall cease, provided that nothing
herein shall relieve any party from liability for any breach of this
Agreement (it being understood that IHK and Merger Sub shall have no
liability for failure to obtain financing of the Offer and the Merger or
to obtain expiration of all waiting periods under the HSR Act or to
avoid the entry or affirmation of any injunction under any antitrust Law
in respect of the Offer or the Merger, unless the Company elects to
terminate this Agreement under Section 8.01(j) or (k), respectively, and
then only to the extent provided in Section 8.05(c)).
SECTION 8.03 Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective
Boards of Directors at any time prior to the Effective Time; provided,
however, that after the approval and adoption of this Agreement and the
transactions contemplated hereby by the stockholders of the Company, no
amendment may be made which would reduce the amount or change the type
of consideration into which each share of Company Common Stock shall be
converted upon consummation of the Merger. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
SECTION 8.04 Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any
obligation or other act of any other party hereto, (b) waive any
inaccuracy in the representations and warranties contained herein or in
any document delivered pursuant hereto and (c) waive compliance with any
agreement or condition contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
SECTION 8.05 Fees and Expenses.
(a) Except as set forth in this Section 8.05, all expenses
incurred in connection with this Agreement shall be paid by the party
incurring such expenses, whether or not the Merger is consummated,
except that the Company and IHK each shall pay one-half of all Expenses
(as defined below) relating to printing, filing and mailing the
Registration Statement and the Proxy Statement and all SEC and other
regulatory filing fees incurred in connection with the Registration
Statement and the Proxy Statement. "Expenses" as used in this Agreement
shall include all reasonable out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates)
incurred by a party or on its behalf in connection with or related to
the authorization, preparation, negotiation, execution and performance
of this Agreement, the preparation, printing, filing and mailing of the
Registration Statement and the Proxy Statement, the solicitation of
stockholder approvals and all other matters related to the closing of
the Merger.
(b) The Company and IHK agree that
(i) if IHK shall terminate this Agreement pursuant to
Section 8.01(e) or
(ii) if the Company shall terminate this Agreement pursuant
to Section 8.01(f) or
(iii) if (A) IHK or the Company shall terminate this
Agreement pursuant to Section 8.01(d) due to the failure of the
Company's stockholders to approve and adopt this Agreement and (B)
at the time of such failure to so approve and adopt this Agreement
there shall exist an Acquisition Proposal with respect to the
Company and, within 12 months of the termination of this
Agreement, the Company enters into a definitive agreement with any
third party with respect to an Acquisition Proposal with respect
to the Company,
then the Company shall pay to IHK an amount equal to $8,000,000 (the
"Company Termination Fee").
(c) The Company and IHK agree that if the Company shall terminate
this Agreement pursuant to Section 8.01(j) or (k), then IHK shall pay to
the Company an amount equal to $8,000,000 (the "IHK Termination Fee").
(d) The Company Termination Fee required to be paid pursuant to
Section 8.05(b)(ii) shall be paid prior to, and shall be a pre-condition
to effectiveness of termination of this Agreement pursuant to Section
8.01(f) and the Company Termination Fee required to be paid pursuant to
Section 8.05(b)(iii) shall be paid to IHK on the next Business Day after
a definitive agreement is entered into with a third party with respect
to an Acquisition Proposal with respect to the Company. Any payment of a
Company Termination Fee otherwise required to be made pursuant to
Section 8.05(b) or an IHK Termination Fee required to be made pursuant
to Section 8.05(c) shall be made not later than two Business Days after
termination of this Agreement. All payments under this Section 8.05
shall be made by wire transfer of immediately available funds to an
account designated by the payee.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination
of this Agreement pursuant to Section 8.01, as the case may be, except
that representations, warranties and agreements set forth in Articles I
and II and Sections 6.06, 6.07 and 6.12 and Article IX shall survive the
Effective Time for the respective periods set forth in such sections or,
if no such period is specified, indefinitely and those set forth in
Sections 3.19, 4.19, 6.03(b), 8.02 and 8.05 and Article IX shall survive
termination for the respective periods set forth in such sections or, if
no such period is specified, indefinitely.
SECTION 9.02 Notices.
(a) All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be sent by an overnight
courier service that provides proof of receipt, mailed by registered or
certified mail (postage prepaid, return receipt requested) or telecopied
to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
if to the Company:
Savannah Foods & Industries, Inc.
Xxx Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X Xxxxxx
if to IHK or Merger Sub:
Imperial Xxxxx Corporation
Xxx Xxxxxxxx Xxxxxx
X.X. Xxx 0
Xxxxx Xxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx L.L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
(b) If this Agreement provides for a designated period after a
notice within which to perform an act, such period shall commence on the
date of receipt or refusal of the notice.
(c) If this Agreement requires the exercise of a right by notice
on or before a certain date or within a designated period, such right
shall be deemed exercised on the date of delivery to the courier
service, telecopying or mailing of the notice pursuant to which such
right is exercised.
(d) Notices of changes of address shall be effective only upon
receipt.
SECTION 9.03 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule
of Law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the Merger is not affected in any
manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
Merger be consummated as originally contemplated to the fullest extent
possible.
SECTION 9.04 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of Law or otherwise) without
the prior written consent of the other parties.
SECTION 9.05 Interpretation.
(a) When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The
table of contents, glossary of defined terms and headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation."
The phrases "the date of this Agreement" and "the date hereof" shall be
deemed to refer to the date in the first paragraph of this Agreement.
(b) The Parties hereto acknowledge that certain matters set forth
in the applicable Disclosure Schedule are included for informational
purposes only, notwithstanding the fact that, because they do not rise
above applicable materiality thresholds or otherwise, they would not be
required to be set forth therein by the terms of this Agreement and that
disclosure of such matters shall not be taken as an admission by the
Company or IHK that such disclosure is required to be made under the
terms or any provision of this Agreement and in no event shall the
disclosure of such matters be deemed or interpreted to broaden or
otherwise amplify the representations and warranties contained in this
Agreement. Notwithstanding anything to the contrary in Articles III and
IV, each section of the Disclosure Schedule that includes an asterisk in
its heading is intended to be responsive to statements in the
correspondingly numbered representation or warranty requesting a listing
of specified matters and does not list exceptions to the correspondingly
numbered representation and warranty.
SECTION 9.06 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or in equity.
SECTION 9.07 Governing Law. This Agreement shall be governed by
and construed in accordance with the Laws of the state of Delaware
applicable to contracts executed in and to be performed in that State.
All actions and proceedings arising out of or relating to this Agreement
shall be heard and determined in any Delaware state or federal court.
SECTION 9.08 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Article II
(which may be enforced by the beneficiaries thereof), Sections 6.06 and
6.07 (which are intended to be for the benefit of the persons covered
thereby and may be enforced by such persons) and Section 6.13.
SECTION 9.09 Counterparts. This Agreement may be executed in two
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 9.10 Waiver of Jury Trial. Each of IHK, the Company and
Merger Sub hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise), arising out of or relating to this Agreement or the actions
of IHK, the Company or Merger Sub in the negotiation, administration,
performance and enforcement thereof.
SECTION 9.11 Entire Agreement. This Agreement (including the
Annexes, the Exhibits, the Company Disclosure Schedule and the IHK
Disclosure Schedule) constitutes the entire agreement among the parties
with respect to the subject matter hereof and, except for the
Confidentiality Agreements, supersedes all prior agreements and
undertakings, both written and oral, among the parties, or any of them,
with respect to the subject matter hereof.
SECTION 9.12 Certain Definitions.
For purposes of this Agreement:
(a) "Affiliate" of a specified Person means a Person who directly
or indirectly through one or more intermediaries controls, is controlled
by or is under common control with, such specified Person;
(b) "Beneficial Owner" with respect to any shares of Company
Common Stock means a Person who shall be deemed to be the beneficial
owner of such shares (i) which such Person or any of its Affiliates or
associates (as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) beneficially owns, directly or indirectly, (ii) which such
Person or any of its Affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding or (iii) which are beneficially owned,
directly or indirectly, by any other Persons with whom such Person or
any of its Affiliates or associates or Person with whom such Person or
any of its Affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing
of any shares;
(c) "Business Day" means any day that is not a Saturday, Sunday or
other day on which banking institutions in New York, New York are
authorized or required by law or executive order to close;
(d) "Closing Price" means the volume weighted average of the
trading prices of IHK Common Stock, rounded to three decimal places, as
reported by Bloomberg Financial Markets, for each of the first 15
consecutive Trading Days in the period commencing 20 Trading Days prior
to the date of the Closing;
(e) "Company Specified Stockholders" means substantially all of
the directors and executive officers of the Company.
(f) "Control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership
of voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended or in effect from time to time;
(h) "Governmental Entity" means any United States (federal, state
or local) or foreign government or governmental, regulatory or
administrative authority, agency or commission;
(i) "IHK Specified Stockholders" means P. C. Xxxxxxxxxx, Xxxx X.
Xxxxxx, X. X. Xxxxxxxxxx, X. X. Xxxxxxx, Xxxxxx Xxxxxxxxxx, Xxx X.
Xxxxxxxx, X. X. Xxxxxxxx, R. E. Xxxxxxxxx, Xxxxx X. Xxxx, X. X. Xxxxx,
Xxxxxx X. Xxxxxxx, Xx., X. X. Xxxxxxx, Xxxxx X. Xxxxxxx, X. X. Xxxxxx,
A. K. Xxxxxxx, H. E. Xxxxx, Xxxxxx X. X. Xxxxx, H. P. Xxxxxxx, X. X.
Xxxxxx, X. X. Xxxxxxxx, Xxxxx Xxxxxxx, X. X. Xxxxxx, X. X. Xxxxxxxxxx,
Xxxxxx X. Xxxxxx (individually, and as trustee for certain trusts),
Xxxxxx Xxxxxx (individually, and as trustee for certain trusts),
Greencore Group plc, X. Xxxxxxx Trust Association, Xxxxxx and Xxxxx
Xxxxxxx Fund and U. S. National Bank (as trustee for certain trusts).
(j) "Knowledge" or "Known" means, with respect to any matter in
question, in the case of IHK or the Company, as the case may be, if any
of the executive officers of IHK or the Company has actual knowledge of
such matter after making due inquiry of all Persons who directly report
to such executive officers;
(k) "Law" means any United States (federal, state or local) or
foreign law, statute, ordinance, rule, regulation, order, judgment or
decree;
(l) "Order" means any decree, judgment, injunction, ruling, writ
or other order (whether temporary, preliminary or permanent);
(m) "Person" means an individual, corporation, partnership,
limited partnership, syndicate, person (including, without limitation, a
"person" defined in Section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government;
(n) "Securities Act" means the Securities Act of 1933, as amended
and in effect from time to time;
(o) "Stock Consideration" is (i) if the Closing Price of IHK
Common Stock is $13.25 or lower, a number of shares of IHK Common Stock
equal to the quotient of the Offer Price divided by $13.25, together
with a corresponding number of IHK Purchase Rights (as defined in
Section 2.06(a)); (ii) if the Closing Price of IHK Common Stock is
$17.25 or greater, a number of shares of IHK Common Stock equal to the
quotient of the Offer Price divided by $17.25, together with a
corresponding number of IHK Purchase Rights; or (iii) if the Closing
Price of the IHK Common Stock is greater than $13.25 but less than
$17.25, that portion of a share of IHK Common Stock equal to the
quotient of the Offer Price divided by the Closing Price of the IHK
Common Stock, together with a corresponding number of IHK Purchase
Rights;
(p) "Subsidiary" or "Subsidiaries" of any Person means any
corporation, partnership, joint venture or other legal entity of which
such Person (either alone or through or together with any other
subsidiary) owns, directly or indirectly, more than 50% of the stock or
other equity interests, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body
of such corporation or other legal entity;
(q) "Trading Day" means a day on which the New York Stock
Exchange, Inc. (the "NYSE") and the American Stock Exchange (the "AMEX")
are both open for trading.
IN WITNESS WHEREOF, IHK, Merger Sub and the Company have caused
this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
IMPERIAL XXXXX CORPORATION
By:______________________________________________
Name: /s/ XXXXX X. XXXXXXX
Title: President and Chief Executive Officer
IHK MERGER SUB CORPORATION
By:______________________________________________
Name: /s/ XXXXX X. XXXXXXX
Title: President and Chief Executive Officer
SAVANNAH FOODS & INDUSTRIES, INC.
By:_______________________________________________
Name: /s/ XXXXXXX X. XXXXXXX III
Title: President and CEO
ANNEX A TO THE
AGREEMENT AND PLAN OF MERGER
CONDITIONS TO THE OFFER
Capitalized terms used in this Annex A shall have the meanings
assigned to them in the Agreement to which it is attached (the "Merger
Agreement").
Merger Sub shall not be required to accept for payment, purchase
or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) under the Exchange Act, to pay for, any shares
of Company Common Stock tendered pursuant to the Offer until the
expiration of any applicable waiting period under the HSR Act and Merger
Sub may, subject to the terms and conditions of the Merger Agreement,
terminate or amend the Offer as to any shares of Company Common Stock
not then accepted for payment, or may delay the acceptance for payment
of or (subject to such Merger Agreement, rules or regulations) payment
for shares of Company Common Stock tendered, if (1) at the expiration of
the Offer, the number of shares of Company Common Stock validly tendered
and not withdrawn, together with any other shares of Company Common
Stock owned by IHK or Merger Sub or their affiliates, shall not
constitute at least 50.1% of the outstanding shares of Company Common
Stock on a fully diluted basis, (2) IHK shall not have obtained
financing sufficient to enable IHK (or cause Merger Sub) to pay the
amounts set forth in clauses (a), (b) and (c) of Section 4.21 of the
Merger Agreement or (3) at any time on or after the date of the Merger
Agreement and prior to the acceptance for payment of shares of Company
Common Stock, any of the following events shall have occurred and be
continuing:
(a) there shall have been any action taken, or any statute,
rule, regulation, judgment, administrative interpretation, Order
or injunction enacted, promulgated, entered, enforced or deemed
applicable to the Offer or the Merger (other than the application
of the waiting period provisions of the HSR Act) by any court of
competent jurisdiction in the United States or other Governmental
Entity, which would (i) restrain, prohibit or make illegal or
otherwise prohibit (A) the acceptance for payment of, or payment
for or purchase of at least 50.1% of the shares of Company Common
Stock or (B) the consummation of the Merger, or (ii) prohibiting
IHK or any of its affiliates to exercise full rights of ownership
of the shares of Company Common Stock, including without
limitation the right to vote any shares of Company Common Stock
purchased by them on all matters properly presented to the
stockholders of the Company, including without limitation the
adoption and approval of this Agreement and the Merger;
(b) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in
the United States, (ii) the declaration of any banking moratorium
or any suspension of payments in respect of banks or any material
limitation (whether or not mandatory) on the extension of credit
by lending institutions in the United States, (iii) the
commencement of a war, material armed hostilities or any other
material international or national calamity involving the United
States having a significant adverse effect on the functioning of
the financial markets in the United States, or (iv) in the case of
any of the foregoing existing at the time of the execution of the
Merger Agreement, a material acceleration or worsening thereof;
(c) the Company shall have breached or failed to comply with
any of its obligations under the Merger Agreement (other than as a
result of a breach by IHK or Merger Sub of any of their
obligations under the Merger Agreement) and such breach or failure
shall continue unremedied for ten (10) business days after the
Company has received written notice from IHK or Merger Sub of the
occurrence of such breach or failure, except such breaches or
failures (i) which, individually and in the aggregate, would not
have a Company Material Adverse Effect and (ii) which,
individually and in the aggregate, would not materially impair or
delay the ability of Merger Sub to consummate the Offer or the
ability of IHK, Merger Sub and the Company to effect the Merger;
(d) any representation or warranty of the Company contained
in the Merger Agreement shall fail to be true and correct as of
such expiration or proposed termination of the Offer except for
such failures (i) which, individually and in the aggregate, would
not have a Company Material Adverse Effect and (ii) which,
individually and in the aggregate, would not materially impair or
delay the ability of Merger Sub to consummate the Offer or the
ability of IHK, Merger Sub and the Company to effect the Merger,
provided that IHK shall have notified the Company promptly upon
learning of such failure;
(e) the Merger Agreement shall have been terminated pursuant
to its terms or amended pursuant to its terms to provide for such
termination or amendment of the Offer; or
(f) the Company's Board of Directors shall have (i)
(including by amendment of the Schedule 14D-9) withdrawn or
modified in any manner adverse to IHK or Merger Sub its approval
or recommendation of the Offer, the Merger or this Agreement or
(ii) resolved to do any of the foregoing;
which, in the good faith reasonable judgment of IHK and Merger Sub,
makes it inadvisable to proceed with acceptance for payment or payment
for shares of Company Common Stock.
Except as set forth in the Merger Agreement, the foregoing
conditions are for the sole benefit of IHK and Merger Sub and may be
asserted regardless of the circumstances (including any action or
inaction by IHK or Merger Sub other than a breach by IHK or Merger Sub
of the Merger Agreement) giving rise to any such condition or waived by
IHK or Merger Sub, in whole or in part, at any time or from time to
time, in its discretion. The failure of IHK or Merger Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
ANNEX B TO THE
AGREEMENT AND PLAN OF MERGER
AGREEMENTS RESPECTING PLANS AND
OTHER EMPLOYEE BENEFIT MATTERS
1. (a) For a period of one year immediately following the
Closing Date, IHK shall provide or cause the Surviving Corporation to
provide all employees of the Company who continue to be employed by IHK
or the Surviving Corporation or any of their respective Affiliates as of
the Effective Time ("Continuing Employees") with compensation and
benefits on terms which are, in the aggregate, not substantially less
favorable than those provided to the Continuing Employees immediately
prior to the date hereof.
(b) IHK further agrees that, for purposes of all employee
benefit plans of IHK or the Surviving Corporation or any of their
respective Affiliates in which Continuing Employees participate from and
after the Effective Time and under which an employee's benefit depends,
in whole or in part, on length of service, credit will be given to
Continuing Employees for service previously credited with the Company or
any Company Subsidiary prior to the Effective Time to the extent that
such crediting of service does not result in duplication of benefits.
(c) IHK shall cause each employee benefit plan in which
Continuing Employees participate from and after the Effective Time to
waive (i) any preexisting condition restriction which was waived under
the terms of any analogous Company plan prior to the Effective Time and
(ii) any waiting period limitation which would otherwise be applicable
to a Continuing Employee on or after the Effective Time to the extent
the Continuing Employee had satisfied any similar waiting period under
an analogous Company plan prior to the Effective Time. IHK further
agrees that it shall guarantee all obligations of the Company under any
Company Plan.
2. IHK and the Company acknowledge that the consummation of
the Offer shall constitute a "Change in Control" for purposes of the
Company Stock Option Plan.
3. (a) IHK will consent to the Company's entering into a new
or amended employment agreement with Xxxxxxx X. Xxxxxxx III on the terms
agreed to by IHK, Merger Sub and the Company.
(b) IHK intends to consent to the Company's entering into
new or amended employment agreements as soon as practicable following
the date hereof with the Continuing Employees agreed to by IHK and the
Company.
4. The Company will cause the following actions with respect
to the Company's Benefit Trust Agreement dated March 14, 1996 as amended
(the "Benefit Trust Agreement") to occur prior to the execution of this
Agreement:
(a) The Company will amend the Benefit Trust Agreement in
the following respects:
(i) provide for the corpus of the trust to be
invested in IHK Common Stock, rather than Company Common
Stock;
(ii) provide for prepayment of the Note, at the
Company's direction, with corpus (cash or IHK Common Stock
as directed);
(iii) clarify Section 3.2 of the Trust Agreement to
ensure that a release of pledged stock is not distributed to
participants on release, but held in trust to pay benefits
when due;
(iv) provide that the Offer and the Merger will not
constitute a Proposed Change in Control under the Trust
Agreement;
(v) provide that the Trustee can only sell IHK Common
Stock after giving IHK a right of first refusal;
(vi) provide that shares of IHK Common Stock held by
the Trust will be voted in proportion to all other
outstanding IHK Common Stock; and
(vii) provide that the Trustee will tender or
exchange of IHK Common Stock held by the Trust as directed
by the Company's Board of Directors.
(b) The cash received by the Benefit Trust in the Offer
and the Merger will be used to repay the existing Note of the
Benefit Trust to the Company and to purchase additional shares of
IHK Common Stock.
EXHIBIT 6.09 TO THE
AGREEMENT AND PLAN OF MERGER
FORM OF AFFILIATE LETTER FOR
AFFILIATES OF THE COMPANY
[DATE]
IMPERIAL XXXXX CORPORATION
Xxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxx 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of Savannah Foods & Industries, Inc., a
Delaware corporation (the "Company"), as the term "Affiliate" is defined
for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations (the "Rules And Regulations") of the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"). Pursuant to the terms of the Agreement and Plan of
Merger dated as of September , 1997 (the "Merger Agreement") among
Imperial Xxxxx Corporation, a Texas corporation ("IHK"), IHK Merger Sub
Corporation, a Delaware corporation ("Merger Sub"), and the Company,
Merger Sub will be merged with and into the Company (the "Merger").
Capitalized terms used in this letter without definition shall have the
meanings assigned to them in the Merger Agreement.
As a result of the Merger, I may receive shares of common
stock, no par value, of IHK ("IHK Common Stock"). I would receive such
IHK Common Stock (the "Shares") in exchange for shares (or upon exercise
of options for shares) owned by me of common stock, par value $.25 per
share, of the Company ("Company Common Stock").
1. I represent, warrant and covenant to IHK that in the event I
receive any Shares as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
the Shares in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement
and discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of
the Shares, to the extent I felt necessary, with my counsel or counsel
for the Company.
C. I have been advised that the issuance of the Shares to me
pursuant to the Merger has been registered with the Commission under the
Act on a Registration Statement on Form S-4. However, I have also been
advised that, because at the time the Merger is submitted for a vote of
the stockholders of the Company, (a) I may be deemed to be an affiliate
of the Company and (b) distribution by me of the IHK Common Stock has
not been registered under the Act, I may not sell, transfer or otherwise
dispose of the IHK Common Stock issued to me in the Merger unless (i)
such sale, transfer or other disposition is made in conformity with the
volume and other limitations of Rule 145 promulgated by the Commission
under the Act, (ii) such sale, transfer or other disposition has been
registered under the Act, the Company shall include the Shares in the
Registration Statement and to maintain the effectiveness of the
Registration statement for a period of 100 days after the effective date
hereof or (iii) in the opinion of counsel reasonably acceptable to IHK,
such sale, transfer or other disposition is otherwise exempt from
registration under the Act.
D. Except as provided in paragraph C, I understand that IHK is
under no obligation to register the sale, transfer or other disposition
of the Shares by me or on my behalf under the Act or, except as provided
in paragraph 2(A) below, to take any other action necessary in order to
make compliance with an exemption from such registration available.
E. I understand that there will be placed on the certificates
for the Shares issued to me, or any substitutions therefor, a legend
stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT
OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT
DATED , 1997 BETWEEN THE REGISTERED HOLDER HEREOF AND IMPERIAL
XXXXX CORPORATION, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF IMPERIAL XXXXX CORPORATION."
F. I understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a
registration statement, IHK reserves the right to put the following
legend on the certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM
A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE
145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE
SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR
RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
G. Execution of this letter should not be considered an
admission on my part that I am an "affiliate" of the Company as
described in the first paragraph of this letter, nor as a waiver of any
rights I may have to object to any claim that I am such an affiliate on
or after the date of this letter.
2. By IHK's acceptance of this letter, IHK hereby agrees with me
as follows:
A. For so long as and to the extent necessary to permit me to
sell the Shares pursuant to Rule 145 and, to the extent applicable, Rule
144 under the Act, IHK shall (a) use its reasonable efforts to (i) file,
on a timely basis, all reports and data required to be filed with the
Commission by it pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and (ii) furnish to me upon
request a written statement as to whether IHK has complied with such
reporting requirements during the 12 months preceding any proposed sale
of the IHK Common Stock by me under Rule 145, and ( b) otherwise use its
reasonable efforts to permit such sales pursuant to Rule 145 and Rule
144. IHK hereby represents to me that it has filed all reports required
to be filed with the Commission under Section 13 of the 1934 Act during
the preceding 12 months.
B. It is understood and agreed that certificates with the
legends set forth in paragraphs E and F above will be substituted by
delivery of certificates without such legend if (i) one year shall have
elapsed from the date the undersigned acquired the IHK Common Stock
received in the Merger and the provisions of Rule 145(d)(2) are then
available to the undersigned, (ii) two years shall have elapsed from the
date the undersigned acquired the IHK Common Stock received in the
Merger and the provisions of Rule 145(d)(3) are then applicable to the
undersigned, or (iii) IHK has received either an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to IHK, or a
"no action" letter obtained by the undersigned from the staff of the
Commission, to the effect that the restrictions imposed by Rule 145
under the Act no longer apply to the undersigned.
Very truly yours,
______________________________
Name:
Agreed and accepted this ____ day of
[_______________], 1997, by
IMPERIAL XXXXX CORPORATION
By:_________________________________
Name:
Title:
