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EXHIBIT (d)
PURCHASE AGREEMENT
BY AND AMONG
CGW SOUTHEAST PARTNERS IV, L.P.,
JI ACQUISITION CORP.,
AND
XXXXXXXX INDUSTRIES, INC.
DATED AS OF MARCH 30, 2000
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into as
of March 30, 2000, by and among CGW Southeast Partners IV, L.P. ("CGW"), a
limited partnership formed under the Delaware Revised Uniform Limited
Partnership Act; JI Acquisition Corp. ("Purchaser"), a Delaware corporation;
and Xxxxxxxx Industries, Inc. ("Xxxxxxxx"), a Delaware corporation.
PREAMBLE
The respective Boards of Directors of Xxxxxxxx and Purchaser and the General
Partner of CGW have approved, and deem it advisable and in the best interests
of their respective stockholders to enter into this Agreement to provide for,
the acquisition of Xxxxxxxx Common Stock and Xxxxxxxx Preferred Stock by
Purchaser upon the terms and subject to the conditions set forth herein.
Certain terms used in this Agreement are defined in Section 10.1
of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
THE OFFER
1.1 THE OFFER.
(a) Subject to the provisions of this Agreement, as
promptly as reasonably practicable, Purchaser shall, and CGW shall cause
Purchaser to, commence (within the meaning of Rule 14d-2 under the 0000 Xxx) a
tender offer (as it may be amended from time to time as permitted by this
Agreement, the "Offer") for all of the then outstanding shares (the "Shares")
of Xxxxxxxx Common Stock at a price of $3.00 per Share, net to the seller in
cash (such price, or any such higher price per Share as may be paid in the
Offer, being referred to herein as the "Offer Price"). The obligation of
Purchaser to, and of CGW to cause Purchaser to, commence the Offer and accept
for payment, and pay for, any Shares tendered pursuant to the Offer shall be
subject to the conditions set forth in Article 8 hereof and Exhibit 1 hereto
(any of which may be waived by Purchaser in its sole discretion) and to the
terms and conditions of this Agreement. Purchaser expressly reserves the right
to modify the terms of the Offer, except that, without the consent of Xxxxxxxx,
Purchaser shall not (i) reduce the price per Share to be paid pursuant to the
Offer, (ii) modify or add to the conditions set forth in Exhibit 1, (iii)
except as provided in the next sentence, extend the Offer, or (iv) change the
form of consideration payable in the Offer. Notwithstanding the foregoing,
Purchaser may, without the consent of Xxxxxxxx, (i) extend the Offer, if at the
scheduled expiration date of the Offer any of the conditions to Purchaser's
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obligations to purchase Shares shall not be satisfied, (ii) extend the Offer
for a period of not more than ten business days beyond the initial expiration
date of the Offer (which initial expiration date shall be 20 business days
following the commencement of the Offer), if on the date of such extension less
than 90% of the outstanding Shares have been validly tendered and not properly
withdrawn pursuant to the Offer, notwithstanding that all conditions to the
Offer are satisfied as of the date of such extension, (iii) extend the Offer
for any period required by any rule, regulation, interpretation or position of
the SEC or the staff thereof applicable to the Offer, and (iv) extend the Offer
for any reason for a period of not more than ten business days beyond the
latest expiration date that would otherwise be permitted under clause (i), (ii)
or (iii) of this sentence. Notwithstanding the foregoing, the Offer may not be
extended beyond the date of termination of this Agreement pursuant to Article
9. Subject to the terms and conditions of the Offer and this Agreement,
Purchaser shall, and CGW shall cause Purchaser to, pay for all Shares validly
tendered and not withdrawn pursuant to the Offer that Purchaser becomes
obligated to purchase pursuant to the Offer as soon as practicable after the
expiration of the Offer.
(b) On the date of commencement of the Offer, Purchaser
shall file, and CGW shall cause Purchaser to file, with the SEC a Tender Offer
Statement on Schedule TO with respect to the Offer, which shall contain an
offer to purchase (the "Offer to Purchase") and a related letter of transmittal
and summary advertisement, all in accordance with the terms of the Offer as set
forth herein (such Schedule TO and the documents included therein pursuant to
which the Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents"). The Offer Documents shall comply in all
material respects with the requirements of applicable federal securities laws
and, on the date filed with the SEC and on the date first published, sent or
given to Xxxxxxxx'x stockholders, shall not 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 were made, not misleading, except that no
representation is made by Purchaser with respect to information furnished in
writing by or on behalf of Xxxxxxxx expressly for inclusion in the Offer
Documents. Purchaser and Xxxxxxxx each agree promptly to correct any
information provided by or on its behalf for use in the Offer Documents if and
to the extent that such information shall have become false or misleading in
any material respect, and Purchaser further agrees to promptly take all steps
necessary to amend or supplement the Offer Documents and to cause the Offer
Documents as so amended or supplemented to be filed with the SEC and to be
disseminated to Xxxxxxxx'x stockholders, in each case as to and to the extent
required by applicable federal securities laws. Xxxxxxxx and its counsel shall
be given the opportunity to review the Schedule TO before it is filed with the
SEC. In addition, Purchaser will provide Xxxxxxxx and its counsel, in writing,
with any comments, whether written or oral, Purchaser or its counsel may
receive from time to time from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
1.2 XXXXXXXX ACTIONS.
(a) Xxxxxxxx hereby approves the making of, and consents to
the Offer and represents and warrants that its Board of Directors, at a meeting
duly called and held, has duly adopted resolutions (i) approving this
Agreement, consenting to the Offer being made and
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approving the sale of Xxxxxxxx Common Stock and Xxxxxxxx Preferred Stock
contemplated by Article 3 hereof (collectively, the "Transactions"), and such
approval constitutes approval of the Transactions for purposes of Section 203
of the DGCL and the Stockholder Protection Agreement, dated as of May 17, 1999,
between Xxxxxxxx and The Bank of New York (the "Stockholder Protection
Agreement"), such that the provisions of said Section 203 and the Stockholder
Protection Agreement will not apply to the Transactions and (ii) determining,
in reliance on the opinion described in Section 4.22 hereof, that the terms of
the Transactions are fair to, and in the best interests of, the stockholders of
Xxxxxxxx.
(b) On the date the Offer Documents are filed with the SEC,
Xxxxxxxx shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (together with all amendments and
supplements thereto and including the exhibits thereto, the "Schedule 14D-9")
which shall contain the position of the Board of Directors of Xxxxxxxx and
shall mail the Schedule 14D-9 to the stockholders of Xxxxxxxx. The Schedule
14D-9 shall comply in all material respects with the requirements of applicable
federal securities laws and, on the date filed with the SEC and on the date
first published, sent or given to Xxxxxxxx'x stockholders, shall not 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 were made, not
misleading, except that no representation is made by Xxxxxxxx with respect to
information furnished in writing by or on behalf of Purchaser expressly for
inclusion in the Schedule 14D-9. Purchaser and Xxxxxxxx agree promptly to
correct any information provided by or on its behalf for use in the Schedule
14D-9 if and to the extent that such information shall have become false or
misleading in any material respect, and Xxxxxxxx further agrees to promptly
take all steps necessary to amend or supplement the Schedule 14D-9 and to cause
the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
to be disseminated to Xxxxxxxx'x stockholders, in each case as to and to the
extent required by applicable Federal securities laws. Purchaser and its
counsel shall be given the opportunity to review the Schedule 14D-9 before it
is filed with the SEC. In addition, Xxxxxxxx agrees to provide Purchaser and
its counsel, in writing, with any comments, whether written or oral, that
Xxxxxxxx or its counsel may receive from time to time from the SEC or its staff
with respect to the Schedule 14D-9 promptly after the receipt of such comments
or other communications.
(c) In connection with the Offer, Xxxxxxxx will promptly
furnish or cause to be furnished to Purchaser mailing labels, security position
listings and any available listing, or computer file containing the names and
addresses of all record holders of the Shares as of a recent date, and shall
furnish Purchaser with such additional information (including, but not limited
to, updated lists of holders of the Shares and their addresses, mailing labels
and lists of security positions) and assistance as the Purchaser or its agents
may reasonably request in communicating the Offer to the record and beneficial
holders of the Shares. Subject to the requirements of applicable Law, and
except for such steps as are necessary to disseminate the Offer Documents, CGW
and Purchaser shall hold in confidence the information contained in any of such
labels and lists and the additional information referred to in the preceding
sentence, will use such information only in connection with the Offer, and, if
this Agreement is terminated, will promptly deliver or cause to be delivered to
Xxxxxxxx all copies of such information then in their possession.
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ARTICLE 2
EFFECTIVE TIME AND CLOSING
2.1 EFFECTIVE TIME. The Transactions shall become effective on
the date and at the time that payment for the Shares validly tendered and not
withdrawn pursuant to the Offer has been made by Purchaser (the "Effective
Time").
2.2 TIME AND PLACE OF CLOSING. The closing of the Transactions
(the "Closing") will take place at 9:00 A.M. on the date that the Effective
Time occurs (or the immediately preceding day if the Effective Time is earlier
than 9:00 A.M.), or at such other time as the Parties, acting through their
authorized officers, may mutually agree. The Closing shall be held at such
location as may be mutually agreed upon by the Parties.
ARTICLE 3
STOCK PURCHASE
Pursuant to the following provisions of this Article 3, Purchaser shall
purchase shares of Xxxxxxxx Common Stock and Xxxxxxxx Preferred Stock having an
aggregate value of $27 million.
3.1 PURCHASE OF COMMON STOCK. At the Closing, Purchaser shall
purchase and acquire, and CGW shall cause Purchaser to purchase and acquire,
and Xxxxxxxx shall issue and sell to Purchaser, 8,750,000 shares of authorized
but unissued Xxxxxxxx Common Stock (the "Additional Common Stock") at a per
share purchase price of $3.00 per share for an aggregate value of $26.25
million. The issuance of the Additional Common Stock shall have been duly
approved by the Board of Directors of Xxxxxxxx as required by applicable law,
such that, when issued, the shares of Additional Common Stock will be duly and
validly issued and outstanding and fully paid and nonassessable under the DGCL.
3.2 DESIGNATION OF SERIES A PREFERRED STOCK. Prior to the
Effective Time, Xxxxxxxx shall cause its Board of Directors to designate a
class of Xxxxxxxx Preferred Stock as Series A Preferred Stock having the
designations and powers, preferences and rights, and the qualifications,
limitations and restrictions set forth in the Certificate of Designation
attached hereto as Exhibit 2.
3.3 PURCHASE OF PREFERRED STOCK. At the Closing, Purchaser shall
purchase and acquire, and CGW shall cause Purchaser to purchase and acquire and
Xxxxxxxx shall issue and sell to Purchaser, 250,000 shares of Series A
Preferred Stock of Xxxxxxxx at a per share purchase price of $3.00 per share
for an aggregate value of $750,000. The issuance of such Series A Preferred
Stock shall have been duly approved by the Board of Directors of Xxxxxxxx as
required by applicable Law, such that, when issued, the shares of Series A
Preferred Stock will be duly and validly issued and outstanding and fully paid
and nonassessable under the DGCL.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX
Except as specifically set forth in the Xxxxxxxx Disclosure
Memorandum, Xxxxxxxx hereby represents and warrants to CGW and Purchaser as
follows:
4.1 ORGANIZATION, STANDING, AND POWER. Xxxxxxxx is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Delaware, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material Assets.
Xxxxxxxx is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect. The minute books and other organizational documents
for Xxxxxxxx have been made available to CGW for its review and are true and
complete in all material respects as of the date of this Agreement and
accurately reflect in all material respects all amendments thereto and all
proceedings of the Board of Directors and stockholders thereof.
4.2 AUTHORITY OF XXXXXXXX; NO BREACH BY AGREEMENT.
(a) Xxxxxxxx has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this Agreement
and to consummate the Transactions. The execution, delivery, and performance of
this Agreement and the consummation of the Transactions have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Xxxxxxxx. This Agreement represents a legal, valid, and binding
obligation of Xxxxxxxx, enforceable against Xxxxxxxx in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Xxxxxxxx, nor the consummation by Xxxxxxxx of the Transactions, nor compliance
by Xxxxxxxx with any of the provisions hereof, will (i) conflict with or result
in a breach of any provision of Xxxxxxxx'x Certificate of Incorporation or
Bylaws or the certificate or articles of incorporation or bylaws of any
Xxxxxxxx Subsidiary or any resolution adopted by the board of directors or the
stockholders of any Xxxxxxxx Entity, or (ii) except as set forth in Section 4.2
of the Xxxxxxxx Disclosure Memorandum, constitute or result in a Default under,
or require any Consent pursuant to, or result in the creation of any Lien on
any material Asset of any Xxxxxxxx Entity under, any Contract of any Xxxxxxxx
Entity, where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect, or, (iii) subject to receipt of the requisite Consents
referred to in Section 8.1(a), constitute or result in a Default under, or
require any Consent pursuant to, any Law or Order applicable to any Xxxxxxxx
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Entity or any of their respective material Assets (including any CGW Entity or
any Xxxxxxxx Entity becoming subject to or liable for the payment of any Tax or
any of the Assets owned by any CGW Entity or any Xxxxxxxx Entity being
reassessed or revalued by any Taxing authority).
(c) No notice to, filing with, or Consent of, any
Governmental Entity is necessary for the consummation by Xxxxxxxx of the
Transactions, except for (i) the filing of a premerger notification and report
form by CGW and Xxxxxxxx under the HSR Act, (ii) the filing with the SEC of (y)
the Schedule TO, and (z) such reports under Section 13(a) of the 1934 Act as
may be required in connection with the Transactions, (iii) the filing of
appropriate documents with the relevant authorities of jurisdictions in which
Xxxxxxxx is qualified to do business, and (iv) such other notices, filings and
Consents as are disclosed in Section 4.2 of the Xxxxxxxx Disclosure Memorandum.
4.3 CAPITAL STOCK.
(a) The entire authorized capital stock of Xxxxxxxx
consists of 23,000,000 shares, of which 20,000,000 are shares of Xxxxxxxx
Common Stock and 3,000,000 are shares of Xxxxxxxx Preferred Stock. Of the
Xxxxxxxx Common Stock, 10,721,872 shares are issued and outstanding and
1,745,819 are held in treasury, and of the Xxxxxxxx Preferred Stock, no shares
have been issued and are outstanding, except for (i) 325,000 shares which have
been designated as Xxxxxxxx preferred stock, series 1996, of which no shares of
such Xxxxxxxx preferred stock, series 1996, are outstanding and no shares are
held in treasury, and (ii) 200,000 shares which have been designated as Series
X Junior Participating Preferred Stock, par value $.01 per share (the "Series X
Preferred Stock"), of which no shares of Series X Preferred Stock are
outstanding and no shares are held in treasury. All of the issued and
outstanding shares of capital stock of Xxxxxxxx are duly and validly issued and
outstanding and are fully paid and nonassessable under the DGCL. None of the
outstanding shares of capital stock of Xxxxxxxx have been issued in violation
of any preemptive rights of the current or past stockholders of Xxxxxxxx.
(b) Except for the shares set forth above, or as disclosed
in Section 4.3(b) of the Xxxxxxxx Disclosure Memorandum, there are no shares of
capital stock or other equity securities of Xxxxxxxx outstanding and no
outstanding Xxxxxxxx Equity Rights. All shares of Xxxxxxxx Common Stock which
may be issued pursuant to Xxxxxxxx Equity Rights as described in Section 4.3(b)
of the Xxxxxxxx Disclosure Memorandum, when issued, will have been duly
authorized, validly issued, fully paid and nonassessable. Set forth on Section
4.3(b) of the Xxxxxxxx Disclosure Memorandum is a list of the holders of
Xxxxxxxx Equity Rights, including the number of shares of Xxxxxxxx Common Stock
issuable upon the exercise of each such Xxxxxxxx Equity Rights and the exercise
price thereof. Except as set forth in Section 4.3(b) of the Xxxxxxxx Disclosure
Memorandum, Xxxxxxxx does not have any outstanding option, warrant,
subscription or other right, agreement or commitment that either (i) obligates
Xxxxxxxx to issue, sell or transfer, repurchase, redeem or otherwise acquire or
vote any shares of the capital stock of Xxxxxxxx or (ii) restricts the transfer
of Xxxxxxxx Common Stock.
4.4 XXXXXXXX SUBSIDIARIES. Xxxxxxxx has disclosed in Section 4.4
of the Xxxxxxxx Disclosure Memorandum all of the Xxxxxxxx Subsidiaries that are
corporations (identifying its
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jurisdiction of incorporation, each jurisdiction in which it is qualified
and/or licensed to transact business, and the number of shares owned and
percentage ownership interest represented by such share ownership) and all of
the Xxxxxxxx Subsidiaries that are general or limited partnerships, limited
liability companies, or other non-corporate entities (identifying the Law under
which such entity is organized, each jurisdiction in which it is qualified
and/or licensed to transact business, and the amount and nature of the
ownership interest therein). Except as disclosed in Section 4.4 of the Xxxxxxxx
Disclosure Memorandum, Xxxxxxxx or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock (or other equity interests) of
each Xxxxxxxx Subsidiary. No capital stock (or other equity interest) of any
Xxxxxxxx Subsidiary is or may become required to be issued by reason of any
Xxxxxxxx Equity Rights, and there are no Contracts by which any Xxxxxxxx
Subsidiary is bound to issue additional shares of its capital stock (or other
equity interests) or Xxxxxxxx Equity Rights or by which any Xxxxxxxx Entity is
or may be bound to transfer any shares of the capital stock (or other equity
interests) of any Xxxxxxxx Subsidiary. There are no Contracts relating to the
rights of any Xxxxxxxx Entity to vote or to dispose of any shares of the
capital stock (or other equity interests) of any Xxxxxxxx Subsidiary. All of
the shares of capital stock (or other equity interests) of each Xxxxxxxx
Subsidiary held by a Xxxxxxxx a Xxxxxxxx Entity are fully paid and
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Xxxxxxxx
Entity free and clear of any Lien. Except as disclosed in Section 4.4 of the
Xxxxxxxx Disclosure Memorandum, each Xxxxxxxx Subsidiary is a corporation, and
each such Subsidiary is duly organized, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction in which it
is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its material Assets and to carry on
its business as now conducted. Each Xxxxxxxx Subsidiary is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Xxxxxxxx Material Adverse Effect. The minute books and other
organizational documents for each Xxxxxxxx Subsidiary have been made available
to CGW for its review, and, except as disclosed in Section 4.4 of the Xxxxxxxx
Disclosure Memorandum, are true and complete in all material respects as in
effect as of the date of this Agreement and accurately reflect all amendments
thereto and all proceedings of the Board of Directors and stockholders thereof.
4.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Xxxxxxxx has timely filed and made available to CGW all
SEC Documents required to be filed by Xxxxxxxx since January 1, 1996 (the
"Xxxxxxxx SEC Reports"). The Xxxxxxxx SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Laws and other applicable Laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Xxxxxxxx SEC Reports or necessary in order to make the statements in such
Xxxxxxxx SEC Reports, in light of the circumstances under which they were made,
not materially misleading. No Xxxxxxxx Subsidiary is required to file any SEC
Documents.
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(b) Each of the Xxxxxxxx Financial Statements (including,
in each case, any related notes) contained in the Xxxxxxxx SEC Reports,
including any Xxxxxxxx SEC Reports filed after the date of this Agreement until
the Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by
Form 10-Q of the SEC), and fairly presented in all material respects the
consolidated financial position of Xxxxxxxx and its Subsidiaries as at the
respective dates and the consolidated results of operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which were not
or are not expected to be material in amount or effect.
4.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
Section 4.6 of the Xxxxxxxx Disclosure Memorandum, no Xxxxxxxx Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Xxxxxxxx Material Adverse Effect. No Xxxxxxxx Entity has incurred
or paid any Liability since January 1, 1999, except for such Liabilities
incurred or paid (i) in the ordinary course of business consistent with past
business practice and which are not reasonably likely to have, individually or
in the aggregate, a Xxxxxxxx Material Adverse Effect or (ii) in connection with
the transactions contemplated by this Agreement. Except as disclosed in Section
4.6 of the Xxxxxxxx Disclosure Memorandum, no Xxxxxxxx Entity is directly or
indirectly liable, by guarantee, indemnity, or otherwise, upon or with respect
to, or obligated, by discount or repurchase agreement or in any other way, to
provide funds in respect to, or obligated to guarantee or assume any Liability
for any Person for any amount in excess of $50,000.
4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since January 1, 1999,
except as disclosed in Section 4.7 of the Xxxxxxxx Disclosure Memorandum, (i)
there have been no events, changes, or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect, (ii) there has not been any split, combination or
reclassification of any of Xxxxxxxx'x outstanding capital stock or any issuance
or authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of its outstanding capital stock, (iii) there
has not been any material change in the accounting methods, principles or
practices by Xxxxxxxx or any Xxxxxxxx Subsidiaries, except insofar as may have
been required by GAAP, and (iv) the Xxxxxxxx Entities have not taken any
action, or failed to take any action, prior to the date of this Agreement,
which action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the covenants
and agreements of Xxxxxxxx provided in Section 6.2.
4.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of
any of the Xxxxxxxx Entities have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1997, and on or before the date of the most recent fiscal
year end immediately preceding the Effective Time, all Tax Returns filed are
complete and accurate in all material respects. All Taxes shown on filed Tax
Returns have been
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paid. There is no audit examination, deficiency, or refund Litigation with
respect to any Taxes that is reasonably likely to result in a determination
that would have, individually or in the aggregate, a Xxxxxxxx Material Adverse
Effect, except as reserved against in the Xxxxxxxx Financial Statements
delivered prior to the date of this Agreement or as disclosed in Section 4.8 of
the Xxxxxxxx Disclosure Memorandum. Xxxxxxxx'x federal income Tax Returns have
been audited by the IRS and accepted through June 30, 1995. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid. There are no Liens with respect to Taxes upon any of
the material Assets of the Xxxxxxxx Entities.
(b) Except as set forth in Section 4.8 of the Xxxxxxxx
Disclosure Memorandum, none of the Xxxxxxxx Entities has executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due (excluding such statutes that relate to years currently under
examination by the Internal Revenue Service or other applicable taxing
authorities) that is currently in effect.
(c) The provision for any Taxes due or to become due for
any of the Xxxxxxxx Entities for the period or periods through and including
the date of the respective Xxxxxxxx Financial Statements that has been made and
is reflected on such Xxxxxxxx Financial Statements is sufficient to cover all
such Taxes.
(d) Deferred Taxes of the Xxxxxxxx Entities have been
provided for in accordance with GAAP.
(e) None of the Xxxxxxxx Entities is a party to any Tax
allocation or sharing agreement and none of the Xxxxxxxx Entities has been a
member of an Affiliated group filing a consolidated federal income Tax Return
(other than a group the common parent of which was Xxxxxxxx) or has any
Liability for Taxes of any Person (other than Xxxxxxxx and its Subsidiaries)
under Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local or foreign Law) as a transferee or successor or by Contract or otherwise.
(f) Each of the Xxxxxxxx Entities is in compliance with,
and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all material applicable
information reporting and Tax withholding requirements under federal, state,
and local Tax Laws, and such records identify with specificity all accounts
subject to backup withholding under Section 3406 of the Internal Revenue Code,
except for such instances of noncompliance and such omissions as are not
reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect.
(g) Except as disclosed in Section 4.8 of the Xxxxxxxx
Disclosure Memorandum, none of the Xxxxxxxx Entities has made any payments, is
obligated to make any payments, or is a party to any Contract that could
obligate it to make any payments that would be disallowed as a deduction under
Section 280G or 162(m) of the Internal Revenue Code.
(h) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the Xxxxxxxx Entities that occurred
during or after any Taxable Period in
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which the Xxxxxxxx Entities incurred a net operating loss that carries over to
any Taxable Period ending after November 2, 1997.
(i) No Xxxxxxxx Entity has or has had in any foreign
country a permanent establishment, as defined in any applicable tax treaty or
convention between the United States and such foreign country.
4.9 ASSETS.
(a) Except as disclosed in Section 4.9 of the Xxxxxxxx
Disclosure Memorandum or as disclosed or reserved against in the Xxxxxxxx
Financial Statements delivered prior to the date of this Agreement, the
Xxxxxxxx Entities have good and marketable title, free and clear of all Liens,
to all of their respective material Assets, except for any such Liens or other
defects of title which are not reasonably likely to have a Xxxxxxxx Material
Adverse Effect. All material tangible properties used in the businesses of the
Xxxxxxxx Entities are in good condition, reasonable wear and tear excepted, and
are usable in the ordinary course of business consistent with Xxxxxxxx'x past
practices.
(b) All items of inventory of the Xxxxxxxx Entities
reflected on the most recent balance sheet included in the Xxxxxxxx Financial
Statements delivered prior to the date of this Agreement and prior to the
Effective Time consisted and will consist, as applicable, of items of a quality
and quantity usable and salable in the ordinary course of business and conform
to generally accepted standards in the industry in which the Xxxxxxxx Entities
are a part.
(c) The accounts receivable of the Xxxxxxxx Entities as set
forth on the most recent balance sheet included in the Xxxxxxxx Financial
Statements delivered prior to the date of this Agreement or arising since the
date thereof are valid and genuine; have arisen solely out of bona fide sales
of goods, performance of services and other business transactions in the
ordinary course of business consistent with past practice; are not subject to
valid defenses, set-offs or counterclaims; and are collectible within 90 days
after billing at the full recorded amount thereof less, in the case of accounts
receivable appearing on the most recent balance sheet included in the Xxxxxxxx
Financial Statements delivered prior to the date of this Agreement, the
recorded allowance for collection losses on such balance sheet. The allowance
for collection losses on such balance sheet has been determined in accordance
with GAAP.
(d) All Assets which are material to Xxxxxxxx'x business on
a consolidated basis, held under leases or subleases by any of the Xxxxxxxx
Entities, are held under valid Contracts enforceable in accordance with their
respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect.
(e) The Xxxxxxxx Entities currently maintain insurance
substantially similar in amounts, scope, and coverage to that maintained by
other peer organizations. None of the
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Xxxxxxxx Entities has received notice from any insurance carrier that (i) any
policy of insurance will be canceled or that coverage thereunder will be
reduced or eliminated, or (ii) premium costs with respect to such policies of
insurance will be substantially increased. Except as set forth in Section 4.9
of the Xxxxxxxx Disclosure Memorandum, there are presently no claims for
amounts exceeding in any individual case $50,000 pending under such policies of
insurance and no notices of claims in excess of such amounts have been given by
any Xxxxxxxx Entity under such policies.
(f) The Assets of the Xxxxxxxx Entities include all Assets
required to operate the business of the Xxxxxxxx Entities as presently
conducted.
4.10 INTELLECTUAL PROPERTY. Each Xxxxxxxx Entity owns or has a
license to use all of the material Intellectual Property used by such Xxxxxxxx
Entity in the course of its business. Each Xxxxxxxx Entity is the owner of or
has a license to any material Intellectual Property sold or licensed to a third
party by such Xxxxxxxx Entity in connection with such Xxxxxxxx Entity's
business operations, and such Xxxxxxxx Entity has the right to convey by sale
or license any material Intellectual Property so conveyed. No Xxxxxxxx Entity
is in Default under any of its material Intellectual Property licenses. No
proceedings have been instituted, or are pending or, to Xxxxxxxx'x Knowledge,
threatened, which challenge the rights of any Xxxxxxxx Entity with respect to
material Intellectual Property used, sold or licensed by such Xxxxxxxx Entity
in the course of its business, nor to Xxxxxxxx'x Knowledge has any person
claimed or alleged any rights to such Intellectual Property. To Xxxxxxxx'x
Knowledge, the conduct of the business of the Xxxxxxxx Entities does not
infringe any Intellectual Property of any other person. No Xxxxxxxx Entity is
obligated to pay any recurring royalties to any Person with respect to any such
Intellectual Property. Except as disclosed in Section 4.10 of the Xxxxxxxx
Disclosure Memorandum, every officer, director, or employee of any Xxxxxxxx
Entity is a party to a Contract which requires such officer, director or
employee to assign any interest in any Intellectual Property to a Xxxxxxxx
Entity and to keep confidential any trade secrets, proprietary data, customer
information, or other business information of a Xxxxxxxx Entity, and, to
Xxxxxxxx'x Knowledge, no such officer, director or employee is party to any
Contract with any Person other than a Xxxxxxxx Entity which requires such
officer, director or employee to assign any interest in any Intellectual
Property to any Person other than a Xxxxxxxx Entity or to keep confidential any
trade secrets, proprietary data, customer information, or other business
information of any Person other than a Xxxxxxxx Entity. Except as disclosed in
Section 4.10 of the Xxxxxxxx Disclosure Memorandum, to Xxxxxxxx'x Knowledge, no
officer, director or employee of any Xxxxxxxx Entity is party to any Contract
which restricts or prohibits such officer, director or employee from engaging
in activities competitive with any Person, including any Xxxxxxxx Entity.
4.11 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Section 4.11 of the Xxxxxxxx
Disclosure Memorandum, each Xxxxxxxx Entity, its Participation Facilities, and
its Operating Properties are, and have been during any Xxxxxxxx Entity's tenure
as an owner or operator thereof, and to Xxxxxxxx'x Knowledge were prior to such
tenure, in compliance with all Environmental Laws, except for violations which
are not reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect.
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(b) Except as set forth in Section 4.11 of the Xxxxxxxx
Disclosure Memorandum, there is no Litigation pending or, to the Knowledge of
Xxxxxxxx, threatened before any court, governmental agency, or authority or
other forum in which any Xxxxxxxx Entity or any of its Operating Properties or
Participation Facilities (or Xxxxxxxx in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant (i) for alleged noncompliance with any Environmental
Law or (ii) relating to the release, discharge, spillage, or disposal into the
environment of any Hazardous Material, whether or not occurring at, on, under,
adjacent to, or affecting (or reasonably expected to affect) a site owned,
leased, or operated by any Xxxxxxxx Entity or any of its Operating Properties
or Participation Facilities, except for such Litigation pending or threatened
that is not reasonably likely to have, individually or in the aggregate, a
Xxxxxxxx Material Adverse Effect, nor, to Xxxxxxxx'x Knowledge, is there any
reasonable basis for any Litigation of a type described in this sentence,
except such as is not reasonably likely to have, individually or in the
aggregate, a Xxxxxxxx Material Adverse Effect.
(c) Except as set forth in Section 4.11 of the Xxxxxxxx
Disclosure Memorandum during the period of (i) any Xxxxxxxx Entity's ownership
or operation of any of their respective current properties, (ii) any Xxxxxxxx
Entity's participation in the management of any Participation Facility, or
(iii) to Xxxxxxxx'x Knowledge, any Xxxxxxxx Entity's holding of a security
interest in an Operating Property, there have been no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, adjacent to, or
affecting (or potentially affecting) such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect. Prior to the period of (i) any Xxxxxxxx Entity's
ownership or operation of any of their respective current properties, (ii) any
Xxxxxxxx Entity's participation in the management of any Participation
Facility, or (iii) to Xxxxxxxx'x Knowledge, any Xxxxxxxx Entity's holding of a
security interest in a Operating Property, to the Knowledge of Xxxxxxxx, there
were no releases, discharges, spillages, or disposals of Hazardous Material in,
on, under, or affecting any such property, Participation Facility or Operating
Property, except such as are not reasonably likely to have, individually or in
the aggregate, a Xxxxxxxx Material Adverse Effect.
4.12 COMPLIANCE WITH LAWS. Each Xxxxxxxx Entity has in effect all
material Permits necessary for it to own, lease, or operate its material Assets
and to carry on its business as now conducted, and there has occurred no
Default under any such Permit, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Xxxxxxxx Material Adverse
Effect. Except as disclosed in Section 4.12 of the Xxxxxxxx Disclosure
Memorandum, none of the Xxxxxxxx Entities:
(a) is in Default under any of the provisions of its
Certificate of Incorporation or Bylaws (or other governing
instruments);
(b) Except for the environmental issues described in Section
4.11 of the Xxxxxxxx Disclosure Memorandum, is in Default under any
Laws, Orders, or Permits applicable to its business or employees
conducting its business, except for Defaults which
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are not reasonably likely to have, individually or in the aggregate, a
Xxxxxxxx Material Adverse Effect; or
(c) Except for the environmental issues described in Section
4.11 of the Xxxxxxxx Disclosure Memorandum, since January 1, 1995, has
received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Xxxxxxxx Entity
is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Xxxxxxxx Material Adverse Effect, (ii) threatening to
revoke any material Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a Xxxxxxxx Material
Adverse Effect, or (iii) requiring any Xxxxxxxx Entity to enter into
or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding, or
to adopt any Board resolution or similar undertaking.
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority, which are in Xxxxxxxx'x
possession, have been made available to CGW.
4.13 LABOR RELATIONS. No Xxxxxxxx Entity is the subject of any
Litigation asserting that it or any other Xxxxxxxx Entity has committed an
unfair labor practice (within the meaning of the National Labor Relations Act
or comparable state law) or seeking to compel it or any other Xxxxxxxx Entity
to bargain with any labor organization as to wages or conditions of employment,
nor is any Xxxxxxxx Entity party to any collective bargaining agreement, nor is
there any strike or other labor dispute involving any Xxxxxxxx Entity, pending
or, to Xxxxxxxx'x Knowledge, threatened, or to the Knowledge of Xxxxxxxx, is
there any activity involving any Xxxxxxxx Entity's employees seeking to certify
a collective bargaining unit or engaging in any other organization activity.
4.14 EMPLOYEE BENEFIT PLANS.
(a) Xxxxxxxx has disclosed in Section 4.14 of the Xxxxxxxx
Disclosure Memorandum, and has delivered or made available to CGW prior to the
execution of this Agreement copies in each case of, all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written
employee programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans, including "employee benefit plans" as that term
is defined in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any Xxxxxxxx Entity or
ERISA Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and under
which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "Xxxxxxxx Benefit Plans"). Any of the Xxxxxxxx Benefit Plans which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
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ERISA, is referred to herein as a "Xxxxxxxx ERISA Plan." Each Xxxxxxxx ERISA
Plan which is also a "defined benefit plan" (as defined in Section 414(j) of
the Internal Revenue Code) is referred to herein as an "Xxxxxxxx Pension Plan."
No Xxxxxxxx Pension Plan is or has been a multiemployer plan within the meaning
of Section 3(37) of ERISA.
(b) All Xxxxxxxx Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Xxxxxxxx Material Adverse Effect. Each
Xxxxxxxx ERISA Plan which is intended to be qualified under Section 401(a) of
the Internal Revenue Code has received a favorable determination letter from
the Internal Revenue Service, and Xxxxxxxx is not aware of any circumstances
likely to result in revocation of any such favorable determination letter. No
Xxxxxxxx Entity has engaged in a transaction with respect to any Xxxxxxxx
Benefit Plan that, assuming the taxable period of such transaction expired as
of the date hereof, would subject any Xxxxxxxx Entity to a Tax imposed by
either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) Except as set forth in Section 4.14(c) of the Xxxxxxxx
Disclosure Memorandum, no Xxxxxxxx Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the
fair market value of the assets of any such plan exceeds the plan's "benefit
liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when
determined under actuarial factors that would apply if the plan terminated in
accordance with all applicable legal requirements. Since the date of the most
recent actuarial valuation, there has been (i) no material change in the
financial position of any Xxxxxxxx Pension Plan, (ii) no change in the
actuarial assumptions with respect to any Xxxxxxxx Pension Plan, and (iii) no
increase in benefits under any Xxxxxxxx Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Xxxxxxxx Material Adverse Effect or
materially adversely affect the funding status of any such plan. Neither any
Xxxxxxxx Pension Plan nor any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any Xxxxxxxx
Entity, or the single-employer plan of any entity which is considered one
employer with Xxxxxxxx under Section 4001 of ERISA or Section 414 of the
Internal Revenue Code or Section 302 of ERISA (whether or not waived) (an
"ERISA Affiliate") has an "accumulated funding deficiency" within the meaning
of Section 412 of the Internal Revenue Code or Section 302 of ERISA. No
Xxxxxxxx Entity has provided, or is required to provide, security to a Xxxxxxxx
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code.
(d) No Liability under Subtitle C or D of Title IV of ERISA
has been or is expected to be incurred by any Xxxxxxxx Entity with respect to
any ongoing, frozen, or terminated single-employer plan or the single-employer
plan of any ERISA Affiliate. No Xxxxxxxx Entity has incurred any withdrawal
Liability with respect to a multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate). No
notice of a "reportable event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required
to be filed for any Xxxxxxxx Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
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(e) Except as disclosed in Section 4.14 of the Xxxxxxxx
Disclosure Memorandum, no Xxxxxxxx Entity has any Liability for retiree health
and life benefits under any of the Xxxxxxxx Benefit Plans and there are no
restrictions on the rights of such Xxxxxxxx Entity to amend or terminate any
such retiree health or benefit Plan without incurring any Liability thereunder.
(f) Except as disclosed in Section 4.14 of the Xxxxxxxx
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the Transactions will (i) result in any payment (including
severance, unemployment compensation, golden parachute, or otherwise) becoming
due to any director or any employee of any Xxxxxxxx Entity from any Xxxxxxxx
Entity under any Xxxxxxxx Benefit Plan or otherwise, (ii) increase any benefits
otherwise payable under any Xxxxxxxx Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees
and former employees of any Xxxxxxxx Entity and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the Xxxxxxxx Financial Statements to the
extent required by and in accordance with GAAP.
4.15 MATERIAL CONTRACTS. Except as disclosed in Section 4.15 of
the Xxxxxxxx Disclosure Memorandum or otherwise reflected in the Xxxxxxxx
Financial Statements, none of the Xxxxxxxx Entities, nor any of their
respective Assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate
payments to any Person in any calendar year in excess of $50,000, (ii) any
Contract relating to the borrowing of money by any Xxxxxxxx Entity or the
guarantee by any Xxxxxxxx Entity of any such obligation (other than Contracts
evidencing trade payables and Contracts relating to borrowings or guarantees
made in the ordinary course of business), (iii) any Contract which prohibits or
restricts any Xxxxxxxx Entity from engaging in any business activities in any
geographic area, line of business or otherwise in competition with any other
Person, (iv) any Contract between or among Xxxxxxxx Entities, (v) any Contract
involving Intellectual Property (other than Contracts entered into in the
ordinary course with customers and "shrink-wrap" software licenses), (vi) any
Contract relating to the provision of data processing, network communication,
or other technical services to or by any Xxxxxxxx Entity, (vii) any Contract
relating to the purchase or sale of any goods or services (other than Contracts
entered into in the ordinary course of business and involving payments under
any individual Contract not in excess of $100,000), (viii) any agreement with
any holder (or Affiliate thereof) of 5% or more of any class of securities of
Xxxxxxxx or any Xxxxxxxx Entity and (ix) any other Contract or amendment
thereto that would be required to be filed as an exhibit to a Form 10-K filed
by Xxxxxxxx with the SEC as of the date of this Agreement (together with all
Contracts referred to in Sections 4.9 and 4.14(a), the "Xxxxxxxx Contracts").
With respect to each Xxxxxxxx Contract and except as disclosed in Section 4.15
of the Xxxxxxxx Disclosure Memorandum:
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(a) the Contract is in full force and effect; (b) no Xxxxxxxx Entity is in
Default thereunder, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Xxxxxxxx Material Adverse Effect, (c)
no Xxxxxxxx Entity has repudiated or waived any material provision of any such
Contract; and (d) no other party to any such Contract is, to the Knowledge of
Xxxxxxxx, in Default in any respect, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect, or has repudiated or waived any material provision
thereunder. Except as set forth in Section 4.15 of the Xxxxxxxx Disclosure
Memorandum, all of the indebtedness of any Xxxxxxxx Entity for money borrowed
is prepayable at any time by such Xxxxxxxx Entity without penalty or premium.
4.16 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of Xxxxxxxx, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any Xxxxxxxx Entity,
or against any director, employee or employee benefit plan of any Xxxxxxxx
Entity, or against any material Asset, interest, or right of any of them, that
is reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Xxxxxxxx Entity, that are reasonably likely to have, individually or in the
aggregate, a Xxxxxxxx Material Adverse Effect. Section 4.16 of the Xxxxxxxx
Disclosure Memorandum contains a summary of all Litigation as of the date of
this Agreement to which any Xxxxxxxx Entity is a party and which names a
Xxxxxxxx Entity as a defendant or cross-defendant or for which, to Xxxxxxxx'x
Knowledge, any Xxxxxxxx Entity has any potential Liability.
4.17 REPORTS. Since January 1, 1996, or the date of organization
if later, each Xxxxxxxx Entity has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with Regulatory Authorities (except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect). As of their respective dates, each of such reports
and documents, including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable Laws. As of its
respective date, each such report and document did not, in all material
respects, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
materially misleading.
4.18 STATEMENTS TRUE AND CORRECT. No statement, certificate,
instrument, or other writing furnished or to be furnished by any Xxxxxxxx
Entity or any Affiliate thereof to CGW pursuant to this Agreement or in
connection with the Transactions contains or will contain, when considered in
light of all information provided to CGW pursuant hereto, any untrue statement
of material fact or will omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of the information supplied or to be supplied by Xxxxxxxx,
or any of its officers, directors, employees, representatives or agents, for
inclusion or incorporation by reference in the Offer Documents or the Schedule
14D-9 including any amendments or supplements thereto, will at the respective
times the Offer Documents or the Schedule 14D-9 are filed with the SEC or first
published, sent or given to Xxxxxxxx'x stockholders, contain any statement
which, at such time and in light of the circumstances under which it is made,
is false or misleading with respect to any material fact, or, in light of the
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circumstances under which they were made, omit to state any material fact
necessary in order to make the statements therein not false or misleading;
provided, that Xxxxxxxx makes no representation or warranty with respect to
information that has been or will be supplied in writing by or on behalf of
CGW, Purchaser or any CGW Subsidiaries, or their officers, directors,
employees, representatives or agents, for inclusion or incorporation by
reference in any of the foregoing documents. The Schedule 14D-9 and any
amendments or supplements thereto will comply in all material respects with the
applicable provisions of the 1934 Act and the rules and regulations thereunder
and all other documents that any Xxxxxxxx Entity or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
Transactions will comply as to form in all material respects with the
provisions of applicable Law.
4.19 REGULATORY MATTERS. No Xxxxxxxx Entity or any Affiliate
thereof has taken or agreed to take any action or has any Knowledge of any fact
or circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 8.1(a) or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
4.20 STATE TAKEOVER LAWS. Each Xxxxxxxx Entity has taken all
necessary action to exempt the transactions contemplated by this Agreement
from, or if necessary to challenge the validity or applicability of, any
applicable "moratorium," "fair price," "business combination," "control share,"
or other anti-takeover Laws (collectively, "Takeover Laws").
4.21 CHARTER PROVISIONS. Each Xxxxxxxx Entity has taken all
action so that the entering into of this Agreement and the consummation of the
Transactions do not and will not result in the grant of any rights to any
Person under the Certificate of Incorporation, Bylaws or other governing
instruments of any Xxxxxxxx Entity or restrict or impair the ability of CGW or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Xxxxxxxx Entity that may be directly
or indirectly acquired or controlled by them.
4.22 OPINION OF FINANCIAL ADVISOR. Xxxxxxxx has received the
opinion of The Xxxxxxxx-Xxxxxxxx Company, LLC, dated the date of this
Agreement, to the effect that the consideration to be received by the holders
of Xxxxxxxx Common Stock is fair, from a financial point of view, to such
holders, a signed copy of which has been delivered to CGW.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Xxxxxxxx as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Purchaser is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Delaware, and has the corporate power and authority to carry on its
business as now conducted and to own,
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lease and operate its material Assets. Purchaser is duly qualified or licensed
to transact business as a foreign corporation in good standing in the States of
the United States and foreign jurisdictions where the character of its Assets
or the nature or conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually or in the aggregate,
a Purchaser Material Adverse Effect.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Purchaser has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the Transactions. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of Purchaser. This Agreement represents a legal,
valid, and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Purchaser, nor the consummation by Purchaser of the Transactions, nor
compliance by Purchaser with any of the provisions hereof, will, subject to
receipt of the requisite Consents referred to in Section 8.1(a), constitute or
result in a Default under, or require any Consent pursuant to, any Law or Order
applicable to Purchaser.
(c) No notice to, filing with, or Consent of, any
Governmental Entity is necessary for the consummation by Purchaser of the
Transactions, except for (i) the filing of a premerger notification and report
form by Purchaser under the HSR Act, (ii) the filing with the SEC of the Offer
Documents and such reports under Sections 13 and 16(a) of the 1934 Act as may
be required in connection with the Transactions, and (iii) such other notices,
filings and Consents as may be required under the Takeover Laws or "blue-sky"
Laws of various states.
5.3 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of Purchaser, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against Purchaser, that is
reasonably likely to prevent, materially delay or materially impair the ability
of Purchaser to consummate the transactions contemplated hereby.
5.4 STATEMENTS TRUE AND CORRECT. No statement, certificate,
instrument or other writing furnished or to be furnished by Purchaser or any
Affiliate thereof to Xxxxxxxx pursuant to this Agreement contains or will
contain, when considered in light of all information provided to Xxxxxxxx
pursuant hereto, any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were
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made, not misleading. None of the information supplied or to be supplied by
Purchaser, or any of its officers, directors, employees, representatives or
agents for inclusion or incorporation by reference in the Offer Documents or
the Schedule 14D-9 including any amendments or supplements thereto, will at the
respective times they are filed with the SEC or first published or sent or
given to Xxxxxxxx'x stockholders, contain any statement which, at such time and
in light of the circumstances under which it is made, is false or misleading
with respect to any material fact, or, in light of the circumstances under
which they were made, omit to state any material fact necessary in order to
make the statements therein not false or misleading. Notwithstanding the
foregoing, Purchaser does not make any representation or warranty with respect
to the information that has been supplied in writing by or on behalf of any
Xxxxxxxx Entity or their respective officers, directors, employees,
representatives or agents for inclusion or incorporation by reference in any of
the foregoing documents. The Offer Documents and any amendments or supplements
thereto will comply in all material respects with the applicable provisions of
the 1934 Act and the rules and regulations thereunder and all other documents
that Purchaser or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the Transactions will comply as to form
in all material respects with the provisions of applicable Law.
5.5 REGULATORY MATTERS. Neither Purchaser nor any Affiliate
thereof has taken or agreed to take any action or has any Knowledge of any fact
or circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 8.1(a) or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.
5.6 COMMITMENT LETTER. Purchaser has received a commitment
letter, dated the date hereof, from a lender to restructure the Bank Credit
Agreement, dated as of March 28, 1996, as amended, between Xxxxxxxx, the
Xxxxxxxx Subsidiaries and the banks named therein, The Chase Manhattan Bank,
N.A. as Administrative Agent, Chase Securities, Inc. as Arranger, and
NationsBank, N.A. as Syndication Agent, on terms and conditions satisfactory to
Purchaser.
5.7 INVESTMENT INTENT. Purchaser is acquiring the Additional
Common Stock and Series A Preferred Stock to be issued pursuant to Article 3 of
this Agreement for investment only, for Purchaser's own account and not as a
nominee or agent, and not with the view to, or for resale in connection with,
any distribution thereof or participation therein. Purchaser is an "accredited
investor" as such term is defined in Rule 501(a) under the Securities Act.
Purchaser understands that the shares of Xxxxxxxx Common Stock and Series A
Preferred Stock to be issued pursuant to Article 3 of this Agreement have not
been, and will not be, registered under the 1933 Act in reliance upon the
representations set forth herein.
ARTICLE 6
CONDUCT OF BUSINESS PENDING CONSUMMATION
6.1 AFFIRMATIVE COVENANTS OF XXXXXXXX. From the date of this
Agreement until the earlier of the termination of this Agreement or the time
designees of Purchaser have been elected to and constitute a majority of the
Board of Directors of Xxxxxxxx (the "Appointment Date"),
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unless the prior written consent of Purchaser shall have been obtained, and
except as otherwise expressly contemplated herein, Xxxxxxxx shall and shall
cause each of its Subsidiaries to (a) operate its business only in the usual,
regular, and ordinary course, (b) preserve intact its business organization and
material Assets and maintain its material rights, and (c) take no action which
would (i) materially adversely affect the ability of any Party to obtain any
Consents required for the Transactions without imposition of a condition or
restriction of the type referred to in the last sentences of Section 8.1(a) or
8.1(b), (ii) except as otherwise permitted by Section 7.9, cause any of the
conditions to the Offers set forth in Exhibit 1, not to be satisfied, or (iii)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement.
6.2 NEGATIVE COVENANTS OF XXXXXXXX. From the date of this
Agreement until the earlier of the termination of this Agreement or the
Appointment Date, unless the prior written consent of Purchaser shall have been
obtained, and except as otherwise expressly contemplated herein, Xxxxxxxx
covenants and agrees that it will not do or agree or commit to do, or permit
any of its Subsidiaries to do or agree or commit to do, any of the following:
(a) amend the Certificate of Incorporation, Bylaws or other
governing instruments of any Xxxxxxxx Entity, or
(b) incur any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a Xxxxxxxx Entity to
another Xxxxxxxx Entity) in excess of an aggregate of $100,000 (for
all the Xxxxxxxx Entities on a consolidated basis) except in the
ordinary course of the business of the Xxxxxxxx Entities consistent
with past practices, or impose, or suffer the imposition, on any
material Asset of any Xxxxxxxx Entity of any Lien or permit any such
Lien to exist (other than in connection with Liens in effect as of the
date hereof that are disclosed in the Xxxxxxxx Disclosure Memorandum);
or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any Xxxxxxxx
Entity, or declare or pay any dividend or make any other distribution
in respect of Xxxxxxxx'x capital stock; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares of Xxxxxxxx Common
Stock or any other capital stock of any Xxxxxxxx Entity, or any stock
appreciation rights, or any option, warrant, or other Xxxxxxxx Equity
Right; or
(e) adjust, split, combine or reclassify any capital stock of
any Xxxxxxxx Entity or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Xxxxxxxx
Common Stock, or sell, lease, mortgage or otherwise dispose of or
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otherwise encumber (x) any shares of capital stock of any Xxxxxxxx
Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Xxxxxxxx Entity) or (y) any Asset having a book
value in excess of $25,000 other than in the ordinary course of
business for reasonable and adequate consideration; or
(f) purchase any securities or make any material investment,
either by purchase of stock of securities, contributions to capital,
Asset transfers, or purchase of any Assets, in any Person other than a
wholly owned Xxxxxxxx Subsidiary, or otherwise acquire direct or
indirect control over any Person, other than in connection with (i)
foreclosures in the ordinary course of business, or (ii) the creation
of new wholly owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any Xxxxxxxx Entity, except in accordance
with past practice disclosed in Section 6.2(g) of the Xxxxxxxx
Disclosure Memorandum or as required by Law; pay any severance or
termination pay or any bonus other than pursuant to written policies
or written Contracts in effect on the date of this Agreement and
disclosed in Section 6.2(g) of the Xxxxxxxx Disclosure Memorandum; and
enter into or amend any severance agreements with officers of any
Xxxxxxxx Entity; grant any material increase in fees or other
increases in compensation or other benefits to directors of any
Xxxxxxxx Entity except in accordance with past practice disclosed in
Section 6.2(g) of the Xxxxxxxx Disclosure Memorandum; or
(h) enter into or amend any employment Contract between any
Xxxxxxxx Entity and any Person (unless such amendment is required by
Law) that the Xxxxxxxx Entity does not have the unconditional right to
terminate without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any Xxxxxxxx
Entity or terminate or withdraw from, or make any material change in
or to, any existing employee benefit plans of any Xxxxxxxx Entity
other than any such change that is required by Law or that, in the
opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan, or make any distributions from such
employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) commence any Litigation other than in accordance with
past practice, or settle any Litigation involving any Liability of any
Xxxxxxxx Entity for material money damages or restrictions upon the
operations of any Xxxxxxxx Entity; or
(l) enter into, modify, amend or terminate any material
Contract or waive, release, compromise or assign any material rights
or claims; or
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(m) authorize any of, or commit or agree to take any of,
the foregoing actions.
6.3 ADVERSE CHANGES IN CONDITION. Xxxxxxxx agrees to give written
notice promptly to CGW and Purchaser upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Xxxxxxxx Material Adverse Effect or (ii) would cause or constitute
a material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1 MERGER WITHOUT MEETING OF STOCKHOLDERS. In the event that
Purchaser and any Affiliates shall acquire in the aggregate at least 90% of the
outstanding shares of the voting capital stock of Xxxxxxxx, pursuant to the
Offer or otherwise (including the purchase of Additional Common Stock and
Series A Preferred Stock pursuant to Article 3 of this Agreement), the parties
hereto shall, at the request of Purchaser and subject to the provisions of this
Article 7, take all necessary and appropriate action to cause a wholly owned
subsidiary of Purchaser to be merged with and into Xxxxxxxx, with Xxxxxxxx as
the surviving corporation (the "Merger"), without a meeting of stockholders of
Xxxxxxxx, in accordance with the DGCL; such that each share of capital stock of
the wholly owned subsidiary of Purchaser owned by Purchaser or its Affiliates
shall be cancelled and cease to be outstanding and each share of Xxxxxxxx
Common Stock, other than those held by CGW, Purchaser or their Affiliates,
shall be exchanged for cash consideration equal to the Offer Price.
7.2 ALTERNATIVE MERGER. In the event that Purchaser and any
Affiliates shall acquire in the aggregate at least 50.1% of the outstanding
shares of the voting capital stock of Xxxxxxxx, pursuant to the Offer or
otherwise (including the purchase of the Additional Common Stock and Series A
Preferred Stock pursuant to Article 3 of this Agreement), then as soon as
practicable after the Closing the parties hereto shall, subject to the
provisions of this Article 7, take all necessary and appropriate action to
cause a wholly owned subsidiary of Purchaser to be merged with and into
Xxxxxxxx, with Xxxxxxxx as the surviving corporation (the "Alternative Merger")
without a meeting of stockholders of Xxxxxxxx, in accordance with the DGCL;
such that each share of capital stock of the wholly owned subsidiary of
Purchaser owned by Purchaser or its Affiliates shall be cancelled and cease to
be outstanding.
7.3 APPLICATIONS; ANTITRUST NOTIFICATION. Purchaser shall
promptly prepare and file, and Xxxxxxxx shall cooperate in the preparation and,
where appropriate, filing of, applications with all Regulatory Authorities
having jurisdiction over the transactions contemplated by this Agreement
seeking the requisite Consents necessary to consummate the transactions
contemplated by this Agreement. To the extent required by the HSR Act, each of
the Parties will promptly file with the United States Federal Trade Commission
and the United States Department of Justice the notification and report form
required for the Transactions and any supplemental or
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additional information which may reasonably be requested in connection
therewith pursuant to the HSR Act and will comply in all material respects with
the requirements of the HSR Act. The Parties shall deliver to each other copies
of all filings, correspondence and orders to and from all Regulatory
Authorities in connection with the Transactions.
7.4 FILINGS WITH STATE OFFICES. If required pursuant to Sections
7.1 or 7.2, Xxxxxxxx shall execute and file the necessary Certificate of Merger
with the Secretary of State of the State of Delaware.
7.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Exhibit 1 and in Article 8; provided, that nothing herein shall
preclude either Party from exercising its rights under this Agreement. Each
Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
7.6 BOARD OF DIRECTORS OF XXXXXXXX.
(a) Promptly upon the purchase of and payment for shares of
Xxxxxxxx Common Stock and Series A Preferred Stock by Purchaser pursuant to
Article 1 and Article 3 hereof, which represent at least a majority of the
outstanding shares of Xxxxxxxx'x capital stock, Purchaser shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of Xxxxxxxx as is equal to the product of the total number
of directors on such Board (giving effect to the directors designated by
Purchaser pursuant to this sentence) multiplied by the percentage that the
number of shares of Xxxxxxxx capital stock so purchased bears to the total
number of shares of Xxxxxxxx capital stock then outstanding. In furtherance
thereof, Xxxxxxxx shall, upon the request of Purchaser, use its commercially
reasonable efforts promptly either to increase the size of its Board of
Directors, including amending the By-laws of Xxxxxxxx if necessary to so
increase the size of Xxxxxxxx'x Board of Directors, or secure the resignations
of such number of its incumbent directors, or both, as is necessary to enable
Purchaser's designees to be so elected to Xxxxxxxx'x Board of Directors, and
shall take all actions available to Xxxxxxxx to cause Purchaser's designees to
be so elected. At such time, Xxxxxxxx shall, if requested by Purchaser, also
cause persons designated by Purchaser to constitute at least the same
percentage (rounded up to the next whole number) as is on Xxxxxxxx'x Board of
Directors of (i) each committee of Xxxxxxxx'x Board of Directors, (ii) of each
Xxxxxxxx Subsidiary and (iii) each committee (or similar body) of each such
board.
(b) Xxxxxxxx shall promptly take all actions required
pursuant to Section 14(f) of the 1934 Act and Rule 14f-1 promulgated thereunder
in order to fulfill its obligations under Section 7.6(a), including mailing to
stockholders the information required by Section 14(f) of the
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1934 Act and Rule 14f-1 as is necessary to enable CGW's designees to be elected
to Xxxxxxxx'x Board of Directors. Purchaser shall supply Xxxxxxxx and be solely
responsible for any information with respect to it and its nominees, officers,
directors and Affiliates required by this Section 7.6(b). The rights and
obligations provided for in this Section 7.6(b) are in addition to and shall
not limit any rights which Purchaser or any of its Affiliates may have as a
holder or beneficial owner of shares of Xxxxxxxx Common Stock as a matter of
law with respect to the election of directors or otherwise.
7.7 PAYMENT IN RESPECT OF XXXXXXXX EQUITY RIGHTS. As soon as
practicable after the date of this Agreement and following the effectiveness of
the Merger or the Alternative Merger, the Board of Directors of Xxxxxxxx (or if
appropriate, any committee administering the Xxxxxxxx Stock Plans) shall adopt
such resolutions or take such other actions as are required to adjust the terms
of all outstanding Xxxxxxxx Equity Rights to purchase shares of Xxxxxxxx Common
Stock (except for those Xxxxxxxx Equity Rights set forth on Schedule 7.7, the
"Retained Xxxxxxxx Equity Rights") to provide that each Xxxxxxxx Equity Right
(excluding the Retained Xxxxxxxx Equity Rights) outstanding immediately prior
to the acceptance for payment of Shares pursuant to the Offer shall be
cancelled and the holder thereof shall be entitled to receive a cash payment
from Purchaser at the Effective Time of an amount equal to (i) the excess, if
any, of (x) the price per Share to be paid pursuant to the Offer over (y) the
exercise or conversion price per Share of such Xxxxxxxx Equity Right,
multiplied by (ii) the number of Shares for which such Xxxxxxxx Equity Right
shall not theretofore been exercised (the "Option Consideration"). Until
surrendered for payment in accordance with the provisions of this Section 7.7,
all Xxxxxxxx Equity Rights (excluding the Retained Xxxxxxxx Equity Rights)
shall, from and after the Effective Time, represent for all purposes only the
right to receive the consideration provided in this Section 7.7, without any
interest thereon.
Xxxxxxxx shall use its best efforts to obtain all necessary Consents or
releases from holders of Xxxxxxxx Equity Rights, to the extent required by the
terms of the plans or agreements governing such Xxxxxxxx Equity Rights, as the
case may be, or pursuant to the terms of any Xxxxxxxx Equity Right granted
thereunder, and take all such other lawful action as may be necessary to give
effect to the transactions contemplated by this Section 7.7 (except for such
action that may require the approval of Xxxxxxxx'x stockholders).
7.8 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, Xxxxxxxx shall keep CGW
advised of all material developments relevant to its business and shall permit
CGW to make or cause to be made such investigation of the business and
properties of Xxxxxxxx and its Subsidiaries and of their respective financial
and legal conditions as CGW reasonably requests, provided that such
investigation shall be reasonably related to the Transactions and shall not
interfere unnecessarily with normal operations. No investigation by a Party
shall affect the representations and warranties of the other Party.
(b) In addition to CGW's obligations under the
Confidentiality Agreement, which is hereby reaffirmed and adopted, and
incorporated by reference herein, CGW shall, and
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shall cause Purchaser and their respective advisers and agents to, maintain the
confidentiality of all confidential information furnished to it or any of them
by Xxxxxxxx concerning Xxxxxxxx and its Subsidiaries' businesses, operations,
and financial positions and shall not use such information for any purpose
except in furtherance of the transactions contemplated by this Agreement. If
this Agreement is terminated prior to the Effective Time, CGW shall promptly
return or cause to be returned, or certify or cause to be certified the
destruction of, all documents and copies thereof, and all work papers
containing confidential information received from Xxxxxxxx.
(c) Xxxxxxxx shall use its best efforts to exercise and
enforce its rights, and shall not, without the prior written consent of
Purchaser, waive any of its rights, under confidentiality agreements entered
into with Persons which were considering an acquisition proposal with respect
to Xxxxxxxx.
(d) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent,
either a material breach of any representation, warranty, covenant or agreement
of the other Party or which has had or is reasonably likely to have a Xxxxxxxx
Material Adverse Effect or a CGW Material Adverse Effect, as applicable.
7.9 PRESS RELEASES. Prior to the Effective Time, the Parties
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 7.9
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
7.10 CERTAIN ACTIONS. Except with respect to this Agreement and
the Transactions, and as provided below, no Xxxxxxxx Entity nor any Affiliate
thereof nor any Representatives thereof retained by any Xxxxxxxx Entity shall
directly or indirectly initiate, solicit, encourage or knowingly facilitate
(including by way of furnishing information) any inquiries or the making of any
acquisition proposal. Notwithstanding anything herein to the contrary, Xxxxxxxx
and its Board of Directors shall be permitted (i) to the extent applicable, to
comply with Rule 14d-9 and Rule 14e-2 promulgated under the 1934 Act with
regard to an acquisition proposal, and (ii) to engage in any discussions or
negotiations with, or provide any information to, any Person in response to an
unsolicited bona fide written acquisition proposal by any such Person, if and
only to the extent that (a) Xxxxxxxx'x Board of Directors concludes in good
faith and consistent with its fiduciary duties to Xxxxxxxx'x stockholders under
applicable Law that such acquisition proposal could reasonably be expected to
result in a Superior Proposal, (b) prior to providing any information or data
to any Person in connection with an acquisition proposal by any such Person,
Xxxxxxxx'x Board of Directors receives from such Person an executed
confidentiality agreement containing confidentiality terms at least as
stringent as those contained in the confidentiality agreement between Xxxxxxxx
and CGW, and (c) prior to providing any information or data to any Person or
entering into discussions or negotiations with any Person, Xxxxxxxx'x Board of
Directors notifies CGW and Purchaser promptly of such inquiries, proposals or
offers received by, any such
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information requested from, or any such discussions or negotiations sought to
be initiated or continued with, any of its Representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any inquiries, proposals or offers. Xxxxxxxx agrees that it will
promptly keep CGW informed of the status and terms of any such proposals or
offers and the status and terms of any such discussions or negotiations.
Xxxxxxxx agrees that it will, and will cause its officers, directors and
Representatives to, immediately cease and cause to be terminated any
activities, discussions or negotiations existing as of the date of this
Agreement with any parties conducted heretofore with respect to any acquisition
proposal. Xxxxxxxx agrees that it will use reasonable best efforts to promptly
inform its directors, officers, key employees, agents and Representatives of
the obligations undertaken in this Section 7.10. Nothing in this Section shall
(x) permit Xxxxxxxx to terminate this Agreement (except as specifically
provided in Article 9 thereof) or (y) affect any other obligation of CGW,
Purchaser or Xxxxxxxx under this Agreement.
7.11 STATE TAKEOVER LAWS. Each Xxxxxxxx Entity shall take all
necessary steps to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the validity or applicability of, any applicable
state takeover law, including Section 203 of the DGCL.
7.12 CHARTER PROVISIONS. Each Xxxxxxxx Entity shall take all
necessary action to ensure that the entering into of this Agreement and the
consummation of the Transactions do not and will not result in the grant of any
rights to any Person under the Certificate of Incorporation, Bylaws or other
governing instruments of any Xxxxxxxx Entity or restrict or impair the ability
of CGW or any of its Subsidiaries to vote, or otherwise to exercise the rights
of a stockholder with respect to, shares of any Xxxxxxxx Entity that may be
directly or indirectly acquired or controlled by them.
7.13 INDEMNIFICATION.
(a) For a period of three years after the Effective Time,
Purchaser shall, and shall cause Xxxxxxxx to, indemnify, defend and hold
harmless the present and former directors, officers, employees and agents of
the Xxxxxxxx Entities (each, an "Indemnified Party") against all Liabilities
arising out of actions or omissions relating to the Indemnified Party's service
or services as directors, officers, employees or agents of Xxxxxxxx or, at
Xxxxxxxx'x request, of another corporation, partnership, joint venture, trust
or other enterprise occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement) to the fullest extent permitted
under Delaware Law and by Xxxxxxxx'x Certificate of Incorporation and Bylaws as
in effect on the date hereof, including provisions relating to advances of
expenses incurred in the defense of any Litigation and whether or not Purchaser
is insured against any such matter. Without limiting the foregoing, in any case
in which approval by Xxxxxxxx is required to effectuate any indemnification,
Xxxxxxxx shall direct, at the election of the Indemnified Party, that the
determination of any such approval shall be made by independent counsel
mutually agreed upon between Purchaser and the Indemnified Party.
(b) Purchaser shall, or shall cause Xxxxxxxx to, use its
reasonable efforts (and Xxxxxxxx shall cooperate prior to the Effective Time in
these efforts) to maintain in effect for a
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period of three years after the Effective Time Xxxxxxxx'x existing directors'
and officers' liability insurance policy (provided that Purchaser may
substitute therefor (i) policies of at least the same coverage and amounts
containing terms and conditions which are substantially no less advantageous or
(ii) with the consent of Xxxxxxxx given prior to the Effective Time, any other
policy) with respect to claims arising from facts or events which occurred
prior to the Effective Time and covering persons who are currently covered by
such insurance; provided, that neither Purchaser, the surviving corporation of
the Merger, if applicable, nor Xxxxxxxx shall be obligated to make aggregate
premium payments for such three-year period in respect of such policy (or
coverage replacing such policy) which exceed, for the portion related to
Xxxxxxxx'x directors and officers, 150% of the annual premium payments on
Xxxxxxxx'x current policy in effect as of the date of this Agreement (the
"Maximum Amount"). If the amount of the premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, Purchaser shall use
its reasonable efforts to maintain the most advantageous policies of directors'
and officers' liability insurance obtainable for a premium equal to the Maximum
Amount.
(c) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 7.13, upon learning of any such Liability
or Litigation, shall promptly notify Purchaser thereof. In the event of any
such Litigation (whether arising before or after the Effective Time), (i) CGW
or Xxxxxxxx shall have the right to assume the defense thereof and neither
Purchaser nor Xxxxxxxx shall be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof, except that if
Purchaser or Xxxxxxxx elects not to assume such defense or counsel for the
Indemnified Parties advises that there are substantive issues which raise
conflicts of interest between Purchaser or Xxxxxxxx and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
Purchaser or Xxxxxxxx shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received; provided, that Purchaser and Xxxxxxxx shall be obligated pursuant to
this paragraph (c) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction, (ii) the Indemnified Parties will cooperate in the
defense of any such Litigation, and (iii) neither Purchaser nor Xxxxxxxx shall
be liable for any settlement effected without its prior written consent; and
provided further that neither Purchaser nor Xxxxxxxx shall have any obligation
hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall determine, and such determination shall have become final,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable Law.
(d) If Purchaser or Xxxxxxxx or any successors or assigns
shall consolidate with or merge into any other Person and shall not be the
continuing or surviving Person of such consolidation or merger or shall
transfer all or substantially all of its assets to any Person, then and in each
case, proper provision shall be made so that the successors and assigns of
Purchaser or Xxxxxxxx shall assume the obligations set forth in this Section
7.13.
(e) The provisions of this Section 7.13 are intended to be
for the benefit of and shall be enforceable by, each Indemnified Party and
their respective heirs and representatives.
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7.14 MAINTENANCE OF PUBLIC TRADING MARKET. In the event that the
Minimum Tender Condition is met but the Purchaser and any Affiliates shall not
have acquired in the aggregate at least 90% of the outstanding Shares of
Xxxxxxxx pursuant to the Transactions, CGW and Purchaser shall, for a period of
three years after the Effective Date use their commercially reasonable best
efforts to maintain a public trading market for the Xxxxxxxx Common Stock
either on a national securities exchange, any of the Nasdaq Stock Markets, or
in over-the-counter trading, and as long as such public trading market exists
CGW and Purchaser shall comply with the 1934 Act, and the rules and regulations
promulgated thereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and the other Transactions
are subject to the satisfaction of the following conditions, unless waived by
both Parties pursuant to Section 10.6:
(A) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Transactions shall have been obtained
or made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the Transactions
shall be conditioned or restricted in a manner (including requirements
relating to the raising of additional capital or the disposition of
Assets) which in the reasonable judgment of the Board of Directors of
Purchaser and the General Partner of CGW would so materially adversely
impact the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or requirement
been known, CGW and Purchaser would not have entered into this
Agreement.
(B) CONSENTS AND APPROVALS. Each Party shall have obtained
any and all Consents required for the preventing of any Default under
any Contract or Permit of such Party which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a Xxxxxxxx
Material Adverse Effect or a Purchaser Material Adverse Effect, as
applicable. No Consent so obtained which is necessary to consummate the
Transactions shall be conditioned or restricted in a manner which in the
reasonable judgment of the Board of Directors of Purchaser and the
General Partner of CGW would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement
that, had such condition or requirement been known, CGW and Purchaser
would not have entered into this Agreement.
(C) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the Transactions contemplated
by this Agreement.
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(D) PURCHASE OF SHARES IN OFFER. Purchaser shall have
purchased Shares pursuant to the Offer, except that this condition shall
not apply if Purchaser shall have failed to purchase Shares pursuant to
the Offer in breach of their obligations under this Agreement.
(E) EMPLOYEE LOANS. Each of the financial institutions that
have made loans to employees of Xxxxxxxx to purchase shares of Xxxxxxxx
Common Stock ("Employee Loans"), and which loans are guaranteed by
Xxxxxxxx (such employees, the lending institutions and the outstanding
amounts under their loans are set forth on Schedule A hereto), shall
have agreed to restructure the Employee Loans on terms reasonably
acceptable to the Parties, including the pledge by each borrower under
the Employee Loans of all shares of Xxxxxxxx Common Stock held by such
borrower and purchased with the proceeds of the Employee Loan to the
lender to secure the Employee Loans; provided, however, that should any
such employee borrower choose to tender such shares of Xxxxxxxx Common
Stock acquired with the Employee Loans, the Employee Loan relating to
that employee borrower shall not be restructured and shall remain due
and payable in accordance with its original terms.
(F) REFINANCING OF XXXXXXXX DEBT. Purchaser shall have
restructured the Bank Credit Agreement, dated as of March 28, 1996, as
amended, between Xxxxxxxx, the Xxxxxxxx Subsidiaries and the banks named
therein, The Chase Manhattan Bank, N.A as Administrative Agent, Chase
Securities, Inc. as Arranger, and NationsBank, N.A. as Syndication
Agent, on terms and conditions satisfactory to Purchaser.
(G) FINANCING. Purchaser will have prior to the Effective
Time, sufficient cash, available lines of credit or other sources of
immediately available funds to enable it to make the aggregate cash
payment required to be paid pursuant to Article 2 of this Agreement and
to purchase and pay for the Additional Common Stock and the Series A
Preferred Stock pursuant to Article 3 of this Agreement (the financing
described in this paragraph (g), together with the financing described
in paragraph (f) above, hereinafter referred to as the "Financing").
8.2 CONDITIONS TO OBLIGATIONS OF CGW AND PURCHASER. The
obligations of CGW and Purchaser to perform their respective obligations under
this Agreement are subject to the satisfaction of the following conditions,
unless waived by CGW and Purchaser pursuant to Section 10.6(a):
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 8.2(a), the accuracy of the representations and warranties of
Xxxxxxxx set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties set forth in Section 4.3 shall
be true and correct (except for inaccuracies which are de minimus in
amount). The representations and warranties set forth in Sections 4.20,
and 4.21 shall be
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true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of Xxxxxxxx set forth
in this Agreement (including the representations and warranties set
forth in Sections 4.3, 4.20, and 4.21) such that the aggregate effect of
such inaccuracies has, or is reasonably likely to have, a Xxxxxxxx
Material Adverse Effect; provided that, for purposes of this sentence
only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the
"Knowledge" of any Person shall be deemed not to include such
qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of Xxxxxxxx to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. Xxxxxxxx shall have delivered to CGW and
Purchaser (i) a certificate, dated as of the Effective Time and signed
on its behalf by its chief executive officer and its chief financial
officer, to the effect that the conditions set forth in Section 8.1 as
relates to Xxxxxxxx and in Section 8.2(a) and 8.2(b) have been
satisfied, and (ii) certified copies of resolutions duly adopted by
Xxxxxxxx'x Board of Directors evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance of
this Agreement, and the consummation of the Transactions, all in such
reasonable detail as CGW, Purchaser and their counsel shall request.
8.3 CONDITIONS TO OBLIGATIONS OF XXXXXXXX. The obligations of
Xxxxxxxx to perform its obligations under this Agreement are subject to the
satisfaction of the following conditions, unless waived by Xxxxxxxx pursuant to
Section 10.6(b):
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 8.3(a), the accuracy of the representations and warranties of
Purchaser set forth in this Agreement shall be assessed as of the date
of this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of Purchaser set forth in
Sections 5.5 and 5.7 shall be true and correct in all material respects.
There shall not exist inaccuracies in the representations and warranties
of Purchaser set forth in this Agreement (including the representations
and warranties set forth in Sections 5.5 and 5.7) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to
have, a Purchaser Material Adverse Effect; provided that, for purposes
of this sentence only, those representations and warranties which are
qualified by references to "material" or "Material Adverse Effect" or to
the "Knowledge" of any Person shall be deemed not to include such
qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of CGW and Purchaser to be performed and
complied with pursuant to this Agreement, including, but not limited to
the provisions set forth in Article 3
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herein and Section 8.1(f) hereof, and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. Purchaser shall have delivered to Xxxxxxxx
(i) a certificate, dated as of the Effective Time and signed on its
behalf by its president, to the effect that the conditions set forth in
Section 8.1 as relates to CGW and Purchaser and in Section 8.3(a) and
8.3(b) have been satisfied, and (ii) certified copies of resolutions
duly adopted by Purchaser's Board of Directors evidencing the taking of
all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the Transactions,
all in such reasonable detail as Xxxxxxxx and its counsel shall request.
(D) PAYING AGENT CERTIFICATION. The bank or trust company
selected by CGW to act as paying agent (the "Paying Agent") shall have
delivered to Xxxxxxxx a certificate, dated as of the Effective Time, to
the effect that Purchaser has deposited with the Paying Agent sufficient
funds to pay the aggregate cash payments required to be paid pursuant to
Article 1.
ARTICLE 9
TERMINATION
9.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of Xxxxxxxx and CGW or both, this Agreement may be terminated at
any time prior to the Effective Time:
(a) By mutual consent of CGW and Xxxxxxxx; or
(b) By either of Xxxxxxxx or CGW:
(i) if (A) the Offer shall have expired without any
Shares being purchased therein or (B) Purchaser shall not have accepted
for payment all Shares tendered pursuant to the Offer by June 30, 2000;
provided, however, that the right to terminate this Agreement under this
Section 9.1(b)(i) 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 Purchaser, to purchase the Shares pursuant
to the Offer on or prior to such date; or
(ii) if any court, arbitration tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency (a "Governmental Entity") shall have issued an
order, decree or ruling or taken any other action (which order, decree,
ruling or other action the parties hereto shall use their reasonable
efforts to lift), which permanently restrains, enjoins or otherwise
prohibits the acceptance for payment of, or payment for, Shares pursuant
to the Offer and such order, decree, ruling or other action shall have
become and final and non-appealable; or
(c) By Xxxxxxxx:
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(i) if Purchaser shall have failed to commence the
Offer as soon as reasonably practical following the date of the initial
public announcement of the Offer; provided, that Xxxxxxxx may not
terminate this Agreement pursuant to this Section 9.1(c)(i) if Xxxxxxxx
is at such time in willful and material breach of this Agreement; or
(ii) if CGW or Purchaser shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which breach
cannot be or has not been cured, in all material respects, within 30
days after the giving of written notice to CGW or Purchaser, as
applicable; or
(iii) if the Board of Directors of Xxxxxxxx shall
have determined to endorse, enter into and recommend to Johnstons'
shareholders a Superior Proposal and shall have concurrently therewith
entered into a definitive Contract with a Person in accordance with
Section 7.10 with respect to such Superior Proposal, provided it has
complied with all of the provisions thereof, including the notice
provisions thereof; or
(d) By CGW:
(i) if, due to an occurrence not involving a breach
by CGW or Purchaser of their obligations hereunder, which makes it
impossible to satisfy any of the conditions set forth in Exhibit 1,
Purchaser shall have failed to commence the Offer as soon as reasonably
practical following the date of the initial public announcement of the
Offer; or
(ii) if prior to the purchase of Shares pursuant to
the Offer, Xxxxxxxx shall have breached in any material respect any
representation, warranty, covenant or other agreement contained in this
Agreement or in the agreements governing the Financing, which (A) would
give rise to the failure of a condition set forth in paragraph (f), (g)
and (j) of Exhibit 1, and (B) as of the Closing, cannot be or has not
been cured, in all material respects.
9.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 9.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
9.2 and Article 10 shall survive any such termination and abandonment, and (ii)
a termination other than pursuant to Section 9.1(a) shall not relieve the
breaching Party from Liability for an uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination.
9.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 9.3 and
Articles 2, 10 and Section 7.13.
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ARTICLE 10
MISCELLANEOUS
10.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial
owner of any 10% or greater equity or voting interest of such Person; or
(iii) any other Person for which a Person described in clause (ii) acts
in any such capacity.
"AGREEMENT" shall mean this Purchase Agreement, including the
Exhibits delivered pursuant hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses and rights of such Person of every kind, nature,
character and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement dated March 2, 1999, between Xxxxxxxx and CGW.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital stock,
Assets or business.
"DGCL" shall mean the Delaware General Corporation Law.
"DEFAULT" shall mean (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or
Permit, (ii) any occurrence of any event that with the passage of time
or the giving of notice or both would constitute a breach or
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violation of, default under, contravention of, or conflict with, any
Contract, Law, Order, or Permit, or (iii) any occurrence of any event
that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain any
relief under, terminate or revoke, suspend, cancel, or modify or change
the current terms of, or renegotiate, or to accelerate the maturity or
performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit.
"XXXXXXXX COMMON STOCK" shall mean the $.10 par value per
share, common stock of Xxxxxxxx.
"XXXXXXXX DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Xxxxxxxx Disclosure Memorandum" delivered prior to
the date of this Agreement to CGW describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with respect
to one Section shall be deemed to be disclosed for purposes of any other
Section for which such disclosure is applicable, if such applicability
is clear in the specific context and cross-referenced in the appropriate
sections.
"XXXXXXXX ENTITIES" shall mean, collectively, Xxxxxxxx and all
Xxxxxxxx Subsidiaries.
"XXXXXXXX EQUITY RIGHTS" shall mean all arrangements, calls,
commitments, Contracts, options (including employee stock options),
rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the
capital stock of a Person or by which a Person is or may be bound to
issue additional shares of its capital stock or other Equity Rights.
"XXXXXXXX FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if
any) of Xxxxxxxx as of January 2, 1999, January 3, 1998 and December 28,
1996, and the related statements of operations, changes in stockholders'
equity, and cash flows (including related notes and schedules, if any)
for the three months ended October 2, 1999, and for each of the three
fiscal years ended January 2, 1999, January 3, 1998 and December 28,
1996, as filed by Xxxxxxxx in SEC Documents, and (ii) the consolidated
balance sheets of Xxxxxxxx (including related notes and schedules, if
any) and related statements of operations, changes in stockholders'
equity, and cash flows (including related notes and schedules, if any)
included in SEC Documents filed with respect to periods ended subsequent
to January 2, 1999.
"XXXXXXXX MATERIAL ADVERSE EFFECT" shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of Xxxxxxxx and
its Subsidiaries, taken as a whole, or (ii) the ability of Xxxxxxxx to
perform its obligations under this Agreement or the other transactions
contemplated by this Agreement.
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"XXXXXXXX PREFERRED STOCK" shall mean the $.01 par value per
share, preferred stock of Xxxxxxxx.
"XXXXXXXX STOCK PLANS" shall mean the existing stock option
and other stock-based compensation plans of Xxxxxxxx set forth in
Schedule 4.14 of the Xxxxxxxx Disclosure Memorandum.
"XXXXXXXX SUBSIDIARIES" shall mean the Subsidiaries of
Xxxxxxxx, which shall include the Xxxxxxxx Subsidiaries described in
Section 4.4 and any corporation or other organization acquired as a
Subsidiary of Xxxxxxxx in the future and held as a Subsidiary by
Xxxxxxxx at the Effective Time.
"ENVIRONMENTAL LAWS" shall mean all currently existing Laws
relating to pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface, or
subsurface strata) and which are administered, interpreted, or enforced
by the United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42
U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and other currently
existing Laws relating to emissions, discharges, releases, or threatened
releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"EXHIBIT 1" shall mean the Exhibit so marked, a copy of which
is attached to this Agreement. Such Exhibit is hereby incorporated by
reference herein and made a part hereof, and may be referred to in this
Agreement and any other related instrument or document without being
attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the Xxxxxxx Act, as
added by Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
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"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, and other intellectual
property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
those facts that are known or should reasonably have been known after
due inquiry by the president, chief financial officer, chief accounting
officer, chief operating officer, or any senior or executive vice
president of such Person.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (iii) Liens which do
not materially impair the use of or title to the Assets subject to such
Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated by
this Agreement.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"OPERATING PROPERTY" shall mean any property owned, leased,
or operated by the Party in question or by any of its Subsidiaries or in
which such Party or Subsidiary holds
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a security interest or other interest (including an interest in a
fiduciary capacity), and, where required by the context, includes the
owner or operator of such property, but only with respect to such
property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
to a material degree in the management and, where required by the
context, said term means the owner or operator of such facility or
property, but only with respect to such facility or property.
"PARTY" shall mean either Xxxxxxxx or CGW, and "PARTIES"
shall mean both Xxxxxxxx and CGW.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in concert,
or any person acting in a representative capacity.
"PURCHASER MATERIAL ADVERSE EFFECT" shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse impact on the
ability of CGW or Purchaser to perform their respective obligations
under this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NYSE, the Nasdaq National Market, the Federal Trade Commission, the
United States Department of Justice, and all other federal, state,
county, local or other governmental or regulatory agencies, authorities
(including self-regulatory authorities), instrumentalities, commissions,
boards or bodies having jurisdiction over the Parties and their
respective Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative
engaged by a Person.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the
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Trust Indenture Act of 1939, as amended, and the rules and regulations
of any Regulatory Authority promulgated thereunder.
"SUBSIDIARIES" shall mean all those corporations,
associations, or other business entities of which the entity in question
either (i) owns or controls 50% or more of the outstanding equity
securities either directly or through an unbroken chain of entities as
to each of which 50% or more of the outstanding equity securities is
owned directly or indirectly by its parent (provided, there shall not be
included any such entity the equity securities of which are owned or
controlled in a fiduciary capacity), (ii) in the case of partnerships,
serves as a general partner, (iii) in the case of a limited liability
company, serves as a managing member, or (iv) otherwise has the ability
to elect a majority of the directors, trustees or managing members
thereof.
"SUPERIOR PROPOSAL" shall mean any proposal (i) made by a
third party to acquire, directly or indirectly, including pursuant to a
tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the shares of Xxxxxxxx
Common Stock then outstanding or all or substantially all the assets of
Xxxxxxxx, (ii) which the Board of Directors of Xxxxxxxx determines in
its good faith judgment that such proposal, if accepted, is reasonably
likely to be consummated, taking into account all legal, financial and
regulatory aspects of the proposal and the Person making the proposal
and (iii) which would, if consummated, result in a more favorable
transaction to the shareholders of Xxxxxxxx than the transaction
contemplated by this Agreement, taking into account, to the extent
relevant, the long-term prospects and interests of Xxxxxxxx and its
stockholders.
"TAX" or "TAXES" shall mean any federal, state, county,
local, or foreign taxes, charges, fees, levies, imposts, duties, or
other assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and unemployment,
disability, real property, personal property, registration, ad valorem,
value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposes or required to be
withheld by the United States or any state, county, local or foreign
government or subdivision or agency thereof, including any interest,
penalties, and additions imposed thereon or with respect thereto.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
Affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Additional Common Stock Section 3.1
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Appointment Date Section 6.1
Alternative Merger Section 7.2
Closing Section 2.2
Xxxxxxxx Benefit Plans Section 4.14
Xxxxxxxx Contracts Section 4.15
Xxxxxxxx ERISA Plan Section 4.14
Xxxxxxxx Pension Plan Section 4.14
Xxxxxxxx SEC Reports Section 4.5
Effective Time Section 2.1
ERISA Affiliate Section 4.14
Fully Diluted Shares Exhibit 1
Governmental Entity Section 9.1
Indemnified Party Section 7.13
Maximum Amount Section 7.13
Merger Section 7.1
Offer Section 1.1
Offer Documents Section 1.1
Offer Price Section 1.1
Offer to Purchase Section 1.1
Option Consideration Section 7.7
Paying Agent Section 8.3
Schedule TO Section 1.1
Schedule 14D-9 Section 1.2
Shares Section 1.1
Stockholder Protection Agreement Section 1.2
Takeover Laws Section 4.20
Transactions Section 1.2
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
10.2 EXPENSES.
(a) Except as otherwise provided in this Section 10.2, each
of the Parties shall bear and pay all direct costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel.
(b) If (i) Xxxxxxxx terminates this Agreement pursuant to
Section 9.1(c)(iii), or (ii) either Xxxxxxxx or CGW terminates this Agreement
pursuant to Section 9.1(b)(i) and prior thereto there shall have been publicly
announced another acquisition proposal, Xxxxxxxx shall pay to CGW, an amount
equal to $3,000,000, plus an amount equal to CGW's actual, reasonable and
reasonably documented out-of-pocket fees and expenses incurred by CGW and
Purchaser in
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connection with the Offer, this Agreement and the consummation of the
Transactions, which shall be payable in same day funds, provided that in no
event shall Xxxxxxxx be obligated to pay any such fees and expenses in excess
of $4,000,000.
(c) If Xxxxxxxx terminates this Agreement pursuant to
Section 9.1(c)(i) or (ii), then CGW shall pay to Xxxxxxxx an amount equal to
Xxxxxxxx'x reasonable and reasonably documented legal fees and expenses
incurred, as of the date of such termination, with respect to this Agreement
and the Transactions.
(d) If CGW terminates this Agreement pursuant to Section
9.1(d)(ii), then Xxxxxxxx shall pay to CGW an amount equal to CGW's reasonable
and reasonably documented legal fees and expenses incurred, as of the date of
such termination, with respect to this Agreement and the Transactions.
(e) If, upon expiration of the Offer, the Minimum Tender
Condition (as defined in Exhibit 1 hereto) is not satisfied, Xxxxxxxx shall pay
to CGW an amount equal to CGW's reasonable and reasonably documented legal fees
and expenses incurred, with respect to this Agreement and the Transactions.
(f) Nothing contained in this Section 10.2 shall constitute
or shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
10.3 BROKERS AND FINDERS. Each of the Parties represents and
warrants that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any Liability for any
financial advisory fees, investment bankers' fees, brokerage fees, commissions,
or finders' fees in connection with this Agreement or the Transactions. In the
event of a claim by any broker or finder based upon his or its representing or
being retained by or allegedly representing or being retained by Xxxxxxxx or by
CGW, each of Xxxxxxxx and CGW, as the case may be, agrees to indemnify and hold
the other Party harmless of and from any Liability in respect of any such
claim.
10.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral (except, as to Section
7.10(b), for the Confidentiality Agreement). Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
10.5 AMENDMENTS. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of each of the Parties.
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10.6 WAIVERS.
(a) Prior to or at the Effective Time, CGW, acting through
its General Partner, shall have the right to waive, for itself and for
Purchaser, any Default in the performance of any term of this Agreement by
Xxxxxxxx, to waive or extend the time for the compliance or fulfillment by
Xxxxxxxx of any and all of its obligations under this Agreement, and to waive
any or all of the conditions precedent to the obligations of CGW under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing
signed by the General Partner of CGW.
(b) Prior to or at the Effective Time, Xxxxxxxx, acting at
the direction of its Board of Directors, shall have the right to waive any
Default in the performance of any term of this Agreement by CGW or Purchaser,
to waive or extend the time for the compliance or fulfillment by CGW or
Purchaser of any and all of these respective obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
Xxxxxxxx under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of Xxxxxxxx.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of
this Agreement. No waiver of any condition or of the breach of any term
contained in this Agreement in one or more instances shall be deemed to be or
construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
10.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
10.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
Xxxxxxxx: Xxxxxxxx Industries, Inc.,
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: D. Xxxxx Xxxx
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43
Copy to Counsel: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxxxx X. Xxx
CGW or Purchaser: CGW Southeast Partners IV, L.P.
Twelve Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxx X. Xxxxxx
Copy to Counsel: Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
10.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Georgia, without regard
to any applicable conflicts of Laws.
10.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in
this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to particular Articles or
Sections shall mean and refer to the referenced Articles and Sections of this
Agreement.
10.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any party, whether
under any rule of construction or otherwise. No party to this Agreement shall
be considered the draftsman. The parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and
intentions of all parties hereto.
10.13 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such
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invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf by its duly authorized officers as of the day and
year first above written.
CGW Southeast Partners IV, L.P.
By: CGW Southeast IV, L.L.C., its General Partner
By: CGW, Inc., its Manager
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
JI Acquisition Corp.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Xxxxxxxx Industries, Inc.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
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EXHIBIT 1
CONDITIONS OF THE OFFER
The capitalized terms used in this Exhibit 1 have the meanings assigned to them
in the Purchase Agreement to which this Exhibit 1 is attached.
Notwithstanding any other provision of the Offer or the Purchase
Agreement, Purchaser shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-1(c) under
the 1934 Act (relating to Purchaser's obligation to pay for or return tendered
Shares promptly after termination or withdrawal of the Offer), pay for any
Shares tendered pursuant to the Offer, and may postpone the acceptance for
payment or, subject to the restriction referred to above, payment for any
Shares tendered pursuant to the Offer, and may amend or terminate the Offer as
to any Shares not then paid for unless (i) there shall have been validly
tendered and not withdrawn, prior to the expiration of the Offer, that number
of Shares which, when aggregated with the shares of Xxxxxxxx Common Stock and
Series A Preferred Stock to be acquired by the Purchaser pursuant to Article 3
hereof, would represent at least a majority of the Fully Diluted Shares (as
defined below) (the "Minimum Tender Condition") and (ii) any waiting period
under the HSR Act applicable to the purchase of Shares pursuant to the Offer
shall have expired or been terminated. The term "Fully Diluted Shares" means
all outstanding securities entitled generally to vote in the election of
directors of Xxxxxxxx on a fully diluted basis, after giving effect to the
exercise or conversion of all Retained Xxxxxxxx Equity Rights exercisable or
convertible into such voting securities and the purchase of the Additional
Common Stock and Series A Preferred Stock pursuant to Article 3 of the
Agreement. Furthermore, notwithstanding any other term of the Offer or the
Purchase Agreement, Purchaser shall not be required to accept for payment or,
subject as aforesaid, to pay for any Shares not theretofore accepted for
payment or paid for, and may terminate or amend the Offer, with the consent of
Xxxxxxxx or if, at any time on or after the date of the Purchase Agreement and
prior to the acceptance for payment of Shares or the payment therefor, any of
the following conditions exists:
(a) there shall have been instituted, threatened or pending any
Litigation brought by any Governmental Entity or other person, or before
any court or governmental authority, agency or tribunal, domestic or
foreign, in each case that has a reasonable likelihood of success, (i)
challenging the acquisition by CGW or Purchaser of any Shares, directly
or indirectly seeking to restrain or prohibit or otherwise make more
costly the making or consummation of the Offer, or seeking to obtain
from Xxxxxxxx, CGW or Purchaser any damages that are material in
relation to Xxxxxxxx and its Subsidiaries, taken as a whole, (ii)
seeking to prohibit or limit the ownership or operation by Xxxxxxxx, CGW
or any of their respective Subsidiaries of any material portion of the
business or assets of Xxxxxxxx, CGW or any of their respective
Subsidiaries, or to compel Xxxxxxxx, CGW or any of their respective
Subsidiaries to dispose of or hold separate any material portion of the
business or assets of Xxxxxxxx, CGW or any of their respective
Subsidiaries, as a result of the Offer,
46
(iii) seeking to impose or to confirm limitations on the ability of CGW
or any of its Subsidiaries effectively to acquire or hold or to exercise
full rights of ownership of Shares, including without limitation the
right to vote any Shares acquired or owned by CGW or any of its
Subsidiaries on all matters properly presented to the stockholders of
Xxxxxxxx, or the right to vote any shares of capital stock of any
Subsidiary directly or indirectly owned by Xxxxxxxx, (iv) seeking to
prohibit CGW or any of its Subsidiaries from effectively controlling in
any material respect the business or operations of Xxxxxxxx or any of its
Subsidiaries, or (v) which otherwise is reasonably likely to have a
Xxxxxxxx Material Adverse Effect
(b) there shall be any Law or Order threatened, proposed, sought,
enacted, entered, enforced, promulgated, amended or issued with respect
to, or deemed applicable to, or any Consent withheld with respect to,
(i) CGW, Xxxxxxxx or any of their respective Subsidiaries or (ii) the
Offer, by any Governmental Entity or before any court or governmental
authority, agency or tribunal, domestic or foreign, that is reasonably
likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred any Xxxxxxxx Material Adverse Effect or
any development that, insofar as reasonably can be foreseen, is
reasonably likely to result in a Xxxxxxxx Material Adverse Effect;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock
Exchange or in the Nasdaq National Market for a period in excess of 24
hours (excluding suspensions or limitations resulting solely from
physical damage or interference not relating to monetary conditions),
(ii) a decline of at least 25% in either the Dow Xxxxx Average of
Industrial Stocks or the Standard & Poor's 500 index from the date
hereof, or a material disruption of or material adverse change in
financial, banking or capital market conditions that could materially
adversely affect syndication of loan facilities, (iii) any material
adverse change in United States currency exchange rates or a suspension
of, or limitation on, the markets therefor, (iv) a declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States, (v) any limitation (whether or not mandatory) by any
domestic government or governmental, administrative or regulatory
authority or agency on, or any other event that could reasonably be
expected to materially adversely affect the extension of credit by banks
or other lending institutions, (vi) a commencement of a war or armed
hostilities or other national or international calamity having a
Xxxxxxxx Material Adverse Effect or CGW Material Adverse Effect or
materially adversely affecting (or materially delaying) the consummation
of the Offer or (vii) in the case of any of the foregoing existing on
the date of the Purchase Agreement, a material acceleration or worsening
thereof;
(e) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes
of this paragraph as set forth in Rule 13d-3 promulgated under the 0000
Xxx) of more than 20% of the outstanding Shares has been acquired by any
corporation (including Xxxxxxxx or any of its Subsidiaries or
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Affiliates), partnership, person or other entity or "group" (within the
meaning of Section 13(d)(3) of the 1934 Act), other than Purchaser or
any of its Affiliates, or (ii) (A) the Board of Directors of Xxxxxxxx or
any committee thereof shall have approved or recommended any acquisition
proposal or any other acquisition of Shares other than the Offer or (B)
Xxxxxxxx shall have entered into an agreement with respect to an
acquisition proposal or (C) the Board of Directors of Xxxxxxxx or any
committee thereof shall have resolved to do any of the foregoing;
(f) any of the representations and warranties of Xxxxxxxx set forth in
the Purchase Agreement that are qualified as to materiality shall not be
true and correct, or any such representations and warranties that are
not so qualified shall not be true and correct in any material respect,
in each case as if such representations and warranties were made at the
time of such determination;
(g) Xxxxxxxx shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of Xxxxxxxx to be performed or complied with by it under the
Purchase Agreement;
(h) the Purchase Agreement shall have been terminated in accordance
with its terms or the Offer shall have been terminated with the consent
of Xxxxxxxx;
(i) all Consents of and notices to or filings with governmental
authorities and third parties required in connection with the
Transactions shall not have been obtained or made other than those the
absence of which, individually or in the aggregate, would not have a
Xxxxxxxx Material Adverse Effect or prevent or materially delay
consummation of any of the Transactions;
(j) Notwithstanding Section 5.6 of the Purchase Agreement, Purchaser
shall not have received financing in an amount necessary to consummate
the Transactions, including the payment of fees and expenses relating to
the Transactions, on terms and conditions reasonably satisfactory to
Purchaser and CGW; or
(k) CGW and Purchaser shall not have received confirmation from
Xxxxxxxx that each of the financial institutions that have made loans to
employees of Xxxxxxxx to purchase shares of Xxxxxxxx Common Stock
("Employee Loans"), and which loans are guaranteed by Xxxxxxxx (such
employees, the lending institutions and the outstanding amounts under
their loans are set forth on Schedule A hereto), shall have agreed to
restructure the Employee Loans on terms reasonably acceptable to CGW and
Purchaser, including the pledge by each borrower under the Employee
Loans of all shares of Xxxxxxxx Common Stock held by such borrower and
purchased with the proceeds of the Employee Loan to the lender to secure
the Employee Loans; provided, however, that should any such employee
borrower choose to tender such shares of Xxxxxxxx Common Stock acquired
with the Employee Loans, the Employee Loan relating to that employee
borrower shall not be restructured and shall remain due and payable in
accordance with its original terms;
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which, in the sole and reasonable judgment of CGW or Purchaser, in any such
case, and regardless of the circumstances giving rise to any such condition
(including any action or inaction by CGW or any of its Affiliates), makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of CGW and Purchaser
and may be asserted by CGW or Purchaser regardless of the circumstances giving
rise to any such condition or may be waived by CGW or Purchaser in whole or in
part at any time and from time to time in their sole discretion (subject in
each case to the terms of the Purchase Agreement). The failure by CGW or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances, and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
Any determination by CGW or Purchaser concerning the events described in this
Exhibit 1 will be final and binding upon all parties.
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EXHIBIT 2
SERIES B PREFERRED STOCK DESIGNATION
50
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF XXXXXXXX INDUSTRIES, INC.
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware, we, D. Xxxxx Xxxx, President and Chief Executive Officer, and X.
Xxxxxxx Xxxxxx, Secretary of XXXXXXXX INDUSTRIES, INC. (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with provisions of Section 103 thereof,
DO HEREBY CERTIFY: That pursuant to the authority conferred upon the
Board of Directors by the Certificate of Incorporation, as amended, of the said
Corporation, the said Board of Directors on ___________ ___, 2000, adopted the
following resolution creating a series of 250,000 shares of Preferred Stock
designated as Series A Convertible Preferred Stock:
RESOLVED, that a series of the Corporation's Preferred Stock consisting
of 250,000 shares of Preferred Stock, par value $.01 per share, be and hereby
is, designated as "Series A Convertible Preferred Stock" (the "Series A
Preferred Stock"), and that the Series A Preferred Stock shall have the
designations, powers, preferences, rights and qualifications, limitations and
restrictions substantially as set forth in the Certificate of Designation,
Preferences and Rights of Series A Convertible Preferred Stock (the
"Certificate") described below.
This Certificate states that the Board of Directors does hereby fix and
herein state and express such designations, powers, preferences and relative and
other special rights and qualifications, limitations and restrictions thereof as
follows (all terms used herein which are defined in the Certificate of
Incorporation shall be deemed to have the meanings provided therein):
SECTION 1.
DESIGNATION AND AMOUNT
The shares of such series shall be designated as "Series A Convertible
Preferred Stock" (the "Series A Preferred Stock") and the number of shares
constituting such series shall be 250,000. Such number of shares of Series A
Preferred Stock may be increased or decreased by resolution of the Board of
Directors; provided however, that no decrease shall reduce the number of shares
of Series A Preferred Stock to a number less than the number of shares of Series
A Preferred Stock then outstanding plus the number of shares of Series A
Preferred Stock reserved for issuance upon the exercise of outstanding options,
rights or warrants exercisable for, or upon the conversion of any outstanding
securities issued by the Corporation convertible into, Series A Preferred Stock.
SECTION 2.
DIVIDENDS AND DISTRIBUTIONS
(A) Subject to the prior and superior rights of the holders of any
shares of any series of preferred stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available therefor, dividends
payable in cash, property, or in shares of the Common Stock, par value $.01 per
share of the Corporation (the "Common Stock") in an amount per share equal to
that amount of cash,
51
property or Common Stock per share declared and paid out of funds legally
available therefor, on the Common Stock.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the date of declaration of
dividends on the Common Stock. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an amount
less than the total amount of such accrued dividends shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
SECTION 3.
VOTING RIGHTS
The holders of shares of Series A Preferred Stock shall have the same
voting rights with respect to matters which the holders of Common Stock are
entitled to vote, and, except as expressly set forth in the General Corporation
Law of the State of Delaware, the holders of shares of Series A Preferred Stock
shall vote together with the holders of Common Stock as a single class.
SECTION 4.
CERTAIN RESTRICTIONS
(A) Whenever dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not: (i) declare or pay dividends on, make any other distribution on, or redeem
or purchase or otherwise acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock; (ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid or distributions made ratably on the
Series A Preferred Stock and all such stock ranking on a parity with respect to
the particular dividend or distribution in proportion to the total amounts to
which the holders of all such shares are then entitled; (iii) redeem or purchase
or otherwise acquire for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior (both as to dividends and
upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A
Preferred Stock, or any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series
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52
and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5.
CONVERSION RIGHTS
(A) General Rights. The shares of Series A Preferred Stock shall
be convertible into Common Stock on the following terms and conditions:
(a) Term. Pursuant to the provisions of paragraph
5(A)(g), the outstanding shares of Series A Preferred Stock shall be
convertible into such number of fully paid and nonassessable shares of
Common Stock as are issuable pursuant to the conversion formula set
forth in paragraph 5(A)(c), as the same may be adjusted from time to
time pursuant to Section 5(B). The Corporation shall make no payment or
adjustment on account of distributions accrued or in arrears on the
Series A Preferred Stock surrendered for conversion and no adjustment
on account of distributions on the shares of Common Stock issuable upon
conversion.
(b) Surrender of Shares. Upon the occurrence of the
provisions set forth in paragraph 5(A)(g), the holders of Series A
Preferred Stock may surrender the certificate or certificates for such
shares of Series A Preferred Stock at the offices of the Corporation,
or at such other place or places, if any, as the Board of Directors of
the Corporation may determine, duly endorsed to the Corporation or in
blank or accompanied by proper instruments of transfer to the
Corporation or in blank, and shall state in writing therein the name or
names in which the holder wishes the certificate or certificates for
shares of Common Stock issuable on such conversion to be issued. The
surrender of shares of Series A Preferred Stock shall constitute a
contract between the holder and the Corporation whereby (i) such holder
shall be deemed to subscribe for the amount of Common Stock which he
will be entitled to receive upon such conversion and, in payment and
satisfaction of such subscription, to surrender the shares of Series A
Preferred Stock and to release the Corporation from all obligation
thereon, and (ii) the Corporation shall be deemed to agree that the
surrender of the certificate or certificates for such shares of Series
A Preferred Stock and the extinguishment of obligation thereon shall
constitute full payment of such subscription for the Common Stock so
subscribed for and to be issued upon such conversion.
The Corporation will as soon as practicable after such deposit
of certificates for shares of Series A Preferred Stock, issue and
deliver to the person for whose account such shares of Series A
Preferred Stock were so surrendered, or to his nominee or nominees, a
certificate or certificates for the number of full shares of Common
Stock to which the holder shall be entitled as aforesaid, together with
a check or cash in respect of any fraction of a share as hereinafter
provided in paragraph 5(A)(f). Subject to the following provisions of
this Section 5, such conversion shall be deemed to have been made on
the Business Day on which a holder of Series A Preferred Stock has
surrendered its shares of Series A Preferred Stock in accordance with
the conditions described in paragraph 5(A), and the person or persons
entitled to receive the Common Stock issuable
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53
upon conversion of the Series A Preferred Stock shall be deemed for all
purposes to have become the record holder or holders of such Common
Stock and to have ceased to be the holder of Series A Preferred Stock
on such Business Day.
(c) Stock Unit. Each share of Series A Preferred Stock
shall be convertible, at the times and places and in the manner
referred to in this Section 5, into one "Stock Unit". The contents of a
Stock Unit as of the date of filing of this Certificate of Designation
with the Secretary of State of the State of Delaware, shall be one (1)
share of Common Stock (as constituted upon such date) of the
Corporation. The contents of a Stock Unit shall thereafter be subject
to adjustment in accordance with the provisions of Section 5(B).
(d) Taxes. The issue of share certificates on conversion
of the Series A Preferred Stock shall be made free of any tax in
respect of such issue. The Corporation shall not, however, be required
to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares in a name other than that of the
holder of Series A Preferred Stock converted, and the Corporation shall
not be required to issue or deliver any such share certificate unless
and until the person or persons requesting the issuance thereof shall
have paid to the Corporation the amount of any such tax or shall have
established to the satisfaction of the Corporation that such tax has
been paid.
(e) Reservation of Shares. The Corporation shall at all
times reserve and keep available, out of its authorized and unissued
shares, solely for the purpose of effecting the conversion of Series A
Preferred Stock, such number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all shares of
Series A Preferred Stock from time to time outstanding. The Corporation
shall from time to time, in accordance with the General Corporation Law
of the State of Delaware, use its best efforts to cause the number of
authorized shares of its Common Stock to be increased if at any time
the number of authorized shares of Common Stock remaining unissued
shall not be sufficient to permit the conversion of all of the then
outstanding shares of Series A Preferred Stock.
(f) Fractional Shares. The Corporation shall not be
required to issue fractional shares of Common Stock or scrip upon
conversion of Series A Preferred Stock. As to any final fraction of a
share of Common Stock which a holder of one or more shares of Series A
Preferred Stock would otherwise be entitled to receive upon conversion
of Series A Preferred Stock, the Corporation shall pay a cash
adjustment in respect of such final fraction in an amount equal to
$3.00 per share of Series A Preferred Stock.
(g) Terms of Conversion. The shares of Series A Preferred
Stock shall be convertible to Common Stock, at the times and places and
in the manner referred to in this Section 5(A), at the election of the
holders of the Series A Preferred Stock, provided the number of shares
of Common Stock authorized but unissued under the Corporation's
Certificate of Incorporation is sufficient to satisfy the number of
shares of Series A Preferred Stock being converted at such time.
(B) Antidilution. The number of shares of Common Stock comprising
a Stock Unit shall be subject to adjustment from time to time, as follows:
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54
(a) Recapitalization. In case the Corporation after the
date of filing of this Certificate of Designation with the Secretary of
State of the State of Delaware (the "Base Date") shall (i) issue a
share dividend to the holders of its Common Stock, (ii) combine its
outstanding shares of Common Stock into a smaller number of shares, or
(iii) issue by reclassification of its shares of Common Stock any
shares of the Corporation, then the number of shares of Common Stock
comprising a Stock Unit immediately after the happening of any of the
events described above shall be adjusted by multiplying the Stock Unit
in effect immediately prior to such event by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event. Similar adjustments to the content of a Stock Unit shall be
made if any of the events described above in this subparagraph (a)
shall thereafter occur. An adjustment made pursuant to this
subparagraph (a) shall become effective retroactively immediately after
the record date in the case of a share dividend, and shall become
effective immediately after the effective date in the case of a
combination or reclassification.
(b) Other Actions by Corporation. In case the Corporation
after the Base Date shall take any action affecting the Common Stock,
other than action described in subparagraph (a) of this Section 5(B),
which in the opinion of the Board of Directors of the Corporation would
materially affect the rights of the holders of the Series A Preferred
Stock, the Common Stock included in a Stock Unit shall be adjusted in
such manner, if any, and at such time, as the Board of Directors of the
Corporation, in its sole discretion, may determine to be equitable in
the circumstances. Failure of the Board of Directors of the Corporation
to provide for an adjustment prior to the effective date of any such
action by the Corporation affecting the Common Stock shall be
conclusive evidence that the Board of Directors of the Corporation has
determined that it is equitable to make no adjustment in the
circumstances.
(c) Notices of Adjustment. Whenever the content of a
Stock Unit is adjusted pursuant to this Section 5(B), the Corporation
shall promptly mail to each holder of record of the shares of Series A
Preferred Stock, a certificate signed by the President or Vice
President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Corporation setting forth in
reasonable detail the events requiring the adjustment and the method by
which such adjustment was calculated and specifying the number, or
kind, or class of shares or other securities or property comprising a
Stock Unit after giving effect to such adjustment.
Failure to file any certificate or notice or to
publish or mail any notice, or any defect in any certificate or notice,
pursuant to this Section 5(B) shall not affect the legality or validity
of the adjustment in the content of a Stock Unit or of any transaction
giving rise thereto.
SECTION 6.
REACQUIRED SHARES
Any shares of Series A Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be
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55
created by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
SECTION 7.
LIQUIDATION, DISSOLUTION OR WINDING UP
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
[$3.00] per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, if declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the Series
A Liquidation Preference, holders of Series A Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of
remaining assets to be distributed.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of the Series A Preferred
Stock and the holders of such parity shares in proportion to their respective
liquidation preferences.
SECTION 8.
NO REDEMPTION
The shares of Series A Preferred Stock shall not be redeemable.
SECTION 9.
RANKING
The Series A Preferred Stock shall rank junior to all other series of
the Corporation's preferred stock, if any, as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall provide
otherwise. Nothing in this Certificate shall limit the power of the Board of
Directors to create a new series of preferred stock ranking senior to the Series
A Preferred Stock in any respect.
SECTION 10.
AMENDMENT
The Certificate of Incorporation of the Corporation shall not be
further amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Preferred Stock, voting separately as a
class.
SECTION 11.
FRACTIONAL SHARES
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Series A Preferred Stock may be issued in fractions of a share, which
shall entitle the holder, in proportion to such holder's fractional shares, to
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this _____ day of
____, 2000.
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D. Xxxxx Xxxx, President
Attest:
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X. Xxxxxxx Xxxxxx, Secretary
