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AGREEMENT AND PLAN OF MERGER
BETWEEN
LEVCOR INTERNATIONAL, INC.
AND
CARLYLE INDUSTRIES, INC.
DATED AS OF MAY 24, 2002
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TABLE OF CONTENTS
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Page
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ARTICLE I THE MERGER..........................................................................1
1.1 The Merger................................................................1
1.2 Closing...................................................................1
1.3 Effective Time of the Merger..............................................1
1.4 Effects of the Merger.....................................................1
1.5 Corporate Organization....................................................2
ARTICLE II MERGER CONSIDERATION...............................................................2
2.1 Effect on Capital Stock...................................................2
2.2 Exchange of Certificates..................................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................................5
3.1 Representations and Warranties of Carlyle.................................5
3.2 Representations and Warranties of Levcor.................................15
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS.........................................24
4.1 Covenants of Carlyle.....................................................24
4.2 Covenants of Levcor......................................................28
ARTICLE V ADDITIONAL AGREEMENTS..............................................................31
5.1 Prospectus/Proxy Statement; Registration Statement.......................31
5.2 Meetings of Stockholders; Board Recommendation...........................31
5.3 Legal Conditions to Merger...............................................32
5.4 Access to Information....................................................33
5.5 Brokers or Finders.......................................................33
5.6 Indemnification..........................................................33
5.7 Stock Options............................................................33
ARTICLE VI CONDITIONS........................................................................34
6.1 Conditions to Each Party's Obligation To Effect the Merger...............34
6.2 Conditions to Obligations of Levcor......................................35
6.3 Conditions to Obligations of Carlyle.....................................36
ARTICLE VII TERMINATION AND AMENDMENT........................................................36
7.1 Termination..............................................................36
7.2 Effect of Termination....................................................38
7.3 Fees, Expenses and Other Payments........................................38
7.4 Amendment................................................................39
7.5 Extension; Waiver........................................................39
ARTICLE VIII GENERAL PROVISIONS..............................................................40
8.1 Nonsurvival of Representations, Warranties and Agreements................40
8.2 Notices..................................................................40
8.3 Certain Definitions......................................................41
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8.4 Interpretation...........................................................43
8.5 Counterparts.............................................................43
8.6 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership......43
8.7 Governing Law............................................................44
8.8 Severability; No Remedy in Certain Circumstances.........................44
8.9 Publicity................................................................44
8.10 Assignment...............................................................44
8.11 Specific Performance.....................................................44
Exhibit A - Form of Certificate of Incorporation of Surviving Corporation
Exhibit B - Form of By-Laws of Surviving Corporation
Exhibit C - Directors of Surviving Corporation
Exhibit D - Officers of Surviving Corporation
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AGREEMENT AND PLAN OF MERGER, dated as of May 24, 2002 (the
"Agreement"), between LEVCOR INTERNATIONAL, INC., a Delaware corporation
("Levcor"), and CARLYLE INDUSTRIES, INC., a Delaware corporation ("Carlyle").
WHEREAS, the Boards of Directors of Levcor and Carlyle have
determined that it is in the best interests of their respective corporations and
stockholders that Levcor and Carlyle merge (the "Merger") pursuant to this
Agreement and in accordance with the applicable provisions of the General
Corporation Law of the State of Delaware ("Delaware Law"), have approved this
Agreement and the transactions contemplated hereby, and have recommended to
their respective stockholders the approval and adoption of this Agreement and
the approval of the Merger; and
WHEREAS, terms listed in Section 8.3 are defined in the Sections set
forth therein.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time and upon the terms of this
Agreement and the applicable provisions of Delaware Law, Carlyle shall be merged
with and into Levcor, the separate corporate existence of Carlyle shall cease
and Levcor shall continue as the surviving corporation (the "Surviving
Corporation").
1.2 CLOSING. Unless this Agreement shall have been terminated
pursuant to Section 7.1 and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Merger (the "Closing")
shall take place as promptly as practicable (and in any event within two
business days) following satisfaction or waiver of the last of the conditions
set forth in Article VI (the "Closing Date"), at 10:00 a.m., at the offices of
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
unless another date, time or place is agreed to in writing by the parties
hereto.
1.3 EFFECTIVE TIME OF THE MERGER. As soon as practicable following
the Closing, Levcor shall file a certificate of merger in accordance with the
relevant provisions of Delaware Law (the "Certificate of Merger") with the
Secretary of State of the State of Delaware and make all other filings or
recordings required by the relevant provisions of Delaware Law in connection
with the Merger. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware (the "Effective Time").
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in this Agreement and the applicable provisions of Delaware Law.
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1.5 CORPORATE ORGANIZATION.
(a) At the Effective Time, the certificate of incorporation of the
Surviving Corporation shall be in the form of the certificate of incorporation
attached hereto as Exhibit A.
(b) At the Effective Time, the by-laws of the Surviving Corporation
shall be in the form of the by-laws attached hereto as Exhibit B.
(c) At the Effective Time, the directors of the Surviving Corporation
shall be the individuals set forth in Exhibit C.
(d) At the Effective Time, the officers of the Surviving Corporation
shall be the individuals set forth in Exhibit D.
ARTICLE II
MERGER CONSIDERATION
2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of capital
stock of Carlyle or any shares of capital stock of Levcor:
(a) COMMON STOCK OF CARLYLE. Each share of common stock, par value
$0.01 per share, of Carlyle (the "Carlyle Common Stock") issued and outstanding
immediately prior to the Effective Time (other than any shares of Carlyle Common
Stock to be cancelled pursuant to Section 2.1(c) and other than Dissenting
Shares), shall be converted into the right to receive 0.2 (the "Common Exchange
Ratio") of a validly issued, fully paid and nonassessable share of common stock,
par value $0.56 per share, of the Surviving Corporation (the "Surviving
Corporation Common Stock"). After the Effective Time, the holders of shares of
Carlyle Common Stock shall cease to have any rights with respect thereto, except
the right to receive the Surviving Corporation Common Stock as provided herein.
(b) SERIES B PREFERRED STOCK OF CARLYLE. Each share of preferred
stock, par value $0.01 per share, of Carlyle (the "Carlyle Preferred Stock")
issued and outstanding immediately prior to the Effective Time (other than any
shares of Carlyle Preferred Stock to be cancelled pursuant to Section 2.1(c) and
other than Dissenting Shares), shall be converted into the right to receive one
of a validly issued, fully paid and nonassessable share of series A preferred
stock, par value $0.01 per share, of the Surviving Corporation (the "Surviving
Corporation Series A Preferred Stock"). After the Effective Time, the holders of
shares of Carlyle Preferred Stock shall cease to have any rights with respect
thereto, except the right to receive Surviving Corporation Series A Preferred
Stock as provided herein.
(c) CANCELLATION OF TREASURY STOCK. Each share of Carlyle Common
Stock and/or Carlyle Preferred Stock (collectively, the "Carlyle Capital
Stock"), that is owned by Carlyle or by any subsidiary of Carlyle shall be
cancelled and retired and shall cease to exist.
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(d) STOCK OPTIONS. All options to purchase Carlyle Common Stock
outstanding immediately prior to the Effective Time, whether under Carlyle's
1994 Incentive Program the ("Carlyle Option Plan"), pursuant to another Carlyle
compensatory plan or otherwise (each such option, a "Carlyle Option"), shall be
assumed by Levcor in accordance with Section 5.7.
(e) FRACTIONAL SHARES. Only whole shares of Surviving Corporation
Common Stock or Surviving Corporation Series A Preferred Stock (collectively,
the "Surviving Corporation Capital Stock") will be issued to holders of Carlyle
Capital Stock in the Merger. Any holder of shares of Carlyle Capital Stock who
would otherwise be entitled to a fraction of a share of the Surviving
Corporation Capital Stock (after aggregating all fractional shares of the
Surviving Corporation Capital Stock to be received by such holder) shall have
such fractional share interest rounded up to the nearest whole share.
(f) APPRAISAL RIGHTS. Notwithstanding anything in this Agreement to
the contrary, to the extent provided by the relevant provisions of Delaware Law,
shares of Carlyle Capital Stock held by any person (a "Dissenting Stockholder")
who elects to demand appraisal of his shares and duly and timely complies with
all the provisions of Delaware Law concerning the right of holders of Carlyle
Capital Stock to require appraisal of their shares ("Dissenting Shares"), shall
not be converted into shares of the Surviving Corporation Capital Stock, but
each Dissenting Stockholder shall have the right to receive such consideration
as may be determined to be due the Dissenting Stockholders pursuant to Delaware
Law. If, after the Effective Time, a Dissenting Stockholder withdraws his demand
for appraisal or fails to perfect or otherwise loses his right of appraisal, in
any case pursuant to the relevant provisions of Delaware Law, his shares will be
deemed to be converted as of the Effective Time into shares of the Surviving
Corporation Capital Stock pursuant to Sections 2.1(a) or 2.1(b). Carlyle shall
give Levcor (i) prompt notice of any demands for appraisal of Dissenting Shares
received by Carlyle and (ii) the opportunity to participate in and direct all
negotiations and proceedings with respect to any such demands. Carlyle will not,
without the prior written consent of Levcor, make any payment with respect to,
or enter into any negotiations or discussions or a binding settlement agreement
or make an offer, written or oral, to settle, any such demands.
(g) LEVCOR COMMON STOCK. The shares of Levcor Common Stock shall not
be canceled, retired or converted by reason of the Merger.
2.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Levcor shall appoint an institution reasonably
satisfactory to Carlyle to act as the exchange agent (the "Exchange Agent") in
the Merger and shall enter into an agreement with the Exchange Agent, reasonably
satisfactory to Carlyle, which shall provide that Levcor shall make available to
the Exchange Agent for exchange in accordance with this Article II, the shares
of the Surviving Corporation Capital Stock issuable pursuant to Sections 2.1(a)
or 2.1(b).
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, Levcor
shall cause the Exchange Agent to mail to each holder of record of Carlyle
Capital Stock as of the
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Effective Time (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the certificates which
immediately prior to the Effective Time represented outstanding shares of
Carlyle Capital Stock (the "Carlyle Certificates") shall pass, only upon
delivery of the Carlyle Certificates to the Exchange Agent and shall be in such
form and have such other provisions as Levcor may reasonably specify), and (ii)
instructions for use in effecting the surrender of the Carlyle Certificates in
exchange for certificates representing shares of the Surviving Corporation
Capital Stock into which the surrendered shares of Carlyle Capital Stock were
converted (the "Surviving Corporation Certificates"). Upon surrender of Carlyle
Certificates for exchange to the Exchange Agent, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto and such other documents as may reasonably be required by
the Exchange Agent, the holder of such Carlyle Certificates shall be entitled to
receive in exchange therefor the number of shares of Surviving Corporation
Capital Stock (after taking into account all Carlyle Certificates surrendered by
such holder) to which such holder is entitled pursuant to Sections 2.1(a) or
2.1(b) and the Carlyle Certificates so surrendered shall forthwith be cancelled.
Until so surrendered, outstanding Carlyle Certificates will be deemed from and
after the Effective Time, for all corporate purposes, to evidence the ownership
of the number of full shares of the Surviving Corporation Capital Stock into
which such shares of Carlyle Capital Stock represented by such Carlyle
Certificate shall have been converted.
(c) TRANSFERS OF OWNERSHIP. If Surviving Corporation Certificates are
to be issued in a name other than that in which the Carlyle Certificates
surrendered in exchange therefor are registered, it will be a condition of the
issuance thereof that the Carlyle Certificates so surrendered will be properly
endorsed and otherwise in proper form for transfer and that the Persons
requesting such exchange will have paid to Levcor or any agent designated by it
any transfer or other Taxes required by reason of the issuance of the Surviving
Corporation Certificates in any name other than that of the registered holder of
the Carlyle Certificates surrendered in exchange therefore, or established to
the satisfaction of Levcor or any agent designated by it that such Tax has been
paid or is not payable.
(d) UNDISTRIBUTED SHARES OF THE SURVIVING CORPORATION CAPITAL STOCK.
Any shares of the Surviving Corporation Capital Stock which remain undistributed
to the holders of Carlyle Certificates six months after the Effective Time
shall, at the request of Levcor, be redelivered to Levcor or otherwise on the
instruction of Levcor, and any holders of shares of Carlyle Capital Stock who
have not surrendered Carlyle Certificates representing such shares in compliance
with this Section 2.2 shall thereafter look only to Levcor for the shares of the
Surviving Corporation Capital Stock into which such shares were converted
pursuant to Sections 2.1(a) or 2.1(b).
(e) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any Carlyle
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Carlyle Certificates, upon
the making of an affidavit of that fact by the holder thereof, such Surviving
Corporation Certificates as may be required pursuant to Sections 2.2(b);
provided, however, that Levcor may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Carlyle Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any
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claim that may be made against Levcor, Carlyle or the Exchange Agent with
respect to the Carlyle Certificates alleged to have been lost, stolen or
destroyed.
(f) NO FURTHER TRANSFERS. At the Effective Time, the stock transfer
books of Carlyle shall be closed, and no transfers of Carlyle Capital Stock
shall thereafter be made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF CARLYLE. Carlyle represents and
warrants to Levcor that, except as specifically disclosed in the letter dated
the date hereof and delivered by Carlyle to Levcor simultaneously with the
execution and delivery of this Agreement (the "Carlyle Disclosure Letter") or in
the Carlyle SEC Documents:
(a) ORGANIZATION, STANDING AND POWER. Each of Carlyle and its
subsidiaries is a corporation or other organization duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has all requisite power to own, lease and operate
its properties and assets and to conduct its business as it is now being
conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties and assets makes such qualification necessary, other than in such
jurisdictions where the failure so to qualify would not, individually or in the
aggregate, have a Material Adverse Effect on Carlyle. Carlyle has made available
to Levcor true and complete copies of its certificate of incorporation and
by-laws and the certificate of incorporation and by-laws (or equivalent
organizational documents) of each subsidiary of Carlyle, each as amended to
date. Such certificates of incorporation, by-laws or equivalent organizational
documents are in full force and effect, and neither Carlyle nor any subsidiary
of Carlyle is in violation of any provision of its certificate of incorporation,
by-laws or equivalent organizational documents.
As used in this Agreement, (i) any reference to any event, change or
effect being "material" with respect to any entity means an event, change or
effect which is material in relation to the condition (financial or otherwise),
properties, assets, liabilities, businesses or operations of such entity and its
subsidiaries taken as a whole, and (ii) the term "Material Adverse Effect"
means, with respect to Carlyle or Levcor, any change, event or effect shall have
occurred or been threatened that, when taken together with all other adverse
changes, events or effects that have occurred or been threatened would or would
reasonably be expected to (I) be materially adverse to the business, assets,
properties, results of operations or condition (financial or otherwise) of such
party and its subsidiaries taken as a whole, or (II) prevent or materially delay
the consummation of the Merger.
(b) SUBSIDIARIES. Carlyle owns, directly or indirectly, all of the
outstanding capital stock or other equity interests in each of its subsidiaries,
free and clear of any claim, lien, encumbrance, security interest or agreement
with respect thereto. The Carlyle Disclosure Letter sets forth a complete list
of Carlyle's subsidiaries. Other than the capital stock or other interests held
by Carlyle in such subsidiaries, neither Carlyle nor any such subsidiary owns
any direct or
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indirect equity interest in any person, domestic or foreign. All of the
outstanding shares of capital stock in each of its subsidiaries are duly
authorized, validly issued, fully paid and nonassessable and were issued free of
preemptive rights and in compliance with applicable securities laws and
regulations. There are no irrevocable proxies or similar obligations with
respect to such capital stock of such subsidiaries and no equity securities or
other interests of any of its subsidiaries are or may become required to be
issued or purchased by reason of any options, warrants, rights to subscribe to,
puts, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of any capital
stock or any other equity interest of any such subsidiary, and there are no
agreements, contracts, commitments, understandings or arrangements by which any
such subsidiary is bound to issue additional shares of its capital stock or
other equity interests, or options, warrants or rights to purchase or acquire
any additional shares of its capital stock or other equity interests or
securities convertible into or exchangeable for such shares or other equity
interests.
(c) CAPITAL STRUCTURE. (i) The authorized capital stock of Carlyle
consists of 20,000,000 shares of Carlyle Common Stock and 41,000,000 shares of
Carlyle Preferred Stock, 11,187,451 of which have been designated Series B
Preferred Stock. As of the date of this Agreement, (A) 13,934,858 shares of
Carlyle Common Stock are outstanding, (B) Carlyle Options are outstanding to
purchase 1,000,000 shares of Carlyle Common Stock, and (C) 4,555,007 shares of
Carlyle Preferred Stock are outstanding. Carlyle has provided Levcor with a true
and complete list of the outstanding Carlyle Options as of the date hereof,
including the exercise prices and vesting schedules therefor.
(ii) No bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into or exercisable for securities having the
right to vote) on any matters on which stockholders may vote ("Voting Debt") of
Carlyle are issued or outstanding.
(iii) All outstanding shares of Carlyle Capital Stock are validly
issued, fully paid and nonassessable and free of preemptive rights and were
issued in compliance with applicable securities laws and regulations. All shares
of Carlyle Common Stock subject to issuance upon the exercise of Carlyle
Options, upon issuance on the terms specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable and free of preemptive rights and will be issued in compliance
with applicable securities laws and regulations.
(iv) Except for this Agreement, the Carlyle Preferred Stock and the
Carlyle Options, there are no options, warrants, calls, rights, convertible
securities, subscriptions, stock appreciation rights, phantom stock plans or
stock equivalents, or other rights, commitments or agreements of any character
to which Carlyle or any subsidiary of Carlyle is a party or by which it is bound
obligating Carlyle or any subsidiary of Carlyle to issue, deliver or sell, or
cause to be issued, delivered or sold, on the date hereof or any date in the
future, additional shares of capital stock or any Voting Debt of Carlyle or of
any subsidiary of Carlyle or obligating Carlyle or any subsidiary of Carlyle to
grant, extend or enter into any such option, warrant, call, right, commitment or
agreement. The execution, delivery and performance by Carlyle of this Agreement
and the consummation of the Merger and the other transactions contemplated
hereby will not obligate Carlyle to issue, or result in the issuance of, any
capital stock of Carlyle
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pursuant to any other agreement or arrangement, except for the acceleration of
vesting and potential exercise of Carlyle Options contemplated by Section 5.7.
There are no outstanding contractual obligations of Carlyle or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of Carlyle or any of its subsidiaries.
(v) Since December 31, 2001, Carlyle and each of its subsidiaries has
not (A) issued, permitted to be issued or entered into any obligation to issue,
any shares of capital stock, or securities exercisable for or convertible into
shares of capital stock, of Carlyle or any of its subsidiaries, other than
pursuant to and as required by the terms of any Carlyle Options that were issued
and outstanding on such date; (B) repurchased, redeemed or otherwise acquired,
directly or indirectly through one or more of its subsidiaries, any shares of
capital stock of Carlyle or any of its subsidiaries; (C) declared, set aside,
made or paid to the stockholders of Carlyle dividends or other distributions on
the outstanding shares of capital stock of Carlyle; or (D) split, combined or
reclassified any of its shares of capital stock of Carlyle or any of its
subsidiaries.
(d) AUTHORITY. (i) Carlyle has all requisite corporate power and
authority to enter into this Agreement and, subject to approval by the
stockholders of Carlyle, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Carlyle, other than such approval by the
stockholders of Carlyle. This Agreement has been duly executed and delivered by
Carlyle and constitutes a valid and binding obligation of Carlyle enforceable in
accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law). The
affirmative vote of holders of a majority of the outstanding shares of Carlyle
Capital Stock entitled to vote at a duly called and held meeting of stockholders
is the only vote of Carlyle's stockholders necessary to approve and adopt this
Agreement and approve the Merger. At a meeting duly called and held on May 24,
2002, Carlyle's Board of Directors adopted resolutions approving this Agreement
and the Merger, determining that the terms of the Merger are fair, from a
financial point of view, to, and in the best interests of, Carlyle's
stockholders and recommending that Carlyle's stockholders approve and adopt this
Agreement and approve the Merger.
(ii) Subject to compliance with the applicable requirements of the
Securities Exchange Act of 0000, (xxx "Xxxxxxxx Xxx"), and the filing of the
Certificate of Merger as contemplated by Section 1.3, the execution and delivery
of this Agreement and the Certificate of Merger, the consummation of the
transactions contemplated hereby and thereby, and compliance by Carlyle with any
of the provisions hereof or thereof will not breach, constitute an ultra xxxxx
act under, or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a material benefit
under, or the creation of a lien, pledge, security interest, charge or other
encumbrance on assets (any such breach, ultra xxxxx act, violation, default,
right of termination, cancellation, acceleration loss or creation, a
"Violation") pursuant to, (x) any provision of the certificate of incorporation
or by-laws of Carlyle or the governing instruments of any subsidiary of Carlyle
or (y) subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in paragraph
(iii) below or in the
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Carlyle Disclosure Letter, any loan or credit agreement, note, mortgage,
indenture, lease, Carlyle Benefit Plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Carlyle or any
subsidiary of Carlyle or their respective properties or assets except Violations
under clause (y) which would not have a Material Adverse Effect on Carlyle.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity"), is required by or with respect to Carlyle or
any subsidiary of Carlyle in connection with the execution and delivery of this
Agreement and the Certificate of Merger by Carlyle, the consummation by Carlyle
of the transactions contemplated hereby and thereby, and compliance by Carlyle
with any of the provisions hereof or thereof, the failure to obtain which would
have a Material Adverse Effect on Carlyle, except for (A) the filing with the
Securities and Exchange Commission (the "SEC") of (1) the Prospectus/Proxy
Statement in definitive form and the effectiveness of the Registration Statement
and (2) such other filings under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby, and (B)
the filing of the Certificate of Merger as contemplated by Section 1.3 and
appropriate documents with the relevant authorities of states in which Carlyle
is qualified to do business.
(e) SEC DOCUMENTS. The reports, schedules, registration statements
and definitive proxy statements (including all exhibits) filed by Carlyle with
the SEC since January 1, 1999, including all amendments thereto (the "Carlyle
SEC Documents"), are all the documents (other than preliminary material) that
Carlyle was required to file with the SEC since such date. As of their
respective dates, (i) the Carlyle SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933 (the "Securities
Act") or the Exchange Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Carlyle SEC Documents, and (ii) none of
the Carlyle SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Carlyle included in the
Carlyle SEC Documents (such financial statements as of and for the year ended
December 31, 2001 being referred to hereinafter as the "Carlyle Year-End
Financial Statements" and the balance sheet included in such financial
statements as of December, 31, 2001 being referred to as the "Carlyle Balance
Sheet"), and the unaudited financial statements of Carlyle and its subsidiaries
for the fiscal quarter ended March 31, 2002, complied in all material respects
with the applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles ("GAAP") applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of the unaudited financial statements, as permitted by
Form 10-Q of the SEC) and fairly present the consolidated financial position of
Carlyle and its consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations, stockholders' equity and cash flows
for the periods then ended in accordance with GAAP, subject to normal year-end
audit adjustments in the case of the March 31, 2002 financial statements. As of
December 31, 2001, neither Carlyle nor any of its subsidiaries had any material
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise,
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that would be required by GAAP to be reflected on a consolidated balance sheet
of Carlyle and its subsidiaries (including the notes thereto) and which were not
reflected on the Carlyle Balance Sheet. Since December 31, 2001, except as and
to the extent set forth in the Carlyle SEC Documents and except for liabilities
or obligations incurred in the ordinary course of business consistent with past
practice and of substantially the same character, type and magnitude as incurred
in the past, neither Carlyle nor any of its subsidiaries has incurred any
liabilities of any nature, whether or not accrued, contingent or otherwise, that
would have a Material Adverse Effect on Carlyle, or would be required by GAAP to
be reflected on a consolidated balance sheet of Carlyle and its subsidiaries
(including the notes thereto). All material agreements, contracts and other
documents required to be filed as exhibits to any of the Carlyle SEC Documents
have been so filed. No subsidiary of Carlyle is required to file any form,
report or other document with the SEC.
(f) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by or on behalf of Carlyle for inclusion or incorporation by reference
in the registration statement on Form S-4 to be filed with the SEC by Levcor in
connection with the issuance of the Surviving Corporation Capital Stock in the
Merger (including amendments or supplements thereto) (the "Registration
Statement") will, at the time the Registration Statement becomes effective under
the Securities Act, 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 the light of the circumstances under which they
are made, not misleading. None of the information supplied or to be supplied by
or on behalf of Carlyle for inclusion or incorporation by reference in the
Prospectus/Proxy Statement to be filed with the SEC as part of the Registration
Statement (the "Prospectus/Proxy Statement"), will, at the time the
Prospectus/Proxy Statement is mailed to the stockholders of Carlyle or Levcor,
at the time of the meeting of stockholders' of Levcor or Carlyle or as of the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. The Prospectus/Proxy Statement will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations promulgated by the SEC thereunder.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by
this Agreement, since December 31, 2001, Carlyle and its subsidiaries have
conducted their respective businesses only in the ordinary course and consistent
with prior practice and there has not been any event, occurrence, fact,
condition, change, development or effect that has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Carlyle.
(h) COMPLIANCE WITH APPLICABLE LAWS. Carlyle and its subsidiaries
have been operated at all times in compliance with all applicable laws and
regulations, and are not in default or violation of any notes, bonds, mortgages,
indentures, contracts, agreements, leases, licenses, permits, franchises, or
other instruments or obligations to which Carlyle or any of its subsidiaries is
a party or by which any of their property or assets is bound, except where any
such noncompliance, conflicts, defaults or violations would not have a Material
Adverse Effect on Carlyle. As of the date hereof, no investigation by any
Governmental Entity with respect to
9
Carlyle or any of its subsidiaries is pending or, to Carlyle's knowledge,
threatened. For the purposes of this Agreement, "knowledge" shall mean the
knowledge of the executive officers of the relevant entity after appropriate due
diligence inquiry.
(i) ENVIRONMENTAL. Except for any matters which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect on Carlyle and to Carlyle's knowledge, (i) Carlyle and each of its
subsidiaries is in compliance in material respects with all applicable laws
relating to Environmental Matters; (ii) Carlyle and each of its subsidiaries has
obtained, and is in compliance in material respects with, all permits, licenses
or approvals required by any Governmental Entity under applicable laws for the
use, storage, treatment, transportation, emission and handling of raw materials,
by-products, wastes and other substances, including, without limitation,
hazardous substances and wastes, used or produced by or otherwise relating to
the operations of any of them; (iii) except for matters resulting from the
inaction or failure to act by any Governmental Entity, there currently are no
events, conditions, activities or practices that would prevent compliance or
continued compliance with any law or give rise to any Environmental Liability;
and (iv) there are no claims either by any Governmental Entity or any third
party pending, or to Carlyle's knowledge, threatened, against Carlyle or any of
its subsidiaries arising from any Environmental Matter.
As used in this Agreement, the term (1) "Environmental Matter" means
any matter arising out of or relating to pollution or protection of the
environment, human safety or health, , including, without limitation, emissions,
discharges, releases, exposures, or threatened releases of pollutants,
contaminants, or hazardous or toxic substances or wastes including petroleum and
its fractions, radiation, or polychlorinated byphenols, into ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or hazardous or toxic substances or wastes
including petroleum and its fractions, or radiation, under the jurisdiction or
subject to the authority of any Governmental Entity, and (2) "Environmental
Liability" means any liability or obligation arising under any statutory or
common law (including, without limitation, any liability for personal injury,
property damage or remediation) arising from or relating to any Environmental
Matters.
(j) LITIGATION. There are (i) no claims, actions, suits or legal or
administrative arbitrations or other proceedings or investigations
("Litigation") pending against Carlyle or any of its subsidiaries, or, to
Carlyle's knowledge, threatened against or affecting Carlyle or any of its
subsidiaries, or to which Carlyle or any of its subsidiaries is a party, before
or by any Federal, foreign, state, local or other governmental or
non-governmental department, commission, board, bureau, agency, court or other
instrumentality, or by any private person or entity, and (ii) no existing or, to
the knowledge of Carlyle, threatened orders, judgments or decrees of any court
or other Governmental Entity which specifically apply to Carlyle, any of its
subsidiaries or any of their respective properties or assets.
(k) TAXES. (i) Each Tax Entity has timely filed all material Tax
Returns required to be filed by any of them (subject to permitted extensions).
All such Tax Returns were true, correct and complete when filed, except for such
instances which individually or in the aggregate could not have a Material
Adverse Effect on Carlyle. All Taxes of each Tax Entity
10
which are (i) shown as due on such Tax Returns, (ii) otherwise due and payable
or (iii) claimed or asserted by any taxing authority to be due, have been paid,
except for those Taxes being contested in good faith and for which adequate
reserves have been established in the financial statements included in Carlyle
SEC Documents in accordance with GAAP. Carlyle does not know of any proposed or
threatened Tax claims or assessments which, if upheld, could individually or in
the aggregate have a Material Adverse Effect on Carlyle. Each Tax Entity has
withheld and paid over to the relevant taxing authority all Taxes required to
have been withheld and paid in connection with payments to employees,
independent contractors, creditors, stockholders or other third parties, except
for such Taxes which individually or in the aggregate could not have a Material
Adverse Effect on Carlyle. No material deficiencies for any Taxes have been
proposed, asserted or assessed against any Tax Entity that are not adequately
reserved for, no audit of any Tax Return of any Tax Entity is being conducted by
a tax authority, and no extension of the statute of limitations on the
assessment of any taxes has been granted to any Tax Entity and is currently in
effect, except that Carlyle and its subsidiaries have various ongoing federal
and state income tax audits which are not material but are open and statute of
limitations have been extended.
As used in this Agreement, the term (1) "Tax" means any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, premium, withholding, alternative or
added minimum, ad valorem, transfer or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, imposed by any Governmental
Entity; (2) "Tax Return" means any return, report or similar statement required
to be filed with respect to any Tax (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax; and (3) "Tax Entity" means Carlyle, each
of Carlyle's subsidiaries, and each consolidated, combined, unitary or similar
group of which Carlyle or any of its subsidiaries is now, or within the
preceding eight years has been, a member.
(ii) No Tax Entity has executed any closing agreement pursuant to
Section 7121 of the Internal Revenue Code of 1986 (the "Code") or any
predecessor provisions thereof, or any similar provision of foreign, state or
local law, or has any ruling request pending with any tax authority. There are
no tax certiorari proceedings currently pending, tax abatements currently in
effect or proposed materially increased tax assessments of which any Tax Entity
has been notified or has knowledge in the context of such Tax Entity's real
estate assets. No assets of any Tax Entity constitutes tax-exempt financed
property or tax-exempt use property within the meaning of Section 168 of the
Code, and no assets of any Tax Entity are subject to a lease, safe-harbor lease,
or other arrangement as a result of which any Tax Entity is not treated as the
owner for federal income tax purposes. No Tax Entity has filed a consent
pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a "subsection (f) asset" (as such term is
defined in Section 341(f)(4) of the Code). No Tax Entity (i) is required or has
agreed to make any adjustments pursuant to Section 481(a) of the Code or any
similar provision of foreign, state or local law by reason of a change in
accounting method initiated by it or any other relevant party, (ii) has
knowledge that any tax authority has proposed any such adjustment or change in
accounting method, and/or (iii) has an application pending with any tax
authority requesting permission for any changes in accounting methods that
relate to
11
the business or assets of any Tax Entity. No Tax Entity is a party to any
contract, agreement, plan or arrangement covering any periods that, individually
or collectively, could give rise to any amount not being deductible by reason of
Section 280G of the Code. Carlyle and each of its subsidiaries are not, have not
been within the preceding eight years, own no interest in, and have never owned
an interest in, "S corporations" within the meaning of Section 1361(a)(1) of the
Code, "qualified subchapter S subsidiaries" within the meaning of Section
1361(b)(3)(B) of the Code, "personal holding companies" within the meaning of
Section 542 of the Code, "controlled foreign corporations" within the meaning of
Section 957 of the Code, "foreign personal holding companies" within the meaning
of Section 552 of the Code, "passive foreign investment companies" within the
meaning of Section 1296 of the Code, "foreign investment companies" within the
meaning of Section 1246 of the Code, an "FSC" within the meaning of Section 922
of the Code, or a "DISC" or "Former DISC" within the meaning of Section 992 of
the Code. No Tax Entity has made, been party to, or been the subject of, any
elections under Sections 108, 168, 338, 441, 472, 1017, 1033 or 4977 of the
Code. No Tax Entity has entered into any transfer pricing agreements with any
tax authority. No assets of any Tax Entity are held in an arrangement for which
partnership Tax Returns are being filed or are required to be filed. No Tax
Entity has availed itself of any Tax amnesty or similar relief in any taxing
jurisdiction. Levcor will not be required to withhold tax under Section 1445 of
the Code with respect to any consideration paid pursuant to this Agreement.
(l) EMPLOYEE BENEFIT PLANS. All employee benefit plans, compensation
arrangements and other benefit arrangements covering employees of Carlyle or any
of its subsidiaries (the "Carlyle Benefit Plans"), and all employee agreements
providing compensation, severance or other benefits to any employee or former
employee of Carlyle or any of its subsidiaries which are not disclosed in the
Carlyle SEC Documents and which exceed $50,000 per annum are set forth in the
Carlyle Disclosure Letter. To the extent applicable, the Carlyle Benefit Plans
comply in all material respects with the requirements of the Employee Retirement
Income Security Act of 1974 ("ERISA"), and the Code, and any Carlyle Benefit
Plan intended to be qualified under Section 401(a) of the Code has received a
determination letter and, to the knowledge of Carlyle, continues to satisfy the
requirements for such qualification. Neither Carlyle nor any of its subsidiaries
nor any ERISA Affiliate of Carlyle maintains, contributes to or is obligated to
contribute to or has maintained or contributed or been obligated to contribute
to in the past six years to any benefit plan which is covered by Title IV of
ERISA or Section 412 of the Code or a "multi-employer plan" within the meaning
of Section 3(37) of ERISA or Section 4001(a)(3) of the Code. No Carlyle Benefit
Plan nor Carlyle nor any subsidiary has incurred any liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA or, to the knowledge of
Carlyle, engaged in any transaction that would reasonably be expected to result
in any such liability or penalty. Each Carlyle Benefit Plan has been maintained
and administered in compliance with its terms and with ERISA and the Code to the
extent applicable thereto, except for such non-compliance which individually or
in the aggregate would not have a Material Adverse Effect on Carlyle. There is
no pending or, to the knowledge of Carlyle, anticipated, Litigation against or
otherwise involving any of Carlyle Benefit Plans and no Litigation (excluding
claims for benefits incurred in the ordinary course of the Carlyle Benefit Plan
activities) has been brought against or with respect to any such Carlyle Benefit
Plan. All contributions required to be made as of the date hereof to the Carlyle
Benefit Plans have been made or provided for. Except as described in the Carlyle
SEC Documents or as required by law,
12
neither Carlyle nor any of its subsidiaries maintains or contributes to any plan
or arrangement which provides or has any liability to provide life insurance or
medical or other employee welfare benefits to any employee or former employee
upon his retirement or termination of employment, and neither Carlyle nor any of
its subsidiaries has ever represented, promised or contracted (whether in oral
or written form) to any employee or former employee that such benefits would be
provided. No Carlyle Benefit Plan is under investigation or audit by either the
United States Department of Labor or the Internal Revenue Service. Except as
provided for in this Agreement, the execution of, and performance of the
transactions contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
benefit plan, policy, arrangement or agreement or any trust or loan that will or
may result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee. No payment or benefit
which will or may be made by Carlyle, any of its subsidiaries or Levcor with
respect to any employee of Carlyle or any of its subsidiaries will constitute an
"excess parachute payment" within the meaning of Section 280G(b)(1) of the Code.
As used in this Agreement, the term "ERISA Affiliate" means any
business or entity which is a member of the same "controlled group of
corporations," under "common control" or an "affiliated service group" with the
relevant entity within the meaning of Sections 414(b), (c) or (m) of the Code,
as required to be aggregated with the relevant entity under Section 414(o) of
the Code, or is under "common control" with the relevant entity, within the
meaning of Section 4001(a)(14) of ERISA, or any regulations promulgated or
proposed under any of the foregoing Sections.
(m) PROPERTIES. Carlyle or its subsidiaries has good title and, in
the case of owned real property, good and marketable fee simple title, to its
properties and assets, including the properties and assets reflected in the
Carlyle Balance Sheet or acquired after December 31, 2001 (other than assets
disposed of since December 31, 2001 in the ordinary course of business
consistent with past practice and of substantially the same character, type and
magnitude as assets disposed of in the past), in each case free and clear of all
title defects, liens, claims, charges, encumbrances and restrictions, except for
(i) liens, encumbrances or restrictions which secure indebtedness which is
properly reflected in the Carlyle Balance Sheet; (ii) liens for Taxes accrued
but not yet payable; (iii) liens arising as a matter of law in the ordinary
course of business with respect to obligations incurred after December 31, 2001,
provided that the obligations secured by such liens are not delinquent; and (iv)
such title defects, liens, encumbrances and restrictions, if any, as
individually or in the aggregate would not have a Material Adverse Effect on
Carlyle. None of Carlyle's or its subsidiaries' properties or assets is owned
jointly with any other person, nor does any other person have any right or
option to acquire the same. Carlyle and each of its subsidiaries either own, or
have valid leasehold interests in, and are in possession of, all properties and
assets used by them in the conduct of their business and each such lease is
valid without material default thereunder by the lessee or, to Carlyle's
knowledge, by the lessor.
(n) LABOR CONTROVERSIES. Neither Carlyle nor any of its subsidiaries
is a party to, or bound by, any collective bargaining agreement or other
contracts or understanding with a
13
labor union or labor organization. Except for such matters which, individually
or in the aggregate, would not have a Material Adverse Effect on Carlyle, there
is no (i) unfair labor practice, labor dispute (other than routine individual
grievances or complaints) or labor arbitration proceeding pending or, to the
knowledge of Carlyle, threatened, against Carlyle or any of its subsidiaries
relating to their business, (ii) to the knowledge of Carlyle, activity or
proceeding by a labor union or representative thereof to organize any employees
of Carlyle or any of its subsidiaries, or (iii) lockouts, strikes, slowdowns,
work stoppages or, to the knowledge of Carlyle, threats thereof by or with
respect to such employees.
(o) INTELLECTUAL PROPERTY. Carlyle and its subsidiaries own or
license all United States and foreign patents, trademarks, trade names, service
marks, copyrights and applications therefor (the foregoing, together with
Carlyle's trade dress and trade secrets (including secret recipes and formulae),
the "Carlyle Intellectual Property Rights") which are material to the business
of Carlyle and its subsidiaries as presently conducted or as currently
contemplated to be conducted. All owned Carlyle Intellectual Property Rights are
free and clear of any liens, claims or encumbrances and are not subject to any
material license (royalty bearing or royalty-free) or any other arrangement
requiring any payment to any person nor the obligation to grant rights to any
person in exchange and all licensed Carlyle Intellectual Property Rights are
free and clear of any liens, claims, encumbrances, royalties or other
obligations other than such terms, conditions and restrictions as are contained
in the document granting such license. The business as presently conducted by
each of Carlyle and its subsidiaries, to the knowledge of Carlyle, does not
conflict with and has not been alleged to conflict with any patents, trademarks,
trade names, service marks, copyrights or other intellectual property rights of
others, which conflict will have a Material Adverse Effect on Carlyle. Carlyle
does not know of any use by others of any of the Carlyle Intellectual Property
Rights material to the business of Carlyle or its subsidiaries as presently
conducted.
(p) CHANGE OF CONTROL AGREEMENTS. Neither the execution and delivery
of this Agreement nor the consummation of the Merger or the other transactions
contemplated by this Agreement, will (either alone or in conjunction with any
other event) result in, cause the accelerated vesting or delivery of (except as
contemplated by Section 5.7), or increase the amount or value of, any payment or
benefit to any director, officer or employee of Carlyle or its subsidiaries,
and, without limiting the generality of the foregoing, no amount paid or payable
by Carlyle or its subsidiaries in connection with the Merger or the other
transactions contemplated by this Agreement (either solely as a result thereof
or as a result of such transactions in conjunction with any other event) will be
an "excess parachute payment" within the meaning of Section 280G of the Code.
(q) CONTRACTS. All material contracts of Carlyle or its subsidiaries
(the "Carlyle Material Contracts") have been filed as exhibits to the Carlyle
SEC Documents, except for those contracts not required to be filed pursuant to
the rules and regulations of the SEC. To the knowledge of Carlyle: (i) all
Carlyle Material Contracts are valid, binding and enforceable against the other
parties thereto in accordance with their terms, and are in full force and
effect; (ii) all parties to Carlyle Material Contracts (other than Carlyle) have
complied in all material respects with the provisions thereof and have performed
all obligations required to be performed by each of them to date; (iii) no such
party is in default under any of the terms thereof, and (iv)
14
no event has occurred that with the passage of time or the giving of notice or
both would constitute a default by any party (other than Carlyle) under any
provision thereof except, in each case, for such non-compliance or default which
will not have a Material Adverse Effect on Carlyle.
(r) AFFILIATED TRANSACTIONS. All transactions between Carlyle or any
of its subsidiaries, on the one hand, and any officer, director or holder of in
excess of 5% of the Carlyle Capital Stock, or any affiliate of any of them, have
been disclosed in the Carlyle SEC Documents. Except as disclosed in the Carlyle
SEC Documents, no officer, director or holder of in excess of 5% of Carlyle
Capital Stock has any material interest in (i) any assets, including, without
limitation, any intellectual property, used or held for use in the business of
Carlyle and its subsidiaries or (ii) any creditor, or supplier of Carlyle or any
or its subsidiaries.
(s) INSURANCE. Carlyle and each of its subsidiaries are adequately
insured in such amounts and against such risks as are usually insured against by
persons operating in the businesses in which Carlyle and its subsidiaries
operate, and all policies relating to such insurance are in full force and
effect. All products liability and general liability policies maintained by or
for the benefit of Carlyle or its subsidiaries have been "claims made" policies.
(t) RECORDS. The respective corporate record books of or relating to
Carlyle and each of its subsidiaries are substantially complete and correct and
contain accurate and substantially complete records of all material corporate
actions of the respective stockholders and directors (and committees thereof) of
Carlyle and its subsidiaries.
(u) SECTION 203 OF DELAWARE LAW. The Board of Directors of Carlyle
has approved the Merger and this Agreement, and such approval is sufficient to
render inapplicable to the Merger and this Agreement, and the transactions
contemplated by this Agreement, the provisions of Section 203 of Delaware Law.
No other state takeover statute or similar statute or regulation applies or
purports to apply to the Merger, this Agreement or the transactions contemplated
by this Agreement.
(v) OPINION OF FINANCIAL ADVISOR. Carlyle has received the opinion of
Xxxxxxxx Xxxxx Xxxxxx & Xxxxx (the "Xxxxxxx Independent Advisor"), dated May 24,
2002, to the effect that, as of such date, the consideration to be received by
the stockholders of Carlyle pursuant to this Agreement is fair to such
stockholders from a financial point of view.
(w) DISCLOSURE. No representation, warranty or covenant made by
Carlyle in this Agreement or the Carlyle Disclosure Letter contains an untrue
statement of a material fact or omits to state a material fact required to be
stated herein or therein or necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. True and complete copies of all Carlyle SEC Documents, Tax Returns,
Carlyle Benefit Plans, Carlyle Material Contracts, corporate records, books and
other documents referred to in the Carlyle Disclosure Letter have been made
available to Levcor.
3.2 REPRESENTATIONS AND WARRANTIES OF LEVCOR. Levcor represents and
warrants to Carlyle that, except as specifically disclosed in the letter dated
the date hereof and
15
delivered by Levcor to Carlyle simultaneously with the execution and delivery of
this Agreement (the "Levcor Disclosure Letter") or in the Levcor SEC Documents:
(a) ORGANIZATION, STANDING AND POWER. Levcor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and
assets and to conduct its business as it is now being conducted and is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties and assets
makes such qualification necessary, other than in such jurisdictions where the
failure so to qualify would not, individually or in the aggregate, have a
Material Adverse Effect on Levcor. Levcor made available to Carlyle true and
complete copies of its certificate of incorporation and by-laws, each as amended
to date. Such certificate of incorporation and by-laws are in full force and
effect, and Levcor is not in violation of any provision of its certificate of
incorporation or by-laws. Levcor does not have any subsidiaries or interests in
any persons.
(b) CAPITAL STRUCTURE. (i) The authorized capital stock of Levcor
consists of 15,000,000 shares of common stock, par value $0.56 per share (the
"Levcor Common Stock"). As of the date of this Agreement, (A) 2,383,647 shares
of Levcor Common Stock are outstanding, (B) options to purchase Levcor Common
Stock whether under Levcor's Stock Option Plan (the "Levcor Option Plan"),
pursuant to another Levcor compensatory plan or otherwise (each such option, a
"Levcor Option") are outstanding to purchase 262,400 shares of Levcor Common
Stock, and (C) 57,600 shares of Levcor Common Stock are held by Levcor in its
treasury. Levcor has provided Carlyle with a true and complete list of the
outstanding Levcor Options as of the date hereof, including the exercise prices
and vesting schedules therefor.
(ii) No Voting Debt of Levcor is issued or outstanding.
(iii) All outstanding shares of Levcor Common Stock are validly
issued, fully paid and nonassessable and free of preemptive rights and were
issued in compliance with applicable securities laws and regulations. All shares
of Levcor Common Stock subject to issuance upon the exercise of Levcor Options,
upon issuance on the terms specified in the instruments pursuant to which they
are issuable, will be duly authorized, validly issued, fully paid and
nonassessable and free of preemptive rights and will be issued in compliance
with applicable securities laws and regulations.
(iv) Except for this Agreement, the Levcor Option Plan and the Levcor
Options, there are no options, warrants, calls, rights, convertible securities,
subscriptions, stock appreciation rights, phantom stock plans or stock
equivalents, or other rights, commitments or agreements of any character to
which Levcor is a party or by which it is bound obligating Levcor to issue,
deliver or sell, or cause to be issued, delivered or sold, on the date hereof or
any date in the future, additional shares of capital stock or any Voting Debt of
Levcor or obligating Levcor to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement. The execution, delivery and
performance by Levcor of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby will not obligate Levcor to issue, or
result in the issuance of, any capital stock of Levcor pursuant to any other
agreement or
16
arrangement. There are no outstanding contractual obligations of Levcor to
repurchase, redeem or otherwise acquire any shares of capital stock of Levcor.
(v) Since December 31, 2001, Levcor has not (A) issued, permitted to
be issued or entered into any obligation to issue, any shares of capital stock,
or securities exercisable for or convertible into shares of capital stock, of
Levcor, other than pursuant to and as required by the terms of any Levcor
Options that were issued and outstanding on such date; (B) repurchased, redeemed
or otherwise acquired any shares of capital stock of Levcor; (C) declared, set
aside, made or paid to the stockholders of Levcor dividends or other
distributions on the outstanding shares of capital stock of Levcor; or (D)
split, combined or reclassified any of its shares of capital stock of Levcor.
(c) AUTHORITY. (i) Levcor has all requisite corporate power and
authority to enter into this Agreement and, subject to approval by the
stockholders of Levcor, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Levcor, other than such approval by the
stockholders of Levcor. This Agreement has been duly executed and delivered by
Levcor and constitutes a valid and binding obligation of Levcor enforceable in
accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law). The
affirmative vote of holders of a majority of the outstanding shares of Levcor
Common Stock entitled to vote at a duly called and held meeting of stockholders
is the only vote of Levcor's stockholders necessary to approve this Agreement
and the Merger. At a meeting duly called and held on May 24, 2002, Levcor's
Board of Directors adopted resolutions approving this Agreement and the Merger,
determining that the terms of the Merger are fair, from a financial point of
view, to, and in the best interests of, Levcor's stockholders and recommending
that Levcor's stockholders approve and adopt this Agreement and approve the
Merger.
(ii) Subject to compliance with the applicable requirements of the
Exchange Act and the filing of the Certificate of Merger as contemplated by
Section 1.3, the execution and delivery of this Agreement and the Certificate of
Merger, the consummation of the transactions contemplated hereby and thereby,
and compliance by Levcor with any of the provisions hereof or thereof will not
breach, constitute an ultra xxxxx act under, or result in a Violation pursuant
to, (x) any provision of the certificate of incorporation or by-laws of Levcor
or (y) subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in paragraph
(iii) below or in the Levcor Disclosure Letter, any loan or credit agreement,
note, mortgage, indenture, lease, Levcor Benefit Plan or other agreement,
obligation, instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Levcor or its
properties or assets except Violations under clause (y) which would not have a
Material Adverse Effect on Levcor.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Levcor in connection with the execution and delivery of this
Agreement and the Certificate of Merger by Levcor, the
17
consummation by Levcor of the transactions contemplated hereby and thereby, and
compliance by Levcor with any of the provisions hereof or thereof, the failure
to obtain which would have a Material Adverse Effect on Levcor, except for (A)
the filing with the SEC of (1) the Prospectus/Proxy Statement in definitive form
and the effectiveness of the Registration Statement and (2) such other filings
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby, (B) the filing of the Certificate of
Merger as contemplated by Section 1.3 and appropriate documents with the
relevant authorities of states in which Levcor is qualified to do business, and
(C) filings and approvals required under state securities or blue sky laws.
(d) SEC DOCUMENTS. The reports, schedules, registration statements
and definitive proxy statements (including all exhibits) filed by Levcor with
the SEC since January 1, 1999 including all amendments thereto (the "Levcor SEC
Documents"), are all the documents (other than preliminary material) that Levcor
was required to file with the SEC since such date. As of their respective dates,
(i) the Levcor SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Levcor SEC
Documents, and (ii) none of the Levcor SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Levcor included in the Levcor SEC Documents (such financial
statements as of and for the year ended December 31, 2001 being referred to
hereinafter as the "Levcor Year-End Financial Statements" and the balance sheet
included in such financial statements as of December, 31, 2001 being referred to
hereinafter as the "Levcor Balance Sheet"), and the unaudited financial
statements of Levcor for the fiscal quarter ended March 31, 2002 complied in all
material respects with the applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited financial statements, as permitted by Form 10-QSB of the
SEC) and fairly present the financial position of Levcor as at the dates thereof
and the results of its operations, stockholders' equity and cash flows for the
periods then ended in accordance with GAAP, subject to normal year-end audit
adjustments in the case of the March 31, 2002 financial statements. As of
December 31, 2001, Levcor did not have any material liabilities or obligations
of any nature, whether or not accrued, contingent or otherwise, that would be
required by GAAP to be reflected on a balance sheet of Levcor (including the
notes thereto) and which were not reflected on the Levcor Balance Sheet. Since
December 31, 2001, except as and to the extent set forth in the Levcor SEC
Documents and except for liabilities or obligations incurred in the ordinary
course of business consistent with past practice and of substantially the same
character, type and magnitude as incurred in the past, Levcor has not incurred
any liabilities of any nature, whether or not accrued, contingent or otherwise,
that would have a Material Adverse Effect on Levcor, or would be required by
GAAP to be reflected on a balance sheet of Levcor (including the notes thereto).
All material agreements, contracts and other documents required to be filed as
exhibits to any of the Levcor SEC Documents have been so filed.
(e) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by or on behalf of Levcor for inclusion the Registration Statement
will, at the time the
18
Registration Statement becomes effective under the Securities Act, 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
the light of the circumstances under which they are made, not misleading. None
of the information supplied or to be supplied by or on behalf of Levcor for
inclusion or incorporation by reference in the Prospectus/Proxy Statement, will,
at the time the Prospectus/Proxy Statement is mailed to the stockholders of
Carlyle or Levcor, at the time of the meeting of stockholders' of Levcor or
Carlyle or as of the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Prospectus/Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations promulgated by the SEC
thereunder.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by
this Agreement, since December 31, 2001, Levcor has conducted its business only
in the ordinary course and consistent with prior practice and there has not been
any event, occurrence, fact, condition, change, development or effect that has
had or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Levcor.
(g) COMPLIANCE WITH APPLICABLE LAWS. Levcor has been operated at all
times in compliance with all applicable laws and regulations, and is not in
default or violation of any notes, bonds, mortgages, indentures, contracts,
agreements, leases, licenses, permits, franchises, or other instruments or
obligations to which Levcor is a party or by which any of its property or assets
is bound, except where any such noncompliance, conflicts, defaults or violations
would not have a Material Adverse Effect on Levcor. As of the date hereof, no
investigation by any Governmental Entity with respect to Levcor is pending or,
to Levcor's knowledge, threatened.
(h) ENVIRONMENTAL. Except for any matters which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect on Levcor and to Levcor's knowledge, (i) Levcor is in compliance in
material respects with all applicable laws relating to Environmental Matters;
(ii) Levcor has obtained, and is in compliance in material respects with, all
permits, licenses or approvals required by any Governmental Entity under
applicable laws for the use, storage, treatment, transportation, emission and
handling of raw materials, by-products, wastes and other substances, including,
without limitation, hazardous substances and wastes, used or produced by or
otherwise relating to the operations of any of them; (iii) except for matters
resulting from the inaction or failure to act by any Governmental Entity, there
currently are no events, conditions, activities or practices that would prevent
compliance or continued compliance with any law or give rise to any
Environmental Liability; and (iv) there are no claims either by any Governmental
Entity or any third party pending, or to Levcor's knowledge, threatened, against
Levcor arising from any Environmental Matter.
(i) LITIGATION. There is (i) no Litigation pending against Levcor or,
to Levcor's knowledge, threatened against or affecting Levcor before or by any
Federal, foreign, state, local or other governmental or non-governmental
department, commission, board, bureau, agency, court or other instrumentality,
or by any private person or entity, and (ii) no existing or,
19
to the knowledge of Levcor, threatened orders, judgments or decrees of any court
or other Governmental Entity which specifically apply to Levcor or any of its
properties or assets.
(j) TAXES. (i) Levcor has timely filed all material Tax Returns
required to be filed by it (subject to permitted extensions). All such Tax
Returns were true, correct and complete when filed, except for such instances
which individually or in the aggregate could not have a Material Adverse Effect
on Levcor. All Taxes of Levcor which are (i) shown as due on such Tax Returns,
(ii) otherwise due and payable or (iii) claimed or asserted by any taxing
authority to be due, have been paid, except for those Taxes being contested in
good faith and for which adequate reserves have been established in the
financial statements included in Levcor SEC Documents in accordance with GAAP.
Levcor does not know of any proposed or threatened Tax claims or assessments
which, if upheld, could individually or in the aggregate have a Material Adverse
Effect on Levcor. Levcor has withheld and paid over to the relevant taxing
authority all Taxes required to have been withheld and paid in connection with
payments to employees, independent contractors, creditors, stockholders or other
third parties, except for such Taxes which individually or in the aggregate
could not have a Material Adverse Effect on Levcor. No material deficiencies for
any Taxes have been proposed, asserted or assessed against Levcor that are not
adequately reserved for, no audit of any Tax Return of Levcor is being conducted
by a tax authority, and no extension of the statute of limitations on the
assessment of any taxes has been granted to Levcor and is currently in effect.
(ii) Levcor has not executed any closing agreement pursuant to
Section 7121 of the Code or any predecessor provisions thereof, or any similar
provision of foreign, state or local law, or has any ruling request pending with
any tax authority. There are no tax certiorari proceedings currently pending,
tax abatements currently in effect or proposed materially increased tax
assessments of which Levcor has been notified or has knowledge in the context of
Levcor's real estate assets. No assets of Levcor constitute tax-exempt financed
property or tax-exempt use property within the meaning of Section 168 of the
Code, and no assets of Levcor are subject to a lease, safe-harbor lease, or
other arrangement as a result of which any Levcor is not treated as the owner
for federal income tax purposes. Levcor has not filed a consent pursuant to
Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply
to any disposition of a "subsection (f) asset" (as such term is defined in
Section 341(f)(4) of the Code). Levcor (i) is not required or has agreed to make
any adjustments pursuant to Section 481(a) of the Code or any similar provision
of foreign, state or local law by reason of a change in accounting method
initiated by it or any other relevant party, (ii) has no knowledge that any tax
authority has proposed any such adjustment or change in accounting method,
and/or (iii) has no application pending with any tax authority requesting
permission for any changes in accounting methods that relate to the business or
assets of Levcor. Levcor is not a party to any contract, agreement, plan or
arrangement covering any periods that, individually or collectively, could give
rise to any amount not being deductible by reason of Section 280G of the Code.
Levcor has not been within the preceding eight years, own no interest in, and
have never owned an interest in, "S corporations" within the meaning of Section
1361(a)(1) of the Code, "qualified subchapter S subsidiaries" within the meaning
of Section 1361(b)(3)(B) of the Code, "personal holding companies" within the
meaning of Section 542 of the Code, "controlled foreign corporations" within the
meaning of Section 957 of the Code, "foreign personal holding companies" within
the meaning of Section 552 of the Code, "passive foreign investment companies"
within the
20
meaning of Section 1296 of the Code, "foreign investment companies" within the
meaning of Section 1246 of the Code, an "FSC" within the meaning of Section 922
of the Code, or a "DISC" or "Former DISC" within the meaning of Section 992 of
the Code. Levcor has not made, been party to, or been the subject of, any
elections under Sections 108, 168, 338, 441, 472, 1017, 1033 or 4977 of the
Code. Levcor has not entered into any transfer pricing agreements with any tax
authority. No assets of Levcor are held in an arrangement for which partnership
Tax Returns are being filed or are required to be filed. Levcor has not availed
itself of any Tax amnesty or similar relief in any taxing jurisdiction. Levcor
will not be required to withhold tax under Section 1445 of the Code with respect
to any consideration paid pursuant to this Agreement.
(k) EMPLOYEE BENEFIT PLANS. All employee benefit plans, compensation
arrangements and other benefit arrangements covering employees of Levcor (the
"Levcor Benefit Plans"), and all employee agreements providing compensation,
severance or other benefits to any employee or former employee of Levcor which
are not disclosed in the Levcor SEC Documents and which exceed $50,000 per annum
are set forth in the Levcor Disclosure Letter. To the extent applicable, the
Levcor Benefit Plans comply in all material respects with the requirements of
the ERISA, and the Code, and any Levcor Benefit Plan intended to be qualified
under Section 401(a) of the Code has received a determination letter and, to the
knowledge of Levcor, continues to satisfy the requirements for such
qualification. Levcor nor any ERISA Affiliate of Levcor maintains, contributes
to or is obligated to contribute to or has maintained or contributed or been
obligated to contribute to in the past six years to any benefit plan which is
covered by Title IV of ERISA or Section 412 of the Code or a "multi-employer
plan" within the meaning of Section 3(37) of ERISA or Section 4001(a)(3) of the
Code. No Levcor Benefit Plan nor Levcor has incurred any liability or penalty
under Section 4975 of the Code or Section 502(i) of ERISA or, to the knowledge
of Levcor, engaged in any transaction that would reasonably be expected to
result in any such liability or penalty. Each Levcor Benefit Plan has been
maintained and administered in compliance with its terms and with ERISA and the
Code to the extent applicable thereto, except for such non-compliance which
individually or in the aggregate would not have a Material Adverse Effect on
Levcor. There is no pending or, to the knowledge of Levcor, anticipated,
Litigation against or otherwise involving any Levcor Benefit Plans and no
Litigation (excluding claims for benefits incurred in the ordinary course of the
Levcor Benefit Plan activities) has been brought against or with respect to any
such Levcor Benefit Plan. All contributions required to be made as of the date
hereof to the Levcor Benefit Plans have been made or provided for. Except as
described in the Levcor SEC Documents or as required by law, Levcor does not
maintain or contribute to any plan or arrangement which provides or has any
liability to provide life insurance or medical or other employee welfare
benefits to any employee or former employee upon his retirement or termination
of employment, and Levcor has never represented, promised or contracted (whether
in oral or written form) to any employee or former employee that such benefits
would be provided. No Levcor Benefit Plan is under investigation or audit by
either the United States Department of Labor or the Internal Revenue Service.
Except as provided for in this Agreement, the execution of, and performance of
the transactions contemplated in, this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) constitute an event under
any benefit plan, policy, arrangement or agreement or any trust or loan that
will or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any
21
employee. No payment or benefit which will or may be made by Levcor with respect
to any employee of Levcor will constitute an "excess parachute payment" within
the meaning of Section 280G(b)(1) of the Code.
(l) PROPERTIES. Levcor has good title to its properties and assets,
including the properties and assets reflected in the Levcor Balance Sheet or
acquired after December 31, 2001 (other than assets disposed of since December
31, 2001 in the ordinary course of business consistent with past practice and of
substantially the same character, type and magnitude as assets disposed of in
the past), in each case free and clear of all title defects, liens, claims,
charges, encumbrances and restrictions, except for (i) liens, encumbrances or
restrictions which secure indebtedness which is properly reflected in the Levcor
Balance Sheet; (ii) liens for Taxes accrued but not yet payable; (iii) liens
arising as a matter of law in the ordinary course of business with respect to
obligations incurred after December 31, 2001, provided that the obligations
secured by such liens are not delinquent; and (iv) such title defects, liens,
encumbrances and restrictions, if any, as individually or in the aggregate would
not have a Material Adverse Effect on Levcor. None of Levcor's properties or
assets is owned jointly with any other person, nor does any other person have
any right or option to acquire the same. Levcor either owns, or has valid
leasehold interests in, and is in possession of, all properties and assets used
by it in the conduct of its business and each such lease is valid without
material default thereunder by the lessee or, to Levcor's knowledge, by the
lessor.
(m) LABOR CONTROVERSIES. Levcor is not a party to, or bound by, any
collective bargaining agreement or other contracts or understanding with a labor
union or labor organization. Except for such matters which, individually or in
the aggregate, would not have a Material Adverse Effect on Levcor, there is no
(i) unfair labor practice, labor dispute (other than routine individual
grievances or complaints) or labor arbitration proceeding pending or, to the
knowledge of Levcor, threatened, against Levcor relating to its business, (ii)
to the knowledge of Levcor, activity or proceeding by a labor union or
representative thereof to organize any employees of Levcor, or (iii) lockouts,
strikes, slowdowns, work stoppages or, to the knowledge of Levcor, threats
thereof by or with respect to such employees.
(n) INTELLECTUAL PROPERTY. Levcor owns or licenses all United States
and foreign patents, trademarks, trade names, service marks, copyrights and
applications therefor (the foregoing, together with Levcor's trade dress and
trade secrets (including secret recipes and formulae), the "Levcor Intellectual
Property Rights") which are material to the business of Levcor as presently
conducted or as currently contemplated to be conducted. All owned Levcor
Intellectual Property Rights are free and clear of any liens, claims or
encumbrances and are not subject to any material license (royalty bearing or
royalty-free) or any other arrangement requiring any payment to any person nor
the obligation to grant rights to any person in exchange and all licensed Levcor
Intellectual Property Rights are free and clear of any liens, claims,
encumbrances, royalties or other obligations other than such terms, conditions
and restrictions as are contained in the document granting such license. The
business as presently conducted by Levcor, to the knowledge of Levcor, does not
conflict with and has not been alleged to conflict with any patents, trademarks,
trade names, service marks, copyrights or other intellectual property rights of
others, which conflict will have a Material Adverse Effect on Levcor. Levcor
22
does not know of any use by others of any of the Levcor Intellectual Property
Rights material to the business of Levcor as presently conducted.
(o) CHANGE OF CONTROL AGREEMENTS. Neither the execution and delivery
of this Agreement nor the consummation of the Merger or the other transactions
contemplated by this Agreement, will (either alone or in conjunction with any
other event) result in, cause the accelerated vesting or delivery of, or
increase the amount or value of, any payment or benefit to any director, officer
or employee of Levcor, and, without limiting the generality of the foregoing, no
amount paid or payable by Levcor in connection with the Merger or the other
transactions contemplated by this Agreement (either solely as a result thereof
or as a result of such transactions in conjunction with any other event) will be
an "excess parachute payment" within the meaning of Section 280G of the Code.
(p) CONTRACTS. All material contracts of Levcor (the "Levcor Material
Contracts") have been filed as exhibits to the Levcor SEC Documents, except for
those contracts not required to be filed pursuant to the rules and regulations
of the SEC. To the knowledge of Levcor: (i) all Levcor Material Contracts are
valid, binding and enforceable against the other parties thereto in accordance
with their terms, and are in full force and effect; (ii) all parties to Levcor
Material Contracts (other than Levcor) have complied in all material respects
with the provisions thereof and have performed all obligations required to be
performed by each of them to date; (iii) no such party is in default under any
of the terms thereof, and (iv) no event has occurred that with the passage of
time or the giving of notice or both would constitute a default by any party
(other than Levcor) under any provision thereof except, in each case, for such
non-compliance or default which will not have a Material Adverse Effect on
Levcor.
(q) AFFILIATED TRANSACTIONS. All transactions between Levcor, on the
one hand, and any officer, director or holder of in excess of 5% of the Levcor
Common Stock, or any affiliate of any of them, have been disclosed in the Levcor
SEC Documents. Except as disclosed in the Levcor SEC Documents, no officer,
director or holder of in excess of 5% of the Levcor Common Stock has any
material interest in (i) any assets, including, without limitation, any
intellectual property, used or held for use in the business of Levcor or (ii)
any creditor, or supplier of Levcor.
(r) INSURANCE. Levcor is adequately insured in such amounts and
against such risks as are usually insured against by persons operating in the
businesses in which Levcor operates, and all policies relating to such insurance
are in full force and effect. All products liability and general liability
policies maintained by or for the benefit of Levcor have been "claims made"
policies.
(s) RECORDS. The corporate record books of or relating to Levcor are
substantially complete and correct and contain accurate and substantially
complete records of all material corporate actions of the stockholders and
directors (and committees thereof) of Levcor.
(t) OPINION OF FINANCIAL ADVISOR. Levcor has received the opinion of
Willamette Management Association (the "Levcor Independent Advisor"), dated May
24, 2002
23
to the effect that, as of such date, the transactions contemplated by this
Agreement are fair to the Levcor stockholders from a financial point of view.
(u) DISCLOSURE. No representation, warranty or covenant made by
Levcor in this Agreement or the Levcor Disclosure Letter contains an untrue
statement of a material fact or omits to state a material fact required to be
stated herein or therein or necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. True and complete copies of all Levcor SEC Documents, Tax Returns,
Levcor Benefit Plans, Levcor Material Contracts, corporate records, books and
other documents referred to in the Levcor Disclosure Letter have been made
available to Carlyle.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 COVENANTS OF CARLYLE. During the period from the date of this
Agreement and continuing until the Effective Time, Carlyle agrees as to itself
and its subsidiaries that (except as expressly contemplated or permitted by this
Agreement or as disclosed in the Carlyle SEC Documents or to the extent that
Levcor shall otherwise consent in writing):
(a) ORDINARY COURSE. Carlyle and its subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary course and use
commercially reasonable efforts to preserve intact their present business
organizations, maintain their rights and franchises and preserve their
relationships with employees, officers, customers, suppliers and others having
business dealings with them. Carlyle and its subsidiaries shall maintain in
force all insurance policies and Consents with respect to Carlyle and its
subsidiaries and shall maintain all assets and properties of Carlyle and its
subsidiaries in customary repair, order and condition, reasonable wear and tear
excepted. Carlyle shall not, nor shall it permit any of its subsidiaries to, (i)
enter into any new material line of business or (ii) incur or commit to any
significant capital expenditures or any obligations or liabilities other than
capital expenditures and obligations or liabilities incurred or committed to as
disclosed in the Carlyle Disclosure Letter. Carlyle and its subsidiaries will
comply with all applicable laws and regulations wherever its business is
conducted, including without limitation the timely filing of all reports, forms
or other documents with the SEC required pursuant to the Securities Act or the
Exchange Act, except where such noncompliance would not have a Material Adverse
Effect on Carlyle.
(b) DIVIDENDS; CHANGES IN STOCK. Carlyle shall not, nor shall it
permit any of its subsidiaries to, nor shall Carlyle propose to, (i) declare or
pay any dividends on or make other distributions in respect of any of its
capital stock, other than cash dividends payable by a subsidiary of Carlyle to
Carlyle or one of its subsidiaries and other than cash dividends required to be
paid on the Carlyle Series B Preferred Stock, (ii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) repurchase, redeem or otherwise acquire, or permit any
subsidiary to purchase or otherwise acquire any shares of its capital stock or
any securities convertible into or exercisable for any shares of its capital
stock.
24
(c) ISSUANCE OF SECURITIES. Carlyle shall not, nor shall it permit
any of its subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any class, any
Voting Debt or any securities convertible into or exercisable for (including any
stock appreciation rights, phantom stock plans or stock equivalents), or any
rights, warrants or options to acquire, any such shares or Voting Debt, or enter
into any agreement with respect to any of the foregoing, other than issuances of
Carlyle Common Stock pursuant to exercises of Carlyle Options.
(d) GOVERNING DOCUMENTS. Carlyle shall not amend or propose to amend,
nor shall it permit any of its subsidiaries to amend, their respective
certificates of incorporation, by-laws or other governing instruments.
(e) NO SOLICITATIONS. Carlyle shall not, nor shall it permit any of
its subsidiaries to, directly or indirectly, through any officer, director,
employee or agent, initiate, solicit or knowingly encourage (including by way of
furnishing information or assistance), or take any other action to facilitate
knowingly, any inquiries or the making of any proposal that constitutes, or
would reasonably be expected to lead to, any Competing Transaction, or enter
into or maintain or continue discussions or negotiate with any person in
furtherance of such inquiries or to obtain a Competing Transaction, or agree to
or endorse any Competing Transaction, or authorize or permit any of the
officers, directors or employees of Carlyle or any of its subsidiaries or any
investment banker, financial advisor, attorney, accountant or other
representative retained by Carlyle or any of its subsidiaries to take any such
action. Carlyle shall notify Levcor in writing (as promptly as practicable) if
any written or oral request for information or proposal relating to a Competing
Transaction is made and shall keep Levcor promptly advised of all such requests
and proposals, and shall provide a copy of any written proposals or requests and
a summary of all oral proposals or requests. Nothing contained in this Section
4.1(e) shall prohibit Carlyle from (i) furnishing information to, or entering
into discussions or negotiations with, any person that makes an unsolicited
written, bona fide proposal to acquire it pursuant to a merger, consolidation,
share exchange, business combination, tender or exchange offer or other similar
transaction, if, (A) Carlyle's Board of Directors determines in good faith that
there is a reasonable probability that the failure to take such action would be
inconsistent with the Board of Directors' fiduciary duties to Carlyle's
stockholders under applicable law, and (B) prior to furnishing such information
to, or entering into discussions or negotiations with, such person, Carlyle (x)
provides reasonable notice to Levcor to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such person
and (y) receives from such person an executed confidentiality agreement in
customary form (the "Confidentiality Agreement"), (ii) complying with Rule 14d-9
or Rule 14e-2 promulgated under the Exchange Act with regard to a tender or
exchange offer, or (iii) failing to make or withdrawing or modifying its
recommendation referred to in Section 5.2, or recommending an unsolicited, bona
fide proposal to acquire Carlyle pursuant to a merger, consolidation, share
exchange, business combination, tender or exchange offer or other similar
transaction, following the receipt of such a proposal, if Carlyle's Board of
Directors determines in good faith that there is a reasonable probability that
the failure to take such action would be inconsistent with the Board of
Directors' fiduciary duties to Carlyle's stockholders under applicable law. In
addition, if Carlyle proposes to enter into an agreement with respect to any
Competing Transaction, it shall
25
concurrently with entering into such agreement pay, or cause to be paid, to
Levcor any amounts due to Levcor from Carlyle pursuant to Section 7.3.
As used in this Agreement, "Competing Transaction" shall mean any of
the following (other than the transactions contemplated by this Agreement)
involving Carlyle or any of its subsidiaries: (i) any merger, consolidation,
share exchange, exchange offer, business combination, recapitalization,
liquidation, dissolution or other similar transaction involving such person;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of assets representing 20% or more of the total assets of such person and its
subsidiaries, in a single transaction or series of transactions; (iii) any
tender offer or exchange offer for 20% or more of the outstanding shares of
capital stock of such person or the filing of a registration statement under the
Securities Act in connection therewith; (iv) any person or group having acquired
beneficial ownership of 15% or more of the outstanding shares of capital stock
of such person with respect to Carlyle Common Stock); or (v) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
(f) NO ACQUISITIONS. Carlyle shall not, nor shall it permit any of
its subsidiaries to, (i) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
limited liability company, partnership, association or other business
organization or division thereof or (ii) otherwise acquire or agree to acquire
any assets which, in the case of this clause (ii), are material, individually or
in the aggregate, to Carlyle.
(g) NO DISPOSITIONS. Carlyle shall not, nor shall it permit any of
its subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to
sell, lease, encumber or otherwise dispose of any of its assets (including
capital stock of subsidiaries), except as disclosed in the Carlyle Disclosure
Letter or the Carlyle SEC Documents and for dispositions in the ordinary course
of business consistent with past practice and of substantially the same
character, type and magnitude as dispositions in the past.
(h) INDEBTEDNESS. Carlyle shall not, nor shall it permit any of its
subsidiaries to, (i) incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any debt securities or warrants or rights to
acquire any long-term debt securities of Carlyle or any of its subsidiaries or
guarantee any long-term debt securities of others or enter into or amend any
contract, agreement, commitment or arrangement with respect to any of the
foregoing, other than (x) in replacement for existing or maturing debt, (y)
indebtedness of any subsidiary of Carlyle to Carlyle or to another subsidiary of
Carlyle or (z) other borrowing under existing lines of credit in the ordinary
course of business consistent with prior practice and of substantially the same
character, type and magnitude as borrowings made in the past or (ii) make any
loans, advances or capital contributions to any person.
(i) OTHER ACTIONS. Carlyle shall not, nor shall it permit any of its
subsidiaries to, take any action that would, or might reasonably be expected to,
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect, or in any of the conditions to
the Merger set forth in Article VI not being satisfied, or which would adversely
affect the ability of any of them to obtain any of the
26
Requisite Regulatory Approvals without imposition of a condition or restriction
of the type referred to in Section 6.2(d) and Carlyle shall, in the event of, or
promptly after the occurrence of, or promptly after obtaining knowledge of the
occurrence of or the impending or threatened occurrence of, any fact or event
which would cause or constitute a breach of any of the representations and
warranties set forth in this Agreement, the non-satisfaction of any of the
conditions to the Merger set forth in Article VI or the failure to obtain the
Requisite Regulatory Approvals, in each case at any time after the date hereof
and through the Closing Date, give detailed notice thereof to Levcor, and
Carlyle shall use commercially reasonable efforts to prevent or promptly to
remedy such breach, non-satisfaction or failure, as the case may be.
(j) ADVICE OF CHANGES; GOVERNMENT FILINGS. Except to the extent
prevented by law, Carlyle shall confer on a regular basis with Levcor, report on
operational matters and promptly advise Levcor, orally and in writing, of any
material change or event or any change or event which would cause or constitute
a material breach of any of the representations, warranties or covenants of
Carlyle contained herein. Carlyle shall file all reports required to be filed by
Carlyle with the SEC between the date of this Agreement and the Effective Time
and shall make available to Levcor copies of all such reports promptly after the
same are filed. Carlyle shall cooperate with Levcor in determining whether any
filings are required to be made with, or consents required to be obtained from,
or fees or expenses required to be paid to, any third party or Governmental
Entity prior to the Effective Time in connection with this Agreement or the
transactions contemplated hereby, and shall cooperate in making any such filings
promptly and in seeking to obtain timely any such consents and, subject to
Levcor's approval, paying any such fees or expenses. Carlyle shall promptly make
available to Levcor copies of all other filings made by Carlyle with any state
or Federal Governmental Entity in connection with this Agreement, the Merger or
the other transactions contemplated hereby. Nothing contained in this Agreement
shall give Levcor, directly or indirectly, the right to control or direct
Carlyle's operations prior to the Effective Time. Prior to the Effective Time,
Carlyle shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
(k) ACCOUNTING METHODS. Carlyle shall not change its methods of
accounting in effect at December 31, 2001, except as required by changes in GAAP
as concurred in by Carlyle's independent auditors.
(l) BENEFIT PLANS. During the period from the date of this Agreement
and continuing until the Effective Time, Carlyle agrees as to itself and its
subsidiaries that it will not, without the prior written consent of Levcor,
except as set forth in the Carlyle Disclosure Letter or the Carlyle SEC
Documents, (i) enter into, adopt, amend (except as may be required by law) or
terminate any Carlyle Benefit Plan or any other employee benefit plan or any
agreement, arrangement, plan or policy between Carlyle or any of its
subsidiaries, on the one hand, and one or more of its or their directors or
officers, on the other hand, (ii) except for normal increases in the ordinary
course of business consistent with past practice and of substantially the same
character, type and magnitude as increases in the past that, in the aggregate,
do not result in a material increase in benefits or compensation expense to
Carlyle or any of its subsidiaries, increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by any plan and arrangement as in effect as of the date hereof
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(including, without limitation, the granting of stock options, stock
appreciation rights, restricted stock, restricted stock units or performance
units or shares) or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing or (iii) enter into or renew any
contract, agreement, commitment or arrangement providing for the payment to any
director, officer or employee of Carlyle or any of its subsidiaries of
compensation or benefits contingent, or the terms of which are materially
altered, upon the occurrence of any of the transactions contemplated by this
Agreement.
(m) TAX ELECTIONS. Except in the ordinary course of business and
consistent with past practice and of substantially the same character, type and
magnitude as elections made in the past, Carlyle shall not make any material tax
election or settle or compromise any material federal, state, local or foreign
income tax claim or liability or amend any previously filed tax return in any
respect.
4.2 COVENANTS OF LEVCOR. During the period from the date of this
Agreement and continuing until the Effective Time, Levcor agrees that (except as
expressly contemplated or permitted by this Agreement or as disclosed in the
Levcor SEC Documents or to the extent that Carlyle shall otherwise consent in
writing):
(a) ORDINARY COURSE. Levcor shall carry on its businesses in the
usual, regular and ordinary course and use commercially reasonable efforts to
preserve intact its present business organizations, maintain its rights and
franchises and preserve its relationships with employees, officers, customers,
suppliers and others having business dealings with it. Levcor shall maintain in
force all insurance policies and Consents with respect to Levcor and shall
maintain all assets and properties of Levcor in customary repair, order and
condition, reasonable wear and tear excepted. Levcor shall not (i) enter into
any new material line of business or (ii) incur or commit to any significant
capital expenditures or any obligations or liabilities other than capital
expenditures and obligations or liabilities incurred or committed to as
disclosed in the Levcor Disclosure Letter. Levcor will comply with all
applicable laws and regulations wherever its business is conducted, including
without limitation the timely filing of all reports, forms or other documents
with the SEC required pursuant to the Securities Act or the Exchange Act, except
where such noncompliance would not have a Material Adverse Effect on Levcor.
(b) DIVIDENDS; CHANGES IN STOCK. Levcor shall not, nor shall Levcor
propose to, (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, (ii) split, combine or reclassify any of
its capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of
its capital stock or any securities convertible into or exercisable for any
shares of its capital stock.
(c) ISSUANCE OF SECURITIES. Levcor shall not issue, deliver or sell,
or authorize or propose the issuance, delivery or sale of, any shares of its
capital stock of any class, any Voting Debt or any securities convertible into
or exercisable for (including any stock appreciation rights, phantom stock plans
or stock equivalents), or any rights, warrants or options to acquire, any such
shares or Voting Debt, or enter into any agreement with respect to any of the
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foregoing, other than issuances of Levcor Common Stock pursuant to exercises of
Levcor Options.
(d) GOVERNING DOCUMENTS. Levcor shall not amend or propose to amend
its certificate of incorporation or by-laws.
(e) NO ACQUISITIONS. Levcor shall not (i) acquire or agree to acquire
by merging or consolidating with, or by purchasing a substantial equity interest
in or a substantial portion of the assets of, or by any other manner, any
business or any corporation, limited liability company, partnership, association
or other business organization or division thereof or (ii) otherwise acquire or
agree to acquire any assets which, in the case of this clause (ii), are
material, individually or in the aggregate, to Levcor.
(f) NO DISPOSITIONS. Levcor shall not sell, lease, encumber or
otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of
any of its assets (including capital stock of subsidiaries), except as disclosed
in the Levcor Disclosure Letter or the Levcor SEC Documents and for dispositions
in the ordinary course of business consistent with past practice and of
substantially the same character, type and magnitude as dispositions in the
past.
(g) INDEBTEDNESS. Levcor shall not (i) incur any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any debt
securities or warrants or rights to acquire any long-term debt securities of
Levcor or guarantee any long-term debt securities of others or enter into or
amend any contract, agreement, commitment or arrangement with respect to any of
the foregoing, other than (x) in replacement for existing or maturing debt, or
(y) other borrowing under existing lines of credit in the ordinary course of
business consistent with prior practice and of substantially the same character,
type and magnitude as borrowings made in the past or (ii) make any loans,
advances or capital contributions to any person.
(h) OTHER ACTIONS. Levcor shall not take any action that would, or
might reasonably be expected to, result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger set forth in Article VI not
being satisfied, or which would adversely affect the ability of any of them to
obtain any of the Requisite Regulatory Approvals and Levcor shall, in the event
of, or promptly after the occurrence of, or promptly after obtaining knowledge
of the occurrence of or the impending or threatened occurrence of, any fact or
event which would cause or constitute a breach of any of the representations and
warranties set forth in this Agreement, the non-satisfaction of any of the
conditions to the Merger set forth in Article VI or the failure to obtain the
Requisite Regulatory Approvals, in each case at any time after the date hereof
and through the Closing Date, give detailed notice thereof to Carlyle, and
Levcor shall use commercially reasonable efforts to prevent or promptly to
remedy such breach, non-satisfaction or failure, as the case may be.
(i) ADVICE OF CHANGES; GOVERNMENT FILINGS. Except to the extent
prevented by law, Levcor shall confer on a regular basis with Carlyle, report on
operational matters and promptly advise Carlyle, orally and in writing, of any
material change or event or any change or event which would cause or constitute
a material breach of any of the representations, warranties
29
or covenants of Levcor contained herein. Levcor shall file all reports required
to be filed by Levcor with the SEC between the date of this Agreement and the
Effective Time and shall make available to Carlyle copies of all such reports
promptly after the same are filed. Carlyle shall cooperate with Levcor in
determining whether any filings are required to be made with, or consents
required to be obtained from, or fees or expenses required to be paid to, any
third party or Governmental Entity prior to the Effective Time in connection
with this Agreement or the transactions contemplated hereby, and shall cooperate
in making any such filings promptly and in seeking to obtain timely any such
consents and, subject to Carlyle's approval, paying any such fees or expenses.
Levcor shall promptly make available to Carlyle copies of all other filings made
by Levcor with any state or Federal Governmental Entity in connection with this
Agreement, the Merger or the other transactions contemplated hereby. Nothing
contained in this Agreement shall give Carlyle, directly or indirectly, the
right to control or direct Levcor's operations. Levcor shall exercise,
consistent with the terms and conditions of this Agreement, complete control and
supervision over its operations.
(j) ACCOUNTING METHODS. Levcor shall not change its methods of
accounting in effect at December 31, 2001, except as required by changes in GAAP
as concurred in by Levcor's independent auditors.
(k) BENEFIT PLANS. During the period from the date of this Agreement
and continuing until the Effective Time, Levcor agrees that it will not, without
the prior written consent of Carlyle, except as set forth in the Levcor
Disclosure Letter or the Levcor SEC Documents, (i) enter into, adopt, amend
(except as may be required by law) or terminate any Levcor Benefit Plan or any
other employee benefit plan or any agreement, arrangement, plan or policy
between Levcor, on the one hand, and one or more of its or their directors or
officers, on the other hand, (ii) except for normal increases in the ordinary
course of business consistent with past practice and of substantially the same
character, type and magnitude as increases in the past that, in the aggregate,
do not result in a material increase in benefits or compensation expense to
Levcor, increase in any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any plan and
arrangement as in effect as of the date hereof (including, without limitation,
the granting of stock options, stock appreciation rights, restricted stock,
restricted stock units or performance units or shares) or enter into any
contract, agreement, commitment or arrangement to do any of the foregoing or
(iii) enter into or renew any contract, agreement, commitment or arrangement
providing for the payment to any director, officer or employee of Levcor of
compensation or benefits contingent, or the terms of which are materially
altered, upon the occurrence of any of the transactions contemplated by this
Agreement.
(l) TAX ELECTIONS. Except in the ordinary course of business and
consistent with past practice and of substantially the same character, type and
magnitude as elections made in the past, levcor shall not make any material tax
election or settle or compromise any material federal, state, local or foreign
income tax claim or liability or amend any previously filed tax return in any
respect.
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 PROSPECTUS/PROXY STATEMENT; REGISTRATION STATEMENT. As promptly
as practicable after the execution of this Agreement, Levcor and Carlyle will
prepare and file with the SEC a Prospectus/Proxy Statement and Levcor will
prepare and file with the SEC the Registration Statement in which the
Prospectus/Proxy Statement is to be included as a prospectus. Levcor and Carlyle
will provide each other with any information which may be required in order to
effectuate the preparation and filing of the Prospectus/Proxy Statement and the
Registration Statement pursuant to this Section 5.1. Each of Levcor and Carlyle
will respond to any comments from the SEC, will use all reasonable efforts to
cause the Registration Statement to be declared effective under the Securities
Act as promptly as practicable after such filing and to keep the Registration
Statement effective as long as is necessary to consummate the Merger and the
transactions contemplated hereby. Each of Levcor and Carlyle will notify the
other promptly upon the receipt of any comments from the SEC or its staff in
connection with the filing of, or amendments or supplements to, the Registration
Statement and/or the Prospectus/Proxy Statement. Whenever any event occurs which
is required to be set forth in an amendment or supplement to the
Prospectus/Proxy Statement or the Registration Statement, Levcor and Carlyle, as
the case may be, will promptly inform the other of such occurrence and cooperate
in filing with the SEC or its staff, and/or mailing to stockholders of Levcor
and/or Carlyle, such amendment or supplement. Each of Levcor and Carlyle shall
cooperate and provide the other (and its counsel) with a reasonable opportunity
to review and comment on any amendment or supplement to the Registration
Statement and Prospectus/Proxy Statement prior to filing such with the SEC, and
will provide each other with a copy of all such filings made with the SEC. Each
of Levcor and Carlyle will cause the Prospectus/Proxy Statement to be mailed to
its respective stockholders at the earliest practicable time after the
Registration Statement is declared effective by the SEC. Levcor shall also use
all reasonable efforts to take any action required to be taken by it under any
applicable state securities laws in connection with the issuance of the
Surviving Corporation Capital Stock in the Merger and the conversion of Carlyle
Options into options to acquire the Surviving Corporation Common Stock, and
Carlyle shall furnish any information concerning Carlyle and the holders of
Carlyle Capital Stock and Carlyle Options as may be reasonably requested in
connection with any such action.
5.2 MEETINGS OF STOCKHOLDERS; BOARD RECOMMENDATION.
(a) MEETING OF STOCKHOLDERS. Promptly after the Registration
Statement is declared effective under the Securities Act, each of Levcor and
Carlyle will take all action necessary in accordance with Delaware Law and its
respective certificate of incorporation and by-laws to call, hold and convene a
meeting of its respective stockholders to consider the adoption and approval of
this Agreement and the approval of the Merger (each, a "Stockholders' Meeting")
to be held as promptly as practicable (without limitation, within 60 days, if
practicable) after the declaration of effectiveness of the Registration
Statement. Each of Levcor and Carlyle will use all reasonable efforts to hold
their respective Stockholders' Meetings on the
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same date. Subject to Section 4.1(e), each of Levcor and Carlyle will use all
reasonable efforts to solicit from its respective stockholders proxies in favor
of the adoption and approval of this Agreement and the approval of the Merger.
Notwithstanding anything to the contrary contained in this Agreement, Levcor or
Carlyle, as the case may be, may adjourn or postpone its Stockholders' Meeting
to the extent necessary to ensure that any necessary supplement or amendment to
the Prospectus/Proxy Statement is provided to its respective stockholders in
advance of a vote on the Merger and this Agreement or, if as of the time for
which the Stockholders' Meeting is originally scheduled (as set forth in the
Prospectus/Proxy Statement) there are insufficient shares of Capital Stock of
Levcor or Carlyle, as the case may be, represented (either in person or by
proxy) to constitute a quorum necessary to conduct the business of such
Stockholders' Meeting. Each of Levcor and Carlyle shall ensure that its
respective Stockholders' Meeting is called, noticed, convened, held and
conducted, and that all proxies solicited by it in connection with the
Stockholders' Meeting are solicited in compliance with Delaware Law, its
certificate of incorporation and by-laws, and all other applicable Legal
Requirements. "Legal Requirements" shall mean any federal, state, local,
municipal, foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity.
(b) BOARD RECOMMENDATION. Except to the extent expressly permitted by
Section 4.1(e): (i) the Board of Directors of each of Levcor and Carlyle shall
recommend that the respective stockholders of Levcor and Carlyle vote in favor
of the adoption and approval of this Agreement and the approval of the Merger,
at their respective Stockholders' Meetings, (ii) the Prospectus/Proxy Statement
shall include a statement to the effect that the Board of Directors of Levcor
and Carlyle has recommended that its stockholders vote in favor of adoption and
approval of this Agreement and the approval of the Merger, and (iii) neither the
Board of Directors of Levcor or Carlyle nor any committee thereof shall
withdraw, amend or modify, or propose or resolve to withdraw, amend or modify in
a manner adverse to the other party, the recommendation of its respective Board
of Directors that the respective stockholders of Levcor and Carlyle vote in
favor of the adoption and approval of this Agreement and the approval of the
Merger.
5.3 LEGAL CONDITIONS TO MERGER. Each of Carlyle, Carlyle's
subsidiaries and Levcor shall use all reasonable efforts (i) to take, or cause
to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party or its subsidiaries with respect
to the Merger and to consummate the transactions contemplated by this Agreement,
subject to the appropriate vote of stockholders of Levcor and Carlyle described
in Section 6.1 (a), and (ii) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any Governmental Entity and of any other public or private third party which is
required to be obtained or made by such party or any of its subsidiaries in
connection with the Merger and the transactions contemplated by this Agreement;
provided, however, that a party shall not be obligated to take any action
pursuant to the foregoing if the taking of such action or such compliance or the
obtaining of such consent, authorization, order, approval or exemption is
likely, in such party's reasonable opinion, (x) to be materially burdensome to
such party and its subsidiaries taken as a whole or to impact in a materially
adverse manner the economic or business benefits of the transactions
contemplated by
32
this Agreement so as to render uneconomic the consummation of the Merger, or (y)
in the case of Carlyle, to result in the imposition of a condition or
restriction on Carlyle or any of their respective subsidiaries of the type
referred to in Section 6.2(d). Each of Carlyle and Levcor will promptly
cooperate with and furnish information to the other in connection with any such
burden suffered by, or requirement imposed upon, any of them or any of their
subsidiaries in connection with the foregoing.
5.4 ACCESS TO INFORMATION. Upon reasonable notice, Levcor and Carlyle
and each of its subsidiaries shall afford to the other party's officers,
employees, accountants, counsel and other representatives, access, during normal
business hours during the period prior to the Effective Time, to all its
properties, books, commitments and records and, during such period, shall make
available to the other party (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period pursuant
to the requirements of Federal securities laws and (b) all other information
concerning its business, properties and personnel as such other party may
reasonably request. The parties will hold any such information which is
nonpublic in confidence. No investigation by either Levcor or Carlyle shall
affect the representations and warranties of the other, except to the extent
such representations and warranties are by their terms qualified by disclosures
made to such first party.
5.5 BROKERS OR FINDERS. Each of Levcor and Carlyle represents, as to
itself, its subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except the Carlyle
Independent Advisor and the Levcor Independent Advisor, whose fees and expenses
will be paid by Carlyle and Levcor respectively, in accordance with their
respective agreements with such firms, and each party agrees to indemnify the
other party and hold the other party harmless from and against any and all
claims, liabilities or obligations with respect to any other fees, commissions
or expenses asserted by any person on the basis of any act or statement alleged
to have been made by such first party or its affiliates.
5.6 INDEMNIFICATION. The provisions with respect to indemnification
contained in the certificate of incorporation of the Surviving Corporation shall
not be amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who at the Effective Time were directors, officers or
employees of Carlyle. Levcor and Carlyle agree that the directors, officers and
employees of Carlyle covered thereby are intended to be third party
beneficiaries under this Section 5.6 and shall have the right to enforce the
obligations of the Surviving Corporation and the Levcor.
5.7 STOCK OPTIONS. At the Effective Time, each outstanding Carlyle
Option, whether or not then exercisable, will be assumed by Levcor. Each Carlyle
Option so assumed by Levcor under this Agreement will continue to have, and be
subject to, the same terms and conditions set forth in the applicable Carlyle
Option Plan, if any, pursuant to which the Carlyle Option was issued and any
option agreement between Carlyle and the optionee with regard to the Carlyle
Option immediately prior to the Effective Time (including, without limitation,
any repurchase rights or vesting provisions), except that (i) each Carlyle
Option will be exercisable
33
(or will become exercisable in accordance with its terms) for that number of
whole shares of the Surviving Corporation Common Stock equal to the product of
the number of shares of Carlyle Common Stock that were issuable upon exercise of
such Carlyle Option immediately prior to the Effective Time multiplied by the
Common Exchange Ratio, rounded up to the nearest whole number of shares of the
Surviving Corporation Common Stock and (ii) the per share exercise price for the
shares of the Surviving Corporation Common Stock issuable upon exercise of such
assumed Carlyle Option will be equal to the quotient determined by dividing the
exercise price per share of Carlyle Common Stock at which such Carlyle Option
was exercisable immediately prior to the Effective Time by the Common Exchange
Ratio, rounded up to the nearest whole cent. Continuous employment with Carlyle
or its subsidiaries shall be credited to the optionee and to all Carlyle
employees for purposes of determining the vesting of all assumed Carlyle Options
and other employee benefits after the Effective Time it being understood that
all Carlyle options immediately vest upon consummation of the Merger. It is
intended that Carlyle Options assumed by Levcor shall qualify following the
Effective Time as incentive stock options as defined in Section 422 of the Code
to the extent Carlyle Options qualified as incentive stock options immediately
prior to the Effective Time and the provisions of this Section 5.7 shall be
applied consistent with such intent.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) STOCKHOLDER APPROVAL. The adoption and approval of this Agreement
and the approval of the Merger, shall have been approved and adopted by the
affirmative vote of the holders of a majority of the outstanding shares of
Levcor Common Stock and Carlyle Capital Stock entitled to vote thereon.
(b) OTHER APPROVALS. All authorizations, consents, orders or
approvals of, or declarations or filings with, and all expirations or early
terminations of waiting periods imposed by, any Governmental Entity (all the
foregoing, "Consents") which are necessary for the consummation of the Merger
shall have been filed, occurred or been obtained (all such permits, approvals,
filings and consents and the lapse of all such waiting periods being referred to
as the "Requisite Regulatory Approvals") and all such Requisite Regulatory
Approvals shall be in full force and effect.
(c) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding by any Governmental Entity seeking any of the foregoing be pending.
There shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger illegal.
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(d) REGISTRATION STATEMENT EFFECTIVE; PROSPECTUS/PROXY STATEMENT. The
SEC shall have declared the Registration Statement effective. No stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose, and no similar
proceeding in respect of the Prospectus/Proxy Statement, shall have been
initiated or threatened in writing by the SEC.
6.2 CONDITIONS TO OBLIGATIONS OF LEVCOR. The obligations of Levcor to
effect the Merger are subject to the satisfaction of the following conditions
unless waived by Levcor:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Carlyle set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date, and Levcor shall have
received a certificate signed on behalf of Carlyle by the President and Chief
Executive Officer of Carlyle, and by the Chief Financial Officer of Carlyle to
such effect.
(b) PERFORMANCE OF OBLIGATIONS OF CARLYLE. Carlyle shall have
performed and complied in all material respects with all obligations required to
be performed or complied with by it under this Agreement at or prior to the
Closing Date, and Levcor shall have received a certificate signed on behalf of
Carlyle by the President and Chief Executive Officer of Carlyle and by the Chief
Financial Officer of Carlyle to such effect.
(c) CONSENTS UNDER AGREEMENTS. Carlyle shall have obtained the
consent or approval of each person (other than the Requisite Regulatory
Approvals) whose consent or approval shall be required in order to permit the
succession by Levcor pursuant to the Merger to any obligation, right or interest
of Carlyle or any subsidiary of Carlyle under any loan or credit agreement,
note, mortgage, indenture, lease, license or other agreement or instrument
except for those consents or approvals for which failure to obtain such consents
or approvals could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Carlyle, it being agreed that consent under
the CIT Financing facilities entered into on January 24, 2002 shall not be
required.
(d) BURDENSOME CONDITION. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, by any Governmental Entity which, in connection with
the grant of a Requisite Regulatory Approval, imposes any requirement upon
Levcor which would so materially adversely impact the economic or business
benefits of the transactions contemplated by this Agreement as to render
uneconomic the consummation of the Merger, or which would require Levcor to
dispose of any asset which is material to Levcor prior to the Effective Time.
(e) MATERIAL ADVERSE EFFECT. Since the date of this Agreement, there
shall not have occurred a Material Adverse Effect with respect to Carlyle and no
facts or circumstances arising after the date of this Agreement shall have
occurred which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect with respect to Carlyle.
35
(f) PROCEEDINGS. All proceedings to be taken on the part of Carlyle
in connection with the transactions contemplated by this Agreement and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Levcor, and Levcor shall have received copies of all such documents
and other evidences as Levcor may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
(g) DISSENTING STOCKHOLDERS. No more than 20% of the holders of
Carlyle's outstanding Capital Stock elect to become Dissenting Stockholders.
6.3 CONDITIONS TO OBLIGATIONS OF CARLYLE. The obligation of Carlyle
to effect the Merger is subject to the satisfaction of the following conditions
unless waived by Carlyle:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Levcor set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date, and Carlyle shall
have received a certificate signed on behalf of Levcor by the Chairman and Chief
Executive Officer of Levcor to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF LEVCOR. Levcor shall have performed
and complied in all material respects with all obligations required to be
performed or complied with by it under this Agreement at or prior to the Closing
Date, and Carlyle shall have received a certificate signed on behalf of Levcor
by the President and Chief Executive Officer of Levcor to such effect.
(c) MATERIAL ADVERSE EFFECT. Since the date of this Agreement, there
shall not have occurred a Material Adverse Effect with respect to Levcor and no
facts or circumstances arising after the date of this Agreement shall have
occurred which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect with respect to Levcor.
(d) PROCEEDINGS. All proceedings to be taken on the part of Levcor in
connection with the transactions contemplated by this Agreement and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Carlyle, and Carlyle shall have received copies of all such
documents and other evidences as Carlyle may reasonably request in order to
establish the consummation of such transactions and the taking of all
proceedings in connection therewith.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of the matters presented
in connection with the Merger by the stockholders of Levcor and/or Carlyle:
36
(a) by mutual consent of Levcor and Carlyle in a written instrument;
(b) by Levcor, if any representation or warranty of Carlyle shall
have become untrue or upon a material breach of any covenant or agreement on the
part of Carlyle set forth in this Agreement such that the conditions set forth
in Section 6.2(a) or Section 6.2(b), as the case may be, would be incapable of
being satisfied by December 31, 2002;
(c) by Carlyle, if any representation or warranty of Levcor shall
have become untrue or upon a material breach of any covenant or agreement on the
part of Levcor set forth in this Agreement such that the conditions set forth in
Section 6.3(a) or Section 6.3(b), as the case may be, would be incapable of
being satisfied by December 31, 2002;
(d) by either Levcor or Carlyle, if any permanent injunction or
action by any Governmental Entity preventing the consummation of the Merger
shall have become final and nonappealable;
(e) by either Levcor or Carlyle if the Merger shall not have been
consummated on or prior to December 31, 2002 (or such later date as may be
agreed to in writing by Carlyle and Levcor) (other than due to the failure of
the party seeking to terminate this Agreement to perform its obligations under
this Agreement required to be performed at or prior to the Effective Time);
(f) by either Carlyle or Levcor if the required approval of the
stockholders of Levcor contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at the Levcor
Stockholders' Meeting duly convened therefor or at any adjournment thereof;
provided, however, that the right to terminate this Agreement under this Section
7.1(f) shall not be available to Levcor where the failure to obtain Levcor
stockholder approval shall have been caused by the action or failure to act of
Levcor and such action or failure to act constitutes a material breach by Levcor
of this Agreement;
(g) by either Carlyle or Levcor if the required approval of the
stockholders of Carlyle contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at the Carlyle
Stockholders' Meeting duly convened therefore or at any adjournment thereof;
provided, however, that the right to terminate this Agreement under this Section
7.1(g) shall not be available to Carlyle where the failure to obtain Carlyle
stockholder approval shall have been caused by the action or failure to act of
Carlyle and such action or failure to act constitutes a material breach by
Carlyle of this Agreement;
(h) by Levcor, if the Board of Directors of Carlyle shall have (i)
withdrawn, modified or changed its approval or recommendation of this Agreement,
the Merger or any of the other transactions contemplated herein in any manner
which is adverse to Levcor or shall have resolved to do the foregoing; or (ii)
approved or have recommended to the stockholders of Carlyle a Competing
Transaction or shall have resolved to do the foregoing;
(i) by Levcor, if (i) Carlyle shall have exercised a right specified
in clause (i) of the third sentence of Section 4.1(e) with respect to any
transaction referred to therein and shall
37
enter into a Competing Transaction, or (ii) (x) a tender offer or exchange offer
or a proposal by a third party to acquire Carlyle pursuant to a merger,
consolidation, share exchange, business combination, tender or exchange offer or
similar transaction shall have been commenced or publicly proposed which
contains a proposal as to price (without regard to the specificity of such price
proposal) and (y) Carlyle shall not have rejected such proposal within 10
business days of its commencement or the date such proposal first becomes
publicly disclosed, if sooner; or
(j) by Carlyle, if it has entered into a Competing Transaction.
(k) The right of any party hereto to terminate this Agreement
pursuant to this Section 7.1 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto, any
person controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement and abandonment of the Merger by either Carlyle or Levcor as provided
in Section 7.1, this Agreement shall forthwith terminate and there shall be no
liability or obligation on the part of Levcor or Carlyle or their respective
officers or directors except with respect to the penultimate sentence of Section
5.4 and Sections 5.5 and 7.3; provided, however, that, subject to the provisions
of Section 8.8, nothing herein shall relieve any party of liability for any
breach hereof.
7.3 FEES, EXPENSES AND OTHER PAYMENTS. (a) Except as otherwise
provided in this Section 7.3, whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including, without limitation, fees and
disbursements of counsel, financial advisors and accountants) shall be borne
solely and entirely by the party which has incurred such costs and expenses
(with respect to such party, its "Expenses").
(b) Carlyle agrees that if this Agreement shall be terminated
pursuant to:
(i) Section 7.1(b) and (x) such termination is the result of material
breach of any covenant, agreement, representation or warranty contained herein
and (y) at any time during the period commencing on the date hereof and ending
twelve months after the date of termination of this Agreement, a Competing
Transaction involving Carlyle shall have occurred or Carlyle shall have entered
into a definitive agreement providing for such a Competing Transaction, which
Competing Transaction values, in the reasonable determination of the Carlyle
Board of Directors, the Carlyle Common Stock at more than 2/10 of the closing
price of the Levcor Common Stock over the 20-day trading period ending on May
23, 2002;
(ii) Section 7.1(g) because this Agreement, the Merger and the other
transactions contemplated hereby shall fail to receive the requisite vote for
approval and adoption by the stockholders of Carlyle at a meeting of the
stockholders of Carlyle called to vote thereon, and at the time of such meeting
there shall exist a proposal with respect to a Competing Transaction with
respect to Carlyle which either (x) the Board of Directors of Carlyle has not
publicly opposed or (y) is consummated, or a definitive agreement with respect
to which is
38
entered into, at any time during the period commencing on the date hereof and
ending twelve months after the date of termination of this Agreement; or
(iii) Section 7.1(h), Section 7.1(i) or Section 7.1(j);
then in each such event Carlyle shall pay to Levcor an amount equal to $300,000,
plus all of Levcor's Expenses not to exceed $200,000.
(c) Carlyle agrees that if this Agreement shall be terminated
pursuant to Section 7.1(b), then Carlyle shall pay to Levcor an amount equal to
Levcor's Expenses not to exceed $200,000; provided that Carlyle shall not be
obligated to make any payment pursuant to this Section 7.3(c) if Carlyle shall
be obligated to make a payment to Levcor pursuant to Section 7.3(b).
(d) Levcor agrees that if this Agreement shall be terminated pursuant
to Section 7.1(c), then Levcor shall pay to Carlyle an amount equal to Carlyle's
Expenses not to exceed $200,000.
(e) Any payment required to be made pursuant to Section 7.3(b),
7.3(c) or Section 7.3(d) shall be made as promptly as practicable but not later
than five business days after termination of this Agreement and shall be made by
wire transfer of immediately available funds to an account designated by Levcor,
except that any payment to be made as the result of an event described in
Section 7.3(b)(i) or clause (y) of Section 7.3(b)(ii) shall be made as promptly
as practicable but not later than five business days after the occurrence of the
Competing Transaction or the execution of the definitive agreement providing for
a Competing Transaction.
7.4 AMENDMENT. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of Carlyle or of Levcor, but, after any such
approval, no amendment shall be made which by law requires further approval by
such stockholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
7.5 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
39
ARTICLE VIII
GENERAL PROVISIONS
8.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for the agreements contained in Sections 2.1, 2.2, 5.6,
5.7, 7.3 and Article VIII.
8.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Levcor, to:
Levcor International, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to Carlyle, to:
Carlyle Industries Inc.
0 Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Chief Financial Officer
and Vice President
Facsimile: (000) 000-0000
With a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
40
8.3 CERTAIN DEFINITIONS. (a) For purposes of this Agreement:
(i) an "affiliate" of any person means another person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first person;
(ii) "beneficial ownership" with respect to any securities, means
having "beneficial ownership" of such securities in accordance with the
provisions of Rule 13d-3 under the Exchange Act. Without duplicative counting of
the same securities by the same holder, securities beneficially owned by a
person include securities beneficially owned by all other persons with whom such
person would constitute a group;
(iii) "group" means two or more persons acting together for the
purpose of acquiring, holding, voting or disposing of any securities, which
persons would be required to file a Schedule 13D or Schedule 13G with the SEC as
a "person" within the meaning of Section 13(d)(3) of the Exchange Act if such
persons beneficially owned a sufficient amount of such securities to require
such a filing under the Exchange Act;
(iv) "person" means an individual, corporation, limited liability
company, partnership, joint venture, association, trust, unincorporated
organization or other legal entity;
(v) a "subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person; and
(vi) Any accounting term that is used in the context of describing or
referring to an accounting concept and that is not specifically defined herein
shall be construed in accordance with GAAP as applied in the preparation of the
financial statements of Carlyle included in Carlyle SEC Documents (including,
without limitation, the Carlyle Year-End Financial Statements and the Carlyle
Balance Sheet) and the financial statements of Levcor included in Levcor SEC
Documents (including, without limitation, the Levcor Year-End Financial
Statements and the Levcor Balance Sheet).
(b) Each of the following terms has the meaning ascribed thereto in
the Section indicated below next to such term:
Defined Term Section Defined In Defined Term Section Defined In
------------ ------------------ ------------ ------------------
Agreement Recital knowledge 3.1(h)
--------- ----------
Carlyle Recital Legal Requirements 5.2(a)
------- ------------------
Carlyle Balance Sheet 3.1(e) Levcor Recital
--------------------- ------
41
Carlyle Benefit Plan 3.1(l) Levcor Balance Sheet 3.2(d)
-------------------- --------------------
Carlyle Capital Stock 2.1 (c) Levcor Benefit Plans 3.2(k)
--------------------- --------------------
Carlyle Certificates 2.2(b) Levcor Common Stock 3.2(b)
-------------------- -------------------
Carlyle Common Stock 2.1(a) Levcor Disclosure Letter 3.2
-------------------- ------------------------
Carlyle Disclosure Letter 3.1 Levcor Independent Advisor 3.1(v)
------------------------- --------------------------
Carlyle Independent Advisor 3.1(v) Levcor Intellectual Property Rights 3.2(n)
--------------------------- -----------------------------------
Carlyle Intellectual Property Rights 3.1(o) Levcor Material Contracts 3.2(p)
------------------------------------ --------------------------
Carlyle Option 2.1(e) Levcor Option 3.2(b)(i)
-------------- -------------
Carlyle Option Plan 2.1(e) Levcor Option Plan 3.2(b)(i)
------------------- ------------------
Carlyle Preferred Stock 2.1(b) Levcor SEC Documents 3.2(d)
----------------------- --------------------
Carlyle SEC Documents 3.1(e) Levcor Year-End Financial Statements 3.2(d)
--------------------- ------------------------------------
Carlyle Year-End Financial Statement 3.1(e) Litigation 3.1(j)
------------------------------------ ----------
Certificates of Merger 1.3 Material 3.1(a)
---------------------- --------
Closing 1.2 Material Adverse Effect 3.1(a)
------- -----------------------
Closing Date 1.2 Prospectus/Proxy Statement 3.1(f)
------------ --------------------------
Code 3.1(k) Registration Statement 3.1(f)
---- ----------------------
Confidentiality Agreement 3.1(e) Requisite Regulatory Approvals 6.1(b)
------------------------- ------------------------------
Consents 6.1(b) SEC 3.1(d)(iii)
-------- ---
Common Exchange Ratio 2.1(a) Securities Act 3.1(e)
--------------------- --------------
Competing Transaction 4.1(e) Series B Preferred Stock 3.1(c)
--------------------- ------------------------
Delaware Law Recital Stockholders' Meeting 5.2(a)
------------ ---------------------
Dissenting Shares 2.1(g) Surviving Corporation 1.1
----------------- ---------------------
Dissenting Stockholder 2.1(g) Surviving Corporation Certificates 2.2(b)
---------------------- ----------------------------------
Effective Time 1.3 Surviving Corporation Capital Stock 2.1(e)
-------------- -----------------------------------
42
Environmental Liability 3.1(i) Surviving Corporation Common Stock 2.1(a)
----------------------- ----------------------------------
Environmental Matter 3.1(i) Surviving Corporation Series A Preferred Stock 2.1(b)
-------------------- ----------------------------------------------
ERISA 3.1(l) Tax 3.1(k)(ii)
----- ---
ERISA Affiliate 3.1(l) Tax Entity 3.1(k)(ii)
--------------- ----------
Exchange Act 3.1(d)(ii) Tax Return 3.1(k)(ii)
------------ ----------
Exchange Agent 2.2(a) Violation 3.1(d)(ii)
-------------- ---------
Expenses 7.3 Voting Debt 3.1(c)(ii)
-------- -----------
GAAP 3.1(e)
----
Governmental Entity 3.1(d)(iii)
-------------------
8.4 INTERPRETATION. When a reference is made in this Agreement to
Sections or Exhibits, such reference shall be to a Section of or Exhibit to this
Agreement unless otherwise indicated. The recitals hereto constitute an integral
part of this Agreement. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The phrase "made available" in this
Agreement shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available. The
phrases "the date of this Agreement", "the date hereof" and terms of similar
import, unless the context otherwise requires, shall be deemed to refer to the
date in the parties section of the first page of this Agreement.
8.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; RIGHTS OF
OWNERSHIP. This Agreement (including the documents and the instruments referred
to herein) (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and (b) except as provided in Sections 2.2
and 5.6, is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder. The parties hereby acknowledge that, except as
hereinafter agreed to in writing, no party shall have the right to acquire or
shall be deemed to have acquired shares of common stock of the other party
pursuant to the Merger until consummation thereof.
43
8.7 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of New York, except to the extent Delaware
law shall govern the Merger, without regard to any applicable conflicts of law
provisions thereof.
8.8 SEVERABILITY; NO REMEDY IN CERTAIN CIRCUMSTANCES. Any term or
provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction.
If the final judgment of a court of competent jurisdiction declares that any
term or provision hereof is invalid or unenforceable, the parties agree that the
court making the determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed unless the
foregoing inconsistent action or the failure to take an action constitutes a
material breach of this Agreement or makes this Agreement impossible to perform,
in which case this Agreement shall terminate pursuant to Article VII hereof.
Except as otherwise contemplated by this Agreement, to the extent that a party
hereto took an action inconsistent herewith or failed to take action consistent
herewith or required hereby pursuant to an order or judgment of a court or other
competent authority, such party shall incur no liability or obligation unless
such party did not in good faith seek to resist or object to the imposition or
entering of such order or judgment.
8.9 PUBLICITY. Unless otherwise required by law, so long as this
Agreement is in effect, neither Carlyle, nor Levcor shall issue or cause the
publication of any press release or other public announcement with respect to
the transactions contemplated by this Agreement without the consent of the other
party, which consent shall not be unreasonably withheld.
8.10 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. 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.
8.11 SPECIFIC PERFORMANCE. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of applicable
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
or New York state court located in the State and City of New York in the event
any dispute arises out of this Agreement or any of the transactions contemplated
hereby, (ii) agrees that such party
44
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court or New York state
court sitting in the State and City of New York, and (iv) waives any right to
trial by jury with respect to any claim or proceeding related to or arising out
of this Agreement or any of the transactions contemplated hereby.
IN WITNESS WHEREOF, Levcor and Carlyle have caused this Agreement, to be signed
by their respective officers thereunto duly authorized, all as of May 24, 2002.
LEVCOR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
CARLYLE INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
45
EXHIBIT A
Certificate of Incorporation of Surviving Corporation
-----------------------------------------------------
AMENDED AND
RESTATED
CERTIFICATE OF INCORPORATION
OF
LEVCOR INTERNATIONAL, INC.
Levcor International, Inc. (the "Corporation"), a corporation organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware (the "GCL"), does hereby certify:
FIRST: That the date of filing of the Corporation's original Certificate
of Incorporation with the Secretary of State of the State of Delaware was August
17, 1967.
SECOND: This Amended and Restated Certificate of Incorporation (the
"Certificate") has been adopted pursuant to Sections 242 and 245 of the GCL and
restates and amends the provisions of the Certificate of Incorporation of the
Corporation.
THIRD: That the Board of Directors of the Corporation (the "Board")
adopted resolutions dated May 24, 2002 proposing and declaring advisable the
amendment and restatement of the Certificate of Incorporation, and that such
amendment and restatement of the Certificate of Incorporation was approved by
the holders of a majority of the shares of common stock entitled to vote at a
special meeting of stockholders held on June __, 2002, to read as follows:
RESOLVED, that the text of the Certificate of Incorporation be amended
and restated to read in its entirety as follows:
I.
The name of the corporation is Levcor International, Inc. (the
"Corporation").
II.
The address of its registered office in the State of Delaware is 00 Xxxxx
Xxxxxx, Xxxx xx Xxxxx, Xxxxxxxx 00000, County of Kent. The name of the
Corporation's registered agent in the State of Delaware at such address is
Nationwide Information Services, Inc.
III.
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the GCL.
IV.
Section 1. Capitalization.
The total number of shares of stock which the Corporation shall have
authority to issue is 23,000,000 consisting of 15,000,000 shares of common
stock, $.01 par value per share (the "Common Stock"), and 8,000,000 shares of
preferred stock, $.01 par value per share (the "Preferred Stock").
(a) The number of authorized shares of Common Stock may be increased
or decreased (but not below the number of shares of Common Stock then
outstanding) by the affirmative vote of the holders of a majority of the capital
stock of the Corporation.
(b) The Board of Directors is hereby expressly authorized to provide
for the issuance of the Preferred Stock in one or more series, and to fix for
each such series such voting powers, full or limited, or no voting powers, and
such designations, preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated and expressed in the resolution or resolutions adopted by the
Board of Directors providing for the issuance of such series.
(c) There is hereby designated a series of Preferred Stock to be
known as "Series A Preferred Stock," the number of shares constituting such
Series being 4,555,007 (the "Series A Preferred Stock").
(d) The powers, preferences, rights, restrictions and other matters
relating to the Series A Preferred are as follows:
Section 2. Dividends.
(a) Each holder of a share of Series A Preferred shall be entitled to
receive cumulative cash dividends at a rate of $.06 per annum per share of
Series A Preferred Stock (the "Series A Base Rate") from funds legally available
therefor, when, as and if declared by the Corporation's Board of Directors. Such
dividends shall be payable quarterly on March 15, June 15, September 15 and
December 15 (each a "Dividend Payment Date") of each year (unless such day is
not a business day, in which event on the next succeeding business day) to
holders of record of the Series A Preferred Stock as they appear in the register
for the Series A Preferred Stock (the "Series A Preferred Stock Register") on
the March 1, June 1, September 1 or December 1 immediately preceding such
Dividend Payment Date.
In the event that the Corporation shall have failed (for whatever reason) to
redeem shares of Series A Preferred Stock scheduled to be redeemed on any
Mandatory Redemption Date (as defined below), then the holders of Series A
Preferred Stock shall be entitled to receive, from and after such Mandatory
Redemption Date, cumulative cash dividends (in lieu of cash dividends at the
Series A Base Rate) at a rate (the "Special Rate") per share of Series A
Preferred Stock equal to 6% per annum on the Base Amount (as defined below). The
Base Amount means, with respect to each share of Series A Preferred Stock, $1;
provided that subsequent to the Mandatory Redemption Date, for purposes of
calculating the dividend due on any Dividend Payment Date
2
(if cumulative dividends have not been paid in full prior to such date), the
full amount of any accrued but unpaid dividends as of the immediately preceding
Dividend Payment Date shall be added to the Base Amount. Dividends payable on
the Preferred Stock for any period less than a full quarter dividend period
shall be computed on the basis of the 365 or 366 day year, as applicable, and
the actual number of days elapsed.
Dividends on each share of Series A Preferred Stock shall accrue from
the date of original issue of such share of Series A Preferred Stock. Quarterly
dividends which are not paid in full in cash on any Dividend Payment Date will
cumulate without interest as if quarterly dividends had been paid in cash on
each succeeding Dividend Payment Date until such accumulated quarterly dividends
shall have been declared and paid in full in cash. Any declaration of dividends
may be for a portion, or all, of the then accumulated dividends. Any accumulated
dividends which are not paid will continue to cumulate in the manner described
above.
No dividend or distribution in cash, shares of capital stock or other
property shall be paid or declared and set apart for payment on any date on or
in respect of the Common Stock, of the Corporation or on any other series of
stock issued by the Corporation ranking junior to the Preferred Stock in payment
of dividends or upon liquidation, dissolution or winding-up of the Corporation
(collectively, the "Junior Securities") (any such dividend or distribution
hereinafter referred to as a "Junior Securities Distribution"), unless,
contemporaneously therewith or with respect to the immediately preceding
Dividend Payment Date for the Series A Preferred Stock, a dividend or
distribution is or was paid or declared and set apart for payment, as the case
may be, on or in respect of the Series A Preferred Stock payable at the rate set
forth herein and payable on a date no later than the payment date set for such
Junior Securities Distribution. In no event may the Corporation (i) make a
Junior Securities Distribution in cash unless, contemporaneously therewith or
with respect to the immediately preceding Dividend Payment Date for the Series A
Preferred Stock, a dividend or distribution in cash is or was paid or declared
and set apart for payment on or in respect of the Series A Preferred Stock,
payable at the rate set forth herein and on a date no later than the payment
date set for such Junior Securities Distribution, (ii) make a Junior Securities
Distribution while there are dividends in arrears on the Series A Preferred
Stock or (iii) redeem, purchase or otherwise acquire for value any Junior
Securities unless, prior to or contemporaneously with such redemption, purchase
or acquisition the Series A Preferred Stock is redeemed in full; provided that
the Corporation may redeem, purchase or otherwise acquire Junior Securities (and
options in respect thereof) held by employees or former employees (or employee
benefit plans) of the Corporation or fractional shares in Junior Securities of
the Corporation which redemption, purchase or other acquisition shall be
approved by the Board of Directors of the Corporation. Notwithstanding the
foregoing, this provision shall not prohibit the payment or declaration and
setting aside of a dividend payable in shares of Junior Securities or a
redemption, purchase or acquisition of Junior Securities with shares of Junior
Securities.
(b) So long as any shares of Series A Preferred Stock shall be
outstanding, no dividend, whether in cash, or share of any security or property,
shall be paid or declared, nor shall any other distribution be made, on any
other capital stock of the Corporation, nor shall any shares of any such other
capital stock of the Corporation be purchased, redeemed, or otherwise acquired
for value by the Corporation until all dividends set forth in Section 2(a) above
on the
3
Series A Preferred Stock shall have been paid or declared and set apart.
Section 3. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, before any payment or distribution
of the assets of the Corporation (whether capital or surplus), or proceeds
thereof, shall be made to or set apart for the holders of shares of any Junior
Securities, holders of shares of Series A Preferred Stock shall be entitled to
receive payment of $1 per share held by them, plus an amount in cash equal to
all accrued and unpaid dividends thereon, which dividends shall have accrued at
the Series A Base Rate or the Special Rate, as the case may be, provided in
Section 2, whether or not declared to the date of such payment. If, upon any
liquidation, dissolution or winding-up of the Corporation, the assets of the
Corporation or proceeds thereof, distributed among the holders of shares of
Series A Preferred Stock and any other series of Preferred Stock which ranks
pari passu in right of payment upon liquidation, dissolution or winding-up of
the Corporation with the Series A Preferred Stock shall be insufficient to pay
in full the respective preferential amounts of shares of Series A Preferred
Stock and such other series of Preferred Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of all such stock
ratably in accordance with the respective amounts which would be payable on such
shares if all amounts payable thereon were paid in full. After payment of the
full amount of the liquidation preference to which the holders of the Series A
Preferred Stock are entitled, such holders will not be entitled to any further
participation in any distribution of assets of the Corporation. For the purposes
of this paragraph, none of the merger or the consolidation of the Corporation
into or with another corporation or the merger or consolidation of any other
corporation into or with the Corporation or the sale, transfer or other
disposition of all or substantially all the assets of the Corporation, shall be
deemed to be voluntary or involuntary liquidation, dissolution or winding-up of
the Corporation.
(b) Voting. Except as otherwise expressly required by the GCL, the
holders of the capital stock of the Corporation, irrespective of the class or
series, shall vote together as a single class for the election or removal of
directors of the Corporation and on all other matters to which stockholders are
entitled to vote. Each holder of the Corporation's Common Stock shall have one
vote for each share of Common Stock held of record by such stockholder and each
holder of the Corporation's Series A Preferred Stock shall have 1/5 vote for
each share of Series A Preferred Stock held of record by such stockholder.
Section 4. Redemption of Series A Preferred Stock.
(a) Mandatory Redemption. The Series A Preferred Stock shall, subject
to the limitations described herein, be subject to mandatory redemption, to the
extent it may lawfully do so, in three equal annual installments on June 15,
2007, June 15, 2008 and June 15, 2009 (each a "Redemption Date"), in each case,
from funds legally available therefor, at a price per share of Series A
Preferred Stock equal to $1 per share (the "Series A Redemption Price"),
together with an amount representing accrued and unpaid dividends, whether or
not declared, to the date of redemption (the "Series A Redemption Date").
4
Each such date on which the Corporation is required to redeem shares of Series A
Preferred Stock is hereinafter referred to as a "Mandatory Redemption Date". Any
shares of Series A Preferred Stock which have been issued and have been
redeemed, repurchased or reacquired in any manner by the Corporation (other than
through the operation of this mandatory redemption provision) prior to any
Mandatory Redemption Date may be credited by the Corporation against the number
of shares of Series A Preferred Stock required to be redeemed on any Mandatory
Redemption Date after the date of such other redemption, repurchase or
reacquisition, unless such shares have been previously so credited. The
Corporation shall cause to be mailed to each holder of Series A Preferred Stock,
at their last addresses as they shall appear upon the Series A Preferred Stock
Register, at least 30 and not more than 60 days prior to the Mandatory
Redemption Date, a notice stating the number of shares of Series A Preferred
Stock owned by such holder that are to be redeemed on the Mandatory Redemption
Date. Except as otherwise required by law, the failure to give any such notice,
or any defect therein, shall not affect the validity of such a redemption.
Notwithstanding the terms of the foregoing paragraphs, the Corporation shall be
obligated to redeem Series A Preferred Stock pursuant to the mandatory
redemption herein described only to the extent that such Series A Preferred
Stock can be redeemed without contravening or causing a default under any
contract, agreement or other instrument by which any of the Corporation or its
subsidiaries or any of their property is bound.
If on any Mandatory Redemption Date the Corporation shall not be obligated, by
reason of the operation of the foregoing paragraph, to redeem shares of Series A
Preferred Stock, then the Corporation shall be obligated, to the extent and on
the first date after such Mandatory Redemption Date on which the limitations
described in the foregoing paragraph shall no longer apply (the "Delayed
Redemption Date"), to redeem the number of shares of Series A Preferred Stock
which it would have been obligated to redeem on the Mandatory Redemption Date,
at a price per share of Series A Preferred Stock equal to the Series A
Redemption Price; it being understood that in any event the unpaid dividends
included in such Redemption Prices shall have accrued at the respective Base
Rate or the Special Rate, as the case may be, as provided in Section 2.
The Series A Preferred Stock may be redeemed at the Corporation's option
(subject to the legal availability of funds) at any time, in whole or in part,
at a price per share equal to the Redemption Price. The Corporation shall cause
to be mailed to each holder of Series A Preferred Stock, at their last addresses
as they shall appear upon the Series A Preferred Stock Register, at least 30 and
not more than 60 days prior to the Optional Redemption Date, a notice stating
the date on which such redemption is expected to take place (the "Optional
Redemption Date") and, if less than all the shares of Series A Preferred Stock
are to be redeemed, the notice shall also specify the number of shares of Series
A Preferred Stock owned by such holder that are to be redeemed. Except as
otherwise required by applicable law, the failure to give any such notice, or
any defect therein, shall not affect the validity of such a redemption.
If less than all the shares of Series A Preferred Stock are to be redeemed, the
shares to be redeemed shall be redeemed, on a pro rata basis, according to the
number of shares of Series A Preferred Stock held by each holder.
5
On or after the Mandatory Redemption Date, the Optional Redemption Date or the
Delayed Redemption Date, as the case may be, the holders of shares of Series A
Preferred Stock which have been redeemed shall surrender their certificates
representing such shares to the Corporation at its principal place of business
or as otherwise notified, and thereupon the redemption price of such shares
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be cancelled. Notice having been given as aforesaid, from and
after the Mandatory Redemption Date, the Optional Redemption Date or the Delayed
Redemption Date, as the case may be, unless there shall have been a default in
payment of the redemption price, all rights of the holders of such redeemed
shares of Series A Preferred Stock, except the right to receive the Redemption
Price without interest upon surrender of their certificate or certificates,
shall cease with respect to such shares, and such shares shall not thereafter be
transferred on the Series A Preferred Stock Register or be deemed to be
outstanding for any purpose whatsoever.
Section 5. Reissuance of Series A Preferred Stock. No shares of Series A
Preferred Stock which are redeemed, purchased or acquired by the Corporation
shall be reissued, and all such shares shall be canceled and eliminated from the
shares which the Corporation shall be authorized to issue.
V.
Unless and except to the extent that the bylaws of the Corporation shall
so require, the election of directors of the Corporation need not be by written
ballot.
VI.
In furtherance and not in limitation of the powers conferred by the laws
of the State of Delaware, the Board is expressly authorized to make, alter and
repeal the bylaws of the Corporation, subject to the power of the stockholders
of the Corporation to alter or repeal any bylaw whether adopted by them or
otherwise.
VII.
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the GCL, or (iv) for any
transaction from which the director derived an improper personal benefit. If the
GCL is amended after approval by the stockholders of this Article VII to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director shall be eliminated or
limited to the fullest extent permitted by the GCL, as so amended.
The Corporation shall, to the fullest extent permitted by the provisions
of Section 145 of the GCL as the same may be amended and supplemented, indemnify
any and all persons whom it shall have power to indemnify under said section
from and against any and all expenses,
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liabilities, or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any By-Law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his or her or their official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person.
Any repeal or modification of this Article VII shall be prospective and
shall not affect the rights under this Article VII in effect at the time of the
alleged occurrence of any act or omission to act giving rise to liability or
indemnification.
VIII.
The Corporation reserves the right at any time, and from time to time, to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, in a manner now or hereafter prescribed by the laws of the State
of Delaware at the time in force; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the rights reserved in this
Article VIII.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Certificate of Incorporation to be signed by its ________________ this ____ day
of _________, 2002.
By:
------------------------------
Name:
Title:
7
EXHIBIT B
By-Laws of Surviving Corporation
--------------------------------
BY-LAWS
OF
LEVCOR INTERNATIONAL, INC.
ARTICLE 1
STOCKHOLDERS
Section 1.1 Annual Meeting. The annual meeting of the stockholders of the
Corporation shall be held annually at the registered office of the Corporation
in the State of Delaware or at such other place within or without the State of
Delaware, at such time and on such date as may from time to time be designated
by the Board of Directors, for the election of directors and for the transaction
of any other proper business.
Section 1.2 Special Meetings. Special meetings of the stockholders of the
Corporation may be called at any time and from time to time by the Chairman,
President or by a majority of the directors then in office, and shall be called
by the Secretary upon the written request of stockholders holding of record at
least a majority in number of the issued and outstanding shares of the
Corporation entitled to vote at such meeting. Special meetings shall be held at
such place within or without the State of Delaware, at such time and on such
date as shall be specified in the call thereof.
Section 1.3 Notice of Meetings. Written notice of each meeting of the
stockholders, stating the place, date and hour thereof and, in the case of a
special meeting, the purpose or purposes for which it is called, shall be given,
not less than ten nor more than sixty days before the date of such meeting (or
at such other time as may be required by statute), to each stockholder entitled
to vote at such meeting. If mailed, such notice is given when deposited in the
United States mail, postage prepaid, directed to each stockholder at his or her
address as it appears on the records of the Corporation.
Section 1.4 Waiver of Notice. Whenever notice is required to be given of
any annual or special meeting of the stockholders, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time stated
in such notice, shall be deemed equivalent to notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice. Attendance of a
person at a meeting of the stockholders shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
Section 1.5 Adjournment. When any meeting of the stockholders is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken. At the adjourned meeting any business may be transacted
which might have been transacted at the original meeting. If the adjournment is
for more than 30 days, or if after such adjournment the Board of Directors shall
fix a new record date for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at such
meeting.
Section 1.6 Quorum. At any meeting of the stockholders the presence, in
person or by proxy, of the holders of a majority of the issued and outstanding
shares of the Corporation entitled to vote at such meeting shall be necessary in
order to constitute a quorum for the transaction of any business. If there shall
not be a quorum at any meeting of the stockholders, the holders of a majority of
the shares entitled to vote present at such meeting, in person or by proxy, may
adjourn such meeting from time to time, without further notice to the
stockholders other than an announcement at such meeting, until holders of the
amount of shares required to constitute a quorum shall be present in person or
by proxy.
Section 1.7 Voting. Each holder of the Corporation's common stock shall
have one vote for each share of common stock held of record by such stockholder.
Each holder of the Corporation's Series A preferred stock shall have 1/5 vote
for each share of Series A preferred stock held of record by such stockholder.
Voting need not be by ballot, except that all election of directors shall be by
written ballot unless otherwise provided in the Certificate of Incorporation.
Whenever any corporate action is to be taken by vote of the stockholders, it
shall, except as otherwise required by law or by the Certificate of
Incorporation, be authorized by a majority of the votes cast at a meeting of
stockholders of the holders of shares entitled to vote thereon, except that all
elections shall be decided by a plurality of the votes cast.
Section 1.8 Action Without a Meeting. Any action required or permitted to
be taken at any annual or special meeting of stockholders may be taken without a
meeting thereof, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
such corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
Section 1.9 Record Date. The Board of Directors may fix, in advance, a
record date, which shall not be more than sixty nor less than ten days before
the date of any meeting of stockholders, nor more than sixty days prior to any
other action, as the record date for the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of the stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action.
Section 1.10 Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period.
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ARTICLE 2
DIRECTORS
Section 2.1 Number; Qualifications. The Board of Directors shall consist
of one or more members as determined from time to time by the Board of
Directors. Directors need not be stockholders of the Corporation.
Section 2.2 Term of Office. Each director shall hold office until his or
her successor is elected and qualified or until his or her earlier death,
resignation or removal.
Section 2.3 Meetings. A meeting of the Board of Directors shall be held
for the election of officers and for the transaction of such other business as
may come before such meeting as soon as practicable after the annual meeting of
the stockholders. Other regular meetings of the Board of Directors may be held
at such times as the Board of Directors of the Corporation may from time to time
determine. Special meetings of the Board of Directors may be called at any time
by the President of the Corporation or by a majority of the directors then in
office. Meetings of the Board of Directors may be held within or without the
State of Delaware.
Section 2.4 Notice of Meetings; Waiver of Notice; Adjournment. No notice
need be given of the first meeting of the Board of Directors after the annual
meeting of stockholders or of any other regular meeting of the Board of
Directors. Notice of a special meeting of the Board of Directors, specifying the
place, date and hour thereof, shall be delivered personally, mailed or
telegraphed to each director at his or her address as such address appears on
the books of the Corporation at least two business days (Saturdays, Sundays and
legal holidays not being considered business days for the purpose of these
By-Laws) before the date of such meeting. Whenever notice is required to be
given under any provision of the Certificate of Incorporation or these By-Laws,
a written waiver thereof, signed by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a director at a special meeting shall constitute a waiver of
notice of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders, the directors or any committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation or these By-Laws. A majority of the directors present whether
or not a quorum is present, may adjourn any meeting to another time and place.
Notice need not be given of the adjourned meeting if the time and place to which
the meeting is adjourned are announced at the meeting at which the adjournment
is taken, and at the adjourned meeting any business may be transacted that might
have been transacted at the original meeting.
Section 2.5 Quorum; Voting. A majority of the total number of directors
shall constitute a quorum for the transaction of business. The vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 2.6 Participation by Telephone. Members of the Board of Directors
or any committee thereof may participate in a meeting of the Board of Directors
or such committee by
3
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute presence in person at
such meeting.
Section 2.7 Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board of Directors or such
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceeding of the Board of Directors or
of such committee.
Section 2.8 Committees. The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors. Any such committee, to the
extent provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed by the officers on all papers which may
require it, but no such committee shall have the power or authority in reference
to (a) amending the Certificate of Incorporation (except that a committee may,
to the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the Board of Directors, fix the
designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of the assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation, or fix the number of shares of any
series of stock or authorize the increase or decrease of the shares of any
series); (b) adopting an agreement of merger or consolidation; (c) recommending
to the stockholders the sale, lease or exchange of all or substantially all of
the Corporation's property and assets; (d) recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution; or (e) amending
these By-Laws and, unless the resolution expressly so provides, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. The Board of Directors may designate one or
more directors as alternate members of any such committee, who may replace any
absent or disqualified member at any meeting of such committee. In the absence
or disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another director to act at the
meeting in the place of such absent or disqualified member.
Section 2.9 Removal; Resignation. Any director or the entire Board of
Directors may be removed with or without cause, by the holders of a majority of
the shares then entitled to vote at an election of directors. Any director may
resign at any time, upon written notice to the Corporation.
Section 2.10 Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of directors then in office, although less than a quorum, or by a
sole remaining director. When one or more directors shall resign from the Board
of Directors, effective at a future date, a majority of the directors then in
office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become
4
effective, and each director so chosen shall hold office as provided above in
the filling of other vacancies. A director elected to fill a vacancy shall hold
office for the unexpired term of his or her predecessor.
Section 2.11 Compensation. The Board of Directors may fix the
compensation of directors.
ARTICLE 3
OFFICERS
Section 3.1 Election; Qualifications. At the first meeting of the Board
of Directors and as soon as practicable after each annual meeting of
stockholders, the Board of Directors shall elect or appoint a Chairman, a
President, one or more Vice-Presidents, a Secretary and a Treasurer, and may
elect or appoint at such time or from time to time such additional officers as
it deems advisable. No officer need be a director of the Corporation. Any number
of offices may be held by the same person, except that there shall always be two
persons who hold offices which entitle them to sign instruments and stock
certificates.
Section 3.2 Term of Office; Vacancies. Each officer shall hold office
until the election and qualification of his or her successor or until his or her
earlier death, resignation or removal. Any vacancy occurring in any office,
whether because of death, resignation or removal, with or without cause, or
otherwise, shall be filled by the Board of Directors.
Section 3.3 Removal; Resignation. Any officer may be removed from office
at any time with or without cause by the Board of Directors. Any officer may
resign his or her office at any time upon written notice to the Corporation.
Section 3.4 Powers and Duties of the Chairman. The Chairman shall be the
chief executive officer of the Corporation and shall have general charge and
supervision of its business and affairs. The Chairman shall from time to time
make such reports concerning the Corporation as the Board of Directors of the
Corporation may direct. The Chairman shall preside at all meetings of the
stockholders and the Board of Directors. The Chairman shall have such other
powers and shall perform such other duties as may from time to time be assigned
to him or her by the Board of Directors.
Section 3.5 Powers and Duties of the President. The President shall be
the chief operating officer of the Corporation and shall have general charge and
supervision of its operations, subject to the supervision of the Chairman. The
President shall from time to time make such reports concerning the Corporation
as the Board of Directors or the Chairman of the Corporation may direct. The
President shall have such other powers and shall perform such other duties as
may from time to time be assigned to him or her by the Board of Directors or the
Chairman.
Section 3.6 Powers and Duties of the Vice-Presidents. Each of the
Vice-Presidents shall be given such titles and designations and shall have such
powers and perform such duties as may from time to time be assigned to him or
her by the Board of Directors.
5
Section 3.7 Powers and Duties of the Secretary. The Secretary shall
record and keep the minutes of all meetings of the stockholders and of the Board
of Directors in a book to be kept for that purpose. The Secretary shall attend
to the giving and serving of all notices by the Corporation. The Secretary shall
be the custodian of, and shall make or cause to be made the proper entries in,
the minute book of the Corporation and such other books and records as the Board
of Directors may direct. The Secretary shall be the custodian of the corporate
seal of the Corporation and shall affix or cause to be affixed such seal to such
contracts and other instruments as the Board of Directors may direct. The
Secretary shall have such other powers and shall perform such other duties as
may from time to time be assigned to him or her by the Board of Directors.
Section 3.8 Powers and Duties of the Treasurer. The Treasurer shall be
the custodian of all funds and securities of the Corporation. Whenever required
by the Board of Directors, the Treasurer shall render a statement of the
Corporation's cash and other accounts, and shall cause to be entered regularly
in the proper books and records of the Corporation to be kept for such purpose
full and accurate accounts of the Corporation's receipts and disbursements. The
Treasurer shall at all reasonable times exhibit the Corporation's books and
accounts to any director of the Corporation upon application at the principal
office of the Corporation during business hours. The Treasurer shall have such
other powers and shall perform such other duties as may from time to time be
assigned to him or her by the Board of Directors.
Section 3.9 Delegation. In the event of the absence of any officer of the
Corporation or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors may at any time or from time to time delegate
all or any part of the powers or duties of any officer to any other officer or
officers or to any director or directors.
ARTICLE 4
STOCK
The shares of the Corporation shall be represented by certificates
signed by the President or any Vice-President and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary. Any of or all the signatures
on the certificate may be a facsimile.
ARTICLE 5
EXECUTION OF DOCUMENTS
All contracts, agreements, instruments, bills payable, notes, checks,
drafts, warrants or other obligations of the Corporation shall be made in the
name of the Corporation and shall be signed by such officer or officers as the
Board of Directors may from time to time designate.
6
ARTICLE 6
SEAL
The seal of the Corporation shall contain the name of the
Corporation, the words "Corporate Seal", the year of its organization and the
word "Delaware".
ARTICLE 7
INDEMNIFICATION
The Corporation shall indemnify all persons to the full extent
permitted, and in the manner provided, by the Delaware General Corporation Law,
as the same now exists or may hereafter be amended.
ARTICLE 8
FISCAL YEAR
The fiscal year of the Corporation shall end on such date as shall be
determined by the Board of Directors.
ARTICLE 9
AMENDMENT OF BY-LAWS
These By-Laws may be amended or repealed, and any new By-Law may be
adopted, by the stockholders entitled to vote or by the Board of Directors.
7
EXHIBIT C
Directors of Surviving Corporation
----------------------------------
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxxxxxxx Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxx X. XxXxxxxxxxx
EXHIBIT D
Officers of Surviving Corporation
---------------------------------
NAME POSITION
-------------------------- ----------------------------------------
Xxxxxx X. Xxxxxxxx Chief Executive Officer, President, and
Chairman of the Board of Directors
Xxxxxx X. Xxxxx Chief Financial Officer, Vice President,
Secretary and Treasurer
