AGREEMENT AND PLAN OF MERGER
by and among
WHX CORPORATION
HN ACQUISITION CORP.
and
HANDY & XXXXXX
March 1, 1998
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TABLE OF CONTENTS
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ARTICLE I
THE OFFER AND MERGER.....................................................................................1
Section 1.1 The Offer..........................................................................1
Section 1.2 Company Actions....................................................................4
Section 1.3 Directors..........................................................................6
Section 1.4 The Merger.........................................................................7
Section 1.5 Effective Time.....................................................................8
Section 1.6 Closing............................................................................8
Section 1.7 Directors and Officers of the Surviving
Corporation..........................................................8
Section 1.8 Shareholders' Meeting..............................................................9
Section 1.9 Merger Without Meeting of
Shareholders........................................................10
ARTICLE II
CONVERSION OF SECURITIES................................................................................10
Section 2.1 Conversion of Capital Stock.......................................................10
Section 2.2 Exchange of Certificates..........................................................11
Section 2.3 Lost Certificates.................................................................13
Section 2.4 Dissenting Shares.................................................................13
Section 2.5 Company Option Plans..............................................................14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................15
Section 3.1 Organization......................................................................15
Section 3.2 Capitalization....................................................................16
Section 3.3 Authorization; Validity of Agreement;
Company Action......................................................18
Section 3.4 Consents and Approvals; No Violations.............................................18
Section 3.5 SEC Reports and Financial Statements..............................................20
Section 3.6 No Undisclosed Liabilities........................................................20
Section 3.7 Absence of Certain Changes........................................................21
Section 3.8 Employee Benefit Plans; ERISA.....................................................21
Section 3.9 Litigation........................................................................23
Section 3.10 No Default; Compliance with
Applicable Laws.....................................................24
Section 3.11 Taxes.............................................................................24
Section 3.12 Real Property.....................................................................26
Section 3.13 Environmental Matters.............................................................26
Section 3.14 Information in Schedule 14D-1.....................................................27
Section 3.15 Compliance with Laws..............................................................27
Section 3.16 HSR Approval......................................................................27
Section 3.17 Precious Metals Inventories.......................................................28
Section 3.18 Opinion of Financial Advisor......................................................28
Section 3.19 Voting Requirements...............................................................28
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND
THE PURCHASER.......................................................28
Section 4.1 Organization......................................................................28
Section 4.2 Authorization; Validity of Agreement;
Necessary Action....................................................29
Section 4.3 Consents and Approvals; No Violations.............................................29
Section 4.4 Information in Proxy Statement;
Schedule 14D-9......................................................30
Section 4.5 Financing.........................................................................30
Section 4.6 Share Ownership...................................................................31
Section 4.7 Purchaser's Operations............................................................31
Section 4.8 HSR Approval......................................................................31
Section 4.9 Investigation by Parent and Purchaser.............................................31
ARTICLE V
COVENANTS...............................................................................................32
Section 5.1 Interim Operations of the Company.................................................32
Section 5.2 Approvals and Consents; Cooperation...............................................35
Section 5.3 Actions Regarding the Rights......................................................35
Section 5.4 Access to Information.............................................................35
Section 5.5 Repayment of Borrowings Under Credit
Agreement...........................................................36
Section 5.6 Consents and Approvals............................................................36
Section 5.7 Employee Benefits.................................................................37
Section 5.8 No Solicitation...................................................................39
Section 5.9 Brokers or Finders................................................................40
Section 5.10 Publicity.........................................................................41
Section 5.11 Notification of Certain Matters...................................................41
Section 5.12 Directors' and Officers' Insurance and
Indemnification.....................................................41
Section 5.13 Further Assurances................................................................43
ARTICLE VI
CONDITIONS..............................................................................................44
Section 6.1 Conditions to Each Party's Obligation To
Effect the Merger...................................................44
ARTICLE VII
TERMINATION.............................................................................................45
Section 7.1 Termination.......................................................................45
Section 7.2 Effect of Termination.............................................................47
Section 7.3 Termination Fee...................................................................47
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ARTICLE VIII
MISCELLANEOUS...........................................................................................48
Section 8.1 Amendment and Modification........................................................48
Section 8.2 Nonsurvival of Representations
and Warranties......................................................48
Section 8.3 Notices...........................................................................48
Section 8.4 Interpretation....................................................................50
Section 8.5 Counterparts......................................................................50
Section 8.6 Entire Agreement; Third Party
Beneficiaries.......................................................50
Section 8.7 Severability......................................................................50
Section 8.8 Governing Law.....................................................................51
Section 8.9 Jurisdiction......................................................................51
Section 8.10 Assignment........................................................................52
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER, dated as of March 1, 1998, by
and among WHX Corporation, Delaware corporation ("Parent"), HN Acquisition
Corp., a New York corporation and a direct, wholly owned subsidiary of Parent
(the "Purchaser"), and Handy & Xxxxxx, a New York corporation (the "Company").
WHEREAS, Parent and the Purchaser have proposed acquiring all
of the outstanding common stock, par value $1.00 per share, of the Company (the
"Shares" or "Company Common Stock") at a price of $35.25 per Share in cash;
WHEREAS, the Boards of Directors of Parent, the Purchaser and
the Company have approved, and deem it advisable and in the best interests of
their respective shareholders to consummate, the acquisition of the Company by
Parent upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
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Section 1.1 The Offer. (a) As promptly as practicable (but in
no event later than five business days after the public announcement of the
execution hereof), the Purchaser shall commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) an offer (the "Offer") to purchase for cash all shares of the issued and
out standing Company Common Stock (together with the related Common Stock
Purchase Rights (the "Rights") issued pursuant to the Rights Agreement between
the Company and ChaseMellon Shareholder Services, L.L.C., dated as of January
26, 1989, as amended as of April 25, 1996 and October 22, 1996 (the "Rights
Agreement"), at a price of $35.25 per Share, net to the seller in cash (such
price, or such higher price per Share as may be paid in the Offer, being
referred to herein as the "Offer Price"),
subject to there being validly tendered and not withdrawn prior to the
expiration of the Offer, that number of Shares which, together with the Shares
beneficially owned by Parent or the Purchaser, represent at least a majority of
the Shares outstanding on a fully diluted basis (the "Minimum Condition") and to
the other conditions set forth in Annex A hereto. The Purchaser shall, on the
terms and subject to the prior satisfaction or waiver (except that the Minimum
Condition may not be waived) of the conditions of the Offer, accept for payment
and pay for Shares tendered as soon as it is legally permitted to do so under
applicable law. The obligations of the Purchaser to commence the Offer and to
accept for payment and to pay for any Shares validly tendered on or prior to the
expiration of the Offer and not withdrawn shall be subject only to the Minimum
Condition and the other conditions set forth in Annex A hereto. The Offer shall
be made by means of an offer to purchase (the "Offer to Purchase") containing
the terms set forth in this Agreement, the Minimum Condition and the other
conditions set forth in Annex A hereto. The Purchaser shall not amend or waive
the Minimum Condition and shall not decrease the Offer Price or decrease the
number of Shares sought, or amend any other condition of the Offer in any manner
adverse to the holders of the Shares (other than with respect to insignificant
changes or amendments) without the prior written consent of the Company (such
consent to be authorized by the Board of Directors of the Company or a duly
authorized committee thereof); provided, however, that (i) subject to applicable
legal requirements, Parent may cause Purchaser to waive any condition to the
Offer, as set forth in Annex A, in Parent's reasonable judgment and (ii) the
Offer may be extended in connection with an increase in the consideration to be
paid pursuant to the Offer so as to comply with applicable rules and regulations
of the United States Securities and Exchange Commission ("SEC"). Notwithstanding
the foregoing, the Purchaser shall, and Parent agrees to cause the Purchaser to,
extend the Offer at any time up to May 1, 1998 for one or more periods of not
more than 10 business days, if at the initial expiration date of the Offer, or
any extension thereof, any condition to the Offer is not satisfied or required.
The Purchaser may also, in its sole discretion, extend the expiration date of
the Offer for up to 10 additional business days after the initial expiration
date. In addition, the Offer Price may be increased and the Offer may be
extended to the extent
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required by law in connection with such increase in each case without the
consent of the Company.
(b) As soon as practicable on the date the Offer is
commenced, Parent and the Purchaser shall file with the SEC a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer (together with all
amendments and supplements thereto and including the exhibits thereto, the
"Schedule 14D-1"). The Schedule 14D-1 will include, as exhibits, the Offer to
Purchase and a form of letter of transmittal and summary advertisement
(collectively, together with any amendments and supplements thereto, the "Offer
Documents"). The Offer Documents will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
shareholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by Parent or
the Purchaser with respect to information supplied by the Company in writing for
inclusion in the Offer Documents. Each of Parent and the Purchaser further
agrees to take all steps necessary to cause the Offer Documents to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Each of Parent and the
Purchaser, on the one hand, and the Company, on the other hand, agrees promptly
to correct any information provided by it for use in the Offer Documents if and
to the extent that it shall have become false and misleading in any material
respect and the Purchaser further agrees to take all steps necessary to cause
the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
the opportunity to review the initial Schedule 14D-1 before it is filed with the
SEC. In addition, Parent and the Purchaser agree to provide the Company and its
counsel in writing with any comments or other communications that Parent, the
Purchaser or their counsel may receive from time to time from the SEC or its
staff with respect to the Offer Documents promptly after the receipt of such
comments or other communications.
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Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to
the Offer and represents that the Board of Directors, at a meeting duly called
and held, has, subject to the terms and conditions set forth herein, (i)
approved this Agreement and the transactions contemplated hereby, including the
Offer and the Merger (as defined in Section 1.4) (collectively, the
"Transactions"), and such approvals constitute approval of the Offer, this
Agreement and the Merger for purposes of Sections 902 and 912 of the New York
Business Corporation Law (the "NYBCL") and similar provisions of any other
similar state statutes that might be deemed applicable to the transactions
contemplated hereby, (ii) resolved to recommend that the shareholders of the
Company accept the Offer, tender their Shares thereunder to the Purchaser and
approve and adopt this Agreement and the Merger and the Company hereby consents
to the inclusion in the Offer Documents of such recommendation; provided, that
such recommendation may be withdrawn, modified or amended if, in the good faith
opinion of the Board of Directors, after consultation with independent legal
counsel, such recommendation would be inconsistent with its fiduciary duties to
the Company's shareholders under applicable law and (iii) approved the
redemption of the Rights prior to the consummation of the Offer according to the
provisions of the Rights Agreement. The Company represents that the actions set
forth in this Section 1.2(a) and all other actions it has taken in connection
therewith are, assuming the accuracy of, and in reliance upon, the information
received in writing from Parent as to the ownership of Shares by Parent and
their affiliates, sufficient to render the relevant provisions of Section 912 of
the NYBCL inapplicable to the Offer and the Merger. The Company further
represents that Xxxxxxx, Xxxxx & Co. ("Goldman") has delivered to the Board of
Directors of the Company the Fairness Opinion as described in Section 3.18.
(b) Concurrently with the commencement of the Offer,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to
the fiduciary duties of the Company's directors under applicable law and to the
4
provisions of this Agreement, contain the recommendation referred to in clause
(ii) of Section 1.2(a) hereof. The Schedule 14D-9 will comply in all material
respects with the provisions of applicable federal securities laws and, on the
date filed with the SEC and on the date first published, sent or given to the
Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by Parent or the
Purchaser in writing for inclusion in the Offer Documents. The Company further
agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Each of the Company, on
the one hand, and Parent and the Purchaser, on the other hand, agrees promptly
to correct any information provided by it for use in the Schedule 14D-9 if and
to the extent that it shall have become false and misleading in any material
respect and the Company further agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated
to holders of the Shares, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given the
opportunity to review the initial Schedule 14D-9 before it is filed with the
SEC. In addition, the Company agrees to provide Parent, the Purchaser and their
counsel in writing with any comments or other communications that the Company
or its counsel may receive from time to time from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments or
other communications. Notwithstanding anything to the contrary contained herein,
if the members of the Board of Directors of the Company determine in the
exercise of their fiduciary duties to withdraw, modify or amend the
recommendation referred to in clause (ii) of Section 1.2(a) hereof, such
withdrawal, modification or amendment shall not constitute a breach of this
Agreement.
(c) In connection with the Offer, the Company will
promptly furnish or cause to be furnished to the Purchaser mailing labels,
security position listings and any available listing or computer file containing
the
5
names and addresses of the record holders of the Shares as of a recent date, and
shall furnish the Purchaser with such information and assistance as the
Purchaser or its agents may reasonably request in communicating the Offer to the
shareholders of the Company. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and the Purchaser shall hold in
confidence the information contained in any of such labels and lists and the
additional information referred to in the preceding sentence, will use such
information only in connection with the Offer, and, if this Agreement is
terminated, will upon request of the Company deliver or cause to be delivered
to the Company all copies of such information then in its possession or the
possession of its agents or representatives.
(d) The Company shall amend the Rights Agreement as
set forth in Annex B hereto, which amendment will be effective as of the date
hereof.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for
Shares by Parent or any of its subsidiaries which represent at least a majority
of the outstanding shares of Company Common Stock (on a fully diluted basis),
Parent shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as is equal to
the product of the total number of directors on such Board (giving effect to the
directors designated by Parent pursuant to this sentence) multiplied by the
percentage that the aggregate number of Shares beneficially owned by the
Purchaser, Parent and any of their affiliates bears to the total number of
shares of Company Common Stock then outstanding (such number being the "Board
Percentage") provided, however, that if the number of Shares purchased by
Parent or any of its Subsidiaries equals or exceeds 50.01% of the outstanding
Shares, the Board Percentage will in all events be at least a majority of the
members of the Board of Directors of the Company. The Company shall, upon
request of the Purchaser, use its best efforts to cause Parent's designees to
satisfy the Board Percentage, including without limitation increasing the size
of its Board of Directors (which, pursuant to the Company's Restated Certificate
of Incorporation, as amended (the "Certificate of Incorporation"), has a
6
maximum number of twelve directors) and securing resignations of such number of
its incumbent directors as is necessary to enable Parent's designees to be so
elected to the Company's Board, and shall promptly cause Parent's designees to
be so elected. Notwithstanding the foregoing, until the Effective Time (as
defined in Section 1.5 hereof), the Company shall retain as members of its Board
of Directors at least two directors who are directors of the Company on the date
hereof (the "Company Designees"); provided, that subsequent to the purchase of
and payment for Shares pursuant to the Offer, Parent shall always have its
designees represent at least a majority of the entire Board of Directors. The
Company's obligations under this Section 1.3(a) shall be subject to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Parent or the
Purchaser will supply the Company any information with respect to either of them
and their nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f-1. Upon receipt of such information from Parent or the Purchaser,
the Company shall include in the Schedule 14D-9 (as an annex or otherwise) the
information required by Section 14(f) and Rule 14f-1 as is necessary to enable
Parent's designees to be elected to the Company's Board of Directors.
(b) From and after the time, if any, that
Parent's designees constitute a majority of the Company's Board of Directors,
any amendment of this Agreement, any termination of this Agreement by the
Company, any extension of time for performance of any of the obligations of
Parent or the Purchaser hereunder, any waiver of any condition or any of the
Company's rights hereunder or other action by the Company hereunder may be
effected only by the action of a majority of the directors of the Company then
in office who were directors of the Company on the date hereof, which action
shall be deemed to constitute the action of the full Board of Directors;
provided, that if there shall be no such directors, such actions may be effected
by majority vote of the entire Board of Directors of the Company.
Section 1.4 The Merger. Subject to the terms and conditions of
this Agreement, at the Effective Time (as defined in Section 1.5 hereof), the
Company and the Purchaser shall consummate a merger (the "Merger") pursuant to
which (a) the Purchaser shall be merged with and into the Company and the
separate corporate existence of
7
the Purchaser shall thereupon cease, (b) the Company shall be the successor or
surviving corporation in the Merger (the "Surviving Corporation") and shall
continue to be governed by the laws of the State of New York, and (c) the
separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger.
Pursuant to the Merger, (x) the Certificate of Incorporation of the Purchaser,
as in effect immediately prior to the Effective Time, shall be the Certificate
of Incorporation of the Surviving Corporation until thereafter amended as
provided by law and such Certificate of Incorporation, and (y) the By-laws of
the Purchaser, as in effect immediately prior to the Effective Time, shall be
the Bylaws of the Surviving Corporation until thereafter amended as provided by
law, the Certificate of Incorporation and such By-laws. The Merger shall have
the effects set forth in the NYBCL.
Section 1.5 Effective Time. Parent, the Purchaser and the
Company will cause an appropriate Certificate of Merger (the "Certificate of
Merger") to be executed and filed on the date of the Closing (as defined in
Section 1.6) (or on such other date as Parent and the Company may agree) with
the Department of State of the State of New York (the "Department of State") as
provided in the NYBCL. The Merger shall become effective on the date on which
the Certificate of Merger has been duly filed with the Department of State or
such time as is agreed upon by the parties and specified in the Certificate of
Merger, and such time is hereinafter referred to as the "Effective Time."
Section 1.6 Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m., on a date to be specified by the parties, which
shall be no later than the second business day after satisfaction or waiver of
all of the conditions set forth in Article VI hereof (the "Closing Date"), at
the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, unless another date or place is agreed to in writing by the
parties hereto.
Section 1.7 Directors and Officers of the Surviving
Corporation. The directors and officers of the Purchaser at the Effective Time
shall, from and after the Effective Time, be the directors and officers, respec-
8
tively, of the Surviving Corporation until their successors shall have been duly
elected or appointed or qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-laws.
Section 1.8 Shareholders' Meeting.
(a) If required by applicable law in order to
consummate the Merger, the Company, acting through its Board of Directors,
shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its shareholders (the "Special Meeting") as
soon as practicable following the acceptance for payment and
purchase of Shares by the Purchaser pursuant to the Offer for
the purpose of considering and taking action upon the approval
of the Merger and the adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary
proxy or information statement relating to the Merger and this
Agreement and use its reason able efforts (x) to obtain and
furnish the information required to be included by the SEC in
the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy or
information statement and cause a definitive proxy or
information statement (the "Proxy Statement") to be mailed to
its shareholders and (y) to obtain the necessary approvals of
the Merger and this Agreement by its shareholders; and
(iii) subject to the fiduciary obligations of the
Board under applicable law as advised by independent counsel,
include in the Proxy Statement the recommendation of the Board
that shareholders of the Company vote in favor of the approval
of the Merger and the adoption of this Agreement.
(b) Parent agrees that it will vote, or cause to be
voted, all of the Shares then owned by it, the Purchaser or any of its other
subsidiaries and affil-
9
iates in favor of the approval of the Merger and the adoption of this Agreement.
Section 1.9 Merger Without Meeting of Shareholders.
Notwithstanding Section 1.8 hereof, in the event that Parent, the Purchaser or
any other subsidiary of Parent shall acquire, together with the Shares owned by
Parent, the Purchaser or any other subsidiary of Parent, at least 90% of the
outstanding shares of each class of capital stock of the Company, pursuant to
the Offer or otherwise, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of shareholders of the
Company, in accordance with Section 905 of the NYBCL.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective
Time, by virtue of the Merger and with out any action on the part of the holders
of any shares of Company Common Stock or common stock, par value $0.01 per
share, of the Purchaser (the "Purchaser Common Stock"):
(a) Purchaser Common Stock. Each issued and
outstanding share of the Purchaser Common Stock shall be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation with the result that the Surviving Corporation will be a
wholly-owned subsidiary of Parent.
(b) Cancellation of Treasury Stock and Parent-Owned
Stock. All shares of Company Common Stock that are owned by the Company as
treasury stock and any shares of Company Common Stock owned by Parent, the
Purchaser or any other wholly owned Subsidiary (as defined in Section 3.1
hereof) of Parent shall be cancelled and retired and shall cease to exist and no
consideration shall be delivered in exchange therefor.
(c) Exchange of Shares. Each issued and outstanding
share of Company Common Stock (other than Shares to be cancelled in accordance
with Section 2.1(b)
10
and any Dissenting Shares (if applicable and as defined in Section 2.4 hereof)),
shall be converted into the right to receive the Offer Price, payable to the
holder thereof, without interest (the "Merger Consideration"), upon surrender of
the certificate formerly representing such share of Company Common Stock in the
manner provided in Section 2.2. All such shares of Company Common Stock, when so
converted, shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration therefor upon the
surrender of such certificate in accordance with Section 2.2, without interest,
or to perfect any rights of appraisal as a holder of Dissenting Shares that such
holder may have pursuant to Section 623 of the NYBCL.
Section 2.2 Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or
trust company reasonably acceptable to the Company to act as agent for the
holders of shares of Company Common Stock in connection with the Merger (the
"Paying Agent") to receive the funds to which holders of shares of Company
Common Stock shall become entitled pursuant to Section 2.1(c). Such funds shall
be invested by the Paying Agent as directed by Parent or the Surviving
Corporation and any interest or other income resulting from such investments
will be paid to Parent from time to time upon request by Parent.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time but in no event more than three business
days thereafter, the Paying Agent shall mail to each holder of record of a
certificate or certificates, which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates"),
whose shares were converted pursuant to Section 2.1 into the right to receive
the Merger Consideration, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Paying Agent and shall be in
such form and have such other provisions as Parent and the Company may
reasonably specify) and (ii) instructions for use in effecting the
11
surrender of the Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration for
each share of Company Common Stock formerly represented by such Certificate and
the Certificate so surrendered shall forthwith be cancelled. If payment of the
Merger Consideration is to be made to a person other than the person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer and that the person requesting such
payment shall have paid any transfer and other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered or shall have established to the satisfaction of
the Surviving Corporation that such tax either has been paid or is not
applicable. Until surrendered as contemplated by this Article II, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive the Merger Consideration in cash as contemplated by
this Article II. No interest will be paid or will accrue on any cash payable to
the holders of Certificates pursuant to the provisions of this Article II.
(c) Transfer Books; No Further Ownership Rights in
Company Common Stock. At the Effective Time, the stock transfer books of the
Company shall be closed and thereafter there shall be no further registration of
transfers of shares of Company Common Stock on the re cords of the Company. From
and after the Effective Time, the holders of Certificates evidencing ownership
of shares of Company Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares, except as
otherwise provided for herein or by applicable law. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time
following one year after the Effective Time, the Surviving Corporation shall be
entitled to require
12
the Paying Agent to deliver to it any funds (including any interest received
with respect thereto) which had been made available to the Paying Agent and
which have not been disbursed to holders of Certificates, and there after such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate has not been surrendered prior to the expiration of the applicable
statute of limitations after the Effective Time (or immediately prior to such
earlier date on which any Merger Consideration payable to the holder of such
Certificate representing Shares pursuant to this Article II would otherwise
escheat to or become the property of any Governmental Entity (as hereinafter
defined)), any such Merger Consideration in respect of such Certificate will
become the property of the Surviving Corporation, free and clear of all claims
or interest of any individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity (a "Person") previously entitled thereto.
Section 2.3 Lost Certificates. If any Certificate is
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration, in accordance with the provisions of this
Agreement.
Section 2.4 Dissenting Shares. Notwithstanding
anything in this Agreement to the contrary, Shares outstanding immediately prior
to the Effective Time and held by a holder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded ap-
13
praisal for such Shares in accordance with Section 623 of the NYBCL ("Dissenting
Shares") shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If, after the Effective Time, such holder fails to
perfect or withdraws or loses his right to appraisal, such Shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration, without interest thereon.
Section 2.5 Company Option Plans. Parent and the Company shall
take all actions necessary to provide that, effective as of the Effective Time,
(i) each out standing employee stock option to purchase Shares (an "Employee
Option") granted under the Company's Long-Term Incentive Stock Option Plan (the
"ISO Plan") or the Company's 1995 Omnibus Stock Incentive Plan (the "1995 Option
Plan") and each outstanding non-employee director option to purchase Shares
("Director Options" and collectively with Employee Options, "Options") granted
under the Company's Outside Director Stock Option Plan (the "Director Plan" and
collectively with the ISO Plan and the 1995 Option Plan, the "Option Plans"),
whether or not then exercisable or vested, shall become fully exercisable and
vested, (ii) each Option that is then outstanding shall be cancelled and (iii)
in consideration of such cancellation, and except to the extent that Parent or
the Purchaser and the holder of any such Option otherwise agree, the Company
(or, at Parent's option, the Purchaser) shall pay to such holders of Options an
amount in respect thereof equal to the product of (A) the excess, if any, of the
Offer Price over the exercise price of each such Option and (B) the number of
Shares subject thereto (such payment to be net of applicable withholding taxes).
Except as may be otherwise agreed to by the Parent or the
Purchaser, all stock option plans of the Company shall terminate as of the
Effective Time and the provisions of any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its Subsidiaries shall be terminated as
of the Effective Time and no holder of Options or any participant in any option
plan or any other plan, program or arrangement
14
shall have any right thereunder to acquire any equity securities of the Company
or the Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the
Purchaser as follows:
Section 3.1 Organization. Each of the Company and its
Subsidiaries (as defined in this Section 3.1) is a corporation, partnership or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has all
requisite corporate or other power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power, authority, and governmental
approvals would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole. As used in this Agreement, the word "Subsidiary"
means, with respect to any party, any corporation or other organization, whether
incorporated or unincorporated, of which (i) such party or any other Subsidiary
of such party is a general partner (excluding such partnerships where such party
or any Subsidiary of such party do not have a majority of the voting interest in
such partnership) or (ii) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries, or by such party and
one or more of its Subsidiaries. As used in this Agreement, any reference to any
event, change or effect being material or having a material adverse effect on or
with respect to any entity (or group of entities taken as a whole) means such
event, change or effect that is materially adverse to the consolidated financial
condition, businesses, properties, assets or results of operations of such
entity or a combination thereof (or, if used with respect thereto, of such group
of entities taken as a whole). The Company
15
and each of its Subsidiaries is duly qualified or licensed to do business and
in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing would not in the aggregate have a
material adverse effect on the Company and its Subsidiaries taken as a whole.
The Company has delivered to Parent prior to the execution of this Agreement
complete and correct copies of its certificate of incorporation and by-laws and
has made available to Parent the certificate of incorporation and by-laws (or
comparable organizational documents) of each of its Subsidiaries, in each case
as amended to date. Exhibit 21 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 includes all subsidiaries of the Company
required to be listed thereon (each a "Subsidiary", and collectively, the
"Subsidiaries"). Except as set forth on Schedule 3.1 hereof, the Company does
not own any minority interests in any other corporation representing at least 5%
of the equity interest of such corporation or participate in joint ventures with
any other party.
Section 3.2 Capitalization. (a) The authorized capital stock
of the Company consists of 60,000,000 shares of Company Common Stock. As of the
date hereof, (i) 12,131,288 shares of Company Common Stock are issued and
outstanding (of which 92,973 shares were granted on February 26, 1998 pursuant
to the Fifth Cycle of the Company's Long-Term Incentive Plan), (ii) 2,480,144
shares of Company Common Stock are issued and held in the treasury of the
Company, (iii) 1,371,104 shares of Company Common Stock are reserved for
issuance upon exercise of then outstanding Options granted under the Option
Plans and (iv) 156,139 shares of Company Common Stock have been allocated for
the Sixth Cycle of the Company's Long-Term Incentive Plan (which allocation
would amount to 69,395 shares of Company Common Stock assuming a May 1, 1998
proration date in the event of a "change in control" (as defined in such Plan)).
Schedule 3.2(a) sets forth the number and weighted average exercise price of
Options outstanding as of the date hereof. As of the date hereof there are
12,131,288 shares of Common Stock reserved for issuance upon exercise of the
Rights. All the outstanding shares of the Company Common Stock are, and all
shares which may be issued pursuant to the exer-
16
cise of outstanding Options or Rights when issued in accordance with the
respective terms thereof will be, duly authorized, validly issued, fully paid
and non-assessable and are not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting Debt") of the Company
or any of its Subsidiaries issued and outstanding. Except (a) as set forth
above, and (b) for the transactions contemplated by this Agreement, as of the
date hereof, (i) there are no shares of capital stock of the Company authorized,
issued or outstanding, (ii) there are no existing options, warrants, calls,
pre-emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any character, relating to the issued or unissued capital stock
of the Company or any of its Subsidiaries, obligating the Company or any of its
Subsidiaries to issue, transfer or sell or cause to be issued, transferred or
sold any shares of capital stock or Voting Debt of, or other equity interest in,
the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment, and
(iii) there are no out standing contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or
capital stock of the Company or any subsidiary or affiliate of the Company.
(b) Except as set forth on Schedule 3.2, all the
outstanding shares of capital stock of each Subsidiary have been validly issued
and are fully paid and nonassessable and are owned directly or indirectly by the
Company, free and clear of all pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever (collectively, "Liens").
(c) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of the capital stock of the Company or any of the
Subsidiaries. None of the Company or its Subsidiaries is required to redeem,
repurchase or otherwise acquire shares of capital stock of the Company, or any
of its
17
Subsidiaries, respectively, as a result of the transactions contemplated by this
Agreement.
Section 3.3 Authorization; Validity of Agreement; Company
Action. (a) The Company has full corporate power and authority to execute and
deliver this Agreement and, subject to obtaining the necessary approval of its
shareholders, to consummate the transactions contemplated hereby. The execution,
delivery and performance by the Company of this Agreement, and the consummation
by it of the transactions contemplated hereby, have been duly authorized by
its Board of Directors and, except for those actions contemplated by Section
1.2(a) hereof and obtaining the approval of its shareholders as contemplated by
Section 1.8 hereof, no other corporate action on the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Company and, subject
to approval and adoption of this Agreement by the Company's shareholders (and
assuming due and valid authorization, execution and delivery hereof by the other
parties there to) is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(b) The Board of Directors of the Company has
approved and taken all corporate action required to be taken by the Board of
Directors for the consummation of the transactions contemplated by this
Agreement. The Board of Directors of the Company also has approved the
transactions contemplated by this Agreement for the purposes of rendering the
provisions of Section 912 of the NYBCL inapplicable to such transactions.
Section 3.4 Consents and Approvals; No Violations. Except
for filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, state
18
or foreign laws relating to takeovers, state securities or blue sky laws and the
NYBCL, neither the execution, delivery or performance of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated
hereby nor compliance by the Company with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws or similar organizational documents of the Company or
of any of its Subsidiaries, (ii) require on the part of the Company any filing
with, or permit, authorization, consent or approval of, any court, arbitral
tribunal, administrative agency or commission or other governmental or other
regulatory authority or agency (a "Governmental Entity"), except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole, (iii) except for the Revolving Credit Agreement,
dated as of September 29, 1997, among the Company, the lenders party thereto and
the Bank of Nova Scotia, as Administrative Agent (the "Credit Agreement"), and
the Note Purchase Agreement, dated as of April 17, 1997, among the Company and
the Purchasers party thereto (the "Note Agreement"), result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any material note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
and which has been filed as an exhibit to the Company SEC Documents (as defined
in Section 3.5) (the "Material Agreements") or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company, any
of its Subsidiaries or any of their properties or assets, excluding from the
foregoing clauses (iii) or (iv) such violations, breaches or defaults which
would not, individually or in the aggregate, have a material adverse effect on
the Company and its Subsidiaries taken as a whole, and which will not materially
impair the ability of the Company to consummate the transactions contemplated
hereby.
19
Section 3.5 SEC Reports and Financial Statements. Except as
set forth in Schedule 3.5, the Company has filed with the SEC, and has
heretofore made available to Parent true and complete copies of, all forms,
reports, schedules, statements and other documents required to be filed by it
since December 31, 1996 under the Exchange Act that were filed and publicly
available prior to the date of this Agreement (as such documents have been
amended since the time of their filing, collectively, the "Company SEC
Documents"). As of their respective dates or, if amended, as of the date of the
last such amendment, the Company SEC Documents, including, without limitation,
any financial statements or schedules included therein did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. None of the
Subsidiaries is required to file any forms, reports or other documents with the
SEC pursuant to Section 12 or 15 of the Exchange Act. The financial statements
of the Company (the "1997 Financial Statements") included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996
(including the related notes thereto) (the "1996 Form 10-K") and in the
quarterly reports on Form 10-Q for the three fiscal quarters occur ring since
the 1996 Form 10-K have been prepared from, and are in accordance with, the
books and records of the Company and its consolidated subsidiaries, comply in
all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto and subject, in the case of
unaudited interim financial statements, to normal year-end adjustments) and
fairly present the consolidated financial position and the consolidated results
of operations and cash flows of the Company and its consolidated subsidiaries as
at the dates thereof or for the periods presented therein.
Section 3.6 No Undisclosed Liabilities. Except (a) as
disclosed in the Company SEC Documents or on Schedule 3.6 hereto, (b) for
liabilities incurred in the ordinary course of business and consistent with past
practice and (c) for liabilities incurred in connection
20
with the consummation of the transactions contemplated hereby, since September
30, 1997, neither the Company nor any of its Subsidiaries has incurred any
liabilities which, individually or in the aggregate, would be reason ably
expected to have a material adverse effect on the Company and its Subsidiaries
taken as a whole and would be required by GAAP to be reflected on a consolidated
balance sheet of the Company and its Subsidiaries (including the notes
thereto).
Section 3.7 Absence of Certain Changes. Except as disclosed in
the Company SEC Documents or on Schedule 3.7 hereto, since September 30, 1997,
the Company and its Subsidiaries have conducted their respective businesses in
the ordinary course of business and there has not been (i) any change in the
business of the Company or the amount, character or ownership interests of the
Company's assets that has resulted in a material adverse effect on the Company
and its Subsidiaries, taken as a whole; (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to the equity interests of the Company or of any of its
Subsidiaries other than the regular quarterly cash dividends; (iii) any change
by the Company or any of its Subsidiaries in accounting principles or methods,
except insofar as may be required by a change in GAAP; (iv) any split,
combination or reclassification of any of the Company's capital stock or any
issuance or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for shares of the Company's capital stock
(other than the Rights) or (v) any change by the Company or any of its
Subsidiaries of any actuarial or other assumption used to calculate funding
obligations with respect to any Company pension plans, or change the manner in
which contributions to any Company pension plans are made or the basis on which
such contributions are determined.
Section 3.8 Employee Benefit Plans; ERISA.
(a) Schedule 3.8 hereto sets forth a list of all
material employee benefit plans, (including but not limited to plans described
in section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), maintained by the Company, any of its Subsidiaries or any
trade or business, whether or not incorporated (an "ERISA Affiliate"), which
together with
21
the Company would be deemed a "single employer" within the meaning of section
4001(b)(15) of ERISA ("Benefit Plans") and all material employment and severance
agreements with employees of the Company ("Employee Agreements"). True and
complete copies of all Employee Agreements have been made available to Parent
by the Company.
(b) With respect to each Benefit Plan, except as
otherwise disclosed on Schedule 3.8: (i) if intended to qualify under section
401(a) or 401(k) of the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder (the "Code"), such plan has received a
determination letter from the Internal Revenue Service stating that it so
qualifies and that its trust is exempt from taxation under section 501(a) of the
Code; (ii) such plan has been administered in all material respects in
accordance with its terms and applicable law; (iii) no breaches of fiduciary
duty have occurred which might reasonably be expected to give rise to material
liability on the part of the Company; (iv) no disputes are pending, or, to the
knowledge of the Company, threatened that might reasonably be expected to give
rise to material liability on the part of the Company; (v) no prohibited
transaction (within the meaning of Section 406 of ERISA) has occurred that might
reasonably be expected to give rise to material liability on the part of the
Company; and (vi) all contributions required to be made to such plan as of the
date hereof (taking into account any extensions for the making of such
contributions) have been made in full.
(c) No Benefit Plan is a "multiemployer pension
plan," as defined in section 3(37) of ERISA, nor is any Benefit Plan a plan
described in section 4063(a) of ERISA.
(d) No liability under Title IV of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any ERISA Affiliate of incurring a material liability under such Title. No
Benefit Plan has incurred an accumulated funding deficiency, as defined in
section 302 of ERISA or section 312 of the Code, whether or not waived.
(e) With respect to each Benefit Plan that is a
"welfare plan" (as defined in section 3(1) of
22
ERISA), no such plan provides medical or death benefits with respect to current
or former employees of the Company or any of its Subsidiaries beyond their
termination of employment (other than to the extent required by applicable
law).
(f) Neither the Company nor any of its Subsidiaries
has been reimbursed by the federal government or any other Governmental Entity
relating to any pension or welfare benefits, or any other employee benefits or
fringe benefits maintained or contributed to by the Company.
(g) To the knowledge of the Company, there has been
no violation (or tax incurred under) Section 4980B of the Code or Sections
601-609 of ERISA with respect to any Benefit Plan that could result in material
liability.
(h) Subject to applicable requirements of ERISA, the
Code and collective bargaining agreements, neither any provision of any Benefit
Plan nor any agreement with any employee nor any representation or course of
conduct by or on behalf of the Company or its ERISA Affiliates would prevent the
amendment or termination after the Effective Time of any Benefit Plan without
liability to Parent, the Purchaser, the Company or their ERISA Affiliates.
(i) Based on the valuation as of January 1, 1997, as
appropriately adjusted through December 31, 1997, for purposes of financial
disclosure in the Company's financial statements, the assets of the Handy &
Xxxxxx Pension Plan, the Handy & Xxxxxx Hourly Pension Plan and the Handy &
Xxxxxx Bargain Unit Pension Plan exceed the FAS 87 liabilities (i.e., the
projected benefit obligations) by an amount in excess of $120 million.
(j) Schedule 3.8 identifies all material written
employment agreements and severance agreements with employees of the Company and
its Subsidiaries in effect or committed to be put into effect as of the date
hereof (an "Employee Agreement").
Section 3.9 Litigation. Except as disclosed in the Company
SEC Documents or on Schedule 3.9 hereto, there is no suit, action or proceeding
pending or, to the
23
knowledge of the Company, threatened against the Company or any of its
Subsidiaries which, individually or in the aggregate, is reasonably likely to
have a material ad verse effect on the Company and its Subsidiaries, taken as a
whole.
Section 3.10 No Default; Compliance with Applicable Laws.
Except as set forth on Schedule 3.10 hereto, the business of the Company and
each of its Subsidiaries is not in default or violation of any term, condition
or provision of (i) its respective articles of incorporation or by-laws or
similar organizational documents, (ii) any Material Agreement or (iii) any
federal, state, local or foreign statute, law, ordinance, rule, regulation,
judgment, decree, order, concession, grant, franchise, permit or license or
other governmental authorization or approval applicable to the Company or any
of its Subsidiaries, excluding from the foregoing clauses (ii) and (iii),
defaults or violations which would not, individually or in the aggregate, have a
material adverse effect on the Company and its Subsidiaries, taken as a whole.
Section 3.11 Taxes. (a) The Company and its Subsidiaries have
(i) duly filed (or there has been filed on their behalf) with the appropriate
governmental authorities all Tax Returns (as defined in Section 3.11(f))
required to be filed by them on or prior to the date hereof, other than those
Tax Returns the failure of which to file would not, individually or in the
aggregate, have a material adverse effect on the Company and its Subsidiaries,
taken as a whole, and such Tax Returns are true, correct and complete in all
material respects, and (ii) duly paid in full or made provision in accordance
with generally accepted accounting principles (or there has been paid or
provision has been made on their behalf) for the payment of all Taxes (as
defined in Section 3.11(f)) shown to be due on such Tax Returns.
(b) Except as set forth on Schedule 3.11 hereto,
there are no ongoing federal, state, local or foreign audits or examinations of
any Tax Return of the Company or its Subsidiaries. Except as set forth on
Schedule 3.11, the Company and its Subsidiaries have not received any written
notice of audit, are not undergoing any audit of its Tax Returns, and have not
received any written notice of deficiency or assessment from any
24
taxing authority with respect to liability for Taxes of the Company or any
Subsidiary, which has not been fully paid or finally settled, except for such
audits, deficiencies and assessments relating to liabilities which would not,
individually or in the aggregate, have a material adverse effect on the Company
and its Subsidiaries.
(c) Except as set forth on Schedule 3.11 hereto,
there are no outstanding requests, agreements, consents or waivers to extend the
statutory period of limitations applicable to the assessment of any Taxes or
deficiencies against the Company or any of its Subsidiaries, and no power of
attorney granted by either the Company or any of its Subsidiaries with respect
to any Taxes is currently in force. The Company has not filed a request with the
Internal Revenue Service for changes in accounting methods within the last two
years, which change would materially affect the accounting for tax purposes,
directly or indirectly, of the Company.
(d) Except as set forth on Schedule 3.11, neither the
Company nor any of its Subsidiaries is a party to any agreement providing for
the allocation or sharing of Taxes.
(e) "Taxes" shall mean any and all taxes, charges,
fees, levies or other assessments, including, without limitation, income, gross
receipts, excise, real or personal property, sales, withholding, social
security, occupation, use, service, service use, license, net worth, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the United
States Internal Revenue Service or any taxing authority (domestic or foreign),
including, without limitation, any state, county, local or foreign government or
any subdivision or taxing agency thereof (including a United States
possession)), whether computed on a separate, consolidated, unitary, combined or
any other basis; and such term shall include any interest, penalties or
additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies or other assessments. "Tax Return" shall mean
any report, return, document, declaration or other information or filing
required to be supplied to any taxing authority or jurisdiction (domestic or
foreign) with respect to Taxes.
25
Section 3.12 Real Property. The Company and the Subsidiaries,
as the case may be, have good and marketable title or valid leasehold rights to
all real property purported to be owned by them or used in the conduct of their
respective businesses as currently conducted with only such exceptions as
individually or in the aggregate would not have a material adverse effect on the
Company and the Subsidiaries, taken as a whole.
Section 3.13 Environmental Matters. (a) Except as set forth in
the Company SEC Documents or in Schedule 3.13:
(i) since December 31, 1996, the Company has not received any
written communication from any person or entity (including any
Governmental Entity) stating or alleging that it may be a potentially
responsible party under Environmental Law (as defined in Section
3.13(b)) with respect to any actual or alleged environmental
contamination; neither the Company nor, to the Company's knowledge, any
Governmental Entity is conducting or has conducted any environmental
remediation or environmental investigation which could reasonably be
expected to result in liability for the Company under Environmental
Law; and the Company has not received any request for information under
Environmental Law from any Governmental Entity with respect to any
actual or alleged environmental contamination, except, in each case,
for communications, environmental remediation and investigations and
requests for information which would not, individually or in the
aggregate, have a material adverse effect;
(ii) since December 31, 1996, the Company has not received any
written communication from any person or entity (including any Govern
mental Entity) stating or alleging that the Company may have violated
any Environmental Law, or that the Company has caused or contributed to
any environmental contamination that has caused any property damage or
personal injury under Environmental Law, except, in each case, for
statements and allegations of violations and statements and allegations
of responsibility for property damage and personal
26
injury which would not, individually or in the aggregate, have a
material adverse effect; and
(iii) all underground storage tanks ("UST's") on property
currently owned by the Company comply with applicable Environmental
Law, except for UST's which would not, individually or in the
aggregate, have a material adverse effect.
(b) For purposes of this Section 3.13, "Environmental
Law" means all applicable state, federal and local laws, regulations and rules,
including common law, judgments, decrees and orders relating to pollution, the
preservation of the environment, and the release of materials into the
environment.
Section 3.14 Information in Schedule 14D-1. None of the
information supplied or to be supplied by the Company in writing specifically
for inclusion in the Schedule 14D-1, at the time such document is first
published, sent or given will at the date it is first mailed to the Company's
shareholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading.
Section 3.15 Compliance with Laws. Except as set forth on
Schedule 3.15 or as disclosed in the SEC Documents, neither the Company nor any
Subsidiary is in violation of, or has violated, any law, statute, ordinance,
rule, regulation, arbitral determination, order, writ, decree or injunction that
is applicable to or binding upon the Company, any Subsidiary or any of their
respective properties, other than in each case such violations that,
individually or in the aggregate, have not had a material adverse effect on the
Company and its Subsidiaries taken as a whole.
Section 3.16 HSR Approval. The Company has filed a premerger
notification and report form under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "HSR Act") with respect to the acquisition of the
Company by Parent. The applicable waiting period under the HSR Act has expired.
27
Section 3.17 Precious Metals Inventories. Schedule 3.17 sets
forth the aggregate net amount of fine ounces of gold, silver, palladium and
platinum owned by the Company and its wholly-owned Subsidiaries as of February
27, 1998 assuming such precious metals were reduced or refined to a fine ounce
basis.
Section 3.18 Opinion of Financial Advisor. The Company has
received the opinion of Xxxxxxx, Sachs & Co. (the "Fairness Opinion") to the
effect that, as of the date thereof, the Merger Consideration to be received by
the Company's shareholders pursuant to this Agreement is fair to the Company's
shareholders (other than Parent and the Purchaser) from a financial point of
view, a copy of which opinion will be made available to Parent.
Section 3.19 Voting Requirements. The affirmative vote of the
holders of 66 2/3% of the voting power of all outstanding Shares, voting as a
single class, at the Company's Stockholders Meeting to adopt this Agreement is
the only vote of the holders of any class or series of the Company's capital
stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser jointly and severally represent and
warrant to the Company as follows:
Section 4.1 Organization. Each of Parent and the Purchaser is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate or
other power and authority and all necessary governmental approvals to own, lease
and operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing and in good standing or to
have such power, authority, and governmental approvals would not have a material
adverse effect on Parent and its Subsidiaries taken as a whole. Parent and the
Purchaser are duly qualified or licensed to do business and in good standing in
each jurisdiction in which the property owned, leased
28
or operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing would not, in the aggregate, have a
material adverse effect on Parent and its Subsidiaries, taken as a whole.
Section 4.2 Authorization; Validity of Agreement; Necessary
Action. Each of Parent and the Purchaser has full corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Parent and the
Purchaser of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly authorized by their Boards of Directors and
no other corporate action on the part of Parent and the Purchaser is necessary
to authorize the execution and delivery by Parent and the Purchaser of this
Agreement and the consummation by them of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Parent and the Purchaser,
as the case may be, and, assuming due and valid authorization, execution and
delivery hereof by the Company, is a valid and binding obligation of each of
Parent and the Purchaser, as the case may be, enforceable against them in
accordance with its respective terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Section 4.3 Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, state or foreign
laws relating to takeovers, state securities or blue sky laws, the NYBCL, the
laws of other states in which Parent or the Purchaser is qualified to do or is
doing business, neither the execution, delivery or performance of this Agreement
by Parent and the Purchaser nor the consummation by Parent and the Purchaser of
the transactions contemplated hereby nor compliance by Parent and the Purchaser
with any of the provisions hereof will
29
(i) conflict with or result in any breach of any provision of the respective
certificate of incorporation or by-laws or similar organizational documents of
Parent, any of its subsidiaries or the Purchaser, (ii) require on the part of
Parent or the Purchaser any filing with, or permit, authorization, consent or
approval of, any Governmental Entity, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings would not
have a material adverse effect on Parent and its Subsidiaries taken as a whole,
(iii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Parent, any of its
Subsidiaries or the Purchaser is a party or by which any of them or any of their
properties or assets may be bound or (iv) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Parent, any of its
Subsidiaries or the Purchaser or any of their properties or as sets, excluding
from the foregoing clauses (iii) or (iv) such violations, breaches or defaults
which would not, individually or in the aggregate, have a material adverse
effect on Parent, its Subsidiaries or the Purchaser taken as a whole and will
not materially impair the ability of Parent or the Purchaser to consummate the
transactions contemplated hereby.
Section 4.4 Information in Proxy Statement; Schedule 14D-9.
None of the information supplied by Parent or the Purchaser for inclusion or
incorporation by reference in the Proxy Statement or the Schedule 14D-9 will, at
the date mailed to shareholders and at the time of the meeting of shareholders
to be held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
Section 4.5 Financing. Either Parent or the Purchaser has
sufficient funds available (through cash on hand and existing credit
arrangements or otherwise) to purchase all of the Shares outstanding on a fully
diluted basis, to repay all amounts outstanding under the Credit
30
Agreement and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
Section 4.6 Share Ownership. Except as set forth in the
Statement on Schedule 13D of Parent and the Purchaser dated January 26, 1998,
Parent and the Purchaser do not beneficially own any Shares. Parent and the
Purchaser will not sell, transfer or otherwise dispose of any of the Shares
beneficially owned by them so long as this Agreement is in effect, except
transfers to a direct or indirect wholly owned subsidiary of Parent.
Section 4.7 Purchaser's Operations. The Purchaser has not
engaged in any business activities or conducted any operations other than in
connection with the transactions contemplated hereby or as disclosed in the
Tender Offer Statement of the Purchaser dated December 16, 1997.
Section 4.8 HSR Approval. Parent and the Purchaser have filed
a premerger notification and report form under the HSR Act with respect to their
acquisition of the Company. The applicable waiting period under the HSR Act has
expired.
Section 4.9 Investigation by Parent and Purchaser. Each of
Parent and the Purchaser:
(a) acknowledge that, other than as set forth in this
Agreement, none of the Company, its Subsidiaries or any of their respective
directors, officers, employees, affiliates, agents or representatives makes any
representation or warranty, either express or implied, as to the accuracy or
completeness of any of the information provided or made available to Parent or
the Purchaser or its agents or representatives prior to the execution of this
Agreement, and
(b) agrees, to the fullest extent permitted by law (except
with respect to claims of fraud), that none of the Company, its Subsidiaries or
any of their respective directors, officers, employees, stockholders,
affiliates, agents or representatives shall have any liability or responsibility
whatsoever to Parent or the Purchaser on any basis (including without limitation
in contract, tort or otherwise) based upon any information provided or made
available, or statements made, to Parent or the
31
Purchaser prior to the execution of this Agreement.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that, except (i) as contemplated by this Agreement, or (ii)
as agreed in writing by Parent, after the date hereof, and prior to the time the
directors of the Purchaser have been elected to, and shall constitute a majority
of, the Board of Directors of the Company pursuant to Section 1.3 (the
"Appointment Date"):
(a) the business of the Company and its Subsidiaries
shall be conducted only in the ordinary and usual course of business;
(b) the Company will not, directly or indirectly, (i)
sell, transfer or pledge or agree to sell, transfer or pledge any Company Common
Stock or capital stock of any of its Subsidiaries beneficially owned by it,
either directly or indirectly; (ii) amend its Certificate of Incorporation or
By-laws or similar organizational documents; or (iii) split, combine or re
classify the outstanding Company Common Stock or any outstanding capital stock
of any of the Subsidiaries of the Company;
(c) except for those actions contemplated in Section
1.2, neither the Company nor any of its Subsidiaries shall: (i) declare, set
aside or pay any dividend or other distribution payable in cash, stock or
property with respect to its capital stock except for its regular quarterly cash
dividend on the Company Common Stock; (ii) issue, sell, pledge, dispose of or
encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than shares of Common Stock reserved for issuance on the
date hereof upon exercise of outstanding Rights pursuant to the Rights Agreement
or issuances pursuant to the exercise of Options outstanding on the date hereof;
(iii) transfer, lease, license, sell, mort-
32
gage, pledge, dispose of, or encumber any material assets other than in the
ordinary and usual course of business and consistent with past practice
including, without limitation, any transfer or sale of any precious metal
inventories set forth on Schedule 3.17, except in the ordinary course of
business consistent with past practice, it being understood that any permanent
reduction, liquidation or increase in the Company's precious metals inventory
position will not be made without Parent's consent; (iv) incur or modify any
material indebtedness or other material liability, other than in the ordinary
and usual course of business and consistent with past practice, provided that
the Company may borrow money for use in the ordinary and usual course of
business; or (v) redeem, purchase or otherwise acquire directly or indirectly
any of its capital stock other than redemption of the outstanding Rights
pursuant to the Rights Agreement;
(d) neither the Company nor any of its Subsidiaries
shall modify, amend or terminate any of its Material Agreements or waive,
release or assign any material rights or claims, except in the ordinary course
of business and consistent with past practice;
(e) neither the Company nor any of its Subsidiaries
shall permit any material insurance policy naming it as a beneficiary or a loss
payable payee to be cancelled or terminated without notice to Parent, except in
the ordinary course of business and consistent with past practice;
(f) neither the Company nor any of its Subsidiaries
shall: (i) assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the material obligations of
any other person, except in the ordinary course of business and consistent with
past practice; (iii) make any material loans, advances or capital contributions
to, or investments in, any other person (other than to Subsidiaries of the
Company), other than in the ordinary course of business and consistent with past
practice; or (iv) enter into any material commitment or transaction with respect
to any of the foregoing (including, but not limited to, any borrowing, capital
expenditure or purchase, sale or lease of assets);
33
(g) neither the Company nor any of its Subsidiaries
shall change any of the accounting methods used by it unless required by GAAP;
(h) except as permitted in connection with the
termination of this Agreement pursuant to Section 7.1(c)(i), neither the Company
nor any of its Subsidiaries will adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Company or any of its Subsidiaries (other than
the Merger);
(i) neither the Company nor any of its Subsidiaries
will, except as required by law, enter into, adopt, create or amend in any
material respect or terminate any benefit plans maintained or contributed to by
the Company or any of its Subsidiaries;
(j) neither the Company nor any of its Subsidiaries
will make or agree to make any capital expenditure or capital expenditures other
than capital expenditures in accordance with the Company's 1998 capital
expenditure program or in the ordinary course of business consistent with past
practice;
(k) neither the Company nor any of its Subsidiaries
will increase the compensation of any director, executive officer or other key
employee of the Company or pay any benefit or amount not required by a plan,
agreement, understanding or arrangement as in effect on the date of this
Agreement to any such person;
(l) neither the Company nor any of its Subsidiaries
will cause a material change in investment policy or a material change in
investment vehicles related to the assets in any pension plan, other than
actions taken in the ordinary course of business or that are consistent with or
required by its fiduciary duties;
(m) neither the Company nor any of its Subsidiaries
will take, or agree to commit to take, any action that would make any
representation or warranty of the Company contained herein inaccurate in any
material respect at, or as of any time prior to, the Effective Time (except for
representations made as of a specific date); or
34
(n) neither the Company nor any of its Subsidiaries
will authorize or enter into an agreement to do any of the foregoing.
Section 5.2 Approvals and Consents; Cooperation. The parties
hereto shall use reasonable efforts, and cooperate with each other, to obtain
all governmental and third party authorizations, approvals, consents or waivers
required in order to consummate the Offer and the Merger. Each of the parties
hereto agrees to use its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable to consummate the Offer and the Merger. The Company further agrees to
use its reasonable efforts to seek to obtain, in connection with Parent and
without cost to the Company, any consent of a third party on Schedule 3.4
required to avoid a default or breach of any such contract resulting from this
Agreement, the Offer or the Merger, including without limitation the Credit
Agreement and the Note Agreement.
Section 5.3 Actions Regarding the Rights. The Company, in
accordance with the terms and provisions of the Rights Agreement, shall take all
reasonable actions necessary to cause the postponement of the Distribution Date
under the Rights Agreement as necessary to prevent this Agreement or the
consummation of any of the transactions contemplated hereby, including without
limitation, the publication or other announcement of the Offer and the
consummation of the Offer and the Merger, from resulting in the distribution of
separate Rights certificates or the occurrence of a Distribution Date or being
deemed a Triggering Event (as defined in the Rights Agreement). The Company's
Board of Directors will take all further action (in addition to that referred to
in Section 1.2(d)) reasonably requested in writing by Parent in order to render
the Rights inapplicable to the Offer and the Merger and the other transactions
contemplated hereby to the extent provided herein and in the Amendment to the
Rights Plan contemplated by Section 1.2(d). So long as this Agreement is in
effect, the Company will not amend the Rights Agreement without Parent's prior
consent.
Section 5.4 Access to Information. Upon reasonable notice, the
Company shall (and shall cause each of its Subsidiaries to) afford to the
officers,
35
employees, accountants, counsel, financing sources and other representatives of
Parent, access, during normal business hours during the period prior to the
Appointment Date, to all its properties, books, contracts, commitments and
records and, during such period, the Company shall (and shall cause each of its
Subsidiaries to) furnish promptly to the Parent (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
Parent may reasonably request. After the Appointment Date the Company shall
provide Parent and such persons as Parent shall designate with all such
information, at such time, as Parent shall request. Unless otherwise required by
law and until the Appointment Date, Parent will hold any such information which
is nonpublic in confidence in accordance with the provisions of the
Confidentiality Agreement between the Company and Parent, dated February 28,
1998 (the "Confidentiality Agreement").
Section 5.5 Repayment of Borrowings Under Credit Agreement. At
the Closing, unless the Company shall have obtained the lenders' consent to the
Merger and a waiver of the change in control provision in the Credit Agreement,
Parent shall repay all outstanding borrowings under the Credit Agreement in
accordance with the terms thereof (through Parent's cash on hand, existing
credit arrangements or otherwise) such that no event of default will exist as a
result of the consummation of the transactions contemplated hereby.
Section 5.6 Consents and Approvals. Each of the Company,
Parent and the Purchaser will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it with respect to
this Agreement and the transactions contemplated hereby (which actions shall
include, without limitation, furnishing all information in connection with
approvals of or filings with any Governmental Entity) and will promptly
cooperate with and furnish information to each other in connection with any such
requirements imposed upon any of them or any of their Subsidiaries in connection
with this Agreement and the transactions contemplated hereby. Each of the
Company, Parent and the Purchaser will, and will cause its Subsidiaries to, take
36
all reasonable actions necessary to obtain (and will cooperate with each other
in obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private third party required to
be obtained or made by Parent, the Purchaser, the Company or any of their
Subsidiaries in connection with the Merger or the taking of any action
contemplated thereby or by this Agreement.
Section 5.7 Employee Benefits.
(a) Parent and the Purchaser shall, as of the
Effective Time, continue the employment of all per sons who, immediately prior
to the Effective Time, were employees of the Company or its Subsidiaries
("Retained Employees"). Parent and the Purchaser agree that, effective as of the
Effective Time and for a three-year period following the Effective Time, the
Surviving Corporation and its Subsidiaries and successors shall provide the
Retained Employees with employee plans and programs which provide benefits that
are no less favorable in the aggregate to those provided to such Retained
Employees immediately prior to the date hereof. With respect to such benefits,
service accrued by such Retained Employees during employment with the Company
and its Subsidiaries prior to the Effective Time shall be recognized for all
purposes, except to the extent necessary to prevent duplication of benefits.
Nothing in this Section 5.7(a) shall be deemed to require the employment of any
Retained Employee to be continued for any particular period of time after the
Effective Time.
(b) Parent and the Purchaser agree to honor, and
cause the Surviving Corporation to honor, without modification, all employment
and severance agreements and arrangements, as amended through the date hereof,
with respect to employees and former employees of the Company, including the
Employee Agreements referred to in Section 3.8(a) hereof (collectively, the
"Severance Agreements"), all Supplemental Retirement and Death Benefit
Agreements, as amended through the date hereof, between the Company and certain
officers (collectively, "Retirement Agreements") and any other Benefit Plan,
agreement or arrangement which provides for the payment or acceleration of
benefits to employees of the Company upon a change in control of the Company.
Parent and the Purchaser acknowledge that the consummation of transac-
37
tions contemplated hereby (including the Offer) shall constitute a "change in
control" for purposes of this Section 5.7(b) and the Severance Agreements,
Retirement Agreements and other agreements referred to herein. If any payments
are required to be made under any employment or severance agreement or
arrangement, as amended through the date hereof, with respect to employees and
former employees of the Company (including the Employee Agreements and Severance
Agreements referred to in Section 3.8 or 5.7 hereof), as a result of the
consummation of the transactions contemplated hereby, such payments shall be
made on the date on which the Shares are accepted for payment pursuant to the
Offer.
(c) Parent and the Purchaser agree that at or prior
to the Effective Time, the Board of Directors of the Company (or the
Compensation Committee thereof) after consultation with the Chief Executive
Officer of the Company, may allocate to officers and employees of the Company
and its Subsidiaries the 1998 Bonus Pool (as defined below) in a manner
consistent with past practice, and, to the extent payments in respect of such
allocated amounts have not been made prior to the Effective Time, Parent and the
Purchaser agree to make payments, or to cause the Surviving Corporation to make
payments, in respect of such allocated amounts within five days after the
Effective Time. The amount of the "1998 Bonus Pool" shall equal the aggregate
amount of bonuses paid in respect of the Company's 1997 fiscal year under the
Company's Management Incentive Plan multiplied by a fraction, the numerator of
which is the number of days which have elapsed during fiscal 1998 and the
denominator of which is 365.
(d) In the event Parent or the Purchaser or the
Surviving Corporation or any of their successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger, or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, to the extent necessary to effectuate
the purposes of this Section 5.7, proper provision shall be made so that the
successors and assigns of Parent, the Purchaser or the Surviving Corporation, as
the case may be, assume the obligations set forth in this Section 5.7
38
and none of the actions described in clauses (i) or (ii) shall be taken until
such provision is made.
Section 5.8 No Solicitation. Neither the Company, any of its
Subsidiaries or affiliates nor its officers, directors or affiliates, shall
directly or indirectly, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent, any of its affiliates or
representatives) concerning any merger, consolidation, tender offer, exchange
offer, sale of all or substantially all of the Company's assets, sale of shares
of capital stock or similar business combination transactions involving the
Company or any principal operating or business unit of the Company (an
"Acquisition Proposal"); provided, however, that if, at any time prior to the
purchase of Shares by Purchaser in the Offer, the Company's Board of Directors
determines in good faith, after receiving formal advice from its financial
advisor and outside counsel, that such action is reasonably necessary for the
Company Board to comply with its fiduciary duties to the Company's shareholders
under applicable law, the Company may, in response to a bona fide written
Acquisition Proposal which did not result from a breach of this Section 5.8 and
which the Board determines is superior to the Offer and which in the event of an
all or part cash transaction is not subject to financing (any such bona fide
written Acquisition Proposal being referred to as a "Superior Proposal"), (i)
furnish information or provide access with respect to the Company and each of
its Subsidiaries to such Person pursuant to a customary confidentiality
agreement (as determined by the Company after consultation with its outside
counsel) and (ii) participate in discussions and negotiations regarding such
Acquisition Proposal. In the event that prior to the completion of the Offer,
the Company's Board of Directors determines in good faith, after the Company has
received a Superior Proposal and after consultation with its financial advisor
and outside counsel, that it is reason ably necessary to do so in order to
comply with its fiduciary duties to the Company's shareholders under applicable
law, the Company's Board of Directors may withdraw or modify its approval or
recommendation of the Offer, the Merger or this Agreement, approve or recommend
a Superior Proposal or terminate this Agreement, provided that prior to any
such termination, the Company shall (i)
39
have given Parent at least two business days notice of the effectiveness of such
termination, and (ii) simultaneously with the termination of this Agreement, pay
to Parent the termination fee referred to in Section 7.3 hereof. Furthermore,
nothing contained in this Section 5.8 shall prohibit the Company or its Board of
Directors from taking and disclosing to the Company's shareholders a position
with respect to a tender or exchange offer by a third party pursuant to Rules
l4d-9 and l4e-2(a) promulgated under the Exchange Act or from making such
disclosure to the Company's shareholders or otherwise which, in the judgment of
the Board of Directors with the advice of independent legal counsel, may be
required under applicable law or rules of any stock exchange.
Section 5.9 Brokers or Finders. (a) The Company 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 brokers' or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement,
except Xxxxxxx, Xxxxx & Co., whose fees and expenses will be paid by the Company
in accordance with the Company's agreement with such firm, which agreement has
been summarized in the Company's Solicitation/Recommendation Statement on
Schedule 14D-9, dated December 24, 1997; and the Company agrees to indemnify and
hold Parent and the Purchaser 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 party or its affiliates.
(b) Parent 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 brokers' or finders' fee
or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement, except Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, whose fees and expenses will be paid by Parent in
accordance with the Parent's agreement with such firm; and Parent agrees to
indemnify and hold the Company 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
40
the basis of any act or statement alleged to have been made by such party or its
affiliates.
Section 5.10 Publicity. The initial press release with respect
to the execution of this Agreement shall be a joint press release reasonably
acceptable to Parent and the Company. Thereafter, so long as this Agreement is
in effect, neither the Company, Parent nor any of their respective affiliates
shall issue or cause the publication of any press release or other announcement
with respect to the Merger, this Agreement or the other transactions
contemplated hereby without the prior consultation of the other party, except as
may be required by law or by any listing agreement with a national securities
exchange.
Section 5.11 Notification of Certain Matters. The Company
shall give prompt notice to Parent and Parent shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence of any event the occurrence,
or non-occurrence of which would cause any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect at or prior
to the Effective Time and (ii) any material failure of the Company or Parent, as
the case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.11 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
Section 5.12 Directors' and Officers' Insurance and
Indemnification. (a) From and after the consummation of the Offer, Parent shall,
and shall cause the Surviving Corporation to, indemnify, defend and hold
harmless any person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, an officer or director (the
"Indemnified Party") of the Company and its Subsidiaries against all losses,
claims, damages, liabilities, costs and expenses (including attorneys' fees and
expenses), judgments, fines, losses, and amounts paid in settlement in
connection with any actual or threatened action, suit, claim, proceeding or
investigation (each a "Claim") to the extent that any such Claim is based on, or
arises out of, (i) the fact that such person is or was a director,
41
officer, employee or agent of the Company or any Subsidiaries or is or was
serving at the request of the Company or any of its Subsidiaries as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, or (ii) this Agreement, or any of the transactions
contemplated hereby, in each case to the extent that any such Claim pertains to
any matter or fact arising, existing, or occurring prior to or at the Effective
Time, regardless of whether such Claim is asserted or claimed prior to, at or
after the Effective Time, to the full extent permitted under New York law or the
Company's Certificate of Incorporation, By-laws or indemnification agreements in
effect at the date hereof, including provisions relating to advancement of
expenses incurred in the defense of any action or suit. Without limiting the
foregoing, in the event any Indemnified Party becomes involved in any capacity
in any Claim, then from and after consummation of the Offer Parent shall, or
shall cause the Company (or the Surviving Corporation if after the Effective
Time) to, periodically advance to such Indemnified Party its legal and other
expenses (including the cost of any investigation and preparation incurred in
connection therewith), subject to the provision by such Indemnified Party of an
undertaking to reimburse the amounts so advanced in the event of a final
non-appealable determination by a court of competent jurisdiction that such
Indemnified Party is not entitled thereto.
(b) Parent and the Company agree that all rights to
indemnification and all limitations or liability existing in favor of the
Indemnified Party as provided in the Company's Certificate of Incorporation and
By-laws as in effect as of the date hereof shall survive the Merger and shall
continue in full force and effect, with out any amendment thereto, for a period
of six years from the Effective Time to the extent such rights are consistent
with the NYBCL; provided that, in the event any claim or claims are asserted or
made within such six year period, all rights to indemnification in respect of
any such claim or claims shall continue until disposition of any and all such
claims; provided further, that any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under New York law, the Company's Certificate of Incorporation or
By-laws or such agreements, as the case may be, shall be made by independent
legal
42
counsel selected by the Indemnified Party and reasonably acceptable to Parent
and; provided further, that nothing in this Section 5.12 shall impair any rights
or obligations of any present or former directors or officers of the Company.
(c) In the event Parent or the Purchaser or any of
their successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case, to
the extent necessary to effectuate the purposes of this Section 5.12, proper
provision shall be made so that the successors and assigns of Parent and the
Purchaser assume the obligations set forth in this Section 5.12 and none of the
actions described in clauses (i) or (ii) shall be taken until such provision is
made.
(d) Parent or the Surviving Corporation shall
maintain the Company's existing officers' and directors' liability insurance
policy ("D&O Insurance") for a period of not less than six years after the
Effective Date; provided, that the Parent may substitute therefor policies of
substantially similar coverage and amounts containing terms no less advantageous
to such former directors or officers; provided, further, if the existing D&O
Insurance expires or is cancelled during such period, Parent or the Surviving
Corporation will use their best efforts to obtain substantially similar D&O
Insurance; provided, however, that if the aggregate annual premiums for such
insurance at any time during such period exceed 200% of the per annum rate of
premiums currently paid by the Company and its Subsidiaries for such insurance
on the date of this Agreement, then Parent will cause the Surviving Corporation
to, and the Surviving Corporation will, provide the maximum coverage that shall
then be available at an annual premium equal to 200% of such rate.
Section 5.13 Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate
43
and make effective the transactions contemplated by this Agreement. If at any
time after the Closing Date any further action is necessary or desirable to
carry out the purposes of this Agreement, the parties hereto shall take or cause
to be taken all such necessary action, including, without limitation, the
execution and delivery of such further instruments and documents as may be
reason ably requested by the other party for such purposes or otherwise to
consummate and make effective the transactions contemplated hereby.
ARTICLE VI
CONDITIONS
Section 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 on or prior to the Closing Date of each of the
following conditions:
(a) Shareholder Approval. This Agreement shall have
been approved and adopted by the requisite vote of the holders of Company Common
Stock, if required by applicable law and the Certificate of Incorporation, in
order to consummate the Merger;
(b) Statutes; Consents. No statute, rule, order,
decree or regulation shall have been enacted or promulgated by any foreign or
domestic Governmental Entity or authority of competent jurisdiction which
prohibits the consummation of the Merger and all foreign or domestic
governmental consents, orders and approvals required for the consummation of the
Merger and the transactions contemplated hereby shall have been obtained and
shall be in effect at the Effective Time;
(c) Injunctions. There shall be no order or
injunction of a foreign or United States federal or state court or other
governmental authority of competent jurisdiction in effect precluding,
restraining, enjoining or prohibiting consummation of the Merger; and
(d) Purchase of Shares in Offer. Parent, the
Purchaser or their affiliates shall have purchased shares of Company Common
Stock pursuant to the Offer.
44
ARTICLE VII
TERMINATION
Section 7.1 Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective Time,
whether before or after shareholder approval thereof:
(a) By the mutual consent of the Board of Directors
of Parent and the Board of Directors of the Company.
(b) By either of the Board of Directors of the
Company or the Board of Directors of Parent:
(i) if shares of Company Common Stock shall not have
been purchased pursuant to the Offer on or prior to July 1,
1998; provided, however, that the right to terminate this
Agreement under this Section 7.1(b)(i) shall not be available
to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the
failure of Parent or the Purchaser, as the case may be, to
purchase shares of Company Common Stock pursuant to the Offer
on or prior to such date; or
(ii) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties hereto shall
use their reasonable efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final
and non-appealable.
(c) By the Board of Directors of the Company:
(i) if, prior to the purchase of shares of Company
Common Stock pursuant to the Offer, the Board of Directors of
the Company shall have (A) withdrawn, or modified or changed
in a
45
manner adverse to Parent or the Purchaser its approval or
recommendation of the Offer, this Agreement or the Merger in
order to approve and permit the Company to execute an
agreement relating to a Superior Proposal, and (B) determined
in good faith, after consultation with independent legal
counsel to the Company, that the failure to take such action
as set forth in the preceding clause (A) would be in
consistent with its fiduciary duties to the Company's
shareholders under applicable law, provided, however, that
prior to any such termination the Company shall (i) have given
Parent at least two business days notice of the effectiveness
of such termination, and (ii) simultaneously with the
effectiveness of such termination, pay to Parent the
termination fee referred to in Section 7.3; or
(ii) if, prior to the purchase of Company Common
Stock pursuant to the Offer, Parent or the Purchaser breaches
or fails in any material respect to perform or comply with any
of its material covenants and agreements contained herein or
breaches its representations and warranties in any material
respect; or
(iii) if Parent or the Purchaser shall have
terminated the Offer, or the Offer shall have expired, without
Parent or the Purchaser, as the case may be, purchasing any
shares of Company Common Stock pursuant thereto; provided that
the Company may not terminate this Agreement pursuant to this
Section 7.1(c)(iii) if the Company is in material breach of
this Agreement; or
(iv) if, due to an occurrence that if occurring after
the commencement of the Offer would result in a failure to
satisfy any of the conditions set forth in Annex A hereto,
Parent, the Purchaser or any of their affiliates shall have
failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the
Offer; provided, that the Company may not terminate this
Agreement pursuant to this Section 7.1(c)(iv) if the Company
is in material breach of this Agreement.
46
(d) By the Board of Directors of Parent:
(i) if, due to an occurrence that if occurring after
the commencement of the Offer would result in a failure to
satisfy any of the conditions set forth in Annex A hereto,
Parent, the Purchaser, or any of their affiliates shall have
failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the
Offer; provided that Parent may not terminate this Agreement
pursuant to this Section 7.1(d)(i) if Parent is in material
breach of this Agreement; or
(ii) if, prior to the purchase of shares of Company
Common Stock pursuant to the Offer, the Board of Directors of
the Company shall have withdrawn, or modified or changed in a
manner adverse to Parent or the Purchaser its approval or
recommendation of the Offer, this Agreement or the Merger or
shall have recommended an Acquisition Proposal or shall have
executed an agreement in principle (or similar agreement) or
definitive agreement relating to an Acquisition Proposal or
similar business combination with a person or entity other
than Parent, the Purchaser or their affiliates (or the Board
of Directors of the Company resolves to do any of the
foregoing).
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 7.1, written notice thereof
shall forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become null and void, and there shall be no liability on the part of
the Parent or the Company except for fraud or for willful breach of this
Agreement.
Section 7.3 Termination Fee. In the event that the Board of
Directors of the Company terminates this Agreement pursuant to Section 7.1(c)(i)
or Parent terminates this Agreement pursuant to Section 7.1(d)(ii) (provided
that at the time of such termination by Parent, Parent and the Purchaser were
not in material breach of this Agreement), the Company shall concurrently pay to
Parent a termination fee of $8 million.
47
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the shareholders of the Company
contemplated hereby, by written agreement of the parties hereto, by action taken
by their respective Boards of Directors (which in the case of the Company shall
include approvals as contemplated in Section 1.3(b)), at any time prior to the
Closing Date with respect to any of the terms contained herein; provided,
however, that after the approval of this Agreement by the shareholders of the
Company, no such amendment, modification or supplement shall reduce or change
the Merger Consideration.
Section 8.2 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time.
Section 8.3 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, 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 Parent or the Purchaser, to:
WHX Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Tabin
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
48
with a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx
LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq. and
Xxxxxx Xxxxxxx, Esq.
and
(b) if to the Company, to:
Handy & Xxxxxx
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: General Counsel
and
Handy & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Section 8.4 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
49
"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 March 1, 1998. As
used in this Agreement, the term "affiliate(s)" shall have the meaning set forth
in Rule l2b-2 of the Exchange Act.
Section 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.
Section 8.6 Entire Agreement; Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement (including the documents and the
instruments referred to herein and therein): (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 2.4, 4.8, 5.7 and 5.12, are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
Section 8.7 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 8.8 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York without
giving effect to the principles of conflicts of law thereof.
Section 8.9 Jurisdiction. Any legal action or proceeding with
respect to this Agreement or any matters
50
arising out of or in connection with this Agreement or otherwise, and any action
for enforcement of any judgment in respect thereof shall be brought exclusively
in the courts of the State of New York or of the United States of America for
the Southern District of New York, and, by execution and delivery of this
Agreement, the Company, Parent and the Purchaser each hereby accepts for itself
and in respect of its property, generally and unconditionally, the exclusive
jurisdiction of the aforesaid courts and appellate courts thereof. The Company,
Parent and the Purchaser irrevocably consent to service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies there of by registered or certified mail, postage prepaid, or by
recognized international express carrier or delivery service, to the Company,
Parent or the Purchaser at their respective addresses referred to in Section 8.3
hereof. In addition, each of Parent and the Purchaser hereby designates Xxxxxx
Xxxxxxxx Frome & Xxxxxxxxxx LLP as its respective agent for service of process,
and service upon Parent or the Purchaser shall be deemed to be effective upon
service of Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP as aforesaid or of its
successor designated in accordance with the following sentence. Parent or the
Purchaser may designate another corporate agent or law firm reasonably
acceptable to the Company and located in the Borough of Manhattan, in the City
of New York, as successor agent for service of process upon 30-days prior
written notice to the Company. The Company, Parent and the Purchaser each hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Agreement or otherwise brought in the courts referred to
above and hereby further irrevocably waives and agrees, to the extent permitted
by applicable law, not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of any party hereto to serve
process in any other manner permitted by law.
Section 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, except that the Purchaser may assign, in
its sole discretion, any or
51
all of its rights, interests and obligations hereunder to Parent or to any
direct or indirect wholly owned Subsidiary of Parent. 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.
52
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
HANDY & XXXXXX
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman
WHX CORPORATION
By: /s/ Xxxxxx XxXxx
-------------------------------------------
Name: Xxxxxx XxXxx
Title: Chairman
HN ACQUISITION CORP.
By: /s/ Xxxxxx XxXxx
-------------------------------------------
Name: Xxxxxx XxXxx
Title: President
ANNEX A
-------
CONDITIONS TO THE OFFER
-----------------------
Notwithstanding any other provisions of the Offer, and in
addition to (and not in limitation of) the Purchaser's rights to extend and
amend the Offer at any time in its sole discretion (subject to the provisions of
the Merger Agreement), the Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e- 1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate the Offer if (i) the Minimum Condition has not been
satisfied, (ii) the Rights under the Rights Agreement shall have become
exercisable, or (iii) at any time on or after March 1, 1998 and before the time
of acceptance of Shares for payment pursuant to the Offer, any of the following
events shall occur:
(a) there shall have been any action taken, or any
statute, rule, regulation, judgment, order or injunction promulgated, entered,
enforced, enacted, issued or applicable to the Offer or the Merger by any
domestic or foreign federal or state governmental regulatory or administrative
agency or authority or court or legislative body or commission which (l)
prohibits, or imposes any material limitations on, Parent's or the Purchaser's
ownership or operation of all or a material portion of the Company's businesses
or assets, (2) prohibits, or makes illegal the acceptance for payment, payment
for or purchase of Shares or the consummation of the Offer or the Merger, (3)
results in a material delay in or restricts the ability of the Purchaser, or
renders the Purchaser unable, to accept for payment, pay for or purchase some or
all of the Shares, or (4) imposes material limitations on the ability of the
Purchaser or Parent effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares purchased by
it on all matters properly presented to the Company's shareholders, provided
that Parent shall have used all reasonable efforts to cause
any such judgment, order or injunction to be vacated or lifted;
(b) the representations and warranties of the Company
set forth in the Merger Agreement shall not be true and correct as of the date
of consummation of the Offer as though made on or as of such date or the Company
shall have breached or failed to perform or comply with any material obligation,
agreement or covenant required by the Merger Agreement to be performed or
complied with by it except, in each case, (i) for changes specifically permitted
by the Merger Agreement and (ii) (A) those representations and warranties that
address matters only as of a particular date which are true and correct as of
such date or (B) where the failure of such representations and warranties to be
true and correct, or the performance or compliance with such obligations,
agreements or covenants, do not, individually or in the aggregate, have a
material adverse effect on the Company and its Subsidiaries, taken as a whole;
(c) the Merger Agreement shall have been terminated
in accordance with its terms;
(d) (i) it shall have been publicly disclosed that
any person, entity or "group" (as defined in Section 13(d)(3) of the Exchange
Act), shall have acquired beneficial ownership (determined pursuant to Rule
13d-3 promulgated under the Exchange Act) of more than 20% of any class or
series of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, other than any
person or group existing on the date hereof which beneficially owns more than
20% of any class or series of capital stock of the Company or (ii) the Company
shall have entered into a definitive agreement or agreement in principle with
any person with respect to an Acquisition Proposal or similar business
combination with the Company;
(e) the Company's Board of Directors shall have
withdrawn, or modified or changed in a manner adverse to Parent or the Purchaser
(including by amendment of the Schedule 14D-9) its recommendation of the Offer,
the Merger Agreement, or the Merger, or recommended another proposal or offer,
or shall have resolved to do any of the foregoing; or
2
(f) there shall have occurred (i) a decline of at
least 25% in either the Dow Xxxxx Average of Industrial Stocks or the Standard &
Poor's 500 Index from the date of the Merger Agreement, or (ii) the declaration
and continuation of a banking moratorium or any limitation or suspension of
payments in respect of the extension of credit by banks or other lending
institutions in the United States;
which in the reasonable judgment of Parent or the Purchaser, in any such case,
and regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
or payments.
The foregoing conditions are for the sole benefit of the
Purchaser and Parent and may be waived by Parent or the Purchaser, in whole or
in part at any time and from time to time in the reasonable discretion of Parent
or the Purchaser.
3
ANNEX B
-------
AMENDMENT TO RIGHTS AGREEMENT
-----------------------------
AMENDMENT, dated as of March 1, 1998, to the Rights Agreement,
dated as of January 26, 1989, as amended as of April 25, 1996 and October 22,
1996 (the "Rights Agreement"), between Handy & Xxxxxx, a New York corporation
(the "Company"), and ChaseMellon Shareholder Services, L.L.C., as Rights Agent
(the "Rights Agent").
WHEREAS, the Company and the Rights Agent entered into the
Rights Agreement specifying the terms of the Rights (as defined therein); and
WHEREAS, the Company and the Rights Agent desire to amend the
Rights Agreement in accordance with Section 26 of the Rights Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth in the Rights Agreement and this Amendment, the parties
hereby agree as follows:
1. Section 1(a) is amended by adding the following at the end
of said Section:
; provided, further, that none of WHX Corporation, a Delaware
corporation ("WHX"), HN Acquisition Corp., a New York corporation and
wholly-owned subsidiary of WHX (the "Purchaser") and their Affiliates
(the "WHX Persons") shall be deemed to be an Acquiring Person by virtue
of (x) the execution of the Agreement and Plan of Merger, dated as of
March 1, 1998 (the "Merger Agreement," which term shall include any
amendments thereto) by and among WHX, the Purchaser and the Company, or
(y) the consummation of any of the transactions contemplated thereby,
including, without limitation, the publication or other announcement
of the Offer (as defined therein), the consummation of the Offer and
the Merger (as defined therein) (the items set forth in (x) and (y) are
referred to herein as the "WHX Transactions").
2. Section 1(j) is amended by adding the following at the end
of said Section:
; provided, however, that the public announcement of any of
the WHX Transactions shall not constitute a Stock Acquisition Date.
3. Section 1(l) is amended by adding the following at the end
of said Section:
Notwithstanding anything to the contrary contained in this
Agreement, none of the WHX Transactions shall constitute a Triggering
Event or an event described in Section 11(a)(ii) or Section 13.
4. Section 3(a) is amended by adding the following at the end
of said Section:
Notwithstanding anything to the contrary contained in this
Agreement, neither the announcement nor the consummation of the WHX
Transactions shall constitute or result in the occurrence of a
Distribution Date.
5. The term "Agreement" as used in the Rights Agreement shall
be deemed to refer to the Rights Agreement as amended hereby.
6. The foregoing amendment shall be effective as of the date
first above written, and, except as set forth herein, the Rights Agreement shall
remain in full force and effect and shall be otherwise unaffected here by.
7. This Amendment may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
2
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of this 1st day of March, 1998.
HANDY & XXXXXX
By:
---------------------------------------
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., as Rights
Agent
By:
---------------------------------------
Name:
Title:
